EXHIBIT 10.16
================================================================================
CREDIT AGREEMENT
among
ORTHODONTIC CENTERS OF AMERICA, INC.
and certain subsidiaries,
as Borrowers,
THE LENDERS NAMED HEREIN,
FIRST UNION NATIONAL BANK,
as Agent,
BANK OF AMERICA FSB,
as Documentation Agent,
and
CITIBANK, N.A.,
as Syndication Agent
$100,000,000 Senior Revolving Credit Facility
Arranged by
FIRST UNION CAPITAL MARKETS
A division of Wheat First Securities, Inc.
Dated as of October 8, 1998
================================================================================
TABLE OF CONTENTS
Page
RECITALS..................................................................... 1
ARTICLE I. DEFINITIONS................................................... 1
1.1 Defined Terms...................................................... 1
1.2 Accounting Terms; Covenant Calculations............................ 21
1.3 Other Terms; Construction.......................................... 21
ARTICLE II AMOUNT AND TERMS OF THE LOANS................................. 22
2.1 Commitments........................................................ 22
2.2 Borrowings......................................................... 22
2.3 Disbursements; Funding Reliance; Domicile of Loans................. 24
2.4 Notes.............................................................. 25
2.5 Termination and Reduction of Commitments........................... 25
2.6 Mandatory Payments and Prepayments................................. 26
2.7 Voluntary Prepayments.............................................. 28
2.8 Interest........................................................... 28
2.9 Fees............................................................... 30
2.10 Interest Periods................................................... 30
2.11 Conversions and Continuations...................................... 31
2.12 Method of Payments; Computations................................... 32
2.13 Recovery of Payments............................................... 34
2.14 Use of Proceeds.................................................... 34
2.15 Pro Rata Treatment................................................. 34
2.16 Increased Costs; Change in Circumstances; Illegality; etc.......... 35
2.17 Taxes.............................................................. 37
2.18 Compensation....................................................... 39
ARTICLE III LETTERS OF CREDIT............................................. 40
3.1 Issuance........................................................... 40
3.2 Notices............................................................ 41
3.3 Participations..................................................... 41
3.4 Reimbursement...................................................... 41
3.5 Payment by Loans................................................... 42
3.6 Payment to Lenders................................................. 43
3.7 Obligations Absolute............................................... 43
3.8 Cash Collateral Account............................................ 44
3.9 Effectiveness...................................................... 45
ARTICLE IV CONDITIONS OF BORROWING....................................... 45
4.1 Conditions of Initial Borrowing.................................... 45
4.2 Conditions of All Borrowings....................................... 49
ARTICLE V REPRESENTATIONS AND WARRANTIES................................ 49
5.1 Corporate Organization and Power................................... 50
5.2 Authorization; Enforceability...................................... 50
5.3 No Violation....................................................... 50
i
5.4 Governmental and Third-Party Authorization; Permits................ 50
5.5 Litigation......................................................... 51
5.6 Taxes.............................................................. 51
5.7 Subsidiaries....................................................... 51
5.8 Full Disclosure.................................................... 52
5.9 Margin Regulations................................................. 52
5.10 No Material Adverse Change......................................... 52
5.11 Financial Matters.................................................. 52
5.12 Ownership of Properties............................................ 53
5.13 ERISA.............................................................. 53
5.14 Environmental Matters.............................................. 54
5.15 Compliance With Laws............................................... 54
5.16 Regulated Industries............................................... 55
5.17 Insurance.......................................................... 55
5.18 Material Contracts................................................. 55
5.19 Pledge Agreements.................................................. 55
5.20 Labor Relations.................................................... 55
5.21 Year 2000 Compatibility............................................ 56
5.22 Service Agreements................................................. 56
5.23 Reimbursement...................................................... 57
5.24 Fraud and Abuse.................................................... 57
ARTICLE VI AFFIRMATIVE COVENANTS......................................... 57
6.1 Financial Statements............................................... 58
6.2 Other Business and Financial Information........................... 58
6.3 Corporate Existence; Franchises; Maintenance of Properties......... 60
6.4 Compliance with Laws............................................... 61
6.5 Payment of Obligations............................................. 61
6.6 Insurance.......................................................... 61
6.7 Maintenance of Books and Records; Inspection....................... 61
6.8 Managed Practices.................................................. 62
6.9 Permitted Acquisitions............................................. 62
6.10 Creation or Acquisition of Subsidiaries............................ 63
6.11 Year 2000 Compatibility............................................ 64
6.12 Further Assurances................................................. 64
6.13 Post-Closing Matters............................................... 65
ARTICLE VII FINANCIAL COVENANTS........................................... 65
7.1 Leverage Ratio..................................................... 65
7.2 Fixed Charge Coverage Ratio........................................ 65
7.3 Consolidated Net Worth............................................. 65
ARTICLE VIII NEGATIVE COVENANTS............................................ 66
8.1 Merger; Consolidation.............................................. 66
8.2 Indebtedness....................................................... 66
8.3 Liens.............................................................. 68
8.4 Disposition of Assets.............................................. 69
8.5 Investments........................................................ 70
ii
8.6 Restricted Payments................................................ 71
8.7 Transactions with Affiliates....................................... 72
8.8 Lines of Business.................................................. 72
8.9 Certain Amendments................................................. 72
8.10 Limitation on Certain Restrictions................................. 72
8.11 No Other Negative Pledges.......................................... 73
8.12 Fiscal Year........................................................ 73
ARTICLE IX EVENTS OF DEFAULT............................................. 73
9.1 Events of Default.................................................. 73
9.2 Remedies: Termination of Commitments, Acceleration, etc............ 76
9.3 Remedies: Set-Off.................................................. 77
ARTICLE X THE AGENT..................................................... 77
10.1 Appointment........................................................ 77
10.2 Nature of Duties................................................... 77
10.3 Exculpatory Provisions............................................. 78
10.4 Reliance by Agent.................................................. 78
10.5 Non-Reliance on Agent and Other Lenders............................ 78
10.6 Notice of Default.................................................. 79
10.7 Indemnification.................................................... 79
10.8 The Agent in its Individual Capacity............................... 80
10.9 Successor Agent.................................................... 80
10.10 Collateral Matters................................................. 81
10.11 Issuing Lender..................................................... 81
10.12 Co-Agents.......................................................... 81
ARTICLE XI GUARANTY...................................................... 81
11.1 Guaranty........................................................... 81
11.2 Right of Set-Off................................................... 82
11.3 No Subrogation..................................................... 82
11.4 Amendments, etc.................................................... 83
11.5 Guaranty Absolute and Unconditional................................ 83
11.6 Reinstatement...................................................... 84
11.7 Payments........................................................... 84
ARTICLE XII MISCELLANEOUS................................................. 84
12.1 Fees and Expenses.................................................. 85
12.2 Indemnification.................................................... 85
12.3 Governing Law; Consent to Jurisdiction............................. 86
12.4 Waiver of Jury Trial............................................... 87
12.5 Notices............................................................ 87
12.6 Amendments, Waivers, etc........................................... 88
12.7 Assignments, Participations........................................ 89
12.8 No Waiver.......................................................... 91
12.9 Successors and Assigns............................................. 92
12.10 Survival........................................................... 92
12.11 Severability....................................................... 92
12.12 Construction....................................................... 92
iii
12.13 Confidentiality.................................................... 92
12.14 Counterparts; Effectiveness........................................ 93
12.15 Disclosure of Information.......................................... 93
12.16 Judgment Currency.................................................. 93
12.17 European Monetary Union............................................ 93
12.18 Addition of Borrowers.............................................. 95
12.19 Entire Agreement................................................... 95
iv
EXHIBITS
Exhibit A-1 Form of Dollar Note
Exhibit A-2 Form of Foreign Currency Note
Exhibit B-1 Form of Notice of Borrowing
Exhibit B-2 Form of Notice of Conversion/Continuation
Exhibit B-3 Form of Letter of Credit Notice
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of OCA Pledge Agreement
Exhibit F Form of Intercompany Note
Exhibit G Form of Subsidiary Guaranty
Exhibit H Form of Joinder Agreement
Exhibit I Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, PLLC
Exhibit J Form of Financial Condition Certificate
SCHEDULES
Schedule 5.7 Subsidiaries
Schedule 5.18 Material Contracts
Schedule 8.2 Indebtedness
Schedule 8.3 Liens
Schedule 8.7 Transactions with Affiliates
v
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of the 8th day of October, 1998 (this
"Agreement"), is made among ORTHODONTIC CENTERS OF AMERICA, INC., a Delaware
corporation with its principal offices in Ponte Vedra Beach, Florida ("OCA"),
certain Foreign Subsidiaries (as hereinafter defined) of OCA that become parties
hereto after the date hereof pursuant to SECTION 12.18 (collectively, together
with OCA, the "Borrowers"), the banks and financial institutions listed on the
signature pages hereto or that become parties hereto after the date hereof
(collectively, the "Lenders"), FIRST UNION NATIONAL BANK ("First Union"), as
agent for the Lenders (in such capacity, the "Agent"), BANK OF AMERICA FSB (in
such capacity, the "Documentation Agent"), and CITIBANK, N.A. (in such capacity,
the "Syndication Agent").
RECITALS
A. OCA has requested that the Lenders make available to OCA and the
other Borrowers a revolving credit facility in the aggregate principal amount of
$100,000,000. The Borrowers will use the proceeds of this facility to refinance
certain existing indebtedness, to pay or reimburse certain fees and expenses in
connection herewith and therewith, to finance certain acquisitions, and for
working capital and general corporate purposes, all as more fully described
herein.
B. The Lenders are willing to make available to the Borrowers the
credit facility described herein subject to and on the terms and conditions set
forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual provisions, covenants and
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement, in addition to
the terms defined elsewhere herein, the following terms shall have the meanings
set forth below (such meanings to be equally applicable to the singular and
plural forms thereof):
"Account Designation Letter" shall mean a letter from one or more Borrowers
to the Agent, duly completed and signed by an Authorized Officer of each such
Borrower and in form and substance satisfactory to the Agent, listing any one or
more accounts to which any such Borrower may from time to time request the Agent
to forward the proceeds of any Loans made hereunder.
"Acquisition" shall mean any transaction or series of related transactions,
consummated on or after the date hereof, by which OCA directly, or indirectly
through one or more Subsidiaries, (i) acquires any going business, or all or
substantially all of the
assets, of any Person, whether through purchase of assets, merger or otherwise,
or (ii) acquires securities or other ownership interests of any Person resulting
in OCA, directly or indirectly, having at least a majority of combined voting
power of the then outstanding securities or other ownership interests of such
Person.
"Acquisition Amount" shall mean, with respect to any Acquisition, the sum
(without duplication) of (i) the amount of cash paid by OCA and its Subsidiaries
in connection with such Acquisition, (ii) the Fair Market Value of all Capital
Stock of OCA issued or given in connection with such Acquisition, (iii) the
amount (determined by using the face amount or the amount payable at maturity,
whichever is greater) of all Indebtedness incurred, assumed or acquired by OCA
and its Subsidiaries in connection with such Acquisition, (iv) all additional
purchase price amounts in connection with such Acquisition in the form of
earnouts and other contingent obligations that should be recorded as a liability
on the balance sheet of OCA and its Subsidiaries or expensed, in either event in
accordance with GAAP, Regulation S-X under the Securities Act of 1933, as
amended, or any other rule or regulation of the Securities and Exchange
Commission, (v) all amounts paid in respect of covenants not to compete,
consulting agreements and other affiliated contracts in connection with such
Acquisition, (vi) the amount of all transaction fees and expenses (including,
without limitation, legal, accounting and finders' fees and expenses) incurred
by OCA and its Subsidiaries in connection with such Acquisition and (vii) the
aggregate fair market value of all other consideration given by OCA and its
Subsidiaries in connection with such Acquisition. For purposes of this
Agreement, all amounts included in calculating the Acquisition Amount with
respect to any Acquisition for which the Acquisition Amount is payable or
determinable in a currency other than Dollars shall be valued at the Dollar
Equivalent thereof as of the relevant date of determination.
"Adjusted Base Rate" shall mean, at any time with respect to any Base Rate
Loan, a rate per annum equal to the Base Rate as in effect at such time plus the
Applicable Margin Percentage for Base Rate Loans as in effect at such time.
"Adjusted Consolidated Indebtedness" shall mean, as of the last day of any
fiscal quarter, the sum of (i) Consolidated Indebtedness as of such date and
(ii) the product of (A) Consolidated Lease Expense for the period of two
consecutive fiscal quarters then ended and (B) sixteen (16).
"Adjusted IBOR Rate" shall mean, at any time with respect to any Foreign
Currency Loan, a rate per annum equal to the IBOR Rate as in effect at such time
plus the Applicable Margin Percentage for Foreign Currency Loans as in effect at
such time.
"Adjusted LIBOR Rate" shall mean, at any time with respect to any LIBOR
Loan, a rate per annum equal to the LIBOR Rate as in effect at such time plus
the Applicable Margin Percentage for LIBOR Loans as in effect at such time.
"Affiliate" shall mean, as to any Person, each other Person that directly,
or indirectly through one or more intermediaries, owns or controls, is
controlled by or under common control with, such Person or is a director or
officer of such Person. For purposes of this definition, with respect to any
Person "control" shall mean (i) the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise,
2
or (ii) the beneficial ownership of securities or other ownership interests of
such Person having 10% or more of the combined voting power of the then
outstanding securities or other ownership interests of such Person ordinarily
(and apart from rights accruing under special circumstances) having the right to
vote in the election of directors or other governing body of such Person.
"Agent" shall mean First Union, in its capacity as Agent appointed under
ARTICLE X, and its successors and permitted assigns in such capacity.
"Agreement" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time.
"Annualized Consolidated Cash Flow" shall mean, as of the last day of any
fiscal quarter, the product of (i) Consolidated Cash Flow for the period of two
consecutive fiscal quarters then ended and (ii) two (2).
"Applicable Currency" shall mean (i) in the case of Dollar Loans, Dollars,
and (ii) in the case of any Foreign Currency Loans, the Foreign Currency in
which such Loans are to be made or maintained, as selected pursuant to the
relevant Notice of Borrowing or Notice of Conversion/Continuation.
"Applicable Margin Percentage" shall mean, at any time from and after the
Closing Date, the applicable percentage (a) to be added to the Base Rate
pursuant to SECTION 2.8 for purposes of determining the Adjusted Base Rate, (b)
to be added to the IBOR Rate pursuant to SECTION 2.8 for purposes of determining
the Adjusted IBOR Rate, (c) to be added to the LIBOR Rate pursuant to SECTION
2.8 for purposes of determining the Adjusted LIBOR Rate, and (d) to be used in
calculating the commitment fee payable pursuant to SECTION 2.9(B), in each case
as determined under the following matrix with reference to the Leverage Ratio:
Applicable
Margin
Applicable Percentage for Applicable
Margin Foreign Currency Margin
Percentage for Loans and Percentage for
Leverage Ratio Base Rate Loans LIBOR Loans Commitment Fee
-------------- --------------- ----------- --------------
Greater than or equal to 2.5 0.500% 1.500% 0.375%
to 1.0
Greater than or equal to 2.0 0.375% 1.375% 0.375%
to 1.0 but less than 2.5 to 1.0
Greater than or equal to 1.5 to 0.250% 1.250% 0.250%
1.0 but less than 2.0 to 1.0
Greater than or equal to 1.0 to 0.125% 1.125% 0.250%
1.0 but less than 1.5 to 1.0
Less than 1.0 to 1.0 0.000% 1.000% 0.250%
3
On each Adjustment Date (as hereinafter defined), the Applicable Margin
Percentage for all Loans and the commitment fee payable pursuant to SECTION
2.9(B) shall be adjusted effective as of such date (based upon the calculation
of the Leverage Ratio as of the last day of the fiscal period to which such
Adjustment Date relates) in accordance with the above matrix; provided, however,
that, notwithstanding the foregoing or anything else herein to the contrary, if
at any time OCA shall have failed to deliver the financial statements and a
Compliance Certificate as required by SECTION 6.1(A) or SECTION 6.1(B), as the
case may be, and SECTION 6.2(A), then at the election of the Required Lenders,
at all times from and including the date on which such statements and Compliance
Certificate are required to have been delivered to the date on which the same
shall have been delivered, each Applicable Margin Percentage shall be determined
in accordance with the above matrix as if the Leverage Ratio were greater than
or equal to 2.5 : 1.0 (notwithstanding the actual Leverage Ratio). For purposes
of this definition, "Adjustment Date" shall mean, with respect to any fiscal
period of OCA beginning with the fiscal quarter ended September 30, 1998, the
tenth (10th) day (or, if such day is not a Business Day, on the next succeeding
Business Day) after delivery by OCA in accordance with SECTION 6.1(A) or SECTION
6.1(B), as the case may be, of (i) financial statements as of the end of and for
such fiscal period and (ii) a duly completed Compliance Certificate with respect
to such fiscal period. Until the first Adjustment Date, each Applicable Margin
Percentage shall be determined in accordance with the Leverage Ratio as set
forth in the Compliance Certificate delivered on the Closing Date pursuant to
SECTION 4.1(K).
"Applicable Number of Business Days" shall mean (i) with respect to all
notices and determinations in connection with Foreign Currency Loans, four (4)
Business Days (measured prior to the Local Time of the funding, payment or other
event with respect to which such notice is given or determination made), (ii)
with respect to all notices and determinations in connection with LIBOR Loans,
three (3) Business Days, and (iii) with respect to all notices and
determinations in connection with Base Rate Loans, one (1) Business Day.
"Arranger" shall mean First Union Capital Markets, a division of Wheat
First Securities, Inc.
"Asset Disposition" shall mean any sale, assignment, transfer or other
disposition by OCA or any of its Subsidiaries to any other Person (other than to
OCA or to a Wholly Owned Subsidiary), whether in one transaction or in a series
of related transactions, of any of its assets, business units or other
properties (including any interests in property, whether tangible or intangible,
and including Capital Stock of Subsidiaries), excluding (i) sales of inventory
in the ordinary course of business, and (ii) the sale or exchange of used or
obsolete equipment to the extent (y) the proceeds of such sale (1) are applied
towards, or such equipment is exchanged for, replacement equipment or (2) do not
exceed $25,000 in the aggregate for any fiscal quarter or (z) such equipment is
no longer necessary for the operations of OCA or its applicable Subsidiary in
the ordinary course of business.
"Assignee" shall have the meaning given to such term in SECTION 12.7(A).
"Assignment and Acceptance" shall mean an Assignment and Acceptance entered
into between a Lender and an Assignee and accepted by the Agent and OCA, in
substantially the form of EXHIBIT D.
4
"Authorized Officer" shall mean, with respect to any action of any Borrower
specified herein, any officer of such Borrower duly authorized by resolution of
its board of directors to take such action on its behalf, and whose signature
and incumbency shall have been certified to the Agent by the secretary or an
assistant secretary of such Borrower.
"Bankruptcy Code" shall mean 11 U.S.C. (S)(S) 101 et seq., as amended from
time to time, and any successor statute.
"Base Rate" shall mean the higher of (i) the per annum interest rate
publicly announced from time to time by First Union in Charlotte, North
Carolina, to be its prime rate (which may not necessarily be its best lending
rate), as adjusted to conform to changes as of the opening of business on the
date of any such change in such prime rate, and (ii) the Federal Funds Rate plus
0.5% per annum, as adjusted to conform to changes as of the opening of business
on the date of any such change in the Federal Funds Rate.
"Base Rate Loan" shall mean, at any time, any Loan that bears interest at
such time at the Adjusted Base Rate.
"Borrowing" shall mean the incurrence by any Borrower (including as a
result of conversions and continuations of outstanding Loans pursuant to SECTION
2.11) on a single date of a group of Loans of a single Type and, in the case of
Fixed Rate Loans, as to which a single Interest Period is in effect.
"Borrowing Date" shall mean, with respect to any Borrowing, the date upon
which such Borrowing is made.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) or (iii) below, any day other than a Saturday or Sunday, a legal
holiday or a day on which commercial banks in Charlotte, North Carolina are
authorized or required by law to be closed, (ii) with respect to all notices and
determinations in connection with, and payments in respect of, LIBOR Loans, any
day described in clause (i) above that is also a day on which tradings are
conducted in the London interbank Eurodollar market, and (iii) with respect to
all notices and determinations in connection with, and payments in respect of,
any Foreign Currency Loans, any day described in clauses (i) and (ii) that is
also (y) not a legal holiday or a day on which banking institutions are
authorized or required by law to close in the city of the country of issuance of
the Applicable Currency where the relevant disbursement or payment office of the
Agent or its applicable Correspondent is located and (z) a day on which tradings
are conducted in the interbank market for the Applicable Currency.
"Capital Expenditures" shall mean, for any period, the aggregate amount
(whether paid in cash or accrued as a liability) that would, in accordance with
GAAP, be included on the consolidated statement of cash flows of OCA and its
Subsidiaries for such period as additions to equipment, fixed assets, real
property or improvements or other capital assets (including, without limitation,
capital lease obligations); provided, however, that Capital Expenditures shall
not include any such expenditures (i) for replacements and substitutions for
capital assets, to the extent made with the proceeds of insurance, or (ii) made
in connection with Permitted Acquisitions.
5
"Capital Stock" shall mean (i) with respect to any Person that is a
corporation, any and all shares, interests or equivalents in capital stock
(whether voting or nonvoting, and whether common or preferred) of such
corporation, and (ii) with respect to any Person that is not a corporation, any
and all partnership, membership, limited liability company or other equity
interests of such Person; and in each case, any and all warrants, rights or
options to purchase any of the foregoing.
"Cash Collateral Account" shall have the meaning given to such term in
SECTION 3.8.
"Cash Equivalents" shall mean (i) securities issued or unconditionally
guaranteed by the United States of America or any agency or instrumentality
thereof, backed by the full faith and credit of the United States of America and
maturing within 90 days from the date of acquisition, (ii) commercial paper
issued by any Person organized under the laws of the United States of America,
maturing within 90 days from the date of acquisition and, at the time of
acquisition, having a rating of at least A-1 or the equivalent thereof by
Standard & Poor's Ratings Services or at least P-1 or the equivalent thereof by
▇▇▇▇▇'▇ Investors Service, Inc., (iii) time deposits and certificates of deposit
maturing within 90 days from the date of issuance and issued by a bank or trust
company organized under the laws of the United States of America or any state
thereof that has combined capital and surplus of at least $500,000,000 and that
has (or is a subsidiary of a bank holding company that has) a long-term
unsecured debt rating of at least A or the equivalent thereof by Standard &
Poor's Ratings Services or at least A2 or the equivalent thereof by ▇▇▇▇▇'▇
Investors Service, Inc., (iv) repurchase obligations with a term not exceeding
seven (7) days with respect to underlying securities of the types described in
clause (i) above entered into with any bank or trust company meeting the
qualifications specified in clause (iii) above, and (v) money market funds at
least 95% of the assets of which are continuously invested in securities of the
type described in clause (i) above.
"Closing Date" shall mean the date upon which the initial extensions of
credit are made pursuant to this Agreement.
"Collateral" shall mean all the assets, property and interests in property
that shall from time to time be pledged or be purported to be pledged as direct
or indirect security for the Obligations pursuant to any one or more of the
Pledge Agreements.
"Commitment" shall mean, with respect to any Lender at any time, the amount
set forth opposite such Lender's name on Annex A hereto or, if such Lender has
entered into one or more Assignment and Acceptances, the amount set forth for
such Lender at such time in the Register maintained by the Agent pursuant to
SECTION 12.7(B) as such Lender's "Commitment," as such amount may be reduced at
or prior to such time pursuant to the terms hereof.
"Compliance Certificate" shall mean a fully completed and duly executed
certificate in the form of EXHIBIT C, together with a Covenant Compliance
Worksheet.
"Consolidated Cash Flow" shall mean, for any period, the aggregate of (i)
Consolidated Net Income for such period, plus (ii) the sum of Consolidated
Interest Expense, federal, state, local and other income taxes, depreciation,
amortization of
6
intangible assets, Consolidated Lease Expense, and extraordinary or nonrecurring
losses (including in connection with the sale or write-down of assets) and other
noncash expenses or charges (including in connection with any acquisition or
purchase of assets) reducing income for such period, all to the extent taken
into account in the calculation of Consolidated Net Income for such period,
minus (iii) the sum of extraordinary or nonrecurring gains (including in
connection with the sale or write-up of assets) and other noncash credits
increasing income for such period, all to the extent taken into account in the
calculation of Consolidated Net Income for such period.
"Consolidated Fixed Charges" shall mean, for any period, the aggregate
(without duplication) of the following, all determined on a consolidated basis
for OCA and its Subsidiaries in accordance with GAAP for such period: (a)
Consolidated Interest Expense for such period, (b) aggregate expense for
federal, state, local and other income taxes for such period, (c) Capital
Expenditures for such period, (d) Consolidated Lease Expense for such period,
(e) the aggregate (without duplication) of all scheduled payments of principal
on Funded Debt required to have been made by OCA and its Subsidiaries during
such period (whether or not such payments are actually made), and (f) the
aggregate of all amounts paid by OCA or any of its Subsidiaries during such
period as dividends or distributions in respect of its Capital Stock or to
purchase, redeem, retire or otherwise acquire its Capital Stock.
"Consolidated Interest Expense" shall mean, for any period, the sum
(without duplication) of (i) total interest expense of OCA and its Subsidiaries
for such period in respect of Funded Debt of OCA and its Subsidiaries
(including, without limitation, all such interest expense accrued or capitalized
during such period, whether or not actually paid during such period), determined
on a consolidated basis in accordance with GAAP, (ii) all net amounts payable
under or in respect of Hedge Agreements, to the extent paid or accrued by OCA
and its Subsidiaries during such period, and (iii) all commitment fees and other
ongoing fees in respect of Funded Debt (including the commitment fee provided
for under SECTION 2.9(B) and the fees provided for under the Fee Letter) paid,
accrued or capitalized by OCA and its Subsidiaries during such period.
"Consolidated Lease Expense" shall mean, for any period, the aggregate
(without duplication) of total lease and rental expense of OCA and its
Subsidiaries for such period (including, without limitation, all such lease and
rental expense accrued or capitalized during such period, whether or not
actually paid during such period, including capital lease obligations),
determined on a consolidated basis in accordance with GAAP (but excluding, in
any event, amounts paid in respect of taxes, utilities, insurance, common area
maintenance and other like charges associated with the lease and rental of real
property).
"Consolidated Net Income" shall mean, for any period, net income (or loss)
for OCA and its Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP.
"Consolidated Net Worth" shall mean, as of any date of determination, the
net worth of OCA and its Subsidiaries as of such date, determined on a
consolidated basis in accordance with GAAP but excluding any Disqualified
Capital Stock.
7
"Contingent Obligation" shall mean, with respect to any Person, any direct
or indirect liability of such Person with respect to any Indebtedness, liability
or other obligation (the "primary obligation") of another Person (the "primary
obligor"), whether or not contingent, (a) to purchase, repurchase or otherwise
acquire such primary obligation or any property constituting direct or indirect
security therefor, (b) to advance or provide funds (i) for the payment or
discharge of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor in respect thereof to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the owner of any
such primary obligation against loss or failure or inability to perform in
respect thereof; provided, however, that, with respect to OCA and its
Subsidiaries, the term Contingent Obligation shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Contingent Obligation of any Person shall be deemed to be an amount equal to the
maximum amount of such Person's liability with respect to the stated or
determinable amount of the primary obligation for which such Contingent
Obligation is incurred or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder).
"Correspondent" shall mean First Union National Bank, London branch, or any
other financial institution designated by the Agent to act as its correspondent
hereunder in respect of the disbursement and payment of Foreign Currency Loans.
"Covenant Compliance Worksheet" shall mean a fully completed worksheet in
the form of Attachment A to EXHIBIT C.
"Credit Documents" shall mean this Agreement, the Notes, the Letters of
Credit, the Fee Letter, the Pledge Agreements, the Subsidiary Guaranty, the
Intercompany Notes, any Hedge Agreement to which OCA and any Lender are parties
and that is permitted or required to be entered into by OCA hereunder, and all
other agreements, instruments, documents and certificates now or hereafter
executed and delivered to the Agent or any Lender by or on behalf of OCA or any
of its Subsidiaries with respect to this Agreement and the transactions
contemplated hereby, in each case as amended, modified, supplemented or restated
from time to time.
"Debt Issuance" shall mean the issuance or sale by OCA or any of its
Subsidiaries of any debt securities, whether in a public offering of such
securities or otherwise.
"Default" shall mean any event or condition that, with the passage of time
or giving of notice, or both, would constitute an Event of Default.
"Disqualified Capital Stock" shall mean, with respect to any Person, any
Capital Stock of such Person that, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event or otherwise, (i) matures or is mandatorily redeemable or
subject to any mandatory repurchase requirement, pursuant to a sinking fund
obligation or otherwise, (ii) is redeemable or subject to any mandatory
repurchase requirement at the sole option of the
8
holder thereof, or (iii) is convertible into or exchangeable for (whether at the
option of the issuer or the holder thereof) (a) debt securities or (b) any
Capital Stock referred to in (i) or (ii) above, in each case under (i), (ii) or
(iii) above at any time on or prior to the first anniversary of the Maturity
Date; provided, however, that only the portion of Capital Stock that so matures
or is mandatorily redeemable, is so redeemable at the option of the holder
thereof, or is so convertible or exchangeable on or prior to such date shall be
deemed to be Disqualified Capital Stock.
"Dollar Amount" shall mean (i) with respect to Dollars or an amount
denominated in Dollars, such amount, and (ii) with respect to an amount
denominated in a Foreign Currency, the Dollar Equivalent of such amount on the
date contemplated by the applicable section of this Agreement.
"Dollar Equivalent" shall mean (i) with respect to each Loan made or
continued in a Foreign Currency, except as specifically provided otherwise
herein, the amount of Dollars into which the Agent could, in accordance with its
customary commercial practice from time to time in the applicable interbank
foreign exchange market, convert such amount of Foreign Currency at the most
favorable spot rate of exchange determined by the Agent to be available to it
(inclusive of all reasonable and related costs of conversion, if any are
actually incurred) at or about 11:00 a.m., Charlotte time, two (2) Business Days
prior to the date such Loan is made or continued (or is to be made or
continued), for purchase on such date, and (ii) with respect to any other amount
denominated in a Foreign Currency (and, for purposes of SECTIONS 2.6(B) and
2.6(C), with respect to each Loan made or continued in a Foreign Currency), the
amount of Dollars into which the Agent could convert such amount of Foreign
Currency at the most favorable spot rate of exchange determined by the Agent to
be available to it (inclusive of all reasonable and related costs of conversion,
if any are actually incurred) as of the date of determination.
"Dollar Loans" shall have the meaning given to such term in SECTION 2.1(A).
"Dollar Notes" shall mean the promissory notes of OCA in substantially the
form of EXHIBIT A-1, together with any amendments, modifications and supplements
thereto, substitutions therefor and restatements thereof.
"Dollars" or "$" shall mean dollars of the United States of America.
"Domestic Subsidiary" shall mean any Subsidiary of OCA that is organized
under the laws of the United States of America or any state thereof or the
District of Columbia.
"ECU" shall mean the currency basket from time to time used as the unit of
account of the European Community as defined in European Council Regulation No.
3320/94.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"ERISA Affiliate" shall mean any Person (including any trade or business,
whether or not incorporated) that would be deemed to be under "common control"
with, or a member
9
of the same "controlled group" as, OCA or any of its Subsidiaries, within the
meaning of Sections 414(b), (c), (m) or (o) of the Internal Revenue Code or
Section 4001 of ERISA.
