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EXHIBIT 10(q)
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED AS OF JULY 31, 2000
AMONG
AMERICAN DENTAL PARTNERS, INC.,
THE LENDERS PARTY HERETO,
FLEET NATIONAL BANK
AS AGENT, AND
SOVEREIGN BANK
AS DOCUMENTATION AGENT
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Section 1. Definitions......................................................... 1
1.1 Certain Definitions................................................. 1
1.2 Accounting Terms.................................................... 13
1.3 Rules of Interpretation............................................. 13
Section 2. Revolving Credit Loans; Swing Line Advances; Letters of Credit...... 14
2.1 Amount.............................................................. 14
2.2 Revolving Credit Note............................................... 14
2.3 Lending Office...................................................... 14
2.4 Requests For Revolving Credit Loans................................. 14
2.5 Swing Line Advances................................................. 15
2.6 Letters of Credit................................................... 16
2.7 Maturity of Loans................................................... 18
2.8 Termination or Reduction of Commitment.............................. 18
2.9 Several Obligations................................................. 18
Section 3. [Intentionally Omitted]............................................. 18
Section 4. Interest Rates; Fees; Payments...................................... 18
4.1 Interest Rates...................................................... 18
4.2 Commitment Fee...................................................... 18
4.3 Letter of Credit Fees............................................... 20
4.4 Certain Notices..................................................... 20
4.5 Non-Receipt of Funds by the Agent................................... 20
4.6 Sharing of Payment; Waiver of Enforcement Without Consent, Etc...... 21
4.7 Minimum and Maximum Amounts......................................... 21
4.8 Computations........................................................ 22
4.9 Manner and Place of Payment......................................... 23
4.10 Pro Rata Treatment.................................................. 23
4.11 Payments Due on Days Other than Banking Days........................ 23
4.12 Additional Costs.................................................... 23
4.13 Limitation on Types of Loans........................................ 25
4.14 Illegality.......................................................... 25
4.15 Substitute Base Rate Loans.......................................... 25
4.16 LIBOR Indemnity..................................................... 25
4.17 Capital Adequacy.................................................... 26
4.18 Optional Prepayments................................................ 27
4.19 Mandatory Prepayments............................................... 27
Section 5. Security Interests.................................................. 27
Section 6. Conditions Precedent................................................ 28
6.1 Conditions to all Loans and Letters of Credit....................... 28
Section 7. Representations and Warranties...................................... 30
7.1 Corporate Status.................................................... 30
7.2 No Violation........................................................ 30
7.3 Corporate Power and Authority....................................... 31
7.4 Enforceability...................................................... 31
7.5 Consents or Approvals............................................... 31
7.6 Financial Statements................................................ 31
7.7 No Material Change.................................................. 32
7.8 Litigation.......................................................... 32
7.9 Compliance with Other Instruments; Compliance with Law.............. 32
7.10 Subsidiaries........................................................ 32
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7.11 Investment Company Status; Limits on Ability to Incur Indebtedness.. 32
7.12 Title to Property................................................... 32
7.13 ERISA............................................................... 33
7.14 Taxes............................................................... 33
7.15 Environmental Matters............................................... 33
7.16 Intellectual Property............................................... 34
7.17 Level of Borrowing.................................................. 34
7.18 Malpractice Insurance............................................... 34
7.19 Management Services Agreements...................................... 34
7.20 Disclosure.......................................................... 35
Section 8. Affirmative Covenants............................................... 35
8.1 Use of Proceeds..................................................... 35
8.2 Conduct of Business; Maintenance of Existence....................... 35
8.3 Compliance with Laws................................................ 35
8.4 Insurance........................................................... 35
8.5 Financial Statements, Etc........................................... 36
8.6 Notice of Default................................................... 37
8.7 Environmental Matters............................................... 37
8.8 Taxes and Other Liens............................................... 38
8.9 ERISA Information................................................... 39
8.10 Inspection.......................................................... 39
8.11 Certain Obligations Respecting Subsidiaries......................... 39
8.12 Further Assurances.................................................. 40
Section 9. Negative Covenants.................................................. 40
9.1 Transactions with Affiliates........................................ 40
9.2 Consolidation, Merger or Acquisition................................ 40
9.3 Disposition of Assets............................................... 42
9.4 Indebtedness........................................................ 42
9.5 Guarantees.......................................................... 43
9.6 Liens............................................................... 43
9.7 Restricted Payments................................................. 44
9.8 Investments......................................................... 44
9.9 Sale and Leaseback.................................................. 44
9.10 Prepayments of Indebtedness......................................... 45
9.11 ERISA............................................................... 45
9.12 Fiscal Year......................................................... 45
Section 10. Financial Covenants................................................ 45
10.1 Debt Coverage...................................................... 45
10.2 Fixed Charges Coverage............................................. 46
10.3 Minimum Net Worth.................................................. 46
10.4 Capital Expenditures............................................... 46
Section 11. Events of Default.................................................. 46
11.1 Events of Default.................................................. 46
11.2 Remedies Upon an Event of Default.................................. 48
Section 12. The Agent.......................................................... 48
12.1 Appointment, Powers and Immunities................................. 48
12.2 Reliance........................................................... 49
12.3 Defaults........................................................... 49
12.4 Rights as a Lender................................................. 50
12.5 Events............................................................. 50
12.6 Non-Reliance on Agent and Other Lenders............................ 50
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12.7 Failure to Act...................................................... 51
12.8 Removal of Agent.................................................... 51
12.9 Collateral Sub-Agents............................................... 51
Section 13. General............................................................ 51
13.1 Amendments, Etc.................................................... 51
13.2 Notices, Etc....................................................... 52
13.3 No Waiver; Remedies................................................ 52
13.4 Right of Set-off................................................... 52
13.5 Expenses; Indemnification.......................................... 53
13.6 Successors and Assigns............................................. 54
13.7 Severability....................................................... 56
13.8 GOVERNING LAW...................................................... 56
13.9 WAIVER OF JURY TRIAL............................................... 56
13.10 VENUE, CONSENT TO SERVICE OF PROCESS............................... 57
13.11 Additional Lenders................................................. 57
13.12 Pledge............................................................. 57
13.13 Headings........................................................... 58
13.14 Counterparts....................................................... 58
13.15 Confidentiality.................................................... 58
13.16 Replacement of Notes, etc.......................................... 58
13.17 Amendment and Restatement.......................................... 58
</TABLE>
EXHIBITS:
A - Revolving Credit Note
B - Compliance Certificate
C - Assignment and Joinder Agreement
D - Instrument of Adherence
SCHEDULES
---------
A - Disclosure Schedule
1 - Applicable Margin and Commitment Fees
2 - Commitments of the Lenders
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SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of
July 31, 2000, by and among AMERICAN DENTAL PARTNERS, INC., a Delaware
corporation (the "Borrower"), having its principal place of business and chief
executive offices at 301 Edgewater Place, Suite 320, Wakefield, Massachusetts
01880; FLEET NATIONAL BANK, a national banking association, with its principal
place of business at Fleet Center, One Hundred Federal Street, Boston,
Massachusetts 02110 (together with its successors, "Fleet"); each other lender
which may from time to time become a signatory hereto (individually, together
with its successors as well as Fleet, a "Lender" and collectively, together with
their respective successors, the "Lenders"); Fleet, as agent for the Lenders (in
such capacity, together with its successors in such capacity, the "Agent"); and
SOVEREIGN BANK ("Sovereign"), as documentation agent for the Lenders (in such
capacity, together with its successors in such capacity, the "Documentation
Agent");
WHEREAS, the Borrower and Fleet (f/k/a BankBoston, N.A. and as successor in
interest to a national banking association formerly known as Fleet National
Bank) are parties to an Amended and Restated Revolving Credit Agreement dated as
of December 4, 1998 (as amended, the "Prior Credit Agreement");
WHEREAS, the Borrower and Fleet desire to amend and restate the Prior
Credit Agreement in its entirety in order to amend and modify certain terms and
provisions of the Prior Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions.
1.1 Certain Definitions. The following terms are used herein with the meanings
assigned to them below:
"Accountants" shall mean KPMG LLP, or another of the so-called "big five"
accounting firms or, subject to the prior approval of the Majority Lenders,
other certified public accountants selected by the Borrower.
"Additional Costs" shall have the meaning set forth in Section 4.12.
"Adjusted EBITDA" shall mean an amount equal to (i) EBITDA of the Borrower
for the twelve month period then ended less (ii) EBITDA for each Acquired
Company for such fiscal period plus (iii) EBITDA for each Acquired Company on a
pro forma basis for the twelve months preceding the end of such fiscal period,
subject to such adjustments as shall be satisfactory to the Agent in its
reasonable discretion.
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"Affiliate" shall mean, with respect to any specified Person (the
"specified person"), any Person directly or indirectly controlling, controlled
by or under direct or indirect common control with, the specified person and,
without limiting the generality of the foregoing, includes (i) any director,
officer or, in the case of a limited liability company, manager of the specified
person or any Affiliate of the specified person, (ii) any such director's,
officer's or manager's parent, spouse, child or child's spouse (a "relative"),
(iii) any group acting in concert, of one or more such directors, officers,
managers, relatives or any combination thereof (a "group"), (iv) any Person
controlled by any such director, officer, manager, relative or group in which
any such director, officer, manager, relative or group beneficially owns or
holds 10% or more of any class of voting securities or a 10% or greater equity
or profits interest and (v) any Person or group which beneficially owns or holds
10% or more of any class of voting securities or membership interests or a 10%
or greater equity or profits interest in the specified person. For the purposes
of this definition, the term "control" when used with respect to any specified
person means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such specified person,
whether through the ownership of voting securities, by contract or otherwise.
"Agents" shall mean the Agent and the Documentation Agent.
"Agreement" shall mean this Second Amended and Restated Revolving Credit
Agreement.
"Alternate Base Rate" shall mean the greater of (i) the Base Rate and (ii)
the Federal Funds Rate plus 1/2 of 1% per annum (rounded upwards, if necessary,
to the next 1/8 of 1%). Changes in the Alternate Base Rate resulting from
changes in the Base Rate or the Federal Funds Rate shall take place immediately
without notice or demand of any kind.
"Applicable Lending Office" means, for each Lender and for each Type of
Loan, the Lending Office of such Lender (or of an affiliate of such Lender)
designated for such Type of Loan on Schedule 3 hereof or such other office of
such Lender (or of an affiliate of such Lender) as such Lender may from time to
time specify to the Agent and the Borrower as the office by which its Loans of
such Type are to be made.
"Applicable Margin" shall mean, in respect of any Type of Loan, the amount
for such Type of Loan determined pursuant to Schedule 1 attached hereto, it
being agreed that any change in the Applicable Margin shall be effective three
(3) days after the date upon which the Agent has received a duly executed and
completed Compliance Certificate evidencing the applicable Total Debt/Adjusted
EBITDA Ratio.
"Banking Day" shall mean any day on which commercial banks settle payments
in New York or London with respect to any payment obligation which is a LIBOR
Loan or New York with respect to any other payment obligation, excluding
Saturday and Sunday and excluding any other day which in The Commonwealth of
Massachusetts is a legal holiday or a day on which banking institutions are
authorized by law to close.
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"Base Rate" shall mean the variable per annum rate of interest so
designated from time to time by Fleet as its base rate. The Base Rate is a
reference rate and does not necessarily represent the lowest or best rate being
charged to any customer.
"Base Rate Loan" means at any time the principal amount of the Loans which
bears interest at the Alternate Base Rate.
"Borrower Group Property" shall mean any real property owned, occupied, or
operated by the Borrower or any of its Subsidiaries.
"Capital Expenditures" shall mean all expenditures for fixed assets made by
the Borrower or any of its Subsidiaries which are capitalized in accordance with
GAAP, including expenditures related to a Capital Lease, but excluding all
expenditures incurred in connection with any Permitted Acquisition.
"Capital Lease" shall mean, as to any Person, any lease which is
capitalized on the balance sheet of such Person in accordance with GAAP.
"Capital Lease Obligations" shall mean, as to any Person, the amount of the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property which
obligations are classified and accounted for as a capital lease on a balance
sheet of such Person in accordance with GAAP (including Statement of Financial
Accounting Standards No. 13, as amended, of the Financial Accounting Standards
Board).
"Closing Date" shall mean the first date on which the conditions set forth
in Section 6.1 have been satisfied and any Loans are to be made or any Letters
of Credit are to be issued hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
successor statute.
"Collateral" shall have the meaning given that term in the Security
Agreement
"Commitment" In relation to any particular Lender, the maximum dollar
amount which such Lender has agreed to loan to the Borrower or make available to
the Borrower upon the terms and subject to the conditions of this Agreement,
initially as set forth on Schedule 2 attached hereto, as such Lender's
Commitment may be modified pursuant hereto and in effect from time to time.
Schedule 2 shall be amended from time to time, with prior notice to the
Borrower, to reflect any changes in the Commitments of the Lenders.
"Commitment Percentage" In relation to any particular Lender, the
percentage which such Lender's Commitment represents of the aggregate
Commitments of all the Lenders, initially as set forth on Schedule 2 attached
hereto, as such Lender's Commitment Percentage may be modified pursuant hereto
and in effect from time to time. Schedule 2 shall be amended from time to time
to reflect any changes in the Commitment Percentages of the Lenders.
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"Contractual Obligation" shall mean, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Sections 414(b) or 414(c) of the Code.
"Default" shall mean any condition or event that constitutes an Event of
Default or that with the giving of notice or lapse of time or both would, unless
cured or waived, become an Event of Default.
"Deposited Funds" shall have the meaning set forth in Section 4.6.
"Documentation Agent" shall mean Sovereign or such other Lender or
financial institution as shall have subsequently been appointed as the successor
Documentation Agent pursuant to Section 12.8.
"EBITDA" shall mean, for any fiscal period, an amount equal to Net Income
for such period, plus each of the following (without duplication), to the extent
deducted in computing such Net Income: (i) Interest Expense, (ii) taxes
accrued, (iii) depreciation, and (iv) amortization of goodwill and other
intangibles.
"Environmental Laws" shall mean all federal, state, local and foreign laws,
and all regulations, notices or demand letters issued, promulgated or entered
thereunder, relating to pollution or protection of the environment and to
occupational health and safety, including, without limitation, laws relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or Hazardous Substances into the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or Hazardous Substances.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, or any successor statutes.
"Event of Default" has the meaning set forth in Section 11.1.
"Excluded Property" shall mean (i) any property of the Borrower or its
Subsidiaries (other than real property) the purchase price of which was, or in
the future may be, financed with Indebtedness permitted by Sections 9.4(b),
9.4(c), 9.4(e), or 9.4(f), (ii) real property of the Borrower or its
Subsidiaries the purchase price of which was financed with Indebtedness listed
on Schedule A or assumed by the Borrower in connection with a Permitted
Acquisition and (iii) leasehold interests in any real property; provided that no
property described in clauses (i) and (ii) of this definition shall be Excluded
Property at any time of determination unless the Indebtedness which finances
such property is outstanding at such time and such Indebtedness is secured by a
Lien on such property.
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"Extension of Credit" shall mean the making of any Loan or the issuance of
any Letter of Credit.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Banking Day next
succeeding such day, provided that (a) if such day is not a Banking Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Banking Day as so published on the next succeeding Banking Day,
and (b) if no such rate is so published on such next succeeding Banking Day, the
Federal Funds Rate for such day shall be the average rate charged to Fleet on
such day on such transactions as determined by the Agent.
"Financial Statement Date" shall mean December 31, 1999.
"Fixed Charges" shall mean, for any fiscal period, the sum of (i) the
amount of the scheduled installments of principal payable in respect of
Indebtedness of the Borrower and its Subsidiaries during such period, plus (ii)
Interest Expense for such period, plus (iii) the tax provision of the Borrower
and its Subsidiaries paid or required to be paid in cash for such period, plus
(iv) Maintenance Capital Expenditures made by the Borrower and its Subsidiaries
during such period, plus (v) Rental Payments, plus (vi) distributions to
stockholders permitted by the Agreement.
"Fleet" means Fleet National Bank and its successors.
"Funding Standard Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrower, are treated as a single
employer under Sections 414(b), 414(c), 414(m) or 414(o) of the Code.
"GAAP" shall mean accounting principles generally accepted in the United
States applied on a consistent basis.
"Governmental Approval" shall mean any authorization, consent, order,
approval, license, lease, ruling, permit, tariff, rate, certification,
validation, exemption, filing or registration by or with, or notice to, any
Governmental Authority.
"Governmental Authority" shall mean any federal, state, municipal or other
governmental department, commission, board, bureau, agency, court, tribunal or
other instrumentality, domestic or foreign, and any arbitrator.
"Guarantee" by any Person shall mean any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise of
such Person (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (b) entered
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into for the purpose of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided that the
term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Guarantors" shall mean, collectively, PDHC, Ltd., a Minnesota corporation,
Texas Dental Partners, Inc., a Texas corporation, American Dental Partners of
Louisiana, Inc., a Delaware corporation, Northpark Dental Group, Inc. (f/k/a
Smileage Dental Care, Inc.), a Wisconsin corporation, American Dental Partners
of Pennsylvania, Inc. (f/k/a Soster Dental, Inc.), a Pennsylvania corporation,
American Dental Partners of Wisconsin, Inc., a Delaware corporation, Apple Park
Associates, Inc., a Delaware corporation, Orthocare, Ltd., a Minnesota
corporation, Innovative Practice Concepts, Inc., an Arizona corporation,
American Dental Professional Services, Inc., a Delaware corporation, American
Dental Partners of Virginia, Inc., a Delaware corporation, American Dental
Partners of Maryland, Inc., a Maryland corporation, American Dental Partners of
Alabama, Inc., an Alabama corporation, American Dental Partners of Oklahoma,
Inc., a Delaware corporation, American Dental Partners of North Carolina, Inc.,
a Delaware corporation, National Financial Resources, Inc., a Delaware
corporation, American Dental Partners of California, Inc., a Delaware
corporation, ADP of New York, Inc., a Delaware corporation and National Dental
Alliance, Inc., a Delaware corporation and any other Person that becomes a party
to a Subsidiary Guaranty.
"Guarantors' Documents" shall mean the Subsidiary Guaranties and the
Subsidiary Security Agreements.
"Hazardous Substances" shall mean all hazardous and toxic substances,
wastes or materials, hydrocarbons (including naturally occurring or man-made
petroleum and hydrocarbons), flammable explosives, urea formaldehyde insulation,
radioactive materials, biological substances, PCBs, pesticides, herbicides and
any other kind and/or type of pollutants, or contaminates and/or any other
similar substances or materials which, because of toxic, flammable, explosive,
corrosive, reactive, radioactive or other properties that may be hazardous to
human health or the environment, are included under or regulated by any
Environmental Laws.
"Indebtedness" of any Person at any date shall mean, (a) all indebtedness
of such Person for borrowed money (excluding current trade liabilities which
shall include payables to affiliated dental groups incurred in the ordinary
course of business and payable in accordance with customary practices), or which
is evidenced by a note, bond, debenture or similar instrument, (b) all
obligations of such Person under leases that are treated as capitalized leases
in accordance with GAAP, (c) all obligations of such Person in respect of
bankers acceptances issued or created for the account of such Person, and all
reimbursement obligations (contingent or otherwise) of such Person in respect of
any letters of credit issued for the account of such Person to the extent not
secured by cash and without duplication of any underlying Indebtedness, (d) all
liabilities secured by any Lien on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment thereof,
and (e) without duplication, all Guaranties.
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"Intellectual Property" shall have the meaning specified in Section 7.16.
"Interest Expense" shall mean, for any fiscal period, the sum (determined
without duplication) of the aggregate amount of interest required to be paid
during such period on Indebtedness of the Borrower and its Subsidiaries (on a
consolidated basis), including the interest portion of payments under Capital
Lease Obligations.
