Exhibit 10.1

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AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of

 

February 22, 2005

 

among

 

AMERICAN DENTAL PARTNERS, INC.,

as Borrower

 

THE LENDING INSTITUTIONS NAMED HEREIN,

as Lenders

 

and

 

KEYBANK NATIONAL ASSOCIATION,

 

as a Letter of Credit Issuer and as the

Lead Arranger and Administrative Agent

 

$70,000,000 Revolving Facility

 

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TABLE OF CONTENTS

 

ARTICLE I.   DEFINITIONS AND TERMS    1

Section 1.1.

 

Certain Defined Terms

   1

Section 1.2.

 

Computation of Time Periods

   20

Section 1.3.

 

Accounting Terms

   21

Section 1.4.

 

Terms Generally

   21 ARTICLE II.   AMOUNT AND TERMS OF LOANS    21

Section 2.1.

 

Loans

   21

Section 2.2.

 

Borrowing, Continuation or Conversion of Loans

   21

Section 2.3.

 

Pro Rata Borrowings; Disbursement of Funds

   22

Section 2.4.

 

Evidence of Obligations

   23

Section 2.5.

 

Interest

   24

Section 2.6.

 

Increased Costs, Illegality, etc

   25

Section 2.7.

 

Breakage Compensation

   27

Section 2.8.

 

Change of Lending Office; Replacement of Lenders

   27 ARTICLE III.   LETTERS OF CREDIT    28

Section 3.1.

 

Letters of Credit

   28

Section 3.2.

 

Letter of Credit Requests: Notices of Issuance

   29

Section 3.3.

 

Agreement to Repay Letter of Credit Drawings

   29

Section 3.4.

 

Letter of Credit Participations

   30

Section 3.5.

 

Increased Costs

   32

Section 3.6.

 

Guaranty of Letter of Credit Obligations of Other Letter of Credit Obligors

   33 ARTICLE IV.   FEES; COMMITMENTS    35

Section 4.1.

 

Fees

   35

Section 4.2.

 

Voluntary Termination/Reduction of Commitments

   36

Section 4.3.

 

Mandatory Adjustments of Commitments, etc

   36 ARTICLE V.   PAYMENTS    36

Section 5.1.

 

Voluntary Prepayments

   36

Section 5.2.

 

Mandatory Prepayments

   37

Section 5.3.

 

Method and Place of Payment

   39

Section 5.4.

 

Net Payments.

   39 ARTICLE VI.   CONDITIONS PRECEDENT    41

Section 6.1.

 

Conditions Precedent at Closing Date

   41

Section 6.2.

 

Conditions Precedent to All Credit Events

   44

 

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ARTICLE VII.    REPRESENTATIONS AND WARRANTIES    44

Section 7.1.

  

Corporate Status, etc

   44

Section 7.2.

  

Corporate Power and Authority, etc

   44

Section 7.3.

  

No Violation

   45

Section 7.4.

  

Governmental Approvals

   45

Section 7.5.

  

Litigation

   45

Section 7.6.

  

Use of Proceeds; Margin Regulations

   45

Section 7.7.

  

Financial Statements, etc

   46

Section 7.8.

  

Solvency

   46

Section 7.9.

  

No Material Adverse Change

   47

Section 7.10.

  

Tax Returns and Payments

   47

Section 7.11.

  

Title to Properties, etc

   47

Section 7.12.

  

Lawful Operations, etc

   47

Section 7.13.

  

Environmental Matters

   47

Section 7.14.

  

Compliance with ERISA

   48

Section 7.15.

  

Intellectual Property, etc

   48

Section 7.16.

  

Investment Company Act, etc

   48

Section 7.17.

  

Insurance

   49

Section 7.18.

  

Certain Contracts; Labor Relations

   49

Section 7.19.

  

True and Complete Disclosure

   49

Section 7.20.

  

Management Service Agreements.

   49

Section 7.21.

  

Malpractice Insurance

   50 ARTICLE VIII.    AFFIRMATIVE COVENANTS    50

Section 8.1.

  

Reporting Requirements

   50

Section 8.2.

  

Books, Records and Inspections

   52

Section 8.3.

  

Insurance

   53

Section 8.4.

  

Payment of Taxes and Claims

   53

Section 8.5.

  

Corporate Franchises

   54

Section 8.6.

  

Good Repair

   54

Section 8.7.

  

Compliance with Statutes, etc

   54

Section 8.8.

  

Compliance with Environmental Laws

   54

Section 8.9.

  

Fiscal Years, Fiscal Quarters

   55

 

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Section 8.10.

  

Certain Subsidiaries to Join in Subsidiary Guaranty

   55

Section 8.11.

  

Additional Security; Further Assurances

   56

Section 8.12.

  

Casualty and Condemnation.

   58

Section 8.13.

  

Most Favored Covenant Status

   58

Section 8.14.

  

Senior Debt

   58

Section 8.15.

  

Management Service Agreements

   58 ARTICLE IX.    NEGATIVE COVENANTS    59

Section 9.1.

  

Changes in Business

   59

Section 9.2.

  

Consolidation, Merger, Acquisitions, Asset Sales, etc

   59

Section 9.3.

  

Liens

   60

Section 9.4.

  

Indebtedness

   61

Section 9.5.

  

Investments and Guaranty Obligations

   62

Section 9.6.

  

Dividends and Other Restricted Payments

   63

Section 9.7.

  

Financial Covenants

   63

Section 9.8.

  

Limitation on Certain Restrictive Agreements

   64

Section 9.9.

  

Prepayments and Refinancings of Other Debt, etc

   64

Section 9.10.

  

Transactions with Affiliates

   64

Section 9.11.

  

Plan Terminations, Minimum Funding, etc

   65 ARTICLE X.    EVENTS OF DEFAULT    65

Section 10.1.

  

Events of Default

   65

Section 10.2.

  

Acceleration, etc

   67

Section 10.3.

  

Application of Liquidation Proceeds

   68 ARTICLE XI.    THE ADMINISTRATIVE AGENT    69

Section 11.1.

  

Appointment

   69

Section 11.2.

  

Delegation of Duties

   69

Section 11.3.

  

Exculpatory Provisions

   69

Section 11.4.

  

Reliance by Administrative Agent

   70

Section 11.5.

  

Notice of Default

   70

Section 11.6.

  

Non-Reliance

   70

Section 11.7.

  

Indemnification

   71

Section 11.8.

  

The Administrative Agent in Individual Capacity

   71

Section 11.9.

  

Successor Administrative Agent

   71

 

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Section 11.10.

  

Other Agents

   72

Section 11.11.

  

No Reliance on Administrative Agent’s Customer Identification Program

   72

Section 11.12.

  

USA Patriot Act

   72 ARTICLE XII.    MISCELLANEOUS    73

Section 12.1.

  

Payment of Expenses etc

   73

Section 12.2.

  

Right of Setoff

   74

Section 12.3.

  

Notices

   74

Section 12.4.

  

Benefit of Agreement

   75

Section 12.5.

  

No Waiver; Remedies Cumulative

   78

Section 12.6.

  

Payments Pro Rata; Sharing of Setoffs, etc

   78

Section 12.7.

  

Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial

   79

Section 12.8.

  

Counterparts

   79

Section 12.9.

  

Integration

   80

Section 12.10.

  

Headings Descriptive

   80

Section 12.11.

  

Amendment or Waiver

   80

Section 12.12.

  

Survival of Indemnities

   81

Section 12.13.

  

Domicile of Loans

   82

Section 12.14.

  

Confidentiality

   82

Section 12.15.

  

Lender Register

   82

Section 12.16.

  

Limitations on Liability of the Letter of Credit Issuers

   83

Section 12.17.

  

General Limitation of Liability

   83

Section 12.18.

  

No Duty

   83

Section 12.19.

  

Lenders and Agent Not Fiduciary to Borrower, etc

   84

Section 12.20.

  

Survival of Representations and Warranties

   84

Section 12.21.

  

Severability

   84

Section 12.22.

  

Independence of Covenants

   84

Section 12.23.

  

Interest Rate Limitation

   84

Section 12.24.

  

USA Patriot Act Notification

   85

 

 

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Exhibit A   Note      Exhibit B-1   Notice of Borrowing, Continuation or
Conversion      Exhibit B-2   Letter of Credit Request      Exhibit C-1  
Amended and Restated Subsidiary Guaranty      Exhibit C-2   Amended and Restated
Pledge and Security Agreement      Exhibit D-1   Solvency Certificate     
Exhibit D-2   Closing Date Certificate      Exhibit E   Assignment Agreement   
  Schedule 1  

Lenders and Commitments

     Schedule 7.1  

Subsidiaries

     Schedule 7.20  

Management Service Agreements

     Schedule 9.3  

Liens

     Schedule 9.4  

Indebtedness

     Schedule 9.5  

Investments

    

 

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THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 22, 2005, among
the following:

 

(i) AMERICAN DENTAL PARTNERS, INC., a Delaware corporation (the “Borrower”);

 

(ii) the lending institutions from time to time party hereto (each a “Lender”
and collectively, the “Lenders”); and

 

(iii) KEYBANK NATIONAL ASSOCIATION, a national banking association, as a Lender,
a Letter of Credit Issuer, and the lead arranger and administrative agent (in
such capacity as administrative agent, the “Administrative Agent”).

 

PRELIMINARY STATEMENTS:

 

WHEREAS, the Borrower and certain lenders (the “Original Lenders”) are parties
to the Credit Agreement, dated as of the Original Closing Date (as amended, the
“Original Credit Agreement”);

 

WHEREAS, the Borrower has requested that the Original Credit Agreement be
amended and restated to make certain modifications thereto; and

 

WHEREAS, the Administrative Agent and the Lenders are willing to amend and
restate the Original Credit Agreement, upon the terms and subject to the
conditions set forth herein.

 

NOW, THEREFORE, it is agreed:

 

ARTICLE I.

 

DEFINITIONS AND TERMS

 

Section 1.1. Certain Defined Terms. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires:

 

“Acquisition” shall mean and include (whether in one transaction or a series of
transactions) (i) any acquisition on a going concern basis (whether by purchase,
lease or otherwise) of any facility and/or business or business unit operated by
any person that is not a Subsidiary of the Borrower, (ii) acquisitions of a
majority of the outstanding equity or other similar interests in any such person
(whether by merger, stock purchase or otherwise), (iii) the affiliation with a
dental group through the acquisition of selected assets consistent with the past
practices of the Borrower and (iv) any transaction in which the Borrower or any
Subsidiary enters into a Management Service Agreement or any similar agreement
or affiliation.

 

“Additional Security Document” shall have the meaning provided in Section
8.11(a).

 

“Adjusted Eurodollar Rate” shall mean, with respect to each Interest Period for
a Eurodollar Loan, (i) the rate per annum appearing on the applicable electronic
page of Reuter’s or Bloomberg’s (or any successor or substitute page of such
service, or any successor to or substitute for such service, providing rate
quotations comparable to those currently provided by such service, as determined
by the

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Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to Dollar deposits in the London interbank market), at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period, as the rate for Dollar deposits with a
maturity comparable to such Interest Period, divided (and rounded to the nearest
one hundreth of 1%) by (ii) a percentage equal to 100% minus the then stated
maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves and without benefit
of credits for proration, exceptions or offsets that may be available from time
to time) applicable to any member bank of the Federal Reserve System in respect
of Eurocurrency liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D); provided, however, that in the
event that the rate referred to in clause (i) above is not available at any such
time for any reason, then the rate referred to in clause (i) shall instead be
the average (rounded to the nearest ten thousandth of 1%) of the rates at which
Dollar deposits of $5,000,000 are offered to the Reference Banks in the London
interbank market at approximately 11:00 a.m. (London time), two Business Days
prior to the commencement of such Interest Period, for contracts that would be
entered into at the commencement of such Interest Period.

 

“Administrative Agent” shall have the meaning provided in the first paragraph of
this Agreement and shall include any successor to the Administrative Agent
appointed pursuant to Section 11.9.

 

“Affiliate” shall mean, with respect to any person, any other person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such person, or, in the case of any Lender that is an investment
fund, the investment advisor thereof and any investment fund having the same
investment advisor. A person shall be deemed to control a second person if such
first person possesses, directly or indirectly, the power (i) to vote 10% or
more of the securities having ordinary voting power for the election of
directors or managers of such second person or (ii) to direct or cause the
direction of the management and policies of such second person, whether through
the ownership of voting securities, by contract or otherwise. Notwithstanding
the foregoing, (x) a director, officer or employee of a person shall not, solely
by reason of such status, be considered an Affiliate of such person; and (y)
neither the Administrative Agent nor any Lender shall in any event be considered
an Affiliate of the Borrower or any other Credit Party or any of their
respective Subsidiaries.

 

“Agreement” shall mean this Amended and Restated Credit Agreement, as the same
may be from time to time further modified, amended, restated or supplemented.

 

“Annual Cap Ex Limit” shall have the meaning provided in Section 9.7(d).

 

“Anti-Terrorism Law” shall mean the USA Patriot Act or any other law pertaining
to the prevention of future acts of terrorism, in each case as such law may be
amended from time to time.

 

“Applicable Commitment Fee Rate” shall mean:

 

(i) Initially, until changed hereunder in accordance with the provisions set
forth in this definition, the Applicable Commitment Fee Rate shall be 37.50
basis points;

 

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(ii) Commencing with the fiscal quarter of the Borrower ended on December 31,
2004, and continuing with each fiscal quarter thereafter, the Administrative
Agent shall determine the Applicable Commitment Fee Rate in accordance with the
following matrix, based on the Leverage Ratio:

 

Leverage Ratio

--------------------------------------------------------------------------------

 

Applicable Commitment Fee Rate

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Greater than or equal to 2.75 to 1.00

  50.00 bps

Greater than 1.25 to 1.00, but less than 2.75 to 1.00

  37.50 bps

Less than or equal to 1.25 to 1.00

  25.00 bps

 

(iii) Changes in the Applicable Commitment Fee Rate based upon changes in the
Leverage Ratio shall become effective on the third Business Day following the
receipt by the Administrative Agent pursuant to Section 8.1(a) or (b) of the
financial statements of the Borrower, accompanied by the certificate and
calculations referred to in Section 8.1(c), demonstrating the computation of the
Leverage Ratio, based upon the Leverage Ratio in effect at the end of the
applicable period covered (in whole or in part) by such financial statements.
Notwithstanding the foregoing, during any period when (A) the Borrower has
failed to timely deliver its consolidated financial statements referred to in
Section 8.1(a) or (b), accompanied by the certificate and calculations referred
to in Section 8.1(c) or (B) an Event of Default has occurred and is continuing,
the Applicable Commitment Fee Rate shall be the highest rate per annum indicated
therefor in the above matrix, regardless of the Leverage Ratio at such time. Any
changes in the Applicable Commitment Fee Rate shall be determined by the
Administrative Agent in accordance with the provisions set forth in this
definition and the Administrative Agent will promptly provide notice of such
determinations to the Borrower and the Lenders. Any such determination by the
Administrative Agent shall be conclusive and binding absent manifest error.

 

“Applicable Lending Office” shall mean, with respect to each Lender, the office
or offices designated by such Lender to the Administrative Agent as such
Lender’s lending office or offices for purposes of this Agreement.

 

“Applicable Margin” shall mean:

 

(i) Initially, until changed hereunder in accordance with the following
provisions, the Applicable Margin shall be (A) 25.00 basis points for Base Rate
Loans, and (B) 125.00 basis points for Eurodollar Loans;

 

(ii) Commencing with the fiscal quarter of the Borrower ended on December 31,
2004, and continuing with each fiscal quarter thereafter, the Administrative
Agent shall determine the Applicable Margin in accordance with the following
matrix, based on the Leverage Ratio:

 

Leverage Ratio

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Applicable Margin for Base Rate Loans

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Applicable Margin for Eurodollar Loans

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Greater than or equal to

2.75 to 1.00

  100.00 bps   200.00 bps

Greater than or equal to

2.25 to 1.00, but less than 2.75 to 1.00

  75.00 bps   175.00 bps

Greater than or equal to

1.75 to 1.00, but less than 2.25 to 1.00

  50.00 bps   150.00 bps

 

3

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Leverage Ratio

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Applicable Margin for Base Rate Loans

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Applicable Margin for Eurodollar Loans

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Greater than 1.25 to 1.00,

but less than 1.75 to 1.00

  25.00 bps   125.00 bps

Less than or equal to 1.25 to 1.00

  0 bps   100.00 bps

 

(iii) Changes in the Applicable Margin based upon changes in the Leverage Ratio
shall become effective on the third Business Day following the receipt by the
Administrative Agent pursuant to Section 8.1(a) or (b) of the financial
statements of the Borrower, accompanied by the certificate and calculations
referred to in Section 8.1(c), demonstrating the computation of the Leverage
Ratio, based upon the Leverage Ratio in effect at the end of the applicable
period covered (in whole or in part) by such financial statements.
Notwithstanding the foregoing provisions, during any period when (A) the
Borrower has failed to timely deliver its consolidated financial statements
referred to in Section 8.1(a) or (b), accompanied by the certificate and
calculations referred to in Section 8.1(c), (B) a Default under Section 10.1(a)
has occurred and is continuing, or (C) an Event of Default has occurred and is
continuing, the Applicable Margin shall be the highest rate per annum indicated
therefor in the above matrix, regardless of the Leverage Ratio at such time. Any
changes in the Applicable Margin shall be determined by the Administrative Agent
in accordance with the provisions set forth in this definition and the
Administrative Agent will promptly provide notice of such determinations to the
Borrower and the Lenders. Any such determination by the Administrative Agent
shall be conclusive and binding absent manifest error.

 

“Approved Fund” shall mean a fund that is administered or managed by a Lender or
an Affiliate of a Lender.

 

“Asset Sale” shall mean the sale, transfer or other disposition (including by
means of Sale and Lease-Back Transactions, and by means of mergers,
consolidations, and liquidations of a corporation, partnership or limited
liability company of the interests therein of the Borrower or any Subsidiary) by
the Borrower or any Subsidiary to any person of any of their respective assets,
provided that the term Asset Sale specifically excludes (i) any sales, transfers
or other dispositions of inventory, or obsolete or excess furniture, fixtures,
equipment or other property, real or personal, tangible or intangible, in each
case in the ordinary course of business, and (ii) any Event of Loss.

 

“Assignment Agreement” shall mean an Assignment Agreement substantially in the
form of Exhibit E hereto.

 

“Authorized Officer” shall mean any of the following officers of the Borrower:
the Chief Executive Officer, the Chief Operating Officer, the Chief Financial
Officer, the Vice-President-Finance or the Treasurer or any other officer of the
Borrower performing a function similar to any of the foregoing that is
acceptable to the Administrative Agent.

 

“Bankruptcy Code” shall have the meaning provided in Section 10.1(h)(i).

