Exhibit 10.43
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 7, 2003
Among
▇▇▇▇▇▇ DENTAL MANAGEMENT SERVICES, INC.
As Borrower
and
KEYBANK NATIONAL ASSOCIATION
as Lender
1
[TO BE REVISED]
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS....................................... 6
SECTION 1.1 Defined Terms..................................... 6
SECTION 1.2 Terms Generally................................... 11
ARTICLE II THE CREDIT........................................ 11
SECTION 2.1 Commitment........................................ 11
SECTION 2.2 Note.............................................. 12
SECTION 2.3 Notice of Borrowings.............................. 12
SECTION 2.4 Note; Repayment of Loans.......................... 12
SECTION 2.5 Fees.............................................. 12
SECTION 2.6 Interest on Loans................................. 12
SECTION 2.7 Default Interest.................................. 13
SECTION 2.8 Termination of Commitments........................ 13
SECTION 2.9 Prepayment........................................ 13
SECTION 2.10 Additional Costs.................................. 13
SECTION 2.11 Payments.......................................... 14
ARTICLE III REPRESENTATIONS AND WARRANTIES.................... 15
SECTION 3.1 Organization; Powers.............................. 15
SECTION 3.2 Authorization..................................... 15
SECTION 3.3 Enforceability.................................... 15
SECTION 3.4 Governmental Approvals............................ 15
SECTION 3.5 Financial Statements.............................. 15
SECTION 3.6 No Material Adverse Change........................ 16
SECTION 3.7 Title to Properties; Possession Under Leases...... 16
SECTION 3.8 Subsidiaries...................................... 16
2
SECTION 3.9 Litigation; Compliance with Laws.................. 16
SECTION 3.10 Agreements........................................ 16
SECTION 3.11 Federal Reserve Regulations....................... 16
SECTION 3.12 Intentionally Deleted............................. 16
SECTION 3.13 Tax Returns....................................... 17
SECTION 3.14 No Material Misstatements......................... 17
SECTION 3.15 Employee Benefit Plans............................ 17
SECTION 3.16 Operation of Business..............................17
SECTION 3.17 Laws; Environment................................. 17
SECTION 3.18 Foreign Person.................................... 18
ARTICLE IV CONDITIONS OF LENDING............................. 18
SECTION 4.1 All Borrowings.................................... 18
SECTION 4.2 Closing Date...................................... 18
ARTICLE V AFFIRMATIVE COVENANTS 19
SECTION 5.1 Existence; Businesses and Properties............... 19
SECTION 5.2 Insurance.......................................... 19
SECTION 5.3 Obligations and Taxes.............................. 19
SECTION 5.4 Financial Statements, Reports, etc................. 19
SECTION 5.5 Litigation and Other Notices....................... 20
SECTION 5.6 ERISA.............................................. 20
SECTION 5.7 Maintaining Records; Access to Properties
and Inspections.................................. 21
SECTION 5.8 Use of Proceeds.................................... 21
SECTION 5.9 Environment........................................ 21
ARTICLE VI NEGATIVE COVENANTS................................. 21
SECTION 6.1 Indebtedness....................................... 21
SECTION 6.2 Liens.............................................. 21
SECTION 6.3 Sale and Lease-Back Transactions................... 21
3
SECTION 6.4 Investments, Loans and Advances.................... 22
SECTION 6.5 Mergers, Consolidations and Sales of Assets........ 22
SECTION 6.6 Transactions with Affiliates....................... 22
SECTION 6.7 Business of Borrower............................... 22
SECTION 6.8 Total Funded Debt to EBITDA Ratio.................. 22
SECTION 6.9 Minimum Net Income................................. 22
SECTION 6.10 Acquisition of Dental Practices.................... 22
SECTION 6.11 Fixed Charge Covenant Ratio........................ 22
SECTION 6.12 Change in Management............................... 22
ARTICLE VII EVENTS OF DEFAULT.................................. 23
ARTICLE VIII MISCELLANEOUS...................................... 24
SECTION 8.1 Notices............................................ 24
SECTION 8.2 Survival of Agreement.............................. 25
SECTION 8.3 Binding Effect..................................... 25
SECTION 8.4 Successors and Assigns............................. 25
SECTION 8.5 Expenses; Indemnity................................ 25
SECTION 8.6 Right of Setoff.................................... 26
SECTION 8.7 Applicable Law..................................... 26
SECTION 8.8 Waivers; Amendment................................. 27
SECTION 8.9 Interest Rate Limitation........................... 27
SECTION 8.10 Entire Agreement................................... 27
SECTION 8.11 Waiver of Jury Trial............................... 27
SECTION 8.12 Severability....................................... 27
SECTION 8.13 Counterparts....................................... 27
SECTION 8.14 Headings........................................... 27
SECTION 8.15 Jurisdiction; Consent to Service of Process........ 28
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LIST OF EXHIBITS
EXHIBIT A Notice of Borrowing
EXHIBIT B Compliance Certificate
5
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of August 7,
2003, between ▇▇▇▇▇▇ DENTAL MANAGEMENT SERVICES, INC., a Colorado corporation
(the "Borrower") and KEYBANK NATIONAL ASSOCIATION, a national association (the
"Lender").
RECITALS
Lender made a revolving loan (the "Original Loan") to Borrower
evidenced and secured by (i) a Promissory Note (the "Original Note") dated as of
October 31, 1996 in the original principal amount of $800,000 executed by
Borrower and payable to the order of Lender, as amended by that certain Amended
and Restated Promissory Note (the "Amended Note") dated as of December 31, 1998
in the amended principal amount of $20,000,000 and the Second Amended and
Restated Promissory Note (the "Second Amended Note") dated as of March 24, 2000
in the amended principal amount of $10,000,000 (the Original Note, the Amended
Note and the Second Amended Note being collectively referred to herein as the
"Note"), (ii) a Security Agreement dated as of October 31, 1996 from Borrower
for the benefit of Lender, (iii) a Credit Agreement dated as of October 31, 1996
between Borrower and Lender, and (iv) certain other documents and instruments,
which together with the Note, the Security Agreement, the Credit Agreement and
such other documents and instruments as may from time-to-time be amended and
replaced, are sometimes collectively referred to herein as the "Original Loan
Documents." The Revolving Loan was modified by (i) a First Amendment to Loan
Documents dated September 3, 1997, (ii) a Second Amendment to Loan Documents
dated November 18, 1997, (iii) a Third Amendment to Loan documents dated
September 30, 1998, (iv) a Fourth Amendment to Loan Documents dated December 31,
1998, (v) a Fifth Amendment to Loan Documents dated May 28, 1999, (vi) a Sixth
Amendment to Loan Documents dated September 20, 1999, (vii) a Seventh Amendment
to Loan Documents dated March 24, 2000 and (viii) an Eighth Amendment to Loan
Documents dated September 29, 2000.
On December 17, 2001, Borrower and Lender amended and restated the
terms and conditions of the Credit Agreement (the "Amended Loan") pursuant to
that certain Amended and Restated Credit Agreement (the "Amended Credit
Agreement"). Borrower and Lender further amended the Amended Credit Agreement by
that certain First Amendment to Amended and Restated Credit Agreement dated
April 30, 2002, that certain Second Amendment to Amended and Restated Credit
Agreement dated September 9, 2002, that certain Third Amendment to Amended and
Restated Credit Agreement dated December 6, 2002 and that certain Fourth
Amendment to Amended and Restated Credit Agreement dated April 24, 2003.
Borrower now desires and has requested Lender to further renew and
extend credit in order to enable Borrower, subject to the terms and conditions
of this Agreement, to (i) borrow on a revolving basis, at any time and from time
to time prior to the Revolving Credit Maturity Date (as defined herein), an
aggregate principal amount at any time outstanding not in excess of $4,000,000
(the "Revolving Loans"). The proceeds of the Revolving Loans shall provide
working capital, the repayment of the Amended Loan and for other general
corporate purposes. Lender is willing to extend such credit to the Borrower on
the terms and subject to the conditions set forth herein.
