Exhibit 10.38
AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 17, 2001,
between XXXXXX DENTAL MANAGEMENT SERVICES, INC., a Colorado corporation (the
"Borrower") and KEYBANK NATIONAL ASSOCIATION, a national association (the
"Lender").
RECITALS
A. Lender made a revolving loan (the "Original Loan") to Borrower
evidenced and secured by (i) a Promissory Note (the "Original Note") dated as of
October 31, 1996 in the original principal amount of $800,000 executed by
Borrower and payable to the order of Lender, as amended by that certain Amended
and Restated Promissory Note (the "Amended Note") dated as of December 31, 1998
in the amended principal amount of $20,000,000 and the Second Amended and
Restated Promissory Note (the "Second Amended Note") dated as of March ,
2000 in the amended principal amount of $10,000,000 (the Original Note, the
Amended Note and the Second Amended Note being collectively referred to herein
as the "Note"), (ii) a Security Agreement dated as of October 31, 1996 from
Borrower for the benefit of Lender, (iii) a Credit Agreement dated as of October
31, 1996 between Borrower and Lender, and (iv) certain other documents and
instruments, which together with the Note, the Security Agreement, the Credit
Agreement and such other documents and instruments as may from time-to-time be
amended and replaced, are sometimes collectively referred to herein as the
"Original Loan Documents." The Revolving Loan was modified by (i) a First
Amendment to Loan Documents dated September 3, 1997, (ii) a Second Amendment to
Loan Documents dated November 18, 1997, (iii) a Third Amendment to Loan
documents dated September 30, 1998, (iv) a Fourth Amendment to Loan Documents
dated December 31, 1998, (v) a Fifth Amendment to Loan Documents dated May 28,
1999, (vi) a Sixth Amendment to Loan Documents dated September 20, 1999, (vii) a
Seventh Amendment to Loan Documents dated March 24, 2000 and (viii) an Eighth
Amendment to Loan Documents dated September 29, 2000.
B. Borrower now desires and has requested Lender to extend credit in
order to enable Borrower, subject to the terms and conditions of this Agreement,
to (i) borrow on a revolving basis, at any time and from time to time prior to
the Revolving Credit Maturity Date (as defined herein), an aggregate principal
amount at any time outstanding not in excess of the lesser of (1) the applicable
Borrowing Base (calculated in accordance with the most recent Borrowing Base
Certificate delivered to Lender pursuant to Section 5.4(d) or (2) $2,000,000
(the "Revolving Loans") and (ii) borrow on a non-revolving basis an aggregate
principal amount not in excess of $4,000,000 (the "Term Loan"). The proceeds of
the Revolving Loans and the Term Loan shall provide working capital, the
restructuring of the Original Loan and for other general corporate purposes.
Lender is willing to extend such credit to the Borrower on the terms and subject
to the conditions set forth herein.
NOW THEREFORE, in consideration of the covenants and conditions set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and Lender hereby
agree to amend and restate in their entirety, the Original Loan Documents as
further set forth herein.
1. DEFINITIONS
a. Defined Terms. As used in this Agreement, the following words and
terms shall have the meanings specified below:
"Account Receivable" means any account receivable, account, chattel
paper, general intangible, document, or instrument owned, acquired, or received
by a person, including, but not limited to any and all rights, interest, or
claims accruing to Borrower either in its own right or pursuant to the terms of
any lease agreement, assignment or other instrument by and between the Borrower
and any other person in and to all accounts, contract rights, general
intangibles and right to payment of every kind or description now or at any time
hereafter arising, directly or indirectly, out of the operations of Borrower
and/or the provision of services by or on behalf of Borrower. An Account
Receivable, as referred to in this Agreement, shall not include any government
receivables or uninsured foreign receivables.
"Acquired Practice Obligation" means the amount of Indebtedness
incurred, assumed, guaranteed or which Borrower has otherwise agreed to be
responsible for in connection with a dental practice (an "Acquired Practice")
acquired by Borrower.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the person
specified.
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"Asset Sale" means the transfer or other disposition, to the extent
consummated after the Closing Date, by Borrower to another person of any asset
of Borrower, other than sales, transfers or other dispositions in the ordinary
course of business, including without limitation as part of this exclusion any
sales and leasebacks of assets in the ordinary course of business.
"Base Rate" shall mean a variable rate of interest equal to the higher
of (i) the rate of interest publicly announced by the Lender from time to time
as its "prime rate," or (ii) the Federal Funds Rate plus one-half of one percent
(0.50%). The Base Rate shall vary on a daily basis as the Lender's "prime rate"
and the Federal Funds Rate vary.
"Base Rate Loan" shall mean any Loan that bears interest with reference
to the Base Rate.
"Base Rate Margin" shall mean such margin as is set forth pursuant to
Section 2.6(b) of this Agreement.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States.
"Borrowing" shall have the meaning set forth in Section 2.3.
"Borrowing Base" means an amount equal to 80% of the Eligible Accounts
Receivable of Borrower.
"Borrowing Base Certificate" has the meaning assigned to that term in
Section 5.4(d).
"Business Day" shall mean a day (other than a Saturday or Sunday) on
which banks generally are open in Denver, Colorado for the conduct of
substantially all of their commercial lending activities.
"Capital Expenditures" shall mean current period net fixed assets less
prior period net fixed assets, plus current period depreciation.
"Capital Lease Obligations" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Change in Management" shall mean any change in the management
positions of or the acceptance of a resignation or other termination, without
Lender's prior written consent, of any of the following officers of Borrower:
Xxxxxx Xxxxx, Xxxx Xxxxxx or Xxxx Xxxxxx.
"Closing Date" shall mean December 17, 2001.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Commitment" shall mean the Commitment of Lender to make Loans
hereunder as set forth in Section 2.1.
"Commitment Fee" shall mean a fee calculated and payable as set forth
in Section 2.5(b).
"Contingent Obligations" means, as to any person, without duplication,
any obligation of such person guaranteeing or intended to guarantee any
indebtedness, leases, dividends or other obligations of any other person in any
manner, whether directly or indirectly. The amount of any Contingent Obligation
shall be deemed to be an amount equal to the maximum amount that such person may
be obligated to expend pursuant to the terms of such Contingent Obligation or,
if such Contingent Obligation is not so limited, the stated or determinable
amount of the primary obligation in respect to which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such person is required to perform
thereunder) as determined by such person in good faith. The amount of Contingent
Obligations shall not include any amounts included in the definition of Acquired
Practice Obligations.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
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"Default Rate" shall mean that rate of interest specified in Section
2.7.
"dollars" or "$" shall mean lawful money of the United States of
America.
"EBITDA" means, calculated for the period of the previous four fiscal
quarters, the net earnings of Borrower plus the aggregate amounts deducted in
determining such net income in respect of interest expenses, taxes, depreciation
and amortization; but not, however, giving effect to extraordinary losses or
gains in calculating net income.