 

“Base Rate” shall mean, for any period, a fluctuating interest rate per annum as
shall be in effect from time to time which rate per annum shall at all times be
equal to the greater of (i) the rate of interest established by KeyBank in
Cleveland, Ohio, from time to time, as its prime rate, whether or not publicly
announced, which interest rate may or may not be the lowest rate charged by it
for commercial loans or other extensions of credit; and (ii) the Federal Funds
Effective Rate in effect from time to time, determined one Business Day in
arrears, plus 1/2 of 1% per annum.

 

4

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“Base Rate Loan” shall mean each Loan bearing interest at a rate based upon the
Base Rate.

 

“Borrower” shall have the meaning provided in the first paragraph of this
Agreement.

 

“Borrowing” shall mean the incurrence of Loans consisting of one Type of Loan,
by the Borrower from all of the Lenders on a pro rata basis on a given date (or
resulting from Conversions or Continuations on a given date), having in the case
of Eurodollar Loans the same Interest Period.

 

“Business Day” shall mean (i) for all purposes other than as covered by clause
(ii) below, any day excluding Saturday, Sunday and any day that shall be in the
city in which the Payment Office is located a legal holiday or a day on which
banking institutions are authorized by law or other governmental actions to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day that
is a Business Day described in clause (i) and that is also a day for trading by
and between banks in Dollar deposits in the London interbank market.

 

“Capital Distribution” shall mean a payment made, liability incurred or other
consideration given as a dividend, return of capital or other distribution in
respect of the Borrower’s or any Subsidiary’s capital stock or other equity
interest.

 

“Capital Lease” as applied to any person shall mean any lease of any property
(whether real, personal or mixed) by that person as lessee that, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
person.

 

“Capitalized Lease Obligations” shall mean all obligations under Capital Leases
of the Borrower or any of its Subsidiaries in each case taken at the amount
thereof accounted for as liabilities identified as “capital lease obligations”
(or any similar words) on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with GAAP.

 

“Carryover” shall have the meaning provided in Section 9.7(d).

 

“Cash Equivalents” shall mean any of the following:

 

(i) securities issued or directly and fully guaranteed or insured by the United
States of America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in support
thereof) having maturities of not more than one year from the date of
acquisition;

 

(ii) Dollar denominated time deposits, certificates of deposit and bankers’
acceptances of (x) any Lender or (y) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from Moody’s is at
least P-1 or the equivalent thereof (any such bank, an “Approved Bank”), in each
case with maturities of not more than three months from the date of acquisition;

 

(iii) commercial paper issued by any Lender or Approved Bank or by the parent
company of any Lender or Approved Bank and commercial paper issued by, or
guaranteed by, any industrial or financial company with a short- term commercial
paper rating of at least A-1 or the equivalent thereof by S&P or at least P-1 or
the equivalent thereof by Moody’s, or guaranteed by any industrial company with
a long term unsecured debt rating of at least A or A-2, or the equivalent of
each thereof, from S&P or Moody’s, as the case may be, and in each case maturing
within 90 days after the date of acquisition;

 

5

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(iv) fully collateralized repurchase agreements entered into with any Lender or
Approved Bank having a term of not more than 30 days and covering securities
described in clause (i) above;

 

(v) investments in money market funds substantially all the assets of which are
comprised of securities of the types described in clauses (i) through (iv)
above;

 

(vi) investments in money market funds access to which is provided as part of
“sweep” accounts maintained with a Lender or an Approved Bank;

 

(vii) investments in industrial development revenue bonds that (A) “re-set”
interest rates not less frequently than quarterly, (B) are entitled to the
benefit of a remarketing arrangement with an established broker dealer, and (C)
are supported by a direct pay letter of credit covering principal and accrued
interest that is issued by an Approved Bank; and

 

(viii) investments in pooled funds or investment accounts consisting of
investments of the nature described in the foregoing clause (vii).

 

“Cash Proceeds” shall mean, with respect to (i) any Asset Sale, the aggregate
cash payments (including any cash received by way of deferred payment pursuant
to a note receivable issued in connection with such Asset Sale, other than the
portion of such deferred payment constituting interest, but only as and when so
received) received by the Borrower or any Subsidiary from such Asset Sale, and
(ii) any Event of Loss, the aggregate cash payments, including all insurance
proceeds and proceeds of any award for condemnation or taking, received in
connection with such Event of Loss.

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as the same may be amended from time to time, 42 U.S.C. §
9601 et seq.

 

“Change of Control” shall occur if:

 

(i) during any period of two consecutive calendar years, individuals who at the
beginning of such period constituted the Borrower’s Board of Directors (together
with any new directors (x) whose election by the Borrower’s Board of Directors
was, or (y) whose nomination for election by the Borrower’s shareholders was
(prior to the date of the proxy or consent solicitation relating to such
nomination), approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved), shall
cease for any reason to constitute a majority of the directors then in office;
or

 

(ii) any person or group (as such term is defined in Section 13(d)(3) of the
1934 Act), shall acquire, directly or indirectly, beneficial ownership (within
the meaning of Rule 13d-3 and 13d-5 of the 1934 Act) of more than 40%, on a
fully diluted basis, of the economic or voting interest in the Borrower’s
capital stock.

 

“Charges” shall have the meaning provided in Section 12.23.

 

“CIP Regulations” shall have the meaning provided in Section 11.11 hereof.

 

6

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“Claims” shall have the meaning set forth in the definition of “Environmental
Claims.”

 

“Closing Date” shall mean the date upon which the conditions specified in
Section 6.1 are satisfied.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and the rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the Closing Date and any
subsequent provisions of the Code, amendatory thereof, supplemental thereto or
substituted therefor.

 

“Collateral” shall mean any collateral covered by any Security Document.

 

“Commitment” shall mean, with respect to each Lender, the amount, if any, set
forth opposite such Lender’s name in Schedule 1 hereto as its “Commitment” as
the same may be reduced from time to time pursuant to Section 4.2, 4.3 and/or
10.2 or adjusted from time to time as a result of assignments to or from such
Lender pursuant to Section 12.4(i).

 

“Commitment Percentage” shall mean, at any time for any Lender with a
Commitment, the percentage obtained by dividing such Lender’s Commitment by the
Total Commitment, provided, that if the Total Commitment has been terminated,
the Commitment Percentage for each Lender shall be determined by dividing such
Lender’s Commitment immediately prior to such termination by the Total
Commitment immediately prior to such termination.

 

“Commitment Fees” shall have the meaning provided in Section 4.1(a).

 

“Confidential Information” shall have the meaning provided in Section 12.14(b).

 

“Consideration” shall mean, in connection with an Acquisition, the aggregate
consideration paid, including borrowed funds, cash, the issuance of securities
or notes, the assumption or incurring of liabilities (direct or contingent), the
payment of consulting fees or fees for a covenant not to compete and any other
consideration paid for the purchase.

 

“Consolidated Capital Expenditures” shall mean, for any period, the aggregate of
all expenditures (whether paid in cash or accrued as liabilities and including
in all events amounts expended or capitalized under Capital Leases and Synthetic
Leases but excluding any amount representing capitalized interest) by the
Borrower and its Subsidiaries during that period that, in conformity with GAAP,
are or are required to be included in the property, plant or equipment reflected
in the consolidated balance sheet of the Borrower and its Subsidiaries.

 

“Consolidated Depreciation and Amortization Expense” shall mean, for any period,
all depreciation and amortization expenses of the Borrower and its Subsidiaries,
all as determined for the Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP.

 

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period; plus (A) the sum of the amounts for such period included in
determining such Consolidated Net Income of (i) Consolidated Interest Expense,
(ii) Consolidated Income Tax Expense, (iii) Consolidated Depreciation and
Amortization Expense, and (iv) extraordinary and other non-recurring non-cash
losses and charges; less (B) gains on sales of assets and other extraordinary
gains and other non-recurring gains; all as determined for the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP; provided that,
notwithstanding anything to the contrary contained herein, the Borrower’s
Consolidated EBITDA for any Testing Period shall (x) include the appropriate
financial items for any person or

 

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business unit that has been acquired by the Borrower for any portion of such
Testing Period prior to the date of acquisition (but excluding anticipated
operating synergies), and (y) exclude the appropriate financial items for any
person or business unit that has been disposed of by the Borrower, for the
portion of such Testing Period prior to the date of disposition, in the case of
clauses (x) and (y), subject to the Administrative Agent’s reasonable discretion
and supporting documentation acceptable to the Administrative Agent.

 

“Consolidated Income Tax Expense” shall mean, for any period, all provisions for
taxes based on the net income of the Borrower or any of its Subsidiaries
(including, without limitation, any additions to such taxes, and any penalties
and interest with respect thereto), all as determined for the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP.

 

“Consolidated Interest Expense” shall mean, for any period, total interest
expense (including that which is capitalized, that which is attributable to
Capital Leases or Synthetic Leases and the pre-tax equivalent of dividends
payable on Redeemable Stock) of the Borrower and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of the Borrower
and its Subsidiaries including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and net costs
under Hedge Agreements.

 

“Consolidated Net Income” shall mean for any period, the net income (or loss) of
the Borrower and its Subsidiaries on a consolidated basis for such period taken
as a single accounting period determined in conformity with GAAP.

 

“Consolidated Net Worth” shall mean at any time for the determination thereof
all amounts that, in conformity with GAAP, would be included under the caption
“total stockholders’ equity” (or any like caption) on a consolidated balance
sheet of the Borrower as at such date, provided that in no event shall
Consolidated Net Worth include any amounts in respect of Redeemable Stock.

 

“Consolidated Net Rent Expense” shall mean, for any period, the total amount of
rent or similar obligations required to be paid during such period by the
Borrower or any of its Subsidiaries in respect of Operating Leases, as
determined on a consolidated basis for such period taken as a single accounting
period determined in conformity with GAAP, but only to the extent such rent or
similar obligations are not reimbursed to the Borrower or any of its
Subsidiaries pursuant to the terms of a Management Service Agreement.

 

“Consolidated Total Debt” shall mean the sum (without duplication) of all
Indebtedness of the Borrower and of each of its Subsidiaries, all as determined
on a consolidated basis.

 

“Continue,” “Continuation” and “Continued” each refers to a continuation of
Eurodollar Loans for an additional Interest Period as provided in Section 2.2.

 

“Convert,” “Conversion” and “Converted” each refers to a conversion of Loans of
one Type into Loans of another Type, pursuant to Section 2.2 or 2.6(b).

 

“Credit Documents” shall mean this Agreement, the Notes, the Subsidiary
Guaranty, the Security Documents and any Letter of Credit Document.

 

“Credit Event” shall mean any Borrowing, Conversion or Continuation or the
issuance of any Letter of Credit or amendment to any Letter of Credit Document
that increases the Stated Amount of any Letter of Credit, or renews or extends
the expiry date of any Letter of Credit.

 

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“Credit Party” shall mean any of the Borrower and each Subsidiary Guarantor.

 

“Default” shall mean any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.

 

“Defaulting Lender” shall mean any Lender with respect to which a Lender Default
is in effect.

 

“Designated Hedge Agreement” shall mean any Hedge Agreement to which the
Borrower or any of its Subsidiaries is a party and as to which a Lender or any
of its Affiliates is a counterparty that, pursuant to a written instrument
signed by the Administrative Agent, has been designated as a Designated Hedge
Agreement so that the Borrower’s or Subsidiaries’ counterparty’s credit exposure
thereunder will be entitled to share in the benefits of the Subsidiary Guaranty
and the Security Documents to the extent the Subsidiary Guaranty and such
Security Documents provide guarantees or security for creditors of the Borrower
or any Subsidiary under Designated Hedge Agreements.

 

“Dollars” and the sign “$” each means lawful money of the United States.

 

“Domestic Subsidiary” shall mean any Subsidiary organized under the laws of the
United States of America, any State thereof, the District of Columbia, or any
United States possession.

 

“Eligible Assignee” means (a) a Lender (other than a Defaulting Lender), (b) an
Affiliate of a Lender (other than a Defaulting Lender), (c) an Approved Fund,
and (d) any other person (other than a natural person) approved by (i) the
Administrative Agent, (ii) each Letter of Credit Issuer, and (iii) unless an
Event of Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrower or any of the Borrower’s Affiliates or Subsidiaries

 

“Environmental Claims” shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations or proceedings relating in any way
to any Environmental Law or any permit issued under any such law (hereafter
“Claims”), including, without limitation, (i) any and all Claims by governmental
or regulatory authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any applicable Environmental Law, and
(ii) any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
the storage, treatment or Release (as defined in CERCLA) of any Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment.

 

“Environmental Law” shall mean any applicable Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy and rule of common law now or
hereafter in effect and in each case as amended, and any binding and enforceable
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment issued to or rendered against
the Borrower or any of its Subsidiaries relating to the environment, employee
health and safety or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, 33 U.S.C. § 2601 et seq.; the
Clean Air Act, 42 U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C.
§ 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. §
11001 et seq., the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et
seq. and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. (to the
extent it regulates occupational exposure to Hazardous Materials); and any state
and local or foreign counterparts or equivalents, in each case as amended from
time to time.

 

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“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the
Closing Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.

 

“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA),
which together with the Borrower or a Subsidiary, would be deemed to be a
“single employer” (i) within the meaning of Section 414(b), (c), (m) or (o) of
the Code or (ii) as a result of the Borrower or a Subsidiary being or having
been a general partner of such person.

 

“Eurodollar Loans” shall mean each Loan bearing interest at a rate based on the
Adjusted Eurodollar Rate.

 

“Event of Default” shall have the meaning provided in Section 10.1.

 

“Event of Loss” shall mean, with respect to any property, (i) the actual or
constructive total loss of such property or the use thereof, resulting from
destruction, damage beyond repair, or the rendition of such property permanently
unfit for normal use from any casualty or similar occurrence whatsoever, (ii)
the destruction or damage of a portion of such property from any casualty or
similar occurrence whatsoever under circumstances in which such damage cannot
reasonably be expected to be repaired, or such property cannot reasonably be
expected to be restored to its condition immediately prior to such destruction
or damage, within 90 days after the occurrence of such destruction or damage,
(iii) the condemnation, confiscation or seizure of, or requisition of title to
or use of, any property, or (iv) in the case of any property located upon a
Leasehold, the termination or expiration of such Leasehold.

 

“Excluded Subsidiary” shall mean American Dental Partners of Ohio, Inc., a
Delaware corporation.

 

“Exemption Certificate” shall have the meaning provided in Section 5.4(b).

 

“Facility” shall mean the credit facility evidenced by the Total Commitment.

 

“Facility Termination Date” shall mean the earlier of (i) February 22, 2008, or
(ii) the date that the Total Commitment is terminated pursuant to Section 10.2
hereof.

 

“Fronting Fee” shall have the meaning provided in Section 4.1(c).

 

“Federal Funds Effective Rate” shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.

 

“Fees” shall mean all amounts payable pursuant to, or referred to in, Section
4.1, together with any other fees payable pursuant to this Agreement or any
other Credit Document.

 

“Financial Projections” shall have the meaning provided in Section 7.7(b).

 

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“Fixed Charge Coverage Ratio” shall mean, for any Testing Period, the ratio of
(a) the sum of (i) Consolidated EBITDA and (ii) Consolidated Net Rent Expense to
(b) the sum of (i) Consolidated Interest Expense, (ii) Consolidated Income Tax
Expense, (iii) Maintenance Capital Expenditures, (iv) scheduled or mandatory
repayments or prepayments (excluding voluntary repayments or prepayments of any
Loans without a corresponding permanent reduction of the Commitments) or
redemptions of the principal of Indebtedness and the stated or liquidation value
of Redeemable Stock (including required reductions in committed credit
facilities), (v) without duplication of any amount included under the preceding
clause (iv), scheduled payments representing the principal portion of
Capitalized Leases and Synthetic Leases, (vi) the aggregate amount of Capital
Distributions made by the Borrower, if any, (vii) the aggregate amount of Share
Repurchases made by the Borrower, if any, and (viii) Consolidated Net Rent
Expense, in each case on a consolidated basis for the Borrower and its
Subsidiaries for such Testing Period; provided that, notwithstanding anything to
the contrary contained herein, the Borrower’s Fixed Charge Coverage Ratio for
any Testing Period shall (x) include the appropriate financial items for any
person or business unit that has been acquired by the Borrower for any portion
of such Testing Period prior to the date of acquisition (but excluding
anticipated operating synergies), and (y) exclude the appropriate financial
items for any person or business unit that has been disposed of by the Borrower,
for the portion of such Testing Period prior to the date of disposition, in the
case of clauses (x) and (y), subject to the Administrative Agent’s reasonable
discretion and supporting documentation acceptable to the Administrative Agent

 

“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic
Subsidiary.

 

“GAAP” shall mean generally accepted accounting principles in the United States
of America as in effect from time to time.

 

“Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Guaranty Obligations” shall mean as to any person (without duplication) any
obligation of such person guaranteeing any Indebtedness (“primary Indebtedness”)
of any other person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, any obligation of such person,
whether or not contingent, (a) to purchase any such primary Indebtedness or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary Indebtedness or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary Indebtedness of the ability of the primary obligor
to make payment of such primary Indebtedness, or (d) otherwise to assure or hold
harmless the owner of such primary Indebtedness against loss in respect thereof;
provided, however, that the Guaranty Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of business. The
amount of any Guaranty Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary Indebtedness (or stated portion
thereof) in respect of which such Guaranty 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.

 

“Hazardous Materials” shall mean (i) any petrochemical or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
and (ii) any chemicals, materials or substances defined as or included in the

 

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definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,”
“restricted hazardous materials,” “extremely hazardous wastes,” “restrictive
hazardous wastes,” “toxic substances,” “toxic pollutants,” “contaminants” or
“pollutants,” or words of similar meaning and regulatory effect, under any
applicable Environmental Law.

 

“Hedge Agreement” shall mean (i) any interest rate swap agreement, any interest
rate cap agreement, any interest rate collar agreement or other similar
agreement or arrangement designed to protect against fluctuations in interest
rates, and (ii) any currency swap agreement, forward currency purchase agreement
or similar agreement or arrangement designed to protect against fluctuations in
currency exchange rates.