"Interest Period" shall mean, with respect to any LIBOR Loan, the period
commencing on the date such LIBOR Loan is made or converted from a Base Rate
Loan or the last day of the next preceding Interest Period with respect to such
LIBOR Loan and ending on the numerically corresponding day in the first, second,
third or sixth calendar month thereafter, as the Borrower may select as provided
in Section 4.4, except that each such Interest Period which commences on the
last Working Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Working Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may end after the
Maturity Date; (ii) each Interest Period which would otherwise end on a day
which is not a Working Day shall end on the next succeeding Working Day (or, if
such next succeeding Working Day falls in the next succeeding calendar month, on
the next preceding Working Day); and (iii) no Interest Period shall have a
duration of less than one month and, if the Interest Period therefor would
otherwise be a shorter period, such LIBOR Loan shall not be available hereunder.
"Investments" shall mean, with respect to any Person (the "Investor"), any
investment by the Investor in any other Person, whether by means of share
purchase, capital contribution, purchase or other acquisition of a partnership
or joint venture interest, loan, time deposit, demand deposit or otherwise.
"Issuing Bank" shall mean Fleet.
"Letter of Credit" shall mean any standby letter of credit issued by the
Issuing Bank for the account of the Borrower as provided in this Agreement.
"Letter of Credit Usage" shall mean, at any time, the aggregate at such
time of (a) the maximum amount then available to be drawn under all outstanding
Letters of Credit, and (b) all then unreimbursed drawings under any Letters of
Credit.
"LIBOR Lending Office" shall mean, initially, the Agent's office at One
Hundred Federal Street, Boston, Massachusetts 02110 and, thereafter, such other
office of the Agent as shall be making or maintaining LIBOR Loans.
"LIBOR Loan" shall mean, at any time, that principal amount of the Loans,
the interest on which is determined at such time on the basis of rates referred
to in the definition of "LIBOR Rate".
"LIBOR Rate" shall mean with respect to any Interest Period pertaining to a
LIBOR Loan, the rate per annum (rounded upwards, if necessary, to the nearest
1/32 of one percent) as determined on the basis of the offered rates for
deposits in U.S. dollars, for a period of time
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comparable to the applicable LIBOR Loan which appears on the Telerate page 3750
as of 11:00 a.m. London time on the day that is two London Banking Days
preceding the first day of such LIBOR Loan; provided, however, if the rate
described above does not appear on the Telerate System on any applicable
interest determination date, the LIBOR rate shall be the rate (rounded upwards
as described above, if necessary) for deposits in dollars for a period
substantially equal to the interest period on the Reuters Page "LIBO" (or such
other page as may replace the LIBO page on that service for the purpose of
displaying such rates), as of 11:00 a.m. (London time), on the day that is two
(2) London Banking Days prior to the beginning of such interest period. "Banking
Day" shall mean, in respect of any city, any date on which commercial banks are
open for business in that city.
If both the Telerate and Reuters system are unavailable, then the rate for
that date will be determined on the basis of the offered rates for deposits in
U.S. dollars for a period of time comparable to the applicable LIBOR Loan which
are offered by four major banks in the London interbank market at approximately
11:00 a.m. London time, on the day that is two (2) London Banking Days preceding
the first day of such LIBOR Loan as selected by the Agent. The principal London
office of each of the four major London banks will be requested to provide a
quotation of its U.S. dollar deposit offered rate. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the rate
for that date will be determined on the basis of the rates quoted for loans in
U.S. dollars to leading European banks for a period of time comparable to such
LIBOR Loan offered by major banks in New York City at approximately 11:00 a.m.
New York City time, on the day that its two London Banking Days preceding the
first day of such LIBOR Loan. In the event that Agent is unable to obtain any
such quotation as provided above, it will be deemed that LIBOR pursuant to a
LIBOR Loan cannot be determined.
In the event that the Board of Governors of the Federal Reserve System
shall impose a Reserve Requirement with respect to LIBOR deposits then for any
period during which such Reserve Requirement shall apply, LIBOR shall be equal
to the amount determined above divided by an amount equal to 1 minus the Reserve
Requirement.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any lease
that is capitalized in accordance with GAAP, and the filing of a financing
statement under the UCC or comparable law of any jurisdiction), together with
any renewal or extension thereof.
"Liquid Investments" means (a) depositary accounts with a Lender; (b)
certificates of deposit issued by a Lender; (c) obligations issued or guaranteed
by the United States of America; (d) commercial paper; (e) repurchase
obligations entered into with a Lender; and (f) investments in money market or
bond funds sponsored or administered by an Affiliate of a Lender.
"Loans" shall mean Revolving Credit Loans and Swing Line Advances.
"Loan Documents" shall mean, collectively, this Agreement, the Notes, the
Security Instruments, the Subsidiary Guaranties, the Subsidiary Security
Agreements and all other
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agreements and instruments that are from time to time executed in connection
with this Agreement, as each of such agreements and instruments may be amended,
modified or supplemented from time to time.
"Maintenance Capital Expenditures" shall mean any expenditures for fixed
assets made by the Borrower or any of its Subsidiaries which are capitalized and
which are necessary to maintain the existing operations of the Borrower and its
Subsidiaries on an ongoing basis and incurred during the relevant period.
"Majority Lenders" shall mean, at any time while no Loans are outstanding,
the Lenders having at least fifty-one percent (51%) of the aggregate amount of
the Commitments and, at any time while Loans are outstanding, Lenders holding at
least fifty-one percent (51%) of the outstanding aggregate principal amount of
the Loans.
"Management Services Agreements" shall have the meaning set forth in
Section 7.19.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform its obligations under this Agreement, the Notes or any of
the other Loan Documents or (c) the validity or enforceability of this
Agreement, the Notes or any of the other Loan Documents or the ability of any
Significant Subsidiary to perform its obligations under the Subsidiary Guaranty
or any of the other Loan Documents to which it is a party, or the rights and
remedies of the Agent and the Lenders hereunder or thereunder.
"Maturity Date" shall mean July 31, 2004.
"Maximum Rate" shall have the meaning set forth in Section 4.1(d).
"Multiemployer Plan" shall mean at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which the Borrower or
any member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the Controlled Group during such five year period.
"Net Income" or "Net Loss" for any period in respect of which the amount
thereof shall be determined, shall mean the aggregate of the consolidated net
income (or net loss) after taxes for such period of the Borrower and its
Subsidiaries, determined in accordance with GAAP.
"Net Worth" shall mean, at any date as of which the amount thereof is to be
determined, the stockholders' equity (including preferred stock) of the Borrower
and its Subsidiaries as determined in accordance with GAAP, provided that in
determining Net Worth any preferred stock shall be treated as equity.
"Notes" shall have the meaning set forth in Section 2.2.
"Notice Date" shall have the meaning set forth in Section 12.8.
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"Obligations" shall mean all obligations of the Borrower and its
Subsidiaries to the Agents and the Lenders of every kind and nature whether such
obligations are now existing or hereafter incurred or created, joint or several,
direct or indirect, absolute or contingent, due or to become due, matured or
unmatured, liquidated or unliquidated, arising by contract, operation of law or
otherwise, including, without limitation, (a) all principal of and interest
(including, without limitation, any interest which accrued after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of the Borrower) on any advance to the Borrower
under the Notes issued by the Borrower or pursuant to this Agreement; (b) all
other amounts (including, without limitation, any fees or expenses) payable by
Borrower or the Guarantors under the Loan Documents; (c) all amounts payable to
the Issuing Bank in connection with the issuance of any letter of credit by the
Issuing Bank for the account of any Borrower or any drawing thereunder,
including, without limitation, any reimbursement obligation and letter of credit
fees payable under any letter of credit application or reimbursement agreement
executed by the Borrower in connection with any such letter of credit; and (d)
any renewals, refinancings or extensions of any of the foregoing.
"Office of the Agent" shall mean the Banking office of the Agent located at
One Hundred Federal Street, Boston, MA 02110 or such other location of which
the Agent shall notify the Borrower.
"Payor" shall have the meaning set forth in Section 4.5.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" shall have the meaning set forth in Section 9.2.
"Permitted Liens" shall have the meaning set forth in Section 9.6.
"Person" shall mean and include any individual, firm, corporation, trust,
limited liability company or other unincorporated organization or association or
other enterprise or any government or political subdivision, agency, department
or instrumentality thereof.
"Plan" means any employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code and is either (a) maintained by the Borrower or any member of the
Controlled Group for employees of the Borrower or any member of the Controlled
Group or (b) maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to
which the Borrower or any member of the Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
"Post-Default Rate" shall mean (i) with respect to any LIBOR Loan, the rate
of interest per annum equal to 2% above the interest rate otherwise applicable
to such LIBOR Loan at the applicable time, (ii) with respect to any Base Rate
Loan, the rate of interest per annum equal to 2% above the interest rate
otherwise applicable to such Base Rate Loan, and (iii) with respect to
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any other amount payable by the Borrower under this Agreement which is not paid
when due, the rate of interest per annum equal to 2% above the Alternate Base
Rate at the applicable time.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulatory Change" means any change on or after the date of this Agreement
in United States federal, state or foreign laws or regulations, including
Regulation D, or the adoption or making on or after such date of any
interpretations, directives or requests applying to a class of lenders including
any of the Lenders of or under any United States federal or state, or any
foreign, laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof (other than changes which affect taxes measured by or
imposed on the overall net income of any Lender or of its LIBOR Lending Office
by the jurisdiction in which the Lenders has its principal office or LIBOR
Lending Office).
"Reimbursement Obligation" shall mean the Obligation of the Borrower to
reimburse the Issuing Bank and the Lenders on account of any drawing under any
Letter of Credit as provided in Section 2.6.
"Rental Payments" means rental payments in respect of operating lease
obligations for facilities of the Borrower and its Subsidiaries.
"Required Payment" shall have the meaning set forth in Section 4.5.
"Reserve Requirement" shall mean, for any LIBOR Loans for any Interest
Period therefor, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by the Lenders against
"Eurocurrency liabilities" (as such term is used in Regulation D).
"Responsible Officer" shall mean the President or the Chief Financial
Officer.
"Restricted Payment" shall mean, with respect to the Borrower or any
Subsidiary thereof, (a) any dividend or other distribution on any shares of
capital stock of the Borrower or such Subsidiary (except dividends payable
solely to the Borrower or any Subsidiary), and (b) any payment on account of the
purchase, redemption, retirement or acquisition of (i) any shares of the capital
stock of the Borrower or a Subsidiary thereof or (ii) any option, warrant,
convertible security or other right to acquire shares of the capital stock of
the Borrower or a Subsidiary thereof, other than, in either case, payments made
solely to the Borrower or such Subsidiary.
"Revenue" for any period in respect of which the amount thereof shall be
determined, shall mean the aggregate of the consolidated revenue for such period
of the Borrower and its Subsidiaries, determined in accordance with GAAP.
"Revolving Credit Commitment" shall have the meaning specified in Section
2.1.
"Revolving Credit Loans" shall have the meaning set forth in Section 2.1.
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"SEC" means the Securities and Exchange Commission.
"Security Agreement" shall have the meaning set forth in Section 5.1..
"Security Instruments" shall mean, collectively, the Security Agreement,
the Subsidiary Security Agreements, the Stock Pledge Agreements and each other
instrument or agreement that purports to secure the Obligations of the Borrower
to the Lenders.
"Significant Subsidiary" means a Guarantor which has annualized revenues of
10% or more of the consolidated revenues of the Borrower and its Subsidiaries.
For purposes of this definition, annualized revenues shall be calculated based
upon the financial statements prepared for the most recent fiscal quarter of the
Person in question.
"Stated Rate" shall have the meaning set forth in Section 4.1(d).
"Stock Pledge Agreement" shall have the meaning set forth in Section 5(c).
"Subordinated Debt" shall mean Indebtedness of the Borrower that is
subordinated to the Indebtedness of the Borrower owing to the Lenders either (a)
pursuant to a subordination agreement in the form (with conforming changes to
dates, parties and amounts and such other changes which, in the reasonable
judgment of the Agent, do not affect in any adverse manner the subordination of
such Indebtedness to the Indebtedness of the Borrower owing to the Lenders) of
the Subordination Agreement, dated June 1, 1998, entered into by the Borrower in
connection with the acquisition by American Dental Partners of Virginia, Inc., a
subsidiary of Borrower of substantially all of the assets of Reston Dental
Group, P.C. and previously provided to and approved by the Agent, (b) in such
form and substance as may be satisfactory to the Majority Lenders between the
Borrower (or the Agent) and the holder(s) of such Indebtedness, or (c) pursuant
to the terms thereof, where the Majority Lenders have confirmed in writing that
such terms are satisfactory to them.
"Subsidiary" shall mean, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person.
"Subsidiary Collateral" shall mean the collateral of each Subsidiary
described in the Subsidiary Security Agreements.
"Subsidiary Guaranties" shall mean the Amended and Restated Unlimited
Guaranty Agreements, entered into by each Subsidiary of the Borrower (other than
shell acquisition subsidiaries with little or no assets), a current list of
which is set forth on Schedule A.
"Subsidiary Security Agreements" shall have the meaning set forth in
Section 5(b).
"Swing Line Advances" shall have the meaning set forth in Section 2.5.
"Total Debt" shall mean the following (without duplication) with respect to
the Borrower and its Subsidiaries: (i) all indebtedness for borrowed money
(other than trade liabilities, which
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shall include payables to affiliated dental groups which are classified as
current liabilities on the balance sheet of the Borrower, incurred in the
ordinary course of business and payable in accordance with customary practices);
(ii) all obligations evidenced by bonds, indentures, notes and similar
instruments; (iii) all Capital Lease Obligations; and (iv) all liabilities
secured by any Lien on any property owned by the Borrower, regardless of whether
such liabilities are non-recourse.
"Trailing Twelve Month Revenue" shall mean for the twelve-month period
ending on the last day of the most recently ended fiscal quarter of the Borrower
and its Subsidiaries the sum of (i) Revenue of the Borrower and its Subsidiaries
for such period determined in accordance with GAAP plus (ii) the most recent
twelve-month revenue of Persons acquired in Permitted Acquisitions consummated
during such twelve-month period, determined in accordance with GAAP, that is not
otherwise included in clause (i) above.
"Type" shall mean a Base Rate Loan or a LIBOR Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to time
in The Commonwealth of Massachusetts.
"Unfunded Liabilities" means, with respect to any Plan, at any time, the
amount (if any) by which (a) the present value of all benefits under such Plan
exceeds (b) the fair market value of all Plan assets allocable to such benefits,
all determined as of the then most recent valuation date for such Plan, but only
to the extent that such excess represents a potential liability of the Borrower
or any member of the Controlled Group to the PBGC or such Plan under Title IV of
ERISA.
"Wholly-owned Subsidiary" shall mean, as to any Person, a Subsidiary of
such Person all of whose outstanding shares of capital stock are owned directly
or indirectly by such Person.
"Working Day" shall mean any day on which dealings in foreign currencies
and exchange between Lenders may be carried on in the place where the LIBOR
Lending Office is located and in Boston, Massachusetts.
1.2 Accounting Terms. Unless otherwise specified herein, all accounting terms
used herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all financial statements and certificates
and reports as to financial matters required to be delivered hereunder shall be
prepared, in accordance with GAAP; provided that if any change in GAAP in itself
materially affects the calculation of any financial covenant in this Agreement,
the Borrower may by notice to the Agent, or the Agent may by notice to the
Borrower, require that such covenant thereafter be calculated in accordance with
GAAP as in effect, and applied by the Borrower, immediately before such change
in GAAP occurs. If such notice is given, the compliance certificates delivered
pursuant to Section 8.5(c) after such change occurs shall be accompanied by
reconciliations of the difference between the calculation set forth therein and
a calculation made in accordance with GAAP as in effect from time to time after
such change occurs.
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1.3 Rules of Interpretation.
(a) A reference to any document or agreement shall include such document or
agreement as amended, modified or supplemented and in effect from time to
time in accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the singular.
(c) A reference to any Person includes its permitted successors and permitted
assigns.
(d) The words "include", "includes" and "including" are not limiting.
(e) The words "herein", "hereof", "hereunder" and words of like import shall
refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.
(f) All terms not specifically defined herein or by GAAP, which terms are
defined in the Uniform Commercial Code as in effect in The Commonwealth of
Massachusetts, shall have the meanings assigned to them in such Code.
Section 2. Revolving Credit Loans; Swing Line Advances; Letters of Credit.
2.1 Amount. Upon the terms and subject to conditions set forth herein, and in
reliance upon the representations, warranties and covenants of the Borrower
herein, the Lenders agree, severally and not jointly, to make loans (each a
"Revolving Credit Loan" and collectively the "Revolving Credit Loans") to the
Borrower and the Issuing Bank hereby agrees to issue Letters of Credit for the
account of the Borrower at the Borrower's request from time to time from and
after the Closing Date and prior to the Maturity Date in an aggregate principal
amount not to exceed at any one time outstanding the sum of $100,000,000 (the
"Revolving Credit Commitment"), as the same may be reduced or terminated
pursuant to the provisions hereof, provided that the sum of all outstanding
Revolving Credit Loans, Swing Line Advances and Letter of Credit Usage (after
giving effect to all requested Revolving Credit Loans, Swing Line Advances and
Letters of Credit) shall not at any time exceed the Revolving Credit Commitment.
Within the foregoing limits and subject to the terms and conditions hereof, the
Borrower may request Letters of Credit and may borrow, repay and reborrow Swing
Line Advances and Revolving Credit Loans at any time or from time to time until
the Maturity Date or the earlier termination of the Revolving Credit Commitment.
2.2 Revolving Credit Note. The Revolving Credit Loans shall be evidenced by
separate promissory notes for each Lender, each such note to be in substantially
the form attached hereto as Exhibit A, dated as of the Closing Date and
completed with appropriate insertions (each such note being referred to herein
as a "Note" and collectively as the "Notes") and shall be payable with interest
in accordance with Section 4 below.
2.3 Lending Office. The Loans of each Type made by each Lender shall be made
and maintained at such Lender's Applicable Lending Office for Loans of such
Type.
2.4 Requests For Revolving Credit Loans. Whenever the Borrower desires to
obtain a Revolving Credit Loan or to convert an outstanding Revolving Credit
Loan from one Type to another, it shall notify the Agent in accordance with the
provisions of Section 4.4 below. Not later than 1:00 p.m. Boston time on the
date specified for each such borrowing hereunder, each
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Lender shall, subject to the terms and conditions of this Agreement, make
available the amount of the Revolving Credit Loan to be made by it on such date
to the Agent at the Office of the Agent, for the account of the Borrower.
Subject to the terms and conditions of this Agreement, the amount so received by
the Agent shall be made available to the Borrower by wiring the funds to such
account as the Borrower shall specify.
2.5 Swing Line Advances.
(a) Upon the terms and subject to the conditions set forth in this Agreement,
and in reliance upon the representations, warranties and covenants of the
Borrower herein, Fleet may, in its sole discretion, make short term
advances ("Swing Line Advances") to the Borrower from time to time from and
after the Closing Date and prior to the Maturity Date, provided that the
sum of all outstanding Revolving Credit Loans, Swing Line Advances and
Letter of Credit Usage (after giving effect to all requested Revolving
Credit Loans, Swing Line Advances and Letters of Credit) shall not at any
time exceed the Revolving Credit Commitment, provided, further that the
aggregate outstanding principal amount of Swing Line Advances shall not
exceed $3,500,000, and provided, further that the aggregate principal
amount of Revolving Credit Loans, Swing Line Advances and Letter of Credit
Usage made by Fleet shall not at any time exceed Fleet's Commitment. Each
Swing Line Advance shall be due and payable on such Banking Day (not more
than fourteen (14) days after the making thereof) as the Borrower shall
specify in the notice of borrowing or conversion requesting such Swing Line
Advance. Each request for a Swing Line Advance hereunder shall constitute
a representation and warranty by the Borrower that the conditions set forth
in Section 6.1 have been satisfied as of the date of such request.