"Eligible Accounts Receivable" means, as at any applicable date of
determination, the aggregate face amount of the Accounts Receivable included in
the definition of Accounts Receivable hereunder without duplication, in each
case less (without duplication) the aggregate amount of all limitations and
deductions with respect to such Accounts Receivable set forth below or as
otherwise provided in this Agreement and less the aggregate amount of all
returns, discounts, claims, credits, charges and allowances of any nature with
respect to such Accounts Receivable (whether issued, owing, granted or
outstanding). Unless otherwise approved in writing by the Lender in its sole
discretion, no individual Account Receivable shall be deemed to be an Eligible
Account Receivable if:
(a) the Borrower does not have legal and valid title to the Account
Receivable; or
(b) the Account Receivable is not the valid, binding and legally
enforceable obligation of the account debtor subject, as to enforceability, only
to (i) applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws at the time in effect affecting the enforceability of creditors' rights
generally and (ii) judicial discretion in connection with the remedy of specific
performance and other equitable remedies; or
(c) the Account Receivable arises out of sale made by any Borrower to
an Affiliate of any Borrower; or
(d) the Account Receivable or any portion thereof is more than 90 days
past due (from the original invoice date); or
(e)The Account Receivable, when aggregated with all other Accounts
Receivable of the same account debtor (or any Affiliate thereof), exceeds ten
percent (10%) in face value of all Accounts Receivable of the Borrower then
outstanding, to the extent of such excess; or
(f)(i) the account debtor is also a creditor of the Borrower, to the
extent of the amount owed by the Borrower to the account debtor, (ii) the
Account Receivable is subject to any claim on the part of the account debtor
disputing liability under such Account Receivable in whole or in part, to the
extent of the amount of such dispute or (iii) the Account Receivable otherwise
is or is reasonably likely to become subject to any right or setoff or any
counterclaim, claim or defense by the account debtor, to the extent of the
amount of such setoff or counterclaim, claim or defense; or
(g)the account debtor has commenced a voluntary case under applicable
bankruptcy laws, as now constituted or hereafter amended, or made an assignment
for the benefit of creditors or if a decree or order for relief has been entered
by a court having jurisdiction in the premises in respect of the account debtor
in an involuntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or if any other petition or other application for relief
under the account debtor, or if the account debtor has failed, suspended
business, ceased to be solvent, or consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a significant
portion of its assets or affairs; or
(h) the Lender does not have a valid and perfected first priority
security interest in such Account Receivable; or
(i) the sale to the account debtor is on a consignment, xxxx-and-hold,
sale on approval, guaranteed sale or sale-and-return basis or pursuant to any
written agreement providing for repurchase or return; or
(j) it is from the same account debtor (or any Affiliate thereof) and
fifty percent (50%) or more, in face amount, of other Accounts Receivable from
either such account debtor or any Affiliate thereof are due or unpaid for more
than the applicable period of time after the original invoice date for such
Account set forth in paragraph (d) above; or
(k) seventy-five percent (75%) or more, in face amount, of other
Accounts Receivable from the same account debtor are not deemed Eligible
Accounts Receivable hereunder; or
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(l) the goods giving rise to such Account have not been shipped and
delivered to and accepted by the account debtor or the services giving rise to
such Account have not been performed by the Borrower and accepted by the account
debtor or the Account otherwise does not represent a final sale; or
(m) the principal place of business of the account debtor is located
outside of the United States; or
(n) the Account Receivable does not comply in all material respects
with all applicable legal requirements, including where applicable, the Federal
Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation
Z of the Board of Governors of the Federal Reserve System, in each case as
amended.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is a member of a group of which the Borrower is a member and
which is treated as a single employer under Section 414 of the Code.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Excess Cash Flow" means Borrower's Net Income plus depreciation and
amortization, plus other non-cash expenses, plus tax benefits, less principal
payments under any term loan now existing or hereafter obtained by Borrower from
Lender at any time during the term of the Loan (including but not limited to the
Term Loan), less non-financed Capital Expenditures, less Put Payments.
"Federal Funds Rate" means, for each day, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight Federal Funds
transactions with members of the Federal Reserve System arranged by Federal
Funds brokers, as published for such day (or, if such day is not a Business Day,
for the immediately preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations at approximately 10:00 A.M. Denver time on such
day on such transactions received by the Lender from three Federal Funds brokers
of recognized standing selected by the Lender in its sole discretion.
"Fees" shall mean the Origination Fee and the Commitment Fee.
"Financial Officer" of any person shall mean the chief financial officer,
principal accounting officer, Treasurer or Controller of such person.
"Financing Proceeds" means the cash (other than Net Cash Proceeds)
received by the Borrower directly or indirectly, from any financing transaction
of whatever kind or nature.
"Fixed Charges" means interest expense, plus lease expense, plus
current maturities of long-term debt and current maturities of capital leases
(calculated for the preceding twelve-month period).
"GAAP" shall mean generally accepted accounting principles.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Intangible Assets" means, with respect to any Person, at any time for
the determination thereof, the amount of (i) all write-ups in the book value of
any asset owned by such Person, (ii) any amount, however designated on the
balance sheet, representing the excess of the purchase price paid for assets or
equity interests over the value assigned thereto on the books of such Person,
(iii) all unamortized debt discount, goodwill, patents, trademarks, service
marks, trade names, copyrights, organization or development expenses and other
intangible items and (iv) all items that would be considered intangible assets
under GAAP.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"Loans" shall mean the loans made by Lender pursuant to Section 2.1.
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"Loan Documents" shall mean this Agreement, the Revolving Credit Note,
the Term Loan Note, the Amended and Restated Security Agreement, UCC-3 Financing
Statements, and any other instruments or documents evidencing, securing or
relating to the Loans.
"Margin Stock" shall have the meaning given such term under Regulation
U.
"Material Adverse Change" shall mean (a) a materially adverse effect on
the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the consolidated Subsidiaries taken as a whole,
(b) material impairment of the ability of the Borrower and the consolidated
Subsidiaries taken as a whole to perform any of its obligations under any Loan
Document to which it is or will be a party or (c) material impairment of the
rights of or benefits available to the Lender under any Loan Document.
"Net Cash Proceeds" means with respect to any Asset Sale, the aggregate
cash payments received by the Borrower and any consolidated Subsidiary, from
such Asset Sale, net of direct expenses of sale.
"Net Equity Proceeds" means the proceeds of any offering of equity in
any person net of all costs and expenses incurred in connection with such
offering.
"Net Income" for any person means, for any period, the net income (or
loss) of such person and its consolidated subsidiaries for such period taken in
a single accounting period determined for such person and its consolidated
subsidiaries in conformity with GAAP; provided that there shall be excluded (i)
the income (or loss) of any other person (other than consolidated subsidiaries
of such person) in which any third person (other than such person or any of its
consolidated subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to such person or any
of its consolidated subsidiaries by such other person during such period, (ii)
the income (or loss) of any other person accrued prior to the date it becomes a
consolidated subsidiary of such person or is merged into or consolidated with
such person or any of its consolidated subsidiaries or such other person's
assets are acquired by such person or any of its consolidated subsidiaries, and
(iii) the income of any consolidated subsidiary of such person to the extent
that the declaration or payment of dividends or similar distributions by that
subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement, instruments, judgment, decree, order, statute,
rule or governmental regulation applicable to that subsidiary.
"Note" shall mean collectively, the Revolving Credit Note and the Term
Loan Note.
"Origination Fee" shall have the meaning assigned to such term in
Section 2.5 (a).
"Operating Cash Flow" shall mean net income after taxes and exclusive
of extraordinary gains, gains on sale of fixed assets, and other income; plus
depreciation, amortization, interest expense and lease expense; less dividends
and distributions.
"PBGC" shall mean the Pension Benefit Guarantee Corporation referred to
and defined in ERISA and any successor thereto.
"person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership, other entity or government, or
any agency or political subdivision thereof.
"Plan" shall mean any pension plan subject to the provisions of Title
IV of ERISA or Section 412 of the Code which is maintained for employees of the
Borrower or any ERISA Affiliate.
"Professional Corporations" shall mean those professional corporations
organized for the practice of dentistry of which Borrower initially acquires
that stock, but thereafter transfers the entirety of such stock to an individual
licensed dentist within thirty (30) days following the date of acquisition and
with which Borrower has entered into a management agreement in the standard form
which has been previously approved by Lender.
"Put Payments" means those certain bullet payments owed to certain
Professional Corporations by Borrower pursuant to the terms and conditions of
written agreements, copies of which will be or have been provided to Lender.
"Regulation G" shall mean Regulation G of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
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"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).
"Responsible Officer" of any person shall mean any executive officer or
financial officer of such person and any other officer or similar official
thereof responsible for the administration of the obligations of such person in
respect of this Agreement.
"Revolving Credit Maturity Date" shall mean April 30, 2002.
"Revolving Credit Note" shall mean a promissory note of the Borrower
evidencing the Revolving Loans.
"Revolving Loans" shall mean the revolving loans made by Lender to the
Borrower pursuant to Section 2.1.
"Revolving Loan Commitment" shall mean the commitment of Lender to make
Revolving Loans hereunder as set forth in Section 2.1.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority to which the Lender is
subject. Such reserve percentages shall include those imposed pursuant to such
Regulation D. Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.