 

“Indebtedness” of any person shall mean without duplication: (i) all
indebtedness of such person for borrowed money; (ii) all bonds, notes,
debentures and similar debt securities of such person; (iii) the deferred
purchase price of capital assets or services that in accordance with GAAP would
be shown on the liability side of the balance sheet of such person; (iv) the
face amount of all letters of credit issued for the account of such person and,
without duplication, all drafts drawn thereunder; (v) all obligations,
contingent or otherwise, of such person in respect of bankers’ acceptances; (vi)
all Indebtedness of a second person secured by any Lien on any property owned by
such first person, whether or not such indebtedness has been assumed; (vii) all
Capitalized Lease Obligations of such person; (viii) the present value,
determined on the basis of the implicit interest rate, of all basic rental
obligations under all Synthetic Leases of such person; (ix) all obligations of
such person to pay a specified purchase price for goods or services whether or
not delivered or accepted, i.e., take-or-pay and similar obligations; (x) all
net obligations of such person under Hedge Agreements; (k) the full outstanding
balance of trade receivables, notes or other instruments sold with full recourse
(and the portion thereof subject to potential recourse, if sold with limited
recourse), other than in any such case any thereof sold solely for purposes of
collection of delinquent accounts; (xi) the stated value, or liquidation value
if higher, of all Redeemable Stock of such person; and (xii) all Guaranty
Obligations of such person (without duplication under clause (vi)); provided,
however that (x) neither trade payables nor other similar accrued expenses, in
each case arising in the ordinary course of business, nor obligations in respect
of insurance policies or performance or surety bonds that themselves are not
guarantees of Indebtedness (nor drafts, acceptances or similar instruments
evidencing the same nor obligations in respect of letters of credit supporting
the payment of the same), shall constitute Indebtedness; and (y) the
Indebtedness of any person shall in any event include (without duplication) the
Indebtedness of any other entity (including any general partnership in which
such person is a general partner) to the extent such person is liable thereon as
a result of such person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide expressly
that such person is not liable thereon.

 

“Interest Period” shall mean, with respect to each Eurodollar Loan, a period of
one, two, three or six months as selected by the Borrower, provided that (i) the
initial Interest Period for any Borrowing of Eurodollar Loans shall commence on
the date of such Borrowing (the date of a Borrowing resulting from a Conversion
or Continuation shall be the date of such Conversion or Continuation) and each
Interest Period occurring thereafter in respect of such Borrowing shall commence
on the day on which the next preceding Interest Period expires; (ii) if any
Interest Period begins on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month; (iii) if any
Interest Period would otherwise expire on a day that is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day, provided that
if any Interest Period would otherwise expire on a day that is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business Day;
(iv) no Interest Period for any Eurodollar Loan may be selected that would end
after the Facility Termination Date; and (v) if, upon the expiration of any
Interest Period, the Borrower has failed to (or may not) elect a new Interest
Period to be applicable

 

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to the respective Borrowing of Eurodollar Loans as provided above, the Borrower
shall be deemed to have elected to Convert such Borrowing to a Base Rate Loan
effective as of the expiration date of such current Interest Period.

 

“Investment” shall mean: (i) any direct or indirect purchase or other
acquisition by the Borrower or any of its Subsidiaries of any of the capital
stock or other equity interest of any other person (other than a person that is,
or after giving effect to such purchase or acquisition would be, a Subsidiary
Guarantor), including any partnership or joint venture interest in such person;
or (ii) any loan or advance to, guarantee or assumption of debt or purchase or
other acquisition of any other debt of, any person (other than a person that is,
or after giving effect to such loan, advance or capital contribution would be, a
Subsidiary Guarantor), by the Borrower or any of its Subsidiaries.

 

“KeyBank” shall mean KeyBank National Association, a national banking
association, together with its successors and assigns.

 

“Leaseholds” of any person means all the right, title and interest of such
person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.

 

“Lender” shall have the meaning provided in the first paragraph of this
Agreement, and shall include any Lender that becomes a party hereto pursuant to
Section 12.4(c).

 

“Lender Default” shall mean (i) the refusal (which has not been retracted) of a
Lender in violation of the requirements of this Agreement to make available its
portion of any incurrence of Loans or to fund its portion of any unreimbursed
payment under Section 3.4(c) or (ii) a Lender having notified the Administrative
Agent that it does not intend to comply with the obligations under Section 2.1
and/or Section 3.4(c), in the case of either (i) or (ii) as a result of the
appointment of a receiver or conservator with respect to such Lender at the
direction or request of any regulatory agency or authority.

 

“Lender Register” shall have the meaning provided in Section 12.15.

 

“Letter of Credit” shall have the meaning provided in Section 3.1(a).

 

“Letter of Credit Commitment Amount” shall mean $3,000,000.

 

“Letter of Credit Documents” shall have the meaning specified in Section 3.2(a).

 

“Letter of Credit Fee” shall have the meaning provided in Section 4.1(b).

 

“Letter of Credit Issuer” shall mean (i) KeyBank or any of its Affiliates, or
(ii) if KeyBank is unable or unwilling to issue any given Letter of Credit, such
other Lender that is requested, and agrees, to so act by the Borrower, and is
approved by the Administrative Agent.

 

“Letter of Credit Obligor” shall have the meaning provided in Section 3.1(a).

 

“Letter of Credit Outstandings” shall mean, at any time, the sum, without
duplication, of (i) the aggregate Stated Amount of all outstanding Letters of
Credit and (ii) the aggregate amount of all Unpaid Drawings.

 

“Letter of Credit Request” shall have the meaning provided in Section 3.2(a).

 

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“Leverage Ratio” shall mean, for any Testing Period, the ratio of (i)
Consolidated Total Debt to (ii) Consolidated EBITDA, in each case on a
consolidated basis for the Borrower and its Subsidiaries for such Testing
Period.

 

“Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement or any lease in the nature
thereof).

 

“Loan” shall have the meaning provided in Section 2.1.

 

“Maintenance Capital Expenditures” shall mean, for any period, any Consolidated
Capital Expenditures made by the Borrower or any of its Subsidiaries that are
necessary to maintain the existing operations of the Borrower and its
Subsidiaries on an ongoing basis and incurred during such period.

 

“Management Service Agreement” shall have the meaning provided in Section 7.20.

 

“Management Service Agreement Termination Event” shall mean, with respect to any
Management Service Agreement, the occurrence of any event that allows any party
to such Management Service Agreement the right to terminate such Management
Service Agreement.

 

“Margin Stock” shall have the meaning provided in Regulation U.

 

“Material Adverse Effect” shall mean any or all of the following: (i) any
material adverse effect on the business, operations, property, assets,
liabilities, financial or other condition, or prospects of, the Borrower or the
Borrower and its Subsidiaries, taken as a whole; (ii) any material adverse
effect on the ability of the Borrower or any other Credit Party to perform any
of its obligations under the Credit Documents to which it is a party; (iii) any
material adverse effect on the ability of the Borrower and its Subsidiaries,
taken as a whole, to pay their liabilities and obligations as they mature or
become due; or (iv) any material adverse effect on the validity, effectiveness
or enforceability, as against any Credit Party, of any of the Credit Documents
to which it is a party.

 

“Maximum Rate” shall have the meaning provided in Section 12.23.

 

“Minimum Borrowing Amount” shall mean, with respect to Base Rate Loans,
$250,000, with minimum increments thereafter of $50,000, and with respect to
Eurodollar Loans, $1,000,000, with minimum increments thereafter of $100,000.

 

“Moody’s” shall mean Moody’s Investors Service, Inc. and its successors.

 

“Multiemployer Plan” shall mean a multiemployer plan, as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making or
accruing an obligation to make contributions or has within any of the preceding
three plan years made or accrued an obligation to make contributions.

 

“Multiple Employer Plan” shall mean an employee benefit plan, other than a
Multiemployer Plan, to which the Borrower or any ERISA Affiliate, and one or
more employers other than the Borrower or an ERISA Affiliate, is making or
accruing an obligation to make contributions or, in the event that any such plan
has been terminated, to which the Borrower or an ERISA Affiliate made or accrued
an obligation to make contributions during any of the five plan years preceding
the date of termination of such plan.

 

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“Net Cash Proceeds” shall mean, with respect to: (i) any Asset Sale, the Cash
Proceeds resulting therefrom net of (A) reasonable and customary expenses of
sale incurred in connection with such Asset Sale, and other reasonable and
customary fees and expenses incurred, and all state, and local taxes paid or
reasonably estimated to be payable by such person, as a consequence of such
Asset Sale and the payment of principal, premium and interest of Indebtedness
(other than the Obligations) secured by the asset that is the subject of the
Asset Sale and required to be, and that is, repaid under the terms thereof as a
result of such Asset Sale, (B) amounts of any distributions payable to holders
of minority interests in the relevant person or in the relevant property or
assets and (C) incremental federal, state and local income taxes paid or payable
as a result thereof; and (ii) any Event of Loss, the Cash Proceeds resulting
therefrom net of (A) reasonable and customary expenses incurred in connection
with such Event of Loss, and local taxes paid or reasonably estimated to be
payable by such person, as a consequence of such Event of Loss and the payment
of principal, premium and interest of Indebtedness (other than the Obligations)
secured by the asset that is the subject of the Event of Loss and required to
be, and that is, repaid under the terms thereof as a result of such Event of
Loss, (B) amounts of any distributions payable to holders of minority interests
in the relevant person or in the relevant property or assets and (C) incremental
federal, state and local income taxes paid or payable as a result thereof.

 

“1934 Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Non-Defaulting Lender” shall mean each Lender other than a Defaulting Lender.

 

“Note” shall have the meaning provided in Section 2.4(d).

 

“Notice of Borrowing, Continuation or Conversion” shall have the meaning
provided in Section 2.2(b).

 

“Notice Office” shall mean the office of the Administrative Agent at Key Center,
127 Public Square, Cleveland, Ohio 44114, Attention: KCIB Healthcare Group
(facsimile: (216) 689-8329), or such other office, located in a city in the
United States Eastern Time Zone, as the Administrative Agent may designate to
the Borrower from time to time.

 

“Obligations” shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing by the
Borrower or any other Credit Party to the Administrative Agent, any Lender or
any Letter of Credit Issuer pursuant to the terms of this Agreement or any other
Credit Document (including, but not limited to, interest and fees that accrue
after the commencement by or against any Credit Party of any insolvency
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding).

 

“Operating Lease” as applied to any person shall mean any lease of any property
(whether real, personal or mixed) by that person as lessee that, in conformity
with GAAP, is not accounted for as a Capital Lease on the balance sheet of that
person.

 

“Original Closing Date” shall mean October 16, 2003.

 

“Original Credit Agreement” shall have the meaning provided in the recitals to
this Agreement.

 

“Participant” shall have the meaning provided in Section 3.4(a).

 

“Payment Office” shall mean the office of the Administrative Agent at Key
Center, 127 Public Square, Cleveland, Ohio 44114, Attention: KCIB Healthcare
Group (facsimile: (216) 689-8329), or such other office, located in a city in
the United States Eastern Time Zone, as the Administrative Agent may designate
to the Borrower from time to time.

 

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“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.

 

“Permitted Acquisition” shall mean and include any Acquisition as to which all
of the following conditions are satisfied:

 

(i) such Acquisition (A) involves a line or lines of business that are
complementary to the lines of business in which the Borrower and its
Subsidiaries, considered as an entirety, are engaged on the Closing Date, and
(B) involves a person or a line or lines of business that are located and
operated in the United States;

 

(ii) the aggregate Consideration for such Acquisition, when added together with
the aggregate Consideration for all other Permitted Acquisitions made during the
same fiscal year as such Acquisition (excluding any Acquisitions made prior to
the Closing Date), shall not exceed $20,000,000;

 

(iii) no Default or Event of Default shall exist prior to or immediately after
giving effect to such Acquisition;

 

(iv) the Borrower would, after giving effect to such Acquisition, on a pro forma
basis, be in compliance with the financial covenants set forth in Section 9.7;

 

(v) at least five Business Days prior to the completion of such Acquisition
(other than an acquisition of patient records in which the aggregate
consideration is less than $250,000), the Borrower shall have delivered to the
Administrative Agent and the Lenders (A) in the case of any Acquisition in which
the aggregate Consideration to be paid is in excess of $1,000,000 (or in the
case of any Acquisition in which the Consideration to be paid, together with the
aggregate Consideration paid in connection with all other Permitted Acquisitions
made during the same fiscal quarter as such Acquisition, is in excess of the
aggregate amount of $1,000,000), a certificate of an Authorized Officer
demonstrating, in reasonable detail, the computation of the financial covenants
referred to in Section 9.7 on a pro forma basis, and (B) in the case of any
Acquisition in which the aggregate Consideration is in excess of $5,000,000,
historical financial statements relating to the business or person to be
acquired, financial projections relating to the Borrower and its Subsidiaries
after giving effect to such Acquisition and such other information as the
Administrative Agent may reasonably request; and

 

(vi) any Management Service Agreement entered into by the Borrower or any of its
Subsidiaries in connection with such Acquisition is collaterally assignable to
the Administrative Agent without the consent of any party to such Management
Service Agreement, subject to any restrictions under applicable law.

 

“Permitted Lien” shall mean any Lien permitted by Section 9.3.

 

“Permitted Prepayment Amount” shall mean an amount equal to $452,466.

 

“Person” shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other entity or
any government or political subdivision or any agency, department or
instrumentality thereof.

 

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“Plan” shall mean any multiemployer or single-employer plan, as defined in
Section 4001 of ERISA, that is maintained or contributed to by (or to which
there is an obligation to contribute by) the Borrower, or a Subsidiary or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, or a Subsidiary or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan.

 

“Prepaid Subordinated Indebtedness” shall mean unsecured Subordinated
Indebtedness incurred by the Borrower and its Subsidiaries prior to the date of
the Original Closing Date in accordance with Section 9.4 of the Original Credit
Agreement.

 

“Primary Indebtedness” shall have the meaning provided in the definition of
“Guaranty Obligations.”

 

“Primary obligor” shall have the meaning provided in the definition of “Guaranty
Obligations.”

 

“Prohibited Transaction” shall mean a transaction with respect to a Plan that is
prohibited under Section 4975 of the Code or Section 406 of ERISA and not exempt
under Section 4975 of the Code or Section 408 of ERISA.

 

“RCRA” shall mean the Resource Conservation and Recovery Act, as the same may be
amended from time to time, 42 U.S.C. § 6901 et seq.

 

“Real Property” of any person shall mean all of the right, title and interest of
such person in and to land, improvements and fixtures, including Leaseholds.

 

“Redeemable Stock” shall mean with respect to any person any capital stock or
similar equity interests of such person that: (i) is by its terms subject to
mandatory redemption, in whole or in part, pursuant to a sinking fund, scheduled
redemption or similar provisions, at any time prior to the Facility Termination
Date; or (ii) otherwise is required to be repurchased or retired on a scheduled
date or dates, upon the occurrence of any event or circumstance, at the option
of the holder or holders thereof, or otherwise, at any time prior to the
Facility Termination Date, other than any such repurchase or retirement
occasioned by a “change of control” or similar event.

 

“Reference Banks” shall mean (i) KeyBank and (ii) any other Lender or Lenders
selected as a Reference Bank by the Administrative Agent.

 

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof establishing reserve requirements.

 

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof establishing margin requirements.

 

“Related Parties” shall mean, with respect to any person, such person’s
Affiliates and the directors, officers, employees, agents and advisors of such
person and of such Affiliate.

 

“Reportable Event” shall mean an event described in Section 4043 of ERISA or the
regulations thereunder with respect to a Plan, other than those events as to
which the notice requirement is waived under subsections .22, .23, .25, .27,
.28, .29, .30, .31, .32, .34, .35, .62, .63, .64, .65 or .67 of PBGC Regulation
Section 4043.

 

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“Required Lenders” shall mean Non-Defaulting Lenders whose outstanding Loans and
Unutilized Commitments constitute at least 66% of the sum of the total
outstanding Loans and Unutilized Commitments of Non-Defaulting Lenders.

 

“Restricted Payment” shall mean (i) any Capital Distribution, (ii) any Share
Repurchase, (iii) any amount paid in redemption (including any mandatory
redemption or optional redemption), retirement, repurchase, direct or indirect,
of any Subordinated Indebtedness, or (iv) the exercise of any right of legal
defeasance or covenant defeasance or similar right with respect to any
Subordinated Indebtedness.

 

“Sale and Lease-Back Transaction” shall mean any arrangement with any person
providing for the leasing by the Borrower or any Subsidiary of any property
(except for temporary leases for a term, including any renewal thereof, of not
more than one year and except for leases between the Borrower and a Subsidiary
or between Subsidiaries), which property has been or is to be sold or
transferred by the Borrower or such Subsidiary to such person.

 

“S&P” shall mean Standard & Poor’s Ratings Group, a division of McGraw Hill,
Inc., and its successors.

 

“SEC” shall mean the United States Securities and Exchange Commission.

 

“SEC Regulation D” shall mean Regulation D as promulgated under the Securities
Act of 1933, as amended, as the same may be in effect from time to time.

 

“Security Agreement” shall have the meaning provided in Section 6.1(d).

 

“Security Documents” shall mean the Security Agreement, and each other document
pursuant to which any Lien or security interest (i) is granted by any Credit
Party to the Administrative Agent or (ii) is perfected, in each case as security
for any of the Obligations.

 

“Share Repurchase” shall mean the purchase, acquisition, repurchase, redemption
or retirement by the Borrower or any of its Subsidiaries of any issued and
outstanding capital stock or other equity interests of the Borrower or any of
its Subsidiaries.

 

“Standard Permitted Liens” shall mean the following:

 

(i) Liens for taxes not yet delinquent or Liens for taxes being contested in
good faith and by appropriate proceedings for which adequate reserves in
accordance with GAAP have been established;

 

(ii) Liens in respect of property or assets imposed by law that were incurred in
the ordinary course of business, such as carriers’, warehousemen’s,
materialmen’s and mechanics’ Liens and other similar Liens arising in the
ordinary course of business, that do not in the aggregate materially detract
from the value of such property or assets or materially impair the use thereof
in the operation of the business of the Borrower or any Subsidiary and do not
secure any Indebtedness;

 

(iii) Liens created by this Agreement or the other Credit Documents;

 

(iv) Liens arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default under Section 10.1(g);

 

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(v) Liens (other than any Lien imposed by ERISA) incurred or deposits made in
the ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security; and Liens to secure
the performance of tenders, statutory obligations, contract bids, government
contracts, performance and return-of-money bonds and other similar obligations,
incurred in the ordinary course of business (exclusive of obligations in respect
of the payment for borrowed money), whether pursuant to statutory requirements,
common law or consensual arrangements;

 

(vi) Leases or subleases granted in the ordinary course of business to others
not interfering in any material respect with the business of the Borrower or any
of its Subsidiaries and any interest or title of a lessor under any lease not in
violation of this Agreement;

 

(vii) easements, rights-of-way, zoning or other restrictions, charges,
encumbrances, defects in title, prior rights of other persons, and obligations
contained in similar instruments, in each case that do not involve, and are not
likely to involve at any future time, either individually or in the aggregate,
(A) a substantial and prolonged interruption or disruption of the business
activities of the Borrower and its Subsidiaries, or (B) a Material Adverse
Effect;

 

(viii) Liens arising from the rights of lessors under leases (including
financing statements regarding property subject to lease) permitted pursuant to
this Agreement, provided that such Liens are only in respect of the property
subject to, and secure only, the respective lease (and any other lease with the
same or an affiliated lessor); and

 

(ix) rights of consignors of goods, whether or not perfected by the filing of a
financing statement under the UCC.