"ERISA Event" shall mean any of the following with respect to a Plan or
Multiemployer Plan, as applicable: (i) a Reportable Event with respect to a
Plan or a Multiemployer Plan, (ii) a complete or partial withdrawal by OCA or
any ERISA Affiliate from a Multiemployer Plan that results in liability under
Section 4201 or 4204 of ERISA, or the receipt by OCA or any ERISA Affiliate of
notice from a Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA, (iii) the distribution by OCA or any
ERISA Affiliate under Section 4041 or 4041A of ERISA of a notice of intent to
terminate any Plan or the taking of any action to terminate any Plan, (iv) the
commencement of proceedings by the PBGC under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by OCA or any ERISA Affiliate of a notice from any Multiemployer Plan
that such action has been taken by the PBGC with respect to such Multiemployer
Plan, (v) the institution of a proceeding by any fiduciary of any Multiemployer
Plan against OCA or any ERISA Affiliate to enforce Section 515 of ERISA, which
is not dismissed within thirty (30) days, (vi) the imposition upon OCA or any
ERISA Affiliate of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, or the imposition
or threatened imposition of any Lien upon any assets of OCA or any ERISA
Affiliate as a result of any alleged failure to comply with the Internal Revenue
Code or ERISA in respect of any Plan, (vii) the engaging in or otherwise
becoming liable for a nonexempt Prohibited Transaction by OCA or any ERISA
Affiliate, (viii) a violation of the applicable requirements of Section 404 or
405 of ERISA or the exclusive benefit rule under Section 401(a) of the Internal
Revenue Code by any fiduciary of any Plan for which OCA or any of its ERISA
Affiliates may be directly or indirectly liable or (ix) the adoption of an
amendment to any Plan that, pursuant to Section 401(a)(29) of the Internal
Revenue Code or Section 307 of ERISA, would result in the loss of tax-exempt
status of the trust of which such Plan is a part if OCA or an ERISA Affiliate
fails to timely provide security to such Plan in accordance with the provisions
of such sections.
"Eligible Assignee" shall mean (i) a commercial bank organized under the
laws of the United States or any state thereof and having total assets in excess
of $1,000,000,000, (ii) a commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development or any successor thereto (the "OECD") or a political subdivision of
any such country and having total assets in excess of $1,000,000,000, provided
that such bank or other financial institution is acting through a branch or
agency located in the United States, in the country under the laws of which it
is organized or in another country that is also a member of the OECD, (iii) the
central bank of any country that is a member of the OECD, (iv) a finance
company, insurance company or other financial institution or fund that is
engaged in making, purchasing or otherwise investing in loans in the ordinary
course of its business and having total assets in excess of $500,000,000, (v)
any Affiliate of an existing Lender or (vi) any other Person approved by the
Required Lenders, which approval shall not be unreasonably withheld.
"Environmental Claims" shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, accusations,
allegations,
10
notices of noncompliance or violation, investigations (other than internal
reports prepared by any Person in the ordinary course of its business and not in
response to any third party action or request of any kind) or proceedings
relating in any way to any actual or alleged violation of or liability under any
Environmental Law or relating to any permit issued, or any approval given, under
any such Environmental Law (collectively, "Claims"), including, without
limitation, (i) any and all Claims by Governmental Authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Substances or arising from alleged
injury or threat of injury to human health or the environment.
"Environmental Laws" shall mean any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals, rules of
common law and orders of courts or Governmental Authorities, relating to the
protection of human health or occupational safety or the environment, now or
hereafter in effect and in each case as amended from time to time, including,
without limitation, requirements pertaining to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation, handling,
reporting, licensing, permitting, investigation or remediation of Hazardous
Substances.
"Equity Issuance" shall mean the issuance, sale or other disposition by OCA
or any of its Subsidiaries of its Capital Stock, any rights, warrants or options
to purchase or acquire any shares of its Capital Stock or any other security or
instrument representing, convertible into or exchangeable for an equity interest
in OCA or any of its Subsidiaries; provided, however, that the term Equity
Issuance shall not include (i) the issuance or sale of Capital Stock by any of
the Subsidiaries of OCA to OCA or any other Subsidiary, provided that such
Capital Stock is pledged to the Agent pursuant to a Pledge Agreement, (ii) any
Capital Stock of OCA issued or sold in connection with any Permitted Acquisition
and constituting all or a portion of the applicable purchase price, or (iii) any
rights, options or other Capital Stock issued pursuant to bona fide employee
stock option or purchase plans or arrangements approved by OCA's board of
directors or upon the exercise of rights or options issued under any such plan
or arrangement.
"Euro" shall mean the monetary unit of participating member states of the
European Union that adopt a single currency in accordance with the Treaty
(whether such monetary unit is denominated or referred to as the "euro" or
otherwise).
"Event of Default" shall have the meaning given to such term in SECTION
9.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute, and all rules and regulations from
time to time promulgated thereunder.
"Fair Market Value" shall mean, with respect to any Capital Stock of OCA
given in connection with an Acquisition, the value given to such Capital Stock
for purposes of such Acquisition by the parties thereto, as determined in good
faith pursuant to the relevant acquisition agreement or otherwise in connection
with such Acquisition.
11
"Federal Funds Rate" shall mean, for any period, a fluctuating per annum
interest rate (rounded upwards, if necessary, to the nearest 1/100 of one
percentage point) equal for each day during such period 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 next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by the Agent.
"Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System or any successor thereto.
"Fee Letter" shall mean the letter from First Union to OCA, dated July 16,
1998, relating to certain fees payable by OCA in respect of the transactions
contemplated by this Agreement, as amended, modified or supplemented from time
to time.
"Financial Condition Certificate" shall mean a fully completed and duly
executed certificate, substantially in the form of EXHIBIT J, together with the
attachments thereto.
"Financial Officer" shall mean, with respect to OCA, the chief financial
officer, vice president - finance, principal accounting officer or treasurer of
OCA.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of (i) Annualized Consolidated Cash Flow as of such date to
(ii) the product of (A) Consolidated Fixed Charges for the period of two fiscal
quarters then ending and (B) two (2).
"Fixed Rate" shall mean the IBOR Rate or the LIBOR Rate, or both, as the
context may require.
"Fixed Rate Loans" shall mean any or all of the Foreign Currency Loans and
the LIBOR Loans, as the context may require.
"Foreign Currency" shall mean each of (i) British pounds sterling, Canadian
dollars, French francs, German deutsche marks, Euros (if and when introduced
pursuant to the Treaty), Mexican pesos and Japanese yen (so long as such
currency is readily available and freely tradable and convertible into Dollars
and the Lenders are able to enter into forward rate agreements to hedge against
fluctuations in the exchange rate for such currency) and (ii) at the option of
the Lenders, any other currency that is readily available and freely tradable
and convertible into Dollars and the Lenders are able to enter into forward rate
agreements to hedge against fluctuations in the exchange rate for such currency;
provided that no such other currency under this clause (ii) shall be included as
a Foreign Currency hereunder or referenced as an Applicable Currency in a Notice
of Borrowing unless the applicable Borrower has first submitted a request to the
Agent and the Lenders that such currency be so included and the Agent and the
Lenders have agreed to such request in their sole discretion.
12
"Foreign Currency Loan" shall have the meaning given to such term in
SECTION 2.1(B).
"Foreign Currency Notes" shall mean the promissory notes of the applicable
Borrowers in substantially the form of EXHIBIT A-2, together with any
amendments, modifications and supplements thereto, substitutions therefor and
restatements thereof.
"Foreign Currency Sublimit" shall mean $10,000,000 or, if less, the
aggregate Commitments at the time of determination, as such amount may be
reduced at or prior to such time pursuant to the terms hereof.
"Foreign Subsidiary" shall mean any Subsidiary of OCA that is organized
under the laws of any nation, state or jurisdiction other than the United States
of America or any state thereof or the District of Columbia.
"Funded Debt" shall mean, with respect to any Person, all Indebtedness for
borrowed money of such Person that by its terms or by the terms of any
instrument or agreement relating thereto matures more than one year from, or is
renewable or extendible at the option of the debtor to a date more than one year
from, the date of creation thereof (including an option of the debtor under a
revolving credit or similar arrangement obligating the lender or lenders to
extend credit over a period of one year or more), including any current
maturities of such Indebtedness.
"GAAP" shall mean generally accepted accounting principles, as set forth in
the statements, opinions and pronouncements of the Accounting Principles Board,
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained, as in effect
from time to time (subject to the provisions of SECTION 1.2).
"Governmental Authority" shall mean any domestic or foreign nation or
government, any state or other political subdivision thereof and any central
bank thereof, any municipal, local, city or county government, and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"Hazardous Substances" shall mean any substances or materials (i) that are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Environmental Law, (ii) that are
defined by any Environmental Law as toxic, explosive, corrosive, ignitable,
infectious, radioactive, mutagenic or otherwise hazardous, (iii) the presence of
which require investigation or response under any Environmental Law, (iv) that
constitute a nuisance, trespass or health or safety hazard to Persons or
neighboring properties, (v) that consist of underground or aboveground storage
tanks, whether empty, filled or partially filled with any substance, or (vi)
that contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.
13
"Hedge Agreement" shall mean any interest or foreign currency rate swap,
cap, collar, option, hedge, forward rate or other similar agreement or
arrangement designed to protect against fluctuations in interest rates or
currency exchange rates.
"IBOR Rate" shall mean, with respect to each Foreign Currency Loan
comprising part of the same Borrowing for any Interest Period, an interest rate
per annum obtained by dividing (i) (y) the rate of interest (rounded upward, if
necessary, to the nearest 1/16 of one percentage point) appearing on Telerate
Page 3750 (or any successor page) or (z) if no such rate is available, the rate
of interest determined by the Agent to be the rate or the arithmetic mean of
rates (rounded upward, if necessary, to the nearest 1/16 of one percentage
point) at which deposits in the applicable Foreign Currency in immediately
available funds are offered by First Union to first-tier banks in the interbank
market for such Foreign Currency, in each case under (y) and (z) above at
approximately 11:00 a.m., London time, two (2) Business Days prior to the first
day of such Interest Period for a period substantially equal to such Interest
Period and in an amount substantially equal to the amount of First Union's
Foreign Currency Loan comprising part of such Borrowing, by (ii) the amount
equal to 1.00 minus the applicable Reserve Requirement (expressed as a decimal)
for such Interest Period.
"Inactive Subsidiary" shall have the meaning given to such term in SECTION
4.1(A).
"Indebtedness" shall mean, with respect to any Person (without
duplication), (i) all indebtedness and obligations of such Person for borrowed
money or in respect of loans or advances of any kind, (ii) all obligations of
such Person evidenced by notes, bonds, debentures or similar instruments, (iii)
all reimbursement obligations of such Person with respect to surety bonds,
letters of credit and bankers' acceptances (in each case, whether or not drawn
or matured and in the stated amount thereof), (iv) all obligations of such
Person to pay the deferred purchase price of property or services, (v) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person, (vi) all
obligations of such Person as lessee under leases that are or are required to
be, in accordance with GAAP, recorded as capital leases, to the extent such
obligations are required to be so recorded, (vii) all Disqualified Capital Stock
issued by such Person, with the amount of Indebtedness represented by such
Disqualified Capital Stock being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price, but
excluding accrued dividends, if any (for purposes hereof, the "maximum fixed
repurchase price" of any Disqualified Capital Stock that does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant to
this Agreement, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value shall be
determined reasonably and in good faith by the board of directors or other
governing body of the issuer of such Disqualified Capital Stock), (viii) the net
termination obligations of such Person under any Hedge Agreements, calculated as
of any date as if such agreement or arrangement were terminated as of such date,
(ix) all Contingent Obligations of such Person and (x) all indebtedness referred
to in clauses (i) through (ix) above secured by any Lien on any property or
asset owned or held by such Person regardless of whether the indebtedness
14
secured thereby shall have been assumed by such Person or is nonrecourse to the
credit of such Person.
"Intercompany Notes" shall mean, collectively, the intercompany notes made
by the Subsidiaries, in substantially the form of EXHIBIT F, as amended,
modified or supplemented from time to time.
"Interest Period" shall have the meaning given to such term in SECTION
2.10.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"Issuing Lender" shall mean First Union in its capacity as issuer of the
Letters of Credit, and its successors in such capacity.
"Joinder Agreement" shall mean a joinder agreement made by a Foreign
Subsidiary and OCA in favor of the Agent and the Lenders, in substantially the
form of EXHIBIT H, as amended, modified or supplemented from time to time.
"LIBOR Loan" shall mean, at any time, any Loan that bears interest at such
time at the Adjusted LIBOR Rate.
"LIBOR Rate" shall mean, with respect to each LIBOR Loan comprising part of
the same Borrowing for any Interest Period, an interest rate per annum obtained
by dividing (i) (y) the rate of interest (rounded upward, if necessary, to the
nearest 1/16 of one percentage point) appearing on Telerate Page 3750 (or any
successor page) or (z) if no such rate is available, the rate of interest
determined by the Agent to be the rate or the arithmetic mean of rates (rounded
upward, if necessary, to the nearest 1/16 of one percentage point) at which
Dollar deposits in immediately available funds are offered by First Union to
first-tier banks in the London interbank Eurodollar market, in each case under
(y) and (z) above at approximately 11:00 a.m., London time, two (2) Business
Days prior to the first day of such Interest Period for a period substantially
equal to such Interest Period and in an amount substantially equal to the amount
of First Union's LIBOR Loan comprising part of such Borrowing, by (ii) the
amount equal to 1.00 minus the applicable Reserve Requirement (expressed as a
decimal) for such Interest Period.
"Lender" shall mean each financial institution signatory hereto and each
other financial institution that becomes a "Lender" hereunder after the date
hereof pursuant to SECTION 12.7, and their respective successors and assigns.
"Lending Office" shall mean, with respect to any Lender, the office of such
Lender designated as its "Lending Office" on its signature page hereto or in an
Assignment and Acceptance, or such other office as may be otherwise designated
in writing from time to time by such Lender to OCA and the Agent. A Lender may
designate separate Lending Offices as provided in the foregoing sentence for the
purposes of making or maintaining different Types of Loans, and, with respect to
Fixed Rate Loans, such office may be a domestic or foreign branch or Affiliate
of such Lender.
15
"Letter of Credit Exposure" shall mean, with respect to any Lender at any
time, such Lender's ratable share (based on the proportion that its Commitment
bears to the aggregate Commitments at such time) of the sum of (i) the aggregate
Stated Amount of all Letters of Credit outstanding at such time and (ii) the
aggregate amount of all Reimbursement Obligations outstanding at such time.
"Letter of Credit Notice" shall have the meaning given to such term in
SECTION 3.2.
"Letters of Credit" shall have the meaning given to such term in SECTION
3.1.
"Leverage Ratio" shall mean, as of the last day of any fiscal quarter, the
ratio of (i) Adjusted Consolidated Indebtedness as of such date to (ii)
Annualized Consolidated Cash Flow as of such date.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, security
interest, lien (statutory or otherwise), preference, priority, charge or other
encumbrance of any nature, whether voluntary or involuntary, including, without
limitation, the interest of any vendor or lessor under any conditional sale
agreement, title retention agreement, capital lease or any other lease or
arrangement having substantially the same effect as any of the foregoing.
"Licenses" shall mean any and all licenses (including provisional
licenses), certificates of need, accreditations, permits, franchises, rights to
conduct business, approvals (by a Governmental Authority or otherwise),
consents, qualifications, operating authority and any other authorizations.
"Limitation" shall mean a revocation, suspension, termination, impairment,
probation, limitation, non-renewal, forfeiture, declaration of ineligibility,
loss of status as a participating provider in a Third Party Payor Arrangement,
and the loss of any other rights.
"Loans" shall mean any or all of the Dollar Loans and Foreign Currency
Loans, as the context may require.
"Local Time" shall mean the local time in effect at the office of the
applicable Correspondent in connection with any disbursements or payments of
Loans by or through such Correspondent.
"Managed Practice" shall mean any dentist, orthodontist, professional
association, professional corporation, partnership or similar Person that,
pursuant to a Service Agreement, provides dental or orthodontic services at a
center, clinic or other facility operated by OCA or any of its Subsidiaries.
"Margin Stock" shall have the meaning given to such term in Regulation U.
"Material Adverse Change" shall mean a material adverse change in the
condition (financial or otherwise), operations, business, performance,
properties or assets of OCA and its Subsidiaries, taken as a whole.
16
"Material Adverse Effect" shall mean a material adverse effect upon (i) the
condition (financial or otherwise), operations, business, performance,
properties or assets of OCA and its Subsidiaries, taken as a whole, (ii) the
ability of any Borrower or any of its Subsidiaries to perform its obligations
under this Agreement or any of the other Credit Documents to which it is a party
or (iii) the legality, validity or enforceability of this Agreement or any of
the other Credit Documents or the rights and remedies of the Agent and the
Lenders hereunder and thereunder.
"Material Contract" shall have the meaning given to such term in SECTION
5.18.
"Maturity Date" shall mean the fifth (5th) anniversary of the Closing Date.
"Multiemployer Plan" shall mean any "multiemployer plan" within the meaning
of Section 4001(a)(3) of ERISA to which OCA or any ERISA Affiliate makes, is
making or is obligated to make contributions or has made or been obligated to
make contributions.
"Net Cash Proceeds" shall mean, in the case of any Equity Issuance or Debt
Issuance, the aggregate cash payments received by OCA and its Subsidiaries less
reasonable and customary fees and expenses (including underwriting discounts and
commissions) incurred by OCA and its Subsidiaries in connection therewith.
"Notes" shall mean any or all of the Dollar Notes and the Foreign Currency
Notes, as the context may require.
"Notice of Borrowing" shall have the meaning given to such term in SECTION
2.2(B).
"Notice of Conversion/Continuation" shall have the meaning given to such
term in Section 2.11(b).
"OCA Pledge Agreement" shall mean a pledge agreement made by OCA and the
Subsidiaries party thereto in favor of the Agent, in substantially the form of
Exhibit E, as amended, modified or supplemented from time to time.
"Obligations" shall mean all principal of and interest (including, to the
greatest extent permitted by law, post-petition interest) on the Loans, all
Reimbursement Obligations and all fees, expenses, indemnities and other
obligations owing, due or payable at any time by any Borrower to the Agent, any
Lender, the Issuing Lender or any other Person entitled thereto, under this
Agreement or any of the other Credit Documents.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"Participant" shall have the meaning given to such term in SECTION 12.7(D).
"Permitted Acquisition" shall mean (a) any Acquisition with respect to
which all of the following conditions are satisfied: (i) each business or assets
thereof acquired shall be within (or any assets acquired shall be used within)
the permitted lines of business described in SECTION 8.8, (ii) any Capital Stock
given as consideration in connection therewith shall be Capital Stock of OCA,
(iii) in the case of an Acquisition involving the
17
acquisition of control of Capital Stock of any Person, immediately after giving
effect to such Acquisition such Person (or the surviving Person, if the
Acquisition is effected through a merger or consolidation) shall be OCA or a
Wholly Owned Subsidiary that is a Domestic Subsidiary, (iv) the Board of
Directors or equivalent governing body of the Person whose Capital Stock or
business is acquired shall have approved such Acquisition and such Acquisition
shall not be "hostile," and (v) all of the conditions and requirements of
SECTIONS 6.9(A) and 6.10 applicable to such Acquisition are satisfied; or (b)
any other Acquisition to which the Required Lenders (or the Agent on their
behalf, provided the Agent has received the consent of the Required Lenders)
shall have given their prior written consent (which consent may be in their sole
discretion and may be given subject to such additional terms and conditions as
the Required Lenders shall establish) and with respect to which all of the
conditions and requirements set forth in this definition and in SECTION 6.9, and
in or pursuant to any such consent, have been completed to the satisfaction of,
or waived in writing by, the Required Lenders (or the Agent on their behalf,
provided the Agent has received the consent of the Required Lenders).
"Permitted Liens" shall have the meaning given to such term in SECTION 8.3.
"Person" shall mean any corporation, association, joint venture,
partnership, limited liability company, organization, business, individual,
trust, government or agency or political subdivision thereof or any other legal
entity.
"Plan" shall mean any "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA that is subject to the provisions of Title IV of ERISA
(other than a Multiemployer Plan) and to which OCA or any ERISA Affiliate may
have any liability.
"Pledge Agreement" shall mean (i) the OCA Pledge Agreement and (ii) each
other pledge agreement made by OCA or any Subsidiary with respect to the pledge
of Capital Stock of any other Subsidiary, in substantially the form of EXHIBIT E
(with such modifications as may be necessary or appropriate for each applicable
foreign jurisdiction), as amended, modified or supplemented from time to time.
"Prohibited Transaction" shall mean any transaction described in (i)
Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or by
reason of a Department of Labor prohibited transaction individual or class
exemption or (ii) Section 4975(c) of the Internal Revenue Code that is not
exempt by reason of Section 4975(c)(2) or 4975(d) of the Internal Revenue Code.
"Projections" shall have the meaning given to such term in SECTION 5.11(B).
"Register" shall have the meaning given to such term in SECTION 12.7(B).
"Regulations D, T, U and X" shall mean Regulations D, T, U and X,
respectively, of the Federal Reserve Board, and any successor regulations.
"Reimbursement Approvals" shall mean, with respect to all Third Party Payor
Arrangements, any and all certifications, provider numbers, provider agreements,
participation agreements, accreditations and any other similar agreements with
or approvals by Governmental Authorities or other Persons.
18
"Reimbursement Obligation" shall have the meaning given to such term in
SECTION 3.4.
"Relevant Type" shall have the meaning given to such term in SECTION
2.16(C).
"Reportable Event" shall mean (i) any "reportable event" within the meaning
of Section 4043(c) of ERISA for which the 30-day notice under Section 4043(a) of
ERISA has not been waived by the PBGC (including any failure to meet the minimum
funding standard of, or timely make any required installment under, Section 412
of the Internal Revenue Code or Section 302 of ERISA, regardless of the issuance
of any waivers in accordance with Section 412(d) of the Internal Revenue Code),
(ii) any such "reportable event" subject to advance notice to the PBGC under
Section 4043(b)(3) of ERISA, (iii) any application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Internal
Revenue Code, and (iv) a cessation of operations described in Section 4062(e) of
ERISA.
"Required Lenders" shall mean the Lenders holding outstanding Loans and
Unutilized Commitments (or, after the termination of the Commitments,
outstanding Loans and Letter of Credit Exposure) representing at least a
majority of the aggregate at such time of all outstanding Loans and Unutilized
Commitments (or, after the termination of the Commitments, the aggregate at such
time of all outstanding Loans and Letter of Credit Exposure).
"Requirement of Law" shall mean, with respect to any Person, the charter,
articles or certificate of organization or incorporation and bylaws or other
organizational or governing documents of such Person, and any statute, law,
treaty, rule, regulation, order, decree, writ, injunction or determination of
any arbitrator or court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject or otherwise pertaining to any or all of the
transactions contemplated by this Agreement and the other Credit Documents.
"Reserve Requirement" shall mean, with respect to any Interest Period, (i)
in respect of any LIBOR Loan, the reserve percentage (expressed as a decimal) in
effect from time to time during such Interest Period, as provided by the Federal
Reserve Board, applied for determining the maximum reserve requirements
(including, without limitation, basic, supplemental, marginal and emergency
reserves) applicable to First Union under Regulation D with respect to
"Eurocurrency liabilities" within the meaning of Regulation D, or under any
similar or successor regulation with respect to Eurocurrency liabilities or
Eurocurrency funding, and (ii) in respect of any Foreign Currency Loan, the
reserve percentage (expressed as a decimal) in effect from time to time during
such Interest Period applied for determining the maximum reserve requirements
(including, without limitation, basic, supplemental, marginal and emergency
reserves), applicable to First Union under any applicable Requirement of Law
established by any Governmental Authority having jurisdiction in respect of such
Foreign Currency Loan or any category of liabilities that includes deposits by
reference to which the interest rate on such Foreign Currency Loan is
determined.
"Responsible Officer" shall mean, with respect to any Borrower or any of
its Subsidiaries, the president, the chief executive officer, the
19
co-chief executive officer, the chief financial officer, any executive officer,
or any other Financial Officer of such Borrower or Subsidiary, and any other
officer or similar official thereof responsible for the administration of the
obligations of the Borrower or such Subsidiary in respect of this Agreement and
the other Credit Documents.
"Service Agreement" shall mean any agreement or arrangement between OCA or
any of its Subsidiaries and one or more Managed Practices pursuant to which OCA
or such Subsidiary agrees to provide or arrange for comprehensive management,
administrative and other non-medical support services to such Managed Practice
or Practices in exchange for payment to OCA or such Subsidiary of a service,
management or similar fee.
"Stated Amount" shall mean, with respect to any Letter of Credit at any
time, the aggregate amount available to be drawn thereunder at such time
(regardless of whether any conditions for drawing could then be met).
"Subordinated Indebtedness" shall have the meaning given to such term in
SECTION 8.2.
"Subsidiary" shall mean, with respect to any Person, any corporation or
other Person of which more than fifty percent (50%) of the outstanding Capital
Stock having ordinary voting power to elect a majority of the board of
directors, board of managers or other governing body of such Person, is at the
time, directly or indirectly, owned or controlled by such Person and one or more
of its other Subsidiaries or a combination thereof (irrespective of whether, at
the time, securities of any other class or classes of any such corporation or
other Person shall or might have voting power by reason of the happening of any
contingency). When used without reference to a parent entity, the term
"Subsidiary" shall be deemed to refer to a Subsidiary of OCA.
"Subsidiary Guarantor" shall mean any Domestic Subsidiary of OCA that is a
guarantor under the Subsidiary Guaranty.
"Subsidiary Guaranty" shall mean a guaranty agreement made by the
Subsidiary Guarantors in favor of the Agent and the Lenders, in substantially
the form of EXHIBIT G, as amended, modified or supplemented from time to time.
"Terminating Indebtedness" shall have the meaning given to such term in
SECTION 4.1(L).
"Termination Date" shall mean the Maturity Date or such earlier date of
termination of the Commitments pursuant to SECTION 2.5 or SECTION 9.2.
"Third Party Payor Arrangements" shall mean any and all arrangements with
Medicare, Medicaid, CHAMPUS and any other Governmental Authority or quasi-public
agency, Blue Cross, Blue Shield, any managed care plans and organizations
including, without limitation, health maintenance organizations and preferred
provider organizations, private commercial insurance companies and any similar
third party arrangements, plans or programs for payment or reimbursement in
connection with health care services, products or supplies.
20
"Treaty" shall mean the Treaty on European Union signed February 7, 1992.
"Type" shall mean the type of Loan determined with regard to both the
currency and interest rate option applicable thereto. Foreign Currency Loans
denominated in different currencies shall be different Types of Loans.
"Unfunded Pension Liability" shall mean, with respect to any Plan or
Multiemployer Plan, the excess of its benefit liabilities under Section
4001(a)(16) of ERISA over the current value of its assets, determined in
accordance with the applicable assumptions used for funding under Section 412 of
the Code for the applicable plan year.
"Unutilized Commitment" shall mean, with respect to any Lender at any time,
such Lender's Commitment at such time less the sum of (i) the aggregate
principal Dollar Amount of all Loans made by such Lender that are outstanding at
such time and (ii) such Lender's Letter of Credit Exposure at such time.
"Wholly Owned" shall mean, with respect to any Subsidiary of any Person,
that 100% of the outstanding Capital Stock of such Subsidiary is owned, directly
or indirectly, by such Person.
1.2 Accounting Terms; Covenant Calculations. Except as specifically
provided otherwise in this Agreement, all accounting terms used herein that are
not specifically defined shall have the meanings customarily given them in
accordance with GAAP. Notwithstanding anything to the contrary in this
Agreement, for purposes of calculation of the financial covenants set forth in
ARTICLE VII, all accounting determinations and computations hereunder shall be
made in accordance with GAAP as in effect as of the date of this Agreement
applied on a basis consistent with the application used in preparing the most
recent financial statements of OCA referred to in SECTION 5.11(A). In the event
that any changes in GAAP after such date are required to be applied to OCA and
would affect the computation of the financial covenants contained in ARTICLE
VII, such changes shall be followed only from and after the date this Agreement
shall have been amended to take into account any such changes. Notwithstanding
the foregoing or any other provision of this Agreement, the assets, liabilities,
revenues, income, losses and other financial statement items of Subsidiaries of
OCA that are not Subsidiary Guarantors shall not be taken into account in the
calculation of the financial covenants set forth in ARTICLE VII.
1.3 Other Terms; Construction. Unless otherwise specified or unless the
context otherwise requires, all references herein to sections, annexes,
schedules and exhibits are references to sections, annexes, schedules and
exhibits in and to this Agreement, and all terms defined in this Agreement shall
have the defined meanings when used in any other Credit Document or any
certificate or other document made or delivered pursuant hereto. All references
herein to the Lenders or any of them shall be deemed to include the Issuing
Lender unless specifically provided otherwise or unless the context otherwise
requires.
21
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1 Commitments. (a) Each Lender severally agrees, subject to and on
the terms and conditions of this Agreement, to make revolving credit loans in
Dollars (each, a "Dollar Loan," and collectively, the "Dollar Loans") to OCA,
from time to time on any Business Day during the period from and including the
Closing Date to but not including the Termination Date, provided that no
Borrowing of Dollar Loans shall be made if, immediately after giving effect
thereto:
(i) the sum of (y) the aggregate principal Dollar Amount of Loans of
such Lender outstanding at such time and (z) such Lender's Letter of Credit
Exposure at such time would exceed its Commitment at such time; or
(ii) the sum of (y) the aggregate principal Dollar Amount of Loans
outstanding at such time and (z) the aggregate Letter of Credit Exposure of
all Lenders at such time would exceed the aggregate Commitments at such
time.
Subject to and on the terms and conditions of this Agreement, OCA may
borrow, repay and reborrow Dollar Loans.
(b) Each Lender severally agrees, subject to and on the terms and
conditions of this Agreement, to make revolving credit loans in any Foreign
Currency (each, a "Foreign Currency Loan," and collectively, the "Foreign
Currency Loans") to any Borrower, from time to time on any Business Day during
the period from and including the Closing Date to but not including the
Termination Date, provided that no Borrowing of Foreign Currency Loans shall be
made if, immediately after giving effect thereto:
(i) the sum of (y) the aggregate principal Dollar Amount of Loans of
such Lender outstanding at such time and (z) such Lender's Letter of Credit
Exposure at such time would exceed its Commitment at such time;
(ii) the sum of (y) the aggregate principal Dollar Amount of Loans
outstanding at such time and (z) the aggregate Letter of Credit Exposure of
all Lenders at such time would exceed the aggregate Commitments at such
time; or
(iii) the aggregate principal Dollar Amount of Foreign Currency Loans
outstanding at such time would exceed the Foreign Currency Sublimit.
Subject to and on the terms and conditions of this Agreement, each Borrower
may borrow, repay and reborrow Foreign Currency Loans.
2.2 Borrowings. (a) Subject to the terms and conditions of this
Agreement, Dollar Loans shall at the option of OCA be either Base Rate Loans or
LIBOR Loans, provided that (i) all Loans comprising the same Borrowing shall,
unless otherwise specifically provided herein, be of the same Type (with regard
to both currency and interest rate option, in the case of Foreign Currency
Loans), and (ii) no Borrowing of LIBOR Loans may be made at any time prior to
the third (3rd) Business Day after the Closing Date, and
22
no Borrowing of Foreign Currency Loans may be made at any time prior to the
fourth (4th) Business Day after the Closing Date.
(b) In order to make a Borrowing (other than Borrowings involving
continuations or conversions of outstanding Fixed Rate Loans, which shall be
made pursuant to Section 2.11), the applicable Borrower will give the Agent
written notice not later than 11:00 a.m., Charlotte time, the Applicable Number
of Business Days prior to each Borrowing; provided, however, that requests for
the Borrowing of any Loans to be made on the Closing Date may, at the discretion
of the Agent, be given later than the times specified hereinabove. Each such
notice (each, a "Notice of Borrowing") shall be irrevocable, shall be given in
the form of EXHIBIT B-1 and shall specify (1) the aggregate principal amount and
initial Type of the Loans to be made pursuant to such Borrowing, (2) in the case
of a Borrowing of Fixed Rate Loans, the initial Interest Period to be applicable
thereto, (3) in the case of a Borrowing of Foreign Currency Loans, the
applicable Foreign Currency, and (4) the requested date of such Borrowing (the
"Borrowing Date"), which shall be a Business Day. Upon its receipt of a Notice
of Borrowing, the Agent will promptly notify each Lender of the proposed
Borrowing. Notwithstanding anything to the contrary contained herein:
(i) the aggregate principal amount of each Borrowing comprised of
Base Rate Loans shall not be less than $500,000 or, if greater, an integral
multiple of $100,000 in excess thereof (or, if less, in the amount of the
aggregate Unutilized Commitments); the aggregate principal amount of each
Borrowing comprised of LIBOR Loans shall not be less than $3,000,000 or, if
greater, an integral multiple of $1,000,000 in excess thereof; and the
aggregate principal amount of each Borrowing comprised of Foreign Currency
Loans shall not be less than a Dollar Amount of $1,000,000;
(ii) no more than $5,000,000 in aggregate Dollar Amount of proceeds
from any Borrowing may be used to fund the Acquisition Amount (in whole or
in part) in connection with any single Permitted Acquisition (provided
that, in connection with any request to the Required Lenders for their
approval of an Acquisition as a Permitted Acquisition pursuant to SECTION
6.9(C), the Borrower may also request that the Lenders permit a Borrowing
in excess of $5,000,000 to fund all or a portion of the Acquisition Amount
in connection therewith); and
(iii) if the applicable Borrower shall have failed to select the
duration of the Interest Period to be applicable to any Borrowing of Fixed
Rate Loans, then such Borrower shall be deemed to have selected an Interest
Period with a duration of one month.