NOW THEREFORE, in consideration of the covenants and conditions set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and Lender hereby
agree to amend and restate in their entirety, the Original Loan Documents as
further set forth herein.
DEFINITIONS
Defined Terms. As used in this Agreement, the following words and terms
shall have the meanings specified below:
"Acquired Practice Obligation" means the amount of Indebtedness
incurred, assumed, guaranteed or which Borrower has otherwise agreed to be
responsible for in connection with a dental practice (an "Acquired Practice")
acquired by Borrower.
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"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the person
specified.
"Asset Sale" means the transfer or other disposition, to the extent
consummated after the Closing Date, by Borrower to another person of any asset
of Borrower, other than sales, transfers or other dispositions in the ordinary
course of business, including without limitation as part of this exclusion any
sales and leasebacks of assets in the ordinary course of business.
"Base Rate" shall mean a variable rate of interest equal to the higher
of (i) the rate of interest publicly announced by the Lender from time to time
as its "prime rate," or (ii) the Federal Funds Rate plus one-half of one percent
(0.50%). The Base Rate shall vary on a daily basis as the Lender's "prime rate"
and the Federal Funds Rate vary.
"Base Rate Loan" shall mean any Loan that bears interest with reference
to the Base Rate.
"Base Rate Margin" shall mean such margin as is set forth pursuant to
Section 2.6 of this Agreement.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States.
"Borrowing" shall have the meaning set forth in Section 2.3.
"Business Day" shall mean a day (other than a Saturday or Sunday) on
which banks generally are open in Denver, Colorado for the conduct of
substantially all of their commercial lending activities.
"Change in Management" shall mean any change in the management
positions of or the acceptance of a resignation or other termination, without
Lender's prior written consent, of any of the following officers of Borrower:
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇.
"Closing Date" shall mean August 7, 2003.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Commitment" shall mean the Commitment of Lender to make Loans
hereunder as set forth in Section 2.1.
"Commitment Fee" shall mean a fee calculated and payable as set forth
in Section 2.5(b).
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Default Rate" shall mean that rate of interest specified in Section
2.7.
"dollars" or "$" shall mean lawful money of the United States of
America.
"EBITDA" means, calculated for the period of the previous four fiscal
quarters, the net earnings of Borrower plus the aggregate amounts deducted in
determining such net income in respect of interest expenses, taxes, depreciation
and amortization; but not, however, giving effect to extraordinary losses or
gains in calculating net income.
7
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is a member of a group of which the Borrower is a member and
which is treated as a single employer under Section 414 of the Code.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Federal Funds Rate" means, for each day, a fluctuating interest rate
per annum 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, as published for such day (or, if such day is not a Business Day,
for the immediately preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations at approximately 10:00 A.M. Denver time on such
day on such transactions received by the Lender from three Federal Funds brokers
of recognized standing selected by the Lender in its sole discretion.
"Fees" shall mean the Origination Fee and the Commitment Fee.
"Financial Officer" of any person shall mean the chief financial
officer, principal accounting officer, Treasurer or Controller of such person.
"Financing Proceeds" means the cash (other than Net Cash Proceeds)
received by the Borrower directly or indirectly, from any financing transaction
of whatever kind or nature.
"Fixed Charges" means interest expense, plus lease expense, plus
current maturities of long-term debt and current maturities of capital leases
(calculated for the preceding twelve-month period).
"GAAP" shall mean generally accepted accounting principles.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Interest Period" means, with respect to any LIBOR Rate Loan, the
period commencing on the date such Loan is made or continued and ending on the
last day of such period as selected by the Borrower pursuant to the provisions
below and, thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of such period
as selected by the Borrower pursuant to the provisions below. The duration for
any LIBOR Rate Loan shall be one (1) month, two (2) months or three (3) months,
as selected by the Borrower; provided, however, that whenever the last day of
any Interest Period would otherwise occur on a day other than a Business Day,
the last day of such Interest Period shall occur on the next succeeding Business
Day, and; provided, further, however, that if such extension of time would cause
the last day of such Interest Period for a LIBOR Rate Loan to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day.
"LIBOR Rate" shall mean for each Interest Period for any LIBOR
Rate Loan, the average rate as established by the British Bankers Association
("BBA") on the first day of such Interest Period, based on the average of the
rates charged by eight (excluding the four highest and the four lowest rates) of
the sixteen largest British Banks in London. If the BBA no longer reports such
rate or Lender determines in good faith that the rate so reported no longer
accurately reflects the rate available to Lender in the London Interbank Market,
Lender may select in its reasonable discretion a replacement index for
determining LIBOR, and shall promptly notify Borrower of such selection. If
there are changes in the LIBOR Reserve Requirement, the LIBOR Rate shall be
adjusted by dividing the LIBOR Rate by the result of (x) 1.00 minus (y) the
LIBOR Reserve Requirement.
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"LIBOR Rate Loan" shall mean any Loan that bears interest with
reference to the LIBOR Rate.
"LIBOR Rate Margin" shall mean such margin as is adjusted
pursuant to Section 2.6 of this Agreement.
"LIBOR Reserve Requirements" means, for any Interest Period for any
LIBOR Rate Loan, the maximum reserves (whether basic, supplemental, marginal,
emergency, or otherwise) prescribed by the Board of Governors of the Federal
Reserve System (or any successor) with respect to liabilities or assets
consisting of or including "Eurocurrency liabilities" (as defined in Regulation
D of the Board of Governors of the Federal Reserve System) having a term equal
to such Interest Period.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"Loans" shall mean the loans made by Lender pursuant to Section 2.1.
"Loan Documents" shall mean this Agreement, the Amended and Restated
Revolving Credit Note, the Second Amended and Restated Security Agreement, and
any other instruments or documents evidencing, securing or relating to the
Loans.
"Margin Stock" shall have the meaning given such term under Regulation
U.
"Material Adverse Change" shall mean (a) a materially adverse effect on
the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the consolidated Subsidiaries taken as a whole,
(b) material impairment of the ability of the Borrower and the consolidated
Subsidiaries taken as a whole to perform any of its obligations under any Loan
Document to which it is or will be a party or (c) material impairment of the
rights of or benefits available to the Lender under any Loan Document.
"Net Cash Proceeds" means with respect to any Asset Sale, the aggregate
cash payments received by the Borrower and any consolidated Subsidiary, from
such Asset Sale, net of direct expenses of sale.
"Net Income" for any person means, for any period, the net income (or
loss) of such person and its consolidated subsidiaries for such period taken in
a single accounting period determined for such person and its consolidated
subsidiaries in conformity with GAAP; provided that there shall be excluded (i)
the income (or loss) of any other person (other than consolidated subsidiaries
of such person) in which any third person (other than such person or any of its
consolidated subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to such person or any
of its consolidated subsidiaries by such other person during such period, (ii)
the income (or loss) of any other person accrued prior to the date it becomes a
consolidated subsidiary of such person or is merged into or consolidated with
such person or any of its consolidated subsidiaries or such other person's
assets are acquired by such person or any of its consolidated subsidiaries, and
(iii) the income of any consolidated subsidiary of such person to the extent
that the declaration or payment of dividends or similar distributions by that
subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement, instruments, judgment, decree, order, statute,
rule or governmental regulation applicable to that subsidiary.
"Note" shall mean the Revolving Credit Note.
"Origination Fee" shall have the meaning assigned to such term in
Section 2.5 (a).
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"Operating Cash Flow" shall mean net income after taxes and exclusive
of extraordinary gains and losses, gains on sale of fixed assets, and other
income; plus depreciation, amortization, interest expense and lease expense;
less dividends and distributions.
"PBGC" shall mean the Pension Benefit Guarantee Corporation referred to
and defined in ERISA and any successor thereto.
"person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership, other entity or government, or
any agency or political subdivision thereof.
"Plan" shall mean any pension plan subject to the provisions of Title
IV of ERISA or Section 412 of the Code which is maintained for employees of the
Borrower or any ERISA Affiliate.
"Regulation G" shall mean Regulation G of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).