 

“Stated Amount” of each Letter of Credit shall mean the maximum amount available
to be drawn thereunder (regardless of whether any conditions or other
requirements for drawing could then be met).

 

“Subordinated Indebtedness” shall mean any Indebtedness that has been
subordinated to the Obligations in such manner and to such extent as the
Administrative Agent (acting on instructions from the Required Lenders) may
require.

 

“Subsidiary” of any person shall mean and include (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such person directly or
indirectly through Subsidiaries, and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such person
directly or indirectly through Subsidiaries, has more than a 50% equity interest
at the time or in which the Borrower, one or more other subsidiaries of the
Borrower or the Borrower and one or more subsidiaries of the Borrower, directly
or indirectly, has the power to direct the policies, management and affairs
thereof; provided, however, that notwithstanding the foregoing, the Excluded
Subsidiary shall not be deemed a Subsidiary hereunder unless or until the
Excluded Subsidiary is required to become a Subsidiary Guarantor pursuant to
Section 8.10 hereof. Unless otherwise expressly provided, all references herein
to “Subsidiary” shall mean a Subsidiary of the Borrower.

 

“Subsidiary Guarantor” shall mean any Subsidiary that is a party to the
Subsidiary Guaranty.

 

“Subsidiary Guaranty” shall have the meaning provided in Section 6.1(d).

 

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“Synthetic Lease” shall mean any lease (i) that is accounted for by the lessee
as an Operating Lease, and (ii) under which the lessee is intended to be the
“owner” of the leased property for Federal income tax purposes.

 

“Taxes” shall have the meaning provided in Section 5.4(a).

 

“Testing Period” shall mean for any determination a single period consisting of
the four consecutive fiscal quarters of the Borrower then last ended (whether or
not such quarters are all within the same fiscal year), except that if a
particular provision of this Agreement indicates that a Testing Period shall be
of a different specified duration, such Testing Period shall consist of the
particular fiscal quarter or quarters then last ended that are so indicated in
such provision.

 

“Total Commitment” shall mean the aggregate amount of the Commitments of the
Lenders, as such commitment may be decreased pursuant to the terms of this
Agreement. The amount of the Total Commitment on the Closing Date is
$70,000,000.

 

“Type” shall mean any type of Loan determined with respect to the interest
option applicable thereto, i.e., a Base Rate Loan or a Eurodollar Loan.

 

“UCC” shall mean the Uniform Commercial Code as in effect from time to time.
Unless otherwise specified, the UCC shall refer to the UCC as in effect in the
State of Ohio.

 

“Unfunded Current Liability” of any Plan shall mean the amount, if any, by which
the actuarial present value of the accumulated plan benefits under the Plan as
of the close of its most recent plan year exceeds the fair market value of the
assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan’s actuary in the most recent annual valuation of the Plan.

 

“United States” and “U.S.” each means United States of America.

 

“Unpaid Drawing” shall have the meaning provided in Section 3.3(a).

 

“Unutilized Commitment” for any Lender at any time shall mean the excess of (i)
such Lender’s Commitment at such time over (ii) the sum of (x) the principal
amount of Loans made by such Lender and outstanding at such time and (y) such
Lender’s Commitment Percentage of Letter of Credit Outstandings at such time.

 

“Unutilized Total Commitment” shall mean, at any time, the excess of (i) the
Total Commitment at such time over (ii) the sum of (x) the aggregate principal
amount of all Loans then outstanding plus (y) the aggregate Letter of Credit
Outstandings at such time.

 

“USA Patriot Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act)
Act of 2001.

 

Section 1.2. Computation of Time Periods. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
“from” means “from and including,” the words “to” and “until” each mean “to but
excluding” and the word “through” means “through and including.”

 

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Section 1.3. Accounting Terms. Except as otherwise specifically provided herein,
all terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time.

 

Section 1.4. Terms Generally. The definitions of terms herein shall apply
equally to 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.” The word “will”
shall be construed to have the same meaning and effect as the word “shall.”
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth herein), (b) any
reference herein to any person shall be construed to include such person’s
successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein
to Sections, Schedules and Exhibits shall be construed to refer to Sections of,
and Schedules and Exhibits to, this Agreement, and (e) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all real property, tangible and intangible assets and properties,
including cash, securities, accounts and contract rights, and interests in any
of the foregoing.

 

ARTICLE II.

 

AMOUNT AND TERMS OF LOANS

 

Section 2.1. Loans. Subject to and upon the terms and conditions herein set
forth, each Lender severally agrees to make a loan or loans (each a “Loan” and,
collectively, the “Loans”) to the Borrower, which Loans shall be drawn, to the
extent such Lender has a Commitment, as hereinafter provided. Loans: (i) may be
incurred by the Borrower at any time and from the Closing Date until the
Facility Termination Date; (ii) except as otherwise provided herein, may, at the
option of the Borrower, be incurred and maintained as, or Converted into, Loans
that are Base Rate Loans or Eurodollar Loans, in each case denominated in
Dollars, provided that all Loans made as part of the same Borrowing shall,
unless otherwise specifically provided herein, consist of Loans of the same
Type; (iii) may be repaid or prepaid and re-borrowed in accordance with the
provisions hereof; and (iv) shall not exceed for any Lender at any time
outstanding that aggregate principal amount that, when added to the product at
such time of (A) such Lender’s Commitment Percentage, times (B) the aggregate
Letter of Credit Outstandings, equals the Commitment of such Lender at such
time. In addition, no Loans shall be incurred at any time if, after giving
effect thereto, the Borrower would be required to prepay Loans in accordance
with Section 5.2(b).

 

Section 2.2. Borrowing, Continuation or Conversion of Loans.

 

(a) Borrowings, Continuations and Conversions. The Borrower may, in accordance
with the provisions set forth in this Section and subject to the other terms and
conditions of this Agreement, (i) request Borrowings, (ii) Convert all or a
portion of the outstanding principal amount of Loans of one Type into a
Borrowing or Borrowings of another Type of Loans that can be made pursuant to
the Facility and (iii) Continue a Borrowing of Eurodollar Loans at the end of
the applicable Interest Period as a new Borrowing of Eurodollar Loans with a new
Interest Period, provided that (A) any Conversion of Eurodollar Loans into Base
Rate Loans shall be made on, and only on, the last day of an Interest Period for
such Eurodollar Loans, (B) Base Rate Loans may only be Converted into Eurodollar
Loans if no

 

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Default under Section 10.1(a) or Event of Default is in existence on the date of
the Conversion unless the Required Lenders otherwise agree, and (C) Base Rate
Loans may not be Converted into Eurodollar Loans during any period when such
Conversion is not permitted under Section 2.6.

 

(b) Notice of Borrowings, Continuation and Conversion. Each Borrowing,
Continuation or Conversion of a Loan shall be made upon notice in the form
provided for below, which notice shall be provided by the Borrower to the
Administrative Agent at its Notice Office not later than (i) in the case of each
Borrowing or Continuation of or Conversion into a Eurodollar Loan, 12:00 noon
(local time at its Notice Office) at least three Business Days’ prior to the
date of such Borrowing, Continuation or Conversion, and (ii) in the case of each
Borrowing of or Conversion to a Base Rate Loan, 12:00 noon (local time at its
Notice Office) on the proposed date of such Borrowing or Conversion. Each such
request shall be made by an Authorized Officer delivering written notice of such
request substantially in the form of Exhibit B-1 hereto (each such notice, a
“Notice of Borrowing, Continuation or Conversion”) or by telephone (to be
confirmed immediately in writing by delivery of an Authorized Officer of a
Notice of Borrowing, Continuation or Conversion), and in any event each such
request shall be irrevocable and shall specify (A) the aggregate principal
amount of the Loans to be made (which shall be in the Minimum Borrowing Amount)
pursuant to such Borrowing or, if applicable, the Borrowings to be Continued or
Converted, (B) the date of the Borrowing, Continuation or Conversion (which
shall be a Business Day), (C) whether the Borrowing will consist of Base Rate
Loans or Eurodollar Loans or, in the case of a Continuation or Conversion, the
Loans to be Continued or Converted, and (D) if applicable, the initial Interest
Period thereto or, in the case of a Continuation, the new Interest Period.
Without in any way limiting the obligation of the Borrower to confirm in writing
any telephonic notice permitted to be given hereunder, the Administrative Agent
may act prior to receipt of written confirmation without liability upon the
basis of such telephonic notice believed by the Administrative Agent in good
faith to be from an Authorized Officer of the Borrower entitled to give
telephonic notices under this Agreement on behalf of the Borrower. In each such
case, the Administrative Agent’s record of the terms of such telephonic notice
shall be conclusive absent manifest error.

 

(c) Minimum Borrowing Amount. The aggregate principal amount of each Borrowing
by the Borrower shall not be less than the Minimum Borrowing Amount. No partial
Conversion of a Borrowing of Eurodollar Loans shall reduce the outstanding
principal amount of the Eurodollar Loans made pursuant to such Borrowing to less
than the Minimum Borrowing Amount applicable thereto.

 

(d) Maximum Borrowings. More than one Borrowing may be incurred by the Borrower
on any day, provided that (i) if there are two or more Borrowings on a single
day by the Borrower that consist of Eurodollar Loans, each such Borrowing shall
have a different initial Interest Period, and (ii) at no time shall there be
more than six Borrowings of Eurodollar Loans outstanding hereunder.

 

(e) Notice to Lenders. The Administrative Agent shall promptly give each Lender
written notice (or telephonic notice promptly confirmed in writing) of (i) each
proposed Borrowing, (ii) such Lender’s proportionate share thereof and (iii) the
other matters covered by the Notice of Borrowing, Continuation or Conversion
relating thereto.

 

Section 2.3. Pro Rata Borrowings; Disbursement of Funds.

 

(a) Loans to be Made Pro Rata. The obligation of each Lender to make Loans
hereunder and the Commitment of each Lender are several and not joint
obligations. All Borrowings shall be made by the Lenders pro rata on the basis
of their respective Commitments. It is understood that no Lender shall be
responsible for any default by any other Lender in its obligation to make Loans
hereunder and that each Lender shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to
fulfill its Commitment.

 

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(b) Funding of Loans. No later than 2:00 P.M. (local time at the Payment Office)
on the date specified in each Notice of Borrowing, Continuation or Conversion,
each Lender will make available its pro rata share, if any, of each Borrowing
requested to be made on such date in the manner provided below. All amounts
shall be made available to the Administrative Agent in Dollars and immediately
available funds at the Payment Office, and the Administrative Agent shall
promptly make available to the Borrower by depositing to its account at the
Payment Office the aggregate of the amounts so made available in the type of
funds received.

 

(c) Advance Funding. Unless the Administrative Agent shall have been notified by
any Lender prior to the date of Borrowing that such Lender does not intend to
make available to the Administrative Agent its portion of the Borrowing or
Borrowings to be made on such date, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent on such
date of Borrowing, and the Administrative Agent, in reliance upon such
assumption, may (in its sole discretion and without any obligation to do so)
make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Lender
and the Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount from
such Lender. If such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent’s demand therefor, the Administrative Agent shall
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent shall
also be entitled to recover from such Lender or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (x) if paid by such Lender,
the overnight Federal Funds Effective Rate or (y) if paid by the Borrower, the
then applicable rate of interest, calculated in accordance with Section 2.5, for
the respective Loans (but without any requirement to pay any amounts in respect
thereof pursuant to Section 2.7).

 

(d) Rights Not Prejudiced. Nothing herein and no subsequent termination of the
Commitments pursuant to Section 4.2 or 4.3 shall be deemed to relieve any Lender
from its obligation to fulfill its commitments hereunder and in existence from
time to time or to prejudice any rights that the Borrower may have against any
Lender as a result of any default by such Lender hereunder.

 

Section 2.4. Evidence of Obligations.

 

(a) Loan Accounts of Lenders. The Obligations of the Borrower owing to each
Lender hereunder shall be evidenced by, and each Lender shall maintain in
accordance with its usual practice, an account or accounts established by such
Lender, which account or accounts shall include the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

 

(b) Loan Accounts of Administrative Agent. The Administrative Agent shall
maintain accounts in which it shall record (i) the amount of each Loan made
hereunder, the Type thereof, and the Interest Period and applicable interest
rate if such Loan is a Eurodollar Loan, (ii) the amount of any principal due and
payable or to become due and payable from the Borrower to each Lender hereunder,
and (iii) the amount of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender’s share thereof.

 

(c) Effect of Loan Accounts, etc. The entries made in the accounts maintained
pursuant to Section 2.4(a) and (b) shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided, that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay or prepay the Loans or any such other amounts in accordance with the
terms of this Agreement.

 

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(d) Notes. Upon request of any Lender, the Borrower’s obligation to pay the
principal of, and interest on, the Loans made to it by each Lender shall be
evidenced by a promissory note of the Borrower substantially in the form of
Exhibit A with blanks appropriately completed in conformity herewith (each a
“Note” and, collectively, the “Notes”), provided that the decision of any Lender
to not request a Note shall in no way detract from the Borrower’s obligation to
repay the Loans and other amounts owing by the Borrower to such Lender. Any Note
issued by the Borrower to a Lender shall: (i) be executed by the Borrower; (ii)
be payable to the order of such Lender and be dated as of the Closing Date (or
in the case of any Note issued in connection with an Assignment Agreement, the
effective date of such Assignment Agreement); (iii) be payable in the principal
amount of Loans evidenced thereby; (iv) mature on the Facility Termination Date;
(v) bear interest as provided in Section 2.5 in respect of the Base Rate Loans
or Eurodollar Loans, as the case may be, evidenced thereby; (vi) be subject to
mandatory prepayment as provided in Section 5.2; and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.

 

Section 2.5. Interest.

 

(a) Interest on Base Rate Loans. During such periods as a Loan is a Base Rate
Loan, it shall bear interest at a fluctuating rate per annum that shall at all
times be equal to the Base Rate in effect from time to time plus the Applicable
Margin in effect from time to time for such Loan.

 

(b) Interest on Eurodollar Loans. During such periods as a Loan is a Eurodollar
Loan, it shall bear interest at a rate per annum that shall at all times during
an Interest Period therefor be the relevant Adjusted Eurodollar Rate for such
Eurodollar Loan for such Interest Period plus the Applicable Margin in effect
from time to time for such Loan.

 

(c) Default Interest. Notwithstanding the above provisions, if a Default under
Section 10.1(a) or Event of Default is in existence, all outstanding amounts of
principal and, to the extent permitted by law, all overdue interest, in respect
of each Loan shall bear interest, payable on demand, at a rate per annum equal
to 2% per annum above the interest rate that is or would be applicable from time
to time pursuant to Section 2.5(a). If any amount (other than the principal of
and interest on the Loans) payable by the Borrower under the Credit Documents is
not paid when due, such amount shall bear interest, payable on demand, at a rate
per annum equal to 2% per annum above the interest rate that is or would be
applicable from time to time pursuant to Section 2.5(a).

 

(d) Accrual and Payment of Interest. Interest shall accrue from and including
the date of any Borrowing to but excluding the date of any prepayment or
repayment thereof and shall be payable:

 

(i) in respect of each Base Rate Loan, quarterly in arrears on the last Business
Day of each March, June, September and December,

 

(ii) in respect of each Eurodollar Loan, on the last day of each Interest Period
applicable thereto and, in the case of an Interest Period in excess of three
months, on the dates that are successively three months after the commencement
of such Interest Period, and

 

(iii) on any repayment, prepayment or Conversion (on the amount repaid, prepaid
or Converted), at maturity (whether by acceleration or otherwise) and, after
such maturity, on demand.

 

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(e) Computations of Interest. All computations of interest on Eurodollar Loans
and other amounts (other than Base Rate Loans) hereunder shall be made on the
actual number of days elapsed over a year of 360 days, and all computations of
interest on Base Rate Loans hereunder shall be made on the actual number of days
elapsed over a year of 365 or 366 days, as applicable.

 

(f) Information as to Interest Rates. The Administrative Agent upon determining
the interest rate for any Borrowing or any change in interest rate applicable to
any Borrowing as a result of a change in the Applicable Margin, a change in the
Base Rate, the implementation of the default rate or otherwise, shall promptly
notify the Borrower and the Lenders thereof, provided that (i) any such change
shall be immediately effective as and when such change occurs without regard to
when the Administrative Agent provides any such notice, and (ii) the failure of
the Administrative Agent to give any such notice shall in no way detract from or
affect the obligation of the Borrower to pay interest at the changed rate. If
the Administrative Agent is unable to determine the Adjusted Eurodollar Rate for
any Borrowing of Eurodollar Loans based on the quotation service referred to in
clause (i) of the definition of the term Adjusted Eurodollar Rate, it will
promptly so notify the Reference Banks and each Reference Bank will furnish the
Administrative Agent timely information for the purpose of determining the
Adjusted Eurodollar Rate for such Borrowing. If any one or more of the Reference
Banks shall not timely furnish such information, the Administrative Agent shall
determine the Adjusted Eurodollar Rate for such Borrowing on the basis of timely
information furnished by the remaining Reference Banks.

 

Section 2.6. Increased Costs, Illegality, etc.

 

(a) In the event that (x) in the case of clause (i) below, the Administrative
Agent or (y) in the case of clauses (ii) and (iii) below, any Lender, shall have
determined on a reasonable basis (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto):

 

(i) on any date for determining the Adjusted Eurodollar Rate for any Interest
Period that, by reason of any changes arising after the Closing Date affecting
the London interbank market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of Adjusted Eurodollar Rate; or

 

(ii) at any time, that such Lender shall incur increased costs or reductions in
the amounts received or receivable hereunder in an amount that such Lender deems
material with respect to any Eurodollar Loans (other than any increased cost or
reduction in the amount received or receivable resulting from the imposition of
or a change in the rate of taxes or similar charges) because of (x) any change
since the Closing Date in any applicable law, governmental rule, regulation,
guideline, order or request (whether or not having the force of law), or in the
interpretation or administration thereof and including the introduction of any
new law or governmental rule, regulation, guideline, order or request (such as,
for example, but not limited to, a change in official reserve requirements, but,
in all events, excluding reserves includable in the Eurodollar Rate pursuant to
the definition thereof) or (y) other circumstances adversely affecting the
London interbank market or the position of such Lender in such market; or

 

(iii) at any time, that the making or continuance of any Eurodollar Loan has
become unlawful by compliance by such Lender in good faith with any change since
the Closing Date in any law, governmental rule, regulation, guideline or order,
or the interpretation or application thereof, or would conflict with any thereof
not having the force of law but with which such Lender customarily complies or
has become impracticable as a result of a contingency occurring after the
Closing Date that materially adversely affects the London interbank market;

 

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then, and in each such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on or promptly following such date or time
and (y) within 10 Business Days of the date on which such event no longer exists
give notice (by telephone confirmed in writing) to the Borrower and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such notice by the Administrative
Agent no longer exist, and any Notice of Borrowing, Notice of Conversion or
Notice of Continuation given by the Borrower with respect to Eurodollar Loans
that have not yet been incurred, Converted or Continued shall be deemed
rescinded by the Borrower or, in the case of a Notice of Borrowing, shall, at
the option of the Borrower, be deemed converted into a Notice of Borrowing for
Base Rate Loans to be made on the date of Borrowing contained in such Notice of
Borrowing, (y) in the case of clause (ii) above, the Borrower shall pay to such
Lender, upon written demand therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender shall determine) as shall be required to compensate such Lender,
for such increased costs or reductions in amounts receivable hereunder (a
written notice as to the additional amounts owed to such Lender, showing the
basis for the calculation thereof, which basis must be reasonable, submitted to
the Borrower by such Lender shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) and (z) in the case of clause
(iii) above, the Borrower shall take one of the actions specified in Section
2.6(b) as promptly as possible and, in any event, within the time period
required by law.