"Subordinated Debt" shall mean the indebtedness and liabilities of
Borrower which have been subordinated by written agreement to indebtedness owed
by Borrower to Lender in form and substance acceptable to Lender.
"subsidiary" shall mean, with respect to any person (herein referred to
as the "parent"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or more than 50%
of the general partnership interests are, at the time any determination is being
made, owned, controlled or held by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Term Loan" shall mean the term loan made by Lender to the Borrower
pursuant to Section 2.1.
"Term Loan Commitment" shall mean the commitment of Lender to make the
Term Loan hereunder as set forth in Section 2.1.
"Term Loan Maturity Date" shall mean April 30, 2003.
"Term Loan Note" shall mean a promissory note of the Borrower
evidencing the Term Loan.
"Total Fixed Charges" shall mean Fixed Charges plus Put Payments.
"Total Funded Debt" shall mean the sum without duplication for Borrower
and/or any of its subsidiaries of all indebtedness for borrowed money, whether
maturing in less than or more than one year, plus all bonds, notes, debentures
or similar debt instruments plus all capitalized lease obligations plus the
present value of all basic rental obligations under any synthetic lease, plus
the stated value, or liquidation value, if higher, of all redeemable stock of
such person.
"Transactions" shall have the meaning assigned to such term in Section
3.2.
b. Terms Generally. The definitions in Section 1.1. shall apply equally
to both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation." All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require.
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Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided, however, that, for purposes of determining compliance
with any covenant set forth in Article VI, such terms shall be construed in
accordance with GAAP as in effect on the date of this Agreement applied on a
basis consistent with the application used in the Borrower's audited financial
statements referred to in Section 3.5.
2. THE CREDIT
a. Commitment. Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, Lender agrees to make (a)
Revolving Loans to the Borrower, at any time and from time to time and until the
earlier of the Revolving Credit Maturity Date and the termination of the
Revolving Loan Commitment in accordance with the terms hereof, in an amount not
to exceed the Revolving Loans and (b) a Term Loan to the Borrower in the
aggregate principal amount not to exceed the Term Loan. Within the limits set
forth in clause (a) of the preceding sentence, the Borrower may borrow, pay or
prepay and reborrow Revolving Loans on or after the Closing Date and prior to
the Revolving Credit Maturity Date, subject to the terms, conditions and
limitations set forth herein. Within the limits set forth in clause (b) of the
preceding sentence, the Borrower may borrow, pay or prepay the Term Loan on or
after the Closing Date and prior to the Term Loan Maturity Date, subject to the
terms, conditions and limitations set forth herein. Each advance under the
Revolving Loans and/or a disbursement of the Term Loan (each such advance or
disbursement is referred to herein as a "Loan") shall constitute a Base Rate
Loan and shall be made on such Business Day and in such amount (equal to a
minimum of $100,000.00) as the Borrower shall request by written notice given to
the Lender, in the case of a disbursement of the Term Loan, no later than 11:00
a.m. (Denver, Colorado time) on the date of disbursement of the requested Term
Loan and in the case of an advance under the Revolving Loans, as set forth in
Section 2.3.
b. Notes. The Revolving Loans shall be evidenced by the Revolving
Credit Note dated the date hereof. The Revolving Credit Note shall be a master
note, and the principal amount of all Revolving Loans outstanding shall be
evidenced by the Revolving Credit Note or any ledger or other record of the
Lender, which shall be presumptive evidence of the principal owing and unpaid on
the Revolving Credit Note. The Term Loan shall be evidenced by the Term Loan
Note dated the date hereof.
c. Notice of Borrowings. The Borrower shall give the Lender written
notice not later than 11:00 a.m. (Denver, Colorado time) on the date of a
requested advance under the Revolving Loan Commitment (a "Borrowing"). Such
notice shall be irrevocable, shall in each case refer to this Agreement and
shall be in the form attached hereto as Exhibit A. Each notice of Borrowing
shall be deemed a representation by Borrower that all conditions precedent to
such Borrowing have been satisfied.
d. Notes; Repayment of Loans.
(i) The Revolving Credit Note shall bear interest from the date of the
first Borrowing on the outstanding principal balance thereof as set forth in
Section 2.6. The Lender shall, and is hereby authorized by the Borrower to,
endorse on a schedule attached to the Revolving Credit Note (or on a
continuation of such schedule attached to such Note and made a part thereof), or
otherwise to record in Lender's internal records, an appropriate notation
evidencing the date and amount of each Revolving Loan, each payment and
prepayment of principal of the Revolving Loans, each payment of interest on the
Revolving Loans and the other information provided for on such schedule;
provided, however, that the failure of the Lender to make such a notation or any
error therein shall not affect the obligation of the Borrower to repay the
Revolving Loans made by Lender in accordance with the terms of this Agreement
and the Revolving Credit Note.
(ii) The Term Loan Note shall bear interest from the date of Borrowing
on the outstanding principal balance thereof as set forth in Section 2.6. The
term of the Term Loan shall commence as of the Closing Date and, if not sooner
paid, the entire unpaid principal balance, all accrued and unpaid interest, and
all other sums payable in connection with the Term Loan shall be due and payable
in full on the Term Loan Maturity Date. Borrower shall make monthly payments of
interest on the unpaid principal balance of the Term Loan pursuant to Section
2.6(b)(ii). Commencing on December 31, 2001, Borrower shall make a principal
payment on the outstanding principal balance of the Term Loan in the amount of
$125,000 and on the last day of each subsequent quarter thereafter, Borrower
shall make principal payments on the outstanding principal balance of the Term
Loan in the amount of $250,000 until the Term Loan Maturity Date.
(iii) In addition to the foregoing, within forty-five (45) days of the
end of each fiscal quarter and within ninety (90) days following the end of each
fiscal year, Borrower shall make principal reduction payments on the outstanding
principal balance of the Term Loan in an amount equal to 75% of the Excess Cash
Flow calculated at such time for the preceding fiscal quarter. Borrower, at the
time of such payment, shall provide to Lender any written evidence and financial
documentation used in calculating the Excess Cash Flow.
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e. Fees.
(a) The Borrower agrees to pay an origination fee (the "Origination
Fee") in an amount equal to $60,000, one-half of which has been paid to Lender
and the other half of which shall be paid on the Closing Date.
(b) A commitment fee (the "Commitment Fee") of .50% per annum on the
average daily unused amount of the Revolving Loans during the preceding month
shall be payable, in arrears, on the last day of each month, commencing December
31, 2001, and continuing on the last day of each month thereafter until the
Revolving Credit Maturity Date. The Commitment Fee shall be computed on the
basis of the actual number of days elapsed in a year of 360 days. The Commitment
Fee due December 31, 2001, shall be prorated based on the number of days from
the Closing Date through December 31, 2001, divided by the number of days in the
month ending December 31, 2001.
(c) All Fees shall be paid on the dates due, in immediately available
funds. Once paid, none of the Fees shall be refundable (absent a calculation
error) under any circumstances.
f. Interest on Loans.
The Borrower shall pay interest on the unpaid principal amount of each
Loan from the date such Loan is made until such principal amount shall be paid
in full as follows:
(a) With respect to any Base Rate Loan, at a rate per annum equal to the sum
of the Base Rate and the Base Rate Margin specified in subpart (b)(i) below,
which rate shall change when and as the Base Rate changes in accordance with
this Agreement.
(b) (i)
Base Rate Margin
Revolving Loan 200 Basis Points
----------------------------- --------------------------
Term Loan 200 Basis Points
----------------------------- --------------------------
(ii) The Borrower shall pay to the Lender
accrued interest on the unpaid principal
balance of each Base Rate Loan on the last
day of each month.
g. Default Interest. If the Borrower shall default in the payment of
the principal of or interest on the Loans or any other amount due or becoming
due hereunder, by acceleration or otherwise, the Borrower shall on demand from
time to time pay interest, to the extent permitted by law, on such defaulted
amount up to (but not including) the date of actual payment (after as well as
before judgment) at a rate per annum (computed on the basis of the actual number
of days elapsed over a year of 360 days) equal to the Base Rate plus 4% (the
"Default Rate") From and after any Event of Default, the outstanding principal
balance of the Loans shall accrue interest at the Default Rate.
h. Termination of Commitments.