(c) In the case of each Borrowing of Dollar Loans, not later than 1:00
p.m., Charlotte time, on the requested Borrowing Date, each Lender will make
available to the Agent at its office referred to in SECTION 12.5 (or at such
other location as the Agent may designate) an amount, in Dollars and in
immediately available funds, equal to the amount of the Dollar Loan to be made
by such Lender. To the extent the Lenders have made such amounts available to
the Agent as provided hereinabove, the Agent will make the aggregate of such
amounts available to OCA in accordance with SECTION 2.3(A) and in like funds as
received by the Agent. In the case of each Borrowing of Foreign Currency Loans,
23
not later than 10:00 a.m., Local Time, on the requested Borrowing Date, each
Lender will make available to the Agent at the office of its applicable
Correspondent (or at such other location as the Agent may designate) an amount,
in the applicable Foreign Currency and in immediately available funds, equal to
the amount of the Foreign Currency Loan to be made by such Lender. To the
extent the Lenders have made such amounts available to the Agent as provided
hereinabove, the Agent will make the aggregate of such amounts available to the
applicable Borrower in accordance with SECTION 2.3(A) and in like funds as
received by the Agent.
2.3 Disbursements; Funding Reliance; Domicile of Loans. (a) Each
Borrower hereby authorizes the Agent and each Correspondent to disburse the
proceeds of each Borrowing in accordance with the terms of any written
instructions from any of its Authorized Officers, provided that neither the
Agent nor any Correspondent shall be obligated under any circumstances to
forward amounts to any account not listed in an Account Designation Letter.
Each Borrower may at any time deliver to the Agent an Account Designation Letter
listing any additional accounts or deleting any accounts listed in a previous
Account Designation Letter.
(b) Unless the Agent has received, prior to the applicable funding deadline
as set forth in SECTION 2.2(C), on the relevant Borrowing Date, written notice
from a Lender that such Lender will not make available to the Agent such
Lender's ratable portion of the relevant Borrowing, the Agent may assume that
such Lender has made such portion available to the Agent in immediately
available funds on such Borrowing Date in accordance with the applicable
provisions of SECTION 2.2(C), and the Agent may, in reliance upon such
assumption, but shall not be obligated to, make a corresponding amount available
to the applicable Borrower on such Borrowing Date. If and to the extent that
such Lender shall not have made such portion available to the Agent, and the
Agent shall have made such corresponding amount available to the applicable
Borrower, such Lender, on the one hand, and the applicable Borrower, on the
other, severally agree to pay to the Agent forthwith on demand such
corresponding amount, together with interest thereon for each day from the date
such amount is made available to the applicable Borrower until the date such
amount is repaid to the Agent, (i) in the case of such Lender, (y) with respect
to any Borrowing of Dollar Loans, at the Federal Funds Rate, and (z) with
respect to any Borrowing of Foreign Currency Loans, at the Agent's average daily
cost of carrying such amount, and (ii) in the case of such Borrower, at the rate
of interest applicable at such time to the Type of Loans comprising such
Borrowing, as determined under the provisions of SECTION 2.8. If such Lender
shall repay to the Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
The failure of any Lender to make any Loan required to be made by it as part of
any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan as part of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender as part of any Borrowing.
(c) Each Lender may, at its option, make and maintain any Loan at, to or
for the account of any of its Lending Offices, provided that any exercise of
such option shall not affect the obligation of the applicable Borrower to repay
such Loan to or for the account of such Lender in accordance with the terms of
this Agreement.
24
2.4 Notes. (a) The Loans made by each Lender shall be evidenced (i) in
the case of Dollar Loans, by a Dollar Note appropriately completed in
substantially the form of EXHIBIT A-1, and (ii) in the case of Foreign Currency
Loans, by a Foreign Currency Note appropriately completed in substantially the
form of EXHIBIT A-2.
(b) Each Dollar Note issued to a Lender shall (i) be executed by OCA, (ii)
be payable to the order of such Lender, (iii) be dated as of the Closing Date
(or, in the case of a Dollar Note issued after the Closing Date, dated the
effective date of the applicable Assignment and Acceptance), (iv) be in a stated
principal amount equal to such Lender's Commitment, (v) bear interest in
accordance with the provisions of Section 2.8, as the same may be applicable
from time to time to the applicable Type of Dollar Loans made by such Lender,
and (vi) be entitled to all of the benefits of this Agreement and the other
Credit Documents and subject to the provisions hereof and thereof.
(c) Each Foreign Currency Note issued to a Lender shall (i) be executed by
the applicable Borrower, (ii) be payable to the order of such Lender, (iii) be
dated as of the Closing Date (or, in the case of a Foreign Currency Note issued
after the Closing Date, dated the effective date of the applicable Assignment
and Acceptance), (iv) be in a stated principal amount equal to such Lender's
ratable share of the Foreign Currency Sublimit, (v) bear interest in accordance
with the provisions of SECTION 2.8, as the same may be applicable from time to
time to the applicable Type of Foreign Currency Loans made by such Lender, and
(vi) be entitled to all of the benefits of this Agreement and the other Credit
Documents and subject to the provisions hereof and thereof.
(d) Each Lender will record on its internal records the amount and Type of
each Loan made by it and each payment received by it in respect thereof and
will, in the event of any transfer of any of its Notes, either endorse on the
reverse side thereof or on a schedule attached thereto (or any continuation
thereof) the outstanding principal amount and Type of the Loans evidenced
thereby as of the date of transfer or provide such information on a schedule to
the Assignment and Acceptance relating to such transfer; provided, however, that
the failure of any Lender to make any such recordation or provide any such
information, or any error therein, shall not affect any Borrower's obligations
under this Agreement or the Notes.
2.5 Termination and Reduction of Commitments. (a) The Commitments
shall be automatically and permanently terminated on the Termination Date (or on
October 31, 1998, but only if the Closing Date shall not have occurred on or
prior to such date).
(b) At any time and from time to time after the date hereof, upon not less
than five (5) Business Days' prior written notice to the Agent, OCA may
terminate in whole or reduce in part the aggregate Unutilized Commitments and/or
the Foreign Currency Sublimit, provided that any such partial reduction shall be
in an aggregate principal amount of not less than $1,000,000 or, if greater, an
integral multiple thereof. The amount of any termination or reduction made
under this subsection (b) may not thereafter be reinstated.
(c) Each reduction of the Commitments or the Foreign Currency Sublimit
pursuant to this Section shall be applied ratably among the Lenders according to
their respective Commitments or ratable share (based on their respective
Commitments) of the
25
Foreign Currency Sublimit, as the case may be. To the extent that the aggregate
Commitments are reduced to an amount lower than the Foreign Currency Sublimit
pursuant to this Section, there shall be a corresponding permanent reduction of
the Foreign Currency Sublimit to the amount of the aggregate Commitments as so
reduced.
2.6 Mandatory Payments and Prepayments. (a) Except to the extent due
or paid sooner pursuant to the provisions of this Agreement, (i) the aggregate
outstanding principal amount of each Borrowing of Foreign Currency Loans shall
be due and payable in full on the last day of the Interest Period applicable
thereto; provided, however, that the Borrower may, subject to the provisions of
SECTION 2.11, continue all or a portion of such outstanding principal amount of
such Foreign Currency Loans for an additional Interest Period in the same
Foreign Currency, and to the extent that any such Foreign Currency Loans are not
continued for an additional Interest Period as provided in such Section, the
Borrower will repay the principal amount thereof not so continued (together with
interest thereon) on the last day of the Interest Period applicable thereto; and
(ii) the aggregate outstanding principal amount of all the Loans shall be due
and payable in full on the Maturity Date. Each payment of a Foreign Currency
Loan made pursuant to the provisions of this subsection (a) shall be made in the
Foreign Currency in which such Foreign Currency Loan was made, as set forth more
particularly in SECTION 2.12(A), and shall be made in an amount (denominated in
the applicable Foreign Currency) equal to the outstanding amount (denominated in
such Foreign Currency) of such Foreign Currency Loan, i.e. without adjustment to
the Dollar Equivalent of such outstanding amount; provided, however, that upon
request by the applicable Borrower and subsequent approval of all of the
Lenders, any such payment may be made in the Dollar Equivalent of such amount,
determined as of the date of payment, as provided in SECTION 2.12(A).
(b) In the event that, at any time, the sum of (y) the aggregate principal
Dollar Amount of Loans outstanding at such time and (z) the aggregate Letter of
Credit Exposure of all Lenders at such time shall exceed the aggregate
Commitments at such time (after giving effect to any concurrent termination or
reduction thereof), the Borrowers will immediately prepay the outstanding
principal amount of the Loans in the Dollar Amount of such excess; provided
that, to the extent such excess amount is greater than the aggregate principal
amount of Loans outstanding immediately prior to the application of such
prepayment, the amount so prepaid shall be retained by the Agent and held in the
Cash Collateral Account as cover for Letter of Credit Exposure, as more
particularly described in SECTION 3.8, and thereupon such cash shall be deemed
to reduce the aggregate Letter of Credit Exposure by an equivalent amount.
(c) In the event that, at any time, the aggregate principal Dollar Amount
of Foreign Currency Loans outstanding at such time shall exceed the Foreign
Currency Sublimit at such time (after giving effect to any concurrent
termination or reduction thereof), the Borrowers will immediately prepay the
outstanding principal amount of the Foreign Currency Loans in the Dollar Amount
of such excess.
(d) Promptly upon (and in any event not later than two (2) Business Days
after) receipt thereof by OCA or any Subsidiary, the Borrowers will prepay the
outstanding principal amount of the Loans in an amount equal to 50% of the Net
Cash Proceeds from any Equity Issuance or 100% of the Net Cash Proceeds from any
Debt Issuance, and in connection therewith OCA will deliver to the Agent,
concurrently with such prepayment, a
26
certificate signed by a Financial Officer of OCA in form and substance
satisfactory to the Agent and setting forth the calculation of such Net Cash
Proceeds.
(e) Not later than ninety (90) days after receipt thereof by OCA or any
Subsidiary (and in any event promptly upon a determination not to acquire
additional assets or properties or otherwise to reinvest in their businesses),
the Borrowers will prepay the outstanding principal amount of the Loans in an
amount equal to 100% of the Net Cash Proceeds from any Asset Disposition (less
any amounts thereof theretofore expended to acquire assets or properties or
otherwise reinvested in their businesses), and in connection therewith OCA will
deliver to the Agent, concurrently with such prepayment, a certificate signed by
a Financial Officer of OCA in form and substance satisfactory to the Agent and
setting forth the calculation of such Net Cash Proceeds. Notwithstanding the
foregoing, nothing in this subsection shall be deemed to permit any Asset
Disposition not expressly permitted under SECTION 8.4.
(f) Each prepayment of the Loans made pursuant to subsection (d) or (e)
above shall be applied (i) first, to reduce the outstanding principal amount of
the Loans (but without any corresponding reduction to the Commitments), and (ii)
second, to the extent of any excess remaining after application as provided in
clause (i) above, to pay any outstanding Reimbursement Obligations, and
thereafter to cash collateralize Letter of Credit Exposure pursuant to SECTION
3.8. Each payment or prepayment pursuant to the provisions of this Section
shall be applied ratably among the Lenders holding the Loans being prepaid, in
proportion to the principal amount held by each, and in the case of prepayments
pursuant to subsection (b), (d) or (e) above shall be applied, as among the
Loans, (x) first, to prepay all Base Rate Loans, (y) second, to the extent of
any excess remaining after application as provided in clause (x) above, to
prepay all LIBOR Loans (and as among LIBOR Loans, first to prepay those LIBOR
Loans, if any, having Interest Periods ending on the date of such prepayment),
and (z) third, to the extent of any excess remaining after application as
provided in clauses (x) and (y) above, to prepay all Foreign Currency Loans in
an amount equal to the Dollar Amount of such excess (and as among Foreign
Currency Loans, first to prepay those Foreign Currency Loans, if any, having
Interest Periods ending on the date of such prepayment).
(g) Each payment or prepayment of a Fixed Rate Loan made pursuant to the
provisions of this Section on a day other than the last day of the Interest
Period applicable thereto shall be made together with all amounts required under
SECTION 2.18 to be paid as a consequence thereof.
(h) For purposes of subsections (b) and (c) above, and notwithstanding any
other provision of this Agreement, the Agent shall calculate the Dollar
Equivalent of each Foreign Currency Loan (i) in connection with the making or
continuation of such Foreign Currency Loan, as of the date such Foreign Currency
Loan is so made or continued, and (ii) on the Termination Date. Notwithstanding
the foregoing, the Agent may in its sole discretion, but unless requested in
writing to do so by the Required Lenders shall not be required to, calculate the
Dollar Equivalent of any Foreign Currency Loan or other amount at any other time
for purposes of determining compliance with the provisions of subsections (b)
and (c) above.
27
2.7 Voluntary Prepayments. (a) At any time and from time to time, each
Borrower shall have the right to prepay the Loans, in whole or in part, without
premium or penalty (except as provided in clause (iii) below), upon written
notice given to the Agent not later than 11:00 a.m., Charlotte time, the
Applicable Number of Business Days prior to each intended prepayment, provided
that (i) each partial prepayment of Base Rate Loans shall be in an aggregate
principal amount of not less than $500,000 or, if greater, an integral multiple
of $100,000 in excess thereof; each partial prepayment of LIBOR Loans shall be
in an aggregate principal amount of not less than $3,000,000 or, if greater, an
integral multiple of $1,000,000 in excess thereof; and each partial prepayment
of Foreign Currency Loans shall be in an aggregate principal Dollar Amount of
not less than $1,000,000, (ii) no partial prepayment of Fixed Rate Loans made
pursuant to any single Borrowing shall reduce the aggregate outstanding
principal amount of the remaining Fixed Rate Loans under such Borrowing to a
Dollar Amount of less than (y) in the case of LIBOR Loans, $3,000,000 or to any
greater amount not an integral multiple of $1,000,000 in excess thereof, and (z)
in the case of Foreign Currency Loans, $1,000,000, and (iii) unless made
together with all amounts required under SECTION 2.18 to be paid as a
consequence of such prepayment, a prepayment of a Fixed Rate Loan may be made
only on the last day of the Interest Period applicable thereto. Each such
notice shall specify the proposed date of such prepayment and the aggregate
principal amount and Type of the Loans to be prepaid (and, in the case of Fixed
Rate Loans, the Borrowing pursuant to which made and the Interest Period
applicable thereto), and shall be irrevocable and shall bind such Borrower to
make such prepayment on the terms specified therein. Each prepayment of the
Loans made pursuant to this Section shall be applied ratably among the Lenders
holding the Loans being prepaid, in proportion to the principal amount held by
each. Loans prepaid pursuant to this Section may be reborrowed, subject to the
terms and conditions of this Agreement.
2.8 Interest. (a) Each Borrower will pay interest in respect of the
unpaid principal amount of each Loan made to it, from the date of Borrowing
thereof until such principal amount shall be paid in full, (i) at the Adjusted
Base Rate, as in effect from time to time during such periods as such Loan is a
Base Rate Loan, (ii) at the Adjusted LIBOR Rate, as in effect from time to time
during such periods as such Loan is a LIBOR Loan, and (iii) at the Adjusted IBOR
Rate, as in effect from time to time during such periods as such Loan is a
Foreign Currency Loan.
(b) Upon the occurrence and during the continuance of any default by any
Borrower in the payment of any principal of or interest on any Loan, any fees or
other amount hereunder when due (whether at maturity, pursuant to acceleration
or otherwise), and (at the election of the Required Lenders) upon the occurrence
and during the continuance of any Event of Default, all outstanding principal
amounts of the Loans and, to the greatest extent permitted by law, all interest
accrued on the Loans and all other accrued and outstanding fees and other
amounts hereunder, shall bear interest at a rate per annum equal to the interest
rate applicable from time to time thereafter to such Loans (whether the Adjusted
Base Rate, the Adjusted LIBOR Rate or the Adjusted IBOR Rate) plus 2% (or, in
the case of fees and other amounts, at the Adjusted Base Rate plus 2%), and, in
each case, such default interest shall be payable on demand. To the greatest
extent permitted by law, interest shall continue to accrue after the filing by
or against any
28
applicable Borrower of any petition seeking any relief in bankruptcy or under
any law pertaining to insolvency or debtor relief.
(c) Accrued (and theretofore unpaid) interest shall be payable as follows:
(i) in respect of each Base Rate Loan (including any Base Rate Loan
or portion thereof paid or prepaid pursuant to the provisions of SECTION
2.6, except as provided hereinbelow), in arrears on the last Business Day
of each calendar quarter, beginning with the first such day to occur after
the Closing Date; provided, that in the event the Loans are repaid or
prepaid in full and the Commitments have been terminated, then accrued
interest in respect of all Base Rate Loans shall be payable together with
such repayment or prepayment on the date thereof;
(ii) in respect of each Fixed Rate Loan (including any Fixed Rate
Loan or portion thereof paid or prepaid pursuant to the provisions of
SECTION 2.6, except as provided hereinbelow), in arrears (y) on the last
Business Day of the Interest Period applicable thereto (subject to the
provisions of clause (iv) in SECTION 2.10) and (z) in addition, in the case
of a Fixed Rate Loan with an Interest Period having a duration of six
months, on the date three months after the first day of such Interest
Period; provided, that in the event all Fixed Rate Loans made pursuant to a
single Borrowing are repaid or prepaid in full, then accrued interest in
respect of such Fixed Rate Loans shall be payable together with such
repayment or prepayment on the date thereof; and
(iii) in respect of any Loan, at maturity (whether pursuant to
acceleration or otherwise) and, after maturity, on demand.
(d) Nothing contained in this Agreement or in any other Credit Document
shall be deemed to establish or require the payment of interest to any Lender at
a rate in excess of the maximum rate permitted by applicable law. If the amount
of interest payable for the account of any Lender on any interest payment date
would exceed the maximum amount permitted by applicable law to be charged by
such Lender, the amount of interest payable for its account on such interest
payment date shall be automatically reduced to such maximum permissible amount.
In the event of any such reduction affecting any Lender, if from time to time
thereafter the amount of interest payable for the account of such Lender on any
interest payment date would be less than the maximum amount permitted by
applicable law to be charged by such Lender, then the amount of interest payable
for its account on such subsequent interest payment date shall be automatically
increased to such maximum permissible amount, provided that at no time shall the
aggregate amount by which interest paid for the account of any Lender has been
increased pursuant to this sentence exceed the aggregate amount by which
interest paid for its account has theretofore been reduced pursuant to the
previous sentence.
(e) The Agent shall promptly notify OCA and the Lenders upon determining
the interest rate for each Borrowing of Fixed Rate Loans after its receipt of
the relevant Notice of Borrowing or Notice of Conversion/Continuation, and upon
each change in the Base Rate; provided, however, that the failure of the Agent
to provide the applicable Borrower or the Lenders with any such notice shall
neither affect any obligations of such Borrower or the Lenders hereunder nor
result in any liability on the part of the Agent to such Borrower
29
or any Lender. Each such determination (including each determination of the
applicable Reserve Requirement) shall, absent manifest error, be conclusive and
binding on all parties hereto.
2.9 Fees. OCA agrees to pay:
(a) To the Agent, for its own account, on the Closing Date, the fee
described in paragraph (2) of the Fee Letter, in the amount agreed to between
the Arranger and OCA;
(b) To the Agent, for the account of each Lender, a commitment fee for
each calendar quarter (or portion thereof) for the period from the date of this
Agreement to the Termination Date, at a per annum rate equal to the Applicable
Margin Percentage in effect for such fee from time to time during such quarter,
on such Lender's ratable share (based on the proportion that its Commitment
bears to the aggregate Commitments) of the average daily aggregate Unutilized
Commitments, payable in arrears (i) on the last Business Day of each calendar
quarter, beginning with the first such day to occur after the Closing Date, and
(ii) on the Termination Date;
(c) To the Agent, for the account of each Lender, a letter of credit fee
for each calendar quarter (or portion thereof) in respect of all Letters of
Credit outstanding during such quarter, at a per annum rate equal to the
Applicable Margin Percentage in effect from time to time during such quarter for
Loans that are maintained as LIBOR Loans, on such Lender's ratable share (based
on the proportion that its Commitment bears to the aggregate Commitments) of the
daily average aggregate Stated Amount of such Letters of Credit, payable in
arrears (i) on the last Business Day of each calendar quarter, beginning with
the first such day to occur after the Closing Date, and (ii) on the later of the
Termination Date and the date of termination of the last outstanding Letter of
Credit;
(d) To the Issuing Lender, for its own account, a facing fee for each
calendar quarter (or portion thereof) in respect of all Letters of Credit
outstanding during such quarter, at a per annum rate of 0.125% on the daily
average aggregate Stated Amount of such Letters of Credit, payable in arrears
(i) on the last Business Day of each calendar quarter, beginning with the first
such day to occur after the Closing Date, and (ii) on the later of the
Termination Date and the date of termination of the last outstanding Letter of
Credit; and
(e) To the Agent, for its own account, the annual administrative fee
described on page 2 of the Fee Letter, on the terms, in the amount and at the
times set forth therein.
2.10 Interest Periods. Concurrently with the giving of a Notice of
Borrowing or Notice of Conversion/Continuation in respect of any Borrowing
comprised of (y) Base Rate Loans to be converted into, or LIBOR Loans to be
continued as, LIBOR Loans, or (z) Foreign Currency Loans in any Foreign Currency
to be continued as Foreign Currency Loans in the same Foreign Currency, the
applicable Borrower shall have the right to elect, pursuant to such notice, the
interest period (each, an "Interest Period") to be applicable to such LIBOR
Loans or Foreign Currency Loans, as the case may be, which Interest Period
shall, at the option of such Borrower, be a one, two, three or six-month period;
provided, however, that:
30
(i) all Fixed Rate Loans comprising a single Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Fixed Rate Loan shall
commence on the date of the Borrowing of such Fixed Rate Loan (including
the date of any continuation of, or conversion into, such Fixed Rate Loan),
and each successive Interest Period applicable to such Fixed Rate Loan
shall commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) Fixed Rate Loans may not be outstanding under more than eight
(8) separate Interest Periods at any one time (for which purpose Interest
Periods shall be deemed to be separate even if they are coterminous);
(iv) if any Interest Period otherwise would expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day unless such next succeeding Business Day falls in
another calendar month, in which case such Interest Period shall expire on
the next preceding Business Day;
(v) the Borrowers may not select any Interest Period that begins
prior to the third (3rd) Business Day after the Closing Date (with respect
to LIBOR Loans) or the fourth (4th) Business Day after the Closing Date
(with respect to Foreign Currency Loans) or that expires after the Maturity
Date; and
(vi) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month during which such
Interest Period would otherwise expire, such Interest Period shall expire
on the last Business Day of such calendar month.
2.11 Conversions and Continuations. (a) The Borrowers shall have the
right, on any Business Day occurring on or after the Closing Date, to elect (i)
to convert all or a portion of the outstanding principal amount of any Base Rate
Loans into LIBOR Loans, or to convert any LIBOR Loans the Interest Periods for
which end on the same day into Base Rate Loans, or (ii) upon the expiration of
any Interest Period, (A) to continue all or a portion of the outstanding
principal amount of any LIBOR Loans, the Interest Periods for which end on the
same day, for an additional Interest Period, or (B) to continue all or a portion
of the outstanding principal amount of any Foreign Currency Loans in any Foreign
Currency, the Interest Periods for which end on the same day, for an additional
Interest Period as Foreign Currency Loans in the same Foreign Currency, provided
that (x) any such conversion of LIBOR Loans into Base Rate Loans shall involve
an aggregate principal amount of not less than $500,000 or, if greater, an
integral multiple of $100,000 in excess thereof; any such conversion of Base
Rate Loans into, or continuation of, LIBOR Loans, shall involve an aggregate
principal amount of not less than $3,000,000 or, if greater, an integral
multiple of $1,000,000 in excess thereof; any such continuation of Foreign
Currency Loans shall involve an aggregate principal Dollar Amount of not less
than $1,000,000; and no partial conversion of LIBOR Loans made pursuant to a
single Borrowing shall reduce the outstanding principal amount of such LIBOR
Loans to less than $3,000,000 or to any greater amount not an integral multiple
of $1,000,000 in excess thereof, (y) except as otherwise provided in SECTION
2.16(D), LIBOR Loans may be converted into Base Rate Loans only on the last day
of the Interest Period applicable
31
thereto (and, in any event, if a LIBOR Loan is converted into a Base Rate Loan
on any day other than the last day of the Interest Period applicable thereto,
the applicable Borrower will pay, upon such conversion, all amounts required
under SECTION 2.18 to be paid as a consequence thereof), and (z) no conversion
of Base Rate Loans into LIBOR Loans or continuation of Fixed Rate Loans shall be
permitted during the continuance of a Default or Event of Default.
(b) The applicable Borrower shall make each such election by giving the
Agent written notice not later than 11:00 a.m., Charlotte time, the Applicable
Number of Business Days prior to the intended effective date of any such
conversion or continuation. Each such notice (each, a "Notice of
Conversion/Continuation") shall be irrevocable, shall be given in the form of
EXHIBIT B-2 and shall specify (w) the date of such conversion or continuation
(which shall be a Business Day), (x) in the case of a conversion of Base Rate
Loans into, or a continuation of, LIBOR Loans, or a continuation of Foreign
Currency Loans, the Interest Period to be applicable thereto, (y) in the case of
a continuation of Foreign Currency Loans, the applicable Foreign Currency, and
(z) the aggregate amount and Type of the Loans being converted or continued.
Upon the receipt of a Notice of Conversion/Continuation, the Agent will promptly
notify each Lender of the proposed conversion or continuation. In the event
that the applicable Borrower shall fail to deliver a Notice of
Conversion/Continuation as provided herein with respect to any outstanding Fixed
Rate Loans, such Fixed Rate Loans shall automatically be converted to Base Rate
Loans upon the expiration of the then current Interest Period applicable thereto
(unless repaid pursuant to the terms hereof), and if such Fixed Rate Loans were
Foreign Currency Loans, any such Base Rate Loans shall be in an aggregate
principal amount equal to the aggregate principal Dollar Amount of such Fixed
Rate Loans. In the event the applicable Borrower shall have failed to select in
a Notice of Conversion/Continuation the duration of the Interest Period to be
applicable to any conversion into, or continuation of, Fixed Rate Loans, then
such Borrower shall be deemed to have selected an Interest Period with a
duration of one month.
2.12 Method of Payments; Computations. (a) All payments by the
Borrowers hereunder shall be made without setoff, counterclaim or other defense
and in immediately available funds to the Agent, for the account of the Lenders
entitled to such payment (except as otherwise expressly provided herein as to
payments required to be made directly to the Issuing Lender and the Lenders),
(i) in the case of payments of principal and interest with respect to any Dollar
Loan and all payments of fees, expenses and any other amounts due hereunder or
under any other Credit Document (except as set forth in clause (ii) below with
respect to Foreign Currency Loans),in Dollars, to the Agent at its office
referred to in SECTION 12.5, prior to 12:00 noon, Charlotte time, on the date
payment is due, and (ii) in the case of payments of principal and interest with
respect to any Foreign Currency Loan, in the Foreign Currency in which such
Foreign Currency Loan was made (or, with the approval of all of the Lenders, in
the Dollar Equivalent of the amount of such payment, determined as of the date
of payment), to the Agent at the office of the applicable Correspondent, prior
to 12:00 noon, Local Time, on the date payment is due. Any payment made as
required hereinabove, but after 12:00 noon, Charlotte time (or Local Time, as
the case may be) shall be deemed to have been made on the next succeeding
Business Day. If any payment falls due on a day that is not a Business Day,
then such due date shall be extended to the next succeeding Business Day (except
that in the case of Fixed Rate Loans
32
to which the provisions of clause (iv) in SECTION 2.10 are applicable, such due
date shall be the next preceding Business Day), and such extension of time shall
then be included in the computation of payment of interest, fees or other
applicable amounts.
(b) The Agent will distribute to the Lenders like amounts relating to
payments made to the Agent for the account of the Lenders as follows: (i) if the
payment is received by 12:00 noon, Charlotte time (in the case of payments
denominated in Dollars) or Local Time (in the case of payments denominated in a
Foreign Currency), in immediately available funds, the Agent will make available
to each relevant Lender on the same date, by wire transfer of immediately
available funds, such Lender's ratable share of such payment (based on the
percentage that the amount of the relevant payment owing to such Lender bears to
the total amount of such payment owing to all of the relevant Lenders), and (ii)
if such payment is received after 12:00 noon, Charlotte time (in the case of
payments denominated in Dollars) or Local Time (in the case of payments
denominated in a Foreign Currency), or in other than immediately available
funds, the Agent will make available to each such Lender its ratable share of
such payment by wire transfer of immediately available funds on the next
succeeding Business Day (or in the case of uncollected funds, as soon as
practicable after collected). The Agent will distribute to the Issuing Lender
like amounts relating to payments made to the Agent for the account of the
Issuing Lender in the same manner, and subject to the same terms and conditions,
as set forth hereinabove with respect to distributions of amounts to the
Lenders.
(c) Unless the Agent shall have received written notice from the
applicable Borrower prior to the date on which any payment is due to any Lender
hereunder that such payment will not be made in full, the Agent may assume that
such Borrower has made such payment in full to the Agent on such date, and the
Agent may, in reliance on such assumption, but shall not be obligated to, cause
to be distributed to such Lender on such due date an amount equal to the amount
then due to such Lender. If and to the extent such Borrower shall not have so
made such payment in full to the Agent, and without limiting the obligation of
such Borrower to make such payment in accordance with the terms hereof, such
Lender shall repay to the Agent forthwith on demand such amount so distributed
to such Lender, together with interest thereon for each day from the date such
amount is so distributed to such Lender until the date repaid to the Agent, (y)
with respect to any amount denominated in Dollars, at the Federal Funds Rate,
and (z) with respect to any amount denominated in a Foreign Currency, at the
Agent's average daily cost of carrying such amount.
(d) All computations of interest and fees hereunder (including
computations of the applicable Reserve Requirement) shall be made on the basis
of a year consisting of (i) in the case of interest on Base Rate Loans and
Foreign Currency Loans denominated in British pounds sterling, 365 or 366 days,
as the case may be, and (ii) in all other instances, 360 days, and in each case,
the actual number of days (including the first day, but excluding the last day)
elapsed.
2.13 Recovery of Payments. (a) Each Borrower agrees that to the extent
such Borrower makes a payment or payments to or for the account of the Agent,
any Lender or the Issuing Lender, which payment or payments or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party under
any bankruptcy, insolvency or similar state or
33
federal law, common law or equitable cause, then, to the extent of such payment
or repayment, the Obligation intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been received.
(b) If any amounts distributed by the Agent to any Lender are subsequently
returned or repaid by the Agent to any Borrower or its representative or
successor in interest, whether by court order or by settlement approved by the
Lender in question, such Lender will, promptly upon receipt of notice thereof
from the Agent, pay the Agent such amount. If any such amounts are recovered by
the Agent from any Borrower or its representative or successor in interest, the
Agent will redistribute such amounts to the Lenders on the same basis as such
amounts were originally distributed.