"Responsible Officer" of any person shall mean any executive officer or
financial officer of such person and any other officer or similar official
thereof responsible for the administration of the obligations of such person in
respect of this Agreement.
"Revolving Credit Maturity Date" shall mean May 31, 2005.
"Revolving Credit Note" shall mean the Amended and Restated Revolving
Credit Note of the Borrower evidencing the Revolving Loans.
"Revolving Loans" shall mean the revolving loans made by Lender to the
Borrower pursuant to Section 2.1.
"Revolving Loan Commitment" shall mean the commitment of Lender to make
Revolving Loans hereunder up to an amount of $4,000,000 as set forth in Section
2.1.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority to which the Lender is
subject. Such reserve percentages shall include those imposed pursuant to such
Regulation D. Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.
"subsidiary" shall mean, with respect to any person (herein referred to
as the "parent"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or more than 50%
of the general partnership interests are, at the time any determination is being
made, owned, controlled or held by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
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"Total Funded Debt" shall mean the sum without duplication for Borrower
and/or any of its subsidiaries of all indebtedness for borrowed money, whether
maturing in less than or more than one year, plus all bonds, notes, debentures
or similar debt instruments plus all capitalized lease obligations plus the
present value of all basic rental obligations under any synthetic lease.
"Transactions" shall have the meaning assigned to such term in Section
3.2.
Terms Generally. The definitions in Section 1.1. shall apply equally to
both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation." All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided, however, that,
for purposes of determining compliance with any covenant set forth in Article
VI, such terms shall be construed in accordance with GAAP as in effect on the
date of this Agreement applied on a basis consistent with the application used
in the Borrower's audited financial statements referred to in Section 3.5.
THE CREDIT
Commitment. Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, Lender agrees to make Revolving
Loans to the Borrower, at any time and from time to time and until the earlier
of the Revolving Credit Maturity Date and the termination of the Revolving Loan
Commitment in accordance with the terms hereof, in an amount not to exceed the
Revolving Loan Commitment. Within the limits set forth in the preceding
sentence, the Borrower may borrow, pay or prepay and reborrow Revolving Loans on
or after the Closing Date and prior to the Revolving Credit Maturity Date,
subject to the terms, conditions and limitations set forth herein. Each advance
under the Revolving Loans (each such advance is referred to herein as a "Loan")
shall constitute either a LIBOR Rate Loan or a Base Rate Loan, subject to the
following conditions:
(A) Each Loan that is made or continued as a LIBOR
Rate Loan shall be made or continued on such
Business Day, in such amount (equal to $100,000.00 or an integral multiple
thereto), and with such an Interest Period as the Borrower shall request by
written notice given to the Lender no later than 11:00 a.m. (Denver, Colorado
time) on the third Business Day prior to the date of disbursement or
continuation of the requested LIBOR Rate Loan. Each written notice of any LIBOR
Rate Loan shall be irrevocable and binding on the Borrower and the Borrower
shall indemnify the Lender against any loss or expense incurred by the Lender as
a result of any failure by the Borrower to consummate such LIBOR Rate Loan,
including, without limitation, any loss (including loss of anticipated profits)
or expense incurred by reason of liquidation or reemployment of deposits or
other funds acquired by the Lender to fund the LIBOR Rate Loan. A certificate as
to the amount of such loss or expense submitted by the Lender to the Borrower
shall be conclusive and binding for all purposes, absent manifest error. In the
event that the Borrower fails to provide the Lender with the required written
notice, the Borrower shall be deemed to have given a written notice that such
LIBOR Rate Loan shall be converted to a Base Rate Loan on the last day of the
applicable Interest Period. In no event shall the Borrower be permitted to
select a LIBOR Rate Loan having an Interest Period ending after the Maturity
Date;
(B) Each Loan that is made as a Base Rate Loan shall be made
on such Business Day and in such amount (equal to $50,000.00 or any integral
multiple thereof) as the Borrower shall request by written notice given to the
Lender no later than 11:00 a.m. (Denver, Colorado time) on the date of
disbursement of the requested Base Rate Loan.
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Note. The Revolving Loans shall be evidenced by the Revolving Credit
Note dated the date hereof. The Revolving Credit Note shall be a master note,
and the principal amount of all Revolving Loans outstanding shall be evidenced
by the Revolving Credit Note or any ledger or other record of the Lender, which
shall be presumptive evidence of the principal owing and unpaid on the Revolving
Credit Note.
Notice of Borrowings. The Borrower shall give the Lender written notice
not later than 2:00 p.m., Denver, Colorado, time, on the same Business Day that
a proposed borrowing under the Revolving Loan Commitment (a "Borrowing"). Such
notice shall be irrevocable, shall in each case refer to this Agreement and
shall be in the form attached hereto as Exhibit A. Each notice of Borrowing
shall be deemed a representation by Borrower that all conditions precedent to
such Borrowing have been satisfied.
Note; Repayment of Loans. The Revolving Credit Note shall bear interest
from the date of the first Borrowing on the outstanding principal balance
thereof as set forth in Section 2.6. The Lender shall, and is hereby authorized
by the Borrower to, endorse on a schedule attached to the Revolving Credit Note
(or on a continuation of such schedule attached to such Note and made a part
thereof), or otherwise to record in Lender's internal records, an appropriate
notation evidencing the date and amount of each Revolving Loan, each payment and
prepayment of principal of the Revolving Loans, each payment of interest on the
Revolving Loans and the other information provided for on such schedule;
provided, however, that the failure of the Lender to make such a notation or any
error therein shall not affect the obligation of the Borrower to repay the
Revolving Loans made by Lender in accordance with the terms of this Agreement
and the Revolving Credit Note.
Fees.
The Borrower agrees to pay an origination fee (the "Origination Fee")
in an amount equal to $2,250, which shall be paid on the Closing Date.
A commitment fee (the "Commitment Fee") of .25% per annum on the
average daily unused amount of the Revolving Loan Commitment during the
preceding quarter shall be payable, in arrears, on the last day of each quarter,
commencing September 30, 2003, and continuing on the last day of each quarter
thereafter until the Revolving Credit Maturity Date. The Commitment Fee shall be
computed on the basis of the actual number of days elapsed in a year of 360
days. The Commitment Fee due September 30, 2003, shall be prorated based on the
number of days from the Closing Date through September 30, 2003, divided by the
number of days in the quarter ending September 30, 2003.
All Fees shall be paid on the dates due, in immediately available
funds. Once paid, none of the Fees shall be refundable (absent a calculation
error) under any circumstances.
Interest on Loans. The Borrower shall pay interest on the unpaid
principal amount of each Loan from the date such Loan is made until such
principal amount shall be paid in full as follows:
(a) (i) With respect to any LIBOR Rate Loan, at a
rate per annum equal to the sum of the LIBOR
Rate effective as of the date such LIBOR Rate Loan was made and the LIBOR Rate
Margin specified in subpart (b)(i) below.
(ii) With respect to any Base Rate Loan, at
a rate per annum equal to the sum of the Base Rate
and the Base Rate Margin specified in subpart (b)(i) below, which rate shall
change when and as the Base Rate changes in accordance with this Agreement.
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(b)(i)
LIBOR Rate Margin Base Rate Margin
-------------------------- ------------------------
Revolving Loan 200 Basis Points 50 Basis Points
(ii) The Borrower shall pay to the Lender accrued interest on
the unpaid principal balance of each Base Rate Loan on either (i) the date such
Loan is converted to a LIBOR Rate Loan, or (ii) the last day of each month,
whichever is earlier. The Borrower shall pay to the Lender accrued interest on
the unpaid principal balance of each LIBOR Rate Loan on (i) the date such Loan
is converted to a Base Rate Loan, or (ii) the last day of the applicable
Interest Period.
Default Interest. If the Borrower shall default in the payment of the
principal of or interest on the Loans or any other amount due or becoming due
hereunder, by acceleration or otherwise, the Borrower shall on demand from time
to time pay interest, to the extent permitted by law, on such defaulted amount
up to (but not including) the date of actual payment (after as well as before
judgment) at a rate per annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the Base Rate plus 4% (the
"Default Rate") From and after any Event of Default, the outstanding principal
balance of the Loans shall accrue interest at the Default Rate.