 

(b) At any time that any Eurodollar Loan is affected by the circumstances
described in Section 2.6(a)(ii) or (iii), the Borrower may (and in the case of a
Eurodollar Loan affected pursuant to Section 2.6(a)(iii) the Borrower shall)
either (i) if the affected Eurodollar Loan is then being made pursuant to a
Borrowing, by giving the Administrative Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
a Lender pursuant to Section 2.6(a)(ii) or (iii), cancel said Borrowing, convert
the related Notice of Borrowing into one requesting a Borrowing of Base Rate
Loans or require the affected Lender to make its requested Loan as a Base Rate
Loan, or (ii) if the affected Eurodollar Loan is then outstanding, upon at least
one Business Day’s notice to the Administrative Agent, require the affected
Lender to Convert each such Eurodollar Loan into a Base Rate Loan, provided that
if more than one Lender is affected at any time, then all affected Lenders must
be treated the same pursuant to this Section 2.6(b).

 

(c) If any Lender shall have determined that after the Closing Date, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
by law with the interpretation or administration thereof, or compliance by such
Lender or its parent corporation with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank, or comparable agency, in each case made subsequent to the Closing Date,
has or would have the effect of reducing by an amount reasonably deemed by such
Lender to be material the rate of return on such Lender’s or its parent
corporation’s capital or assets as a consequence of such Lender’s commitments or
obligations hereunder to a level below that which such Lender or its parent
corporation could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender’s or its parent corporation’s
policies with respect to capital adequacy), then from time to time, within 15
days after demand by such Lender (with a copy to the Administrative Agent), the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or its parent corporation for such reduction. Each
Lender, upon determining in good faith that any additional amounts will be
payable pursuant to this Section 2.6(c), will give prompt written notice thereof
to the Borrower, which notice shall set forth, in reasonable detail, the basis
of the calculation of such additional amounts, which basis must be reasonable,
although the failure to give any such notice shall not release or diminish any
of the Borrower’s obligations to pay additional amounts pursuant to this Section
2.6(c) upon the subsequent receipt of such notice.

 

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(d) Notwithstanding anything in this Agreement to the contrary, (i) no Lender
shall be entitled to compensation or payment or reimbursement of other amounts
under Section 3.5 or 5.4 for any amounts incurred or accruing more than 270 days
prior to the giving of notice to the Borrower of additional costs or other
amounts of the nature described in such Sections, and (ii) no Lender shall
demand compensation for any reduction referred to in Section 2.6(c) or payment
or reimbursement of other amounts under Section 3.5 or 5.4 if it shall not at
the time be the general policy or practice of such Lender to demand such
compensation, payment or reimbursement in similar circumstances under comparable
provisions of other credit agreements.

 

Section 2.7. Breakage Compensation. The Borrower shall compensate each Lender,
upon its written request (which request shall set forth the detailed basis for
requesting and the method of calculating such compensation), for all reasonable
losses, costs, expenses and liabilities (including, without limitation, any
loss, cost, expense or liability incurred by reason of the liquidation or
reemployment of deposits or other funds required by such Lender to fund its
Eurodollar Loans) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender or the Administrative Agent) a Borrowing of
Eurodollar Loans does not occur on a date specified therefor in a Notice of
Borrowing, Notice of Conversion or Notice of Continuation (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 2.6(a)); (ii)
if any repayment, prepayment, Conversion or Continuation of any of its
Eurodollar Loans occurs on a date that is not the last day of an Interest Period
applicable thereto; (iii) if any prepayment of any of its Eurodollar Loans is
not made on any date specified in a notice of prepayment given by the Borrower;
(iv) as a result of an assignment by a Lender of any Eurodollar Loan other than
on the last day of the Interest Period applicable thereto pursuant to a request
by the Borrower pursuant to Section 2.8(b); or (v) as a consequence of (x) any
other default by the Borrower to repay or prepay its Eurodollar Loans when
required by the terms of this Agreement or (y) an election made pursuant to
Section 2.6(b). Such loss, cost, expense and liability to any Lender shall be
deemed to include an amount determined by such Lender to be the excess, if any,
of (i) the amount of interest that would have accrued on the principal amount of
such Loan had such event not occurred, at the interest rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to effect a Borrowing, Conversion or Continuation, for the period that would
have been the Interest Period for such Loan), over (ii) the amount of interest
that would accrue on such principal amount for such period at the interest rate
that such Lender would bid were it to bid, at the commencement of such period,
for dollar deposits of a comparable amount and period from other banks in the
eurodollar market. A certificate of any Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this Section shall
be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such request
within 10 days after receipt thereof.

 

Section 2.8. Change of Lending Office; Replacement of Lenders.

 

(a) Each Lender agrees that, upon the occurrence of any event giving rise to the
operation of Sections 2.6(a)(ii) or (iii), 2.6(c), 3.5 or 5.4 with respect to
such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
Applicable Lending Office for any Loans or Commitment affected by such event,
provided that such designation is made on such terms that such Lender and its
Applicable Lending Office suffer no economic, legal or regulatory disadvantage,
with the object of avoiding the consequence of the event giving rise to the
operation of any such Section.

 

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(b) If any Lender requests any compensation, reimbursement or other payment
under Sections 2.6(a)(ii) or (iii), 2.6(c) or 3.5 with respect to such Lender,
or if the Borrower is required to pay any additional amount to any Lender or
governmental authority pursuant to Section 5.4, or if any Lender is a Defaulting
Lender, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with the restrictions contained in
Section 12.4(c)), all its interests, rights and obligations under this Agreement
to an Eligible Assignee that shall assume such obligations; provided that (i)
the Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not be unreasonably withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts,
including any breakage compensation under Section 2.7 hereof), and (iii) in the
case of any such assignment resulting from a claim for compensation,
reimbursement or other payments required to be made under Section 2.6(a)(ii) or
(iii), 2.6(c) or 3.5 with respect to such Lender, or resulting from any required
payments to any Lender or governmental authority pursuant to Section 5.4, such
assignment will result in a reduction in such compensation, reimbursement or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.

 

(c) Nothing in this Section 2.8 shall affect or postpone any of the obligations
of the Borrower or the right of any Lender provided in Section 2.6, 3.5 or 5.4.

 

ARTICLE III.

 

LETTERS OF CREDIT

 

Section 3.1. Letters of Credit.

 

(a) Subject to and upon the terms and conditions herein set forth, the Borrower
may request a Letter of Credit Issuer at any time and from time to time on or
after the Closing Date and prior to the date that is 60 Business Days prior to
the Facility Termination Date to issue, for the account of the Borrower or any
Subsidiary Guarantor (the Borrower or any such Subsidiary Guarantor, a “Letter
of Credit Obligor”), and subject to and upon the terms and conditions herein set
forth, such Letter of Credit Issuer agrees to issue from time to time,
irrevocable standby letters of credit denominated and payable in Dollars in such
form as may be approved by such Letter of Credit Issuer and the Administrative
Agent (each such letter of credit (a “Letter of Credit” and collectively, the
“Letters of Credit”).

 

(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued, and
the Stated Amount of any outstanding Letter of Credit shall not be increased, if
after giving effect thereto the Letter of Credit Outstandings would exceed
either (x) the Letter of Credit Commitment Amount (y) when added to the
aggregate principal amount of all Loans then outstanding, an amount equal to the
Total Commitment at such time; (ii) no individual Letter of Credit shall be
issued that has an initial Stated Amount less than $100,000 unless such lesser
Stated Amount is acceptable to the Letter of Credit Issuer; and (iii) each
Letter of Credit shall have an expiry date (including any renewal periods)
occurring not later than the earlier of (A) one year from the date of issuance
thereof, and (B) 30 Business Days prior to the Facility Termination Date, in
each case on terms acceptable to the Administrative Agent and the relevant
Letter of Credit Issuer. In addition, no Letter of Credit shall be issued or
increased in amount if after giving effect thereto the Borrower would be
required to prepay Loans in accordance with Section 5.2(b).

 

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(c) Notwithstanding the foregoing, in the event a Lender Default exists, no
Letter of Credit Issuer shall be required to issue any Letter of Credit unless
either (i) such Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrower to eliminate such Letter of Credit Issuer’s
risk with respect to the participation in Letters of Credit of the Defaulting
Lender or Lenders, including by cash collateralizing such Defaulting Lender’s or
Lenders’ Commitment Percentage of the Letter of Credit Outstandings; or (ii) the
issuance of such Letter of Credit, taking into account the potential failure of
the Defaulting Lender or Lenders to risk participate therein, will not cause the
Letter of Credit Issuer to incur aggregate credit exposure hereunder with
respect to Loans and Letter of Credit Outstandings in excess of its Commitment,
and the Borrower has undertaken, for the benefit of such Letter of Credit
Issuer, pursuant to an instrument satisfactory in form and substance to such
Letter of Credit Issuer, not to thereafter incur Loans or Letter of Credit
Outstandings hereunder that would cause the Letter of Credit Issuer to incur
aggregate credit exposure hereunder with respect to Loans and Letter of Credit
Outstandings in excess of its Commitment.

 

(d) Unless otherwise agreed to by a Letter of Credit Issuer and the Borrower,
the rules of the “International Standby Practices 1998” published by the
Institute of International Banking Law & Practice (or such later version thereof
as may be in effect at the time of issuance) shall apply to each Letter of
Credit issued hereunder.

 

Section 3.2. Letter of Credit Requests: Notices of Issuance.

 

(a) Whenever it desires that a Letter of Credit be issued, the Borrower shall
give the Administrative Agent and the Letter of Credit Issuer written or
telephonic notice (in the case of telephonic notice, promptly confirmed in
writing if so requested by the Administrative Agent) which, if in the form of
written notice shall be substantially in the form of Exhibit B-2, or transmit by
electronic communication (if arrangements for doing so have been approved by the
Letter of Credit Issuer), prior to 12:00 noon (local time at the Notice Office)
at least three Business Days (or such shorter period as may be acceptable to the
relevant Letter of Credit Issuer) prior to the proposed date of issuance (which
shall be a Business Day) (each a “Letter of Credit Request”), which Letter of
Credit Request shall include such supporting documents that such Letter of
Credit Issuer customarily requires in connection therewith (including, in the
case of a Letter of Credit for an account party other than the Borrower, an
application for, and if applicable a reimbursement agreement with respect to,
such Letter of Credit). Any such documents executed in connection with the
issuance of a Letter of Credit, including the Letter of Credit itself, are
herein referred to as “Letter of Credit Documents.” In the event of any
inconsistency between any of the terms or provisions of any Letter of Credit
Document and the terms and provisions of this Agreement respecting Letters of
Credit, the terms and provisions of this Agreement shall control. The
Administrative Agent shall promptly notify each Lender of each Letter of Credit
Request.

 

(b) Each Letter of Credit Issuer shall, on the date of each issuance of a Letter
of Credit by it, give the Administrative Agent, each applicable Lender and the
Borrower written notice of the issuance of such Letter of Credit, accompanied by
a copy to the Administrative Agent of the Letter of Credit or Letters of Credit
issued by it. Each Letter of Credit Issuer shall provide to the Administrative
Agent a quarterly (or monthly if requested by any applicable Lender) summary
describing each Letter of Credit issued by such Letter of Credit Issuer and then
outstanding and an identification for the relevant period of the daily aggregate
Letter of Credit Outstandings represented by Letters of Credit issued by such
Letter of Credit Issuer.

 

Section 3.3. Agreement to Repay Letter of Credit Drawings.

 

(a) The Borrower hereby agrees to reimburse (or cause any Letter of Credit
Obligor for whose account a Letter of Credit was issued to reimburse) each
Letter of Credit Issuer, by making

 

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payment directly to such Letter of Credit Issuer in immediately available funds
at the payment office of such Letter of Credit Issuer, for any payment or
disbursement made by such Letter of Credit Issuer under any Letter of Credit
(each such amount so paid or disbursed until reimbursed, an “Unpaid Drawing”)
immediately after, and in any event on the date on which, such Letter of Credit
Issuer notifies the Borrower (or any such other Letter of Credit Obligor for
whose account such Letter of Credit was issued) of such payment or disbursement
(which notice to the Borrower (or such other Letter of Credit Obligor) shall be
delivered reasonably promptly after any such payment or disbursement), such
payment to be made in Dollars, with interest on the amount so paid or disbursed
by such Letter of Credit Issuer, to the extent not reimbursed prior to 1:00 P.M.
(local time at the payment office of the Letter of Credit Issuer) on the date of
such payment or disbursement, from and including the date paid or disbursed to
but not including the date such Letter of Credit Issuer is reimbursed therefor
at a rate per annum that shall be the rate then applicable to Loans that are
Base Rate Loans (plus an additional 2% per annum if not reimbursed on the date
of such payment or disbursement), any such interest also to be payable on
demand. If by 11:00 A.M. on the Business Day immediately following notice to it
of its obligation to make reimbursement in respect of an Unpaid Drawing, the
Borrower has not made such reimbursement out of its available cash on hand or a
contemporaneous Borrowing hereunder, (x) the Borrower will be deemed to have
given a Notice of Borrowing for Base Rate Loans in an aggregate principal amount
sufficient to reimburse such Unpaid Drawing (and the Administrative Agent shall
promptly give notice to the Lenders of such deemed Notice of Borrowing), (y) the
Lenders shall, unless they are legally prohibited from doing so, make the Loans
contemplated by such deemed Notice of Borrowing (which Loans shall be considered
made under Section 2.1 hereof), and (z) the proceeds of such Base Rate Loans
shall be disbursed directly to the applicable Letter of Credit Issuer to the
extent necessary to effect such reimbursement, with any excess proceeds to be
made available to the Borrower in accordance with the applicable provisions of
this Agreement.

 

(b) The Borrower’s obligation under this Section 3.3 to reimburse, or cause
another Letter of Credit Obligor to reimburse, each Letter of Credit Issuer with
respect to Unpaid Drawings (including, in each case, interest thereon) shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment that the Borrower or any other
Letter of Credit Obligor may have or have had against such Letter of Credit
Issuer, the Administrative Agent, any other Letter of Credit Issuer or any
Lender, including, without limitation, any defense based upon the failure of any
drawing under a Letter of Credit to conform to the terms of the Letter of Credit
or any non-application or misapplication by the beneficiary of the proceeds of
such drawing; provided, however, that the Borrower shall not be obligated to
reimburse, or cause another Letter of Credit Obligor to reimburse, a Letter of
Credit Issuer for any wrongful payment made by such Letter of Credit Issuer
under a Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such Letter of Credit Issuer.

 

Section 3.4. Letter of Credit Participations.

 

(a) Immediately upon the issuance by a Letter of Credit Issuer of any Letter of
Credit, such Letter of Credit Issuer shall be deemed to have sold and
transferred to each Lender, and each such Lender (each a “Participant”) shall be
deemed irrevocably and unconditionally to have purchased and received from such
Letter of Credit Issuer, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender’s Commitment Percentage, in such
Letter of Credit, each substitute letter of credit, each drawing made
thereunder, the obligations of the Borrower under this Agreement with respect
thereto (although Letter of Credit Fees shall be payable directly to the
Administrative Agent for the account of the Lenders as provided in Section
4.1(b) and the Participants shall have no right to receive any portion of any
fees of the nature contemplated by Section 4.1(c)), the obligations of any
Letter of Credit Obligor under any Letter of Credit Documents pertaining
thereto, and any security for, or guaranty pertaining to, any of the foregoing.
Upon any change in the Commitments of the Lenders pursuant to

 

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Section 12.4(c), it is hereby agreed that, with respect to all outstanding
Letters of Credit and Unpaid Drawings, there shall be an automatic adjustment to
the participations pursuant to this Section 3.4 to reflect the new Commitment
Percentages of the assigning and assignee Lender.

 

(b) In determining whether to pay under any Letter of Credit, a Letter of Credit
Issuer shall not have any obligation relative to the Participants other than to
determine that any documents required to be delivered under such Letter of
Credit have been delivered and that they appear to comply on their face with the
requirements of such Letter of Credit. Any action taken or omitted to be taken
by a Letter of Credit Issuer under or in connection with any Letter of Credit if
taken or omitted in the absence of gross negligence or willful misconduct, shall
not create for such Letter of Credit Issuer any resulting liability.

 

(c) In the event that a Letter of Credit Issuer makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed (or caused any
applicable Letter of Credit Obligor to reimburse) such amount in full to such
Letter of Credit Issuer pursuant to Section 3.3(a), such Letter of Credit Issuer
shall promptly notify the Administrative Agent, and the Administrative Agent
shall promptly notify each Participant of such failure, and each Participant
shall promptly and unconditionally pay to the Administrative Agent for the
account of such Letter of Credit Issuer, the amount of such Participant’s
Commitment Percentage of such payment in Dollars and in same day funds;
provided, however, that no Participant shall be obligated to pay to the
Administrative Agent its Commitment Percentage of such unreimbursed amount for
any wrongful payment made by such Letter of Credit Issuer under a Letter of
Credit as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of such Letter of Credit Issuer. If the Administrative
Agent so notifies any Participant required to fund a payment under a Letter of
Credit prior to 11:00 A.M. (local time at its Notice Office) on any Business
Day, such Participant shall make available to the Administrative Agent for the
account of the relevant Letter of Credit Issuer such Participant’s Commitment
Percentage of the amount of such payment on such Business Day in same day funds.
If and to the extent such Participant shall not have so made its Commitment
Percentage of the amount of such payment available to the Administrative Agent
for the account of the relevant Letter of Credit Issuer, such Participant agrees
to pay to the Administrative Agent for the account of such Letter of Credit
Issuer, forthwith on demand such amount, together with interest thereon, for
each day from such date until the date such amount is paid to the Administrative
Agent for the account of such Letter of Credit Issuer at the Federal Funds
Effective Rate. The failure of any Participant to make available to the
Administrative Agent for the account of the relevant Letter of Credit Issuer its
Commitment Percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available to
the Administrative Agent for the account of such Letter of Credit Issuer its
Commitment Percentage of any payment under any Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to the Administrative Agent
for the account of such Letter of Credit Issuer such other Participant’s
Commitment Percentage of any such payment.