(a) The Revolving Loan Commitment shall be automatically
terminated at 5:00 p.m., Denver, Colorado time, on the
Revolving Credit Maturity Date.
(b) The Term Loan shall terminate at 5:00 p.m., Denver, Colorado
time, on the Term Loan Maturity Date.
(c) The Borrower shall pay to the Lender, on the date of
termination, the Commitment Fee on the amount of the Revolving
Loan Commitment so terminated accrued through the date of such
termination.
i. Prepayment.
(a) The Borrower may prepay any Base Rate Loan in whole, or in
part, at any time or times.
(b) Without notice or demand, if the sum of the outstanding
principal balance of the Loans shall at any time exceed the
Borrowing Base, the Borrower shall immediately prepay the
Loans to the extent necessary to eliminate such excess. Any
payment received by the Lender under this Section 2.9(b) may
be applied to the Borrower indebtedness, in such order and in
such amounts as the Lender, in its discretion, may from time
to time determine.
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(c) The Borrower shall give prior written notice to Lender before
a proposed borrowing (a "Borrowing") pursuant to Section 2.3
hereof. Such notice shall be irrevocable and shall in each
case refer to this Agreement. Each notice of Borrowing shall
be deemed a representation by Borrower that all conditions
precedent to such Borrowing have been satisfied.
j. Additional Costs. If either (i) any change in any law or regulation
(or its interpretation), or (ii) the compliance with any guideline or request
from any central lender or other governmental authority (whether or not having
the force of law), affects or would affect the amount of capital required or
expected to be maintained by the Lender or any corporation controlling the
Lender and the Lender determines that the amount of such capital is increased by
or based upon the existence of the Loan (or commitment to make the Loan) and
other extensions of credit (or commitments to extend credit) of similar type,
then, upon demand by the Lender, the Borrower shall pay to the Lender from time
to time as specified by the Lender additional amounts sufficient to compensate
the Lender in the light of such circumstances, to the extent that the Lender
reasonably determines such increase in capital to be allocable to the existence
of the Lender's Loan (or commitment to make the Loan). A certificate of the
Lender submitted to the Borrower as to such amounts shall be conclusive and
binding for all purposes, absent manifest error. Upon notice from the Borrower
to the Lender within five (5) Business Days after the Lender notifies the
Borrower of any such additional costs pursuant to this Section 2.10, the
Borrower may either (A) prepay in full the Loan if so affected, together with
interest accrued thereon to the date of such prepayment, or (B) convert the Loan
if so affected into a Loan of any other type not so affected upon not less than
four (4) Business Days' notice to the Lender.
k. Payments.
(a) The Borrower shall make each payment (including principal of
or interest on any Borrowing or any Fees or other amounts)
hereunder and under any other Loan Document not later than
12:00 (noon), Denver, Colorado time, on the date when due in
dollars to the Lender at its offices at 0000 Xxxxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxx 00000, in immediately available funds.
(b) Whenever any payment (including principal of or interest on
any Borrowing or any Fees or other amounts) hereunder or under
any other Loan Document shall become due, or otherwise would
occur, on a day that is not a Business Day, such payment may
be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the
computation of interest or Fees, if applicable.
3. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to Lender that:
a. Organization; Powers. (a) Xxxxxx Dental Management Services, Inc. is
a corporation, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its respective organization, (b) the Borrower has
all requisite power and authority to own its property and assets and to carry on
its business as now conducted and as proposed to be conducted, (c) the Borrower
is qualified to do business in every jurisdiction where such qualification is
required, except where the failure to qualify would not result in a Material
Adverse Change, and (d) the Borrower has the power and authority to execute,
deliver and perform its obligations under each of the Loan Documents and each
other agreement or instrument contemplated thereby to which it is or will be a
party and to borrow hereunder.
b. Authorization. The execution, delivery and performance by the
Borrower of each of the Loan Documents and the borrowings hereunder
(collectively, the "Transactions") (a) have been duly authorized by all
requisite action and (b) will not (i) violate (A) any provision of law, statute,
rule or regulation, or of the certificate or articles of incorporation, articles
of organization, operating agreement or other constitutive documents or by-laws
of the Borrower or any Subsidiary, (B) any order of any Governmental Authority
or (C) as of the Closing Date, any provision of any indenture, agreement or
other instrument to which the Borrower or any Subsidiary is a party or by which
any of them or any of their property is or may be bound which could result in a
Material Adverse Change, (ii) as of the Closing Date, be in conflict with,
result in a breach of or constitute (alone or with notice or lapse of time or
both) a default under any such indenture, agreement or other instrument which
could result in a Material Adverse Change or (iii) result in the creation or
imposition of any Lien upon any property or assets of the Borrower or any
subsidiary.
c. Enforceability. This Agreement has been duly executed and delivered
by the Borrower and constitutes, and each other Loan Document when executed and
delivered by the Borrower will constitute, a legal, valid and binding obligation
of the Borrower enforceable against the Borrower in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
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d. Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except such as have
been made or obtained and are in full force and effect.
e. Financial Statements. The Borrower has heretofore furnished to
Lender its consolidated and consolidating balance sheets and statements of
income and changes in financial condition as of and for the quarter ended
September 30, 2001. Such financial statements present fairly the financial
condition and results of operations of the Borrower and its consolidated
subsidiaries as of such dates and for such periods. Such balance sheets and the
notes thereto disclose all material liabilities, direct or contingent, of the
Borrower and its consolidated subsidiaries as of the dates thereof. Such
financial statements were prepared in accordance with GAAP applied on a
consistent basis, except for any omission of notes.
f. No Material Adverse Change. There has been no Material Adverse
Change in the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Subsidiaries, taken as a whole, since
September 30, 2001.
g. Title to Properties; Possession Under Leases.
(a) The Borrower and each of the Subsidiaries has good and
marketable title to, or valid leasehold interests in, all its
material properties and assets, except for minor defects in
title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties
and assets for their intended purposes. As of the Closing
Date, all of Borrower's material properties and assets
securing the Loans hereunder are free and clear of Liens,
other than Liens expressly permitted by Section 6.2.
(b) The Borrower and each of the Subsidiaries has complied with
all obligations under all material leases to which it is a
party and all such leases are in full force and effect. The
Borrower and each of the Subsidiaries enjoys peaceful and
undisturbed possession under all such material leases.
h. Subsidiaries. As of the Closing Date, Borrower has no Subsidiaries.
i. Litigation; Compliance with Laws.
(a) As of the Closing Date, there are not any actions, suits or
proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of the
Borrower, threatened against the Borrower or any Subsidiary or
any business, property or rights of any such person (i) which
involve any Loan Document or the Transactions or (ii) as to
which there is a reasonable possibility of an adverse
determination and which, if adversely determined, could,
individually or in the aggregate, result in a Material Adverse
Change.
(b) Neither the Borrower nor any of the Subsidiaries is in
violation of any law, rule or regulation, or in default with
respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default could
result in a Material Adverse Change.
j. Agreements.
(a) Neither the Borrower nor any of the Subsidiaries is a party to
any agreement or instrument or subject to any corporate
restriction that because of onerous terms has resulted or
could result in a Material Adverse Change.
(b) Neither the Borrower nor any of its Subsidiaries is in default
in any manner under any provision of any indenture or other
agreement or instrument evidencing indebtedness, or any other
material agreement or instrument to which it is a party or by
which it or any of its properties or assets are or may be
bound, where such default could result in a Material Adverse
Change.
k. Federal Reserve Regulations.
(a) Neither the Borrower nor any of the Subsidiaries is engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally
or ultimately, (i) to purchase or carry Margin Stock or to
extend credit to others for the purpose of purchasing or
carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which
entails a violation of, or which is inconsistent with, the
provisions of the Regulations of the Board, including
Regulation G, U or X.