2.14 Use of Proceeds. The proceeds of the Loans shall be used (i)
first, to repay the Terminating Indebtedness in full, (ii) second, to pay or
reimburse reasonable transaction fees and expenses in connection with the
closing of the transactions contemplated hereby, and (iii) thereafter, for
working capital and general corporate purposes and in accordance with the terms
and provisions of this Agreement (including to finance Permitted Acquisitions in
accordance with the terms and provisions of this Agreement, including, without
limitation, the provisions set forth in SECTION 6.9).
2.15 Pro Rata Treatment. (a) All fundings, continuations and
conversions of Loans shall be made by the Lenders pro rata on the basis of their
respective Commitments (in the case of the initial funding of Loans pursuant to
SECTION 2.2) or on the basis of their respective outstanding Loans (in the case
of continuations and conversions of Loans pursuant to SECTION 2.11, and
additionally in all cases in the event the Commitments have expired or have been
terminated), as the case may be from time to time. All payments on account of
principal of or interest on any Loans, fees or any other Obligations owing to or
for the account of any one or more Lenders shall be apportioned ratably among
such Lenders in proportion to the amounts of such principal, interest, fees or
other Obligations owed to them respectively.
(b) Each Lender agrees that if it shall receive any amount hereunder
(whether by voluntary payment, realization upon security, exercise of the right
of setoff or banker's lien, counterclaim or cross action, or otherwise, other
than pursuant to SECTION 12.7) applicable to the payment of any of the
Obligations that exceeds its ratable share (according to the proportion of (i)
the amount of such Obligations due and payable to such Lender at such time to
(ii) the aggregate amount of such Obligations due and payable to all Lenders at
such time) of payments on account of such Obligations then or therewith obtained
by all the Lenders to which such payments are required to have been made, such
Lender shall forthwith purchase from the other Lenders such participations in
such Obligations as shall be necessary to cause such purchasing Lender to share
the excess payment or other recovery ratably with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each such other Lender
shall be rescinded and each such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery, together with an
amount equal to such other Lender's ratable share (according to the proportion
of (i) the amount of such other Lender's required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered. Each Borrower agrees
34
that any Lender so purchasing a participation from another Lender pursuant to
the provisions of this subsection may, to the fullest extent permitted by law,
exercise any and all rights of payment (including, without limitation, setoff,
banker's lien or counterclaim) with respect to such participation as fully as if
such participant were a direct creditor of such Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or similar law,
any Lender receives a secured claim in lieu of a setoff to which this subsection
applies, such Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Lenders entitled under this subsection to share in the benefits of any recovery
on such secured claim.
2.16 Increased Costs; Change in Circumstances; Illegality; etc. (a)
If, at any time after the date hereof and from time to time, the introduction of
or any change in any applicable law, rule or regulation or in the interpretation
or administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender with any
guideline or request from any such Governmental Authority (whether or not having
the force of law), shall (i) subject such Lender to any tax or other charge, or
change the basis of taxation of payments to such Lender, in respect of any of
its Fixed Rate Loans or any other amounts payable hereunder or its obligation to
make, fund or maintain any Fixed Rate Loans (other than any change in the rate
or basis of tax on the overall net income of such Lender or its applicable
Lending Office), (ii) impose, modify or deem applicable any reserve, special
deposit or similar requirement (other than any reserves to the extent included
in the calculation of any Fixed Rate pursuant to the applicable Reserve
Requirement) against assets of, deposits with or for the account of, or credit
extended by, such Lender or its applicable Lending Office, or (iii) impose on
such Lender or its applicable Lending Office any other condition, and the result
of any of the foregoing shall be to increase the cost to such Lender of making
or maintaining any Fixed Rate Loans or issuing or participating in Letters of
Credit or to reduce the amount of any sum received or receivable by such Lender
hereunder (including in respect of Letters of Credit), each applicable Borrower
will, promptly upon demand therefor by such Lender, pay to such Lender such
additional amounts as shall compensate such Lender for such increase in costs or
reduction in return actually incurred by such Lender.
(b) If, at any time after the date hereof and from time to time, any
Lender shall have reasonably determined that the introduction of or any change
in any applicable law, rule or regulation regarding capital adequacy or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by such Lender
with any guideline or request from any such Governmental Authority (whether or
not having the force of law), has or would have the effect, as a consequence of
such Lender's Commitment, Loans or issuance of or participations in Letters of
Credit hereunder, of reducing the rate of return on the capital of such Lender
or any Person controlling such Lender to a level below that which such Lender or
controlling Person could have achieved but for such introduction, change or
compliance (taking into account such Lender's or controlling Person's policies
with respect to capital adequacy), each applicable Borrower will, promptly upon
demand therefor by such Lender therefor, pay to such Lender such additional
amounts as will compensate such Lender or controlling Person for such reduction
in return actually incurred by such Lender.
35
(c) If, on or prior to the first day of any Interest Period, (x) the Agent
or the Required Lenders shall have determined that by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
Eurodollars or any Foreign Currency in the applicable amounts are not being
quoted or offered to the Agent or the Lenders for such Interest Period, or that
a fundamental change has occurred in the foreign exchange or interbank markets
with respect to any Foreign Currency (including, without limitation, changes in
national or international financial, political or economic conditions or
currency exchange rates or exchange controls), (y) the Agent shall have
determined that adequate and reasonable means do not exist for ascertaining the
applicable Fixed Rate for such Interest Period, or (z) the Agent shall have
received written notice from the Required Lenders of their determination that
the rate of interest referred to in the definition of "LIBOR Rate" or "IBOR
Rate" upon the basis of which the applicable Fixed Rate for such Interest Period
is to be determined will not adequately and fairly reflect the cost to such
Lenders of making or maintaining the relevant Type of Fixed Rate Loans during
such Interest Period, the Agent will forthwith so notify the Borrowers and the
Lenders. Upon such notice, (i) all then outstanding Fixed Rate Loans of each
affected currency and/or Interest Period type specified in such notice (each, a
"Relevant Type") shall automatically, on the expiration date of the respective
Interest Periods applicable thereto, be converted into Base Rate Loans or
prepaid in full (provided that if any such Fixed Rate Loan is a Foreign Currency
Loan, such Loan shall be prepaid in full on the expiration date of the
applicable Interest Period), and (ii) the obligation of the Lenders to make, to
convert Loans into, or to continue, Fixed Rate Loans of each Relevant Type shall
be suspended (including pursuant to the Borrowing to which such Interest Period
applies), in each case until the Agent or the Required Lenders, as the case may
be, shall have determined that the circumstances giving rise to such suspension
no longer exist (and the Required Lenders, if making such determination, shall
have so notified the Agent), and the Agent shall have so notified the Borrowers
and the Lenders.
(d) Notwithstanding any other provision in this Agreement, if, at any time
after the date hereof and from time to time, any Lender shall have determined in
good faith that the introduction of or any change in any applicable law, rule or
regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance with any guideline or request from any such Governmental
Authority (whether or not having the force of law), has or would have the effect
of making it unlawful for such Lender to make or to continue to make or maintain
Fixed Rate Loans of any currency or Interest Period type, such Lender will
forthwith so notify the Agent and the Borrowers. Upon such notice, (i) each of
such Lender's then outstanding Fixed Rate Loans of each Relevant Type shall
automatically, on the expiration date of the respective Interest Period
applicable thereto (or, to the extent any such Fixed Rate Loan may not lawfully
be maintained as a Fixed Rate Loan of such Type until such expiration date, upon
such notice), be converted into a Base Rate Loan (provided that if any such
Fixed Rate Loan is a Foreign Currency Loan, such Loan shall be prepaid in full
on the expiration date of the applicable Interest Period), and (ii) the
obligation of such Lender to make, to convert Loans into, or to continue, Fixed
Rate Loans of each Relevant Type shall be suspended (including pursuant to any
Borrowing for which the Agent has received a Notice of Borrowing but for which
the Borrowing Date has not arrived), in each case until such Lender shall have
determined that the circumstances
36
giving rise to such suspension no longer exist and shall have so notified the
Agent, and the Agent shall have so notified the Borrowers.
(e) In the event, as a result of increases in the value of any Foreign
Currency against the Dollar or for any other reason, the obligation of any
Lender to make, maintain or continue Loans or issue or participate in Letters of
Credit (taking into account the Dollar Amount of the Obligations and all other
indebtedness required to be aggregated under 12 U.S.C.A. (S)84, as amended, the
regulations promulgated thereunder and any other applicable Requirement of Law)
is determined by such Lender to exceed its then applicable legal lending limit
under 12 U.S.C.A. (S)84, as amended, the regulations promulgated thereunder, or
any other applicable Requirement of Law, the amount of additional extensions of
credit (including participations in Letters of Credit) such Lender shall be
obligated to make or issue or participate in hereunder shall, immediately
thereupon, be reduced to the maximum amount that such Lender may legally advance
or maintain (as determined by such Lender), the obligation of each of the
remaining Lenders hereunder shall be proportionately reduced, based on their
respective Commitments, and, to the extent necessary under such applicable
Requirements of Law (as determined by each Lender with respect to itself), the
Borrowers shall reduce, or cause to be reduced, complying to the extent
practicable with the remaining provisions hereof, the Obligations outstanding
hereunder by an amount sufficient to comply with such maximum amounts.
(f) Determinations by the Agent or any Lender for purposes of this Section
of any increased costs, reduction in return, market contingencies, illegality or
any other matter shall, absent manifest error, be conclusive, provided that such
determinations are made in good faith. No failure by the Agent or any Lender at
any time to demand payment of any amounts payable under this Section shall
constitute a waiver of its right to demand payment of any additional amounts
arising at any subsequent time. Nothing in this Section shall require or be
construed to require any Borrower to pay any interest, fees, costs or other
amounts in excess of that permitted by applicable law.
2.17 Taxes. (a) Any and all payments by the Borrowers hereunder or
under any Note shall be made, in accordance with the terms hereof and thereof,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, other than net income and franchise taxes imposed on the Agent
or any Lender by the United States or by the jurisdiction under the laws of
which the Agent or such Lender, as the case may be, is organized or in which its
principal office or (in the case of a Lender) its applicable Lending Office is
located, or any political subdivision or taxing authority thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to the Agent or any Lender, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section), the Agent or such Lender, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
such Borrower will make such deductions, (iii) such Borrower will pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with
37
applicable law and (iv) such Borrower will deliver to the Agent or such Lender,
as the case may be, evidence of such payment.
(b) The Borrowers will indemnify the Agent and each Lender for the full
amount of Taxes (including, without limitation, any Taxes imposed by any
jurisdiction on amounts payable under this Section) paid by the Agent or such
Lender, as the case may be, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally asserted. This indemnification shall be made within
30 days from the date the Agent or such Lender, as the case may be, makes
written demand therefor.
(c) Each of the Agent and the Lenders agrees that if it subsequently
recovers, or receives a permanent net tax benefit with respect to, any amount of
Taxes (i) previously paid by it and as to which it has been indemnified by or on
behalf of the Borrowers or (ii) previously deducted by the Borrowers (including,
without limitation, any Taxes deducted from any additional sums payable under
clause (i) of subsection (a) above), the Agent or such Lender, as the case may
be, shall reimburse the Borrowers to the extent of the amount of any such
recovery or permanent net tax benefit (but only to the extent of indemnity
payments made, or additional amounts paid, by or on behalf of the Borrowers
under this Section with respect to the Taxes giving rise to such recovery or tax
benefit); provided, however, that the Borrowers, upon the request of the Agent
or such Lender, agree to repay to the Agent or such Lender, as the case may be,
the amount paid over to the Borrowers (together with any penalties, interest or
other charges), in the event the Agent or such Lender is required to repay such
amount to the relevant taxing authority or other Governmental Authority. The
determination by the Agent or any Lender of the amount of any such recovery or
permanent net tax benefit shall, in the absence of manifest error, be conclusive
and binding.
(d) If any Lender is incorporated or organized under the laws of a
jurisdiction other than the United States of America or any state thereof (a
"Non-U.S. Lender") and claims exemption from United States withholding tax
pursuant to the Internal Revenue Code, such Non-U.S. Lender will deliver to each
of the Agent and OCA, on or prior to the Closing Date (or, in the case of a Non-
U.S. Lender that becomes a party to this Agreement as a result of an assignment
after the Closing Date, on the effective date of such assignment), (i) in the
case of a Non-U.S. Lender that is a "bank" for purposes of Section 881(c)(3)(A)
of the Internal Revenue Code, a properly completed Internal Revenue Service Form
4224 or 1001, as applicable (or successor forms), certifying that such Non-U.S.
Lender is entitled to an exemption from or a reduction of withholding or
deduction for or on account of United States federal income taxes in connection
with payments under this Agreement or any of the Notes, together with a properly
completed Internal Revenue Service Form W-8 or W-9, as applicable (or successor
forms), and (ii) in the case of a Non-U.S. Lender that is not a "bank" for
purposes of Section 881(c)(3)(A) of the Internal Revenue Code, a certificate in
form and substance reasonably satisfactory to the Agent and OCA and to the
effect that (x) such Non-U.S. Lender is not a "bank" for purposes of Section
881(c)(3)(A) of the Internal Revenue Code, is not subject to regulatory or other
legal requirements as a bank in any jurisdiction, and has not been treated as a
bank for purposes of any tax, securities law or other filing or submission made
to any governmental authority, any application made to a rating agency or
qualification for any exemption from
38
any tax, securities law or other legal requirements, (y) is not a 10-percent
shareholder for purposes of Section 881(c)(3)(B) of the Internal Revenue Code
and (z) is not a controlled foreign corporation receiving interest from a
related person for purposes of Section 881(c)(3)(C) of the Internal Revenue
Code, together with a properly completed Internal Revenue Service Form W-8 or
W-9, as applicable (or successor forms). Each such Non-U.S. Lender further
agrees to deliver to each of the Agent and OCA an additional copy of each such
relevant form on or before the date that such form expires or becomes obsolete
or after the occurrence of any event (including a change in its applicable
Lending Office) requiring a change in the most recent forms so delivered by it,
in each case certifying that such Non-U.S. Lender is entitled to an exemption
from or a reduction of withholding or deduction for or on account of United
States federal income taxes in connection with payments under this Agreement or
any of the Notes, unless an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required, which event renders all such forms
inapplicable or the exemption to which such forms relate unavailable and such
Non-U.S. Lender notifies the Agent and OCA that it is not entitled to receive
payments without deduction or withholding of United States federal income taxes.
Each such Non-U.S. Lender will promptly notify the Agent and OCA of any changes
in circumstances that would modify or render invalid any claimed exemption or
reduction.
(e) If any Lender is entitled to a reduction in (and not a complete
exemption from) the applicable withholding tax, the Borrowers and the Agent may
withhold from any interest payment to such Lender an amount equivalent to the
applicable withholding tax after taking into account such reduction. If any of
the forms or other documentation required under subsection (d) above are not
delivered to the Agent as therein required, then the Borrowers and the Agent may
withhold from any interest payment to such Lender not providing such forms or
other documentation an amount equivalent to the applicable withholding tax.
2.18 Compensation. Each Borrower will compensate each Lender upon
demand for all losses, expenses and liabilities (including, without limitation,
any loss, expense or liability actually incurred by reason of the liquidation or
reemployment of deposits or other funds required by such Lender to fund or
maintain Fixed Rate Loans or by reason of the liquidation or closing out of any
foreign currency contract undertaken by such Lender to fund or maintain Fixed
Rate Loans) that such Lender may incur or sustain (i) if for any reason (other
than a default by such Lender) a Borrowing or continuation of, or conversion
into, a Fixed Rate Loan by or to such Borrower does not occur on a date
specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation, (ii) if any repayment, prepayment or conversion of any
Fixed Rate Loan by such Borrower occurs on a date other than the last day of an
Interest Period applicable thereto (including as a consequence of acceleration
of the maturity of the Loans pursuant to SECTION 9.2), (iii) if any prepayment
of any Fixed Rate Loan by such Borrower is not made on any date specified in a
notice of prepayment given by such Borrower, (iv) as a consequence of any other
failure by such Borrower to make any payments with respect to any Fixed Rate
Loan when due hereunder, or (v) as a consequence of any failure by such Borrower
to pay a Foreign Currency Loan in the applicable Foreign Currency. Calculation
of all amounts payable to a Lender under this Section shall be made as though
such Lender had actually funded its relevant Fixed Rate Loan through the
purchase in the applicable interbank market of a Eurodollar (or
39
other applicable Foreign Currency) deposit bearing interest at the relevant
Fixed Rate in an amount equal to the amount of such Fixed Rate Loan, having a
maturity comparable to the relevant Interest Period; provided, however, that
each Lender may fund its Fixed Rate Loans in any manner it sees fit and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this Section. Determinations by any Lender for purposes of this
Section of any such losses, expenses or liabilities shall, absent manifest
error, be conclusive, provided that such determinations are made in good faith.
ARTICLE III
LETTERS OF CREDIT
3.1 Issuance. Subject to and upon the terms and conditions herein set
forth, so long as no Default or Event of Default has occurred and is continuing,
the Issuing Lender will, at any time and from time to time on and after the
Closing Date and prior to the earlier of (i) the seventh day prior to the
Maturity Date and (ii) the Termination Date, and upon request by OCA in
accordance with the provisions of SECTION 3.2, issue for the account of OCA one
or more irrevocable standby letters of credit denominated in Dollars and in a
form customarily used or otherwise approved by the Issuing Lender (together with
all amendments, modifications and supplements thereto, substitutions therefor
and renewals and restatements thereof, collectively, the "Letters of Credit").
The Stated Amount of each Letter of Credit shall not be less than such amount as
may be acceptable to the Issuing Lender. Notwithstanding the foregoing:
(a) No Letter of Credit shall be issued the Stated Amount upon issuance of
which (i) when added to the aggregate Letter of Credit Exposure of the Lenders
at such time, would exceed $10,000,000 or (ii) when added to the sum of (y) the
aggregate Letter of Credit Exposure of all Lenders at such time and (z) the
aggregate principal Dollar Amount of all Loans then outstanding, would exceed
the aggregate Commitments at such time;
(b) No Letter of Credit shall be issued that by its terms expires later
than the seventh day prior to the Maturity Date or, in any event, more than one
(1) year after its date of issuance; provided, however, that a Letter of Credit
may, if requested by OCA, provide by its terms, and on terms acceptable to the
Issuing Lender, for renewal for successive periods of one year or less (but not
beyond the seventh day prior to the Maturity Date), unless and until the Issuing
Lender shall have delivered a notice of nonrenewal to the beneficiary of such
Letter of Credit; and
(c) The Issuing Lender shall be under no obligation to issue any Letter of
Credit if, at the time of such proposed issuance, (i) any order, judgment or
decree of any Governmental Authority or arbitrator shall purport by its terms to
enjoin or restrain the Issuing Lender from issuing such Letter of Credit, or any
Requirement of Law applicable to the Issuing Lender or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing
Lender refrain from, the issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon the Issuing Lender with respect to
such Letter of Credit any restriction or reserve or capital requirement (for
which the Issuing Lender is not otherwise compensated) not in effect on the
Closing Date, or any
40
unreimbursed loss, cost or expense that was not applicable, in effect or known
to the Issuing Lender as of the Closing Date and that the Issuing Lender in good
▇▇▇▇▇ ▇▇▇▇▇ material to it, or (ii) the Issuing Lender shall have actual
knowledge, or shall have received notice from any Lender, prior to the issuance
of such Letter of Credit that one or more of the conditions specified in
SECTIONS 4.1 (if applicable) or 4.2 are not then satisfied (or have not been
waived in writing as required herein) or that the issuance of such Letter of
Credit would violate the provisions of subsection (a) above.
3.2 Notices. Whenever OCA desires the issuance of a Letter of Credit,
OCA will give the Issuing Lender written notice with a copy to the Agent not
later than 11:00 a.m., Charlotte time, three (3) Business Days (or such shorter
period as is acceptable to the Issuing Lender in any given case) prior to the
requested date of issuance thereof. Each such notice (each, a "Letter of Credit
Notice") shall be irrevocable, shall be given in the form of EXHIBIT B-3 and
shall specify (i) the requested date of issuance, which shall be a Business Day,
(ii) the requested Stated Amount and expiration date of the Letter of Credit,
and (iii) the name and address of the requested beneficiary or beneficiaries of
the Letter of Credit. OCA will also complete any application procedures and
documents required by the Issuing Lender in connection with the issuance of any
Letter of Credit. Upon its issuance of any Letter of Credit, the Issuing Lender
will promptly notify the Agent of such issuance, and the Agent will give prompt
notice thereof to each Lender.
3.3 Participations. Immediately upon the issuance of any Letter of
Credit, the Issuing Lender shall be deemed to have sold and transferred to each
Lender, and each Lender shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Lender, without recourse or warranty, an
undivided interest and participation, pro rata (based on the percentage of the
aggregate Commitments represented by such Lender's Commitment), in such Letter
of Credit, each drawing made thereunder and the obligations of OCA under this
Agreement with respect thereto and any Collateral or other security therefor or
guaranty pertaining thereto; provided, however, that the fee relating to Letters
of Credit described in SECTION 2.9(D) shall be payable directly to the Issuing
Lender as provided therein, and the Lenders shall have no right to receive any
portion thereof. Upon any change in the Commitments of any of the Lenders
pursuant to SECTION 12.7(A), with respect to all outstanding Letters of Credit
and Reimbursement Obligations there shall be an automatic adjustment to the
participations pursuant to this Section to reflect the new pro rata shares of
the assigning Lender and the Assignee.
3.4 Reimbursement. OCA hereby agrees to reimburse the Issuing Lender by
making payment to the Agent, for the account of the Issuing Lender, in
immediately available funds, for any payment properly made by the Issuing Lender
under any Letter of Credit (each such amount so paid until reimbursed, together
with interest thereon payable as provided hereinbelow, a "Reimbursement
Obligation") immediately after, and in any event within one (1) Business Day
after its receipt of notice of, such payment (provided that any such
Reimbursement Obligation shall be deemed timely satisfied (but nevertheless
subject to the payment of interest thereon as provided hereinbelow) if satisfied
pursuant to a Borrowing of Dollar Loans made on or prior to the next Business
Day following the date of OCA's receipt of notice of such payment), together
with interest on the amount so paid by the Issuing Lender, to the extent not
reimbursed prior to 12:00
41
noon, Charlotte time, on the date of such payment or disbursement, for the
period from the date of the respective payment to the date the Reimbursement
Obligation created thereby is satisfied, at the Adjusted Base Rate applicable to
Dollar Loans as in effect from time to time during such period, such interest
also to be payable on demand. The Issuing Lender will provide the Agent and OCA
with prompt notice of any payment or disbursement made under any Letter of
Credit, although the failure to give, or any delay in giving, any such notice
shall not release, diminish or otherwise affect OCA's obligations under this
Section or any other provision of this Agreement. The Agent will promptly pay to
the Issuing Lender any such amounts received by it under this Section.
3.5 Payment by Loans. In the event that the Issuing Lender makes any
payment under any Letter of Credit and OCA shall not have timely satisfied in
full its Reimbursement Obligation to the Issuing Lender pursuant to SECTION 3.4,
and to the extent that any amounts then held in the Cash Collateral Account
established pursuant to SECTION 3.8 shall be insufficient to satisfy such
Reimbursement Obligation in full, the Issuing Lender will promptly notify the
Agent, and the Agent will promptly notify each Lender, of such failure. If the
Agent gives such notice prior to 11:00 a.m., Charlotte time, on any Business
Day, each Lender will make available to the Agent, for the account of the
Issuing Lender, its pro rata share (based on the percentage of the aggregate
Commitments represented by such Lender's Commitment) of the amount of such
payment on such Business Day in immediately available funds. If the Agent gives
such notice after 11:00 a.m., Charlotte time, on any Business Day, each such
Lender shall make its pro rata share of such amount available to the Agent on
the next succeeding Business Day. If and to the extent any Lender shall not
have so made its pro rata share of the amount of such payment available to the
Agent, such Lender agrees to pay to the Agent, for the account of the Issuing
Lender, forthwith on demand such amount, together with interest thereon at the
Federal Funds Rate for each day from such date until the date such amount is
paid to the Agent. The failure of any Lender to make available to the Agent its
pro rata share of any payment under any Letter of Credit shall not relieve any
other Lender of its obligation hereunder to make available to the Agent its pro
rata share of any payment under any Letter of Credit on the date required, as
specified above, but no Lender shall be responsible for the failure of any other
Lender to make available to the Agent such other Lender's pro rata share of any
such payment. Each such payment by a Lender under this Section of its pro rata
share of an amount paid by the Issuing Lender shall constitute a Dollar Loan by
such Lender (OCA being deemed to have given a timely Notice of Borrowing
therefor) and shall be treated as such for all purposes of this Agreement;
provided that for purposes of determining the aggregate Unutilized Commitments
immediately prior to giving effect to the application of the proceeds of such
Dollar Loans, the Reimbursement Obligation being satisfied thereby shall be
deemed not to be outstanding at such time.
3.6 Payment to Lenders. Whenever the Issuing Lender receives a payment
in respect of a Reimbursement Obligation as to which the Agent has received, for
the account of the Issuing Lender, any payments from the Lenders pursuant to
SECTION 3.5, the Issuing Lender will promptly pay to the Agent, and the Agent
will promptly pay to each Lender that has paid its pro rata share thereof, in
immediately available funds, an amount equal to such Lender's ratable share
(based on the proportionate amount funded by such Lender to the aggregate amount
funded by all Lenders) of such Reimbursement Obligation.
42
3.7 Obligations Absolute. The Reimbursement Obligations of OCA, and the
obligations of the Lenders under SECTION 3.5 to make payments to the Agent, for
the account of the Issuing Lender, with respect to Letters of Credit, shall be
irrevocable, shall remain in effect until the Issuing Lender shall have no
further obligations to make any payments or disbursements under any
circumstances with respect to any Letter of Credit, and, except to the extent
resulting from any gross negligence or willful misconduct on the part of the
Issuing Lender, shall be absolute and unconditional, shall not be subject to
counterclaim, setoff or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(a) Any lack of validity or enforceability of this Agreement, any of the
other Credit Documents or any documents or instruments relating to any Letter of
Credit;
(b) Any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations in respect of any Letter of Credit,
whether or not OCA has notice or knowledge thereof;
(c) The existence of any claim, setoff, defense or other right that OCA
may have at any time against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any Person for whom any such transferee
may be acting), the Agent, the Issuing Lender, any Lender or other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated hereby or any unrelated transactions (including any
underlying transaction between OCA and the beneficiary named in any such Letter
of Credit);
(d) Any draft, certificate or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect
(provided that such draft, certificate or other document appears on its face to
comply with the terms of such Letter of Credit and, in honoring the credit, the
Issuing Lender acts in good faith), any errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, telecopier or
otherwise, or any errors in translation or in interpretation of technical terms;
(e) Any defense based upon the failure of any drawing under a Letter of
Credit to conform to the terms of the Letter of Credit (provided that any draft,
certificate or other document presented pursuant to such Letter of Credit
appears on its face to comply with the terms thereof and, in honoring the
credit, the Issuing Lender acts in good faith), any nonapplication or
misapplication by the beneficiary or any transferee of the proceeds of such
drawing or any other act or omission of such beneficiary or transferee in
connection with such Letter of Credit;
(f) The exchange, release, surrender or impairment of any Collateral or
other security for the Obligations;
(g) The occurrence of any Default or Event of Default; or
(h) Any other circumstance or event whatsoever, including, without
limitation, any other circumstance that might otherwise constitute a defense
available to, or a
43
discharge of, OCA or a guarantor (other than the gross negligence or willful
misconduct of the Issuing Lender).
Any action taken or omitted to be taken by the Issuing Lender under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall be binding upon OCA and each
Lender and shall not create or result in any liability of the Issuing Lender to
OCA or any Lender. It is expressly understood and agreed that, for purposes of
determining whether a wrongful payment under a Letter of Credit resulted from
the Issuing Lender's gross negligence or willful misconduct, (i) the Issuing
Lender's acceptance of documents that appear on their face to comply with the
terms of such Letter of Credit, without responsibility for further
investigation, regardless of any notice or information to the contrary, (ii) the
Issuing Lender's exclusive reliance on the documents presented to it under such
Letter of Credit as to any and all matters set forth therein, including the
amount of any draft presented under such Letter of Credit, whether or not the
amount due to the beneficiary thereunder equals the amount of such draft and
whether or not any document presented pursuant to such Letter of Credit proves
to be insufficient in any respect (so long as such document appears on its face
to comply with the terms of such Letter of Credit), and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be inaccurate
or untrue in any respect whatsoever, and (iii) any noncompliance in any
immaterial respect of the documents presented under such Letter of Credit with
the terms thereof shall, in each case, be deemed not to constitute gross
negligence or willful misconduct of the Issuing Lender.
3.8 Cash Collateral Account. At any time and from time to time (i)
after the occurrence and during the continuance of an Event of Default, the
Agent, at the direction or with the consent of the Required Lenders, may require
OCA to deliver to the Agent such additional amount of cash as is equal to the
aggregate Stated Amount of all Letters of Credit at any time outstanding
(whether or not any beneficiary under any Letter of Credit shall have drawn or
be entitled at such time to draw thereunder) and (ii) in the event of a
prepayment under SECTION 2.6(B), or to the extent any amount of a required
prepayment under SECTION 2.6(D) or 2.6(E) remains after prepayment of all
outstanding Loans and Reimbursement Obligations and termination of the
Commitments, as contemplated by SECTION 2.6(F), the Agent will retain such
amount as may then be required to be retained, such amounts in each case under
clauses (i) and (ii) above to be held by the Agent in a cash collateral account
(the "Cash Collateral Account"). OCA hereby grants to the Agent, for the
benefit of the Issuing Lender and the Lenders, a Lien upon and security interest
in the Cash Collateral Account and all amounts held therein from time to time as
security for Letter of Credit Exposure, and for application to OCA's
Reimbursement Obligations as and when the same shall arise. The Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest on the investment of
such amounts in Cash Equivalents, which investments shall be made at the
direction of OCA (unless an Event of Default shall have occurred and be
continuing, in which case the determination as to investments shall be made at
the option and in the discretion of the Agent), amounts in the Cash Collateral
Account shall not bear interest. Interest and profits, if any, on such
investments shall accumulate in such account. In the event of a drawing, and
subsequent payment by the Issuing Lender, under any Letter of Credit at any time
during which any amounts are held in the Cash Collateral Account, the
44
Agent will deliver to the Issuing Lender an amount equal to the Reimbursement
Obligation created as a result of such payment (or, if the amounts so held are
less than such Reimbursement Obligation, all of such amounts) to reimburse the
Issuing Lender therefor. Any amounts remaining in the Cash Collateral Account
after the expiration of all Letters of Credit and reimbursement in full of the
Issuing Lender for all of its obligations thereunder shall be held by the Agent,
for the benefit of OCA, to be applied against the Obligations in such order and
manner as the Agent may direct. If OCA is required to provide cash collateral
pursuant to SECTION 2.6(B), such amount (to the extent not applied as aforesaid)
shall be returned to OCA on demand, provided that after giving effect to such
return (i) the sum of (y) the aggregate principal Dollar Amount of all Loans
outstanding at such time and (z) the aggregate Letter of Credit Exposure of all
Lenders at such time would not exceed the aggregate Commitments at such time and
(ii) no Default or Event of Default shall have occurred and be continuing at
such time. If OCA is required to provide cash collateral as a result of an Event
of Default, such amount (to the extent not applied as aforesaid) shall be
returned to OCA within three (3) Business Days after all Events of Default have
been cured or waived.
3.9 Effectiveness. Notwithstanding any termination of the Commitments
or repayment of the Loans, or both, the obligations of OCA under this Article
shall remain in full force and effect until the Issuing Lender and the Lenders
shall have no further obligations to make any payments or disbursements under
any circumstances with respect to any Letter of Credit.