(b) Each Swing Line Advance shall be a Base Rate Loan; no Swing Line Advance
shall be a LIBOR Loan. No Swing Line Advance shall be requested or made
for less than $100,000 in principal amount. No Revolving Credit Loan may
be converted into a Swing Line Advance.
(c) Upon the satisfaction of the conditions set forth in Section 6, to the
extent applicable, Fleet will make available to the Borrower the amount of
any Swing Line Advance that Fleet determines, in its sole discretion, to
make. If any Swing Line Advance is not repaid when due, upon written
demand by Fleet given to the Agent and each other Lender, each other Lender
shall purchase from Fleet, and Fleet shall sell and assign to each such
Lender, such other Lender's pro rata share (based on its Commitment) of
such unpaid Swing Line Advance as of the date of such advance, by making
available to the Agent, at its head office, in immediately available funds,
an amount equal to the pro rata portion of outstanding principal amount of
such Swing Line Advance to be purchased by such other Lender. The Borrower
hereby agrees to each such sale and assignment. Each such Lender agrees to
make such purchase of its share of the unpaid Swing Line Advance on (i) the
Banking Day on which such demand is made by Fleet, provided that notice of
such demand is given not later than 12:00 noon (Boston time) on such
Banking Day, or (ii) the first Banking Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment,
Fleet represents and warrants to each such other Lender that Fleet is the
legal and beneficial owner of the interest in such Swing Line Advance being
assigned by it, but makes no other representation or warranty and assumes
no responsibility with respect to such Swing Line Advance. If any such
other Lender makes
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available to the Agent such amount on a date after the date such interest
is to be assigned to it, such Lender shall pay to Fleet on demand an amount
equal to the product of (i) the average, computed for the period referred
to in clause (iii) below, of the Federal Funds Rate for each day included
in such period, times (ii) the amount to have been paid by such Lender on
such purchase date, times (iii) a fraction, the numerator of which is the
number of days that elapse from and including the date scheduled for such
purchase to the date on which the amount of such Lender's Commitment
Percentage of such unpaid Swing Line Advance shall become immediately
available to the Agent, and the denominator of which is 365. A statement of
the Agent submitted to such Lender with respect to any amounts owing under
this paragraph shall be prima facie evidence of the amount due and owing to
Fleet by such Lender, absent manifest error. When such Lender shall pay
such amount to the Agent for the account of Fleet, such amount so paid in
respect of principal shall constitute a Revolving Credit Loan which is a
Base Rate Loan made by such Lender on such date for purposes of this
Agreement.
2.6 Letters of Credit.
(a) The Borrower may use the Revolving Credit Commitment for Letters of Credit
to be issued by the Issuing Bank, provided that in each case (a) the
Borrower executes and delivers a letter of credit application and
reimbursement agreement reasonably satisfactory to the Issuing Bank and
complies with any conditions to the issuance of such Letter of Credit
(including payment of any applicable fees); (b) the Issuing Bank has
approved the form of such Letter of Credit; (c) the requested Letter of
Credit is for a purpose permitted by Section 8.1 hereof; (d) such Letter of
Credit bears an expiration date not later than one year from its date of
issuance and not later than the Maturity Date; (e) the conditions set forth
in Section 6.1 shall have been satisfied as of the date of the issuance of
the Letter of Credit; and (f) both before the issuance of the requested
Letter of Credit and after giving effect to the issuance thereof the sum of
(i) all outstanding Revolving Credit Loans, Swing Line Advances and Letter
of Credit Usage shall not exceed the Revolving Credit Commitment; and (ii)
the Letter of Credit Usage shall not exceed $3,000,000.
(b) Effective upon the issuance of each Letter of Credit and without any
further action on the part of the Issuing Bank or the Lenders in respect
thereof, the Issuing Bank hereby grants to each Lender, and each Lender
hereby acquires from the Issuing Bank, a participating interest in such
Letter of Credit to the extent of such Lender's Commitment Percentage
thereof and each Lender severally agrees that it shall be absolutely
liable, without regard to the occurrence of any Default or Event of
Default, to the extent of such Lender's Commitment Percentage thereof, to
reimburse the Issuing Bank on demand for the amount of each draft paid by
the Issuing Bank under each Letter of Credit to the extent that such amount
is not reimbursed by the Borrower. Each Lender's obligation to make
further Loans to the Borrower shall be reduced by such Lender's Percentage
of Letter of Credit Usage.
(c) In order to induce the Issuing Bank to issue, extend and renew each Letter
of Credit, the Borrower hereby agrees to reimburse or pay to the Issuing
Bank, for the account of the Issuing Bank or (as the case may be) the
Lenders, with respect to each Letter of Credit issued, extended or renewed
by the Issuing Bank hereunder, on each date that any draft presented under
any Letter of Credit is honored by the Issuing Bank or the Issuing Bank
otherwise makes payment with respect thereto, (i) the amount paid by the
Issuing Bank under or with respect to
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such Letter of Credit, and (ii) the amount of any reasonable and customary
fees, charges or other costs and expenses whatsoever incurred by the
Issuing Bank or any Lender in connection with any payment made by the
Issuing Bank under, or with respect to, such Letter of Credit.
(d) If any draft shall be presented or other demand for payment shall be made
under any Letter of Credit, the Issuing Bank shall notify the Borrower of
the date and amount of the draft presented or demand for payment and of the
date and time when it expects to pay such draft or honor such demand for
payment. On the date that such draft is paid or other payment is made by
the Issuing Bank, the Issuing Bank shall promptly notify the Lenders of the
amount of any unpaid Reimbursement Obligation. All such unpaid
Reimbursement Obligations with respect to Letters of Credit shall be deemed
to be Base Rate Loans. No later than 12:00 noon (Boston time) on the
Banking Day next following the receipt of such notice, each Lender shall
make available to the Agent, at the Agent's head office, in immediately
available funds, such Lender's Commitment Percentage of such unpaid
Reimbursement Obligation, together with an amount equal to the product of
(i) the average, computed for the period referred to in clause (iii)
below, of the weighted average interest rate paid by the Agent for federal
funds acquired by the Agent during each day included in such period, times
(ii) the amount equal to such Lender's Commitment Percentage of such unpaid
Reimbursement Obligation, times (iii) a fraction, the numerator of which is
the number of days that have elapsed from and including the date the
Issuing Bank paid the draft presented for honor or otherwise made payment
until the date on which such Lender's Commitment Percentage of such unpaid
Reimbursement Obligation shall become immediately available to the Agent,
and the denominator of which is 365. The responsibility of the Issuing
Bank to the Borrower shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection
with such presentment shall be in conformity in all material respects with
such Letter of Credit.
(e) The Borrower's Reimbursement Obligations shall be absolute and
unconditional under any and all circumstances and irrespective of the
occurrence of any Default or Event of Default or any condition precedent
whatsoever or any set off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Bank, the Agent, the
Lenders or any beneficiary of a Letter of Credit. The Borrower further
agrees that the Issuing Bank, the Agent and the Lenders shall not be
responsible for, and the Borrower's Reimbursement Obligations shall not be
affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even if such documents should in fact prove
to be in any or all respects invalid, fraudulent or forged, or any dispute
between or among the Borrower, the beneficiary of any Letter of Credit or
any financing institution or other party to which any Letter of Credit may
be transferred or any claims or defenses whatsoever of the Borrower,
against the beneficiary of any Letter of Credit or any such transferee.
(f) The Issuing Bank, the Agent and the Lenders shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. The Borrower agrees that any action taken or omitted
by the Issuing Bank, the Agent or the Lenders under or in connection with
each Letter of Credit and the related drafts and documents, if done in good
faith, shall be binding upon the Borrower and shall not result in any
liability on the part of the Issuing Bank, the Agent or the Lenders to the
Borrower except, in the case of any such party, any such liability resulted
from the gross negligence or willful misconduct of such party.
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2.7 Maturity of Loans. All Loans shall mature and the total unpaid principal
amount thereunder shall be due and payable on the Maturity Date, or such earlier
date on which the Loans and all other sums owing under this Agreement and the
other Loan Documents shall be due as a result of acceleration, at which time all
amounts advanced under this Section 2 shall be immediately due and payable.
2.8 Termination or Reduction of Commitment.
(a) The Revolving Credit Commitment shall automatically terminate at 5:00 p.m.
Boston time on the Maturity Date. The Borrower, upon notice to the Agent
and each Lender in accordance with Section 4.4 and the repayment in full of
the outstanding principal balance of the Loans (and accrued interest
thereon) and the payment in full of any expenses or other fees owed by the
Borrower to the Agent or any Lender under or pursuant to this Agreement,
may elect to terminate the Revolving Credit Commitment permanently,
whereupon the Commitments of the Lenders shall be terminated entirely. If
any Letters of Credit would remain outstanding after the effective date of
any such termination, in addition to the satisfaction of all other
applicable terms and conditions of this Agreement, the Borrower shall
either deposit with and pledge to the Agent cash in an amount equal to 100%
of the Letter of Credit Usage at the effective date of such termination, or
(ii) arrange for the termination of such Letters of Credit and the return
thereof to the Issuing Bank. No such termination may be reinstated.
(b) The Borrower may also, upon notice to the Agent and each Lender in
accordance with Section 4.4, reduce the Revolving Credit Commitment in
integral multiples of $500,000, whereupon the Commitments of the Lenders
shall be reduced pro rata in accordance with their respective Commitment
Percentages by the aggregate amount specified in such notice. If, as a
result of any such reduction, the aggregate outstanding balance of
Revolving Credit Loans, Swing Line Advances plus the Letter of Credit Usage
would exceed the Revolving Credit Commitment, the Borrower shall, as a
condition precedent to any such reduction, deposit with and pledge to the
Agent cash in an amount equal to 100% of such excess or to make repayments
of outstanding Revolving Credit Loans and/or Swing Line Advances in an
aggregate amount equal to such excess. No such reduction may be
reinstated.
2.9 Several Obligations. The failure of any Lender to make any Loan to be made
by it on the date specified therefor shall not relieve any other Lender of its
obligation to make its Loan on such date, but neither the Agent nor any Lender
shall be responsible for the failure of any other Lender to make a Loan to be
made by such other Lender.
Section 3. [Intentionally Omitted]
Section 4. Interest Rates; Fees; Payments.
4.1 Interest Rates.
(a) The Borrower agrees to pay to the Agent for the account of each Lender
interest on the unpaid principal amount of each Loan for each day from and
including the date such Loan is made to but excluding the date the
principal of such Loan is paid in full at the following rates per annum:
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(i) for Loans which are Base Rate Loans, at a rate per annum equal to the
Alternate Base Rate plus the Applicable Margin; and
(ii) for Loans which are LIBOR Loans, at a rate per annum equal to the
LIBOR Rate plus the Applicable Margin.
(b) Notwithstanding the foregoing, if an Event of Default shall occur, then at
the option of the Agent or the Majority Lenders, the unpaid balance of
Loans and any other amount payable hereunder which is not paid in full when
due shall bear interest at a rate per annum equal to the Post-Default Rate,
until such Event of Default is cured or waived.
(c) Accrued interest on each Base Rate Loan shall be payable monthly in arrears
on the first day of each month, accrued interest on LIBOR Loans shall be
payable on the last day of each Interest Period and, if any such Interest
Period is longer than three months, at intervals of three months after the
first day thereof, and interest on all Loans shall be payable in any event
upon the payment, prepayment or conversion thereof, but only on the
principal so paid or prepaid or converted; provided that interest payable
pursuant to Section 4.1(b) during the pendency of an Event of Default shall
be payable from time to time on demand of the Agent. Promptly after the
determination of any interest rate provided for herein or any change
therein, the Agent shall notify the Borrower and each of the Lenders
thereof.
(d) Notwithstanding the foregoing provisions of this Section 4.1, if at any
time the rate of interest set forth in subparagraph (a) above (the "Stated
Rate") exceeds the maximum non-usurious interest rate permissible for any
Lender to charge a commercial borrower under applicable law (the "Maximum
Rate"), the rate of interest charged on the Loans by such Lender hereunder
shall be limited to the Maximum Rate. As used herein, the term "applicable
law" shall mean the law in effect as of the date hereof provided, however,
in the event there is a change which results in a higher permissible rate
of interest, then the rate of interest provided for herein shall be
governed by such new law as of its effective date. In the event the Stated
Rate that has theretofore been subject to the preceding sentence at any
time is less than the Maximum Rate in respect of the Loans hereunder by any
Lender, the principal amount of the Loans shall bear interest at the
Maximum Rate until the total amount of interest paid to such Lender or
accrued on such Loans by such Lender hereunder equals the amount of
interest which would have been paid to the Lenders or accrued on the Loans
by the Lenders hereunder if the Stated Rate had at all times been in
effect. In the event that upon payment in full of all amounts payable
hereunder, the total amount of interest paid to any Lender or accrued on
such Lender's Loans under the terms of this Agreement is less than the
total amount of interest which would have been paid to such Lender or
accrued on such Lender's Loans if the Stated Rate had at all times been in
effect, then the Borrower shall, to the extent permitted by applicable law,
pay to such Lender an amount equal to the difference between (a) the lesser
of (i) the amount of interest which would have accrued on the Loans if the
Maximum Rate had at all times been in effect or (ii) the amount of interest
which would have accrued on the Loans if the Stated Rate had at all times
been in effect and (b) the amount of interest actually paid to the Lenders
or accrued on the Loans under this Agreement. In the event any Lender ever
receives, collects or applies as interest any sum in excess of the Maximum
Rate, such excess amount shall be applied to the reduction of the principal
balance of such Lender's Loans or to other amounts (other than interest)
payable hereunder, and if no such principal is then outstanding, such
excess or part thereof remaining shall be paid to the Borrower.
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4.2 Commitment Fee. The Borrower shall pay to the Agent for the ratable account
of each Lender quarterly in arrears on the first day of each quarter a
commitment fee on the actual daily balance of the unutilized portion of the
Commitment for the preceding quarter at a rate per annum as set forth on
Schedule 1 attached hereto based on the actual number of days elapsed in the
period based on a year of 360 days.
4.3 Letter of Credit Fees. In connection with each Letter of Credit, the
Borrower shall pay to the Issuing Bank any applicable issuance, amendment,
transfer and similar fees in accordance with the Issuing Bank's customary
charges and in connection with the issuance or extension of any Standby Letter
of Credit shall also pay an annual standby commission equal to the then
effective Applicable Margin for LIBOR Loans of the total face amount of such
Standby Letter of Credit. In addition, the Borrower shall pay to the Issuing
Bank a fronting fee equal to 0.25% of the total face amount of each Letter of
Credit.
4.4 Certain Notices. Notices to the Agent of borrowings, conversions and
prepayments of Loans, of the duration of Interest Periods and of termination or
reduction of Commitments shall be irrevocable and shall be effective only if
received by the Lenders not later than the time specified below on the number of
Banking Days prior to the date of the borrowing, conversion, prepayment,
termination or reduction specified below:
<TABLE>
<CAPTION>
Number of Banking Time of Day
Days Prior Notice (Boston Time)
----------------- -------------
<S> <C> <C>
Borrowings or prepayment
of Base Rate Loans 0 11:00 a.m.
Borrowings of, prepayment
of, conversion into, or
duration of Interest Periods
for LIBOR Loans 2 10:30 a.m.
Termination or reduction
of Commitments 3 12:00 noon
</TABLE>
Each notice of borrowing, conversion or prepayment shall specify the amount, the
Type of the Loan to be borrowed, converted or prepaid, the date of borrowing,
conversion or prepayment (which shall be a Banking Day in the case of the
prepayment of a Base Rate Loan, or a Working Day in the case of the conversion
or prepayment of a LIBOR Loan) and, in the case of LIBOR Loans, the duration of
the Interest Period therefor (subject to the definition of Interest Period).
Each such notice of duration of an Interest Period shall specify the Loans to
which such Interest Period is to relate, provided, however, as long as an Event
of Default has occurred and is continuing, the Borrower's right to request new
LIBOR Loans shall cease. In the event that the Borrower fails to select the
duration of any Interest Period for any LIBOR Loan within the time period and
otherwise as provided in this Section 4.4, such LIBOR Loan will be automatically
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converted into a Base Rate Loan on the last day of the then current Interest
Period for such LIBOR Loan or (if outstanding as Base Rate Loans) will remain
as, or (if not then outstanding) will be made as Base Rate Loans. In the case of
a Swing Line Advance, the notice shall specify the maturity date thereof (which
maturity date shall be a Banking Day no later than fourteen (14) days after the
date such Swing Line Advance is requested to be made and a date prior to the
Maturity Date).
4.5 Non-Receipt of Funds by the Agent. Unless the Agent shall have been
notified by a Lender or the Borrower (the "Payor") prior to the date on which
such Lender is to make payment to the Agent of the proceeds of a Loan to be made
by it hereunder or the Borrower is to make a payment to the Agent for the
account of one or more of the Lenders, as the case may be (such payment being
herein called the "Required Payment"), which notice shall be effective upon
receipt, that the Payor does not intend to make the Required Payment to the
Agent, the Agent may assume that the Required Payment has been made and may, in
reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient on such date and, if the Payor has
not in fact made the Required Payment to the Agent, the recipient of such
payment shall, on demand, pay to the Agent the amount made available to it
together with interest thereon in respect of the period commencing on the date
such amount was so made available by the Agent until the date the Agent recovers
such amount at a rate per annum equal to the Federal Funds Rate for such period.
4.6 Sharing of Payment; Waiver of Enforcement Without Consent, Etc.
(a) The Borrower agrees that, in addition to (and without limitation of) any
right of set-off, banker's lien or counterclaim any Lender may otherwise
have, each Lender shall be entitled, at its option and without regard to
the adequacy of any other Collateral or Subsidiary Collateral held by or
for the benefit of such Lender, to offset balances (whether based on
provisional or final credits or on collected or uncollected funds),
credits, securities or other property of the Borrower or any Subsidiary
held by such Lender, for the account of the Borrower at any of its offices,
in Dollars or in any other currency (collectively, the "Deposited Funds"),
against any principal of or interest on any Loans to the Borrower by any
Lender hereunder, or any other Obligation of the Borrower hereunder, which
is not paid when due, taking into account any applicable grace period,
(regardless of whether such balances are then due to the Borrower), in
which case it shall promptly notify the Borrower, the Agent and the other
Lenders thereof, provided that such Lender's failure to give such notice
shall not affect the validity thereof. The Borrower further grants to the
Agent for the benefit of the Agent and each Lender a lien, security
interest and right of set-off in all such Deposited Funds, it being agreed
that the possession of any such Deposited Funds by any Lender shall be for
the benefit of the Agent and the Lenders, provided, however, that nothing
herein shall restrict the Borrower from using such Deposited Funds unless
and until a Default or Event of Default shall have occurred and be
continuing. The Borrower agrees, to the fullest extent it may effectively
do so under applicable law, that any Person purchasing a participation in
the Loans made, or other obligations held, by another Person, whether or
not acquired pursuant to the foregoing arrangements, may exercise all
rights of set-off, banker's lien, counterclaim or similar rights with
respect to such participation as fully as if such Lender were a direct
holder of Loans or other obligations in the amount of such participation.
ANY AND ALL RIGHTS TO REQUIRE THE AGENT OR A LENDER TO EXERCISE ITS RIGHTS
OR REMEDIES WITH RESPECT TO ANY OTHER
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COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF
WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER OR
ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
(b) The Lenders agree among themselves that no Lender shall, except with the
written consent of the Majority Lenders, exercise any right pursuant to
Section 4.6(a) or exercise, with respect to any Loans or other obligations
hereunder, any other right of set-off, banker's Lien, counterclaim or
similar right, so long as any Lender has any Commitment hereunder or any
amounts due hereunder remain unpaid.