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l. Intentionally Deleted.
m. Tax Returns. The Borrower and its Subsidiaries have filed or caused
to be filed all Federal, state and local tax returns required to have been filed
by it and has paid or caused to be paid all taxes shown to be due and payable on
such returns or on any assessments received by it, except taxes that are being
contested in accordance with Section 5.3.
n. No Material Misstatements. No written information, report, financial
statement, exhibit or schedule furnished by or on behalf of the Borrower to the
Lender in connection with the negotiation of any Loan Document or included
therein or delivered pursuant thereto contained, contains or will contain any
material misstatement of fact or omitted, omits or will omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading.
o. Employee Benefit Plans. The Borrower and each of its ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the regulations and published interpretations
thereunder. No Reportable Event has occurred as to which the Borrower or any
ERISA Affiliate was required to file a report with the PBGC, and the present
value of all benefit liabilities under each Plan (based on those assumptions
used to fund such Plan) did not, as of the last annual valuation date applicable
thereto, exceed by a material amount the value of the assets of such Plan.
p. Operation of Business. The Borrower possesses all licenses, permits,
franchises, patents, copyrights, trademarks, and trade names, or rights thereto,
to conduct its effective businesses substantially as now conducted and as
presently proposed to be conducted and the Borrower is not in material violation
of any valid rights of others with respect to any of the foregoing.
q. Laws; Environment. The Borrower has duly complied, and its
businesses, operations, assets, equipment, property, leaseholds, or other
facilities are in compliance, in all material respects, with the provisions of
all federal, state, and local statutes, laws, codes, and ordinances and all
rules and regulations promulgated thereunder (including without limitation those
relating to the environment, health and safety) . The Borrower has been issued
and will maintain all required federal, state, and local permits, licenses,
certificates, and approvals relating to (1) air emissions; (2) discharges to
surface water or groundwater; (3) noise emissions; (4) solid or liquid waste
disposal; (5) the use, generation, storage, transportation, or disposal of toxic
or hazardous substances or hazardous wastes (intended hereby and hereafter to
include any and all such materials listed in any federal, state, or local law,
code, or ordinance and all rules and regulations promulgated thereunder as
hazardous); or (6) other environmental, health or safety matters, other than
such as would not have a Material Adverse Change or result in a fine, penalty,
judgment or other liability in excess of $50,000. During the past five years,
the Borrower has not received notice of, or has actual knowledge of any
violations of any federal, state, or local environmental, health, or safety
laws, codes or ordinances or any rules or regulations promulgated thereunder
with respect to its businesses, operations, assets, equipment, property,
leaseholds, or other facilities which would result in a Material Adverse Change
or result in a fine, penalty, judgment or other liability in excess of $50,000.
Except in accordance with a valid governmental permit, license, certificate or
approval, during the past five years, there has been no material emission,
spill, release, or discharge into or upon (1) the air; (2) soils, or any
improvements located thereon; (3) surface water or groundwater; or (4) the
sewer, septic system or waste treatment, storage or disposal system servicing
any premises owned or leased by Borrower, of any toxic or hazardous substances
or hazardous wastes at or from any premises owned or operated by Borrower.
During the past five years, there has been no complaint, order, directive,
claim, action, or notice by any governmental authority or any Person or entity
with respect to violations of law or damages by reason of Borrower's (1) air
emissions; (2) spills, releases, or discharges to soils or improvements located
thereon, surface water, groundwater or the sewer, septic system or waste
treatment, storage or disposal systems servicing the premises; (3) noise
emissions; (4) solid or liquid waste disposal; (5) use, generation, storage,
transportation, or disposal of toxic or hazardous substances or hazardous waste;
or (6) other environmental, health or safety matters affecting the Borrower or
its business, operations, assets, equipment, property, leaseholds, or other
facilities, other than such as would not have a Material Adverse Change or
result in a fine, penalty, judgment or other liability in excess of $50,000.
Borrower does not have any material indebtedness, obligation, or liability,
absolute or contingent, matured or not matured, with respect to the storage,
treatment, cleanup, or disposal of any solid wastes, hazardous wastes, or other
toxic or hazardous substances including without limitation any such
indebtedness, obligation, or liability with respect to any current regulation,
law, or statute regarding such storage, treatment, cleanup, or disposal, other
than obligations in the ordinary course of Borrower's business.
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r. Foreign Person. The Borrower is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Code.
s. Put Payments. The only Professional Corporations that are owed Put
Payments from Borrower pursuant to certain written and/or oral agreements with
Borrower are: Glendale Dental Group and Mississippi Dental Associates, P.C., in
the amounts and in accordance with the terms and conditions of the respective
agreements referenced in Article VII (m) hereof.
4. CONDITIONS OF LENDING
The obligations of Lender to make the Loan hereunder are subject to the
satisfaction of the following conditions:
a. All Borrowings. On the date of each Borrowing:
i. The Lender shall have received a notice of such borrowing as
required by Section 2.3.
ii. The representations and warranties set forth in Article III hereof
shall be true and correct in all material respects on and as of the date of such
Borrowing with the same effect as though made on and as of such date, except to
the extent such representations and warranties expressly relate to an earlier
date.
iii. The Borrower shall be in compliance with all the terms and
provisions set forth herein and in each other Loan Document on its part to be
observed or performed, and at the time of and immediately after such Borrowing
no Event of Default or Default shall have occurred and be continuing. Without
limiting the foregoing, as of the date of each Borrowing, Borrower must have
furnished to Lender all of the financial information required by Section 5.4.
Each Borrowing shall be deemed to constitute a representation and
warranty by the Borrower on the date of such borrowing as to the matters
specified in paragraphs (b) and (c) of this Section 4.1.
b. Closing Date. On the Closing Date:
i. Lender shall have received a duly executed Revolving Credit Note and
Term Loan Note complying with the provisions of Section 2.4, and all other Loan
Documents required herein.
ii. Lender shall have received a favorable written opinion from counsel
for the Borrower, dated as of the Closing Date and addressed to the Lender, in a
form satisfactory to Lender.
iii. All legal matters incident to this Agreement and the borrowings
hereunder shall be satisfactory to the Lender and its counsel.
iv. The Lender shall have received (i) a copy of the certificate or
articles of incorporation or articles of organization, including all amendments
thereto, of the Borrower, certified as of a recent date by the Secretary of
State of the state of its organization, and a certificate as to the good
standing of the Borrower as of a recent date, from such Secretary of State; (ii)
a certificate of the President, Secretary, Assistant Secretary, or other
authorized officer, of the Borrower dated the Closing Date and certifying (A)
that attached thereto is a true and complete copy of the by-laws of the Borrower
as in effect on the Closing Date and at all times since a date prior to the date
of the resolutions described in clause (B) below, (B) that attached thereto is a
true and complete copy of resolutions duly adopted by the Board of Directors of
the Borrower authorizing the execution, delivery and performance of the Loan
Documents and the borrowings hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C) that the
certificate or articles of incorporation of the Borrower have not been amended
since the date of the last amendment thereto shown on the certificate furnished
pursuant to clause (i) above, and (D) as to the incumbency and specimen
signature of each officer executing any Loan Document or any other document
delivered in connection herewith on behalf of the Borrower; (iii) a certificate
of another officer as to the incumbency and specimen signature of the Secretary
or Assistant Secretary executing the certificate pursuant to (ii) above; and
(iv) such other documents as Lender or counsel for the Lender, may reasonably
request.
v. The Lender shall have received a certificate, dated the Closing Date
and signed by the President or a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and (c) of
Section 4.1 and shall have received a Borrowing Base Certificate for the month
of October, 2001.
vi. The Lender shall have received satisfactory evidence confirming
that it will have a first lien on all Accounts Receivable and all other assets
of Borrower.
vii. The Lender shall have received insurance certificates evidencing
adequate insurance on the property of Borrower, with Lender as an additional
insured, in such amounts and in such form acceptable to Lender.
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Unless otherwise expressly agreed to by Borrower and Lender, in the
event any of the conditions set forth in this Section 4.2 above have not been
met on or before the Closing Date, Lender will not be obligated to make any Loan
to Borrower and both parties shall be released from any further obligations
hereunder.
5. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with Lender that so long as this
Agreement shall remain in effect or the principal of or interest on any Loan,
any Fees or any other expenses or amounts payable under any Loan Document shall
be unpaid, unless the Lender shall otherwise consent in writing, the Borrower
will, and will cause each of the Subsidiaries to:
a. Existence; Businesses and Properties.
i. Do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its legal existence.
ii. Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated; comply
in all material respects with all applicable laws, rules, regulations and orders
of any Governmental Authority, whether now in effect or hereafter enacted; and
at all times maintain and preserve all property material to the conduct of such
business and keep such property in good repair, working order and condition and
from time to time make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection therewith may be properly conducted
at all times.
b. Insurance. Keep its insurable properties adequately insured at all
times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies in the same
or similar businesses, including public liability insurance against claims for
personal injury or death or property damage occurring upon, in, about or in
connection with the use of any properties owned, occupied or controlled by it
and maintain such other insurance as may be required by law.
c. Obligations and Taxes. Pay its indebtedness and other obligations
promptly and in accordance with their terms and pay and discharge promptly all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or in respect of its property, before the same shall
become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise which, if unpaid, might give rise to a Lien
upon such properties or any part thereof; provided, however, that such payment
and discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Borrower shall set
aside on its books reserves, if any, believed to be adequate with respect
thereto.
d. Financial Statements, Reports, etc. In the case of the Borrower
shall furnish to Lender:
i. within 90 days after the end of each fiscal year, its consolidated
and consolidating balance sheets and related statements of income and changes in
financial position, showing the financial condition of the Borrower and its
consolidated subsidiaries as of the close of such fiscal year and the results of
its operations and the operations of such subsidiaries during such year, all
audited by an independent public accountant of recognized national standing
acceptable to the Lender and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial condition and
results of operations of the Borrower on a consolidated basis in accordance with
GAAP consistently applied;
ii. within 45 days after the end of each fiscal quarter of each fiscal
year and within 30 days after the end of each month, its consolidated balance
sheets and related statements of income and within 45 days after the end of each
fiscal quarter of each fiscal year its statements of changes in financial
position, all such statements showing the financial condition of the Borrower
and its consolidated subsidiaries as of the close of such month or fiscal
quarter, as applicable, and the results of its operations and the operations of
such subsidiaries during such month or fiscal quarter, all certified by one of
its Financial Officers as fairly presenting the financial condition and results
of operations of the Borrower on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and omission
of notes;
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iii. concurrently with any delivery of the quarterly or year-end
financial statements under (a) or (b) above, a certificate of the Financial
Officer opining on or certifying such statements (i) certifying that no Event of
Default or Default has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto and (ii) setting forth
computations in reasonable detail satisfactory to the Lender demonstrating
compliance with the covenants contained in Sections 6.9 through 6.12, inclusive;
iv. Within thirty (30) days after the end of each month, the Borrowers
shall deliver to Lender a borrowing base certificate in the form of Exhibit B
hereto (the "Borrowing Base Certificate") detailing the Borrowers' Eligible
Accounts Receivable as of the last day of such month, certified as complete and
correct on behalf of the Borrower by the chief executive officer, chief
financial officer, controller or other Responsible Officer of the Borrower,
respectively. In addition, each Borrowing Base Certificate shall have attached
to it such additional schedules and/or other information as the Lender may
reasonably request including, without limitation, an accounts receivable aging
report. If the Borrower fails to deliver any such Borrowing Base Certificate
within ten (10) days after receiving notice from Lender that Borrower has not
delivered a Borrowing Base Certificate within the time period described above,
then the Borrowing Base shall be deemed to be $0 until such time as the Borrower
delivers such required Borrowing Base Certificate;
v. promptly after the same become publicly available, if applicable,
copies of all periodic and other reports, proxy statements and other materials
filed by it with the Securities and Exchange Commission, or any governmental
authority succeeding to any of or all the functions of said Commission, or with
any national securities exchange, or distributed to its shareholders, as the
case may be; and
vi. promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
subsidiary, or compliance with the terms of any Loan Document, as the Lender may
reasonably request, including, but not limited to (i) an annual budget with
respect to the operations of Borrower, delivered within 90 days after the end of
each fiscal year and (ii) the performance of an annual collateral exam by a
collateral examiner designated by Lender.
e. Litigation and Other Notices. Furnish to the Lender prompt written
notice of the following:
i. any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) proposed to be taken with respect
thereto;
ii. the filing or commencement of, or any threat or notice of intention
of any person to file or commence, any action, suit or proceeding, whether at
law or in equity or by or before any Governmental Authority, against the
Borrower or any Affiliate thereof which, if adversely determined, could result
in a Material Adverse Change; and
iii. any development that has resulted in, or could reasonably be
anticipated to result in, a Material Adverse Change.
f. ERISA. (a) Comply in all material respects with the applicable
provisions of ERISA and (b) furnish to the Lender (i) as soon as possible, and
in any event within 30 days after any Responsible Officer of the Borrower either
knows or has reason to know that any Reportable Event has occurred that alone or
together with any other Reportable Event could reasonably be expected to result
in liability of the Borrower to the PBGC in an aggregate amount exceeding
$50,000, a statement of a Financial Officer setting forth details as to such
Reportable Event and the action proposed to be taken with respect thereto,
together with a copy of the notice, if any, of such Reportable Event given to
the PBGC, (ii) promptly after receipt thereof, a copy of any notice the Borrower
may receive from the PBGC relating to the intention of the PBGC to terminate any
Plan or Plans (other than a Plan maintained by an ERISA Affiliate which is
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section
412 of the Code) or to appoint a trustee to administer any Plan or Plans, and
(iii) within 10 days after a filing with the PBGC pursuant to Section 412(n) of
the Code of a notice of failure to make a required installment or other payment
with respect to a Plan,, a statement of a Financial officer setting forth
details as to such failure and the action proposed to be taken with respect
thereto, together with a copy of such notice given to the PBGC.
g. Maintaining Records; Access to Properties and Inspections.
Maintain all financial records in accordance with GAAP and permit any
representatives designated by Lender to visit and inspect the financial records
and the properties of the Borrower or any Subsidiary at reasonable times after
reasonable advance notice by Lender and as often as requested and to make
extracts from and copies of such financial records, and permit any
representatives designated by Lender to discuss the affairs, finances and
condition of the Borrower or any Subsidiary with the officers thereof and
independent accountants therefor.
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h. Use of Proceeds. Use the proceeds of the Loans only for the purposes
set forth in the preamble to this Agreement.
i. Environment. Be and remain in compliance in all material respects
with the provisions of all federal, state, and local environmental, health, and
safety laws, codes and ordinances, and all rules and regulations issued
thereunder; notify the Lender promptly of any notice of a hazardous discharge or
environmental complaint received from any governmental agency or any other party
which could have a Material Adverse Change or result in a penalty, fine,
judgment or other liability in excess of $50,000; notify the Lender promptly of
any hazardous discharge from or affecting its premises which could have a
Material Adverse Change or result in a penalty, fine, judgment or other
liability in excess of $50,000; promptly contain and remove the same, to the
extent required by applicable laws; and promptly pay any fine or penalty
assessed in connection therewith.