 

(d) Whenever a Letter of Credit Issuer receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account of
such Letter of Credit Issuer any payments from the Participants pursuant to
Section 3.4(c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant that has paid its Commitment Percentage thereof, in Dollars and in
same day funds, an amount equal to such Participant’s Commitment Percentage of
the principal amount thereof and interest thereon accruing after the purchase of
the respective participations, as and to the extent so received.

 

(e) The obligations of the Participants to make payments to the Administrative
Agent for the account of each Letter of Credit Issuer with respect to Letters of
Credit shall be irrevocable and not subject to counterclaim, set-off or other
defense or any other qualification or exception whatsoever and

 

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shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:

 

(i) any lack of validity or enforceability of this Agreement or any of the other
Credit Documents;

 

(ii) the existence of any claim, set-off defense or other right that the
Borrower (or any other Letter of Credit Obligor) may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of Credit
(or any person for whom any such transferee may be acting), the Administrative
Agent, any Letter of Credit Issuer, any Lender, or other person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the Borrower (or any other Letter of Credit Obligor) and the
beneficiary named in any such Letter of Credit), other than any claim that the
Borrower (or any other Letter of Credit Obligor that is the account party with
respect to a Letter of Credit) may have against any applicable Letter of Credit
Issuer for gross negligence or willful misconduct of such Letter of Credit
Issuer in making payment under any applicable Letter of Credit;

 

(iii) any draft, certificate or other document presented under the Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;

 

(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents: or

 

(v) the occurrence of any Default or Event of Default.

 

(f) To the extent the Letter of Credit Issuer is not reimbursed by the Borrower,
the Participants will reimburse the Letter of Credit Issuer, in proportion to
their respective Commitment Percentages, for and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature that
may be imposed on, asserted against or incurred by the Letter of Credit Issuer
in performing its respective duties in any way related to or arising out of its
issuance of Letters of Credit, provided that no Participants shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements resulting from the
Letter of Credit Issuer’s acts or omissions constituting gross negligence or
willful misconduct.

 

Section 3.5. Increased Costs. If after the Closing Date, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Letter of Credit Issuer or any Lender with any
request or directive (whether or not having the force of law) by any such
authority, central bank or comparable agency (in each case made subsequent to
the Closing Date) shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against Letters of
Credit issued by such Letter of Credit Issuer or such Lender’s participation
therein, or (ii) shall impose on such Letter of Credit Issuer or any Lender any
other conditions affecting this Agreement, any Letter of Credit or such Lender’s
participation therein; and the result of any of the foregoing is to increase the
cost to such Letter of Credit Issuer or such Lender of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Letter of Credit Issuer or such Lender hereunder
(other than any increased cost or reduction in the amount received or receivable
resulting from the imposition of or a change in the rate of taxes or similar
charges), then, upon demand to the Borrower

 

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by such Letter of Credit Issuer or such Lender (a copy of which notice shall be
sent by such Letter of Credit Issuer or such Lender to the Administrative
Agent), the Borrower shall pay to such Letter of Credit Issuer or such Lender
such additional amount or amounts as will compensate any such Letter of Credit
Issuer or such Lender for such increased cost or reduction. A certificate
submitted to the Borrower by any Letter of Credit Issuer or any Lender, as the
case may be (a copy of which certificate shall be sent by such Letter of Credit
Issuer or such Lender to the Administrative Agent), setting forth, in reasonable
detail, the basis for the determination of such additional amount or amounts
necessary to compensate any Letter of Credit Issuer or such Lender as aforesaid
shall be conclusive and binding on the Borrower absent manifest error, although
the failure to deliver any such certificate shall not release or diminish any of
the Borrower’s obligations to pay additional amounts pursuant to this Section
3.5. Reference is hereby made to the provisions of Section 2.6(d) for certain
limitations upon the rights of a Letter of Credit Issuer or Lender under this
Section.

 

Section 3.6. Guaranty of Letter of Credit Obligations of Other Letter of Credit
Obligors.

 

(a) The Borrower hereby unconditionally guarantees, for the benefit of the
Administrative Agent, each Letter of Credit Issuer and the Lenders, the full and
punctual payment of the Obligations of each other Letter of Credit Obligor under
each Letter of Credit Document to which such other Letter of Credit Obligor is
now or hereafter becomes a party. Upon failure by any such other Letter of
Credit Obligor to pay punctually any such amount, the Borrower shall forthwith
on demand by the Administrative Agent pay the amount not so paid at the place
and in the currency and otherwise in the manner specified in this Agreement or
any applicable Letter of Credit Document.

 

(b) As a separate, additional and continuing obligation, the Borrower
unconditionally and irrevocably undertakes and agrees, for the benefit of the
Administrative Agent and the Lenders, that, should any amounts not be
recoverable from the Borrower under Section 3.6(a) for any reason whatsoever
(including, without limitation, by reason of any provision of any Credit
Document or any other agreement or instrument executed in connection therewith
being or becoming void, unenforceable, or otherwise invalid under any applicable
law) then, notwithstanding any notice or knowledge thereof by any Lender, the
Administrative Agent, any of their respective Affiliates, or any other person,
at any time, the Borrower as sole, original and independent obligor, upon demand
by the Administrative Agent, will make payment to the Administrative Agent, for
the account of the Lenders and the Administrative Agent, of all such obligations
not so recoverable by way of full indemnity, in such currency and otherwise in
such manner as is provided in the Credit Documents.

 

(c) The obligations of the Borrower under this Section shall be unconditional
and absolute and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by the occurrence, one or more times,
of any of the following:

 

(i) any extension, renewal, settlement, compromise, waiver or release in respect
to any obligation of any other Letter of Credit Obligor under any Letter of
Credit Document, by operation of law or otherwise;

 

(ii) any modification or amendment of or supplement to this Agreement, any Note
or any other Credit Document;

 

(iii) any release, non-perfection or invalidity of any direct or indirect
security for any obligation of the Borrower under this Agreement, any Note or
any other Credit Document or of any other Letter of Credit Obligor under any
Letter of Credit Document;

 

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(iv) any change in the existence, structure or ownership of any other Letter of
Credit Obligor or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any other Letter of Credit Obligor or its assets or any
resulting release or discharge of any obligation of any other Letter of Credit
Obligor contained in any Letter of Credit Document;

 

(v) the existence of any claim, set-off or other rights that the Borrower may
have at any time against any other Letter of Credit Obligor, the Administrative
Agent, any Letter of Credit Issuer any Lender or any other person, whether in
connection herewith or any unrelated transactions;

 

(vi) any invalidity or unenforceability relating to or against any other Letter
of Credit Obligor for any reason of any Letter of Credit Document, or any
provision of applicable law or regulation purporting to prohibit the payment by
any other Letter of Credit Obligor of any Obligations in respect of any Letter
of Credit; or

 

(vii) any other act or omission to act or delay of any kind by any other Letter
of Credit Obligor, the Administrative Agent, any Lender or any other person or
any other circumstance whatsoever that might, but for the provisions of this
Section, constitute a legal or equitable discharge of the Borrower’s obligations
under this Section.

 

(d) The Borrower’s obligations under this Section shall remain in full force and
effect until the Commitments shall have terminated and all of the Obligations
shall have been paid in full. If at any time any payment of any of the
Obligations of any other Letter of Credit Obligor in respect of any Letter of
Credit Documents is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of such other Letter of Credit Obligor,
the Borrower’s obligations under this Section with respect to such payment shall
be reinstated at such time as though such payment had been due but not made at
such time.

 

(e) The Borrower irrevocably waives acceptance hereof, presentment, demand,
protest and any notice not provided for herein, as well as any requirement that
at any time any action be taken by any person against any other Letter of Credit
Obligor or any other person, or against any collateral or guaranty of any other
person.

 

(f) Until the indefeasible payment in full of all of the Obligations and the
termination of the Commitments of the Lenders hereunder, the Borrower shall have
no rights, by operation of law or otherwise, upon making any payment under this
Section to be subrogated to the rights of the payee against any other Letter of
Credit Obligor with respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by any other Letter of Credit Obligor in respect
thereof.

 

(g) In the event that acceleration of the time for payment of any amount payable
by any other Letter of Credit Obligor under any Letter of Credit Document is
stayed upon insolvency, bankruptcy or reorganization of such other Letter of
Credit Obligor, all such amounts otherwise subject to acceleration under the
terms of any applicable Letter of Credit Document shall nonetheless be payable
by the Borrower under this Section forthwith on demand by the Administrative
Agent.

 

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ARTICLE IV.

 

FEES; COMMITMENTS

 

Section 4.1. Fees.

 

(a) Commitment Fees. The Borrower agrees to pay to the Administrative Agent
commitment fees (“Commitment Fees”) for the account of each Non-Defaulting
Lender for the period from the Closing Date to the Facility Termination Date or,
if earlier, the date upon which the Total Commitment has been terminated
pursuant to Section 4.2 or 4.3, computed for each day at a rate per annum equal
to the Applicable Commitment Fee Rate in effect for such day on the amount of
such Lender’s Commitment Percentage of the Unutilized Total Commitment for such
day. Commitment Fees shall be due and payable in arrears on the last Business
Day of each March, June, September and December and on the Facility Termination
Date.

 

(b) Letter of Credit Fees. The Borrower agrees to pay to the Administrative
Agent, for the account of each Non-Defaulting Lender, pro rata on the basis of
its Commitment Percentage, a fee in respect of each Letter of Credit (the
“Letter of Credit Fee”), payable on the date of issuance (or on the date of any
increase in the amount, or renewal or extension of the expiry date thereof),
computed at a rate per annum equal to the Applicable Margin then in effect for
Eurodollar Loans, on the Stated Amount thereof for the period from the date of
issuance (or increase, renewal or extension) to the expiration date thereof
(including any extensions of such expiration date that may be made at the
election of the account party or beneficiary). The Borrower also agrees to pay
additional Letter of Credit Fees, on demand, at the rate of 2% per annum, on the
Stated Amount of each Letter of Credit, for any period when a Default under
Section 10.1(a) or Event of Default has occurred and is continuing. Accrued
Letter of Credit Fees shall be due and payable in arrears on the last Business
Day of each March, June, September and December and on the Facility Termination
Date.

 

(c) Fronting Fees. The Borrower agrees to pay directly to each Letter of Credit
Issuer, for its own account, a fee in respect of each Letter of Credit issued by
it (a “Fronting Fee”), payable on the date of issuance (or any increase in the
amount, or renewal or extension) thereof, computed at the rate of 1/8 of 1% per
annum on the Stated Amount thereof for the period from the date of issuance (or
increase, renewal or extension) to the expiration date thereof (including any
extensions of such expiration date that may be made at the election of the
beneficiary thereof). Accrued Fronting Fees shall be due and payable quarterly
in arrears on the last Business Day of each March, June, September and December
and on the Facility Termination Date.

 

(d) Additional Charges of Letter of Credit Issuer. The Borrower agrees to pay
directly to each Letter of Credit Issuer upon each issuance of, drawing under,
or amendment, extension, renewal or transfer of, a Letter of Credit issued by it
such amount as shall at the time of such issuance, drawing, amendment,
extension, renewal or transfer be the administrative or processing charge that
such Letter of Credit Issuer is customarily charging for issuances of, drawings
under or amendments, extensions, renewals or transfers of, letters of credit
issued by it.

 

(e) Other Fees. The Borrower shall pay to the Administrative Agent, on the
Closing Date and thereafter, such fees as heretofore agreed by the Borrower and
the Administrative Agent or the Lenders as set forth in any agent fee letter,
closing fee letter or similar agreement.

 

(f) Computations of Fees. All computations of Commitment Fees, Letter of Credit
Fees and other Fees hereunder shall be made on the actual number of days elapsed
over a year of 360 days.

 

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Section 4.2. Voluntary Termination/Reduction of Commitments. Upon at least three
Business Days’ prior irrevocable written notice (or telephonic notice confirmed
in writing) to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrower shall have the right to:

 

(a) terminate in whole the Total Commitment, provided that (i) all outstanding
Loans are contemporaneously prepaid in accordance with Section 5.1, and (ii)
either (A) no Letters of Credit remain outstanding, or (B) the Borrower shall
contemporaneously either (x) cause all outstanding Letters of Credit to be
surrendered for cancellation (any such Letters of Credit to be replaced by
letters of credit issued by other financial institutions acceptable to each
Letter of Credit Issuer and the Required Lenders), or (y) the Borrower shall pay
to the Administrative Agent an amount in cash and/or Cash Equivalents equal to
100% of the Letter of Credit Outstandings, and the Administrative Agent shall
hold such payment as security for the reimbursement obligations of the Borrower
hereunder in respect of Letters of Credit pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
the Administrative Agent, each Letter of Credit Issuer and the Borrower (which
shall permit certain investments in Cash Equivalents satisfactory to the
Administrative Agent, each Letter of Credit Issuer and the Borrower until the
proceeds are applied to the secured obligations); or

 

(b) partially and permanently reduce the Unutilized Total Commitment, provided
that (i) any such reduction shall apply to proportionately and permanently
reduce the Commitment of each of the Lenders and (ii) any partial reduction of
the Unutilized Total Commitment pursuant to this Section 4.2(b) shall be in the
amount of at least $5,000,000 (or, if greater, in integral multiples of
$1,000,000).

 

Section 4.3. Mandatory Adjustments of Commitments, etc.

 

(a) The Total Commitment (and the Commitment of each Lender) shall terminate on
the Facility Termination Date.

 

(b) The Total Commitment shall be permanently reduced, without premium or
penalty, at the time that any mandatory prepayment of Loans are required to be
made pursuant to Sections 5.2 (d), (e) or (f) in an amount equal to the required
prepayment of principal of Loans that would be required to be made in such
circumstance (whether or not any Loans are outstanding or any Letter of Credit
Outstandings exist). Any such reduction shall apply to proportionately and
permanently reduce the Commitment of each of the affected Lenders. The Borrower
will provide at least three Business Days’ prior written notice (or telephonic
notice promptly confirmed in writing) to the Administrative Agent at its Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Lenders), of any reduction of the Total Commitment pursuant to this Section
4.3(b), specifying the date and amount of the reduction.

 

(c) The Total Commitment shall be permanently and automatically reduced, without
notice of any kind, to $65,000,000 on the second anniversary of the Closing
Date. Such reduction shall apply to proportionately and permanently reduce the
Commitment of each of the affected Lenders.

 

ARTICLE V.

 

PAYMENTS

 

Section 5.1. Voluntary Prepayments. The Borrower shall have the right to prepay
any of the Loans, in whole or in part, without premium or penalty (except as
specified below), from time to time on the following terms and conditions:

 

(a) the Borrower shall give the Administrative Agent at the Notice Office
written or telephonic notice (in the case of telephonic notice, promptly
confirmed in writing if so requested by the Administrative Agent) of its intent
to prepay the Loans, the amount of such prepayment and (in the case of
Eurodollar Loans) the specific Borrowing(s) pursuant to which made, which notice
shall be received by the Administrative Agent by (i) 12:00 noon (local time at
the Notice Office) three Business Days prior to

 

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the date of such prepayment, in the case of any prepayment of Eurodollar Loans,
or (ii) 12:00 noon (local time at the Notice Office) one Business Day prior to
the date of such prepayment, in the case of any prepayment of Base Rate Loans,
and which notice shall promptly be transmitted by the Administrative Agent to
each of the Lenders;

 

(b) in the case of prepayment of any Borrowings, each partial prepayment of any
such Borrowing shall be in an aggregate principal amount of at least the Minimum
Borrowing Amount applicable thereto;

 

(c) no partial prepayment of any Loans made pursuant to a Borrowing shall reduce
the aggregate principal amount of such Loans outstanding pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, provided that the foregoing limitation shall not apply if such Loans
are being prepaid in full;

 

(d) each prepayment in respect of any Loans made pursuant to a Borrowing shall
be applied pro rata among such Loans; and

 

(e) each prepayment of Eurodollar Loans pursuant to this Section 5.1 on any date
other than the last day of the Interest Period applicable thereto shall be
accompanied by any amounts payable in respect thereof under Section 2.7.

 

Section 5.2. Mandatory Prepayments. The Loans shall be subject to mandatory
repayment or prepayment, and the Letter of Credit Outstandings shall be subject
to cash collateralization requirements, in accordance with the following
provisions:

 

(a) Facility Termination Date. The Borrower shall repay the entire principal
amount outstanding of any Loans on the Facility Termination Date and, if any
Letter of Credit Outstandings exist, then on such date the Borrower shall cause
each Letter of Credit to be replaced or cash collateralized in accordance with
the provisions of Section 5.2(b).

 

(b) Mandatory Prepayment—Loans Exceed Total Commitment. If on any date (after
giving effect to any other payments on such date) the sum of (i) the aggregate
outstanding principal amount of Loans plus (ii) the aggregate amount of Letter
of Credit Outstandings, exceeds the Total Commitment as then in effect, then the
Borrower shall prepay on such date that principal amount of Loans and, after
Loans have been paid in full, Unpaid Drawings, in an aggregate amount at least
equal to such excess and conforming in the case of partial prepayments of Loans
to the requirements as to the amounts of partial prepayments of Loans that are
contained in Section 5.1. If at any time the aggregate amount of Letter of
Credit Outstandings exceeds the Total Commitment as then in effect, or if at any
time the aggregate amount of Letter of Credit Outstandings (or any particular
Letter of Credit or grouping of Letters of Credit) exceeds the Letter of Credit
Commitment Amount, then the Borrower shall pay to the Administrative Agent an
amount in cash and/or Cash Equivalents equal to such excess and the
Administrative Agent shall hold such payment as security for the reimbursement
obligations of the Borrower and any other Credit Parties hereunder in respect of
Letters of Credit pursuant to a cash collateral agreement to be entered into in
form and substance reasonably satisfactory to the Administrative Agent, each
Letter of Credit Issuer and the Borrower (which shall permit certain investments
in Cash Equivalents satisfactory to the Administrative Agent, each Letter of
Credit Issuer and the Borrower until the proceeds are applied to the secured
obligations).