Termination of Commitments.
The Revolving Loan Commitment shall be automatically terminated at 5:00
p.m., Denver, Colorado time, on the Revolving Credit Maturity Date.
The Borrower shall pay to the Lender, on the date of termination, the
Commitment Fee on the amount of the Revolving Loan Commitment so terminated
accrued through the date of such termination.
Prepayment. The Borrower may prepay any Base Rate Loan in whole, or in
part, at any time or times. The Borrower may prepay any LIBOR Rate Loan, in
whole or in part, upon not less than three (3) Business Days' prior written
notice given to the Lender; provided, that, if payment of a LIBOR Rate Loan
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, the Borrower shall
indemnify Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits required to fund or maintain the LIBOR Rate Loan.
(b) The Borrower shall give prior written notice to Lender
before a proposed borrowing (a "Borrowing") pursuant to Section 2.3 hereof. Such
notice shall be irrevocable and shall in each case refer to this Agreement. Each
notice of Borrowing shall be deemed a representation by Borrower that all
conditions precedent to such Borrowing have been satisfied.
Additional Costs.
(a) If, due to either (i) any change in any law or regulation (or its
interpretation), or (ii) the compliance with any guideline or request from any
central lender or other governmental authority (whether or not having the force
of law), there shall be any increase in the cost to the Lender of making,
funding or maintaining LIBOR Rate Loans, then the Borrower shall from time to
time, upon demand by the Lender pay to the Lender additional amounts sufficient
13
to reimburse the Lender for any such additional costs. A certificate of the
Lender submitted to the Borrower as to the amount of such additional costs,
shall be conclusive and binding for all purposes, absent manifest error. Upon
notice from the Borrower to the Lender within five (5) Business Days after the
Lender notifies the Borrower of any such additional costs pursuant to this
Section 2.10(a), the Borrower may either prepay in full all LIBOR Rate Loans so
affected then outstanding, together with interest accrued thereon to the date of
such prepayment, or (ii) convert such LIBOR Rate Loans so affected then
outstanding into Base Rate Loans upon not less than four (4) Business Days'
notice to the Lender. If any such prepayment or conversion of any LIBOR Rate
Loan occurs on any day other than the last day of the applicable Interest Period
for such Loan, the Borrower also shall pay to the Lender such additional amounts
sufficient to indemnify the Lender against any loss, cost, or expense incurred
by the Lender as a result of such prepayment or conversion, including, without
limitation, any loss (including loss of anticipated profits), cost, or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by the Lender to fund any such Loan, and a certificate as to the amount
of any such loss, cost, or expense submitted by the Lender to the Borrower shall
be conclusive and binding for all purposes, absent manifest error.
(b) If either (i) any change in any law or regulation
(or its interpretation), or (ii) the compliance
with any guideline or request from any central lender or other governmental
authority (whether or not having the force of law), affects or would affect the
amount of capital required or expected to be maintained by the Lender or any
corporation controlling the Lender and the Lender determines that the amount of
such capital is increased by or based upon the existence of the Loan (or
commitment to make the Loan) and other extensions of credit (or commitments to
extend credit) of similar type, then, upon demand by the Lender, the Borrower
shall pay to the Lender from time to time as specified by the Lender additional
amounts sufficient to compensate the Lender in the light of such circumstances,
to the extent that the Lender reasonably determines such increase in capital to
be allocable to the existence of the Lender's Loan (or commitment to make the
Loan). A certificate of the Lender submitted to the Borrower as to such amounts
shall be conclusive and binding for all purposes, absent manifest error. Upon
notice from the Borrower to the Lender within five (5) Business Days after the
Lender notifies the Borrower of any such additional costs pursuant to this
Section 2.10(b), the Borrower may either (A) prepay in full the Loan if so
affected, together with interest accrued thereon to the date of such prepayment,
or (B) convert the Loan if so affected into a Loan of any other type not so
affected upon not less than four (4) Business Days' notice to the Lender. If any
such prepayment or conversion of any LIBOR Rate Loan occurs on any day other
than the last day of the applicable Interest Period for such Loan, the Borrower
also shall pay to the Lender such additional amounts sufficient to indemnify the
Lender against any loss, cost, or expense incurred by the Lender as a result of
such prepayment or conversion, including, without limitation, any loss
(including loss of anticipated profits), cost, or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by the
Lender to fund any such Loan, and a certificate as to the amount of any such
loss, cost, or expense submitted by the Lender to the Borrower shall be
conclusive and binding for all purposes, absent manifest error..
Payments.
The Borrower shall make each payment (including principal of or
interest on any Borrowing or any Fees or other amounts) hereunder and under any
other Loan Document not later than 2:00 p.m., Denver, Colorado time, on the date
when due in dollars to the Lender at its offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in immediately available funds.
Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
SECTION 2.12 Illegality. Notwithstanding any other provision of this
Agreement, if any change in any law or regulation (or its interpretation) shall
make it unlawful, or any central Lender or other governmental authority shall
assert that it is unlawful, for the Lender to perform its obligations hereunder
to make, continue, or convert LIBOR Rate Loans hereunder, then, (a) on notice
thereof by the Lender to the Borrower, the obligation of the Lender to make or
14
continue a LIBOR Rate Loan or to convert any Base Rate Loan into a LIBOR Rate
Loan shall terminate and the Lender shall thereafter be obligated to make only
Base Rate Loans whenever any written notice requests for any type LIBOR Rate
Loan is received, and (b) upon demand therefor by the Lender to the Borrower,
the Borrower shall either (i) forthwith prepay in full any LIBOR Rate Loan then
outstanding, together with interest accrued thereon, or request that the Lender,
upon four (4) Business Days' notice, convert any LIBOR Rate Loan then
outstanding into a Base Rate Loan. If any such prepayment or conversion of any
LIBOR Rate Loan occurs on any day other than the last day of the applicable
Interest Period for such Loan, the Borrower also shall pay to the Lender such
additional amounts sufficient to indemnify the Lender against any loss, cost, or
expense incurred by the Lender as a result of such prepayment or conversion,
including, without limitation, any loss (including loss of anticipated profits),
cost, or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by the Lender to fund any such Loan, and a
certificate as to the amount of any such loss, cost, or expense submitted by the
Lender to the Borrower shall be conclusive and binding, for all purposes, absent
manifest error.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to Lender that:
Organization; Powers. (a) ▇▇▇▇▇▇ Dental Management Services, Inc. is a
corporation, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its respective organization, (b) the Borrower has
all requisite power and authority to own its property and assets and to carry on
its business as now conducted and as proposed to be conducted, (c) the Borrower
is qualified to do business in every jurisdiction where such qualification is
required, except where the failure to qualify would not result in a Material
Adverse Change, and (d) the Borrower has the power and authority to execute,
deliver and perform its obligations under each of the Loan Documents and each
other agreement or instrument contemplated thereby to which it is or will be a
party and to borrow hereunder.
Authorization. The execution, delivery and performance by the Borrower
of each of the Loan Documents and the borrowings hereunder (collectively, the
"Transactions") (a) have been duly authorized by all requisite action and (b)
will not (i) violate (A) any provision of law, statute, rule or regulation, or
of the certificate or articles of incorporation, articles of organization,
operating agreement or other constitutive documents or by-laws of the Borrower
or any Subsidiary, (B) any order of any Governmental Authority or (C) as of the
Closing Date, any provision of any indenture, agreement or other instrument to
which the Borrower or any Subsidiary is a party or by which any of them or any
of their property is or may be bound which could result in a Material Adverse
Change, (ii) as of the Closing Date, be in conflict with, result in a breach of
or constitute (alone or with notice or lapse of time or both) a default under
any such indenture, agreement or other instrument which could result in a
Material Adverse Change or (iii) result in the creation or imposition of any
Lien upon any property or assets of the Borrower or any subsidiary.