ARTICLE IV
CONDITIONS OF BORROWING
4.1 Conditions of Initial Borrowing. The obligation of each Lender to
make Loans in connection with the initial Borrowing hereunder, and the
obligation of the Issuing Lender to issue Letters of Credit hereunder on the
Closing Date, is subject to the satisfaction of the following conditions
precedent:
(a) The Agent shall have received the following, each dated as of the
Closing Date (unless otherwise specified) and, except for the Notes and any
certificates or instruments required to be delivered under the OCA Pledge
Agreement, in sufficient copies for each Lender:
(i) A Dollar Note for each Lender that is a party hereto as of the
Closing Date, in the amount of such Lender's Commitment, and a Foreign
Currency Note for each such Lender, in the amount of such Lender's ratable
share of the Foreign Currency Sublimit, each duly completed in accordance
with the relevant provisions of SECTION 2.4 and executed by OCA;
(ii) the Subsidiary Guaranty, duly completed and executed by each
Subsidiary of OCA (other than any corporation the capital stock of which is
or has been acquired by OCA or any of its Subsidiaries from individuals who
enter into a Service Agreement in the ordinary course of OCA's or its
Subsidiaries' acquisition program, the assets of which are transferred to
another Subsidiary of OCA that is a
45
Subsidiary Guarantor, and which does not conduct any active trade or
business (collectively, "Inactive Subsidiaries")), and an Intercompany
Note, duly completed and executed by each such Subsidiary;
(iii) the OCA Pledge Agreement, duly executed by OCA and each
Subsidiary of OCA that owns Capital Stock of another Subsidiary other than
an Inactive Subsidiary (provided that the Capital Stock of Inactive
Subsidiaries shall not be required to be pledged), together with any
certificates evidencing the Capital Stock being pledged thereunder as of
the Closing Date and undated assignments separate from certificate for any
such certificate, duly executed in blank, and any promissory notes being
pledged thereunder, duly endorsed in blank; and
(iv) the favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, PLLC,
special counsel to OCA and its Subsidiaries, in substantially the form of
EXHIBIT I, addressed to the Agent and the Lenders and addressing such other
matters as the Agent or any Lender may reasonably request.
(b) The Agent shall have received a certificate, signed by the president,
the chief executive officer, the co-chief executive officer or the chief
financial officer of OCA, in form and substance satisfactory to the Agent,
certifying that (i) all representations and warranties of OCA contained in this
Agreement and the other Credit Documents are true and correct as of the Closing
Date, both immediately before and after giving effect to the consummation of the
transactions contemplated hereby, the making of the initial Loans hereunder and
the application of the proceeds thereof, (ii) no Default or Event of Default has
occurred and is continuing, both immediately before and after giving effect to
the consummation of the transactions contemplated hereby, the making of the
initial Loans hereunder and the application of the proceeds thereof, (iii) both
immediately before and after giving effect to the consummation of the
transactions contemplated hereby, the making of the initial Loans hereunder and
the application of the proceeds thereof, no Material Adverse Change has occurred
since December 31, 1997, and there exists no event, condition or state of facts
that could reasonably be expected to result in a Material Adverse Change, and
(iv) all conditions to the initial extensions of credit hereunder set forth in
this Section and in SECTION 4.2 have been satisfied or waived as required
hereunder.
(c) The Agent shall have received a certificate of the secretary or an
assistant secretary of each of OCA and its Subsidiaries (other than Inactive
Subsidiaries), in form and substance satisfactory to the Agent, certifying (i)
that attached thereto is a true and complete copy of the articles or certificate
of incorporation and all amendments thereto of OCA or such Subsidiary, as the
case may be, certified as of a recent date by the Secretary of State (or
comparable Governmental Authority) of its jurisdiction of organization, and that
the same has not been amended since the date of such certification, (ii) that
attached thereto is a true and complete copy of the bylaws of OCA or such
Subsidiary, as the case may be, as then in effect and as in effect at all times
from the date on which the resolutions referred to in clause (iii) below were
adopted to and including the date of such certificate, and (iii) that attached
thereto is a true and complete copy of resolutions adopted by the board of
directors of OCA or such Subsidiary, as the case may be, authorizing the
execution, delivery and performance of this Agreement and the other Credit
Documents to which it is a party, and as to the incumbency and genuineness of
the signature of each officer of OCA or such Subsidiary, as the case may be,
executing this Agreement or any of
46
such other Credit Documents, and attaching all such copies of the documents
described above.
(d) The Agent shall have received (i) a certificate as of a recent date of
the good standing of each of OCA and its Subsidiaries (other than Inactive
Subsidiaries) under the laws of its jurisdiction of organization, from the
Secretary of State (or comparable Governmental Authority) of such jurisdiction,
(ii) a certificate as of a recent date of the qualification of each of OCA and
its Subsidiaries to conduct business as a foreign corporation in the
jurisdiction in which it primarily conducts business as of the Closing Date,
from the Secretary of State (or comparable Governmental Authority) of such
jurisdiction, and (iii) to the extent generally provided, a tax clearance, tax
good standing or similar certificate or letter as to each of OCA and its
Subsidiaries, from the Department of Revenue (or comparable Governmental
Authority) in each applicable jurisdiction under (i) and (ii) above.
(e) All legal matters, documentation, and corporate or other proceedings
incident to the transactions contemplated hereby shall be satisfactory in form
and substance to the Agent in its reasonable discretion; all approvals, permits
and consents of any Governmental Authorities or other Persons required in
connection with the execution and delivery of this Agreement and the other
Credit Documents and the consummation of the transactions contemplated hereby
and thereby shall have been obtained, without the imposition of conditions that
are not acceptable to the Agent, and all related filings, if any, shall have
been made, and all such approvals, permits, consents and filings shall be in
full force and effect and the Agent shall have received such copies thereof as
it shall have requested; all applicable waiting periods shall have expired
without any adverse action being taken by any Governmental Authority having
jurisdiction; and no action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before, and no
order, injunction or decree shall have been entered by, any court or other
Governmental Authority, in each case to enjoin, restrain or prohibit, to obtain
substantial damages in respect of, or that is otherwise related to or arises out
of, this Agreement, any of the other Credit Documents or the consummation of the
transactions contemplated hereby or thereby, or that, in the opinion of the
Agent, could reasonably be expected to have a Material Adverse Effect.
(f) The Agent shall have received certified reports from an independent
search service satisfactory to it listing any judgment or tax lien filing or
Uniform Commercial Code financing statement that names OCA or any Subsidiary
Guarantor as debtor in any of such jurisdictions as may be designated by the
Agent, and the results thereof shall be satisfactory to the Agent.
(g) The Agent shall have received evidence in form and substance
satisfactory to it that all filings, recordings, registrations and other actions
necessary or, in the reasonable opinion of the Agent, desirable to perfect the
Liens created by the OCA Pledge Agreement shall have been completed, or
arrangements satisfactory to the Agent for the completion thereof shall have
been made.
(h) Since December 31, 1997, both immediately before and after giving
effect to the consummation of the transactions contemplated by this Agreement,
there shall not
47
have occurred any Material Adverse Change or any event, condition or state of
facts that could reasonably be expected to result in a Material Adverse Change.
(i) OCA shall have paid (i) to the Agent, the fee described in paragraph
(2) of the Fee Letter, (ii) to the Agent, the initial payment of the annual
administrative fee described on page 2 of the Fee Letter, and (iii) all other
fees and expenses of the Agent and the Lenders required hereunder or under any
other Credit Document to be paid on or prior to the Closing Date (including the
reasonable fees and expenses of counsel) in connection with this Agreement and
the transactions contemplated hereby.
(j) The Agent shall have received a Financial Condition Certificate,
together with the Projections as described in SECTION 5.11(B), all of which
shall be in form and substance satisfactory to the Agent.
(k) The Agent shall have received a Covenant Compliance Worksheet, duly
completed and certified by the chief financial officer of OCA and in form and
substance satisfactory to the Agent, demonstrating OCA's compliance with the
financial covenants set forth in SECTIONS 7.1 through 7.3, determined on a pro
forma basis as of June 30, 1998 after giving effect to the making of the initial
Loans hereunder and the consummation of the transactions contemplated hereby.
(l) The Agent shall have received evidence satisfactory to it that (i)
concurrently with the making of the initial Loans hereunder, (x) all principal,
interest and other amounts outstanding with respect to any Indebtedness of OCA
or any Subsidiary (including under OCA's Revolving Credit Agreement with First
Union dated as of May 1, 1998) not expressly permitted under SECTION 8.2 to
remain outstanding on and after the Closing Date or otherwise to be terminated
(the "Terminating Indebtedness") shall be repaid and satisfied in full, (y) all
commitments to extend credit under the agreements and instruments relating
thereto shall be terminated, and (z) any Liens securing any Terminating
Indebtedness shall be released and any related filings terminated of record (or
arrangements satisfactory to the Agent made therefor), and (ii) any letters of
credit outstanding with respect to Terminating Indebtedness shall have been
terminated or canceled (or, to the extent that First Union is the issuer
thereof, such letters of credit shall be deemed issued and outstanding as
Letters of Credit hereunder).
(m) The Agent shall have received an Account Designation Letter, together
with written instructions from an Authorized Officer of OCA, including wire
transfer information, directing the payment of the proceeds of the initial Loans
to be made hereunder.
(n) The Agent and each Lender shall have received such other documents,
certificates, opinions and instruments in connection with the transactions
contemplated hereby as it shall have reasonably requested.
4.2 Conditions of All Borrowings. The obligation of each Lender to make
any Loans hereunder, including the initial Loans, and the obligation of the
Issuing Lender to issue any Letters of Credit hereunder, is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date or date of issuance:
48
(a) The Agent shall have received a Notice of Borrowing in accordance with
SECTION 2.2(B), or (together with the Issuing Lender) a Letter of Credit Notice
in accordance with SECTION 3.2, as applicable;
(b) Each of the representations and warranties contained in ARTICLE V and
in the other Credit Documents shall be true and correct on and as of such
Borrowing Date (including the Closing Date, in the case of the initial Loans
made hereunder) or date of issuance with the same effect as if made on and as of
such date, both immediately before and after giving effect to the Loans to be
made or Letter of Credit to be issued on such date (except to the extent any
such representation or warranty is expressly stated to have been made as of a
specific date, in which case such representation or warranty shall be true and
correct in all material respects as of such date); and
(c) No Default or Event of Default shall have occurred and be continuing
on such date, both immediately before and after giving effect to the Loans to be
made or Letter of Credit to be issued on such date.
Each giving of a Notice of Borrowing or a Letter of Credit Notice, and the
consummation of each Borrowing or issuance of a Letter of Credit, shall be
deemed to constitute a representation by the Borrowers that the statements
contained in subsections (b) and (c) above are true, both as of the date of such
notice or request and as of the relevant Borrowing Date or date of issuance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and to
induce the Lenders to extend the credit contemplated hereby, each of the
Borrowers represents and warrants to the Agent and the Lenders as follows:
5.1 Corporate Organization and Power. Each of OCA and its Subsidiaries
(i) is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, (ii) has the full corporate
power and authority to execute, deliver and perform the Credit Documents to
which it is or will be a party, to own and hold its property and to engage in
its business as presently conducted, and (iii) is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction where the
nature of its business or the ownership of its properties requires it to be so
qualified, except where the failure to be so qualified would not, individually
or in the aggregate, be reasonably likely to have a Material Adverse Effect.
5.2 Authorization; Enforceability. Each of OCA and its Subsidiaries has
taken, or on the Closing Date will have taken, all necessary corporate action to
execute, deliver and perform each of the Credit Documents to which it is or will
be a party, and has, or on the Closing Date (or any later date of execution and
delivery) will have, validly executed and delivered each of the Credit Documents
to which it is or will be a party. This Agreement constitutes, and each of the
other Credit Documents upon execution and delivery will constitute, the legal,
valid and binding obligation of each of OCA and its
49
Subsidiaries that is a party hereto or thereto, enforceable against it in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, by general equitable principles or by
principles of good faith and fair dealing.
5.3 No Violation. The execution, delivery and performance by each of
OCA and its Subsidiaries of this Agreement and each of the other Credit
Documents to which it is or will be a party, and compliance by it with the terms
hereof and thereof, do not and will not (i) violate any provision of its
articles or certificate of incorporation or bylaws or contravene any other
Requirement of Law applicable to it, (ii) conflict with, result in a breach of
or constitute (with notice, lapse of time or both) a default under any
indenture, agreement or other instrument to which it is a party, by which it or
any of its properties is bound or to which it is subject, (iii) result in a
Limitation on any Licenses applicable to the business, operations or properties
of OCA or any of its Subsidiaries or adversely affect the ability of OCA or any
of its Subsidiaries to participate in any Third Party Payor Arrangement, or (iv)
except for the Liens granted in favor of the Agent pursuant to the Pledge
Agreements, result in or require the creation or imposition of any Lien upon any
of its properties or assets. No Subsidiary is a party to any agreement or
instrument or otherwise subject to any restriction or encumbrance that restricts
or limits its ability to make dividend payments or other distributions in
respect of its Capital Stock, to repay Indebtedness owed to OCA or any other
Subsidiary, to make loans or advances to OCA or any other Subsidiary, or to
transfer any of its assets or properties to OCA or any other Subsidiary, in each
case other than such restrictions or encumbrances existing under or by reason of
the Credit Documents or applicable Requirements of Law.
5.4 Governmental and Third-Party Authorization; Permits. (a) No
consent, approval, authorization or other action by, notice to, or registration
or filing with, any Governmental Authority or other Person is or will be
required as a condition to or otherwise in connection with the due execution,
delivery and performance by each of OCA and its Subsidiaries of this Agreement
or any of the other Credit Documents to which it is or will be a party or the
legality, validity or enforceability hereof or thereof.
(b) Each of OCA and its Subsidiaries and, to the knowledge of OCA, each
Managed Practice, has, and is in good standing with respect to, all governmental
approvals, permits and other Licenses and (to the extent applicable) all
Reimbursement Approvals necessary to conduct its business as presently conducted
and to own or lease and operate its properties, except for those the failure to
obtain which would not be reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect. There is no pending or, to the knowledge of
OCA, threatened Limitation of any such approval, permit or other License or
Reimbursement Approval of OCA or any Subsidiary or any Managed Practice, except
for such Limitations as would not be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect. No Medicare or Medicaid
certifications are required for the operation of the business of OCA or any of
its Subsidiaries, and neither OCA nor any Subsidiary or Managed Practice is
required to have entered into any Medicare or Medicaid provider agreement for
the operation of its business.
5.5 Litigation. There are no actions, investigations, suits or
proceedings pending or, to the knowledge of OCA, threatened, at law, in equity
or in arbitration, before any court, other Governmental Authority or other
Person, (i) against or affecting OCA or any of
50
its Subsidiaries or, to the knowledge of OCA, any Managed Practice, or any of
their respective properties that would, if adversely determined, be reasonably
likely to have a Material Adverse Effect, or (ii) with respect to this Agreement
or any of the other Credit Documents.
5.6 Taxes. Each of OCA and its Subsidiaries has timely filed all
federal, state and local tax returns and reports required to be filed by it and
has paid all taxes, assessments, fees and other charges levied upon it or upon
its properties that are shown thereon as due and payable, other than those that
are being contested in good faith and by proper proceedings and for which
adequate reserves have been established in accordance with GAAP. Such returns
accurately reflect in all material respects all liability for taxes of OCA and
its Subsidiaries for the periods covered thereby. There is no ongoing audit or
examination or, to the knowledge of OCA, other investigation by any Governmental
Authority of the tax liability of OCA or any of its Subsidiaries, and there is
no unresolved claim by any Governmental Authority concerning the tax liability
of OCA or any of its Subsidiaries for any period for which tax returns have been
or were required to have been filed, other than claims for which adequate
reserves have been established in accordance with GAAP. Neither OCA nor any of
its Subsidiaries has waived or extended or has been requested to waive or extend
the statute of limitations relating to the payment of any taxes.
5.7 Subsidiaries. SCHEDULE 5.7 sets forth a list, as of the Closing
Date, of all of the Subsidiaries of OCA (other than Inactive Subsidiaries) and,
as to each such Subsidiary, the percentage ownership (direct and indirect) of
OCA in each class of its capital stock and each direct owner thereof. Except
for the shares of capital stock expressly indicated on SCHEDULE 5.7, there are
no shares of capital stock, warrants, rights, options or other equity
securities, or other Capital Stock of any Subsidiary of OCA (other than Inactive
Subsidiaries) outstanding or reserved for any purpose. All outstanding shares
of capital stock of each Subsidiary of OCA (other than Inactive Subsidiaries)
are duly and validly issued, fully paid and nonassessable. Except as set forth
on SCHEDULE 5.7, as of the Closing Date, neither OCA nor any Subsidiary is
engaged in any joint venture, partnership or similar arrangement with any other
Person.
5.8 Full Disclosure. All factual information heretofore or
contemporaneously furnished to the Agent or any Lender in writing by or on
behalf of OCA or any of its Subsidiaries for purposes of or in connection with
this Agreement and the transactions contemplated hereby is, and all other such
factual information hereafter furnished to the Agent or any Lender in writing by
or on behalf of OCA or any of its Subsidiaries will be, true and accurate in all
material respects on the date as of which such information is dated or certified
(or, if such information has been amended or supplemented, on the date as of
which any such amendment or supplement is dated or certified) and not made
incomplete by omitting to state a material fact necessary to make the statements
contained therein, in light of the circumstances under which such information
was provided, not misleading.
5.9 Margin Regulations. Neither OCA nor any of its 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
proceeds of the Loans will be used, directly or indirectly, to purchase or carry
any Margin Stock, to extend credit for such
51
purpose or for any other purpose that would violate or be inconsistent with
Regulations T, U or X or any provision of the Exchange Act.
5.10 No Material Adverse Change. There has been no Material Adverse
Change since December 31, 1997, and there exists no event, condition or state of
facts that could reasonably be expected to result in a Material Adverse Change.
5.11 Financial Matters. (a) OCA has heretofore furnished to the Agent
copies of (i) the audited consolidated balance sheets of OCA and its
Subsidiaries as of December 31, 1997 and 1996, and the related statements of
income, cash flows and stockholders' equity for the fiscal years then ended and
for the fiscal year ended December 31, 1995, together with the opinion of Ernst
& Young LLP thereon, and (ii) the unaudited consolidated balance sheet of OCA
and its Subsidiaries as of June 30, 1998, and the related statements of income,
cash flows and stockholders' equity for the six-month period then ended. Such
financial statements have been prepared in accordance with GAAP (subject, with
respect to the unaudited financial statements, to the absence of notes required
by GAAP and to normal year-end adjustments) and present fairly the financial
condition of OCA and its Subsidiaries on a consolidated basis as of the
respective dates thereof and the consolidated results of operations of OCA and
its Subsidiaries for the respective periods then ended. Except as fully
reflected in the most recent financial statements referred to above and the
notes thereto, there are no material liabilities or obligations with respect to
OCA or any of its Subsidiaries of any nature whatsoever (whether absolute,
contingent or otherwise and whether or not due).
(b) OCA has prepared, and has heretofore furnished to the Agent a copy of,
annual projected balance sheets and statements of income and cash flows of OCA
for the period ending March 31, 2003, giving effect to the consummation of the
transactions contemplated by this Agreement, the initial extensions of credit
hereunder, and the payment of transaction fees and expenses related to the
foregoing (the "Projections"). In the opinion of management of OCA, the
assumptions used in the preparation of the Projections were fair, complete and
reasonable when made and continue to be fair, complete and reasonable as of the
date hereof. The Projections have been prepared in good faith by the executive
and financial personnel of OCA, are complete and represent a reasonable estimate
of the future performance and financial condition of OCA, subject to the
uncertainties and approximations inherent in any projections.
(c) Each of OCA and its Subsidiaries, after giving effect to the
consummation of the transactions contemplated hereby, (i) has capital sufficient
to carry on its businesses as conducted and as proposed to be conducted, (ii)
has assets with a fair saleable value, determined on a going concern basis, (y)
not less than the amount required to pay the probable liability on its existing
debts as they become absolute and matured and (z) greater than the total amount
of its liabilities (including identified contingent liabilities, valued at the
amount that can reasonably be expected to become absolute and matured), and
(iii) does not intend to, and does not believe that it will, incur debts or
liabilities beyond its ability to pay such debts and liabilities as they mature.
5.12 Ownership of Properties. Each of OCA and its Subsidiaries (i) has
good and marketable title to all real property owned by it, (ii) holds interests
as lessee under valid leases in full force and effect with respect to all
material leased real and personal property
52
used in connection with its business, (iii) possesses or has rights to use
licenses, patents, copyrights, trademarks, service marks, trade names and other
assets sufficient to enable it to continue to conduct its business substantially
as heretofore conducted and without any material conflict with the rights of
others, and (iv) has good title to all of its other properties and assets
reflected in the most recent financial statements referred to in SECTION 5.11(A)
(except as sold or otherwise disposed of since the date thereof in the ordinary
course of business), in each case under (i), (ii), (iii) and (iv) above free and
clear of all Liens other than Permitted Liens.
5.13 ERISA. (a) Each of OCA and its ERISA Affiliates is in compliance
in all material respects with the applicable provisions of ERISA, and each Plan
is and has been administered in compliance in all material respects with all
applicable Requirements of Law, including, without limitation, the applicable
provisions of ERISA and the Internal Revenue Code. No ERISA Event (i) has
occurred within the five-year period prior to the Closing Date, (ii) has
occurred and is continuing, or (iii) to the knowledge of OCA, is reasonably
expected to occur with respect to any Plan. No Plan has any Unfunded Pension
Liability as of the most recent annual valuation date applicable thereto, and
neither OCA nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
(b) Neither OCA nor any ERISA Affiliate has had a complete or partial
withdrawal from any Multiemployer Plan, and neither OCA nor any ERISA Affiliate
would become subject to any liability under ERISA if OCA or any ERISA Affiliate
were to withdraw completely from all Multiemployer Plans as of the most recent
valuation date. No Multiemployer Plan is in "reorganization" or is "insolvent"
within the meaning of such terms under ERISA.
5.14 Environmental Matters. (a) No Hazardous Substances are or have
been generated, used, located, released, treated, disposed of or stored by OCA
or any of its Subsidiaries or, to the knowledge of OCA, by any other Person
(including any predecessor in interest) or otherwise, in, on or under any
portion of any real property, leased or owned, of OCA or any of its
Subsidiaries, except in material compliance with all applicable Environmental
Laws, and no portion of any such real property or, to the knowledge of OCA, any
other real property at any time leased, owned or operated by OCA or any of its
Subsidiaries, has been contaminated by any Hazardous Substance; and to the
knowledge of OCA, no portion of any real property, leased or owned, of OCA or
any of its Subsidiaries has been or is presently the subject of an environmental
audit, assessment or remedial action.
(b) No portion of any real property, leased or owned, of OCA or any of its
Subsidiaries has been used by OCA or any of its Subsidiaries or, to the
knowledge of OCA, by any other Person, as or for a mine, a landfill, a dump or
other disposal facility, a gasoline service station, or (other than for
petroleum substances stored in the ordinary course of business) a petroleum
products storage facility; to the knowledge of OCA, no portion of such real
property or any other real property at any time leased, owned or operated by OCA
or any of its Subsidiaries has, pursuant to any Environmental Law, been placed
on the "National Priorities List" or "CERCLIS List" (or any similar federal,
state or local list) of sites subject to possible environmental problems; and to
the knowledge of
53
OCA, there are not and have never been any underground storage tanks situated on
any real property, leased or owned, of OCA or any of its Subsidiaries.
(c) All activities and operations of OCA and its Subsidiaries are in
compliance with the requirements of all applicable Environmental Laws, except to
the extent the failure so to comply, individually or in the aggregate, would not
be reasonably likely to have a Material Adverse Effect. Each of OCA and its
Subsidiaries has obtained all licenses and permits under Environmental Laws
necessary to its respective operations; all such licenses and permits are being
maintained in good standing; and each of OCA and its Subsidiaries is in
compliance with all terms and conditions of such licenses and permits, except
for such licenses and permits the failure to obtain, maintain or comply with
which would not be reasonably likely, individually or in the aggregate, to have
a Material Adverse Effect. Neither OCA nor any of its Subsidiaries is involved
in any suit, action or proceeding, or has received any notice, complaint or
other request for information from any Governmental Authority or other Person,
with respect to any actual or alleged Environmental Claims that, if adversely
determined, would be reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect; and, to the knowledge of OCA, there are no
threatened actions, suits, proceedings or investigations with respect to any
such Environmental Claims, nor any basis therefor.
5.15 Compliance With Laws. Each of OCA and its Subsidiaries and, to the
knowledge of OCA, each Managed Practice, has timely filed all material reports,
documents and other materials required to be filed by it under all applicable
Requirements of Law with any Governmental Authority, has retained all material
records and documents required to be retained by it under all applicable
Requirements of Law, and is otherwise in compliance with all applicable
Requirements of Law in respect of the conduct of its business and the ownership
and operation of its properties, except for such Requirements of Law the failure
to comply with which, individually or in the aggregate, would not be reasonably
likely to have a Material Adverse Effect.
5.16 Regulated Industries. Neither OCA nor any of its Subsidiaries is
(i) an "investment company," a company "controlled" by an "investment company,"
or an "investment advisor," within the meaning of the Investment Company Act of
1940, as amended, or (ii) a "holding company," a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
5.17 Insurance. The assets, properties and business of OCA and its
Subsidiaries are insured against such hazards and liabilities, under such
coverages and in such amounts, as are customarily maintained by prudent
companies similarly situated and under policies issued by insurers of recognized
responsibility.
5.18 Material Contracts. SCHEDULE 5.18 lists, as of the Closing Date,
each "material contract" (within the meaning of Item 601(b)(10) of Regulation
S-K under the Exchange Act) to which OCA or any of its Subsidiaries is a party,
by which any of them or their respective properties is bound or to which any of
them is subject (collectively, "Material Contracts"), and also indicates the
parties, subject matter and term thereof. As of the Closing Date, (i) each
Material Contract is in full force and effect and is enforceable by OCA or the
Subsidiary that is a party thereto in accordance with its terms, and (ii)
54
neither OCA nor any of its Subsidiaries (nor, to the knowledge of OCA, any other
party thereto) is in breach of or default under any Material Contract in any
material respect or has given notice of termination or cancellation of any
Material Contract.
5.19 Pledge Agreements. The provisions of each of the Pledge Agreements
(whether executed and delivered prior to or on the Closing Date or thereafter)
are and will be effective to create in favor of the Agent, for its benefit and
the benefit of the Lenders, a valid and enforceable security interest in and
Lien upon all right, title and interest of each of OCA and its Subsidiaries that
is a party thereto in and to the Collateral purported to be pledged by it
thereunder and described therein, and upon (i) the initial extension of credit
hereunder, (ii) the possession by the Agent of any certificates evidencing the
securities pledged thereby, and (iii) in the case of uncertificated securities,
control thereof by the Agent within the meaning of Section 8-106 (or its
successor provision) of the applicable Uniform Commercial Code, such security
interest and Lien shall constitute a fully perfected and first priority security
interest in and Lien upon such right, title and interest of OCA or such
Subsidiary, as applicable, in and to such Collateral, to the extent that such
security interest and Lien can be perfected by such actions and possession,
subject only to Permitted Liens.
5.20 Labor Relations. Neither OCA nor any of its Subsidiaries is
engaged in any unfair labor practice within the meaning of the National Labor
Relations Act of 1947, as amended. There is (i) no unfair labor practice
complaint before the National Labor Relations Board, or grievance or arbitration
proceeding arising out of or under any collective bargaining agreement, pending
or, to the knowledge of OCA, threatened, against OCA or any of its Subsidiaries,
(ii) no strike, lock-out, slowdown, stoppage, walkout or other labor dispute
pending or, to the knowledge of OCA, threatened, against OCA or any of its
Subsidiaries, and (iii) to the knowledge of OCA, no petition for certification
or union election or union organizing activities taking place with respect to
OCA or any of its Subsidiaries.
5.21 Year 2000 Compatibility. (a) OCA and its Subsidiaries have (i)
conducted a comprehensive review and assessment of all areas of their business
on which the "year 2000 problem" (that is, the risk that computer applications
may not be able to perform properly date-sensitive functions after December 31,
1999) could reasonably be expected to have a Material Adverse Effect, (ii)
developed a detailed plan and timeline for addressing the year 2000 problem on a
timely basis, and (iii) to date, implemented that plan in accordance with that
timetable in all material respects. Any reprogramming required to permit the
proper functioning, before, on and after January 1, 2000, of OCA's and its
Subsidiaries' computer-based systems, and the testing of all such systems, as so
reprogrammed, will be completed by June 30, 1999. The cost to OCA and its
Subsidiaries of such reprogramming and testing and of the reasonably foreseeable
consequences of the year 2000 to OCA and its Subsidiaries (including, without
limitation, reprogramming errors and the failure of others' systems or
equipment) will not result in an Event of Default or Material Adverse Effect.
Except for such of the reprogramming referred to in the preceding sentence as
may be necessary, the computer and management information systems of OCA and its
Subsidiaries are and, with ordinary course upgrading and maintenance will
continue for the term of this Agreement to be, sufficient to permit OCA and its
Subsidiaries to conduct their respective businesses without a Material Adverse
55
Effect; and OCA reasonably anticipates that all computer applications, the
failure of which could reasonably be expected to have a Material Adverse Effect,
will on a timely basis be able to perform properly date-sensitive functions for
all dates before and after January 1, 2000 (i.e., be "year 2000 compliant").
(b) OCA and its Subsidiaries have made written inquiry of each of their
key suppliers, vendors and customers with respect to the year 2000 problem and,
based on that inquiry, believe that each of them will on a timely basis be year
2000 compliant in all material respects. For the purposes of this subsection
(b), "key suppliers, vendors and customers" refers to those suppliers, vendors
and customers of OCA and its Subsidiaries the business failure of which would
with reasonable probability result in a Material Adverse Effect.
5.22 Service Agreements. No Service Agreement to which OCA or any of
its Subsidiaries is a party, nor any of the transactions contemplated
thereunder, violates any applicable Requirement of Law (i) relating to the
eligibility of a Managed Practice to enter into or participate in any Third
Party Payor Arrangement or otherwise applicable to such Managed Practice as a
result of such participation, (ii) relating to any License or Reimbursement
Approval of a Managed Practice required in connection with any Third Party Payor
Arrangement in which it participates, or (iii) relating to the practice of
medicine or the sharing of fees in connection therewith, except in each case
under (i), (ii) and (iii) above for such violations as would not, individually
or in the aggregate, be reasonably likely to have a Material Adverse Effect.
5.23 Reimbursement. The accounts receivable of OCA and each Subsidiary
have been properly adjusted in all material respects to reflect the
reimbursement policies under all applicable Requirements of Law and other Third
Party Payor Arrangements to which OCA, such Subsidiary or any Managed Practice
is subject, and do not exceed in any material respect amounts OCA or such
Subsidiary or Managed Practice is entitled to receive under any capitation
arrangement, fee schedule, discount formula, cost-based reimbursement or other
adjustment or limitation to usual charges. All ▇▇▇▇▇▇▇▇ by OCA, each Subsidiary
and each Managed Practice pursuant to Third Party Payor Arrangements have been
made in compliance with all applicable Requirements of Law, except where the
failure to comply would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect; and there has been no intentional or
material overbilling or overcollection pursuant to any Third Party Payor
Arrangements, other than as created by routine adjustments and disallowances
made in the ordinary course of business by the payors with respect to such
▇▇▇▇▇▇▇▇.
5.24 Fraud and Abuse. Neither OCA nor any Subsidiary (nor, to the
knowledge of OCA, any Managed Practice or any physician shareholder or employee
of any Managed Practice), has engaged in any activities that are prohibited
under 42 U.S.C. (S)(S) 1320a-7b, or the regulations promulgated thereunder, or
related Requirements of Law, or that are prohibited by rules of professional
conduct, including, without limitation, the following: (i) knowingly and
willfully making or causing to be made a false statement or misrepresentation of
a material fact in any application for any benefit or payment; (ii) knowingly
and willfully making or causing to be made any false statement or
misrepresentation of a material fact for use in determining rights to any
benefit or payment; (iii) failure to disclose knowledge by a claimant of the
occurrence of any event
56
affecting the initial or continued right to any benefit or payment on its own
behalf or on behalf of another, with intent to secure such benefit or payment
fraudulently; and (iv) knowingly and willfully soliciting or receiving any
remuneration (including any kickback, bribe or rebate), directly or indirectly,
overtly or covertly, in cash or in kind, or offering to pay or receive such
remuneration (y) in return for referring an individual to a Person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by Medicare, Medicaid or any other
government or private third party payor, or (z) in return for purchasing,
leasing, or ordering or arranging for or recommending purchasing, leasing or
ordering any good, facility, service, or item for which payment may be made in
whole or in part by Medicare, Medicaid or any other government or private third
party payor.