(c) If a Lender shall obtain payment of any principal of or interest on any
Loan made by it under this Agreement, or on any other obligation then due
to such Lender hereunder, through the exercise of any right of set-off,
banker's lien, counterclaim or similar right, or otherwise, it shall
promptly notify the Agent and purchase from the other Lenders
participations in the Loans made, or other obligations held, by the other
Lenders in such amounts, and make such other adjustments from time to time
as shall be equitable to the end that all the Lenders shall share the
benefit of such payment (net of any expenses which may be incurred by such
Lender in obtaining or preserving such benefit) pro rata in accordance with
the unpaid principal and interest on the Loans or other obligations then
due to each of them. To such end, all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or
otherwise) if such payment is rescinded or must otherwise be restored
(including the payment of interest to the extent that the Lender obligated
to return such funds is obligated to return interest).
(d) Each Lender waives all rights to enforce, and shall not attempt to enforce,
any rights hereunder, under the Notes or under any other Loan Document
without the prior written consent of the Majority Lenders. Each Lender
further agrees that all rights under the Security Instruments shall be
exercised only through the Agent under the Security Instruments.
(e) Nothing contained herein shall require any Lender to exercise any right of
set-off, banker's Lien, counterclaim or similar right or shall affect the
right of any Lender to exercise, and retain the benefits of exercising, any
such right with respect to any other indebtedness or obligation of any
Borrower.
(f) This Section 4.6 is for the benefit of the Lenders only and does not
constitute a waiver of any rights against the Borrower or any of its
Subsidiaries or against any property held as security for any obligations
hereunder or under any Loan Document.
4.7 Minimum and Maximum Amounts. Each borrowing, conversion and prepayment of
principal of Revolving Credit Loans shall be in an aggregate principal amount
equal to (a) in the case of LIBOR Loans, $500,000 or a larger multiple of
$100,000, and (b) in the case of Base Rate Loans, $250,000 (or, in the case of
Swing Line Advances, $100,000) or a larger multiple of $50,000 (conversions or
prepayments of Revolving Credit Loans of different Types or, in the case of
LIBOR Loans, having different Interest Periods, at the same time hereunder shall
be deemed separate conversions and prepayments for purposes of the foregoing,
one for each Type or Interest Period); provided that any payment or prepayment
in full of the Loans may be in the aggregate outstanding principal amount
thereof.
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<PAGE>
4.8 Computations. All interest on LIBOR Loans shall be computed on the basis
of a year of 360 days and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable and all
interest on Base Rate Loans shall be computed on the basis of a year of 365 days
(or 366 days in the case of a leap year) and actual days elapsed (including the
first but excluding the last day) occurring in the period for which payable.
4.9 Manner and Place of Payment. All payments under this Agreement shall be
made not later than 1:00 p.m. (Boston Time) on the date when due and shall be
made in lawful money of the United States in immediately available funds at the
Office of the Agent for the account of each Lender or by the Borrower's check
drawn on the depositary account(s) maintained by the Borrower with the Agent
payable to the Agent for the account of each Lender or its order. All payments
shall be made without setoff, counterclaim, withholding or reduction of any kind
whatsoever. The Agent (or any Lenders for whose account any such payment is
made) may (but shall not be obligated to) debit the amount of any such payment
on the date when due, taking into account any applicable grace period, to any
ordinary deposit account of the Borrower with the Agent, or such Lender, as the
case may be, without notice to the Borrower. The Borrower shall, at the time of
making each payment hereunder or under any Note, specify to the Agent the Loans
or other amounts payable by the Borrower hereunder to which such payment is to
be applied (and in the event that they fail to so specify, or if an Event of
Default has occurred and is continuing, the Agent may apply such payment for the
benefit of the Lenders as it may elect in its sole discretion, but subject to
the other terms and conditions of this Agreement, including without limitation,
Section 4.10 hereof). Each payment received by the Agent hereunder or under any
Note for the account of a Lender shall be paid promptly to such Lender, in
immediately available funds, for the account of such Lender's Applicable Lending
Office.
4.10 Pro Rata Treatment. Except to the extent otherwise provided herein: (a)
each borrowing from the Lenders under Section 2.1 hereof shall be made from the
Lenders and the payment of the commitment fee under Section 4.2 hereof shall be
made for the account of the Lenders pro rata according to the Lenders'
Commitment Percentage, (b) each payment by the Borrower of principal of or
interest on Loans of a particular Type shall be made to the Agent for the
account of the Lenders pro rata in accordance with the respective unpaid
principal amounts of such Loans held by the Lenders and (c) each conversion of
Loans of a particular Type shall be made pro rata among the Lenders in
accordance with the respective principal amounts of such Loans held by the
Lenders.
4.11 Payments Due on Days Other than Banking Days. Subject to the definition
of "Interest Period" with respect to LIBOR Loans as set forth in Section 1.1,
whenever any payment to be made hereunder or under the Notes shall be due on a
day which is not a Banking Day, such payment may be made on the next succeeding
Banking Day, and such extension of time shall be included in computing any
interest or fees due.
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4.12 Additional Costs.
(a) The Borrower shall pay to the Agent for the account of each Lender from
time to time such amounts as such Lender may determine to be necessary to
compensate it for any costs incurred by such Lender which such Lender
determines are attributable to its making or maintaining of any LIBOR Loans
hereunder or its obligation to make any of such Loans hereunder, or any
reduction in any amount receivable by such Lender hereunder in respect of
any LIBOR Loan or such obligation (such increases in costs and reductions
in amounts receivable being herein called "Additional Costs"), in each case
resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to such Lender
under this Agreement or the Notes in respect of any LIBOR Loan; or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement, to the extent it is
taken into consideration in determining the LIBOR Rate) relating to
any extensions of credit or other assets of, or any deposits with or
other liabilities of, such Lender (including any LIBOR Loan or any
deposits referred to in the definition of "LIBOR Rate" below).
Each Lender will provide the Borrower notice of any event occurring after the
date of this Agreement which will entitle such Lender to compensation pursuant
to this Section as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation. Each Lender will furnish the
Borrower with a statement, in reasonable detail, setting forth the basis and
amount of each request by such Lender for compensation under this Section.
Within 30 days of the notice by such Lender, the Borrower shall pay the Agent
for the benefit of the affected Lender that portion of such increased costs
incurred or reduction in an amount received which is attributable to making,
funding and maintaining such affected Lender's Loans hereunder. If such sum is
not paid within such 30 day period, it shall bear interest at the Post-Default
Rate until paid in full. The Borrower shall not be required to make any such
payment for such increased costs arising prior to the date which is one hundred
twenty (120) days before the date of such notice (unless and only to the extent
such law, rule, regulation, policy, guideline, directive or interpretation
applies retroactively to a period prior to the date which is one hundred twenty
(120) days before the date of such notice, in which case, the Borrower shall not
be required to make any payment for increased costs resulting from such
retroactive application unless such Lender provides such notice within one
hundred twenty (120) days after such rule, regulation, policy, guideline,
directive or interpretation is published in final form and the Lender reasonably
should have been aware thereof. If any affected Lender shall subsequently
recoup costs for which such Lender has heretofore been compensated by the
Borrower under this Section 4.12, such Lender shall remit to the Borrower the
amount of such recoupment.
(b) Without limiting the effect of the foregoing provisions of this Section, in
the event that, by reason of any Regulatory Change, any Lender either (i)
incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other
liabilities of such Lender which includes deposits by reference to which
the interest rate on LIBOR Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets of such
Lender which includes LIBOR Loans or (ii) becomes subject to restrictions
on the amount of such a category of liabilities or assets which it may
hold, then, if such Lender so elects by notice to the Borrower, the
obligation of such Lender to make LIBOR Loans hereunder shall be suspended
until the date such Regulatory Change ceases to be in effect.
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(i) Determinations and allocations by any Lender for purposes of this
Section of the effect of any Regulatory Change on its costs of
maintaining its obligations to make LIBOR Loans or of making or
maintaining LIBOR Loans or on amounts receivable by it in respect of
LIBOR Loans, and of the additional amounts required to compensate such
Lender in respect of any Additional Costs, shall be conclusive absent
manifest error, provided that such determinations and allocations are
made on a reasonable basis.
4.13 Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, with respect to any LIBOR Loans, the Majority Lenders
determine in good faith (which determination shall be conclusive) that the
relevant rates of interest referred to in the definition of "LIBOR Rate" upon
the basis of which the rates of interest for any LIBOR Loan are to be determined
do not accurately reflect the cost to such Lenders of making or maintaining such
LIBOR Loans for the Interest Period therefor, then the Agent shall promptly
notify the Borrower, and so long as such condition remains in effect, the
Lenders shall be under no obligation to make LIBOR Loans or to convert Base Rate
Loans into LIBOR Loans and the Borrower shall, on the last day(s) of the then
current Interest Period(s) for the outstanding LIBOR Loans, either prepay such
LIBOR Loans or convert such LIBOR Loans into Base Rate Loans.
4.14 Illegality. Notwithstanding any other provision of this Agreement to the
contrary, in the event that it becomes unlawful for any Lender or its LIBOR
Lending Office to (a) honor its obligation to make LIBOR Loans hereunder, or (b)
maintain LIBOR Loans hereunder, then such Lender shall promptly notify the
Borrower thereof (identifying the illegality in question in reasonable detail)
and such Lenders' obligation to make LIBOR Loans hereunder shall be suspended
until such time as such Lender may again make and maintain LIBOR Loans.
4.15 Substitute Base Rate Loans. If the obligation of any Lender to make LIBOR
Loans shall be suspended pursuant to Sections 4.12, 4.13 or 4.14 hereof, all
Loans which would otherwise be made by such Lender as LIBOR Loans shall be made
instead as Base Rate Loans (and, if an event referred to in Section 4.12(b) or
Section 4.14 has occurred and such Lender so requests, by notice to the
Borrower, each LIBOR Loan of such Lender then outstanding shall be automatically
converted into a Base Rate Loan on the date specified by such Lender in such
notice) and, to the extent that LIBOR Loans are so made as (or converted into)
Base Rate Loans, all payments of principal which would otherwise be applied to
such LIBOR Loans shall be applied instead to such Base Rate Loans.
4.16 LIBOR Indemnity. If the Borrower for any reason (including, without
limitation, pursuant to Sections 2.7, 4.14 and 11.2 hereof) makes any payment of
principal with respect to any LIBOR Loan on any day other than the last day of
an Interest Period applicable to such LIBOR Loan, or fails to borrow or continue
or convert to a LIBOR Loan after giving a Notice of Borrowing or Conversion
thereof pursuant to Section 4.4, or fails to prepay a LIBOR Loan after having
given notice thereof, the Borrower shall pay to the Agent for the benefit of the
Lenders any amount required to compensate the Lenders for any additional losses,
costs or expenses which they may reasonably incur as a result of such payment or
failure, including, without limitation, any loss (including loss of anticipated
profits), costs or expense incurred by reason of
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the liquidation or re-employment of deposits or other funds required by the
Lenders to fund or maintain such LIBOR Loan. Without limiting the foregoing, the
Borrower shall pay to the Agent a "yield maintenance fee" in an amount computed
as follows: the current rate for United States Treasury securities (bills on a
discounted basis shall be converted to a bond equivalent) with a maturity date
closest to the remaining balance of the Interest Period for the Loan with
respect to which the prepayment is made, shall be subtracted from the interest
rate applicable (pursuant to Section 4.1(a)(ii)) to each LIBOR Loan in effect at
the time of prepayment. If the result is zero or a negative number, there shall
be no yield maintenance fee. If the result is a positive number, then the
resulting percentage shall be multiplied by the amount of the principal balance
being prepaid. The resulting amount shall be divided by 360 and multiplied by
the number of days remaining in the Interest Period for the Loan with respect to
which the prepayment is made. Said amount shall be reduced to present value
calculated by using the above referenced United States Treasury securities rate
and the number of days remaining in the Interest Period for the Loan with
respect to which the prepayment is made. The resulting amount shall be the yield
maintenance fee due to the Lenders upon the payment of a LIBOR Loan under the
circumstances described in the first sentence of this Section. The Borrower
shall pay such amount upon presentation by the Agent of a statement setting
forth the amount and the Agent's (or the affected Lenders') calculation thereof
pursuant hereto, which statement shall be deemed true and correct absent
manifest error. If the Obligations are declared immediately due and payable
pursuant to Section 11.2, then any amount provided for in this Section shall be
due and payable in the same manner as though the Borrower had made a prepayment
of the LIBOR Loans.
4.17 Capital Adequacy. If any Lender shall determine that the applicability of
any law, rule, regulation or guideline adopted pursuant to or arising out of the
July 1988 report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and Capital
Standards", or the adoption after the date hereof of any other applicable law,
rule, regulation or guideline regarding capital adequacy, or any change in the
foregoing or in the enforcement, interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, or compliance by such Lender or any Person controlling
such Lender (a "Parent") with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority, has or would have the effect of reducing the rate of return on
capital of such Lender or its Parent as a consequence of such Lender's
obligations hereunder to a level below that which such Lender (or its Parent)
could have achieved but for such applicability, adoption, change or compliance
(taking into consideration the policies of such Lender (or its Parent) with
respect to capital adequacy) by an amount reasonably deemed by such Lender to be
material, then such Lender shall provide the Borrower notice thereof. A
statement of such Lender, in reasonable detail, claiming compensation under this
Section and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive absent manifest error; provided that the
determination thereof is made on a reasonable basis. In determining such
amount, such Lender may use any reasonable averaging and attribution methods.
Within 30 days of the notification by such Lender, the Borrower shall pay the
Agent for the benefit of the affected Lender that portion of such increased
costs incurred (including any reduction in the rate of return on capital to an
amount below that which such Lender could have achieved but for such change in
regulation after taking into account the Lenders' policies as to capital
adequacy) or reduction in an amount received which is attributable to making,
funding and maintaining such
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affected Lender's Loans hereunder. If such sum is not paid within such 30 day
period, it shall bear interest at the Post-Default Rate until paid in full. The
Borrower shall not be required to make any such payment for such increased costs
arising prior to the date which is one hundred twenty (120) days before the date
of such notice (unless and only to the extent such law, rule, regulation,
policy, guideline, directive or interpretation applies retroactively to a period
prior to the date which is one hundred twenty (120) days before the date of such
notice, in which case, the Borrower shall not be required to make any payment
for increased costs resulting from such retroactive application unless such
Lender provides such notice within one hundred twenty (120) days after such
rule, regulation, policy, guideline, directive or interpretation is published in
final form and the Lender reasonably should have been aware thereof). If any
affected Lender shall subsequently recoup costs for which such Lender has
heretofore been compensated under this Section 4.17 by the Borrower, such Lender
shall remit to the Borrower the amount of such recoupment.
4.18 Optional Prepayments. The Borrower shall have the right to prepay the
Loans in whole or in part and to convert Loans of one Type into another Type,
without premium or penalty, at any time and from time to time, provided that (i)
at the time of the prepayment in full of all Extensions of Credit, the Borrower
shall pay all interest accrued on the amount prepaid; (ii) the Borrower shall
give the Agent notice of such prepayment as provided in Section 4.4; (iii) LIBOR
Loans may be converted into Base Rate Loans only on the last day of an Interest
Period thereof; and (iv) the Agent for the account of each Lender shall be paid,
at the time of any prepayment of a LIBOR Loan that is being prepaid on other
than the last day of an Interest Period therefor, the amount provided for in
Section 4.16.
4.19 Mandatory Prepayments. In the event the Borrower after the date hereof
closes any public offering of its capital stock or makes a disposition of any of
its assets other than to the extent permitted by under clauses (i) and (ii) of
Section 9.3, the Borrower shall be required to prepay the Loans in an amount
equal to the net proceeds (after costs and expenses associated with such
offering or disposition of assets) received by the Borrower in such offering or
disposition of assets.
Section 5. Security Interests.
(a) In connection with the Prior Credit Agreement, the Borrower granted to the
Agent for the benefit of the Lenders a security interest in, and a lien on,
all right, title and interest of the Borrower in and to substantially all
the assets of the Borrower (excluding Excluded Property) and by entering
into a security agreement in favor of the Agent for the benefit of the
Lenders dated as of December 4, 1998 (the "Security Agreement") in order to
secure payment and performance of the Borrower's Obligations to the Agent
and the Lenders under the Prior Credit Agreement and the Notes and the
other Loan Documents as defined therein.
(b) In connection with the Prior Credit Agreement, the Borrower caused each of
its Subsidiaries to grant to the Agent for the benefit of the Lenders
thereunder a security interest in, and a lien on, all right, title and
interest of each such Subsidiary in and to substantially all the assets of
each such Subsidiary (excluding Excluded Property) and by entering into a
security agreement in favor of the Agent for the benefit of such Lenders
(collectively, the "Subsidiary Security Agreements") in order to secure
payment and performance of the Borrower's Obligations to the Agent and the
Lenders under the Prior Credit Agreement and the Notes and the other Loan
Documents as defined therein. A list of the Subsidiary Security Agreements
that are as of the date hereof in full force and effect is set forth on
Schedule A.
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(c) In connection with the Prior Credit Agreement, the Borrower entered into a
stock pledge agreement in favor of the Agent for the benefit of the Lenders
dated as of December 4, 1998 (the "Stock Pledge Agreement") providing for
the pledge to the Agent for the benefit of the Lenders of all outstanding
capital stock of all present and future Subsidiaries of the Borrower and
delivered to the Agent for the benefit of the Lenders certificates
representing all such shares accompanied by undated stock powers or other
appropriate instruments of transfer duly executed in blank. A list of the
Stock Pledge Agreements that are as of the date hereof in full force and
effect are set forth on Schedule A.
(d) The Borrower agrees that all references in the Security Agreement, the
Subsidiary Security Agreements and the Stock Pledge Agreement, to the Prior
Credit Agreement and the Notes issued in connection therewith shall mean
and be a reference to this Agreement and the Notes issued hereunder and
that the definition of "Secured Obligations" in such Security Instruments
shall include all Obligations as defined herein.
Section 6. Conditions Precedent.
6.1 Conditions to all Loans and Letters of Credit. The Lenders shall not be
obligated to make any of the Loans to the Borrower and the Issuing Bank shall
not be obligated to issue any Letter of Credit hereunder until the following
conditions have been satisfied to the satisfaction of the Agent:
(a) This Agreement the Notes and the Security Instruments. This Agreement, the
borrowings hereunder, the Notes, the Security Instruments and all
transactions contemplated by this Agreement and the Security Instruments
shall have been duly authorized by the Borrower. The Subsidiary Guaranty
and Security Instrument to which a Guarantor is a party and all
transactions contemplated thereby shall have been duly authorized by such
Guarantor. The Borrower shall have duly executed and delivered to the
Agent this Agreement, the Notes and the Security Instruments in form and
substance satisfactory to the Agent and its counsel. The Guarantors shall
have duly executed and delivered to the Agent the Subsidiary Guaranties and
the Subsidiary Security Agreements.
(b) No Default or Event of Default. On the date hereof and on the date of
making each Extension of Credit, no Default or Event of Default shall have
occurred and be continuing.
(c) Correctness of Representations. On the Closing Date and on the date of
each Extension of Credit, all representations and warranties made by the
Borrower in Section 7 below or otherwise in writing in connection herewith
shall be true and correct with the same effect as though such
representations and warranties had been made on and as of today's date,
except that representations and warranties expressly limited to a certain
date shall be true and correct as of that date.
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(d) Opinion of Counsel for the Borrower. The Agent shall have received the
favorable opinion of counsel to the Borrower and the Guarantors addressed
to the Agent and the Lenders, in form and substance reasonably satisfactory
to the Agent and its counsel.