Enforceability. This Agreement has been duly executed and delivered by
the Borrower and constitutes, and each other Loan Document when executed and
delivered by the Borrower will constitute, a legal, valid and binding obligation
of the Borrower enforceable against the Borrower in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
Governmental Approvals. No action, consent or approval of, registration
or filing with or any other action by any Governmental Authority is or will be
required in connection with the Transactions, except such as have been made or
obtained and are in full force and effect.
Financial Statements. The Borrower has heretofore furnished to Lender
its consolidated and consolidating balance sheets and statements of income and
changes in financial condition as of and for the quarter ended March 31, 2003.
Such financial statements present fairly the financial condition and results of
operations of the Borrower and its consolidated subsidiaries as of such dates
15
and for such periods. Such balance sheets and the notes thereto disclose all
material liabilities, direct or contingent, of the Borrower and its consolidated
subsidiaries as of the dates thereof. Such financial statements were prepared in
accordance with GAAP applied on a consistent basis, except for any omission of
notes.
No Material Adverse Change. There has been no Material Adverse Change
in the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Subsidiaries, taken as a whole, since March
31, 2003.
Title to Properties; Possession Under Leases.
The Borrower and each of the Subsidiaries has good and marketable title
to, or valid leasehold interests in, all its material properties and assets,
except for minor defects in title that do not interfere with its ability to
conduct its business as currently conducted or to utilize such properties and
assets for their intended purposes. As of the Closing Date, all of Borrower's
material properties and assets securing the Loans hereunder are free and clear
of Liens, other than Liens expressly permitted by Section 6.2.
The Borrower and each of the Subsidiaries has complied with all
obligations under all material leases to which it is a party and all such leases
are in full force and effect. The Borrower and each of the Subsidiaries enjoys
peaceful and undisturbed possession under all such material leases.
Subsidiaries. As of the Closing Date, Borrower has no Subsidiaries.
Litigation; Compliance with Laws.
As of the Closing Date, there are not any actions, suits or proceedings
at law or in equity or by or before any Governmental Authority now pending or,
to the knowledge of the Borrower, threatened against the Borrower or any
Subsidiary or any business, property or rights of any such person (i) which
involve any Loan Document or the Transactions or (ii) as to which there is a
reasonable possibility of an adverse determination and which, if adversely
determined, could, individually or in the aggregate, result in a Material
Adverse Change.
Neither the Borrower nor any of the Subsidiaries is in violation of any
law, rule or regulation, or in default with respect to any judgment, writ,
injunction or decree of any Governmental Authority, where such violation or
default could result in a Material Adverse Change.
Agreements.
Neither the Borrower nor any of the Subsidiaries is a party to any
agreement or instrument or subject to any corporate restriction that because of
onerous terms has resulted or could result in a Material Adverse Change.
Neither the Borrower nor any of its Subsidiaries is in default in any
manner under any provision of any indenture or other agreement or instrument
evidencing indebtedness, or any other material agreement or instrument to which
it is a party or by which it or any of its properties or assets are or may be
bound, where such default could result in a Material Adverse Change.
Federal Reserve Regulations.
Neither the Borrower nor any of the Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock.
No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to purchase
or carry Margin Stock or to extend credit to others for the purpose of
purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails a violation of,
or which is inconsistent with, the provisions of the Regulations of the Board,
including Regulation G, U or X.
16
Intentionally Deleted.
Tax Returns. The Borrower and its Subsidiaries have filed or caused to
be filed all Federal, state and local tax returns required to have been filed by
it and has paid or caused to be paid all taxes shown to be due and payable on
such returns or on any assessments received by it, except taxes that are being
contested in accordance with Section 5.3.
No Material Misstatements. No written information, report, financial
statement, exhibit or schedule furnished by or on behalf of the Borrower to the
Lender in connection with the negotiation of any Loan Document or included
therein or delivered pursuant thereto contained, contains or will contain any
material misstatement of fact or omitted, omits or will omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading.
Employee Benefit Plans. The Borrower and each of its ERISA Affiliates
is in compliance in all material respects with the applicable provisions of
ERISA and the regulations and published interpretations thereunder. No
Reportable Event has occurred as to which the Borrower or any ERISA Affiliate
was required to file a report with the PBGC, and the present value of all
benefit liabilities under each Plan (based on those assumptions used to fund
such Plan) did not, as of the last annual valuation date applicable thereto,
exceed by a material amount the value of the assets of such Plan.
Operation of Business. The Borrower possesses all licenses, permits,
franchises, patents, copyrights, trademarks, and trade names, or rights thereto,
to conduct its effective businesses substantially as now conducted and as
presently proposed to be conducted and the Borrower is not in material violation
of any valid rights of others with respect to any of the foregoing.
Laws; Environment. The Borrower has duly complied, and its businesses,
operations, assets, equipment, property, leaseholds, or other facilities are in
compliance, in all material respects, with the provisions of all federal, state,
and local statutes, laws, codes, and ordinances and all rules and regulations
promulgated thereunder (including without limitation those relating to the
environment, health and safety) . The Borrower has been issued and will maintain
all required federal, state, and local permits, licenses, certificates, and
approvals relating to (1) air emissions; (2) discharges to surface water or
groundwater; (3) noise emissions; (4) solid or liquid waste disposal; (5) the
use, generation, storage, transportation, or disposal of toxic or hazardous
substances or hazardous wastes (intended hereby and hereafter to include any and
all such materials listed in any federal, state, or local law, code, or
ordinance and all rules and regulations promulgated thereunder as hazardous); or
(6) other environmental, health or safety matters, other than such as would not
have a Material Adverse Change or result in a fine, penalty, judgment or other
liability in excess of $50,000. During the past five years, the Borrower has not
received notice of, or has actual knowledge of any violations of any federal,
state, or local environmental, health, or safety laws, codes or ordinances or
any rules or regulations promulgated thereunder with respect to its businesses,
operations, assets, equipment, property, leaseholds, or other facilities which
would result in a Material Adverse Change or result in a fine, penalty, judgment
or other liability in excess of $50,000. Except in accordance with a valid
governmental permit, license, certificate or approval, during the past five
years, there has been no material emission, spill, release, or discharge into or
upon (1) the air; (2) soils, or any improvements located thereon; (3) surface
water or groundwater; or (4) the sewer, septic system or waste treatment,
storage or disposal system servicing any premises owned or leased by Borrower,
of any toxic or hazardous substances or hazardous wastes at or from any premises
owned or operated by Borrower. During the past five years, there has been no
complaint, order, directive, claim, action, or notice by any governmental
authority or any Person or entity with respect to violations of law or damages
by reason of Borrower's (1) air emissions; (2) spills, releases, or discharges
to soils or improvements located thereon, surface water, groundwater or the
sewer, septic system or waste treatment, storage or disposal systems servicing
the premises; (3) noise emissions; (4) solid or liquid waste disposal; (5) use,
generation, storage, transportation, or disposal of toxic or hazardous
substances or hazardous waste; or (6) other environmental, health or safety
matters affecting the Borrower or its business, operations, assets, equipment,
property, leaseholds, or other facilities, other than such as would not have a
Material Adverse Change or result in a fine, penalty, judgment or other
liability in excess of $50,000. Borrower does not have any material
indebtedness, obligation, or liability, absolute or contingent, matured or not
matured, with respect to the storage, treatment, cleanup, or disposal of any
17
solid wastes, hazardous wastes, or other toxic or hazardous substances including
without limitation any such indebtedness, obligation, or liability with respect
to any current regulation, law, or statute regarding such storage, treatment,
cleanup, or disposal, other than obligations in the ordinary course of
Borrower's business.
Foreign Person. The Borrower is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Code.
CONDITIONS OF LENDING
The obligations of Lender to make the Loan hereunder are subject to the
satisfaction of the following conditions:
All Borrowings. On the date of each Borrowing:
The Lender shall have received a notice of such borrowing as required
by Section 2.3.
The representations and warranties set forth in Article III hereof
shall be true and correct in all material respects on and as of the date of such
Borrowing with the same effect as though made on and as of such date, except to
the extent such representations and warranties expressly relate to an earlier
date.