ARTICLE VI
AFFIRMATIVE COVENANTS
OCA covenants and agrees that, until the termination of the Commitments,
the termination or expiration of all Letters of Credit and the payment in full
of all principal and interest with respect to the Loans and all Reimbursement
Obligations together with all other amounts then due and owing hereunder:
6.1 Financial Statements. OCA will deliver to each Lender:
(a) As soon as available and in any event within forty-five (45) days
after the end of each of the first three fiscal quarters of each fiscal year,
beginning with the fiscal quarter ended September 30, 1998, unaudited
consolidated and consolidating balance sheets of OCA and its Subsidiaries as of
the end of such fiscal quarter and unaudited consolidated and consolidating
statements of income, cash flows and stockholders' equity for OCA and its
Subsidiaries for the fiscal quarter then ended and for that portion of the
fiscal year then ended, in each case setting forth comparative consolidated (or
consolidating) figures as of the end of and for the corresponding period in the
preceding fiscal year, all in reasonable detail and prepared in accordance with
GAAP (subject to the absence of notes required by GAAP and subject to normal
year-end adjustments) applied on a basis consistent with that of the preceding
quarter or containing disclosure of the effect on the financial condition or
results of operations of any change in the application of accounting principles
and practices during such quarter; and
(b) As soon as available and in any event within 100 days after the end of
each fiscal year, beginning with the fiscal year ending December 31, 1998, (i)
an audited consolidated balance sheet of OCA and its Subsidiaries as of the end
of such fiscal year and audited consolidated statements of income, cash flows
and stockholders' equity for OCA and its Subsidiaries for the fiscal year then
ended, including the notes thereto, in each case setting forth comparative
figures as of the end of and for the preceding fiscal year, all in reasonable
detail and certified by the independent certified public accounting firm
regularly retained by OCA or another independent certified public accounting
firm of recognized national standing reasonably acceptable to the Required
Lenders, together with (y) a report thereon by such accountants that is not
qualified as to going concern or scope of audit and to the effect that such
financial statements present fairly the consolidated
57
financial condition and results of operations of OCA and its Subsidiaries as of
the dates and for the periods indicated in accordance with GAAP applied on a
basis consistent with that of the preceding year or containing disclosure of the
effect on the financial condition or results of operations of any change in the
application of accounting principles and practices during such year, and (z) a
report by such accountants to the effect that, based on and in connection with
their examination of the financial statements of OCA and its Subsidiaries, they
obtained no knowledge of the occurrence or existence of any Default or Event of
Default relating to accounting matters, or a statement specifying the nature and
period of existence of any such Default or Event of Default disclosed by their
audit; provided, however, that such accountants shall not be liable by reason of
the failure to obtain knowledge of any Default or Event of Default that would
not be disclosed or revealed in the course of their audit examination, and (ii)
an unaudited consolidating balance sheet of OCA and its Subsidiaries as of the
end of such fiscal year and unaudited consolidating statements of income, cash
flows and stockholders' equity for OCA and its Subsidiaries for the fiscal year
then ended, all in reasonable detail.
6.2 Other Business and Financial Information. OCA will deliver to each
Lender:
(a) Concurrently with each delivery of the financial statements described
in SECTION 6.1, a Compliance Certificate with respect to the period covered by
the financial statements then being delivered, executed by a Financial Officer
of OCA, together with a Covenant Compliance Worksheet reflecting the computation
of the financial covenants set forth in SECTIONS 7.1 through 7.3 as of the last
day of the period covered by such financial statements;
(b) As soon as available and in any event within thirty (30) days prior to
the end of each fiscal year, beginning with the fiscal year ending December 31,
1998, a consolidated operating budget for OCA and its Subsidiaries for the
succeeding fiscal year (prepared on a quarterly basis), consisting of a
consolidated balance sheet and consolidated statements of income and cash flows,
together with a certificate of a Financial Officer of OCA to the effect that
such budgets have been prepared in good faith and are reasonable estimates of
the financial position and results of operations of OCA and its Subsidiaries for
the period covered thereby; and as soon as available from time to time
thereafter, any modifications or revisions to or restatements of such budget;
(c) Promptly upon receipt thereof, copies of any "management letter"
submitted to OCA or any of its Subsidiaries by its certified public accountants
in connection with each annual, interim or special audit, and promptly upon
completion thereof, any response reports from OCA or any such Subsidiary in
respect thereof;
(d) Promptly upon the sending, filing or receipt thereof, copies of (i)
all financial statements, reports, notices and proxy statements that OCA shall
send or make available generally to its shareholders, (ii) all regular, periodic
and special reports, registration statements and prospectuses (other than on
Form S-8) that OCA or any of its Subsidiaries shall render to or file with the
Securities and Exchange Commission, the National Association of Securities
Dealers, Inc. or any national securities exchange, and (iii) all press releases
and other statements made available generally by OCA or any of its Subsidiaries
to the public concerning material developments in the business of OCA or any of
its Subsidiaries;
58
(e) Promptly upon (and in any event within five (5) Business Days after)
any Responsible Officer of OCA or any of its Subsidiaries obtaining knowledge
thereof, written notice of any of the following:
(i) the occurrence of any Default or Event of Default, together with
a written statement of a Responsible Officer of OCA or such Subsidiary
specifying the nature of such Default or Event of Default, the period of
existence thereof and the action that OCA has taken and proposes to take
with respect thereto;
(ii) the institution or threatened institution of any action, suit,
investigation or proceeding against or affecting OCA, any of its
Subsidiaries or any Managed Practice, including any such investigation or
proceeding by any Governmental Authority (other than routine periodic
inquiries, investigations or reviews), that would, if adversely determined,
be reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect, and any material development in any litigation or other
proceeding previously reported pursuant to SECTION 5.5 or this subsection;
(iii) the receipt by OCA or any of its Subsidiaries from any
Governmental Authority or other Person of (y) any notice asserting any
failure by OCA, any of its Subsidiaries or any Managed Practice to be in
compliance with applicable Requirements of Law or that threatens the taking
of any action against such Person or sets forth circumstances that, if
taken or adversely determined, would be reasonably likely to have a
Material Adverse Effect, or (z) any notice of any actual or threatened
Limitation with respect to any License or Reimbursement Approval of OCA,
any of its Subsidiaries or any Managed Practice, where such action would be
reasonably likely to have a Material Adverse Effect;
(iv) the occurrence of any ERISA Event, together with (x) a written
statement of a Responsible Officer of OCA or such Subsidiary specifying the
details of such ERISA Event and the action that OCA or such Subsidiary has
taken and proposes to take with respect thereto, (y) a copy of any notice
with respect to such ERISA Event that may be required to be filed with the
PBGC and (z) a copy of any notice delivered by the PBGC to OCA or such
ERISA Affiliate with respect to such ERISA Event;
(v) the occurrence of any material default under, or any proposed or
threatened termination or cancellation of, any Material Contract or other
material contract or agreement to which OCA, any of its Subsidiaries or any
Managed Practice is a party, the termination or cancellation of which would
be reasonably likely to have a Material Adverse Effect;
(vi) the occurrence of any of the following: (x) the assertion of any
Environmental Claim against or affecting OCA, any of its Subsidiaries or
any of their respective real property, leased or owned; (y) the receipt by
OCA or any of its Subsidiaries of notice of any alleged violation of or
noncompliance with any Environmental Laws; or (z) the taking of any
remedial action by OCA, any of its Subsidiaries or any other Person in
response to the actual or alleged generation, storage, release, disposal or
discharge of any Hazardous Substances on, to, upon or
59
from any real property leased or owned by OCA or any of its Subsidiaries;
but in each case under clauses (x), (y) and (z) above, only to the extent
the same would be reasonably likely to have a Material Adverse Effect; and
(vii) any other matter or event that has, or would be reasonably
likely to have, a Material Adverse Effect, together with a written
statement of a Responsible Officer of OCA or such Subsidiary setting forth
the nature and period of existence thereof and the action that OCA or such
Subsidiary has taken and proposes to take with respect thereto; and
(f) As promptly as reasonably possible, such other information about the
business, condition (financial or otherwise), operations or properties of OCA or
any of its Subsidiaries (including any Plan and any information required to be
filed under ERISA) as the Agent or any Lender may from time to time reasonably
request.
6.3 Corporate Existence; Franchises; Maintenance of Properties. OCA
will, and will cause each of its Subsidiaries to, (i) maintain and preserve in
full force and effect its corporate existence, except as expressly permitted
otherwise by SECTION 8.1, (ii) obtain, maintain and preserve in full force and
effect all other rights, franchises, licenses, permits, certifications,
approvals, authorizations and other Licenses, and all Reimbursement Approvals,
required by Governmental Authorities and necessary to the ownership, occupation
or use of its properties or the conduct of its business, except to the extent
the failure to do so would not be reasonably likely to have a Material Adverse
Effect, and (iii) keep all material properties in good working order and
condition (normal wear and tear excepted) and from time to time make all
necessary repairs to and renewals and replacements of such properties, except to
the extent that any of such properties are obsolete or are being replaced.
6.4 Compliance with Laws. OCA will, and will cause each of its
Subsidiaries to, comply in all respects with all Requirements of Law applicable
in respect of the conduct of its business and the ownership and operation of its
properties, except to the extent the failure so to comply would not be
reasonably likely to have a Material Adverse Effect.
6.5 Payment of Obligations. OCA will, and will cause each of its
Subsidiaries to, (i) pay all liabilities and obligations as and when due
(subject to any applicable subordination provisions), except to the extent
failure to do so would not be reasonably likely to have a Material Adverse
Effect, and (ii) pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it, upon its income or profits or upon any of its
properties, prior to the date on which penalties would attach thereto, and all
lawful claims that, if unpaid, might become a Lien upon any of the properties of
OCA or any of its Subsidiaries; provided, however, that neither OCA nor any of
its Subsidiaries shall be required to pay any such tax, assessment, charge, levy
or claim that is being contested in good faith and by proper proceedings and as
to which OCA or such Subsidiary is maintaining adequate reserves with respect
thereto in accordance with GAAP.
6.6 Insurance. OCA will, and will cause each of its Subsidiaries to,
maintain with financially sound and reputable insurance companies insurance with
respect to its assets, properties and business, against such hazards and
liabilities, of such types and in
60
such amounts, as is customarily maintained by companies in the same or similar
businesses similarly situated.
6.7 Maintenance of Books and Records; Inspection. OCA will, and will
cause each of its Subsidiaries to, (i) maintain adequate books, accounts and
records, in which full, true and correct entries shall be made of all financial
transactions in relation to its business and properties, and prepare all
financial statements required under this Agreement, in each case in accordance
with GAAP and in compliance with the requirements of any Governmental Authority
having jurisdiction over it, and (ii) permit employees or agents of the Agent or
any Lender to inspect its properties and examine or audit its books, records,
working papers and accounts and make copies and memoranda of them, and to
discuss its affairs, finances and accounts with its officers and employees and,
upon notice to OCA, the independent public accountants of OCA and its
Subsidiaries (and by this provision OCA authorizes such accountants to discuss
the finances and affairs of OCA and its Subsidiaries), all at such times and
from time to time, upon reasonable notice and during business hours, as may be
reasonably requested.
6.8 Managed Practices. OCA will use its best efforts to cause each
Managed Practice to (i) comply in all respects with all Requirements of Law
applicable in respect of the conduct of its business and the ownership and
operation of its properties, and (ii) obtain, maintain and preserve in full
force and effect all other rights, franchises, permits, certifications,
approvals, authorizations and other Licenses (including with respect to
physician employees), and all Reimbursement Approvals, required by Governmental
Authorities and necessary to the ownership, occupation or use of its properties
or the conduct of its business, except in each case under (i) and (ii) above to
the extent the failure to do so would not be reasonably likely to have a
Material Adverse Effect.
6.9 Permitted Acquisitions. (a) Subject to the provisions of
subsection (b) below and the requirements contained in the definition of
Permitted Acquisition, and subject to the other terms and conditions of this
Agreement, OCA may from time to time on or after the Closing Date effect
Permitted Acquisitions, provided that, with respect to each Permitted
Acquisition:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of the consummation of such Permitted Acquisition or
would exist immediately after giving effect thereto; and
(ii) the Acquisition Amount with respect thereto (y) shall be less
than $5,000,000, and (z) together with the aggregate of the Acquisition
Amounts for all other Permitted Acquisitions consummated during the same
fiscal year, shall not exceed $45,000,000.
(b) Within forty-five (45) days after the end of each fiscal quarter, OCA
will deliver to the Agent and each Lender, with respect to each Permitted
Acquisition during such fiscal quarter the Acquisition Amount in respect of
which is less than $5,000,000, the items described in clauses (i) and (ii) of
subsection (c) below.
(c) Not less than ten (10) Business Days prior to the consummation of any
proposed Acquisition with respect to which the Acquisition Amount equals or
exceeds
61
$5,000,000, OCA shall have delivered to the Agent and each Lender a request that
such Acquisition be approved as a Permitted Acquisition and, in support of such
request (at a minimum, and without limitation of any other materials or
information that may be requested by the Agent or any Lender), the following:
(i) a reasonably detailed description of the material terms of such
Acquisition (including, without limitation, the purchase price and method
and structure of payment) and of each Person or business that is the
subject of such Acquisition (each, a "Target");
(ii) historical financial statements of the Target (or, if there are
two or more Targets that are the subject of such Acquisition and that are
part of the same consolidated group, consolidated historical financial
statements for all such Targets) for the two (2) most recent fiscal years
available and, if available, for any interim periods since the most recent
fiscal year-end;
(iii) consolidated projected income statements of OCA and its
Subsidiaries (giving effect to such Acquisition and the consolidation with
OCA of each relevant Target) for the five-year period following the
consummation of such Acquisition (or, if shorter, the period until the
Maturity Date), in reasonable detail, together with any appropriate
statement of assumptions and pro forma adjustments; and
(iv) a certificate, in form and substance reasonably satisfactory to
the Agent, executed by a Financial Officer of OCA setting forth the
Acquisition Amount and further to the effect that, to the best of such
individual's knowledge, (x) the consummation of such Acquisition will not
result in a violation of any provision of this Section, and after giving
effect to such Acquisition and any Borrowings made in connection therewith,
OCA will be in compliance with the financial covenants contained in
SECTIONS 7.1 through 7.3, such compliance determined with regard to
calculations made on a pro forma basis in accordance with GAAP as if each
Target had been consolidated with OCA for those periods applicable to such
covenants (such calculations to be attached to the certificate), (y) OCA
believes in good faith that it will continue to comply with such financial
covenants for a period of one year following the date of the consummation
of such Acquisition, and (z) after giving effect to such Acquisition and
any Borrowings in connection therewith, OCA believes in good faith that it
will have sufficient funds available to meet its ongoing working capital
requirements.
(d) As soon as reasonably practicable after the consummation of any
Permitted Acquisition, OCA will deliver to the Agent and each Lender a copy of
the fully executed acquisition agreement (including schedules and exhibits
thereto) and other material documents and closing papers delivered in connection
therewith.
(e) The consummation of each Permitted Acquisition shall be deemed to be a
representation and warranty by OCA that (except as shall have been approved in
writing by the Required Lenders) all conditions thereto set forth in this
Section and in the description furnished under clause (i) of subsection (c)
above (if applicable) have been satisfied, that the same is permitted in
accordance with the terms of this Agreement, and that the matters certified to
by the Financial Officer of OCA in the certificate referred to in
62
clause (iv) of subsection (c) above (if applicable) are, to the best of such
individual's knowledge, true and correct in all material respects as of the date
such certificate is given, which representation and warranty shall be deemed to
be a representation and warranty as of the date thereof for all purposes
hereunder, including, without limitation, for purposes of SECTIONS 4.2 and 9.1.
6.10 Creation or Acquisition of Subsidiaries. Subject to the provisions
of SECTION 8.5, OCA may from time to time create or acquire new Wholly Owned
Subsidiaries in connection with Permitted Acquisitions or otherwise as permitted
under SECTION 8.5, and the Wholly Owned Subsidiaries of OCA may create or
acquire new Wholly Owned Subsidiaries, provided that:
(a) Concurrently with (and in any event within ten (10) Business Days
thereafter) the creation or direct or indirect acquisition by OCA of any new
Domestic Subsidiary (other than an Inactive Subsidiary), (i) OCA will cause such
Domestic Subsidiary to execute and deliver to the Agent a joinder to the
Subsidiary Guaranty, pursuant to which such new Domestic Subsidiary shall become
a party thereto and shall guarantee the payment in full of the Obligations of
OCA under this Agreement and the other Credit Documents, and (ii) OCA and/or any
applicable Subsidiary will execute and deliver to the Agent a Pledge Agreement
or an amendment or supplement to the OCA Pledge Agreement pursuant to which all
of the Capital Stock of such new Domestic Subsidiary shall be pledged to the
Agent, together with the certificates evidencing such Capital Stock and undated
stock powers duly executed in blank;
(b) Concurrently with (and in any event within ten (10) Business Days
thereafter) the creation or direct or indirect acquisition by OCA of any new
Foreign Subsidiary (other than an Inactive Subsidiary), OCA and/or any
applicable Subsidiary will execute and deliver to the Agent a Pledge Agreement
or an amendment or supplement to the OCA Pledge Agreement pursuant to which all
of the Capital Stock of such new Foreign Subsidiary shall be pledged to the
Agent, together with the certificates evidencing such Capital Stock and undated
stock powers duly executed in blank (or such other documents, instruments and
other evidence as the Agent shall require in order to perfect its security
interest (or the equivalent thereof under applicable law of the relevant foreign
jurisdiction) in such Capital Stock); provided that no more than 65% of the
Capital Stock of any Foreign Subsidiary shall be required to be pledged to the
Agent if the pledge of more than 65% thereof would, in the good faith judgment
of OCA, result in adverse tax consequences to OCA or would be unlawful for such
Foreign Subsidiary; and
(c) As promptly as reasonably possible, OCA and its Subsidiaries will
deliver any such other documents, certificates and opinions (including opinions
of local counsel in the jurisdiction of organization of each such new
Subsidiary, including any new Foreign Subsidiary), in form and substance
reasonably satisfactory to the Agent, as the Agent may reasonably request in
connection therewith and will take such other action as the Agent may reasonably
request to create in favor of the Agent a perfected security interest in the
Collateral being pledged pursuant to the documents described above. Nothing
contained in this Section, however, shall be deemed to permit the creation or
acquisition by OCA, directly or indirectly, of any Subsidiary not expressly
permitted under SECTION 8.5.
63
6.11 Year 2000 Compatibility. OCA will, and will cause each of its
Subsidiaries to, (i) continue to implement the year 2000 plan referred to in
SECTION 5.21 in accordance with the timetable referred to therein in all
material respects, and (ii) take all action necessary to ensure that its
computer-based systems are able to operate and effectively process data
including dates on and after January 1, 2000. At the request of the Agent or
the Required Lenders, OCA will provide reasonable assurance of its Year 2000
compatibility.
6.12 Further Assurances. OCA will, and will cause each of its
Subsidiaries to, make, execute, endorse, acknowledge and deliver any amendments,
modifications or supplements hereto and restatements hereof and any other
agreements, instruments or documents, and take any and all such other actions,
as may from time to time be reasonably requested by the Agent or the Required
Lenders to perfect and maintain the validity and priority of the Liens granted
pursuant to the Pledge Agreements and to effect, confirm or further assure or
protect and preserve the interests, rights and remedies of the Agent and the
Lenders under this Agreement and the other Credit Documents.
6.13 Post-Closing Matters. As promptly as reasonably possible after the
Closing Date, OCA will, and will cause each of its applicable Subsidiaries to,
take all action as may be reasonably requested by the Agent to pledge as
security for the Obligations, pursuant to the Pledge Agreement, the capital
stock of its Foreign Subsidiaries Orthodontic Centers of Japan, K.K. and
Orthodontic Centers of America de Mexico, S.A. de C.V. and, to the extent
permitted under the applicable joint venture documents, the interests of such
Foreign Subsidiaries in the joint ventures described on SCHEDULE 5.7.
ARTICLE VII
FINANCIAL COVENANTS
OCA covenants and agrees that, until the termination of the Commitments,
the termination or expiration of all Letters of Credit and the payment in full
of all principal and interest with respect to the Loans and all Reimbursement
Obligations together with all other amounts then due and owing hereunder:
7.1 Leverage Ratio. OCA will not permit the Leverage Ratio as of the
last day of any fiscal quarter, beginning with the fiscal quarter ended
September 30, 1998, to be greater than 3.0 to 1.0.
7.2 Fixed Charge Coverage Ratio. OCA will not permit the Fixed Charge
Coverage Ratio (i) as of the last day of each of the fiscal quarter ended
September 30, 1998 and the fiscal quarter ending December 31, 1998, to be less
than 1.4 to 1.0, and (ii) as of the last day of any fiscal quarter ending
thereafter, to be less than 1.5 to 1.0.
7.3 Consolidated Net Worth. OCA will not permit Consolidated Net Worth
as of the last day of any fiscal quarter, beginning with the fiscal quarter
ended September 30, 1998, to be less than the sum of (i) $201,342,000, plus (ii)
80% of the aggregate of Consolidated Net Income for each fiscal quarter ending
after September 30, 1998 (provided that Consolidated Net Income for any such
fiscal quarter shall be taken into account for
64
purposes of this calculation only if positive), plus (iii) 90% of the aggregate
amount of all increases in the stated capital and additional paid-in capital
accounts of OCA and its Subsidiaries, as determined on a consolidated basis in
accordance with GAAP, resulting from the issuance of equity securities
(including pursuant to the exercise of options, rights or warrants or pursuant
to the conversion of convertible securities) or other Capital Stock after
September 30, 1998.
ARTICLE VIII
NEGATIVE COVENANTS
OCA covenants and agrees that, until the termination of the Commitments,
the termination or expiration of all Letters of Credit and the payment in full
of all principal and interest with respect to the Loans and all Reimbursement
Obligations together with all other amounts then due and owing hereunder:
8.1 Merger; Consolidation. OCA will not, and will not permit or cause
any of its Subsidiaries to, liquidate, wind up or dissolve, or enter into any
consolidation, merger or other combination, or agree to do any of the foregoing;
provided, however, that:
(i) OCA may merge or consolidate with another Person, provided that
(x) OCA is the surviving entity, (y) unless such other Person is a Wholly
Owned Subsidiary immediately prior to giving effect thereto, such merger or
consolidation shall constitute a Permitted Acquisition and the applicable
conditions and requirements of SECTIONS 6.9 and 6.10 shall be satisfied,
and (z) immediately after giving effect thereto, no Default or Event of
Default would exist;
(ii) any Wholly Owned Subsidiary may merge or consolidate with OCA
(provided that OCA is the surviving entity) or with any Subsidiary
Guarantor (provided that a Subsidiary Guarantor is the surviving entity),
and in each case provided further that immediately after giving effect
thereto, no Default or Event of Default would exist;
(iii) any Wholly Owned Subsidiary that is a Domestic Subsidiary may
merge or consolidate with another Person not a Subsidiary immediately prior
to giving effect thereto, provided that (x) the surviving entity shall be a
Wholly Owned Subsidiary that is a Domestic Subsidiary and a Subsidiary
Guarantor, (y) such merger or consolidation shall constitute a Permitted
Acquisition and the applicable conditions and requirements of SECTIONS 6.9
and 6.10 shall be satisfied, and (z) immediately after giving effect
thereto, no Default or Event of Default would exist; and
(iv) any Inactive Subsidiary may dissolve and thereafter liquidate
and wind up its affairs so long as (y) no Default or Event of Default would
result therefrom and (z) its assets, if any, are distributed only to OCA or
a Subsidiary Guarantor.
65
8.2 Indebtedness. OCA will not, and will not permit or cause any of its
Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness other
than:
(i) Indebtedness incurred under this Agreement, the Notes and the
Subsidiary Guaranty;
(ii) Indebtedness existing on the Closing Date and described in
SCHEDULE 8.2, and any extensions, renewals, replacements, modifications and
refundings thereof, provided that the principal amount thereof is not
increased from the amount shown on such Schedule;
(iii) accrued expenses (including salaries, accrued vacation and
other compensation), current trade or other accounts payable and other
current liabilities arising in the ordinary course of business and not
incurred through the borrowing of money, provided that the same shall be
paid when due except to the extent being contested in good faith and by
appropriate proceedings;
(iv) loans and advances by any Borrower or Subsidiary Guarantor to
any other Borrower or Subsidiary Guarantor, provided that (y) any such loan
or advance is subordinated in right and time of payment to the Obligations
and is evidenced by an Intercompany Note, or other promissory note in form
and substance satisfactory to the Agent, pledged to the Agent pursuant to a
Pledge Agreement, and (z) no such loan or advance shall be made to any
Borrower or Subsidiary that is the subject of a proceeding of the type
described in SECTION 9.1(F) or 9.1(G);
(v) unsecured Indebtedness of OCA that is expressly subordinated and
made junior in right and time of payment to the Obligations and that is
evidenced by one or more written indentures, agreements or instruments
having terms, conditions and provisions (including, without limitation,
terms and provisions relating to principal amount, maturity, covenants,
defaults, interest, and subordination) satisfactory in form and substance
to the Required Lenders in their sole discretion and which shall provide,
at a minimum and without limitation, that such Indebtedness (a) shall
mature by its terms no earlier than the second anniversary of the Maturity
Date, (b) shall not require any scheduled payment of principal prior to the
first anniversary of the Maturity Date, and (c) shall have covenants and
undertakings that, taken as a whole, are materially less restrictive than
those contained herein (the Indebtedness described hereinabove,
"Subordinated Indebtedness"); provided that, as further conditions to the
issuance of any Subordinated Indebtedness, (1) immediately after giving
effect to the issuance of such Subordinated Indebtedness, no Default or
Event of Default shall exist, (2) all indentures, agreements and
instruments evidencing or governing such Subordinated Indebtedness shall
have been approved in writing by the Required Lenders (or the Agent on
their behalf), and (3) prior to or concurrently with the issuance of such
Subordinated Indebtedness, OCA shall have delivered to each Lender a
certificate, signed by a Financial Officer of OCA, satisfactory in form and
substance to the Required Lenders and to the effect that, after giving
effect to the incurrence of such Subordinated Indebtedness, OCA is in
compliance with the financial covenants set forth in Sections 7.1 through
7.3, such compliance being determined with regard to calculations made on a
pro forma basis in accordance
66
with GAAP as of the last day of the fiscal quarter then most recently ended
and as if such Subordinated Indebtedness had been incurred on the first day
of the period applicable to such covenants (such calculations to be
attached to such certificate); and provided further that the Net Cash
Proceeds from the issuance of such Subordinated Indebtedness shall be
applied to prepay the Loans in accordance with, and to the extent required
under, the provisions of SECTION 2.6(D);
(vi) Indebtedness consisting of guarantees by OCA or any of its
Subsidiaries of loans made to affiliated orthodontists and orthodontic
practices for the purpose of financing costs associated with the
development of new orthodontic centers, provided that the aggregate amount
so guaranteed shall not exceed $10,000,000 outstanding at any time;
(vii) unsecured Indebtedness issued after the Closing Date by OCA or
any of its Subsidiaries to sellers in connection with Permitted
Acquisitions, in an aggregate principal amount not exceeding $35,000,000
outstanding at any time, provided that such Indebtedness is subordinated in
right and time of payment to the Obligations on terms and conditions
acceptable to the Agent and is otherwise on terms and conditions acceptable
to, and in a form approved in writing by, the Agent;
(viii) Indebtedness consisting of guarantees made in the ordinary
course of business by OCA or any of its Subsidiaries of leases or other
obligations of OCA or any of its Subsidiaries, which obligations are
otherwise permitted under this Agreement (including guarantees of other
Indebtedness permitted under this Section, but excluding, for purposes of
this clause (viii), Indebtedness permitted under clause (ix) of this
Section), provided that any guarantee of Subordinated Indebtedness shall be
subordinated to the guarantees of the Obligations to at least the same
extent and in the same manner as such Subordinated Indebtedness is
subordinated to the Obligations; and
(ix) purchase money Indebtedness of OCA and its Subsidiaries
incurred solely to finance the payment of all or part of the purchase price
of any equipment, real property or other fixed assets acquired in the
ordinary course of business, including Indebtedness in respect of capital
lease obligations, and any renewals, refinancings or replacements thereof
(subject to the limitations on the principal amount thereof set forth in
this clause (ix)), and other Indebtedness of OCA and its Subsidiaries that
is unsecured, including Contingent Obligations (other than Indebtedness
specified in clauses (i) through (viii) above), which purchase money
indebtedness and other unsecured indebtedness shall not exceed $3,500,000
in aggregate principal amount outstanding at any time.
8.3 Liens. OCA will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer
to exist, any Lien upon or with respect to any part of its property or assets,
whether now owned or hereafter acquired, or file or permit the filing of, or
permit to remain in effect, any financing statement or other similar notice of
any Lien with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any state or under any similar recording or notice
statute, or agree to do any of the foregoing, other than the following
(collectively, "Permitted Liens"):
67
(i) Liens created under the Pledge Agreements;
(ii) Liens in existence on the Closing Date and set forth on
SCHEDULE 8.3;
(iii) Liens imposed by law, such as Liens of carriers, warehousemen,
mechanics, materialmen and landlords, and other similar Liens incurred in
the ordinary course of business for sums not constituting borrowed money
that are not overdue for a period of more than thirty (30) days or that are
being contested in good faith by appropriate proceedings and for which
adequate reserves have been established in accordance with GAAP (if so
required);
(iv) Liens (other than any Lien imposed by ERISA, the creation or
incurrence of which would result in an Event of Default under SECTION
9.1(J)) incurred in the ordinary course of business in connection with
worker's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure the performance of letters
of credit, bids, tenders, statutory obligations, surety and appeal bonds,
leases, government contracts and other similar obligations (other than
obligations for borrowed money) entered into in the ordinary course of
business;
(v) Liens for taxes, assessments or other governmental charges or
statutory obligations that are not delinquent or remain payable without any
penalty or that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in
accordance with GAAP (if so required);
(vi) Liens securing purchase money Indebtedness permitted under
clause (ix) of SECTION 8.2, provided that any such Lien (a) shall attach to
such property concurrently with or within ten (10) days after the
acquisition thereof by OCA or such Subsidiary, (b) shall not exceed the
lesser of (y) the fair market value of such property or (z) the cost
thereof to OCA or such Subsidiary and (c) shall not encumber any other
property of OCA or any of its Subsidiaries;
(vii) any attachment or judgment Lien not constituting an Event of
Default under SECTION 9.1(H) that is being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP (if so required);
(viii) Liens arising from the filing, for notice purposes only, of
financing statements in respect of true leases;
(ix) with respect to any real property occupied by OCA or any of its
Subsidiaries, all easements, rights of way, licenses and similar
encumbrances on title that do not materially impair the use of such
property for its intended purposes; and
(x) other Liens securing obligations in an aggregate amount not
exceeding $1,000,000 at any time outstanding.