(e) Approvals. On the Closing Date and on the date of each Extension of
Credit, all necessary consents, approvals, licenses, permissions,
registrations or validations of any Governmental Authority or any other
Person required for the execution, delivery, performance or carrying out of
the provisions of this Agreement, the Notes, the Subsidiary Guaranties and
the Security Instruments, or for the validity or enforceability of the
obligations incurred thereunder (other than the filing of financing
statements as required under subparagraph (f) below), shall have been
obtained and shall be in full force and effect and copies thereof certified
by a duly authorized officer of the Borrower to such effect shall have been
delivered to the Agent.
(f) Filing of Financing Statements, etc. On or before the Closing Date,
financing statements or other appropriate documentation relating to the
security interests and rights granted pursuant to the Security Instruments,
executed and delivered by the Borrower to the Agent, shall have been duly
recorded or filed in such manner and in such places as is required by law
(including, pursuant to the UCC) to establish, preserve, protect, and
perfect such security interests and rights; and all taxes, fees and other
charges in connection with the execution, delivery and filing of this
Agreement and such financing statements and other appropriate documentation
shall have been duly paid.
(g) Supporting Documents. On or before the date hereof, there shall have been
delivered to the Agent the following supporting documents:
(i) a long-form legal existence and corporate good standing certificates
with respect to the Borrower and each of the Guarantors dated as of a
recent date issued by the appropriate Secretary of State or other
official;
(ii) certificates dated as of a recent date with respect to the due
qualification of the Borrower and each of the Guarantors to do
business in each jurisdiction where the failure to be so qualified
would have a Material Adverse Effect, issued by the Secretary of
State of each such jurisdiction;
(iii) copies of the corporate charters of the Borrower and each of the
Guarantors, certified by the appropriate Secretary of State or other
officials, as in effect on the date hereof;
(iv) a certificate of the Secretary or Assistant Secretary of the Borrower
certifying as to (a) the By-Laws of the Borrower, as in effect on the
date hereof; (b) the incumbency and signatures of the officers of the
Borrower who have executed any documents in connection with the
transactions contemplated by this Agreement; and (c) the resolutions
of the Board of Directors of the Borrower authorizing the execution,
delivery and performance of this Agreement and the making of the
Loans hereunder, and the execution and delivery of the Notes and the
other Loan Documents;
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(v) a certificate of the Secretary or Assistant Secretary of each
Guarantor certifying as to (a) the By-Laws of the such Guarantor, as
in effect on the date hereof; (b) the incumbency and signatures of the
officers of such Guarantor who have executed any documents in
connection with the transactions contemplated by this Agreement; and
(c) the resolutions of the Boards of Directors of such Guarantor
authorizing the execution, delivery and performance of the Subsidiary
Guaranty and Subsidiary Security Agreement to which it is a party.
(vi) all other information and documents which the Agent or its counsel may
reasonably request in connection with the transactions contemplated by
this Agreement.
(h) Compliance Certificate. The Borrower shall have furnished to the Agent a
Compliance Certificate in the form of attached Exhibit B appropriately
completed and signed by a Responsible Officer of the Borrower, which
certificate shall reflect compliance by the Borrower with the requirements
of this Agreement as of the date thereof.
(i) Litigation. No litigation, arbitration, proceeding or investigation shall
be pending or, to the knowledge of the Borrower, threatened against any
Borrower or any Subsidiary of a Borrower which, in the sole judgment of the
Agent, might have a Material Adverse Effect.
(j) Fees and Expenses. On or before the Closing Date, the Borrower shall have
(i) paid to the Agent for the account of the Lenders all amounts payable
under Section 13.5 hereof identified by the Agent on or before the Closing
Date; and (ii) paid to the Agent all fees due under a certain letter
between the Agent and the Borrower, dated the date hereof.
(k) Legal Matters. All documents and legal matters incident to the
transactions contemplated by this Agreement shall be reasonably
satisfactory to Sullivan & Worcester LLP, special counsel for the Agent.
Section 7. Representations and Warranties.
In order to induce the Agent and the Lenders to enter into this Agreement
and to make the contemplated Extensions of Credit, the Borrower hereby
represents and warrants as follows to the Agent and the Lenders (except to the
extent qualified by supplemental disclosure set forth on Schedule A hereto) and
the following representations and warranties (to the extent so qualified, if
any) shall survive the execution and delivery of this Agreement and the Notes:
7.1 Corporate Status. The Borrower and each Guarantor is a duly organized and
validly existing corporation in good standing under the laws of the state of its
organization and is duly qualified or licensed as a foreign corporation in good
standing in each jurisdiction in which the failure to do so would have a
Material Adverse Effect.
7.2 No Violation. Neither the execution, delivery or performance of this
Agreement or any other Loan Document, nor consummation of the transactions
contemplated therein or thereby will (i) contravene any law, statute, rule or
regulation to which the Borrower or any Guarantor is subject or any judgment,
decree, franchise, order or permit applicable to the Borrower or any Guarantor
where such contravention has or could reasonably be anticipated to have a
Material Adverse Effect, or (ii) conflict or be inconsistent with or will result
in any breach of, or constitute a default under, or result in or require the
creation or imposition of any Lien (other than the liens created by the Security
Instruments) upon any of the property or assets of the Borrower or any Guarantor
pursuant to, any Contractual Obligation of the Borrower or any Guarantor, or
(iii) violate any provision of the corporate charters or by-laws of the Borrower
or any Guarantor.
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7.3 Corporate Power and Authority. The execution, delivery and performance of
this Agreement and the other Loan Documents to which it is a party are within
the corporate powers of the Borrower and each Guarantor and have been duly
authorized by all necessary corporate action.
7.4 Enforceability. This Agreement and each other Loan Document to which it is
a party constitutes valid and binding obligations of the Borrower and each
Guarantor enforceable against the Borrower and each Guarantor in accordance with
its terms, except as be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally and subject to general principles of equity, whether applied in
a court of equity or at law.
7.5 Consents or Approvals. No order, permission, consent, approval, license,
authorization, registration or validation of, or filing with, or exemption by,
any Governmental Authority or any other Person is required to authorize, or is
required in connection with, the execution, delivery and performance of this
Agreement or any other Loan Document by the Borrower or any Guarantor, or the
taking of any action contemplated hereby or thereby, except where the failure to
obtain such authorization could reasonably be anticipated to have a Material
Adverse Effect and except for the filing of UCC-1 financing statements in the
appropriate UCC filing offices listed on the Perfection Certificate (as defined
in the Security Agreement) and for routine filings under federal securities
laws.
7.6 Financial Statements.
(a) The Borrower has furnished the Agent with the consolidated balance sheet of
the Borrower and its Subsidiaries as of the Financial Statement Date, and
the related consolidated statements of operations, stockholders' equity and
cash flows for the year then ended, which have been audited by the
Accountants. Such financial statements, including the related schedules
and notes, fairly present the consolidated financial position of the
Borrower and its Subsidiaries as of the Financial Statement Date, and the
results of their operations and their cash flows for the year then ended in
conformity with GAAP.
(b) During the period from the Financial Statement Date to the Closing Date:
(i) except as permitted pursuant to Section 9.3 or identified in Schedule A
or in the Borrower's Form 10-Q filed with the SEC for the first quarter of
2000, copies of which have previously been delivered to Agent, there has
been no sale, transfer or other disposition by the Borrower or any of its
Subsidiaries of any material part of their business or property and, except
as set forth in Schedule A, no purchase or other acquisition of any
business or property (including any capital stock of any Person) material
in relation to the consolidated financial condition of the Borrower and its
Subsidiaries at the Financial Statement Date; and (ii) neither the Borrower
nor any of its Subsidiaries have made a Restricted Payment, or agreed or
committed to make a Restricted Payment, except as permitted pursuant to
Section 9.7.
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(c) The Borrower has and, after giving effect to the Loans to be made on the
Closing Date, will have, assets (both tangible and intangible), having a
value in excess of the amount required to pay the probable liability on its
then-existing debts (whether matured or unmatured, liquidated or
unliquidated, fixed or contingent); the Borrower has and will have access
to adequate capital for the conduct of its business and the discharge of
its debts incurred in connection therewith as such debts mature; the
Borrower was not insolvent immediately prior to the making of the Loans on
the Closing Date and immediately after giving effect thereto, the Borrower
will not be insolvent.
(d) All the above-referenced financial statements (including the related
schedules and notes) have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
Accountants and disclosed therein and, in the case of interim financial
statements, subject to normal year-end adjustments and the absence of
footnotes and schedules).
7.7 No Material Change. Since the Financial Statement Date there has been no
development or event, or to the best knowledge of the Borrower, any prospective
development or event, which has had or could reasonably be anticipated to have a
Material Adverse Effect.
7.8 Litigation. There are no actions, suits or proceedings pending or
threatened against or affecting the Borrower or any of its Subsidiaries which
(i) are not set forth on the attached Schedule A or (ii) in any one case or in
the aggregate, if determined adversely to the interests of such party, could
reasonably be anticipated to have a Material Adverse Effect.
7.9 Compliance with Other Instruments; Compliance with Law. Neither the
Borrower nor any of its Subsidiaries are (after taking into account applicable
cure periods) in default under any Contractual Obligation (including any
Contractual Obligation relating to any Indebtedness of the Borrower) where such
default could reasonably be anticipated to have a Material Adverse Effect.
Neither the Borrower nor any of its Subsidiaries are in default and/or in
violation of any applicable statute, rule, writ, injunction, decree, order or
regulation of any Governmental Authority having jurisdiction over the Borrower
or its Subsidiaries which default or violation (i) is not set forth on the
attached Schedule A or (ii) could reasonably be anticipated to have a Material
Adverse Effect.
7.10 Subsidiaries. On the Closing Date, the Borrower does not have any
Subsidiaries except as set forth on attached Schedule A.
7.11 Investment Company Status; Limits on Ability to Incur Indebtedness. The
Borrower is not an "investment company" or a company "controlled by" an
investment company within the meaning of the Investment Company Act of 1940, as
amended. The Borrower is not subject to regulation under any Federal or State
statute or regulation which limits its ability to incur Indebtedness.
7.12 Title to Property. The Borrower and each of its Subsidiaries has good and
marketable title to all of its properties and assets, including the properties
and assets reflected in the consolidated balance sheet of the Borrower as of the
Financial Statement Date, except such as have been disposed of since that date
in the ordinary course of business, and none of such
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properties or assets is subject to any Lien except for (a) Permitted Liens, or
(b) a defect in title or other claim other than defects and claims that, in the
aggregate, would have no Material Adverse Effect. The Borrower and each of its
Subsidiaries enjoys peaceful and undisturbed possession under all leases
necessary in any material respect for the operation of their properties and
assets and no material default exists under such leases (after taking into
account applicable cure periods under said leases). All such leases are valid
and subsisting and are in full force and effect.
7.13 ERISA. The Borrower and each member of the Funding Standard Controlled
Group have fulfilled their obligations under the minimum funding standards of
ERISA and the Code with respect to pension plans maintained by the Borrower or
any member of the Funding Standard Controlled Group or to which the Borrower or
any member of the Funding Standard Controlled Group is obligated to contribute,
except where the failure to fulfill such obligations would not result in the
aggregate of an "accumulated funding deficiency", within the meaning of Section
302 of ERISA, in excess of $250,000. The Borrower and each member of the
Controlled Group are in compliance in all material respects with the presently
applicable provisions of ERISA and the Code, and have not incurred any liability
to the PBGC or a Plan under Title IV of ERISA (other than to make contributions
or premium payments in the ordinary course).
7.14 Taxes. All tax returns of the Borrower and its Subsidiaries required to
be filed have been timely filed (after giving effect to any permitted
extensions) except for any tax returns which if not filed on a timely basis
would not have a Material Adverse Effect, all material taxes, fees and other
governmental charges (other than those being contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
accruals have been established and, in the case of ad valorem taxes or
betterment assessments, no proceedings to foreclose any lien with respect
thereto have been commenced and, in all other cases, no notice of lien has been
filed or other action taken to perfect or enforce such lien) shown thereon which
are payable have been paid. The charges and reserves on the books of the
Borrower and its Subsidiaries for all income and other taxes are adequate, and
the Borrower knows of no additional assessment or any basis therefor. The
Federal income tax returns of the Borrower and its Subsidiaries have not been
audited within the last three years, all prior audits have been closed, and
there are no unpaid assessments, penalties or other charges arising from such
prior audits, except as set forth on the attached Schedule A.
7.15 Environmental Matters.
(a) The Borrower and each of its Subsidiaries have obtained all Governmental
Approvals that are required for the operation of their business under any
Environmental Law, except where the failure to so obtain a Governmental
Approval would not have a Material Adverse Effect.
(b) The Borrower and each of its Subsidiaries are in compliance with all terms
and conditions of all required Governmental Approvals and are also in
compliance with all terms and conditions of all applicable Environmental
Laws, noncompliance with which would have a Material Adverse Effect.
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(c) There is no civil, criminal or administrative action, suit, demand, claim,
hearing, notice of violation, investigation, proceeding, notice or demand
letter pending or, to the best knowledge of the Borrower threatened against
the Borrower or any of its Subsidiaries relating in any way to the
Environmental Laws which could have a Material Adverse Effect, and there is
no Lien of any private entity or Governmental Authority against any
Borrower Group Property, which Lien could have a Material Adverse Effect.
(d) There has been no claim, complaint, notice, or request for information
received by the Borrower or any Subsidiary with respect to any site listed
on the National Priority List promulgated pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA") 42 USC
(S) 9601 et seq. or any state list of sites requiring investigation or
cleanup with respect to contamination by Hazardous Substances, which claim,
complaint, notice, or request for information could have a Material Adverse
Effect.
(e) To the best of the Borrower's knowledge, there has been no release or
threat of release of any Hazardous Substance at any Borrower Group Property
which would likely result in liability being imposed upon the Borrower or
any Subsidiary thereof, which liability would have a Material Adverse
Effect.
7.16 Intellectual Property. The Borrower and each of its Subsidiaries owns or
licenses such copyrights, patents, trademarks and similar rights ("Intellectual
Property") as are necessary for the conduct of its respective businesses as now
conducted, without any known conflict with the rights of others which would have
a Material Adverse Effect.
7.17 Level of Borrowing. After giving effect to any Extensions of Credit to be
made as of the date hereof under this Agreement, the sum of all outstanding
Revolving Credit Loans, Swing Line Advances and Letter of Credit Usage do not
exceed the Revolving Credit Commitment.
7.18 Malpractice Insurance. The senior management of the Borrower, and each of
its Subsidiaries, has concluded, after the exercise of reasonable business
judgment, that such entities are not engaged in the practice of dentistry and
are not required to maintain malpractice insurance and that if such senior
management concludes after the Closing Date that such entities are required to
maintain malpractice insurance, the Borrower covenants and agrees to, and will
require each of its Subsidiaries to, obtain and maintain comprehensive
malpractice insurance against bodily injury and death with financially sound and
reputable insurance companies in such amounts and against such risks as are
usually carried by owners of similar businesses and properties in the same
general areas in which the Borrower and its Subsidiaries operate.
7.19 Management Services Agreements. The Borrower and its Subsidiaries have
entered into management services agreements (the "Management Services
Agreement") substantially in the form previously delivered to the Agent (with
certain variations to the fee structure and the type of personnel employed by
the Subsidiaries) with the Persons set forth on attached Schedule A. Subject to
any restrictions under applicable law, all such Management Services Agreements
are freely assignable to third parties and collaterally assignable to the Agent
without the consent of any party to such Management Services Agreements, except
as set forth on Schedule A.
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7.20 Disclosure. None of the representations or warranties made by the
Borrower in this Agreement, or in any other document furnished to the Agent or
the Lenders by or on behalf of the Borrower in connection herewith contains (or
will contain on the Closing Date) any untrue statement of a material fact or
omits (or will omit on the Closing Date) to state any material fact necessary to
make the statements herein or therein, in light of the circumstances under which
they are made, not misleading. There is no fact known to the Borrower on the
date of this Agreement which has any reasonable likelihood of having a Material
Adverse Effect which has not been set forth in or referred to in this Agreement.
Section 8. Affirmative Covenants.
The Borrower covenants and agrees that for so long as this Agreement is in
effect and until the Notes, together with all interest thereon and all other
Obligations of the Borrower and the Guarantors to the Lenders are paid or
satisfied in full, unless the Majority Lenders shall otherwise consent in
writing:
8.1 Use of Proceeds. The Borrower shall use the proceeds of Revolving Credit
Loans for the working capital purposes of the Borrower and its Subsidiaries and
for Permitted Acquisitions, including for payments under Letters of Credit and
for the costs and expenses of the transactions contemplated hereby. Without
limiting the foregoing, no part of such proceeds will be used for the purpose of
purchasing or carrying any "margin security" as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System.
8.2 Conduct of Business; Maintenance of Existence. The Borrower will, and will
cause of each of its Subsidiaries to, continue to engage in the business in
which they are engaged and maintain its existence and comply with all applicable
statutes, rules and regulations and remain duly qualified as a foreign
corporation, licensed and in good standing in each jurisdiction where such
qualification or licensing is required by the nature of its business, the
character and location of its property, business, or the ownership or leasing of
its property, except where such noncompliance or failure to so qualify would not
have a Material Adverse Effect, and the Borrower will maintain its properties in
good operating condition, and continue to conduct its business as presently
conducted.
8.3 Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply in all material respects with all applicable laws,
ordinances, rules, regulations and requirements of Governmental Authorities.
8.4 Insurance.
(a) The Borrower will, and will cause each of its Subsidiaries to, maintain
insurance with financially sound and reputable insurance companies in such
amounts and with such deductibles and against such risks as is usually
carried by owners of similar businesses and properties in the same general
areas in which the Borrower and its Subsidiaries operate, provided that in
any event the Borrower and its Subsidiaries shall maintain or cause to be
maintained (i) insurance against casualty, loss or damage covering all
property and improvements of the Borrower and its Subsidiaries in amounts
and in respect of perils usually carried by owners of similar businesses
and properties in the same general areas in which Borrower and its
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Subsidiaries operate; (ii) comprehensive general liability insurance
against claims for bodily injury, death or property damage; and (iii)
workers' compensation insurance to the extent required by applicable law.
Such policies may be blanket policies covering the Borrower and all its
Subsidiaries. In the case of policies referenced in clauses (i) and (ii)
above, all such insurance shall (x) name the Borrower and the Agent, for
the benefit of the Lenders, as loss payees for losses exceeding $500,000
and additional insureds as their interests may appear; (y) provide that no
termination, cancellation or material reduction in the amount or material
modification to the extent of coverage shall be effective until at least 30
days after receipt by the Agent of notice thereof; and (z) be reasonably
satisfactory in all other respects to the Agent. Notwithstanding the
foregoing, the Borrower may upon a determination to such effect by its
Board of Directors and notice to the Agent, self insure, in whole or in
part, for risks and claims of the type described in clauses (i) and (ii) of
the first sentence of this Section 8.4 to the extent that self insurance is
normal and customary for similarly situated businesses.
(b) The Borrower will not enter into any management service agreement or
similar agreement with an affiliated dentist or professional corporation
unless such dentist or professional corporation agrees to maintain
comprehensive malpractice insurance against claims for bodily injury and
death with financially sound and reputable insurance companies in such
amounts and against such risks as is usually carried by dentists in the
same general areas in which such dentists operate.
(c) As long as no Default or Event of Default shall have occurred and be
continuing, the Agent shall return to the Borrower any insurance proceeds
it receives in payment of a claim filed by the Borrower or any of its
Subsidiaries.