6. NEGATIVE COVENANTS
The Borrower covenants and agrees with Lender that, so long as this
Agreement shall remain in effect or the principal of or interest on any Loan,
any Fees or any other expenses or amounts payable under any Loan Document shall
be unpaid, unless the Lender shall otherwise consent in writing, the Borrower
will not, and will not cause or permit any of the Subsidiaries to:
a. Indebtedness. Incur, create, assume or permit to exist any
indebtedness, except:
i. Indebtedness represented by the Note;
ii. Indebtedness for which the Financing Proceeds are paid solely to
Lender for application against, and to reduce the outstanding principal balance
of, the Loans; provided that if the Loans are not paid in full, the lender
providing such new loan proceeds will execute a subordination and standstill
agreement in favor of Lender and in such form reasonably acceptable to Lender;
iii. Indebtedness subordinated to the Loans pursuant to a subordination
and standstill agreement satisfactory to Lender; and iv. Any Acquired Practice
Obligations existing as of the date of this Agreement or any notes relating to
Put Payments owing to Glendale and Mississippi (as defined in Subparagraph (m)
of Article VII).
b. Liens. Create, incur, assume or permit to exist any Lien on any
property or assets of Borrower or any of its Subsidiaries which is now owned or
hereafter acquired by it or on any income or rights in respect of any thereof,
or enter into any agreement in favor of another party not to create, incur,
assume or permit any such Lien, except:
i. liens for taxes and other obligations not yet due or which are being
contested in compliance with Section 5.3;
ii. pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other social
security laws or regulations;
iii. zoning restrictions, easements, rights-of-way, restrictions on use
of real property and other similar encumbrances incurred in the ordinary course
of business which, in the aggregate, are not substantial in amount and do not
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the business of the Borrower or any of its
Subsidiaries; and
iv. liens which arise in the ordinary course of business for sums not
due or sums which the Company is contesting in good faith and by appropriate
proceedings and with respect to which the Company has made adequate reserves in
accordance with GAAP, but which do not involve any deposits or advances or
borrowed money or the deferred purchase price of property or services.
c. Sale and Lease-Back Transactions. Except for any sales and
leasebacks of assets in the ordinary course of business, enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.
d. Investments, Loans and Advances. Purchase, hold or acquire any
capital stock, evidences of indebtedness or other securities of, make or permit
to exist any loans or advances to shareholders, officers, directors or
Affiliates of Borrower, without Lender's prior approval, or make or permit to
exist any investment or any other interest in, any other person, except (1) a
direct obligation of the United States or any agency thereof with maturities of
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one year or less from the date of acquisition; (2) commercial paper of a
domestic issuer rated at least "A-1" by Standard & Poor's Corporation of "P-1"
by Xxxxx'x Investors Service, Inc.; (3) certificates of deposit with maturities
of one year or less from the date of acquisition issued by any commercial lender
or federal savings lender having capital and surplus in excess of $250,000,000;
(4) stocks, obligations, or securities received in settlement of debts (created
in the ordinary course of business) owing to the Borrower; and (5) those certain
loans or expense advances made to employees as of the date of this Agreement
which do not exceed, as of December 31, 2001, principal and accrued interest in
the aggregate amount of $288,000, together with any further interest accruing on
such loans thereafter; and (6) advances or loans (the "Dentist Advances") to an
Acquired Practice in an amount not to exceed $50,000 in the aggregate, provided
that the Dental Advances are evidenced by negotiable promissory notes, which
shall be pledged to Lender as further security for the Loans, in form reasonably
satisfactory to Lender.
e. Mergers, Consolidations and Sales of Assets. Merge into or
consolidate with any other person, or permit any other person to merge into or
consolidate with it, or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or any substantial part of its
assets (whether now owned or hereafter acquired) or any capital stock of any
Subsidiary, or purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any other
person, except that (a) the Borrower may purchase and sell inventory in the
ordinary course of business and (b) the Borrower may enter into one or more
Asset Sales provided that the Net Cash Proceeds are paid over to Lender for
application against the Loans, first to the payment of interest and other
charges due thereunder, and thereafter, against the principal payments due under
the Loans in the inverse order of payment dates.
f. Dividends and Distributions. Declare or pay, directly or indirectly,
any dividend or make any other distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, with
respect to any shares of its capital stock or directly or indirectly redeem,
purchase, repurchase, retire or otherwise acquire for value (or permit any
Subsidiary to purchase or acquire) any shares of any class of its capital stock
or set aside any amount for any such purpose; provided, however, that any
Subsidiary may declare and pay dividends or make other distributions to the
Borrower.
g. Transactions with Affiliates. Sell or transfer any property or
assets to, or purchase or acquire any property or assets of, or otherwise engage
in any other transactions with, any of its Affiliates, except that as long as no
Default or Event of Default shall have occurred and be continuing, the Borrower
or any Subsidiary may engage in any of the foregoing transactions in the
ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties.
h. Business of Borrower. Engage at any time in any business or business
activity other than the business currently conducted by it and business
activities reasonably incidental thereto and, if Borrower is in violation of any
of the financial covenants set forth herein, further expand as to the
acquisition of any Acquired Practices relating to its current business.
i. Total Funded Debt to EBITDA Ratio. The Borrower shall not permit the
ratio of its Total Funded Debt to its EBITDA, measured at the end of each fiscal
quarter, calculated on a rolling four quarter basis, to be greater than 2.00 to
1.00 through maturity of the Loans.
j. Capital Expenditures. Borrower shall not permit Capital
Expenditures, excluding Put Payments, to exceed $1,250,000, tested quarterly and
calculated on a rolling four quarter basis.
k. Total Fixed Charge Coverage Ratio. Borrower shall not permit, the
ratio of Operating Cash Flow to Total Fixed Charges to be less than 1.10 through
maturity of the Loans, to be tested at the end of each fiscal quarter,
calculated on a rolling four quarter basis.
l. Fixed Charge Covenant Ratio. Borrower shall not permit the ratio of
Operating Cash Flow to Fixed Charges to be less than 1.25 through maturity of
the Loans, to be tested at the end of each fiscal quarter, calculated on a
rolling four quarter basis.
m. Change in Management. Borrower shall not permit any Change in
Management.
7. EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
i. any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings hereunder, or any
representation, warranty, statement or information contained in any report,
certificate, financial statement or other instrument furnished in connection
with or pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made, deemed made or furnished;
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ii. default shall be made in the payment of any principal of any Loan
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration thereof or
otherwise and such default shall continue unremedied for a period of three (3)
Business Days;
iii. default shall be made in the payment of any interest on any Loan
or any Fee or any other amount (other than an amount referred to in (b) above)
due under any Loan Document, when and as the same shall become due and payable,
and such default shall continue unremedied for a period of three Business Days;
iv. default shall be made in the due observance or performance by the
Borrower or any Subsidiary of any covenant, condition or agreement contained in
Article V or in Article VI and such default shall continue unremedied for a
period of thirty (30) days after notice thereof from Lender to Borrower;
v. default shall be made in the due observance or performance by the
Borrower or any Subsidiary of any covenant, condition or agreement contained in
any Loan Document (other than those specified in (b), (c) or (d) above) and such
default shall continue unremedied for a period of thirty (30) days after notice
thereof from the Lender to the Borrower;
vi. the Borrower or any Subsidiary shall (i) fail to pay any principal
or interest, regardless of amount, due in respect of any indebtedness, when and
as the same shall become due and payable, or (ii) fail to observe or perform any
other term, covenant, condition or agreement which would constitute a default
under any agreement or instrument evidencing or governing any such indebtedness
after the expiration of any applicable notice and grace periods, if any;
vii. an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Borrower or any Subsidiary, or of a substantial part of the
property or assets of the Borrower or a Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law, (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of the property or
assets of the Borrower or a Subsidiary or (iii) the winding-up or liquidation of
the Borrower or any Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
viii. the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in (g) above, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or for a
substantial part of the property or assets of the Borrower or any Subsidiary,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action for the
purpose of effecting any of the foregoing;
ix. one or more judgments for the payment of money in an aggregate
amount in excess of $100,000.00 shall be rendered against the Borrower, any
Subsidiary or any combination thereof (unless Lender receives evidence
demonstrating, to Lender's satisfaction, that such judgment is fully insured),
subject to customary deductibles acceptable to Lender and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to levy, upon assets or properties of the Borrower or any Subsidiary to
enforce any such judgment;
x. a Reportable Event or Reportable Events, or a failure to make a
required payment (within the meaning of Section 412(n)(1)(A) of the Code), shall
have occurred with respect to any Plan or Plans that reasonably could be
expected to result in liability of the Borrower to the PBGC or to a Plan in an
aggregate amount exceeding $50,000.00 and, within 30 days after the reporting of
any such Reportable Event to the Lender or after the receipt by the Lender of
the statement required pursuant to Section 5.6, the Lender shall have notified
the Borrower in writing that (i) the Lender have made a determination that, on
the basis of such Reportable Event or Reportable Events or the failure to make a
required payment, there are reasonable grounds (A) for the termination of such
Plan or Plans by the PBGC, (B) for the appointment by the appropriate United
States District Court of a trustee to administer such Plan or Plans or (C) for
the imposition of a lien in favor of a Plan and (ii) as a result thereof an
Event of Default exists hereunder; or a trustee shall be appointed by a United
States District court to administer any such Plan or Plans; or the PBGC shall
institute proceedings to terminate any Plan or Plans;
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xi. there shall have occurred a Change in Management;
xii. Xxxx Xxxxxx has his license to practice dentistry revoked or
suspended in any manner during the term of the Loan;
xiii. Put Payments are made by Borrower to any Professional Corporation
during the term of the Loan other than to (i) Glendale Dental Group ("Glendale")
pursuant to that certain agreement dated February 11, 1999 between Borrower and
Glendale and (ii) Mississippi Dental Associates, P.C. ("Mississippi") pursuant
to that certain agreement dated September 28, 1998 between Borrower and
Mississippi;
then, and in every such event and at any time thereafter during the
continuance of such event, the Lender may by notice to the Borrower, take either
or both of the following actions, at the same or different times: (i) terminate
forthwith the Commitment, (ii) declare the Loans then outstanding to be
forthwith due and payable, whereupon the principal of the Loans, together with
accrued interest thereon and any unpaid accrued Fees and all other liabilities
of the Borrower accrued hereunder and under any other Loan Document, shall
become forthwith due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding; and in any event with respect to the Borrower
described in paragraph (g) or (h) above, the Commitment shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding, and (iii) take such other actions provided for in any
of the other Loan Documents.