68
8.4 Disposition of Assets. OCA will not, and will not permit or cause
any of its Subsidiaries to, sell, assign, lease, convey, transfer or otherwise
dispose of (whether in one or a series of transactions) all or any portion of
its assets, business or properties (including, without limitation, any Capital
Stock of any Subsidiary), or enter into any arrangement with any Person
providing for the lease by OCA or any Subsidiary as lessee of any asset that has
been sold or transferred by OCA or such Subsidiary to such Person, or agree to
do any of the foregoing, except for:
(i) sales of inventory in the ordinary course of business;
(ii) the sale or exchange of used or obsolete equipment to the extent
(y) the proceeds of such sale (1) are applied towards, or such equipment is
exchanged for, replacement equipment or (2) do not exceed $25,000 in the
aggregate for any fiscal quarter or (z) such equipment is no longer
necessary for the operations of OCA or its applicable Subsidiary in the
ordinary course of business;
(iii) the sale, lease or other disposition of assets by any
Subsidiary to OCA or to a Subsidiary Guarantor if, immediately after giving
effect thereto, no Default or Event of Default would exist; and
(iv) the sale or disposition of assets outside the ordinary course of
business for fair value and for cash, provided that (w) the Net Cash
Proceeds from such sales or dispositions do not exceed $5,000,000 in the
aggregate for OCA and its Subsidiaries during any fiscal year, (x) to the
extent not theretofore expended to acquire assets or properties or
otherwise reinvested in the businesses of OCA and its Subsidiaries, such
Net Cash Proceeds are delivered to the Agent within 90 days after receipt
thereof for application in prepayment of the Loans in accordance with the
provisions of SECTION 2.6(E), (y) in no event shall OCA or any of its
Subsidiaries sell or otherwise dispose of any of the Capital Stock of any
Subsidiary, and (z) immediately after giving effect thereto, no Default or
Event of Default would exist.
8.5 Investments. OCA will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, purchase, own, invest in or otherwise
acquire any Capital Stock, evidence of indebtedness or other obligation or
security or any interest whatsoever in any other Person, or make or permit to
exist any loans, advances or extensions of credit to, or any investment in cash
or by delivery of property in, any other Person, or purchase or otherwise
acquire (whether in one or a series of related transactions) any portion of the
assets, business or properties of another Person (including pursuant to an
Acquisition), or create or acquire any Subsidiary, or become a partner or joint
venturer in any partnership or joint venture (collectively, "Investments"), or
make a commitment or otherwise agree to do any of the foregoing, other than:
(i) Investments in Cash Equivalents;
(ii) Investments consisting of purchases and acquisitions of
inventory, supplies, materials and equipment in the ordinary course of
business,
(iii) Investments consisting of loans and advances to employees for
reasonable travel, relocation and business expenses in the ordinary course
of
69
business, extensions of trade credit in the ordinary course of business,
and prepaid expenses incurred in the ordinary course of business;
(iv) without duplication, Investments consisting of intercompany
Indebtedness permitted under clause (iv) of SECTION 8.2;
(v) Investments in (y) Domestic Subsidiaries existing as of the
date hereof and (z) Foreign Subsidiaries and joint ventures existing as of
the date hereof described in SCHEDULE 5.7, provided that this clause (z)
shall not permit any Investments after the date hereof in such Foreign
Subsidiaries or joint ventures;
(vi) Investments consisting of the making of capital contributions
or the purchase of Capital Stock (a) by OCA or any Subsidiary in any other
Wholly Owned Subsidiary that is (or immediately after giving effect to such
Investment will be) a Domestic Subsidiary and a Subsidiary Guarantor,
provided that OCA complies with the provisions of SECTION 6.10, and (b) by
any Subsidiary in OCA;
(vii) Permitted Acquisitions; provided that the Acquisition Amounts
with respect to Permitted Acquisitions of businesses having assets or
operations located outside of the United States of America shall not
exceed, in the aggregate, $1,000,000 for any individual foreign Acquisition
or $10,000,000 for all such foreign Acquisitions from and after the Closing
Date;
(viii) Investments consisting of temporary or overnight investments
and other investment products sold to OCA or any of its Subsidiaries by any
Lender or any Affiliate thereof in order to facilitate OCA's cash
management; and
(ix) other Investments (including, without limitation, Investments
in Foreign Subsidiaries not otherwise included under the proviso in clause
(vii) above) in an aggregate amount not exceeding $1,000,000 at any time
outstanding.
8.6 Restricted Payments. (a) OCA will not, and will not permit or
cause any of its Subsidiaries to, directly or indirectly, declare or make any
dividend payment, or make any other distribution of cash, property or assets, in
respect of any of its Capital Stock or any warrants, rights or options to
acquire its Capital Stock, or purchase, redeem, retire or otherwise acquire for
value any shares of its Capital Stock or any warrants, rights or options to
acquire its Capital Stock, or set aside funds for any of the foregoing, except
that:
(i) OCA may declare and make dividend payments or other
distributions payable solely in its common stock; and
(ii) each Wholly Owned Subsidiary of OCA may declare and make
dividend payments or other distributions to OCA or to another Wholly Owned
Subsidiary that is a Subsidiary Guarantor, or (if such declaring Subsidiary
is a Foreign Subsidiary) to another Foreign Subsidiary, in each case to the
extent not prohibited under applicable Requirements of Law; and
(iii) OCA may purchase, redeem, retire or otherwise acquire for value
shares of its Capital Stock in an aggregate amount not exceeding $5,000,000
during
70
any fiscal year, provided that, immediately after giving effect thereto, no
Default or Event of Default would exist.
(b) OCA will not, and will not permit or cause any of its Subsidiaries to,
make (or give any notice in respect of) any voluntary or optional payment or
prepayment of principal on any Subordinated Indebtedness, or directly or
indirectly make any redemption (including pursuant to any change of control
provision), retirement, defeasance or other acquisition for value of any
Subordinated Indebtedness, or make any deposit or otherwise set aside funds for
any of the foregoing purposes.
8.7 Transactions with Affiliates. OCA will not, and will not permit or
cause any of its Subsidiaries to, enter into any transaction (including, without
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service) with any officer, director, stockholder or other Affiliate of
OCA or any Subsidiary, except in the ordinary course of its business and upon
fair and reasonable terms that are no less favorable to it than would obtain in
a comparable arm's length transaction with a Person other than an Affiliate of
OCA or such Subsidiary; provided, however, that nothing contained in this
Section shall prohibit:
(i) transactions described on SCHEDULE 8.7 or otherwise expressly
permitted under this Agreement; and
(ii) the payment by OCA of reasonable and customary fees to members
of its board of directors.
8.8 Lines of Business. OCA will not, and will not permit or cause any
of its Subsidiaries to, engage in any business other than the provision of
practice management and consulting services to dental and orthodontic practices
and businesses and activities reasonably related thereto.
8.9 Certain Amendments. OCA will not, and will not permit or cause any
of its Subsidiaries to, (i) amend, modify or waive, or permit the amendment,
modification or waiver of, any provision of any agreement or instrument
evidencing or governing any Subordinated Indebtedness, the effect of which would
be to (a) increase the principal amount due thereunder, (b) shorten or
accelerate the time of payment of any amount due thereunder, (c) increase the
applicable interest rate or amount of any fees or costs due thereunder, (d)
amend any of the subordination provisions thereunder (including any of the
definitions relating thereto), (e) make any covenant therein more restrictive or
add any new covenant, or (f) otherwise materially and adversely affect the
Lenders, or breach or otherwise violate any of the subordination provisions
applicable thereto, including, without limitation, restrictions against payment
of principal and interest thereon, or (ii) amend, modify or change any provision
of its articles or certificate of incorporation or bylaws, or the terms of any
class or series of its Capital Stock, other than in a manner that could not
reasonably be expected to adversely affect the Lenders.
8.10 Limitation on Certain Restrictions. OCA will not, and will not
permit or cause any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any restriction or
encumbrance on (i) the ability of OCA and its Subsidiaries to perform and comply
with their respective obligations under the Credit
71
Documents or (ii) the ability of any Subsidiary of any Borrower to make any
dividend payments or other distributions in respect of its Capital Stock, to
repay Indebtedness owed to such Borrower or any other Subsidiary, to make loans
or advances to such Borrower or any other Subsidiary, or to transfer any of its
assets or properties to such Borrower or any other Subsidiary, in each case
other than such restrictions or encumbrances existing under or by reason of the
Credit Documents or applicable Requirements of Law.
8.11 No Other Negative Pledges. OCA will not, and will not permit or
cause any of its Subsidiaries to, directly or indirectly, enter into or suffer
to exist any agreement or restriction that prohibits or conditions the creation,
incurrence or assumption of any Lien upon or with respect to any part of its
property or assets, whether now owned or hereafter acquired, or agree to do any
of the foregoing, other than as set forth in (i) this Agreement and the Pledge
Agreements, (ii) any agreement or instrument creating a Permitted Lien (but only
to the extent such agreement or restriction applies to the assets subject to
such Permitted Lien), and (iii) operating leases of real or personal property
entered into by OCA or any of its Subsidiaries as lessee in the ordinary course
of business.
8.12 Fiscal Year. OCA will not, and will not permit or cause any of its
Subsidiaries to, change the ending date of its fiscal year to a date other than
December 31.
8.13 Accounting Changes. OCA will not, and will not permit or cause any
of its Subsidiaries to, make or permit any material change in its accounting
policies or reporting practices, except as may be required or permitted by GAAP.
ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default":
(a) Any Borrower shall fail to pay (i) any principal of any Loan when due,
or (ii) any interest on any Loan, any Reimbursement Obligation, any fee or any
other Obligation when due, and in the case of clause (ii) only, such failure
shall continue unremedied for a period of two (2) Business Days; or any
Subsidiary Guarantor shall fail to pay when due any of its obligations under the
Subsidiary Guaranty;
(b) Any Borrower shall fail to observe, perform or comply with any
condition, covenant or agreement contained in any of SECTIONS 2.14, 6.2(E)(I),
6.3(I), 6.10 or in ARTICLE VII or ARTICLE VIII;
(c) Any Borrower or any of its Subsidiaries shall fail to observe, perform
or comply with any condition, covenant or agreement contained in this Agreement
or any of the other Credit Documents other than those enumerated in subsections
(a) and (b) above, and such failure shall continue unremedied for any grace
period specifically applicable thereto or, if no such grace period is
applicable, for a period of (i) five (5) days, in the case of the covenants set
forth in SECTIONS 6.1, 6.2 (other than 6.2(E)(I)) and 6.9, and (ii) thirty (30)
days, in all other instances, in each case under (i) and (ii) after the earlier
of (i) the
72
date on which a Responsible Officer of the Borrower or such Subsidiary acquires
knowledge thereof and (ii) the date on which written notice thereof is delivered
by the Agent or any Lender to the Borrower;
(d) Any representation or warranty made or deemed made by or on behalf of
any Borrower or any of its Subsidiaries in this Agreement, any of the other
Credit Documents or in any certificate, instrument, report or other document
furnished in connection herewith or therewith or in connection with the
transactions contemplated hereby or thereby shall prove to have been false or
misleading in any material respect as of the time made, deemed made or
furnished;
(e) OCA or any of its Subsidiaries shall (i) fail to pay when due (whether
by scheduled maturity, acceleration or otherwise and after giving effect to any
applicable grace period) any principal of or interest on any Indebtedness (other
than the Indebtedness incurred pursuant to this Agreement) having an aggregate
principal Dollar Amount of at least $250,000 or (ii) fail to observe, perform or
comply with any condition, covenant or agreement contained in any agreement or
instrument evidencing or relating to any such Indebtedness, or any other event
shall occur or condition exist in respect thereof, and the effect of such
failure, event or condition is to cause, or permit the holder or holders of such
Indebtedness (or a trustee or agent on its or their behalf) to cause (with the
giving of notice, lapse of time, or both), such Indebtedness to become due, or
to be prepaid, redeemed, purchased or defeased, prior to its stated maturity;
(f) OCA or any of its Subsidiaries (with assets having a value of $250,000
or more) shall (i) file a voluntary petition or commence a voluntary case
seeking liquidation, winding-up, reorganization, dissolution, arrangement,
readjustment of debts or any other relief under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to controvert in a timely
and appropriate manner, any petition or case of the type described in subsection
(g) below, (iii) apply for or consent to the appointment of or taking possession
by a custodian, trustee, receiver or similar official for or of itself or all or
a substantial part of its properties or assets, (iv) fail generally, or admit in
writing its inability, to pay its debts generally as they become due, (v) make a
general assignment for the benefit of creditors or (vi) take any corporate
action to authorize or approve any of the foregoing;
(g) Any involuntary petition or case shall be filed or commenced against
OCA or any of its Subsidiaries (with assets having a value of $250,000 or more)
seeking liquidation, winding-up, reorganization, dissolution, arrangement,
readjustment of debts, the appointment of a custodian, trustee, receiver or
similar official for it or all or a substantial part of its properties or any
other relief under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, and such petition or case
shall continue undismissed and unstayed for a period of sixty (60) days; or an
order, judgment or decree approving or ordering any of the foregoing shall be
entered in any such proceeding;
(h) Any one or more money judgments, writs or warrants of attachment,
executions or similar processes involving an aggregate amount (exclusive of
amounts fully bonded or covered by insurance as to which the surety or insurer,
as the case may be, has acknowledged its liability in writing and that carry a
deductible not exceeding $10,000 in
73
the aggregate) in excess of $1,000,000 shall be entered or filed against OCA or
any of its Subsidiaries or any of their respective properties and the same shall
not be dismissed, stayed or discharged for a period of thirty (30) days or in
any event later than five days prior to the date of any proposed sale
thereunder;
(i) Any Pledge Agreement to which OCA or any of its Subsidiaries is now or
hereafter a party shall for any reason cease to be in full force and effect or
cease to be effective to give the Agent a valid and perfected security interest
in and Lien upon the Collateral purported to be covered thereby, subject to no
Liens other than Permitted Liens, in each case unless any such cessation (i)
occurs in accordance with the terms thereof, (ii) is due to any act or failure
to act on the part of the Agent or any Lender, or (iii) affects a material
portion of the Collateral purported to be covered thereby; or OCA or any such
Subsidiary shall assert any of the foregoing; or OCA or any Person acting on its
behalf shall deny or disaffirm its obligations under the guaranty contained in
ARTICLE XI; or any Subsidiary of OCA or any Person acting on behalf of any such
Subsidiary shall deny or disaffirm such Subsidiary's obligations under the
Subsidiary Guaranty;
(j) Any ERISA Event or any other event or condition shall occur or exist
with respect to any Plan or Multiemployer Plan and, as a result thereof,
together with all other ERISA Events and other events or conditions then
existing, OCA and its ERISA Affiliates have incurred or would be reasonably
likely to incur liability to any one or more Plans or Multiemployer Plans or to
the PBGC (or to any combination thereof) in excess of $1,000,000;
(k) There shall occur a Limitation with respect to any one or more
Licenses or Reimbursement Approvals of OCA, any of its Subsidiaries or any
Managed Practice, or any other action shall be taken by any Governmental
Authority or other Person in response to any alleged failure by OCA, such
Subsidiary or such Managed Practice to be in compliance with applicable
Requirements of Law, and such Limitation or other action, individually or in the
aggregate, has or would be reasonably likely to have a Material Adverse Effect;
or there shall occur any introduction of or change in any Requirement of Law (or
in the interpretation or administration thereof by any Governmental Authority)
governing or affecting OCA, any of its Subsidiaries or any Managed Practice, and
such introduction or change, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect;
(l) Any one or more agreements or contracts to which OCA or any of its
Subsidiaries is a party shall be terminated or shall, for any other reason, fail
to be in full force and effect and enforceable in accordance with its terms, and
such event or condition, together with all other such events or conditions, if
any, has or would be reasonably likely to have a Material Adverse Effect;
(m) There shall occur (i) any uninsured damage to, or loss, theft or
destruction of, any Collateral or other properties of OCA and its Subsidiaries
having an aggregate fair market value in excess of $1,000,000 or (ii) any labor
dispute, act of God or other casualty that has or would be reasonably likely to
have a Material Adverse Effect;
(n) There shall occur any Material Adverse Change or any event, condition
or state of facts that could reasonably be expected to result in a Material
Adverse Change; or
74
(o) Any of the following shall occur: (i) any Person or group of Persons
acting in concert as a partnership or other group shall, as a result of a tender
or exchange offer, open market purchases, privately negotiated purchases or
otherwise, have become, after the date hereof, the "beneficial owner" (within
the meaning of such term under Rule 13d-3 under the Exchange Act) of securities
of OCA representing 30% or more of the combined voting power of the then
outstanding securities of OCA ordinarily (and apart from rights accruing under
special circumstances) having the right to vote in the election of directors; or
(ii) the Board of Directors of OCA shall cease to consist of a majority of the
individuals (y) who constituted the Board of Directors as of the date hereof or
(z) who shall have become a member thereof subsequent to the date hereof after
having been nominated, or otherwise approved in writing, by at least a majority
of individuals who constituted the Board of Directors of OCA as of the date
hereof (or their replacements approved as herein required).
9.2 Remedies: Termination of Commitments, Acceleration, etc. Upon and
at any time after the occurrence and during the continuance of any Event of
Default, the Agent shall at the direction, or may with the consent, of the
Required Lenders, take any or all of the following actions at the same or
different times:
(a) Declare the Commitments and the Issuing Lender's obligation to issue
Letters of Credit, to be terminated, whereupon the same shall terminate
(provided that, upon the occurrence of an Event of Default pursuant to SECTION
9.1(F) or SECTION 9.1(G), the Commitments and the Issuing Lender's obligation to
issue Letters of Credit shall automatically be terminated);
(b) Declare all or any part of the outstanding principal amount of the
Loans to be immediately due and payable, whereupon the principal amount so
declared to be immediately due and payable, together with all interest accrued
thereon and all other amounts payable under this Agreement, the Notes and the
other Credit Documents, shall become immediately due and payable without
presentment, demand, protest, notice of intent to accelerate or other notice or
legal process of any kind, all of which are hereby knowingly and expressly
waived by the Borrowers (provided that, upon the occurrence of an Event of
Default pursuant to Section 9.1(f) or Section 9.1(g), all of the outstanding
principal amount of the Loans and all other amounts described in this subsection
(b) shall automatically become immediately due and payable without presentment,
demand, protest, notice of intent to accelerate or other notice or legal process
of any kind, all of which are hereby knowingly and expressly waived by the
Borrowers);
(c) Direct OCA to deposit (and OCA hereby agrees, forthwith upon receipt
of notice of such direction from the Agent, to deposit) with the Agent from time
to time such additional amount of cash as is equal to the aggregate Stated
Amount of all Letters of Credit then outstanding (whether or not any beneficiary
under any Letter of Credit shall have drawn or be entitled at such time to draw
thereunder), such amount to be held by the Agent in the Cash Collateral Account
as security for the Letter of Credit Exposure as described in SECTION 3.8; and
(d) Exercise all rights and remedies available to it under this Agreement,
the other Credit Documents and applicable law.
75
9.3 Remedies: Set-Off. In addition to all other rights and remedies
available under the Credit Documents or applicable law or otherwise, upon and at
any time after the occurrence and during the continuance of any Event of
Default, each Lender may, and each is hereby authorized by each Borrower, at any
such time and from time to time, to the fullest extent permitted by applicable
law, without presentment, demand, protest or other notice of any kind, all of
which are hereby knowingly and expressly waived by each Borrower, to set off and
to apply any and all deposits (general or special, time or demand, provisional
or final) and any other property at any time held (including at any branches or
agencies, wherever located), and any other indebtedness at any time owing, by
such Lender to or for the credit or the account of such Borrower against any or
all of the Obligations to such Lender now or hereafter existing, whether or not
such Obligations may be contingent or unmatured, each Borrower hereby granting
to each Lender a continuing security interest in and Lien upon all such deposits
and other property as security for such Obligations. Each Lender agrees
promptly to notify the applicable Borrower and the Agent after any such set-off
and application; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application.
ARTICLE X
THE AGENT
10.1 Appointment. Each Lender hereby irrevocably appoints and
authorizes First Union to act as Agent hereunder and under the other Credit
Documents and to take such actions as agent on its behalf hereunder and under
the other Credit Documents, and to exercise such powers and to perform such
duties, as are specifically delegated to the Agent by the terms hereof or
thereof, together with such other powers and duties as are reasonably incidental
thereto.
10.2 Nature of Duties. The Agent shall have no duties or
responsibilities other than those expressly set forth in this Agreement and the
other Credit Documents. The Agent shall not have, by reason of this Agreement
or any other Credit Document, a fiduciary relationship in respect of any Lender;
and nothing in this Agreement or any other Credit Document, express or implied,
is intended to or shall be so construed as to impose upon the Agent any
obligations or liabilities in respect of this Agreement or any other Credit
Document except as expressly set forth herein or therein. The Agent may execute
any of its duties under this Agreement or any other Credit Document by or
through agents or attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact that it selects with
reasonable care. The Agent shall be entitled to consult with legal counsel,
independent public accountants and other experts selected by it with respect to
all matters pertaining to this Agreement and the other Credit Documents and its
duties hereunder and thereunder and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts. The Lenders hereby acknowledge that the Agent
shall not be under any duty to take any discretionary action permitted to be
taken by it pursuant to the provisions of this Agreement or any other Credit
Document unless it shall be requested in writing to do so by the Required
Lenders (or, where a higher percentage of the Lenders is expressly required
hereunder, such Lenders).
76
10.3 Exculpatory Provisions. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action taken or omitted to be taken by it or such Person under or
in connection with the Credit Documents, except for its or such Person's own
gross negligence or willful misconduct, (ii) responsible in any manner to any
Lender for any recitals, statements, information, representations or warranties
herein or in any other Credit Document or in any document, instrument,
certificate, report or other writing delivered in connection herewith or
therewith, for the execution, effectiveness, genuineness, validity,
enforceability or sufficiency of this Agreement or any other Credit Document, or
for the financial condition of any Borrower, its Subsidiaries or any other
Person, or (iii) required to ascertain or make any inquiry concerning the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document or the existence or possible existence of
any Default or Event of Default, or to inspect the properties, books or records
of any Borrower or any of its Subsidiaries.
10.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any notice, statement, consent or other
communication (including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons. The Agent may deem and treat each Lender as the owner of its interest
hereunder for all purposes hereof unless and until a written notice of the
assignment, negotiation or transfer thereof shall have been given to the Agent
in accordance with the provisions of this Agreement. The Agent shall be
entitled to refrain from taking or omitting to take any action in connection
with this Agreement or any other Credit Document (i) if such action or omission
would, in the reasonable opinion of the Agent, violate any applicable law or any
provision of this Agreement or any other Credit Document or (ii) unless and
until it shall have received such advice or concurrence of the Required Lenders
(or, where a higher percentage of the Lenders is expressly required hereunder,
such Lenders) as it deems appropriate or it shall first have been indemnified to
its satisfaction by the Lenders against any and all liability and expense (other
than liability and expense arising from its own gross negligence or willful
misconduct) that may be incurred by it by reason of taking, continuing to take
or omitting to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Agent as a result of the
Agent's acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Lenders (or, where
a higher percentage of the Lenders is expressly required hereunder, such
Lenders), and such instructions and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders (including all subsequent
Lenders).
10.5 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representation
or warranty to it and that no act by the Agent or any such Person hereinafter
taken, including any review of the affairs of OCA and its Subsidiaries, shall be
deemed to constitute any representation or warranty by the Agent to any Lender.
Each Lender represents to the Agent that (i) it has, independently and without
reliance upon the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, properties, financial
and other
77
condition and creditworthiness of OCA and its Subsidiaries and made its own
decision to enter into this Agreement and extend credit to the Borrowers
hereunder, and (ii) it will, independently and without reliance upon the Agent
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action hereunder and under the other
Credit Documents and to make such investigation as it deems necessary to inform
itself as to the business, prospects, operations, properties, financial and
other condition and creditworthiness of OCA and its Subsidiaries. Except as
expressly provided in this Agreement and the other Credit Documents, the Agent
shall have no duty or responsibility, either initially or on a continuing basis,
to provide any Lender with any credit or other information concerning the
business, prospects, operations, properties, financial or other condition or
creditworthiness of any Borrower, its Subsidiaries or any other Person that may
at any time come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
10.6 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default unless the Agent
shall have received written notice from a Borrower or a Lender referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent will give notice thereof to the Lenders as soon as reasonably
practicable; provided, however, that if any such notice has also been furnished
to the Lenders, the Agent shall have no obligation to notify the Lenders with
respect thereto. The Agent shall (subject to SECTIONS 10.4 and 12.6) take such
action with respect to such Default or Event of Default as shall reasonably be
directed by the Required Lenders; provided that, unless and until the Agent
shall have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders except to the extent that this Agreement expressly requires that
such action be taken, or not be taken, only with the consent or upon the
authorization of the Required Lenders or all of the Lenders.
10.7 Indemnification. To the extent the Agent is not reimbursed by or
on behalf of the Borrowers, and without limiting the obligation of the Borrowers
to do so, the Lenders agree (i) to indemnify the Agent and its officers,
directors, employees, agents, attorneys-in-fact and Affiliates, ratably in
proportion to their respective percentages as used in determining the Required
Lenders as of the date of determination, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, attorneys' fees and expenses) or
disbursements of any kind or nature whatsoever that may at any time (including,
without limitation, at any time following the repayment in full of the Loans and
the termination of the Commitments) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or any
other Credit Document or any documents contemplated by or referred to herein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing, and (ii) to
reimburse the Agent upon demand, ratably in proportion to their respective
percentages as used in determining the Required Lenders as of the date of
determination, for any expenses incurred by the Agent in connection with the
preparation, negotiation, execution, delivery, administration, amendment,
modification, waiver or enforcement (whether
78
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement or any of the other
Credit Documents (including, without limitation, reasonable attorneys' fees and
expenses and compensation of agents and employees paid for services rendered on
behalf of the Lenders); provided, however, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting from the gross negligence or willful misconduct of the party to be
indemnified.
10.8 The Agent in its Individual Capacity. With respect to its
Commitment, the Loans made by it, the Letters of Credit issued or participated
in by it and the Note or Notes issued to it, the Agent in its individual
capacity and not as Agent shall have the same rights and powers under the Credit
Documents as any other Lender and may exercise the same as though it were not
performing the agency duties specified herein; and the terms "Lenders,"
"Required Lenders," "holders of Notes" and any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its individual
capacity. The Agent and its Affiliates may accept deposits from, lend money to,
make investments in, and generally engage in any kind of banking, trust,
financial advisory or other business with any Borrower, any of its Subsidiaries
or any of their respective Affiliates as if the Agent were not performing the
agency duties specified herein, and may accept fees and other consideration from
any of them for services in connection with this Agreement and otherwise without
having to account for the same to the Lenders.
10.9 Successor Agent. The Agent may resign at any time by giving ten
(10) days' prior written notice to OCA and the Lenders. Upon any such notice of
resignation, the Required Lenders will, with the prior written consent of OCA
(which consent shall not be unreasonably withheld), appoint from among the
Lenders a successor to the Agent (provided that OCA's consent shall not be
required in the event an Event of Default shall have occurred and be
continuing). If no successor to the Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within such ten-day
period, then the retiring Agent may, on behalf of the Lenders and after
consulting with the Lenders and OCA, appoint a successor Agent from among the
Lenders. Upon the acceptance of any appointment as Agent by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder and under
the other Credit Documents. After any retiring Agent's resignation as Agent,
the provisions of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent. If no successor to the
Agent has accepted appointment as Agent by the thirtieth (30th) day following a
retiring Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective, and the Lenders shall thereafter
perform all of the duties of the Agent hereunder and under the other Credit
Documents until such time, if any, as the Required Lenders appoint a successor
Agent as provided for hereinabove.
10.10 Collateral Matters. (a) The Agent is hereby authorized on behalf
of the Lenders, without the necessity of any notice to or further consent from
the Lenders, from time to time (but without any obligation) to take any action
with respect to the Collateral
79
and the Pledge Agreements that may be necessary to perfect and maintain
perfected the Liens upon the Collateral granted pursuant to the Pledge
Agreements.
(b) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments, termination or expiration of
all outstanding Letters of Credit and payment in full of all of the Obligations,
(ii) constituting property sold or to be sold or disposed of as part of or in
connection with any disposition expressly permitted hereunder or under any other
Credit Document or to which the Required Lenders have consented or (iii)
otherwise pursuant to and in accordance with the provisions of any applicable
Credit Document. Upon request by the Agent at any time, the Lenders will
confirm in writing the Agent's authority to release Collateral pursuant to this
subsection (b).
10.11 Issuing Lender. The provisions of this Article (other than
SECTION 10.9) shall apply to the Issuing Lender mutatis mutandis to the same
extent as such provisions apply to the Agent.
10.12 Co-Agents. Notwithstanding any other provision of this Agreement
or any of the other Credit Documents, any Lenders designated on the cover page
of this Agreement or elsewhere herein as "Syndication Agent," "Documentation
Agent," "Managing Agent" or "Co-Agent" or any similar designation are named as
such for recognition purposes only, and in their capacities as such shall have
no powers, rights, duties, responsibilities or liabilities with respect to this
Agreement and the other Credit Documents and the transactions contemplated
hereby and thereby.
ARTICLE XI
GUARANTY
11.1 Guaranty. (a) OCA hereby unconditionally and irrevocably
guarantees to the Agent, for the ratable benefit of the Agent and the Lenders
and their respective successors, indorsees, transferees and assigns, the prompt
and complete payment and performance by the Borrowers when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations.
(b) OCA further agrees to pay any and all expenses (including, without
limitation, all reasonable fees and expenses of counsel) that may be paid or
actually incurred by the Agent or any Lender in enforcing, or obtaining advice
of counsel in respect of, any rights with respect to, or collecting, any or all
of the Obligations and/or enforcing any rights with respect to, or collecting
against, OCA (but not against the Agent or any other Lender) under this Section.
This Section shall remain in full force and effect until the Obligations are
paid in full, all Letters of Credit have expired or terminated and the
Commitments have been terminated, notwithstanding that from time to time prior
thereto the Borrowers may be free from any Obligations.
(c) No payment or payments made by any Borrower or any other Person or
received or collected by the Agent or any Lender from any Borrower or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application, at any time
80
or from time to time, in reduction of or in payment of the Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of OCA
hereunder, and OCA shall, notwithstanding any such payment or payments, remain
liable hereunder for the Obligations until the Obligations are paid in full, all
Letters of Credit have expired or terminated and the Commitments have been
terminated.
(d) OCA agrees that whenever, at any time, or from time to time, it shall
make any payment to the Agent or any Lender on account of its liability under
this Section, it will notify the Agent and such Lender in writing that such
payment is made under this Section for such purpose.
11.2 Right of Set-Off. The Agent and each Lender is hereby irrevocably
authorized at any time and from time to time without notice to OCA, any such
notice being expressly waived by OCA, to set off and appropriate and apply any
and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Agent or such Lender to or for the
credit or the account of OCA, or any part thereof in such amounts as the Agent
or such Lender may elect, against or on account of the obligations and
liabilities of OCA to the Agent or such Lender hereunder which are then due and
payable and claims of every nature and description of the Agent or such Lender
against OCA, in any currency, whether arising hereunder, under any other Credit
Document or otherwise in connection therewith, as the Agent or such Lender may
elect, whether or not the Agent or such Lender has made any demand for payment.
The Agent and each Lender shall notify OCA promptly of any such set-off and the
application made by the Agent or such Lender, as the case may be, of the
proceeds thereof; provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Agent and each
Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that the Agent or such
Lender may have.
11.3 No Subrogation. Notwithstanding any payment or payments made by
OCA hereunder, or any set-off or application of funds of OCA by the Agent or any
Lender, OCA shall not be entitled to be subrogated to any of the rights of the
Agent or any Lender against the Borrowers or against any Collateral or other
security or guarantee or right of offset held by the Agent or any Lender for the
payment of the Obligations, nor shall OCA seek or be entitled to seek any
contribution or reimbursement from any of the Borrowers in respect of payments
made by OCA hereunder, until all amounts owing to the Agent and the Lenders by
the Borrowers on account of the Obligations are paid in full, all Letters of
Credit have expired or terminated and the Commitments have been terminated. If
any amount shall be paid to OCA on account of such subrogation rights at any
time when all of the Obligations shall not have been paid in full, such amount
shall be held by OCA in trust for the Agent and the Lenders, segregated from
other funds of OCA, and shall, forthwith upon receipt by OCA, be turned over to
the Agent in the exact form received by OCA (duly endorsed by OCA to the Agent,
if required), to be applied against the Obligations, whether matured or
unmatured, in such order as Agent may determine. The provisions of this Section
shall survive the termination of this Agreement and the payment in full of the
Obligations, the termination or expiration of all Letters of Credit and the
termination of the Commitments.