8.5 Financial Statements, Etc. The Borrower will furnish to each of the
Lenders:
(a) within forty-five (45) days after the end of each quarter of the Borrower
(other than the fourth quarter), the unaudited consolidated balance sheet
as of the end of such period and the related consolidated statements of
operations and cash flows of the Borrower and its Subsidiaries as of and
for the three-month period and the year-to-date period ended on the last
day of such quarter, accompanied by a certificate of a Responsible Officer
of the Borrower to the effect that such financial statements fairly present
the consolidated financial condition of the Borrower and its Subsidiaries
as of the end of such quarter, and the consolidated results of their
operations for such quarter, in each case in accordance with GAAP (except
for the absence of footnotes) consistently applied (subject to normal year-
end audit adjustments);
(b) within forty-five (45) days after the end of the second financial quarter
of the Borrower, the unaudited consolidating balance sheet (which may be
grouped by geographic region) as of the end of such period and the related
unaudited consolidating statement of operations (which may be grouped by
geographic region) for the six-month period ended on the last day of such
quarter, accompanied by a certificate of a Responsible Officer of the
Borrower to the effect that such financial statements fairly present the
consolidated financial condition of the Borrower and its Subsidiaries as of
the end of such period, and the consolidated results of their operations
for such period, in each case in accordance with GAAP (except for the
absence of footnotes) consistently applied (subject to normal year-end
audit adjustments);
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(c) within one hundred twenty (120) days after the last day of each year of the
Borrower, the audited consolidated balance sheet and income statement and
statement of cash flows of the Borrower and its Subsidiaries as of and for
the year then ended, audited by the Accountants without any material
qualifications together with the unaudited consolidating balance sheet and
statement of operations of the Borrower and its Subsidiaries as of and for
the year then ended, together with a certificate (which may be included as
part of a Compliance Certificate) of a Responsible Officer of the Borrower
to the effect that such financial statements fairly present the
consolidated financial condition of the Borrower and its Subsidiaries as of
the end of such year and the consolidated results of their operations for
such year, in each case in accordance with GAAP.
(d) at the time of the delivery of the quarterly, six-month and yearly
financial statements required by Sections 8.5(a), (b) and (c) above, a
Compliance Certificate signed by a Responsible Officer of the Borrower in
the form attached to this Agreement as Exhibit B, appropriately completed;
(e) copies of any management letter provided by the Accountants and addressed
to the Board of Directors of the Borrower or to the Audit Committee of the
Board of Directors of the Borrower;
(f) promptly upon becoming aware of any litigation or other proceeding against
the Borrower or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect, notice thereof;
(g) promptly following the request of the Majority Lenders, such further
information concerning the business, affairs and financial condition or
operations of the Borrower and its Subsidiaries as the Agent may reasonably
request;
(h) promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports, proxy statements
and other materials; and
(i) promptly upon the filing thereof by the Borrower with the SEC (and in any
event within ten (10) days of such filing), copies of any registration
statements (on SEC Form S-1, S-3 or any other form) and reports on Forms
10-K, 10-Q and 8-K (or their equivalents if such forms no longer exist).
8.6 Notice of Default. As soon as practicable, and in any event, within three
(3) Banking Days of becoming aware of the existence of any condition or event
which constitutes a Default, the Borrower will provide the Agent and each Lender
with written notice specifying the nature and period of existence thereof and
what action the Borrower is taking or proposes to take with respect thereto.
8.7 Environmental Matters.
(a) The Borrower and each of its Subsidiaries shall comply with all terms and
conditions of all applicable Governmental Approvals and all applicable
Environmental Laws, except where failure to comply would not have a
Material Adverse Effect.
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(b) The Borrower shall promptly notify the Agent (and the Agent shall promptly
thereafter notify the Lenders) should the Borrower become aware of:
(i) any spill, release, or threat of release of any Hazardous Substance
at or from any Borrower Group Property or by any Person for whose
conduct the Borrower or any Subsidiary thereof are responsible, to
the extent the Borrower is required by Environmental Laws to report
such to any Governmental Authority;
(ii) any action or notice with respect to a civil, criminal or
administrative action, suit, demand, claim, hearing, notice of
violation, investigation, proceeding, notice or demand letter pending
or threatened against the Borrower or any Subsidiary thereof relating
in any way to the Environmental Laws, or any Lien of any Governmental
Authority or any other Person against any Borrower Group Property
relating in any way to the Environmental Laws;
(iii) any claim made or threatened by any Person against the Borrower or
any of its Subsidiaries or any property of the Borrower or any of its
Subsidiaries thereof relating to damage, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous Substance
pertaining to such property or the business or operations of the
Borrower or such Subsidiary; and
(iv) any occurrence or condition on any real property adjoining any
Borrower Group Property known to the officers or supervisory
personnel of the Borrower or any of its Subsidiaries or other
employees having responsibility for the compliance by the Borrower or
any Subsidiary thereof with Environmental Laws, without any
independent investigation, which does cause, or could cause, such
Borrower Group Property, or any part thereof, to contain Hazardous
Substances in violation of any Environmental Laws, or which does
cause, or could cause, such Borrower Group Property to be subject to
any restrictions on the ownership, occupancy, transferability or use
thereof by the Borrower or any of its Subsidiaries.
(c) The Borrower will, and will cause each of its Subsidiaries to, at their own
cost and expense, and within such period as may be required by applicable
law or regulation, initiate all remedial actions and thereafter diligently
prosecute such action as shall be required by law for the cleanup of such
Borrower Group Property, including all removal, containment and remedial
actions in accordance with all applicable Environmental Laws (and in all
events in a manner reasonably satisfactory to the Majority Lenders) and
shall further pay or cause to be paid, at no expense to the Agent or the
Lenders, all cleanup, administrative, and enforcement costs of applicable
Government Authorities which may be asserted against such Borrower Group
Property.
8.8 Taxes and Other Liens. The Borrower will, and will cause each of its
Subsidiaries to, pay when due all taxes, assessments, governmental charges or
levies, or claims for labor, supplies, rent and other obligations made against
it which, if unpaid, might become a Lien against the Borrower or such Subsidiary
or on its property, except liabilities being contested in good faith and by
proper proceedings, as to which adequate accruals are maintained on the books of
the Borrower or its Subsidiaries, in accordance with GAAP.
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8.9 ERISA Information. If and when the Borrower or any member of the
Controlled Group (a) gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA) with respect to any
Plan which might constitute grounds for a termination of such Plan under Title
IV of ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, (b) receives notice of
complete or partial withdrawal liability under Title IV of ERISA or (c) receives
notice from the PBGC under Title IV of ERISA of an intent to terminate or
appoint a trustee to administer the Plan, the Borrower shall in each such
instance promptly furnish to the Lenders a copy of any such notice.
8.10 Inspection. The Borrower will permit a representative of the Agent
(including any field examiner or auditor retained by the Agent) to inspect and
make copies of the Borrower's books and records, and to discuss their affairs,
finances and accounts with their officers and accountants, at such reasonable
times and places and as often as the Agent may reasonably request.
8.11 Certain Obligations Respecting Subsidiaries.
(a) The Borrower will, and will cause each of its Subsidiaries to, take such
action from time to time as shall be necessary to ensure that the Borrower
at all times owns (subject only to the Lien of the Security Instruments)
all of the issued and outstanding shares of each class of stock of each of
its Subsidiaries. Without limiting the generality of the foregoing, the
Borrower shall not, and shall not permit any of its Subsidiaries to, sell,
transfer or otherwise dispose of any shares of stock in any Subsidiary
owned by it, or permit any of its Subsidiaries to issue any shares of stock
of any class whatsoever to any Person other than the Borrower. In the
event that any such additional shares of stock shall be issued by any
Subsidiary of the Borrower, the Borrower agrees forthwith to deliver to the
Agent pursuant to the Security Instruments the certificates evidencing such
shares of stock, accompanied by undated stock powers executed in blank and
shall take such other action as the Agent shall request to perfect the
security interest created therein pursuant to the Security Instruments.
(b) Promptly (but in any event within thirty (30) days) following the creation
of any Subsidiary (other than a shell acquisition subsidiary with little or
no assets) of the Borrower following the Closing Date, or the acquisition
of any Person by a Borrower or any Subsidiary thereof pursuant to which
such Person becomes a direct or indirect Subsidiary of the Borrower, the
Borrower (i) shall notify the Agent in writing of the creation or
acquisition of such Subsidiary (and the Agent shall promptly thereafter
notify the Lenders) and (ii) shall cause such Subsidiary to become a
guarantor of the performance of the Obligations and to execute and deliver
a Subsidiary Guaranty and a Subsidiary Security Agreement and such other
documents, in form and substance satisfactory to the Agent, as the Agent
shall reasonably require in order to confirm the authorization and
enforceability of such guaranty.
(c) Promptly (but in any event within thirty (30) days) following the creation
of any Subsidiary (other than a shell acquisition subsidiary with little or
no assets) of the Borrower following the Closing Date, or the acquisition
of any Person by a Borrower or any Subsidiary thereof pursuant to which
such Person becomes a direct or indirect Subsidiary of the Borrower, the
Borrower shall (i) cause such Subsidiary to grant to the Agent for the
benefit of the Lenders a
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security interest in, and a lien on, all right, title and interest of such
Subsidiary in and to substantially all the assets of such Subsidiary
(except for Excluded Property) and to enter into a Subsidiary Security
Agreement in favor of the Agent for the benefit of the Lenders and such
other documents, in form and substance satisfactory to the Agent, as the
Agent shall reasonably require in order to confirm and perfect the
authorization and enforceability of such security interest, and (ii)
forthwith deliver to the Lenders pursuant to the Security Instruments the
certificates evidencing all of the issued and outstanding shares of stock
of such Subsidiary, accompanied by undated stock powers executed in blank
and take such other action as the Agent shall request to perfect the
security interest created therein pursuant to the Security Instruments. The
Borrower shall, and shall cause the appropriate Subsidiaries of the
Borrower to, promptly (x) execute and deliver to the Agent such number of
copies as the Agent may specify of documents creating such Liens, (y) do
all other things which may be necessary or which the Agent may reasonably
request in order to confer upon and confirm to the Agent the benefits of
such security, and (z) deliver such certificates, evidences of corporate
action or other documents as the Agent may reasonably request, all in form
and substance reasonably satisfactory to the Lenders, relating to the
satisfaction of the Borrower's obligations under this Section.
8.12 Further Assurances. The Borrower will, and will cause each of its
Subsidiaries to, execute and deliver to the Agent or any Lender any writings and
do all things necessary, effectual or reasonably requested by the Agent to carry
into effect the provisions and intent of this Agreement or any other Loan
Document.
Section 9. Negative Covenants.
The Borrower covenants and agrees that for so long as this Agreement is in
effect and until the Notes, together with all interest thereon and all other
Obligations of the Borrower and the Guarantors to the Lenders are paid or
satisfied in full, without the prior written consent of the Majority Lenders:
9.1 Transactions with Affiliates. Except as permitted by Section 9.8 hereof or
as set forth on Schedule A, the Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly, pay any funds to or for the account
of, make any Investment in, lease, sell, transfer or otherwise dispose of any
assets, tangible or intangible, or engage in any transaction in connection with
any joint enterprise or other joint arrangement with, any Affiliate of the
Borrower, unless such transaction is not prohibited by this Agreement, is for
reasonable business or tax purposes, is in the ordinary course of the Borrower's
or such Subsidiary's business, and is upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary as those that could be obtained in
a comparable arm's length transaction with a Person that is not an Affiliate.
9.2 Consolidation, Merger or Acquisition.
(a) Neither the Borrower nor any of its Subsidiaries shall merge or consolidate
with or into any other Person, or make any acquisition of the business or
assets of any other Person except: (i) any Subsidiary of the Borrower
which is a Guarantor may merge into a Borrower or any wholly-owned
Subsidiary of a Borrower which is a Guarantor; (ii) Investments to the
extent permitted by Section 9.8 hereof; and (iii) Permitted Acquisitions.
For purposes hereof a "Permitted Acquisition" is an acquisition which
satisfies the following requirements: (A) if it
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involves an asset purchase, stock purchase or a merger or consolidation,
upon the consummation of which the surviving or acquired party shall be the
Borrower or a Subsidiary of the Borrower which is a Guarantor; (B) at the
time of such acquisition and after giving effect thereto on a pro forma
basis no Event of Default shall have occurred and be continuing; (C) is not
hostile or contested and (D) the conditions set forth in Section 9.2(b)
hereof shall have been satisfied with respect to the proposed acquisition.
For purposes of this Section 9.2, the term "acquisition" shall include any
transaction in which the Borrower or any Subsidiary of the Borrower enters
into a Management Services Agreement with any Person or any similar
agreement or affiliation.
(b) In addition to the requirements set forth in Section 9.2(a), the following
additional conditions must be satisfied with respect to each Permitted
Acquisition:
(i) Each company, business or Person to be acquired shall be engaged in
the same or a related line of business to the then current businesses
conducted by the Borrower and its Subsidiaries, shall be organized in
and conducts its business operations primarily in the United States
and shall have EBITDA with adjustments for certain one-time saving
reasonably acceptable to the Agent for the twelve months immediately
preceding the proposed acquisition date greater than $1.00;
(ii) the combination of cash consideration, any assumed Indebtedness and
seller notes in connection with any single acquisition or series of
acquisitions shall not exceed Ten Million Dollars ($10,000,000);
(iii) All necessary consents, approvals, licenses, permissions,
registrations or validations of any Governmental Authority or any
other Person required for the consummation of the proposed
acquisition shall have been obtained and shall be in full force and
effect;
(iv) With respect to any individual proposed acquisition involving an
aggregate acquisition price in excess of Five Million Dollars
($5,000,000) (including assumption of Indebtedness and seller notes),
such acquisition shall be subject to the review (but not the
approval) of the Majority Lenders which review shall be completed
within five (5) Banking Days after the Agent and each of the Lenders
shall have received copies of the following: (A) a pro forma
Compliance Certificate to the Agent which shall demonstrate that on a
pro forma basis and after giving effect to the proposed acquisition
the Borrower will be in compliance with the financial covenants set
forth in Section 10. hereof; (B) the draft acquisition agreement for
such proposed acquisition; (C) the financial statements of the target
entity (audited or reviewed to the extent available); (D) financial
projections for the target entity (if available); and (E) due
diligence summaries (if available) provided, however, that the
Borrower shall deliver to the Agent and each of the Lenders such
additional information or documents as the Agent shall reasonably
request, provided that any such additional request shall not extend
or delay the running of the aforementioned five (5) Banking Day
period;
(v) Each new Subsidiary of the Borrower formed to make such acquisition
and each Person to be acquired which becomes a Subsidiary of the
Borrower shall agree to become a guarantor of the Obligations and
shall have executed such instruments in connection therewith as the
Agent and its counsel shall reasonably request, including without
limitation a Subsidiary Guaranty and a Subsidiary Security Agreement;
and
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(vi) Any Management Service Agreement entered into by the Borrower or any
of its Subsidiaries in connection with the acquisition be
collaterally assignable to the Agent without the consent of any party
to such Management Services Agreement subject to any restrictions
under applicable law.
(c) In the event a proposed acquisition meets the requirements for a Permitted
Acquisition except for the requirements set forth in Section 9.2(b)(ii),
the Borrower may request the consent thereto of the Agent and the Majority
Lenders in the exercise of their sole discretion, which consent shall be
granted or denied as soon as reasonably possible (but in no event later
than two weeks after the date on which the Agent and each of the Lenders
shall have received copies of the items listed in Section 9.2(b)(iv)).
9.3 Disposition of Assets. The Borrower shall not convey, sell, lease,
transfer or otherwise dispose of any of their property, business or assets
(including, without limitation, accounts receivable and leasehold assets),
whether now owned or hereafter acquired, except for (i) equipment or other
assets sold, leased, assigned or otherwise disposed of in the ordinary course of
business; (ii) the sale of inventory in the ordinary course of business and
(iii) other assets (excluding accounts receivable which may not be disposed of),
provided that the aggregate book value of all assets disposed of pursuant to
this clause (iii) in any fiscal year shall not exceed five percent (5%) of the
consolidated total assets, determined on a pro forma basis for completed
Permitted Acquisitions, of the Borrower as of the end of any such year.
9.4 Indebtedness. Neither the Borrower nor any of its Subsidiaries shall
create, incur, assume or suffer to exist any Indebtedness, except:
(a) the Obligations;
(b) existing Indebtedness, including Subordinated Debt, if any, listed on
Schedule A hereto;
(c) Capital Lease Obligations in an aggregate amount not to exceed $250,000 at
any one time outstanding; provided that after giving effect to the
incurrence of any such Capital Lease Obligations, no Default or Event of
Default shall have occurred and be continuing;
(d) Subordinated Debt incurred by the Borrower after the date hereof; provided
that, after giving effect to the incurrence of such Subordinated Debt, no
Default or Event of Default shall have occurred and be continuing;
(e) purchase money Indebtedness for the purchase price of equipment and capital
assets incurred in the ordinary course of business, provided that such
Indebtedness does not exceed $250,000 in principal amount in the aggregate
at any time outstanding;
(f) other Indebtedness that does not exceed an amount equal to 1.5% of Trailing
Twelve Month Revenue (not including any other Indebtedness permitted by
this Section 9.4); and
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(g) Indebtedness owing by the Borrower to one of the Guarantors or to the
Borrower from one of the Guarantors.
9.5 Guarantees. Neither the Borrower or any of its Subsidiaries shall create,
incur or suffer to exist any obligations in respect of Guarantees except for:
(a) the Subsidiary Guaranties;
(b) existing Guarantees, if any, listed on Schedule A hereto;
(c) Guarantees entered into after the date hereof in connection with Capital
Lease Obligations and Indebtedness permitted under Section 9.4.
(d) Guarantees entered into by Borrower whereby it guarantees the performance
of any of its Subsidiaries under leases of office space or dental practice
space.
9.6 Liens. Neither the Borrower nor any of its Subsidiaries shall create,
incur, assume or suffer to exist any Lien on any of its properties or assets,
except the following (collectively, "Permitted Liens"):
(a) Liens for taxes, fees, assessments and other governmental charges not
delinquent or being contested in good faith and by proper proceedings, as
to which adequate accruals are maintained on the books of the Borrower in
accordance with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, landlord's or similar
liens imposed by law incurred in the ordinary course of business in respect
of obligations not overdue, or being contested in good faith and by proper
proceedings and as to which adequate accruals with respect thereto are
maintained on the books of the Borrower in accordance with GAAP;
(c) pledges or deposits in connection with workers' compensation, unemployment
insurance and other types of social security legislation;
(d) security deposits made to secure the performance of leases, licenses and
statutory obligations incurred in the ordinary course of business;
(e) Liens in favor of the Agent for the benefit of the Lenders;
(f) existing Liens, if any, listed on Schedule A hereto; provided that no such
Lien is spread to cover any additional property after the date hereof, and
that the principal amount of the Indebtedness secured thereby is not
increased; and
(g) Liens securing (i) Indebtedness for the purchase price of property or the
refinancing thereof (provided such refinancing does not increase the amount
of such Indebtedness) to the extent permitted by Section 9.4(e) or (ii)
Indebtedness permitted by Sections 9.4(c) or 9.4(f), provided that in each
such case (x) each such Lien is given solely to secure the purchase price
of such property (or the refinancing thereof), does not extend to any other
property and is given at the time of acquisition of such property, and (y)
the Indebtedness secured thereby does not exceed the lesser of the cost of
such property or its fair market value at the time of acquisition.
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9.7 Restricted Payments. Neither the Borrower nor any of its Subsidiaries
shall declare or make any Restricted Payment except that, (i) the Subsidiaries
may declare and make cash dividends to the Borrower, and (ii) as long as no
Event of Default has occurred and is continuing or could reasonably be expected
to arise therefrom, the Borrower may continue and complete the purchase or
redemption of the shares of its capital stock up to a maximum expenditure of
$5,000,000 as previously approved by the Agent.