8. MISCELLANEOUS
a. Notices. Notices and other communications provided for herein shall
be in writing and shall be delivered by hand or overnight courier service,
mailed or sent by telex, graphic scanning or other telegraphic communications
equipment of the sending party, as follows:
i. if to the Borrower, to it at 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxx 00000, Attention of Xxxxxx Xxxxx, Telecopy No. 000-000-0000,
with a copy to Xxxxxx X. Xxxxxxx, Esq., Holland & Xxxx LLP, Xxxx Xxxxxx Xxx
0000, Xxxxxx, Xxxxxxxx 00000.
ii. if to the Lender, to it at 0000 Xxxxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxx 00000, Attention of Xxxxxxxx Xxxxxx, Telecopy No. 000-000-0000, with a
copy to Lea Xxx X. Xxxxxxxx, Esq., Xxxxxxxxxx Hyatt & Xxxxxx, P.C. 000 00xx
Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxx 00000, Telecopy No. 303-223-1111.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telex, graphic scanning or other telegraphic communications equipment
of the sender, or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 8.1 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 8.1.
b. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Borrower herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied
upon by the Lender and shall survive the making by the Lender of the Loan, and
the execution and delivery to the Lender of the Note evidencing such Loan,
regardless of any investigation made by the Lender or on their behalf, and shall
continue in full force and effect as long as the principal of or any accrued
interest on any Loan or any Fee or any other amount payable under this Agreement
or any other Loan Document is outstanding and unpaid and so long as the
Commitments have not been terminated.
c. Binding Effect. This Agreement shall become effective when it shall
have been executed by the Borrower and the Lender, and thereafter shall be
binding upon and inure to the benefit of the Borrower and the Lender and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
consent of the Lender .
Successors and Assigns.
i. Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the successors and assigns of such
party; and all covenants, promises and agreements by or on behalf of the
Borrower or the Lender that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns.
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ii. Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loan at the time owing to it and the Note held
by it); provided, however, that Lender shall furnish notice to Borrower of any
such assignment no less than thirty (30) days in advance of making any such
assignment;
d. Expenses; Indemnity.
i. The Borrower agrees to pay all out-of-pocket expenses incurred by
the Lender in connection with the preparation of this Agreement and the other
Loan Documents or in connection with any amendments, modifications or waivers of
the provisions hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the Lender in connection with
the enforcement or protection of its rights in connection with this Agreement
and the other Loan Documents to the extent Lender prevails or in connection with
the Loan made or the Note issued hereunder, including the fees and disbursements
of Xxxxxxxxxx Hyatt & Xxxxxx, P.C., counsel for the Lender, and, in connection
with any such amendment, modification or waiver or any such enforcement or
protection, the fees and disbursements of any other counsel for the Lender. The
Borrower further agrees that it shall indemnify the Lender from and hold them
harmless against any documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and delivery of this Agreement
or any of the other Loan Documents.
ii. The Borrower agrees to indemnify the Lender and its directors,
officers, employees and agents (each such person being called an "Indemnitee")
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees and
expenses, incurred by or asserted against any Indemnitee arising out of, in any
way connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the transactions contemplated thereby, (ii)
the use of the proceeds of the Loan or (iii) any claim, litigation,
investigation or proceeding by a third party relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of any Indemnitee.
iii. The provisions of this Section 8.5 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loan, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Lender. All amounts due under this Section 8.5 shall
be payable on written demand therefor.
e. Right of Setoff. If an Event of Default shall have occurred and be
continuing Lender is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by Lender to or for the credit or the
account of the Borrower against any of and all the obligations of the Borrower
now or hereafter existing under this Agreement and other Loan Documents held by
Lender, irrespective of whether or not Lender shall have made any demand under
this Agreement or such other Loan Document and although such obligations may be
unmatured. The rights of Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which Lender may have.
f. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF COLORADO.
g. Waivers; Amendment.
i. No failure or delay of the Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
Lender hereunder and under the other Loan Documents are cumulative and exclusive
of any rights or remedies which they would otherwise have. No waiver of any
provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.
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No notice or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances. Each
holder of any of the Notes shall be bound by any amendment, modification, waiver
or consent authorized as provided herein, whether or not such Note shall have
been marked to indicate such amendment, modification, waiver or consent.
ii. Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Lender.
h. Interest Rate Limitation. Notwithstanding anything herein or in the
Notes to the contrary, if at any time the applicable interest rate, together
with all fees and charges which are treated as interest under applicable law
(collectively the "Charges"), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for, charged, received,
taken or reserved by Lender, shall exceed the maximum lawful rate (the "Maximum
Rate") which may be contracted for, charged, taken, received or reserved by
Lender in accordance with applicable law, the rate of interest payable under the
Note, together with all Charges payable to Lender, shall be limited to the
Maximum Rate.
i. Entire Agreement. This Agreement and the other Loan Documents
constitute the entire contract between the parties relative to the subject
matter hereof. Any previous agreement among the parties with respect to the
subject matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan Documents, expressed
or implied, is intended to confer upon any party other than the parties hereto
any rights, remedies, obligations or liabilities under or by reason of this
Agreement or the other Loan Documents.
j. Waiver of Jury Trial. Each party hereto hereby waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by
jury in respect of any litigation directly or indirectly arising out of, under
or in connection with this Agreement or any of the other Loan Documents. Each
party hereto (a) certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement and the other Loan Documents, as applicable, by, among other
things, the mutual waivers and certifications in this Section 8.11.
k. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
l. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 8.3.
m. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
Jurisdiction; Consent to Service of Process.
i. The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any Colorado State
court or Federal court of the United States of America sitting in Denver,
Colorado, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such Colorado State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that Lender may otherwise have to bring any action or proceeding relating
to this Agreement or the other Loan Documents against the Borrower or its
properties in the courts of any jurisdiction.
ii. The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this agreement or the other Loan Documents in any
Colorado State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense or an inconvenient
forum to the maintenance of such action or proceeding in any such court.
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iii. Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.1. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
XXXXXX DENTAL MANAGEMENT SERVICES, INC.,
a Colorado corporation
By: /s/ Xxxxxx X. Xxxxx
------------------------
Title: Chief Financial Officer
KEYBANK NATIONAL ASSOCIATION,
a national banking association
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------
Title: Vice President