 

(c) Mandatory Prepayment—Certain Proceeds of Asset Sales. If during any fiscal
year of the Borrower, the Borrower and its Subsidiaries have received cumulative
Cash Proceeds during such fiscal year from one or more Asset Sales (other than
any Asset Sale permitted pursuant to Section 9.2(a)

 

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or (f)) of at least $500,000, not later than the third Business Day following
the date of receipt of any Cash Proceeds in excess of such amount, an amount,
conforming to the requirements as to the amount of partial prepayments contained
in Section 5.1, at least equal to 100% of the Net Cash Proceeds then received in
excess of such amount from any Asset Sale, shall be applied as a mandatory
prepayment of principal of the outstanding Loans; provided, that (i) if no
Default under Section 10.1(a) or Event of Default shall have occurred and be
continuing, (ii) the Borrower and its Subsidiaries have scheduled Consolidated
Capital Expenditures during the following 12 months, and (iii) the Borrower
notifies the Administrative Agent of the amount and nature thereof and of its
intention to reinvest all or a portion of such Net Cash Proceeds in such
Consolidated Capital Expenditures during such 12 month period, then no such
prepayment shall be required to the extent of the amount of such Net Cash
Proceeds as to which the Borrower so indicates such reinvestment will take
place. If at the end of any such 12 month period any portion of such Net Cash
Proceeds has not been so reinvested or upon the occurrence and continuation of
an Event of Default, the Borrower will immediately make a prepayment of the
principal of first, Unpaid Drawings, and second, after all Unpaid Drawings have
been paid in full, Loans.

 

(d) Mandatory Prepayment—Certain Proceeds of Equity Sales. Not later than the
Business Day following the date of the receipt by the Borrower or any Subsidiary
of the cash proceeds (net of underwriting discounts and commissions, placement
agent fees and other customary fees and costs associated therewith) from any
sale or issuance of equity securities by the Borrower or any Subsidiary after
the Closing Date (other than (i) any intercompany sale to the Borrower or any
Subsidiary, (ii) any sale or issuance to management, employees (or key
employees) or directors pursuant to stock option or similar plans for the
benefit of management, employees (or key employees) or directors generally or
(iii) any sale or issuance to management or employees pursuant to stock purchase
plans or similar plans for the benefit of management or employees (or key
employees) generally, up to an aggregate amount of $250,000 per fiscal year),
the Borrower will prepay the principal of the outstanding Loans, in an aggregate
amount, conforming to the requirements as to the amounts of partial prepayments
contained in Section 5.1, that is not less than (x) 75% of such net proceeds, or
(y) if less, an amount equal to the then aggregate outstanding principal amount
of the outstanding Loans, if any.

 

(e) Mandatory Prepayment—Certain Proceeds of Debt Securities. Not later than the
Business Day following the date of the receipt by the Borrower or any Subsidiary
of the cash proceeds (net of underwriting discounts and commissions, placement
agent fees and other customary fees and costs associated therewith) from any
Indebtedness incurred after the Closing Date (other than the proceeds of
Indebtedness incurred pursuant to Section 9.4), the Borrower will prepay the
principal of the outstanding Loans, in an aggregate amount, conforming to the
requirements as to the amounts of partial prepayments contained in Section 5.1,
that is not less than (x) 100% of such net proceeds, or (y) if less, an amount
equal to the then aggregate outstanding principal amount of the outstanding
Loans, if any.

 

(f) Mandatory Prepayment—Certain Proceeds of an Event of Loss. If during any
fiscal year of the Borrower, the Borrower and its Subsidiaries have received
cumulative Cash Proceeds during such fiscal year from one or more Events of Loss
of at least $500,000, not later than the third Business Day following the date
of receipt of any Cash Proceeds in excess of such amount, an amount, conforming
to the requirements as to the amount of partial prepayments contained in Section
5.1, at least equal to 100% of the Net Cash Proceeds then received in excess of
such amount from any Event of Loss, shall be applied as a mandatory prepayment
of principal of the outstanding Loans.

 

(g) Particular Loans to be Prepaid. With respect to each repayment or prepayment
of Loans required by this Section 5.2, the Borrower shall designate the Types of
Loans that are to be repaid or prepaid and the specific Borrowing(s) pursuant to
which such repayment or prepayment is to be made, provided that (i) the Borrower
shall first so designate all Loans that are Base Rate Loans and Eurodollar Loans
with Interest Periods ending on the date of repayment or prepayment prior to
designating any other

 

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Eurodollar Loans for repayment or prepayment, (ii) if the outstanding principal
amount of Eurodollar Loans made pursuant to a Borrowing is reduced below the
applicable Minimum Borrowing Amount as a result of any such repayment or
prepayment, then all the Loans outstanding pursuant to such Borrowing shall be
Converted into Base Rate Loans, and (iii) each repayment and prepayment of any
Loans made pursuant to a Borrowing shall be applied pro rata among such Loans.
In the absence of a designation by the Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above, make such
designation in its sole discretion with a view, but no obligation, to minimize
breakage costs owing under Section 2.7. Any repayment or prepayment of
Eurodollar Loans pursuant to this Section 5.2 shall in all events be accompanied
by such compensation as is required by Section 2.7.

 

Section 5.3. Method and Place of Payment.

 

(a) Except as otherwise specifically provided herein, all payments under this
Agreement shall be made to the Administrative Agent for the ratable (based on
its pro rata share) account of the Lenders entitled thereto, not later than
12:00 noon (local time at the Payment Office) on the date when due and shall be
made at the Payment Office in immediately available funds and in lawful money of
the United States of America, it being understood that written notice by the
Borrower to the Administrative Agent to make a payment from the funds in the
Borrower’s account at the Payment Office shall constitute the making of such
payment to the extent of such funds held in such account. Any payments under
this Agreement that are made later than 12:00 noon (local time at the Payment
Office) shall be deemed to have been made on the next succeeding Business Day.
Whenever any payment to be made hereunder shall be stated to be due on a day
that is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.

 

(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, Unpaid Drawings,
interest and Fees then due hereunder and an Event of Default is not then in
existence, such funds shall be applied (i)first, towards payment of interest and
Fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and Fees then due to such parties, and
(ii)second, towards payment of principal and Unpaid Drawings then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and Unpaid Drawings then due to such parties.

 

Section 5.4. Net Payments.

 

(a) All payments made by the Borrower hereunder, under any Note or any other
Credit Document, shall be made without setoff, counterclaim or other defense.
Except as provided for in Section 5.4(b), all such payments will be made free
and clear of, and without deduction or withholding for, any present or future
taxes, levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax,
imposed on or measured by the net income or net profits of a Lender pursuant to
the laws of the jurisdiction under which such Lender is organized or the
jurisdiction in which the principal office or Applicable Lending Office of such
Lender is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect to such non-excluded taxes, levies
imposts, duties, fees, assessments or other charges (all such non-excluded
taxes, levies, imposts, duties, fees assessments or other charges being referred
to collectively as “Taxes”). If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes and such additional amounts as may
be necessary so that every payment by it of all amounts due hereunder, under any
Note or under any other Credit Document, after withholding or deduction for or
on account of any Taxes will not be less than the amount provided for herein or
in such Note or in such other Credit Document. If any amounts are payable in

 

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respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Lender, upon the written request of such Lender for taxes imposed
on or measured by the net income or profits of such Lender pursuant to the laws
of the jurisdiction in which such Lender is organized or in which the principal
office or Applicable Lending Office of such Lender is located or under the laws
of any political subdivision or taxing authority of any such jurisdiction in
which the principal office or Applicable Lending Office of such Lender is
located and for any withholding of income or similar taxes imposed by the United
States of America as such Lender shall determine are payable by, or withheld
from, such Lender in respect of such amounts so paid to or on behalf of such
Lender pursuant to the preceding sentence and in respect of any amounts paid to
or on behalf of such Lender pursuant to this sentence, which request shall be
accompanied by a statement from such Lender setting forth, in reasonable detail,
the computations used in determining such amounts. The Borrower will furnish to
the Administrative Agent within 45 days after the date the payment of any Taxes,
or any withholding or deduction on account thereof, is due pursuant to
applicable law certified copies of tax receipts, or other evidence satisfactory
to the Lender, evidencing such payment by the Borrower. The Borrower will
indemnify and hold harmless the Administrative Agent and each Lender, and
reimburse the Administrative Agent or such Lender upon its written request, for
the amount of any Taxes so levied or imposed and paid or withheld by such
Lender.

 

(b) Each Lender that is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for Federal income tax purposes agrees to
provide to the Borrower and the Administrative Agent on or prior to the Closing
Date, or in the case of a Lender that is an assignee or transferee of an
interest under this Agreement pursuant to Section 12.4 (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment or
transfer and such Lender is in compliance with the provisions of this Section
5.4(b)), on the date of such assignment or transfer to such Lender, and from
time to time thereafter if required by the Borrower or the Administrative Agent:
(i) two accurate and complete original signed copies of Internal Revenue Service
Form 1001, 4224, W-8BEN, W-8ECI, W-8EXP or W-8IMY (or successor, substitute or
other appropriate forms) certifying to such Lender’s entitlement to a complete
exemption from, or a reduced rate of withholding from, United States withholding
tax with respect to payments to be made under this Agreement, any Note or any
other Credit Document, or (ii) if the Lender cannot deliver the appropriate
Internal Revenue Service Forms referred to in clause (i) above, (x) a
certificate in form and substance satisfactory to the Administrative Agent (any
such certificate, an “Exemption Certificate”) and (y) other appropriate
documentation certifying to such Lender’s entitlement to a complete exemption
from, or reduced rate of withholding from, United States withholding tax with
respect to payments of interest to be made under this Agreement, any Note or any
other Credit Document. In addition, each Lender agrees that from time to time
after the Closing Date, when a lapse in time or change in circumstances renders
the previous certification obsolete or inaccurate in any material respect, it
will deliver to the Borrower and the Administrative Agent two new accurate and
complete original signed copies of the applicable Internal Revenue Service Form,
or an Exemption Certificate and related documentation, as the case may be, and
such other forms as may be required in order to confirm or establish the
entitlement of such Lender to a continued exemption from or reduction in United
States withholding tax with respect to payments under this Agreement, any Note
or any other Credit Document, or it shall immediately notify the Borrower and
the Administrative Agent of its inability to deliver any such Form or Exemption
Certificate and related documentation, in which case such Lender shall not be
required to deliver any such Form or Exemption Certificate and related
documentation pursuant to this Section 5.4(b). Notwithstanding anything to the
contrary contained in Section 5.4(a), but subject to Section 12.4(c) and the
immediately succeeding sentence, (x) the Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or other
similar taxes imposed by the United States (or any political subdivision or
taxing authority thereof or therein) from interest, fees or other amounts
payable hereunder for the account of any Lender that is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for United
States federal income tax purposes and that has not provided to the Borrower
such Forms or such Exemption Certificate

 

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and related documentation that establish a complete exemption from or reduction
in the rate of such deduction or withholding and (y) the Borrower shall not be
obligated pursuant to Section 5.4(a) hereof to gross-up payments to be made to a
Lender in respect of income or similar taxes imposed by the United States or any
additional amounts with respect thereto (i) if such Lender has not provided to
the Borrower the Internal Revenue Service forms required to be provided to the
Borrower pursuant to this Section 5.4(b) or (ii) in the case of a payment other
than interest, to a Lender described in clause (ii) above, to the extent that
such forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in Section 5.4(a), but
subject to Section 12.4(c) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or other similar taxes imposed by the United States
(or any political subdivision or taxing authority thereof or therein) from
interest, fees or other amounts payable hereunder for the account of any Lender
that is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for United States federal income tax purposes and that
has not provided to the Borrower such forms that establish a complete exemption
from such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 5.4(a) hereof to gross-up payments to be made to a Lender in
respect of income or similar taxes imposed by the United States or any
additional amounts with respect thereto (i) if such Lender has not provided to
the Borrower the Internal Revenue Service forms required to be provided to the
Borrower pursuant to this Section 5.4(b) or (ii) in the case of a payment other
than interest, to a Lender described in clause (ii) above, to the extent that
such forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 5.4 and except as specifically provided for in Section
12.4(c), the Borrower agrees to pay additional amounts and indemnify each Lender
in the manner set forth in Section 5.4(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as described in the previous sentence as a result of
any changes after the Closing Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of income or similar Taxes.

 

(c) If any Lender, in its sole opinion, determines that it has finally and
irrevocably received or been granted a refund in respect of any Taxes paid as to
which indemnification has been paid by the Borrower pursuant to this Section, it
shall promptly remit such refund (including any interest received in respect
thereof), net of all actual out-of-pocket costs and expenses; provided, that the
Borrower agrees to promptly return any such refund (plus interest) to such
Lender in the event such Lender is required to repay such refund to the relevant
taxing authority. Any such Lender shall provide the Borrower with a copy of any
notice of assessment from the relevant taxing authority (redacting any unrelated
confidential information contained therein) requiring repayment of such refund.
Nothing contained herein shall impose an obligation on any Lender to apply for
any such refund.

 

ARTICLE VI.

 

CONDITIONS PRECEDENT

 

Section 6.1. Conditions Precedent at Closing Date. The obligation of the Lenders
to make Loans, and of any Letter of Credit Issuer to issue Letters of Credit, is
subject to the satisfaction of each of the following conditions on or prior to
the Closing Date:

 

(a) Credit Agreement. This Agreement shall have been executed by the Borrower,
the Administrative Agent, the Letter of Credit Issuer and each of the Lenders.

 

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(b) Notes. The Borrower shall have executed and delivered to the Administrative
Agent a Note for the account of each Lender that has requested a Note.

 

(c) Fees, etc. The Borrower shall have paid or caused to be paid all fees
required to be paid by it on the Closing Date pursuant to Section 4.1 hereof and
all reasonable fees and expenses of the Administrative Agent and of special
counsel to the Administrative Agent that have been invoiced on or prior to such
date in connection with the preparation, negotiation, execution and delivery of
this Agreement and the other Credit Documents and the consummation of the
transactions contemplated hereby and thereby.

 

(d) Other Credit Documents. The Credit Parties named therein shall have duly
executed and delivered and there shall be in full force and effect, (i) the
Amended and Restated Subsidiary Guaranty (as modified, amended or supplemented
from time to time in accordance with the terms thereof and hereof, the
“Subsidiary Guaranty”), substantially in the form attached hereto as Exhibit
C-1, and (ii) the Amended and Restated Pledge and Security Agreement (as
modified, amended or supplemented from time to time in accordance with the terms
thereof and hereof, the “Security Agreement”), substantially in the form
attached hereto as Exhibit C-2, and in each case, shall have satisfied all
obligations set forth therein.

 

(e) Corporate Resolutions and Approvals. The Administrative Agent shall have
received certified copies of the resolutions of the Board of Directors of the
Borrower and each other Credit Party, approving the Credit Documents to which
the Borrower or any such other Credit Party, as the case may be, is or may
become a party, and of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to the execution, delivery and
performance by the Borrower or any such other Credit Party of the Credit
Documents to which it is or may become a party.

 

(f) Incumbency Certificates. The Administrative Agent shall have received a
certificate of the Secretary or an Assistant Secretary of the Borrower and of
each other Credit Party, certifying the names and true signatures of the
officers of the Borrower or such other Credit Party, as the case may be,
authorized to sign the Credit Documents to which the Borrower or such other
Credit Party is a party and any other documents to which the Borrower or any
such other Credit Party is a party that may be executed and delivered in
connection herewith.

 

(g) Opinions of Counsel. The Administrative Agent shall have received such
opinions of counsel from counsel to the Borrower as the Administrative Agent
shall request, each of which shall be addressed to the Administrative Agent and
each of the Lenders and dated the Closing Date and shall be in form and
substance satisfactory to the Administrative Agent.

 

(h) [Reserved]

 

(i) Recordation of Security Documents, Delivery of Collateral, Taxes, etc. To
the extent requested by the Administrative Agent, the Security Documents (or
proper notices or financing statements in respect thereof) shall have been duly
recorded, published and filed in such manner and in such places as is required
by law to establish, perfect, preserve and protect the rights and security
interests of the parties thereto and their respective successors and assigns,
all collateral items required to be physically delivered to the Administrative
Agent thereunder shall have been so delivered, accompanied by any appropriate
instruments of transfer, and all taxes, fees and other charges then due and
payable in connection with the execution, delivery, recording, publishing and
filing of such instruments and the issue and delivery of the Notes shall have
been paid in full.

 

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(j) Evidence of Insurance. The Administrative Agent shall have received
certificates of insurance and other evidence, satisfactory to it, of compliance
with the insurance requirements of this Agreement and the Security Documents.

 

(k) Search Reports. If requested by the Administrative Agent, the Administrative
Agent shall have received the results of UCC and other search reports from one
or more commercial search firms acceptable to the Administrative Agent, listing
all of the effective financing statements and other Liens filed against any
Credit Party (i) in the jurisdiction in which each such Credit Party is
organized or formed, (ii) in any jurisdiction in which such Credit Party
maintains an office or (iii) in any jurisdiction in which any Collateral of such
Credit Party is located.

 

(l) Organizational Documents and Good Standing Certificates. The Administrative
Agent shall have received: (i) an original certified copy of the Certificate of
Incorporation of the Borrower, and any and all amendments and restatements
thereof, certified as of a recent date by the relevant Secretary of State; (ii)
an original certified copy of the Certificate of Formation of American Dental
Partners of Missouri, LLC, and any and all amendments and restatements thereof,
certified as of a recent date by the relevant Secretary of State; (iii) a copy
of the Certificate of Incorporation, Certificate of Formation or Certificate of
Limited Partnership, as applicable, of each other Credit Party and any and all
amendments and restatements thereof, certified by the relevant Secretary of
State and certified by the Secretary or Assistant Secretary of each other Credit
Party as being true, complete and correct and in full force and effect; (iv) a
copy of each Credit Party’s by-laws, agreement of limited partnership or other
similar document, as applicable, certified by the Secretary or Assistant
Secretary of such Credit Party as being true, complete and correct and in full
force and effect; (v) an original good standing certificate from the Secretary
of State of the state of incorporation or formation, as applicable, dated as of
a recent date, listing all charter documents affecting such Credit Party and
certifying as to the good standing of such Credit Party; and (vi) original
certificates of good standing from each other jurisdiction in which each Credit
Party is authorized or qualified to do business.

 

(m) Solvency Certificate. The Administrative Agent shall have received, in
sufficient quantities for the Lenders, a duly executed solvency certificate
substantially in the form attached hereto as Exhibit D-1, and such certificate
shall be satisfactory in form and substance to each of the Lenders.

 

(n) Borrower’s Closing Certificate. The Administrative Agent shall have received
a certificate in the form attached hereto as Exhibit D-2, dated the Closing
Date, of an Authorized Officer to the effect that, at and as of the Closing Date
and both before and after giving effect to the initial Borrowings hereunder and
the application of the proceeds thereof: (x) no Default or Event of Default has
occurred and is continuing; and (y) all representations and warranties of the
Credit Parties contained herein or in the other Credit Documents are true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the Closing Date,
except that as to any such representations and warranties that expressly relate
to an earlier specified date, such representations and warranties are only
represented as having been true and correct in all material respects as of the
date when made.