9.8 Investments. Subject to the provisions of Section 9.2, neither the
Borrower nor any of its Subsidiaries shall make, maintain or acquire any
Investment in any Person other than:
(a) marketable obligations issued or guaranteed by the United States of America
having a maturity of one year or less from the date of purchase;
(b) certificates of deposit, eurodollar time deposits, commercial paper or any
other obligations of any Lender or of any other bank or savings and loan
with a minimum capital surplus of $100,000,000, with a maturity of less
than one year from the date of such Investment;
(c) commercial paper with maturities of not more than 90 days having the
highest rating then given by Moody's Investors Services, Inc. or Standard &
Poor's Corporation;
(d) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in subparagraph (a) above
entered into with any bank with a minimum capital surplus of $100,000,000;
(e) shares in money market mutual funds substantially all the assets of which
are comprised of securities and other obligations of the types described in
subparagraphs (a) through (d) above;
(f) depository accounts at any Lender;
(g) stock or obligations issued to the Borrower or any Subsidiary thereof in
settlement of claims against others by reason of an event of bankruptcy or
a composition or the readjustment of debt or a reorganization of any debtor
of the Borrower or such Subsidiary;
(h) currently existing Investments set forth on Schedule A;
(i) Investments by the Borrower in its Subsidiaries; and
(j) Investments in stock of publicly traded companies provided that the initial
aggregate amount of cash so invested shall not exceed $50,000 in the
aggregate.
9.9 Sale and Leaseback. Neither the Borrower nor any of its Subsidiaries shall
enter into any arrangement (other than the potential sale and leaseback of the
Borrower's Brookpark facility in which the proceeds from the sale of the
Brookpark facility are used to repay the mortgage Indebtedness associated with
such facility), directly or indirectly, whereby it shall sell
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or transfer any property owned by them in order to lease such property or lease
other property that the Borrower or any such Subsidiary intends to use for
substantially the same purpose as the property being sold or transferred.
9.10 Prepayments of Indebtedness. The Borrower shall not, and shall not permit
any of its Subsidiaries to, purchase, redeem, retire or otherwise acquire for
value, deposit any monies with any Person with respect to, or make any voluntary
payment or prepayment of the principal of or interest on, or any other amount
owing in respect of, any Indebtedness for borrowed money or in respect of any
Capital Lease Obligations; provided that the Borrower may make regularly
scheduled principal and interest payments in respect of any such Indebtedness
for borrowed money and regularly scheduled lease payments in respect of any such
Capital Lease Obligations in cash, and provided further that (i) the Borrower
may make prepayments of principal in respect of any Indebtedness for borrowed
money (other than with respect to outstanding seller notes) to the extent that
the aggregate amount of such prepayments does not exceed $250,000 in the
aggregate and (ii) the Borrower may prepay any Indebtedness associated with the
mortgage with respect to the Borrower's Brookpark facility and provided further
that in each case immediately after and giving effect to any such payment or
prepayment no Default or Event of Default has occurred and is continuing or
could reasonably be expected to arise therefrom.
9.11 ERISA. The Borrower will not permit any Plan maintained by the Borrower
or by any member of the Controlled Group to: (a) engage in any "prohibited
transaction" (ERISA (S)2003(c)); (b) fail to report to the Agent a "reportable
event" (ERISA (S)4043) within 30 days after its occurrence or as to any
reportable event as to which the 30-day notice period requirement of Section
4043(b) of Title IV of ERISA has been waived by the PBGC, within 30 days of such
time as the Borrower is requested to notify the PBGC of such reportable event;
(c) incur any "accumulated funding deficiency" (ERISA (S)302); (d) terminate its
existence at any time in a manner which could result in the imposition of a Lien
on the property of the Borrower or any Subsidiary thereof; or (e) fail to report
to the Agent any "complete withdrawal" or "partial withdrawal" by the Borrower
or an affiliate from a "multiemployer plan" (ERISA (S)(S)4203, 4205, and 4001,
respectively). The quoted terms are defined in the respective sections of ERISA
cited above.
9.12 Fiscal Year. The Borrower and its Subsidiaries shall not change their
fiscal year without giving the Agent notice in writing at least forty-five (45)
days prior to the effective date of such change and negotiating and reaching
agreement with the Majority Lenders as to any changes to the financial covenants
set forth in Section 10 as may be occasioned thereby in the reasonable judgment
of the Majority Lenders.
Section 10. Financial Covenants.
The Borrower covenants and agrees that so long as this Agreement is in
effect and until the Notes, together with all interest thereon and all other
Obligations of the Borrower to the Lenders are paid or satisfied in full:
10.1 Debt Coverage. The Borrower will not permit the ratio of Total Debt to
Adjusted EBITDA, as determined at the end of each fiscal quarter for the four
quarters then ended to
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exceed (a) 3.0 to 1.0 through June 30, 2003, and (b) 2.75 to 1.0 commencing with
the fiscal quarter ending September 30, 2003 and each fiscal quarter thereafter.
10.2 Fixed Charges Coverage. The Borrower will not permit the ratio of
Adjusted EBITDA plus Rental Payments to Fixed Charges to be less than 1.25 to
1:00 as determined at the end of each fiscal quarter for the four quarters then
ended.
10.3 Minimum Net Worth. The Borrower shall at all times maintain Net Worth at
the end of any fiscal quarter in an amount of not less than (i) ninety percent
(90%) of the Net Worth of the Borrower at March 31, 2000 plus (ii) fifty percent
(50%) of cumulative consolidated Net Income for the period (taken as a single
period) from March 31, 2000 through the end of such quarter, provided, that for
purposes of this clause (ii) only positive consolidated Net Income shall be
included and any net losses shall be disregarded, plus (iv) one hundred percent
(100%) of the net proceeds of any public offering by the Borrower of shares of
its capital stock., less (v) the amount of any permitted stock repurchases as
set forth in Section 9.7 hereof.
10.4 Capital Expenditures. The Borrower and its Subsidiaries will not make
Capital Expenditures in excess of Ten Million ($10,000,000) in any fiscal year.
Section 11. Events of Default.
11.1 Events of Default. The occurrence of any of the following events shall be
an "Event of Default" hereunder:
(a) The Borrower shall default (i) in the due and punctual payment of principal
of any Loan; or (ii) in the payment of interest on any Loan or in the
payment of any other amount due under any Loan Document and such default
shall continue for more than five (5) Business Days after such payment was
due; or
(b) Any representation, warranty or statement made herein or any other Loan
Document, or in any certificate or statement furnished pursuant to or in
connection herewith or therewith, shall prove to be incorrect, misleading
or incomplete in any material respect on the date as of which made or
deemed made; or
(c) The Borrower shall default in the performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to
Sections 8.1 (but only to the extent such default relates to Regulation U)
8.2, 8.6, 8.10, 9.2, 9.7, 9.9, 9.10, 9.11 and 9.12 and 10 hereof; or
(d) The Borrower shall default in the performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to
any of the provisions of this Agreement or any other Loan Document (other
than those referred to in paragraphs (a) through (c) above) and such
default shall continue unremedied for a period of thirty (30) days after
the occurrence of such Default; or
(e) Any obligation of the Borrower or any of its Subsidiaries in respect of any
Indebtedness (other than the Notes) or any Guarantee, including, without
limitation, any Indebtedness owing to the Agent or any Lender, which
involves an aggregate amount in excess
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of $500,000 shall be declared to be or shall become due and payable prior
to the stated maturity thereof and shall not be paid, or such Indebtedness
or Guarantee shall not be paid as and when the same becomes due and
payable, or there shall occur and be continuing any default under any
instrument, agreement or evidence of indebtedness relating to any such
Indebtedness the effect of which is to permit the holder or holders of such
instrument, agreement or evidence of indebtedness, or a trustee, agent or
other representative on behalf of such holder or holders, to cause such
Indebtedness to become due prior to its stated maturity and shall not be
paid; or
(f) The Borrower or any of its Subsidiaries thereof shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part
of its property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv)
file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code, or (vi) take any corporate
action for the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the application or consent
of the Borrower or any of its Subsidiaries in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of
the Borrower or any of its Subsidiaries or of all or any substantial part
of its assets, or (iii) similar relief in respect of the Borrower or any of
its Subsidiaries under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 60 days; or an order for
relief against the Borrower or any of its Subsidiaries shall be entered in
an involuntary case under the Bankruptcy Code; or
(h) A judgment or judgments for the payment of money in excess of $500,000 (net
of insurance proceeds) in the aggregate shall be rendered against the
Borrower or any of its Subsidiaries and any such judgment or judgments
shall not have been vacated, discharged, stayed or bonded pending appeal
within thirty (30) days from the entry thereof; or
(i) The Borrower or any member of the Controlled Group shall fail to pay when
due an amount or amounts aggregating in excess of $500,000 which it is
obligated to pay to the PBGC or to a Plan under Title IV of ERISA; or a
notice of intent to terminate a Plan or Plans having aggregate Unfunded
Liabilities in excess of $500,000 shall be filed under Title IV of ERISA by
the Borrower or any member of the Controlled Group, any plan administrator
or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to
be appointed to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans against the Borrower or
any member of the Controlled Group to enforce Sections 515 or 4219(c)(5) of
ERISA; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must
be terminated; or there shall occur a complete or partial withdrawal form,
or a default, within the meaning of Section 4219(c)(5) of ERISA, with
respect to, one or more Multiemployer Plans which could cause the Borrower
or one or more members of the Controlled Group to incur a current payment
obligation in excess of $500,000; or
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(j) Pension plans maintained by the Borrower or any member of the Funding
Standard Controlled Group or to which the Borrower or any member of the
Funding Standard Controlled Group is obligated to contribute shall incur in
the aggregate an "accumulated funding deficiency", within the meaning of
Section 302 of ERISA, in excess of $500,000, or
(k) Any Security Instrument shall cease for any reason to be in full force and
effect or shall cease to be effective to grant a perfected security
interest in a material portion of the Collateral described in such Security
Instrument with the priority stated to be granted thereby;
(l) Any Significant Subsidiary shall revoke its Subsidiary Guaranty or any
Subsidiary Guaranty or Subsidiary Security Document to which a Significant
Subsidiary is a party shall cease for any reason to be in full force and
effect; or
(m) The individuals serving as Chief Executive Officer and Chief Financial
Officer of the Borrower on the Closing Date shall both cease, for any
reason (including, without limitation, resignation, removal or death), to
be executive officers of the Borrower within any six month period, unless
successors reasonably acceptable to the Majority Lenders replace such
individuals within a reasonable period of time after they shall have ceased
to serve.
11.2 Remedies Upon an Event of Default. If any Event of Default shall have
occurred and be continuing, the Agent may (and, if directed by Majority Lenders,
shall) by notice (a) declare the Commitments terminated (whereupon the
Commitments shall be terminated) and/or (b) declare the principal amount then
outstanding of, and the accrued interest on, the Loans and commitment fees and
all other amounts payable hereunder and under the Notes to be forthwith due and
payable, whereupon such amounts shall be and become immediately due and payable,
without further notice (including, without limitation, notice of intent to
accelerate), presentment, demand, protest or other formalities of any kind, all
of which are hereby expressly waived by the Borrower; provided that in the case
of the occurrence of an Event of Default with respect to the Borrower referred
to in clauses (f) and (g) of Section 11.1, the Commitments shall be
automatically terminated and the principal amount then outstanding of, and the
accrued interest on, the Loans and commitment fees and all other amounts payable
hereunder and under the Notes shall be and become automatically and immediately
due and payable, without notice (including, without limitation, notice of intent
to accelerate), presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Borrower.
Section 12. The Agents.
12.1 Appointment, Powers and Immunities.
(a) Each Lender and the Issuing Bank hereby irrevocably appoints and authorizes
the Agent to act as its agent hereunder and under the other Loan Documents
with such powers as are specifically delegated to the Agent by the terms
hereof and thereof, together with such other powers as are reasonably
incidental thereto.
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(b) The Agent (which term as used in this Section 12 shall include reference to
the Agent's Affiliates and the Agent's own and its Affiliates' officers,
directors, employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Loan Documents, and shall not by reason of this Agreement or any
other Loan Document be a trustee for any Lender; (b) shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or any other Loan Document, or in
any certificate or other document referred to or provided for in, or
received by any of them under, this Agreement or any other Loan Document,
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or any other
document referred to or provided for herein or therein or for any failure
by the Borrower or any other Person to perform any of its obligations
hereunder or thereunder; (c) shall not be required to initiate or conduct
any litigation or collection proceedings hereunder or under any other Loan
Document except to the extent requested by the Majority Lenders, and (d)
shall not be responsible for any action taken or omitted to be taken by
them hereunder or under any other Loan Document or any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, except for their own gross negligence or willful
misconduct. The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
(c) Each Lender and the Issuing Bank hereby irrevocably appoints the
Documentation Agent as documentation agent hereunder and under the other
Loan Documents and authorizes the Documentation Agent to take such action
on behalf of each of the Lenders and the Issuing Bank and to exercise all
such powers on their behalf as are expressly delegated to the Documentation
Agent by the Agent, together with such other powers as are reasonably
incidental thereto. The Documentation Agent shall not have any duties or
responsibilities or any fiduciary relationship with any Lender or the
Issuing Bank except those expressly set forth in this Agreement.
12.2 Reliance. The Agents shall be entitled to rely upon any certification,
notice or other communication (including any thereof by telephone, telex,
telegram or cable) believed by them to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Agent. As to any matters not expressly provided for by this
Agreement or any other Loan Document, each of the Agents shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions signed by the Majority Lenders (or if
required by Section 13.1 hereof, by all of the Lenders), and such instructions
of the Majority Lenders and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders.
12.3 Defaults. The Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the non-payment of principal of or interest
on Loans) unless the Agent has received notice from a Lender or the Borrower
specifying such Default and stating that such notice is a "Notice of Default".
In the event that the Agent receives such a notice of the occurrence of a
Default, the Agent shall give prompt notice thereof to the Lenders (and shall
give each Lender prompt notice of each such non-payment). The Agent shall
(subject to Section 12.7 hereof) take such action with respect to such Default
as shall be directed by the Majority Lenders
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(or if required by Section 13.1 hereof, by all of the Lenders), provided that,
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default as it shall deem advisable in the best
interests of the Lenders.
12.4 Rights as a Lender. Subject to the provisions of Section 4.6(b), with
respect to their Commitments and the Loans made by them, each of Fleet and
Sovereign, in their respective capacity as a Lender hereunder, shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though they were not acting as the Agent or the Documentation Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include Fleet and Sovereign in their individual capacity. The Agent and the
Documentation Agent may (without having to account therefor to any Lender)
accept deposits from, lend money to and generally engage in any kind of banking,
trust or other business with the Borrower (and any of their Affiliates) as if
they were not acting as the Agent or the Documentation Agent, and the Agent and
the Documentation Agent may accept fees and other consideration from the
Borrower (in addition to the agency fees and arrangement fees heretofore agreed
to between the Borrower and the Agent) for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
12.5 Events. The Lenders agree to indemnify the Agents (to the extent not
reimbursed under Section 13.5 hereof), but without limiting the obligations of
the Borrower under said Section 13.5, ratably in accordance with their
respective Commitments, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against either of the Agents in any way relating to or arising out of
this Agreement or any other Loan Document or any other documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses which the
Borrower is obligated to pay under Section 13.5 hereof but excluding, unless a
Default has occurred and is continuing, normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or of any such other documents, provided
that no Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the party to be indemnified
and provided further that nothing in this Section 12.5 shall require any Lender
to reimburse the Agent or the Documentation Agent for internal overhead.
12.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees that it has,
independently and without reliance on the Agents or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis of the Borrower and decision to enter into this Agreement and
that it will, independently and without reliance upon the Agents or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement or any of the other Loan Documents. The
Agents shall not be under any obligation to any Lender to ascertain or to
inquire as to the performance or observance by the Borrower of this Agreement or
any of the other Loan Documents or any other document referred to or provided
for herein or therein or to inspect the properties or books of the Borrower.
Except for notices, reports and other documents and information expressly
required
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to be furnished to the Lenders by the Agents hereunder or the other Loan
Documents, the Agents shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition or business of the Borrower (or any of its Affiliates) which may come
into the possession of the Agents.
12.7 Failure to Act. Except for action expressly required of the Agent
hereunder and under the other Loan Documents, the Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction by the Lenders of their
indemnification obligations under Section 12.5 hereof against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
12.8 Removal of Agents. Subject to the appointment and acceptance of a
successor Agent or Documentation Agent as provided below, the Agent or
Documentation Agent may be removed at any time with or without cause by the
Majority Lenders. Upon any such removal the Majority Lenders shall have the
right to appoint a successor Agent or Documentation Agent reasonably acceptable
to the Borrower. If no successor Agent or Documentation Agent shall have been
so appointed by the Majority Lenders and shall have accepted such appointment
within 30 days after the Majority Lenders' removal of the retiring Agent or
Documentation Agent (the "Notice Date"), then the retiring Agent or
Documentation Agent may, on behalf of the Lenders, appoint a successor Agent or
Documentation Agent reasonably acceptable to the Borrower. Any successor Agent
or Documentation Agent shall be (i) a Lender or (ii) if no Lender has accepted
such appointment within 30 days after the Notice Date, a bank which has an
office in Boston, Massachusetts with a combined capital and surplus of at least
$200,000,000. Upon the acceptance of any appointment as Agent or Documentation
Agent hereunder by a successor Agent or Documentation Agent, such successor
Agent or Documentation Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent or
Documentation Agent, and the retiring Agent or Documentation Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Agent's or Documentation Agent's removal hereunder as Agent or Documentation
Agent, the provisions of this Section 12 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent or Documentation Agent. The Agent or Documentation
Agent may upon notice thereof to the Borrower and the Lenders, but subject to
the prior written consent of the Borrower, resign, in which case the procedures
for appointing a successor Agent or Documentation Agent set forth in this
Section 12.8 shall be followed as though the Agent or Documentation Agent had
been removed by the Majority Lenders.
12.9 Collateral Sub-Agents. Each Lender by its execution and delivery of this
Agreement agrees, as contemplated by the Security Instruments, that, in the
event it shall hold any Liquid Investments referred to therein, such Liquid
Investments shall be held in the name and under the control of such Lender and
such Lender shall hold such Liquid Investments as a collateral sub-agent for the
Agent thereunder.
Section 13. General.
13.1 Amendments, Etc. No amendment or waiver of any provision of this
Agreement, the Notes, or any other Loan Document nor consent to any departure by
the Borrower therefrom,
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shall in any event be effective unless the same shall be in writing and signed
by the Majority Lenders and the Borrower, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders, do any of the following: (i) increase any
Commitment of any of the Lenders or subject the Lenders to any additional
obligations; (ii) reduce the principal of, or interest on, any Loan or fees
hereunder; (iii) postpone any date fixed for any payment of principal of, or
interest on, any Loan, or fee hereunder; (iv) change the percentage of any of
the Commitments or of the aggregate unpaid principal amount of any of the Loans,
or the number of Lenders, which shall be required for the Lenders or any of them
to take any action under this Agreement; (v) change any provision contained in
Sections 2.1, 4.12, through 4.19, 13.5 or this Section 13.1 hereof; (vi) release
any substantial portion of the security for the Obligations of the Borrower
under this Agreement or any Note, except for dispositions permitted under
Section 9.3 or release any Guarantor of any of its respective obligations under
the Guarantors' Documents; (vii) modify the definition of "Majority Lenders" as
set forth in Section 1.1; or (viii) in those provisions where consent or
approval by the Majority Lenders is required, eliminate the requirement of such
consent or approval. Notwithstanding anything in this Section 13.1 to the
contrary, no amendment, waiver or consent shall be made with respect to Section
12 without the consent of the Agent. Upon receipt of an affidavit of an officer
of Agent as to the loss, theft, destruction or mutilation of any Note or any
other security document which is not of public record and in the case of any
such loss, theft, destruction or mutilation, upon surrender and cancellation of
any such Note or other Loan Document, Borrower will issue, in lieu thereof, a
replacement Note or other Loan Document in the same principal amount thereof (to
the extent applicable) and otherwise of like tenor.