81
11.4 Amendments, etc. with respect to the Obligations; Waiver of Rights.
OCA shall remain obligated hereunder notwithstanding that, without any
reservation of rights against OCA, and without notice to or further assent by
OCA, any demand for payment of any of the Obligations made by the Agent or any
Lender may be rescinded by the Agent or such Lender, and any of the Obligations
continued, and the Obligations, or the liability of any other party upon or for
any part thereof, or any Collateral or other security or guarantee therefor or
right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Agent or any Lender, and any Credit Documents and
any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, in
accordance with the provisions thereof as the Agent (or the requisite Lenders,
as the case may be) may deem advisable from time to time, and any Collateral or
other security, guarantee or right of offset at any time held by the Agent or
any Lender for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. None of the Agent or any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Obligations or for this Agreement or any property subject
thereto. When making any demand hereunder against OCA, the Agent or any Lender
may, but shall be under no obligation to, make a similar demand on any Borrower
or any other guarantor, and any failure by the Agent or any Lender to make any
such demand or to collect any payments from any Borrower or any such other
guarantor or any release of any Borrower or such other guarantor shall not
relieve OCA of its obligations or liabilities hereunder, and shall not impair or
affect the rights and remedies, express or implied, or as a matter of law, of
the Agent or any Lender against OCA. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
11.5 Guaranty Absolute and Unconditional. OCA waives any and all notice
of the creation, renewal, extension or accrual of any of the Obligations and
notice of or proof of reliance by the Agent or any Lender upon this Agreement or
acceptance of this Agreement; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon this Agreement; and all dealings
between OCA and the other Borrowers, on the one hand, and the Agent and the
Lenders, on the other, shall likewise be conclusively presumed to have been had
or consummated in reliance upon this Agreement. OCA waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon OCA and the other Borrowers with respect to the Obligations, and without
limitation of the foregoing, specifically waives the benefits of Sections 26-7
through 26-9, inclusive, of the General Statutes of North Carolina, as amended
from time to time. This ARTICLE XI shall be construed as a continuing, absolute
and unconditional guaranty of payment without regard to (a) the validity,
regularity or enforceability of this Agreement, any other Credit Document, any
of the Obligations or any other Collateral or other security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Agent or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) that may at any time be
available to or be asserted by any of the Borrowers against the Agent or any
Lender, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of OCA or any other Borrower) that constitutes, or might be construed
to constitute, an equitable or legal discharge of the Borrowers for the
Obligations, or of OCA under this ARTICLE XI, in bankruptcy or in any other
instance.
82
When pursuing its rights and remedies hereunder against OCA, the Agent and any
Lender may, but shall be under no obligation to, pursue such rights and remedies
as it may have against the Borrowers or any other Person or against any
Collateral or other security or guarantee for the Obligations or any right of
offset with respect thereto, and any failure by the Agent or any Lender to
pursue such other rights or remedies or to collect any payments from the
Borrowers or any such other Person or to realize upon any such Collateral or
other security or guarantee or to exercise any such right of offset, or any
release of any of the Borrowers or any such other Person or of any such
Collateral or other security, guarantee or right of offset, shall not relieve
OCA of any liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the Agent
or any Lender against OCA. This ARTICLE XI shall remain in full force and effect
and be binding in accordance with and to the extent of its terms upon OCA and
its successors and assigns, and shall inure to the benefit of the Agent and the
Lenders, and their respective successors, indorsees, transferees and assigns,
until all the Obligations and the obligations of OCA under this Agreement shall
have been satisfied by payment in full, all Letters of Credit shall have expired
or terminated, and the Commitments shall have been terminated, notwithstanding
that from time to time during the term of this Agreement the Borrowers may be
free from any Obligations.
11.6 Reinstatement. This ARTICLE XI shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Obligations is rescinded or must otherwise be restored or returned
by the Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Borrower or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, any Borrower or any substantial part of its property, or otherwise,
all as though such payments had not been made.
11.7 Payments. OCA hereby agrees that all payments required to be made
by it hereunder will be made to the Agent without set-off or counterclaim in
accordance with the terms of the Obligations, including, without limitation, in
the currency in which payment is due.
ARTICLE XII
MISCELLANEOUS
12.1 Fees and Expenses. The Borrowers agree (i) whether or not the
transactions contemplated by this Agreement shall be consummated, to pay upon
demand all reasonable out-of-pocket costs and expenses of the Agent and each
Lender (including, without limitation, the reasonable fees and expenses of
counsel to the Agent or any Lender) in connection with (y) the Agent's and each
Lender's due diligence investigation in connection with, and the preparation,
negotiation, execution, delivery and syndication of, this Agreement and the
other Credit Documents, and any amendment, modification or waiver hereof or
thereof or consent with respect hereto or thereto, and (z) the creation,
perfection and maintenance of the perfection of the Agent's Liens upon the
Collateral, including, without limitation, Lien search, filing and recording
fees, (ii) to pay upon demand all reasonable out-of-pocket costs and expenses of
the Agent and each Lender (including, without limitation, reasonable attorneys'
fees and expenses) in connection with (y) any
83
refinancing or restructuring of the credit arrangement provided under this
Agreement, whether in the nature of a "work-out," in any insolvency or
bankruptcy proceeding or otherwise and whether or not consummated, and (z) the
enforcement, attempted enforcement or preservation of any rights or remedies
under this Agreement or any of the other Credit Documents, whether in any
action, suit or proceeding (including any bankruptcy or insolvency proceeding)
or otherwise, and (iii) to pay and hold the Agent and each Lender harmless from
and against all liability for any intangibles, documentary, stamp or other
similar taxes, fees and excises, if any, including any interest and penalties,
and any finder's or brokerage fees, commissions and expenses (other than any
fees, commissions or expenses of finders or brokers engaged by the Agent or any
Lender), that may be payable in connection with the transactions contemplated by
this Agreement and the other Credit Documents.
12.2 Indemnification. The Borrowers agree, whether or not the
transactions contemplated by this Agreement shall be consummated, to indemnify
and hold the Agent and each Lender and each of their respective directors,
officers, employees, agents and Affiliates (each, an "Indemnified Person")
harmless from and against any and all claims, losses, damages, obligations,
liabilities, penalties, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) of any kind or nature whatsoever,
whether direct, indirect or consequential (collectively, "Indemnified Costs"),
that may at any time be imposed on, incurred by or asserted against any such
Indemnified Person as a result of, arising from or in any way relating to the
preparation, execution, performance or enforcement of this Agreement or any of
the other Credit Documents, any of the transactions contemplated herein or
therein or any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loans or Letters of Credit
(including, without limitation, in connection with the actual or alleged
generation, presence, discharge or release of any Hazardous Substances on, into
or from, or the transportation of Hazardous Substances to or from, any real
property at any time owned or leased by any Borrower or any of its Subsidiaries,
any other Environmental Claims or any violation of or liability under any
Environmental Law), or any action, suit or proceeding (including any inquiry or
investigation) by any Person, whether threatened or initiated, related to any of
the foregoing, and in any case whether or not such Indemnified Person is a party
to any such action, proceeding or suit or a subject of any such inquiry or
investigation; provided, however, that no Indemnified Person shall have the
right to be indemnified hereunder for any Indemnified Costs to the extent
resulting from the gross negligence or willful misconduct of such Indemnified
Person. All of the foregoing Indemnified Costs of any Indemnified Person shall
be paid or reimbursed by the Borrowers, as and when incurred and upon demand.
12.3 Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT REGARD TO THE
CONFLICTS OF LAW PROVISIONS THEREOF); PROVIDED THAT EACH LETTER OF CREDIT SHALL
BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OR RULES
DESIGNATED IN SUCH LETTER OF CREDIT OR, IF NO SUCH LAWS OR RULES ARE DESIGNATED,
THE UNIFORM CUSTOMS AND PRACTICES FOR DOCUMENTARY CREDITS, INTERNATIONAL CHAMBER
OF
84
COMMERCE, AS IN EFFECT FROM TIME TO TIME (THE "UNIFORM CUSTOMS"), AND, AS TO
MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF FLORIDA
(WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF). EACH BORROWER
HEREBY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT WITHIN ST.
▇▇▇▇▇ COUNTY, FLORIDA OR MECKLENBURG COUNTY, NORTH CAROLINA OR ANY FEDERAL COURT
LOCATED WITHIN THE MIDDLE DISTRICT OF THE STATE OF FLORIDA OR THE WESTERN
DISTRICT OF THE STATE OF NORTH CAROLINA FOR ANY PROCEEDING INSTITUTED HEREUNDER
OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO
WHICH THE AGENT OR ANY LENDER OR SUCH BORROWER IS A PARTY, INCLUDING ANY ACTIONS
BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT OR ANY
LENDER OR SUCH BORROWER, AND FURTHER AGREES NOT TO BRING ANY SUCH ACTION OR
PROCEEDING IN, OR ATTEMPT TO REMOVE ANY SUCH ACTION OR PROCEEDING TO, ANY STATE
OR FEDERAL COURT LOCATED WITHIN THE SOUTHERN DISTRICT OF THE STATE OF FLORIDA.
EACH BORROWER IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF
APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES
ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE
OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING. EACH BORROWER
CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL
DIRECTED TO OCA AT ITS ADDRESS SET FORTH HEREINBELOW, AND SERVICE SO MADE SHALL
BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE
(3) DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID AND
PROPERLY ADDRESSED. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE
AGENT OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST ANY BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION.
12.4 Waiver of Jury Trial. EACH BORROWER AND, BY ITS ACCEPTANCE OF THE
BENEFITS HEREOF, THE AGENT AND EACH LENDER, HEREBY IRREVOCABLY WAIVES, TO THE
GREATEST EXTENT PERMITTED BY APPLICABLE LAW, ITS RESPECTIVE RIGHTS TO TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO WHICH THE
AGENT OR ANY LENDER OR SUCH BORROWER IS A PARTY, INCLUDING ANY ACTIONS BASED
UPON, ARISING OUT OF, OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT OR ANY
LENDER OR SUCH BORROWER.
85
12.5 Notices. (a) All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telex, facsimile
transmission or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered to the party to be notified at the following
addresses:
(a) if to OCA or any other Borrower, to Orthodontic Centers of
America, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇, with a copy (which shall not constitute notice) to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, A Professional Limited Liability Corporation, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇. ▇▇▇▇▇
▇▇▇▇, Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇;
(b) if to the Agent, to First Union National Bank, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇-▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-
0680, Attention: Syndication Agency Services, Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇;
and
(c) if to any Lender, to it at the address set forth on its signature
page hereto (or if to any Lender not a party hereto as of the date hereof,
at the address set forth in its Assignment and Acceptance);
or in each case, to such other address as any party may designate for itself by
like notice to all other parties hereto. All such notices and communications
shall be deemed to have been given (i) if mailed as provided above by any method
other than overnight delivery service, on the third Business Day after deposit
in the mails, (ii) if mailed by overnight delivery service, telegraphed,
telexed, telecopied or cabled, when delivered for overnight delivery, delivered
to the telegraph company, confirmed by telex answerback, transmitted by
telecopier or delivered to the cable company, respectively, or (iii) if
delivered by hand, upon delivery; provided that notices and communications to
the Agent shall not be effective until received by the Agent.
(b) Each Borrower (other than OCA) hereby irrevocably designates and
appoints OCA as its designee, appointee and agent to receive on its behalf all
service of process in any action or proceeding and any other notice or
communication hereunder, consents that all service of process upon it may be
made by registered or certified mail directed to OCA at its address set forth
hereinabove (and service so made shall be deemed to be completed upon the
earlier of actual receipt thereof or three (3) Business Days after deposit in
the United States mails, proper postage prepaid and properly addressed), and
agrees that service so made shall be effective and binding upon such Borrower in
every respect and that any other notice or communication given to OCA at the
address and in the manner specified herein shall be effective notice to such
Borrower. Further, each Borrower does hereby irrevocably make, constitute and
appoint OCA as its true and lawful attorney-in-fact, with full authority in its
place and stead and in its name, OCA's name or otherwise, and with full power of
substitution in the premises, from time to time in OCA's discretion to agree on
behalf of, and sign the name of, such Borrower to any Notice of Borrowing or
Notice of Conversion/Continuation, or any amendment, modification or supplement
to, restatement of, or waiver or consent in connection with, this Agreement, any
other Credit Document or any document or instrument pursuant hereto or thereto,
and to take any other action and do all other things on behalf of such Borrower
that OCA may deem necessary or advisable to carry out and accomplish the
purposes of this Agreement and the
86
other Credit Documents. OCA will not be liable for any act or omission nor for
any error of judgment or mistake of fact unless the same shall occur as a result
of its gross negligence or willful misconduct. This power, being coupled with an
interest, is irrevocable by any Borrower for so long as such Borrower shall be a
party hereto. By its signature hereto, OCA consents to its appointment as
provided for herein and agrees promptly to distribute all process, notices and
other communications to each other Borrower.
12.6 Amendments, Waivers, etc. No amendment, modification, waiver or
discharge or termination of, or consent to any departure by any Borrower from,
any provision of this Agreement or any other Credit Document, shall be effective
unless in a writing signed by the Required Lenders (or by the Agent at the
direction or with the consent of the Required Lenders), and then the same shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such amendment, modification, waiver,
discharge, termination or consent shall:
(a) unless agreed to by each Lender directly affected thereby, (i) reduce
or forgive the principal amount of any Loan, reduce the rate of or forgive any
interest thereon, or reduce or forgive any fees or other Obligations (other than
fees payable to the Agent for its own account), or (ii) extend the Maturity Date
or any other date fixed for the payment of any principal of or interest on any
Loan (other than additional interest payable under SECTION 2.8(B) at the
election of the Required Lenders, as provided therein), any fees (other than
fees payable to the Agent for its own account) or any other Obligations or
extend the expiration date of any Letter of Credit beyond the seventh day prior
to the Maturity Date;
(b) unless agreed to by all of the Lenders, (i) increase or extend any
Commitment of any Lender (it being understood that a waiver of any Event of
Default, if agreed to by the requisite Lenders hereunder, shall not constitute
such an increase), (ii) change the percentage of the aggregate Commitments or of
the aggregate unpaid principal amount of the Loans, or the number or percentage
of Lenders, that shall be required for the Lenders or any of them to take or
approve, or direct the Agent to take, any action hereunder (including as set
forth in the definition of "Required Lenders"), (iii) except as may be otherwise
specifically provided in this Agreement or in any other Credit Document, release
all or substantially all of the Collateral, release OCA from its obligations
under its guaranty contained in ARTICLE XI, or release any Subsidiary Guarantor
from its obligations under the Subsidiary Guaranty, or (iv) change any provision
of SECTION 2.15 or this Section; and
(c) unless agreed to by the Issuing Lender or the Agent in addition to
the Lenders required as provided hereinabove to take such action, affect the
respective rights or obligations of the Issuing Lender or the Agent, as
applicable, hereunder or under any of the other Credit Documents;
and provided further that the Fee Letter and any Hedge Agreement to which any
Lender is a party may be amended or modified, and any rights thereunder waived,
in a writing signed by the parties thereto.
12.7 Assignments, Participations. (a) Each Lender may assign to one or
more other Eligible Assignees (each, an "Assignee") all or a portion of its
rights and obligations
87
under this Agreement (including, without limitation, all or a portion of its
Commitment, the outstanding Loans made by it, the Note or Notes held by it and
its participations in Letters of Credit); provided, however, that (i) any such
assignment shall not be made without the prior written consent of the Agent and
OCA (to be evidenced by its counterexecution of the relevant Assignment and
Acceptance), which consent shall not be unreasonably withheld (provided that
OCA's consent shall not be required in the event a Default or Event of Default
shall have occurred and be continuing), (ii) each such assignment shall be of a
uniform, and not varying, percentage of all of the assigning Lender's rights and
obligations under this Agreement, (iii) except in the case of an assignment to a
Lender or an Affiliate of a Lender, no such assignment shall be in an aggregate
principal amount (determined as of the date of the Assignment and Acceptance
with respect to such assignment) less than $5,000,000, determined by combining
the amount of the assigning Lender's outstanding Loans, Letter of Credit
Exposure and Unutilized Commitment being assigned pursuant to such assignment
(or, if less, the entire Commitment of the assigning Lender), and (iv) the
parties to each such assignment will execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment, and will pay a nonrefundable
processing fee of $3,000 to the Agent for its own account. Upon such execution,
delivery, acceptance and recording of the Assignment and Acceptance, from and
after the effective date specified therein, which effective date shall be at
least five Business Days after the execution thereof (unless the Agent shall
otherwise agree), (A) the Assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, shall have the rights and
obligations of the assigning Lender hereunder with respect thereto and (B) the
assigning Lender shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (other than rights under the provisions of this Agreement and the other
Credit Documents relating to indemnification or payment of fees, costs and
expenses, to the extent such rights relate to the time prior to the effective
date of such Assignment and Acceptance) and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of such assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto). The terms
and provisions of each Assignment and Acceptance shall, upon the effectiveness
thereof, be incorporated into and made a part of this Agreement, and the
covenants, agreements and obligations of each Lender set forth therein shall be
deemed made to and for the benefit of the Agent and the other parties hereto as
if set forth at length herein.
(b) The Agent will maintain at its address for notices referred to herein
a copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amount of the Loans owing to, each Lender from
time to time (the "Register"). The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the Borrowers, the
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrowers and each Lender at any
reasonable time and from time to time upon reasonable prior notice.
88
(c) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee and, if required,
counterexecuted by OCA, together with the Note or Notes subject to such
assignment and the processing fee referred to in subsection (a) above, the Agent
will (i) accept such Assignment and Acceptance, (ii) on the effective date
thereof, record the information contained therein in the Register and (iii) give
notice thereof to OCA and the Lenders. Within five (5) Business Days after its
receipt of such notice, each applicable Borrower, at its own expense, will
execute and deliver to the Agent, in exchange for the surrendered Note or Notes,
a new Note or Notes to the order of the Assignee (and, if the assigning Lender
has retained any portion of its rights and obligations hereunder, to the order
of the assigning Lender), prepared in accordance with the provisions of SECTION
2.4 as necessary to reflect, after giving effect to the assignment, the
Commitments of the Assignee and (to the extent of any retained interests) the
assigning Lender, dated the date of the replaced Note or Notes and otherwise in
substantially the form of EXHIBIT A-1 or EXHIBIT A-2, as applicable. The Agent
will return canceled Notes to the Borrowers.
(d) Each Lender may, without the consent of any Borrower, the Agent or
any other Lender, sell to one or more other Persons (each, a "Participant")
participations in any portion comprising less than all of its rights and
obligations under this Agreement (including, without limitation, a portion of
its Commitment, the outstanding Loans made by it, the Note or Notes held by it
and its participations in Letters of Credit); provided, however, that (i) such
Lender's obligations under this Agreement shall remain unchanged and such Lender
shall remain solely responsible for the performance of such obligations, (ii) no
Lender shall sell any participation that, when taken together with all other
participations, if any, sold by such Lender, covers all of such Lender's rights
and obligations under this Agreement, (iii) the Borrowers, the Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
no Lender shall permit any Participant to have any voting rights or any right to
control the vote of such Lender with respect to any amendment, modification,
waiver, consent or other action hereunder or under any other Credit Document
(except as to actions that would (x) reduce or forgive the principal amount of
any Loan, reduce the rate of or forgive any interest thereon, or reduce or
forgive any fees or other Obligations, (y) extend the Maturity Date or any other
date fixed for the payment of any principal of or interest on any Loan, any fees
or any other Obligations, or (z) increase or extend any Commitment of any
Lender), and (iv) no Participant shall have any rights under this Agreement or
any of the other Credit Documents, each Participant's rights against the
granting Lender in respect of any participation to be those set forth in the
participation agreement, and all amounts payable by the Borrowers hereunder
shall be determined as if such Lender had not granted such participation.
Notwithstanding the foregoing, each Participant shall have the rights of a
Lender for purposes of SECTIONS 2.16(A), 2.16(B), 2.17, 2.18 and 9.3, and shall
be entitled to the benefits thereto, to the extent that the Lender granting such
participation would be entitled to such benefits if the participation had not
been made, provided that no Participant shall be entitled to receive any greater
amount pursuant to any of such Sections than the Lender granting such
participation would have been entitled to receive in respect of the amount of
the participation made by such Lender to such Participant had such participation
not been made.
89
(e) Nothing in this Agreement shall be construed to prohibit any Lender
from pledging or assigning all or any portion of its rights and interest
hereunder or under any Note to any Federal Reserve Bank as security for
borrowings therefrom; provided, however, that no such pledge or assignment shall
release a Lender from any of its obligations hereunder.
(f) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section,
disclose to the Assignee or Participant or proposed Assignee or Participant any
information relating to OCA and its Subsidiaries furnished to it by or on behalf
of any other party hereto, provided that such Assignee or Participant or
proposed Assignee or Participant agrees in writing to keep such information
confidential to the same extent required of the Lenders under SECTION 12.13.
12.8 No Waiver. The rights and remedies of the Agent and the Lenders
expressly set forth in this Agreement and the other Credit Documents are
cumulative and in addition to, and not exclusive of, all other rights and
remedies available at law, in equity or otherwise. No failure or delay on the
part of the Agent or any Lender in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude other or further exercise thereof or
the exercise of any other right, power or privilege or be construed to be a
waiver of any Default or Event of Default. No course of dealing between any of
the Borrowers and the Agent or the Lenders or their agents or employees shall be
effective to amend, modify or discharge any provision of this Agreement or any
other Credit Document or to constitute a waiver of any Default or Event of
Default. No notice to or demand upon any Borrower in any case shall entitle
such Borrower or any other Borrower to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the right of the Agent
or any Lender to exercise any right or remedy or take any other or further
action in any circumstances without notice or demand.
12.9 Successors and Assigns. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, and all references herein to any party shall be
deemed to include its successors and assigns; provided, however, that (i) no
Borrower may sell, assign or transfer any of its rights, interests, duties or
obligations under this Agreement without the prior written consent of all of the
Lenders and (ii) any Assignees and Participants shall have such rights and
obligations with respect to this Agreement and the other Credit Documents as are
provided for under and pursuant to the provisions of SECTION 12.7.
12.10 Survival. All representations, warranties and agreements made by
or on behalf of any Borrower or any of its Subsidiaries in this Agreement and in
the other Credit Documents shall survive the execution and delivery hereof or
thereof, the making and repayment of the Loans and the issuance and repayment of
the Letters of Credit. In addition, notwithstanding anything herein or under
applicable law to the contrary, the provisions of this Agreement and the other
Credit Documents relating to indemnification or payment of fees, costs and
expenses, including, without limitation, the provisions of SECTIONS 2.16(A),
2.16(B), 2.17, 2.18, 10.7, 12.1 and 12.2, shall survive the payment in full of
all Loans and Letters of Credit, the termination of the Commitments and all
Letters of Credit, and any termination of this Agreement or any of the other
Credit Documents.
90
12.11 Severability. To the extent any provision of this Agreement is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
12.12 Construction. The headings of the various articles, sections and
subsections of this Agreement have been inserted for convenience only and shall
not in any way affect the meaning or construction of any of the provisions
hereof. Except as otherwise expressly provided herein and in the other Credit
Documents, in the event of any inconsistency or conflict between any provision
of this Agreement and any provision of any of the other Credit Documents, the
provision of this Agreement shall control.
12.13 Confidentiality. Each Lender agrees to keep confidential,
pursuant to its customary procedures for handling confidential information of a
similar nature and in accordance with safe and sound banking practices, all
nonpublic information provided to it by or on behalf of OCA or any of its
Subsidiaries in connection with this Agreement or any other Credit Document;
provided, however, that any Lender may disclose such information (i) to its
directors, employees and agents and to its auditors, counsel and other
professional advisors, (ii) at the demand or request of any bank regulatory
authority, court or other Governmental Authority having or asserting
jurisdiction over such Lender, as may be required pursuant to subpoena or other
legal process, or otherwise in order to comply with any applicable Requirement
of Law, (iii) in connection with any proceeding to enforce its rights hereunder
or under any other Credit Document or any other litigation or proceeding related
hereto or to which it is a party, (iv) to the Agent or any other Lender, (v) to
the extent the same has become publicly available other than as a result of a
breach of this Agreement and (vi) pursuant to and in accordance with the
provisions of SECTION 12.7(F).
12.14 Counterparts; Effectiveness. This Agreement may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto and receipt by the Agent and OCA of written or
telephonic notification of such execution and authorization of delivery thereof.
12.15 Disclosure of Information. OCA agrees and consents to the Agent's
disclosure of information relating to this transaction to Gold Sheets and other
similar bank trade publications. Such information will consist of deal terms
and other information customarily found in such publications.
12.16 Judgment Currency. The obligations of the Borrowers and each
Guarantor hereunder and under the other Credit Documents to make payment of
principal of and interest on the Loans, and any other amounts payable hereunder
and thereunder, in the Applicable Currency (the "Obligation Currency") shall not
be discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery shall result in the effective
receipt by the Agent or any applicable Lender of the full amount of the
Obligation Currency expressed to be payable under this Agreement or any other
Credit
91
Document, as applicable. If, for the purpose of obtaining or enforcing judgment
against any Borrower or any Guarantor in any court or in any jurisdiction, it
becomes necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the conversion shall be
made at the rate of exchange (as quoted by the Agent or if the Agent does not
quote a rate of exchange on such currency, by a known dealer in such currency
designated by the Agent) or the Dollar Equivalent thereof, as the case may be,
determined, in each case, as of the Business Day immediately preceding the day
on which the judgment is given (such Business Day being hereinafter referred to
as the "Judgment Currency Conversion Date"). If there shall occur any change in
the rate of exchange prevailing between the Judgment Currency Conversion Date
and the date of actual payment of the amount due, each applicable Borrower
agrees to pay, or cause to be paid, such additional amounts, if any (but in any
event not a lesser amount), as may be necessary to ensure that the amount paid
in the Judgment Currency, when converted at the rate of exchange prevailing on
the date of payment, will produce the amount of the Obligation Currency that
could have been purchased with the amount of Judgment Currency stipulated in the
judgment or judicial award at the rate of exchange prevailing on the Judgment
Currency Conversion Date. In determining the Dollar Equivalent or any other rate
of exchange for purposes of this Section, such amounts shall include any premium
or other costs payable in connection with the purchase of the Obligation
Currency.
12.17 European Monetary Union. (a) Each of the parties to this
Agreement hereby confirms and agrees that the occurrence or nonoccurrence of an
event associated with economic and monetary union in the European Community will
not (x) have the effect of altering any term of, or discharging or excusing
performance under, this Agreement, any other Credit Document, or any covenant or
obligation contained herein or therein, (y) give any party the right
unilaterally to alter or terminate this Agreement, any other Credit Document, or
any covenant or obligation contained herein or therein, or (z) in and of itself,
give rise to any Default or Event of Default. As used in this Section, "an
event associated with economic and monetary union in the European Community"
shall include, without limitation, each (and any combination of one or more) of
the following:
(i) the introduction of, changeover to, or operation of a single
European currency (whether the Euro or otherwise);
(ii) the fixing of conversion rates between a member state's
currency and the new currency or between the currencies of member states;
(iii) the substitution of that new currency for the ECU as the unit
of account of the European Community;
(iv) the introduction of that new currency as lawful currency in a
member state;
(v) the withdrawal from legal tender of any currency that, before
the introduction of the new currency, was lawful currency in one of the
member states; or
92
(vi) the disappearance or replacement of a relevant rate option or
other price source for the ECU or the national currency of any member
state, or the failure of the agreed sponsor (or any successor sponsor) to
publish or display a relevant rate, index, price, page or screen.
(b) For all purposes of this Agreement and the other Credit Documents,
the Euro shall be a commercially reasonable substitute for, and substantial
equivalent of, any Foreign Currency (including the ECU) that has been
substituted or replaced by the Euro, and the Euro may be (i) used in determining
the value of such Foreign Currency or (ii) tendered, in each case at the
conversion rate specified in, and otherwise calculated in accordance with,
regulations adopted from time to time by the council of the European Union. Any
payment hereunder or under any other Credit Document required or permitted by
the terms hereof or thereof to be made in a particular Foreign Currency may be
made in such Foreign Currency (so long as such Foreign Currency remains legal
tender) or in Euro, but not in any other currency, whether or not such other
currency (y) has been substituted or replaced by the Euro or (z) is a currency
that is considered a denomination of the Euro and has a fixed conversion rate
with respect to the Euro.
(c) Upon the occurrence of an event associated with economic and monetary
union in the European Community, each Borrower agrees that this Agreement
(including, without limitation, the definition of "IBOR Rate") shall be amended
to the extent reasonably determined by the Agent (acting in consultation with
the Borrowers) to be necessary to reflect such event and to put the Agent and
the Lenders in the same position, as nearly as practicable, that they would have
been in if such event had not occurred. Additionally, the Borrowers will, upon
demand therefor by any Lender from time to time, pay to such Lender the amount
of any costs incurred by, or of any reduction in any amount payable to or in the
effective return on its capital to, or of interest or other return foregone by,
such Lender or its applicable Lending Office, or any Person controlling such
Lender, as a result of the occurrence of an event associated with economic and
monetary union in the European Community.
12.18 Addition of Borrowers. Any Foreign Subsidiary of OCA may join
this Agreement as a Borrower hereunder upon (i) execution and delivery by OCA,
such Foreign Subsidiary and the Agent of a Joinder Agreement providing for such
Foreign Subsidiary to become a Borrower hereunder, (ii) execution and delivery
by such Foreign Subsidiary to the Agent of a Foreign Currency Note,
appropriately completed as set forth in SECTION 2.4, (iii) execution and
delivery by OCA and any applicable Subsidiaries to the Agent of a Pledge
Agreement or an amendment or supplement to the OCA Pledge Agreement, together
with the certificates evidencing the Capital Stock of such Foreign Subsidiary
being pledged thereby and undated stock powers duly executed in blank, all as
required by, and as described more completely in, SECTION 6.10, and (iii) to the
extent not previously delivered pursuant to SECTION 6.10, delivery to the Agent
of documents and certificates with respect to such Foreign Subsidiary of the
type described in SECTIONS 4.1(C) and 4.1(D) and such other documents,
certificates and opinions (including opinions of local counsel in the
jurisdiction of organization of such Foreign Subsidiary) as the Agent may
reasonably request, all in form and substance reasonably satisfactory to the
Agent. Any such Foreign Subsidiary may be removed and released as a Borrower
upon (a) written notice from OCA to the Agent to such effect and (b) repayment
in full of all outstanding Loans of such
93
Borrower, together with all accrued and unpaid interest thereon and all other
fees, expenses and other Obligations owing by such Borrower in connection
therewith.
12.19 Entire Agreement. THIS AGREEMENT AND THE OTHER DOCUMENTS AND
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND THERETO RELATING TO
THE SUBJECT MATTER HEREOF AND THEREOF, (B) SUPERSEDE ANY AND ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF, INCLUDING, WITHOUT LIMITATION, THE COMMITMENT
LETTER FROM FIRST UNION TO OCA DATED JULY 16, 1998, BUT SPECIFICALLY EXCLUDING
THE FEE LETTER, AND (C) MAY NOT BE AMENDED, SUPPLEMENTED, CONTRADICTED OR
OTHERWISE MODIFIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
[Signature pages follow.]
94
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
ORTHODONTIC CENTERS OF
AMERICA, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Faux
-------------------------------
Title: President
(signatures continued)
S-1
FIRST UNION NATIONAL BANK, as
Agent and as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: Senior Vice President
Instructions for wire transfers to the Agent:
First Union National Bank
ABA Routing ▇▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Account Name: Orthodontic Centers of
America, Inc.
Attention: Syndication Agency Services
Address for notices as a Lender:
First Union National Bank
One First Union Center, 5th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office:
First Union National Bank
One First Union Center, 5th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(signatures continued)
S-2
BANK OF AMERICA FSB, as
Documentation Agent and as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇
--------------------------------------
Title: Vice President
Address for notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(signatures continued)
▇-▇
▇▇▇▇▇▇▇▇, N.A., as Syndication Agent and
as a Lender
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Title: Attorney-In-Fact
Address for notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ 8
New York, New York 10043
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ 8
New York, New York 10043
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(signatures continued)
▇-▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
Address for notices:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-5