The Borrower shall be in compliance with all the terms and provisions
set forth herein and in each other Loan Document on its part to be observed or
performed, and at the time of and immediately after such Borrowing no Event of
Default or Default shall have occurred and be continuing. Without limiting the
foregoing, as of the date of each Borrowing, Borrower must have furnished to
Lender all of the financial information required by Section 5.4.
Each Borrowing shall be deemed to constitute a representation and
warranty by the Borrower on the date of such borrowing as to the matters
specified in paragraphs (b) and (c) of this Section 4.1.
Closing Date. On the Closing Date:
Lender shall have received a duly executed Revolving Credit Note
complying with the provisions of Section 2.4, and all other Loan Documents
required herein.
Lender shall have received a favorable written opinion from counsel for
the Borrower, dated as of the Closing Date and addressed to the Lender, in a
form satisfactory to Lender.
All legal matters incident to this Agreement and the borrowings
hereunder shall be satisfactory to the Lender and its counsel.
The Lender shall have received (i) a copy of the certificate or
articles of incorporation or articles of organization, including all amendments
thereto, of the Borrower, certified as of a recent date by the Secretary of
State of the state of its organization, and a certificate as to the good
standing of the Borrower as of a recent date, from such Secretary of State; (ii)
a certificate of the President, Secretary, Assistant Secretary, or other
authorized officer, of the Borrower dated the Closing Date and certifying (A)
that attached thereto is a true and complete copy of the by-laws of the Borrower
as in effect on the Closing Date and at all times since a date prior to the date
of the resolutions described in clause (B) below, (B) that attached thereto is a
true and complete copy of resolutions duly adopted by the Board of Directors of
the Borrower authorizing the execution, delivery and performance of the Loan
Documents and the borrowings hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C) that the
certificate or articles of incorporation of the Borrower have not been amended
since the date of the last amendment thereto shown on the certificate furnished
pursuant to clause (i) above, and (D) as to the incumbency and specimen
signature of each officer executing any Loan Document or any other document
delivered in connection herewith on behalf of the Borrower; (iii) a certificate
18
of another officer as to the incumbency and specimen signature of the Secretary
or Assistant Secretary executing the certificate pursuant to (ii) above; and
(iv) such other documents as Lender or counsel for the Lender, may reasonably
request.
The Lender shall have received a certificate, dated the Closing Date
and signed by the President or a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and (c) of
Section 4.1.
The Lender shall have received satisfactory evidence confirming that it
will have a first lien on all Accounts Receivable and all other assets of
Borrower.
The Lender shall have received insurance certificates evidencing
adequate insurance on the property of Borrower, with Lender as an additional
insured, in such amounts and in such form acceptable to Lender.
Unless otherwise expressly agreed to by Borrower and Lender, in the
event any of the conditions set forth in this Section 4.2 above have not been
met on or before the Closing Date, Lender will not be obligated to make any Loan
to Borrower and both parties shall be released from any further obligations
hereunder.
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with Lender that so long as this
Agreement shall remain in effect or the principal of or interest on any Loan,
any Fees or any other expenses or amounts payable under any Loan Document shall
be unpaid, unless the Lender shall otherwise consent in writing, the Borrower
will, and will cause each of the Subsidiaries to:
Existence; Businesses and Properties.
Do or cause to be done all things necessary to preserve, renew and keep
in full force and effect its legal existence.
Do or cause to be done all things necessary to obtain, preserve, renew,
extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated; comply
in all material respects with all applicable laws, rules, regulations and orders
of any Governmental Authority, whether now in effect or hereafter enacted; and
at all times maintain and preserve all property material to the conduct of such
business and keep such property in good repair, working order and condition and
from time to time make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection therewith may be properly conducted
at all times.
Insurance. Keep its insurable properties adequately insured at all
times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies in the same
or similar businesses, including public liability insurance against claims for
personal injury or death or property damage occurring upon, in, about or in
connection with the use of any properties owned, occupied or controlled by it
and maintain such other insurance as may be required by law.
Obligations and Taxes. Pay its indebtedness and other obligations
promptly and in accordance with their terms and pay and discharge promptly all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or in respect of its property, before the same shall
become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise which, if unpaid, might give rise to a Lien
upon such properties or any part thereof; provided, however, that such payment
and discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Borrower shall set
aside on its books reserves, if any, believed to be adequate with respect
thereto.
19
Financial Statements, Reports, etc. In the case of the Borrower shall
furnish to Lender:
within 90 days after the end of each fiscal year, its consolidated and
consolidating balance sheets and related statements of income and changes in
financial position, showing the financial condition of the Borrower and its
consolidated subsidiaries as of the close of such fiscal year and the results of
its operations and the operations of such subsidiaries during such year, all
audited by an independent public accountant of recognized national standing
acceptable to the Lender and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial condition and
results of operations of the Borrower on a consolidated basis in accordance with
GAAP consistently applied;
within 45 days after the end of each fiscal quarter, its consolidated
balance sheets and related statements of income and its statements of changes in
financial position, all such statements showing the financial condition of the
Borrower and its consolidated subsidiaries as of the close of such fiscal
quarter and the results of its operations and the operations of such
subsidiaries during such fiscal quarter, all certified by one of its Financial
Officers as fairly presenting the financial condition and results of operations
of the Borrower on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and omission of notes;
concurrently with any delivery of the quarterly or year-end financial
statements under (a) or (b) above, a certificate (substantially in the form
attached hereto as Exhibit B) of the Financial Officer opining on or certifying
as follows: (i) that no Event of Default or Default has occurred or, if such an
Event of Default or Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto and (ii) setting forth computations in reasonable detail satisfactory to
the Lender demonstrating compliance with the covenants contained in Sections 6.8
through 6.12, inclusive;
promptly after the same become publicly available, if applicable,
copies of all periodic and other reports, proxy statements and other materials
filed by it with the Securities and Exchange Commission, or any governmental
authority succeeding to any of or all the functions of said Commission, or with
any national securities exchange, or distributed to its shareholders, as the
case may be; and
promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
subsidiary, or compliance with the terms of any Loan Document, as the Lender may
reasonably request, including, but not limited to an annual budget with respect
to the operations of Borrower, delivered prior to the last day of the current
fiscal year.
Litigation and Other Notices. Furnish to the Lender prompt written
notice of the following:
any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) proposed to be taken with respect
thereto;
the filing or commencement of, or any threat or notice of intention of
any person to file or commence, any action, suit or proceeding, whether at law
or in equity or by or before any Governmental Authority, against the Borrower or
any Affiliate thereof which, if adversely determined, could result in a Material
Adverse Change; and
any development that has resulted in, or could reasonably be
anticipated to result in, a Material Adverse Change.
ERISA. (a) Comply in all material respects with the applicable
provisions of ERISA and (b) furnish to the Lender (i) as soon as possible, and
in any event within 30 days after any Responsible Officer of the Borrower either
knows or has reason to know that any Reportable Event has occurred that alone or
together with any other Reportable Event could reasonably be expected to result
in liability of the Borrower to the PBGC in an aggregate amount exceeding
$50,000, a statement of a Financial Officer setting forth details as to such
Reportable Event and the action proposed to be taken with respect thereto,
together with a copy of the notice, if any, of such Reportable Event given to
20
the PBGC, (ii) promptly after receipt thereof, a copy of any notice the Borrower
may receive from the PBGC relating to the intention of the PBGC to terminate any
Plan or Plans (other than a Plan maintained by an ERISA Affiliate which is
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section
412 of the Code) or to appoint a trustee to administer any Plan or Plans, and
(iii) within 10 days after a filing with the PBGC pursuant to Section 412(n) of
the Code of a notice of failure to make a required installment or other payment
with respect to a Plan,, a statement of a Financial officer setting forth
details as to such failure and the action proposed to be taken with respect
thereto, together with a copy of such notice given to the PBGC.
Maintaining Records; Access to Properties and Inspections.