13.2 Notices, Etc. Unless otherwise specified herein, all notices hereunder to
any party hereto shall be in writing and shall be deemed to have been given when
delivered by hand, or when sent by electronic facsimile transmission or by
telex, answer back received, or on the first Banking Day after delivery to any
overnight delivery service, freight pre-paid, or three days after being sent by
certified or registered mail, return receipt requested, postage pre-paid, and
addressed to such party at its address indicated on Schedule 2 hereto; or at any
other address specified by such party in writing except that notices to the
Agent pursuant to Section 4 shall not be effective until received by the Agent.
13.3 No Waiver; Remedies. No failure on the part of the Agent or the Lenders
to exercise, and no delay in exercising, any right hereunder, under the Notes or
under any of the other Loan Documents shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder, under the Notes or
under any of the other Loan Documents preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
13.4 Right of Set-off.
(a) Upon the occurrence and during the continuance of any Event of Default,
each Lender is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held
and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement
and the Notes, irrespective of whether or not such Lender shall have made
any demand hereunder.
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(b) Each Lender agrees promptly to notify the Borrower, the Agent and the other
Lenders after any such set-off and application, provided that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of the Lenders under this Section 13.4 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Lenders may have.
13.5 Expenses; Indemnification.
(a) The Borrower shall pay on demand (i) any and all reasonable expenses
incurred by the Agent in connection with the syndication of the Revolving
Credit Loans; (ii) all out-of-pocket costs and expenses of the Agent in
connection with the administration of this Agreement and the other Loan
Documents, and any waiver or amendment of any provision hereof or thereof,
including without limitation, the reasonable fees and disbursements of
counsel for the Agent; and (iii) if any Default or Event of Default
occurs, all reasonable costs and expenses incurred by the Agent and the
Lenders, including the reasonable fees and disbursements of counsel to the
Agent and the Lenders, and of any field examiners, auditors, appraisers,
environmental engineers or consultants, or investment banking firms
retained by the Agent and the Lenders in connection with such Event of
Default or collection, bankruptcy, insolvency and other enforcement
proceedings related thereto. The Borrower agrees to pay, indemnify and
hold the Agent and the Lenders harmless from, any and all recording and
filing fees, and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise or other taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of or the consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement or the
other Loan Documents, or any documents delivered pursuant hereto or
thereto.
(b) The Borrower agree to indemnify the Agent and the Lenders and their
respective officers and directors and hold the Agent and the Lenders and
their respective officers and directors harmless from and against any and
all liabilities, losses, damages, reasonable costs and expenses of any kind
(including, without limitation, the reasonable fees and disbursements of
counsel for the Agent and each Lender in connection with any investigative,
administrative or judicial proceeding initiated by a third party, whether
or not the Agent or any Lender shall be designated a party thereto) which
may be incurred by the Agent or any Lender, relating to or arising out of
this Agreement or any other Loan Document, or the existence of any
Hazardous Substance on, in, or under any Borrower Group Property, or any
violation of any applicable Environmental Laws for which the Borrower or
any Subsidiary thereof has any liability or which occurs upon any Borrower
Group Property, or the imposition of any Lien under any Environmental Laws,
provided that neither the Agent nor any Lender shall not have the right to
be indemnified hereunder for its own bad faith, gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(c) The agreements in this Section 13.5 shall survive the repayment of the
Notes, and all other amounts payable under this Agreement and the other
Loan Documents.
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13.6 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns except that the
Borrower may not assign its rights or obligations hereunder or under the
Notes without the prior written consent of all of the Lenders.
(b) Each Lender shall have the right with the consent of the Agent and the
Borrower (which consent in each case shall not be unreasonably withheld or
delayed) to assign at any time any portion of its Commitment hereunder and
its interests in the risk relating to any Revolving Credit Loans and Letter
of Credit participations in an amount equal to or greater than $2,500,000
to other Lenders or to banks or financial institutions acceptable to the
Agent (each an "Assignee"), provided that any Lender which proposes to
assign less than its total Commitment must retain a Commitment of at least
$5,000,000. Each Assignee shall execute and deliver to the Agent and the
Borrower a counterpart joinder in the form of Exhibit C hereto and shall
pay to the Agent, solely for the account of the Agent, an assignment fee of
$3,500. Upon the execution and delivery of such counterpart joinder, (a)
such Assignee shall, on the date and to the extent provided in such
counterpart joinder, become a "Lender" party to this Agreement and the
other Loan Documents for all purposes of this Agreement and the other Loan
Documents and shall have all rights and obligations of a "Lender" with a
Commitment as set forth in such counterpart joinder, and the transferor
Lender shall, on the date and to the extent provided in such counterpart
joinder, be released prospectively from its obligations hereunder and under
the other Loan Documents to a corresponding extent (and, in the case of an
assignment covering all of the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such transferor shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Section 13.5 and to any interest or fees accrued for its account hereunder
and not yet paid); (b) the assigning Lender shall promptly surrender its
Notes to the Agent for cancellation and delivery to the Borrower, provided
that if the assigning Lender has retained any Commitment, the Borrower
shall execute and deliver to the Agent for delivery to such assigning
Lender new Notes in the aggregate amount of the assigning Lender's retained
Commitment; (c) the Borrower shall issue to the Assignee such Notes in the
aggregate amount of such Assignee's Commitment dated the Closing Date or
such other date as may be specified by such Assignee; (d) this Agreement
shall be deemed appropriately amended to reflect (i) the status of such
Assignee as a party hereto and (ii) the status and rights of the Lenders
hereunder; and (e) the Borrower shall take such action as the Agent may
reasonably request to perfect or maintain the perfection of any security
interests contemplated by this Agreement or any other Loan Document in
favor of the Agent or Lenders, including any Assignee which becomes a party
to this Agreement.
(c) If the Assignee, or any Participant pursuant to Section 13.6(d) hereof, is
organized under the laws of a jurisdiction other than the United States or
any state thereof, such Assignee shall execute and deliver to the Borrower,
simultaneously with or prior to such Assignee's execution and delivery of
the counterpart joinder described above in Section 13.6(b) and such
Participant shall execute and deliver to the Lender granting the
participation, a United States Internal Revenue Service Form 4224 or Form
1001 (or any successor form), appropriately completed, wherein such
Assignee or Participant claims entitlement to complete exemption from
United States Federal Withholding Tax on all interest payments hereunder
and all fees payable pursuant to any of the Loan Documents. The Borrower
shall not be required to pay any
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increased amount to any Assignee or other Lender on account of taxes to the
extent such taxes would not have been payable if the Assignee or
Participant had furnished the Forms referenced in this Section 13.6(b)
unless the failure to furnish such a Form results from (i) any act of or
failure to act by any of the Borrower or (ii) the adoption of or change in
any law, rule, regulation or guideline affecting such Assignee or
Participant occurring (y) after the date on which any such Assignee
executes and delivers the counterpart joinder and complies with all other
applicable provisions of Section 13.6(b) or (z) after the date a
Participant is granted its participation.
(d) Each Lender shall have the right, with the consent of the Agent (which
consent shall not be unreasonably withheld or delayed), to grant
participations, each in an amount equal to or greater than $2,500,000 to
one or more banks or other financial institutions (each a "Participant") in
all or any part of any Loans and Letter of Credit participations owing to
such Lender and the Notes held by such Lender. Notwithstanding the
foregoing, any participation granted by a Lender to an Affiliate of the
granting Lender shall not be subject to either the consent of the Agent or
the minimum participation amount. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents, provided
that the documents evidencing any such participation may provide that,
except with the consent of such Participant, such Lender will not consent
to (a) the reduction in or forgiveness of the stated principal of or rate
of interest on or commitment fee with respect to the portion of any
Revolving Credit Loan subject to such participation, (b) the extension or
postponement of any stated date fixed for payment of principal or interest
or commitment fee with respect to the portion of any Revolving Credit Loan
subject to such participation, or (c) the waiver or reduction of any right
to indemnification of such Lender hereunder. Notwithstanding the
foregoing, no participation shall operate to increase the total Commitments
hereunder or otherwise alter the substantive terms of this Agreement. In
the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Agreement shall remain
unchanged, such Lender shall remain solely responsible for the performance
thereof, such Lender shall remain the holder of such Notes for all purposes
under this Agreement and the Borrower and Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Notwithstanding anything to
the contrary contained herein, the Borrower agrees that provisions of
Sections 4.10 and 4.12 through 4.19 shall inure to the benefit of each
Participant, and each Lender may enforce such provisions on behalf of any
of its Participants; provided, however, in no event shall the Borrower be
required to pay to the Participants of a Lender and such Lender, in the
aggregate, any amounts in excess of the total amount they would otherwise
be obligated to pay to such Lender under the applicable section referred
above had such Lender not granted participations pursuant to this Section
13.6(d).
(e) Each Lender may furnish any information concerning the Borrower, its
Subsidiaries and any other Loan Party in the possession of such Lender from
time to time to assignees and participants (including prospective assignees
and participants), provided, that such Lender shall require any such
prospective or actual assignee or participant to maintain the
confidentiality requirements of Section 13.15. Notwithstanding any other
provision of this Section 13.6, Fleet agrees for the benefit of the
Borrower to retain for its own account a principal amount of the Loans and
a portion of the Revolving Credit Commitment equal in the aggregate to at
least 50% of the principal amount from time to time outstanding of the
Loans and of the Revolving Credit Commitment.
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(f) Any other bank or financial institution selected by the Agent with the
approval of the Borrower (such approval not to be unreasonably withheld or
delayed), may, prior to the Maturity Date, become a "Lender" party to this
Agreement for all purposes of this Agreement and the other Loan Documents
with respect to a specified additional Commitment hereunder (each such
Lender being referred to herein as a "New Lender"), provided that the sum
of the aggregate Commitments of the existing Lenders and the aggregate
Commitments of the New Lenders do not exceed $100,000,000.
Each New Lender, the Agent and the Borrower shall execute and deliver to
the Agent an instrument of adherence in the form of Exhibit D hereto (the
"Instrument of Adherence"), which Instrument of Adherence shall specify the new
Commitment of each New Lender, and pursuant to which each New Lender, shall
agree to be bound as a Lender by the terms and conditions hereof and the other
Loan Documents. Upon the execution and delivery of such Instrument of Adherence,
(a) each New Lender shall, on the effective date thereof, become a "Lender"
party to this Agreement and the other Loan Documents and shall have all rights
and obligations of a "Lender" with a Commitment as set forth in such Instrument
of Adherence , (b) the total Revolving Credit Commitment shall be increased
accordingly, (c) each Lender shall be deemed to have consented to such increase
in the total Revolving Credit Commitment, and the addition of such New Lender or
Lenders as parties to this Agreement and the other Loan Documents with such new
Commitments, (d) this Agreement (including Schedule 2 hereto) shall be deemed
appropriately amended to reflect such changes in Commitments and the status and
rights of the Lenders hereunder, (e) the Agent shall notify the Lenders of such
increases and shall furnish the Lenders and the Borrower with a new Schedule 2
hereto, and (f) the Borrower shall issue new Notes to the New Lenders, in each
case in the amount of such New Lender's Commitment, dated the Closing Date or
such other date as may be specified by such Lender and otherwise completed in
substantially the form of Exhibit A hereto.
13.7 Severability. Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition, unenforceability
or non-authorization without invalidating the remaining provisions hereof or
affecting the validity, enforceability or legality of such provision in any
other jurisdiction.
13.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT REGARD
TO CONFLICTS OF LAWS RULES).
13.9 WAIVER OF JURY TRIAL. THE AGENT, THE LENDERS AND THE BORROWER KNOWINGLY,
VOLUNTARILY, INTENTIONALLY AND MUTUALLY AGREE THAT NONE OF THEM NOR ANY ASSIGNEE
OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING,
COUNTERCLAIM OR ANY OTHER ACTION BASED UPON, OR ARISING OUT OF, OR IN CONNECTION
WITH THIS AGREEMENT, THE NOTES, ANY RELATED DOCUMENTS OR INSTRUMENTS, ANY
COLLATERAL OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS OR STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY
SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THE PROVISIONS
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OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE AGENT, THE LENDERS AND THE
BORROWER, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER THE
AGENT, THE LENDERS NOR THE BORROWER HAS AGREED WITH OR REPRESENTED TO THE OTHER
THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES. THE BORROWER'S AGREEMENT TO THE FOREGOING CONSTITUTES A MATERIAL
INDUCEMENT FOR THE AGENT, AND THE LENDERS TO ENTER INTO THIS AGREEMENT, FOR THE
LENDERS TO MAKE THE LOANS AND FOR THE ISSUING BANK TO ISSUE LETTERS OF CREDIT.
13.10 VENUE, CONSENT TO SERVICE OF PROCESS. THE BORROWER ACCEPT FOR THEMSELVES
AND IN CONNECTION WITH THEIR PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT OR PROCEEDING OF ANY
KIND AGAINST THEM WHICH ARISES OUT OF OR BY REASON OF THIS AGREEMENT, THE NOTES,
ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY,
IRREVOCABLY AGREE TO BE BOUND BY ANY FINAL JUDGMENT RENDERED BY ANY SUCH COURT
IN ANY SUCH ACTION, SUIT OR PROCEEDING IN WHICH THEY SHALL HAVE BEEN SERVED WITH
PROCESS IN THE MANNER HEREINAFTER PROVIDED, SUBJECT TO EXERCISE AND EXHAUSTION
OF ALL RIGHTS OF APPEAL AND TO THE EXTENT THAT THEY MAY LAWFULLY DO SO, WAIVE
AND AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN SUCH
ACTION, SUIT OR PROCEEDING ANY CLAIMS THAT THEY ARE NOT PERSONALLY SUBJECT TO
THE JURISDICTION OF SUCH COURT, THAT THEIR PROPERTY IS EXEMPT OR IMMUNE FROM
ATTACHMENT OR EXECUTION, THAT THE ACTION, SUIT OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS IMPROPER, AND AGREE THAT PROCESS
MAY BE SERVED UPON THEM IN ANY SUCH ACTION, SUIT OR PROCEEDING IN THE MANNER
PROVIDED BY CHAPTER 223A OF THE GENERAL LAWS OF MASSACHUSETTS, RULE 4 OF THE
MASSACHUSETTS RULES OF CIVIL PROCEDURE OR RULE 4 OF THE FEDERAL RULES OF CIVIL
PROCEDURE.
13.11 Additional Lenders. The Borrower, each of the Lenders and the Agent may
at any time agree to add one or more lenders to this agreement pursuant to an
instrument in writing specifying such new lender's "commitments" (and the
reduction in commitments of the existing Lenders as a result thereof) in such
manner as the Borrower, each of the Lenders and the Agent shall agree. Upon the
execution of such instrument (and the satisfaction of such conditions and other
terms as shall therein be specified) such additional lender or lenders shall be
deemed a "lender" or "lenders" for the purposes of this agreement and shall
enjoy all rights and assume all obligations on the part of the Lenders set forth
in this agreement, and the Lenders whose commitments are then being reduced
shall be released from their commitments to the extent of such reduction.
13.12 Pledge. Any Lender may at any time pledge all or any portion of its
rights under the Agreement including any portion of any of the Notes to any of
the twelve (12) Federal
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Reserve Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C.
Section 341. No such pledge or enforcement thereof shall release Fleet from its
obligations under any of the Loan Documents.
13.13 Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
13.14 Counterparts. This Agreement may be signed in one or more counterparts
each of which shall constitute an original and all of which taken together shall
constitute one and the same instrument.
13.15 Confidentiality. The Agent and each Lender and participant will keep
confidential all Confidential Information (as defined below) and will not,
without the Borrower's consent, disclose the same to any person other than to
directors, officers, employees, agents or other representatives (including
attorneys, accountants and financial advisers) of the Agent or any Lender or
prospective Lender or any of their respective Affiliate and other than to any
governmental agency or authority in accordance with applicable laws, rules or
regulations or to any other third party as such Lender may deem reasonably
necessary in connection with or in response to a subpoena, order, decree, notice
of discovery or ruling which has been or on its face purports to have been
issued, filed or served under authority of any court, tribunal, arbitration
board, commission or similar entity in connection with any case or pending
matter. As used herein, the term "Confidential Information" shall mean only
information prepared by the Borrower and furnished to the Lenders or obtained by
the Lenders hereunder which consists of financial statements and projections of
the Borrower, the Borrower's form of management agreement, business plan, and
documents with respect to acquisitions by the Borrower or which is identified as
confidential and which (i) is not ascertainable or obtained from public or
published information or (ii) is not known or does not become known to the
public (other than through a breach by the Lenders of this Section).
13.16 Replacement of Notes, etc. Upon receipt of an affidavit of an officer of
any Lender or the Agent as to the loss, theft, destruction or mutilation of any
Note or any Security Instrument which is not of public record, and, in the case
of any such loss, theft, destruction or mutilation, upon cancellation of any
such Note or other Security Instrument, Borrower will issue, in lieu thereof, a
replacement note or Security Instrument in the same principal amount thereof and
otherwise of like tenor.
13.17 Amendment and Restatement. This Agreement amends and restates in its
entirety the Prior Credit Agreement. This Agreement and the other Loan
Documents express the entire understanding of the parties with respect to the
transactions contemplated hereby, except for the letter agreement dated June 6,
2000 between the Borrower and the Agent with respect to fees payable to the
Agent, which letter agreement shall continue in full force and effect and shall
not be superseded by any of the Loan Documents.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal and delivered by their respective officers thereunto
duly authorized as of the date first above written.
AMERICAN DENTAL PARTNERS, INC.
By: /s/ Ronald M. Levenson
---------------------------
Name: Ronald M. Levenson
Title: SVP, CFO & Treasurer
FLEET NATIONAL BANK, Individually
and as Agent
By: /s/ Ginger C. Stolzenthaler
---------------------------
Ginger C. Stolzenthaler
Managing Director
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Michael Ouellete
---------------------------
Name: Michael Ouellete
Title: Asst. Vice President
KEY BANK
By: /s/ James R. Lynch
---------------------------
Name: James R. Lynch
Title: VP & Director of Healthcare
Products & Services Group
SOVEREIGN BANK, Individually and as
Documentation Agent
By: /s/ Sarah J. Healy
---------------------------
Name: Sarah J. Healy
Title: Vice President
<PAGE>
Schedule 1
----------
<TABLE>
<CAPTION>
TOTAL DEBT/ADJUSTED EBITDA RATIO APPLICABLE MARGIN
------------------------------------------------ -----------------------------------------
ALTERNATE BASE RATE LIBOR
PLUS PLUS COMMITMENT FEE
------------------- ------------------- ----------------------
<S> <C> <C> <C>
(greater than equal to) 2.75 0.750% 2.750% 0.375%
(greater than equal to) 2.25 and (less than) 2.75 0.500% 2.500% 0.375%
(greater than equal to) 1.75 and (less than) 2.25 0.250% 2.250% 0.375%
(greater than equal to) 1.25 and (less than) 1.75 0.000% 2.000% 0.375%
(less than) 1.75 0.000% 1.750% 0.250%
</TABLE>
Notwithstanding the foregoing, for the period commencing on the Closing Date and
terminating on January 31, 2001, in no event shall the Total Debt/Adjusted
EBITDA Ratio be deemed to be less than 2.25 to 1.00 and the Applicable Margin
during such period shall be determined accordingly.
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