Maintain all financial records in accordance with GAAP and permit any
representatives designated by Lender to visit and inspect the financial records
and the properties of the Borrower or any Subsidiary at reasonable times after
reasonable advance notice by Lender and as often as requested and to make
extracts from and copies of such financial records, and permit any
representatives designated by Lender to discuss the affairs, finances and
condition of the Borrower or any Subsidiary with the officers thereof and
independent accountants therefor.
Use of Proceeds. Use the proceeds of the Loans only for the purposes
set forth in the preamble to this Agreement.
Environment. Be and remain in compliance in all material respects with
the provisions of all federal, state, and local environmental, health, and
safety laws, codes and ordinances, and all rules and regulations issued
thereunder; notify the Lender promptly of any notice of a hazardous discharge or
environmental complaint received from any governmental agency or any other party
which could have a Material Adverse Change or result in a penalty, fine,
judgment or other liability in excess of $50,000; notify the Lender promptly of
any hazardous discharge from or affecting its premises which could have a
Material Adverse Change or result in a penalty, fine, judgment or other
liability in excess of $50,000; promptly contain and remove the same, to the
extent required by applicable laws; and promptly pay any fine or penalty
assessed in connection therewith.
NEGATIVE COVENANTS
The Borrower covenants and agrees with Lender that, so long as this
Agreement shall remain in effect or the principal of or interest on any Loan,
any Fees or any other expenses or amounts payable under any Loan Document shall
be unpaid, unless the Lender shall otherwise consent in writing, the Borrower
will not, and will not cause or permit any of the Subsidiaries to:
Indebtedness. Incur, create, assume or permit to exist any indebtedness
in excess of $100,000 without the prior written consent of Lender, except
indebtedness subordinated to the Loans pursuant to a subordination and
standstill agreement satisfactory to Lender.
Liens. Create, incur, assume or permit to exist any Lien on any
property or assets of Borrower or any of its Subsidiaries which is now owned or
hereafter acquired by it or on any income or rights in respect of any thereof,
or enter into any agreement in favor of another party not to create, incur,
assume or permit any such Lien, except:
liens for taxes and other obligations not yet due or which are being
contested in compliance with Section 5.3;
pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other social
security laws or regulations;
zoning restrictions, easements, rights-of-way, restrictions on use of
real property and other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount and do not
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the business of the Borrower or any of its
Subsidiaries; and
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liens which arise in the ordinary course of business for sums not due
or sums which the Company is contesting in good faith and by appropriate
proceedings and with respect to which the Company has made adequate reserves in
accordance with GAAP, but which do not involve any deposits or advances or
borrowed money or the deferred purchase price of property or services.
Sale and Lease-Back Transactions. Except for any sales and leasebacks
of assets in the ordinary course of business, enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred.
Investments, Loans and Advances. Purchase, hold or acquire any capital
stock, evidences of indebtedness or other securities of, make or permit to exist
any loans or advances to shareholders, officers, directors or Affiliates of
Borrower, without Lender's prior approval, or make or permit to exist any
investment or any other interest in, any other person, except (1) a direct
obligation of the United States or any agency thereof with maturities of one
year or less from the date of acquisition; (2) commercial paper of a domestic
issuer rated at least "A-1" by Standard & Poor's Corporation of "P-1" by ▇▇▇▇▇'▇
Investors Service, Inc.; (3) certificates of deposit with maturities of one year
or less from the date of acquisition issued by any commercial lender or federal
savings lender having capital and surplus in excess of $250,000,000; (4) stocks,
obligations, or securities received in settlement of debts (created in the
ordinary course of business) owing to the Borrower; and (5) advances or loans
(the "Dentist Advances") to an Acquired Practice in an amount not to exceed
$50,000 in the aggregate, provided that the Dental Advances are evidenced by
negotiable promissory notes, which shall be pledged to Lender as further
security for the Loans, in form reasonably satisfactory to Lender.
Mergers, Consolidations and Sales of Assets. Merge into or consolidate
with any other person, or permit any other person to merge into or consolidate
with it, or sell, transfer, lease or otherwise dispose of (in one transaction or
in a series of transactions) all or any substantial part of its assets (whether
now owned or hereafter acquired) or any capital stock of any Subsidiary, or
purchase, lease or otherwise acquire (in one transaction or a series of
transactions) all or any substantial part of the assets of any other person,
except that (a) the Borrower may purchase and sell inventory in the ordinary
course of business and (b) the Borrower may enter into one or more Asset Sales
provided that the Net Cash Proceeds are paid over to Lender for application
against the Loans, first to the payment of interest and other charges due
thereunder, and thereafter, against the principal payments due under the Loans
in the inverse order of payment dates.
Transactions with Affiliates. Sell or transfer any property or assets
to, or purchase or acquire any property or assets of, or otherwise engage in any
other transactions with, any of its Affiliates, except that as long as no
Default or Event of Default shall have occurred and be continuing, the Borrower
or any Subsidiary may engage in any of the foregoing transactions in the
ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties.
Business of Borrower. Engage at any time in any business or business
activity other than the business currently conducted by it and business
activities reasonably incidental thereto and, if Borrower is in violation of any
of the financial covenants set forth herein, further expand as to the
acquisition of any Acquired Practices relating to its current business.
Total Funded Debt to EBITDA Ratio. The Borrower shall not permit the
ratio of its Total Funded Debt to its EBITDA, measured at the end of each fiscal
quarter, calculated on a rolling four quarter basis, to be greater than 2.00 to
1.00 through maturity of the Loans.
Minimum Net Income. The Borrower shall have minimum quarterly Net
Income of $1,000.00 through maturity of the Loans, to be tested at the end of
each fiscal quarter.
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Acquisition of Dental Practices. The Borrower shall not acquire an
Acquired Practice without (i) prior written notification to Lender and (ii)
verification of Borrower's current and proforma compliance with the covenants
set forth herein in such form and substance acceptable to Lender for purposes of
evidencing that any such acquisition will not have an adverse effect on the
Borrower or its ability to satisfy the financial covenants set forth herein.
Fixed Charge Covenant Ratio. Borrower shall not permit the ratio of
Operating Cash Flow to Fixed Charges to be less than 1.25 through maturity of
the Loans, to be tested at the end of each fiscal quarter, calculated on a
rolling four quarter basis.
Change in Management. Borrower shall not permit any Change in
Management.
EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
any representation or warranty made or deemed made in or in connection
with any Loan Document or the borrowings hereunder, or any representation,
warranty, statement or information contained in any report, certificate,
financial statement or other instrument furnished in connection with or pursuant
to any Loan Document, shall prove to have been false or misleading in any
material respect when so made, deemed made or furnished;
default shall be made in the payment of any principal of any Loan when
and as the same shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof or by acceleration thereof or otherwise
and such default shall continue unremedied for a period of three (3) Business
Days;
default shall be made in the payment of any interest on any Loan or any
Fee or any other amount (other than an amount referred to in (b) above) due
under any Loan Document, when and as the same shall become due and payable, and
such default shall continue unremedied for a period of three Business Days;
default shall be made in the due observance or performance by the
Borrower or any Subsidiary of any covenant, condition or agreement contained in
Article V or in Article VI and such default shall continue unremedied for a
period of thirty (30) days after notice thereof from Lender to Borrower;
default shall be made in the due observance or performance by the
Borrower or any Subsidiary of any covenant, condition or agreement contained in
any Loan Document (other than those specified in (b), (c) or (d) above) and such
default shall continue unremedied for a period of thirty (30) days after notice
thereof from the Lender to the Borrower;
the Borrower or any Subsidiary shall (i) fail to pay any principal or
interest, regardless of amount, due in respect of any indebtedness, when and as
the same shall become due and payable, or (ii) fail to observe or perform any
other term, covenant, condition or agreement which would constitute a default
under any agreement or instrument evidencing or governing any such indebtedness
after the expiration of any applicable notice and grace periods, if any;
an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of the Borrower or any Subsidiary, or of a substantial part of the
property or assets of the Borrower or a Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law, (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of the property or
assets of the Borrower or a Subsidiary or (iii) the winding-up or liquidation of
the Borrower or any Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
23
the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in (g) above, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or for a
substantial part of the property or assets of the Borrower or any Subsidiary,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action for the
purpose of effecting any of the foregoing;
one or more judgments for the payment of money in an aggregate amount
in excess of $100,000.00 shall be rendered against the Borrower, any Subsidiary
or any combination thereof (unless Lender receives evidence demonstrating, to
Lender's satisfaction, that such judgment is fully insured), subject to
customary deductibles acceptable to Lender and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to levy, upon assets or properties of the Borrower or any Subsidiary to
enforce any such judgment;
a Reportable Event or Reportable Events, or a failure to make a
required payment (within the meaning of Section 412(n)(1)(A) of the Code), shall
have occurred with respect to any Plan or Plans that reasonably could be
expected to result in liability of the Borrower to the PBGC or to a Plan in an
aggregate amount exceeding $50,000.00 and, within 30 days after the reporting of
any such Reportable Event to the Lender or after the receipt by the Lender of
the statement required pursuant to Section 5.6, the Lender shall have notified
the Borrower in writing that (i) the Lender have made a determination that, on
the basis of such Reportable Event or Reportable Events or the failure to make a
required payment, there are reasonable grounds (A) for the termination of such
Plan or Plans by the PBGC, (B) for the appointment by the appropriate United
States District Court of a trustee to administer such Plan or Plans or (C) for
the imposition of a lien in favor of a Plan and (ii) as a result thereof an
Event of Default exists hereunder; or a trustee shall be appointed by a United
States District court to administer any such Plan or Plans; or the PBGC shall
institute proceedings to terminate any Plan or Plans;
there shall have occurred a Change in Management;
then, and in every such event and at any time thereafter during the
continuance of such event, the Lender may by notice to the Borrower, take either
or both of the following actions, at the same or different times: (i) terminate
forthwith the Commitment, (ii) declare the Loans then outstanding to be
forthwith due and payable, whereupon the principal of the Loans, together with
accrued interest thereon and any unpaid accrued Fees and all other liabilities
of the Borrower accrued hereunder and under any other Loan Document, shall
become forthwith due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding; and in any event with respect to the Borrower
described in paragraph (g) or (h) above, the Commitment shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding, and (iii) take such other actions provided for in any
of the other Loan Documents.
MISCELLANEOUS
Notices. Notices and other communications provided for herein shall be
in writing and shall be delivered by hand or overnight courier service, mailed
or sent by telex, graphic scanning or other telegraphic communications equipment
of the sending party, as follows:
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if to the Borrower, to it at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇, Telecopy No. ▇▇▇-▇▇▇-▇▇▇▇,
with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., Holland & ▇▇▇▇ LLP, Post Office Box
8749, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
if to the Lender, to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Telecopy No. ▇▇▇-▇▇▇-▇▇▇▇, with a copy to
Lea ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇▇▇▇ Hyatt & ▇▇▇▇▇▇, P.C. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopy No. 303-223-1111.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telex, graphic scanning or other telegraphic communications equipment
of the sender, or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 8.1 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 8.1.
Survival of Agreement. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied
upon by the Lender and shall survive the making by the Lender of the Loan, and
the execution and delivery to the Lender of the Note evidencing such Loan,
regardless of any investigation made by the Lender or on their behalf, and shall
continue in full force and effect as long as the principal of or any accrued
interest on any Loan or any Fee or any other amount payable under this Agreement
or any other Loan Document is outstanding and unpaid and so long as the
Commitments have not been terminated.
Binding Effect. This Agreement shall become effective when it shall
have been executed by the Borrower and the Lender, and thereafter shall be
binding upon and inure to the benefit of the Borrower and the Lender and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
consent of the Lender .
Successors and Assigns.
Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the successors and assigns of such
party; and all covenants, promises and agreements by or on behalf of the
Borrower or the Lender that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns.
Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loan at the time owing to it and the Note held
by it); provided, however, that Lender shall furnish notice to Borrower of any
such assignment no less than thirty (30) days in advance of making any such
assignment;
Expenses; Indemnity.
The Borrower agrees to pay all out-of-pocket expenses incurred by the
Lender in connection with the preparation of this Agreement and the other Loan
Documents or in connection with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the Lender in connection with
the enforcement or protection of its rights in connection with this Agreement
and the other Loan Documents to the extent Lender prevails or in connection with
the Loan made or the Note issued hereunder, including the fees and disbursements
of ▇▇▇▇▇▇▇▇▇▇ Hyatt & ▇▇▇▇▇▇, P.C., counsel for the Lender, and, in connection
with any such amendment, modification or waiver or any such enforcement or
protection, the fees and disbursements of any other counsel for the Lender. The
Borrower further agrees that it shall indemnify the Lender from and hold them
harmless against any documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and delivery of this Agreement
or any of the other Loan Documents.
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The Borrower agrees to indemnify the Lender and its directors,
officers, employees and agents (each such person being called an "Indemnitee")
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees and
expenses, incurred by or asserted against any Indemnitee arising out of, in any
way connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the transactions contemplated thereby, (ii)
the use of the proceeds of the Loan or (iii) any claim, litigation,
investigation or proceeding by a third party relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of any Indemnitee.
The provisions of this Section 8.5 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loan, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Lender. All amounts due under this Section 8.5 shall be payable on
written demand therefor.
Right of Setoff. If an Event of Default shall have occurred and be
continuing 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 Lender to or for the credit or the
account of the Borrower against any of and all the obligations of the Borrower
now or hereafter existing under this Agreement and other Loan Documents held by
Lender, irrespective of whether or not Lender shall have made any demand under
this Agreement or such other Loan Document and although such obligations may be
unmatured. The rights of Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which Lender may have.
Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF COLORADO.
26
Waivers; Amendment.
No failure or delay of the Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
Lender hereunder and under the other Loan Documents are cumulative and exclusive
of any rights or remedies which they would otherwise have. No waiver of any
provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances. Each holder of any of the Notes shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or not
such Note shall have been marked to indicate such amendment, modification,
waiver or consent.
Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Lender.
Interest Rate Limitation. Notwithstanding anything herein or in the
Notes to the contrary, if at any time the applicable interest rate, together
with all fees and charges which are treated as interest under applicable law
(collectively the "Charges"), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for, charged, received,
taken or reserved by Lender, shall exceed the maximum lawful rate (the "Maximum
Rate") which may be contracted for, charged, taken, received or reserved by
Lender in accordance with applicable law, the rate of interest payable under the
Note, together with all Charges payable to Lender, shall be limited to the
Maximum Rate.
Entire Agreement. This Agreement and the other Loan Documents
constitute the entire contract between the parties relative to the subject
matter hereof. Any previous agreement among the parties with respect to the
subject matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan Documents, expressed
or implied, is intended to confer upon any party other than the parties hereto
any rights, remedies, obligations or liabilities under or by reason of this
Agreement or the other Loan Documents.
Waiver of Jury Trial. Each party hereto hereby waives, to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect of any litigation directly or indirectly arising out of, under or in
connection with this Agreement or any of the other Loan Documents. Each party
hereto (a) certifies that no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement and the other Loan Documents, as applicable, by, among other
things, the mutual waivers and certifications in this Section 8.11.
Severability. In the event any one or more of the provisions contained
in this Agreement or in any other Loan Document should be held invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 8.3.
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Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and
are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
Jurisdiction; Consent to Service of Process.
The Borrower hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any Colorado State court
or Federal court of the United States of America sitting in Denver, Colorado,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such Colorado State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that Lender may otherwise have to bring any action or proceeding relating
to this Agreement or the other Loan Documents against the Borrower or its
properties in the courts of any jurisdiction.
The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this agreement or the other Loan Documents in any
Colorado State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense or an inconvenient
forum to the maintenance of such action or proceeding in any such court.
Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 8.1. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
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IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
▇▇▇▇▇▇ DENTAL MANAGEMENT SERVICES, INC., a Colorado corporation
By: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
KEYBANK NATIONAL ASSOCIATION, a national banking association
By: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
29