 

(o) Management Service Agreements. The Administrative Agent shall have received
a copy of each Management Service Agreement to which the Borrower or any of its
Subsidiaries is a party as of the Closing Date certified by an Authorized
Officer as being true, correct and complete, in each case to the extent any such
Management Service Agreement was not previously delivered to the Administrative
Agent pursuant to Section 8.15 of the Original Credit Agreement.

 

(p) Proceedings and Documents. All corporate and other proceedings and all
documents incidental to the transactions contemplated hereby shall be
satisfactory in substance and form to the

 

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Administrative Agent and the Lenders and the Administrative Agent and its
special counsel and the Lenders shall have received all such counterpart
originals or certified or other copies of such documents as the Administrative
Agent or its special counsel or any Lender may reasonably request.

 

Section 6.2. Conditions Precedent to All Credit Events. The obligation of the
Lenders to make or participate in each Credit Event is subject, at the time
thereof, to the satisfaction of the following conditions:

 

(a) Notice of Borrowing, Continuation or Conversion, etc. The Administrative
Agent shall have received a Notice of Borrowing, Continuation or Conversion
meeting the requirements of Section 2.2 with respect to the Borrowing,
Continuation or Conversion of a Loan, or a Letter of Credit Request meeting the
requirement of Section 3.2 with respect to the issuance of a Letter of Credit.

 

(b) No Default; Representations and Warranties. At the time of each Credit Event
and after giving effect thereto, (i) there shall exist no Default or Event of
Default and (ii) all representations and warranties of the Credit Parties
contained herein or in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on and as of the date of such Credit Event, except to
the extent that such representations and warranties expressly relate to an
earlier specified date, in which case such representations and warranties shall
have been true and correct in all material respects as of the date when made.

 

The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the applicable conditions specified in Sections 6.1 and/or 6.2, as the case may
be, have been satisfied as of the times referred to in Sections 6.1 and 6.2.

 

ARTICLE VII.

 

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Lenders to enter into this Agreement and to make the
Loans and to issue and to participate in the Letters of Credit provided for
herein, the Borrower makes the following representations and warranties to, and
agreements with, the Lenders, all of which shall survive the execution and
delivery of this Agreement and each Credit Event:

 

Section 7.1. Corporate Status, etc. Each of the Borrower and its Subsidiaries
(i) is a duly organized or formed and validly existing corporation, partnership
or limited liability company, as the case may be, in good standing or full force
and effect, as applicable, under the laws of the jurisdiction of its
organization or formation and has the corporate, partnership or limited
liability company power and authority, as applicable, to own its property and
assets and to transact the business in which it is engaged and presently
proposes to engage, and (ii) has duly qualified and is authorized to do business
in all jurisdictions where it is required to be so qualified except where the
failure to be so qualified would not have a Material Adverse Effect. Schedule
7.1 hereto lists, as of the Closing Date, each Subsidiary (and the direct and
indirect ownership interest of the Borrower therein).

 

Section 7.2. Corporate Power and Authority, etc. Each Credit Party has the
corporate, partnership or other organizational power and authority to execute,
deliver and carry out the terms and provisions of the Credit Documents to which
it is party and has taken all necessary corporate or other organizational action
to authorize the execution, delivery and performance of the Credit Documents to
which it is party. Each Credit Party has duly executed and delivered each Credit
Document to which it is party, and each Credit Document to which it is party
constitutes the legal, valid and binding agreement or

 

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obligation of such Credit Party enforceable in accordance with its terms, except
to the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors’ rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).

 

Section 7.3. No Violation. Neither the execution, delivery and performance by
any Credit Party of the Credit to which it is party nor compliance with the
terms and provisions thereof (i) will contravene any material provision of any
law, statute, rule, regulation, order, writ, injunction or decree of any
Governmental Authority applicable to such Credit Party or its material
properties and assets, (ii) will conflict with or result in any breach of, any
of the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien (other than the Liens created pursuant to the Security
Documents) upon any of the property or assets of such Credit Party pursuant to
the terms of any promissory note, bond, debenture, indenture, mortgage, deed of
trust, credit or loan agreement, or any other material agreement or other
instrument, to which such Credit Party is a party or by which it or any of its
property or assets are bound or to which it may be subject, or (iii) will
violate any provision of the certificate or articles of incorporation,
certificate of limited partnership, code of regulations or by-laws, limited
partnership agreement or other charter documents of such Credit Party.

 

Section 7.4. Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any Governmental Authority is required to authorize or is required
as a condition to (i) the execution, delivery and performance by any Credit
Party of any Credit Document to which it is a party, or (ii) the legality,
validity, binding effect or enforceability of any Credit Document to which any
Credit Party is a party, except the filing and recording of financing statements
and other documents necessary in order to perfect the Liens created by the
Security Documents.

 

Section 7.5. Litigation. There are no actions, suits or proceedings pending or,
to, the knowledge of the Borrower, threatened with respect to the Borrower or
any of its Subsidiaries (i) that have, or could reasonably be expected to have,
a Material Adverse Effect, or (ii) that question the validity or enforceability
of any of the Credit Documents, or of any action to be taken by the Borrower or
any of the other Credit Parties pursuant to any of the Credit Documents.

 

Section 7.6. Use of Proceeds; Margin Regulations.

 

(a) The proceeds of all Loans shall be utilized to refinance existing senior
debt facilities, provide funds for Permitted Acquisitions and provide working
capital and funds for general corporate and other lawful purposes not
inconsistent with the requirements of this Agreement.

 

(b) No part of the proceeds of any Credit Event will be used directly or
indirectly to purchase or carry Margin Stock, or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock, in violation of any of
the provisions of Regulation U or X of the Board of Governors of the Federal
Reserve System. The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying any Margin Stock. At no time would
more than 25% of the value of the assets of the Borrower or of the Borrower and
its consolidated Subsidiaries that are subject to any “arrangement” (as such
term is used in Section 221.2(g) of such Regulation U) hereunder be represented
by Margin Stock.

 

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Section 7.7. Financial Statements, etc.

 

(a) The Borrower has furnished to the Lenders and the Administrative Agent
complete and correct copies of (i) the audited consolidated balance sheets of
the Borrower and its consolidated subsidiaries as of December 31, 2003 and the
related audited consolidated statements of income, shareholders’ equity, and
cash flows of the Borrower and its consolidated subsidiaries for the fiscal
years then ended, accompanied by the report thereon of KPMG LLP; and (ii) the
condensed consolidated balance sheets of the Borrower and its consolidated
subsidiaries as of March 31, 2004, June 30, 2004, and September 30, 2004 and the
related condensed consolidated statements of income and of cash flows of the
Borrower and its consolidated subsidiaries for the fiscal period then ended, as
included in the Borrower’s Report on Form 10-Q for the fiscal quarter ended
September 30, 2004, filed with the SEC. All such financial statements have been
prepared in accordance with GAAP, consistently applied (except as stated
therein), and fairly present the financial position of the entities described in
such financial statements as of the respective dates indicated and the
consolidated results of their operations and cash flows for the respective
periods indicated, subject in the case of any such financial statements that are
unaudited, to normal audit adjustments, none of which will involve a Material
Adverse Effect. The Borrower and its Subsidiaries did not have, as of the date
of the latest financial statements referred to above, and will not have as of
the Closing Date after giving effect to the incurrence of Loans hereunder, any
material or significant contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
foregoing financial statements or the notes thereto in accordance with GAAP and
that in any such case is material in relation to the business, operations,
properties, assets, financial or other condition or prospects of the Borrower or
any of its Subsidiaries.

 

(b) The Borrower has delivered or caused to be delivered to the Lenders prior to
the execution and delivery of this Agreement financial projections prepared by
management of the Borrower for the Borrower and its Subsidiaries for the fiscal
years 2005 through 2007 (the “Financial Projections”). The Financial Projections
were prepared on behalf of the Borrower in good faith after taking into account
historical levels of business activity of the Borrower and its Subsidiaries,
known trends, including general economic trends, and all other information,
assumptions and estimates considered by management of the Borrower and its
Subsidiaries to be pertinent thereto; provided, that (i) no representation or
warranty is made as to the impact of future general economic conditions or as to
whether the Borrower’s projected consolidated results as set forth in the
Financial Projections will actually be realized, and (ii) the Administrative
Agent and the Lenders understand that the Financial Projections are subject to
uncertainties and other factors that could cause actual results to differ
materially from those projected, anticipated or implied.

 

Section 7.8. Solvency. The Borrower has received consideration that is the
reasonable equivalent value of the obligations and liabilities that the Borrower
has incurred to the Administrative Agent and the Lenders. The Borrower now has
capital sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage and is now solvent and able to
pay its debts as they mature and the Borrower, as of the Closing Date, owns
property having a value, both at fair valuation and at present fair salable
value, greater than the amount required to pay the Borrower’s debts; and the
Borrower is not entering into the Credit Documents with the intent to hinder,
delay or defraud its creditors. For purposes of this Section 7.8, “debt” means
any liability on a claim, and “claim” means (x) right to payment whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.

 

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Section 7.9. No Material Adverse Change. Since December 31, 2003, there has been
no change in the financial or other condition, business, affairs or prospects of
the Borrower and its Subsidiaries taken as a whole, or their properties and
assets considered as an entirety, except for changes none of which, individually
or in the aggregate, has had or could reasonably be expected to have, a Material
Adverse Effect.

 

Section 7.10. Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it that have become due, other than
those not yet delinquent and except for those contested in good faith. The
Borrower and each of its Subsidiaries has established on its books such charges,
accruals and reserves in respect of taxes, assessments, fees and other
governmental charges for all fiscal periods as are required by GAAP. The
Borrower knows of no proposed assessment for additional federal, foreign or
state taxes for any period, or of any basis therefor, which, individually or in
the aggregate, taking into account such charges, accruals and reserves in
respect thereof as the Borrower and its Subsidiaries have made, could reasonably
be expected to have a Material Adverse Effect.

 

Section 7.11. Title to Properties, etc. The Borrower and each of its
Subsidiaries has good and marketable title, in the case of real property, and
good title (or valid Leaseholds, in the case of any leased property), in the
case of all other property, to all of its properties and assets free and clear
of Liens other than Permitted Liens. The interests of the Borrower and each of
its Subsidiaries in the properties reflected in the most recent balance sheet
referred to in Section 7.7, taken as a whole, were sufficient, in the judgment
of the Borrower, as of the date of such balance sheet for purposes of the
ownership and operation of the businesses conducted by the Borrower and such
Subsidiaries.

 

Section 7.12. Lawful Operations, etc. The Borrower and each of its Subsidiaries:
(i) holds all necessary federal, state and local governmental licenses,
registrations, certifications, permits and authorizations necessary to conduct
its business, except to the extent the failure to so hold could reasonably be
expected to have a Material Adverse Effect; (ii) is in full compliance with all
material requirements imposed by law, regulation or rule, whether federal, state
or local, that are applicable to it, its operations, or its properties and
assets, including without limitation, applicable requirements of Environmental
Laws, except for any failure to obtain and maintain in effect, or noncompliance,
that, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect; (iii) conduct their business in compliance with all
provisions of the Fair Debt Practices Collection Act and all other applicable
federal, state or local laws governing the collection of debts and neither the
Borrower nor any of its Subsidiaries is in material violation of any of such
laws; and (iv) are in compliance with all federal, state and local privacy laws.

 

Section 7.13. Environmental Matters.

 

(a) The Borrower and each of its Subsidiaries is in compliance with all
Environmental Laws governing its business, except to the extent that any such
failure to comply (together with any resulting penalties, fines or forfeitures)
would not reasonably be expected to have a Material Adverse Effect. All
licenses, permits, registrations or approvals required for the conduct of the
business of the Borrower and each of its Subsidiaries under any Environmental
Law have been secured and the Borrower and each of its Subsidiaries is in
substantial compliance therewith, except for such licenses, permits,
registrations or approvals the failure to secure or to comply therewith is not
reasonably likely to have a Material Adverse Effect. Neither the Borrower nor
any of its Subsidiaries has received written notice, or otherwise knows, that it
is in any respect in noncompliance with, breach of or default under any
applicable writ, order, judgment, injunction, or decree to which the Borrower or
such Subsidiary is a party or that would affect the ability of the Borrower or
such Subsidiary to operate any Real Property and no event has occurred and

 

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is continuing that, with the passage of time or the giving of notice or both,
would constitute noncompliance, breach of or default thereunder, except in each
such case, such noncompliance, breaches or defaults as would not reasonably be
expected to, in the aggregate, have a Material Adverse Effect. There are no
Environmental Claims pending or, to the best knowledge of the Borrower,
threatened wherein an unfavorable decision, ruling or finding would reasonably
be expected to have a Material Adverse Effect. There are no facts,
circumstances, conditions or occurrences on any Real Property now or at any time
owned, leased or operated by the Borrower or any of its Subsidiaries or on any
property adjacent to any such Real Property, that are known by the Borrower or
as to which the Borrower or any such Subsidiary has received written notice,
that could reasonably be expected: (i) to form the basis of an Environmental
Claim against the Borrower or any of its Subsidiaries or any Real Property of
the Borrower or any of its Subsidiaries; or (ii) to cause such Real Property to
be subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Property under any Environmental Law, except in
each such case, such Environmental Claims or restrictions that individually or
in the aggregate would not reasonably be expected to have a Material Adverse
Effect.

 

(b) Hazardous Materials have not at any time been (i) generated, used, treated
or stored on, or transported to or from, any Real Property of the Borrower or
any of its Subsidiaries or (ii) released on any such Real Property, in each case
where such occurrence or event is not in compliance with Environmental Laws and
is reasonably likely to have a Material Adverse Effect.

 

Section 7.14. Compliance with ERISA. Compliance by the Borrower with the
provisions hereof and Credit Events contemplated hereby will not involve any
prohibited transaction within the meaning of ERISA or Section 4975 of the Code.
The Borrower and each of its Subsidiaries, (i) has fulfilled all obligations
under minimum funding standards of ERISA and the Code with respect to each Plan
that is not a Multiemployer Plan or a Multiple Employer Plan, (ii) has satisfied
all respective contribution obligations in respect of each Multiemployer Plan
and each Multiple Employer Plan, (iii) is in compliance in all material respects
with all other applicable provisions of ERISA and the Code with respect to each
Plan, each Multiemployer Plan and each Multiple Employer Plan, and (iv) has not
incurred any liability under the Title IV of ERISA to the PBGC with respect to
any Plan, any Multiemployer Plan, any Multiple Employer Plan, or any trust
established thereunder. No Plan or trust created thereunder has been terminated,
and there have been no Reportable Events, with respect to any Plan or trust
created thereunder or with respect to any Multiemployer Plan or Multiple
Employer Plan, which termination or Reportable Event will or could result in the
termination of such Plan, Multiemployer Plan or Multiple Employer Plan and give
rise to a material liability of the Borrower or any ERISA Affiliate in respect
thereof. Neither the Borrower nor any ERISA Affiliate is at the date hereof, or
has been at any time within the two years preceding the date hereof, an employer
required to contribute to any Multiemployer Plan or Multiple Employer Plan, or a
“contributing sponsor” (as such term is defined in Section 4001 of ERISA) in any
Multiemployer Plan or Multiple Employer Plan. Neither the Borrower nor any ERISA
Affiliate has any contingent liability with respect to any post-retirement
“welfare benefit plan” (as such term is defined in ERISA) except as has been
disclosed to the Lenders in writing.

 

Section 7.15. Intellectual Property, etc. The Borrower and each of its
Subsidiaries has obtained or has the right to use all material patents,
trademarks, service marks, trade names, copyrights, licenses and other rights
with respect to the foregoing necessary for the present conduct of its business,
without any known conflict with the rights of others, except for such patents,
trademarks, service marks, trade names, copyrights, licenses and rights, the
loss of which, and such conflicts, which in any such case individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect.

 

Section 7.16. Investment Company Act, etc. Neither the Borrower nor any of its
Subsidiaries is subject to regulation with respect to the creation or incurrence
of Indebtedness under the Investment Company Act of 1940, as amended, the
Interstate Commerce Act, as amended, the Federal Power Act, as amended, the
Public Utility Holding Company Act of 1935, as amended, or any applicable state
public utility law.

 

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Section 7.17. Insurance. The Borrower and each of its Subsidiaries maintains
insurance coverage by such insurers and in such forms and amounts and against
such risks as are generally consistent with industry standards and in compliance
with the terms of the Credit Documents.

 

Section 7.18. Certain Contracts; Labor Relations. Neither the Borrower nor any
of its Subsidiaries (i) is subject to any burdensome contract, agreement,
corporate restriction, judgment, decree or order, (ii) is a party to any labor
dispute affecting any bargaining unit or other group of employees generally,
(iii) is subject to any strike, slow down, workout or other concerted
interruptions of operations by employees of the Borrower or any Subsidiary,
whether or not relating to any labor contracts, (iv) is subject to any pending
or, to the knowledge of the Borrower, threatened, unfair labor practice
complaint, before the National Labor Relations Board, (v) is subject to any
pending or, to the knowledge of the Borrower, threatened, grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement, (vi) is subject to any pending or, to the knowledge of the Borrower,
threatened, strike, labor dispute, slowdown or stoppage, or (vii) is, to the
knowledge of the Borrower, involved or subject to any union representation
organizing or certification matter with respect to the employees of the Borrower
or any of its Subsidiaries, except (with respect to any matter specified in any
of the above clauses), for such matters as, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

 

Section 7.19. True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Borrower
or any of its Subsidiaries in writing to the Administrative Agent or any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated herein, other than the Financial Projections (as to which
representations are made only as provided in Section 7.7), is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of such person in writing to any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided, except that any such
future information consisting of financial projections prepared by the Borrower
is only represented herein as being based on good faith estimates and
assumptions believed by such persons to be reasonable at the time made, it being
recognized by the Lenders that such projections as to future events are not to
be viewed as facts and that actual results during the period or periods covered
by any such projections may differ materially from the projected results.

 

Section 7.20. Management Service Agreements.

 

(a) Schedule 7.20 hereto sets forth each service agreement relating to the
affiliation with a professional corporation or other dental group that the
Borrower or any of its Subsidiaries is a party to as of the Closing Date (each
such service agreement, together with each additional service agreement entered
into by the Borrower or any of its Subsidiaries after the Closing Date, and as
any of the foregoing may be amended from time to time are referred to herein as
a “Management Service Agreement” and collectively, the “Management Service
Agreements”). The Borrower has provided the Administrative Agent a true, correct
and complete copy of each Management Service Agreement in effect as of the
Closing Date.

 

(b) No Management Service Agreement Termination Event exists under any
Management Service Agreement that individually, or when taken together with all
other existing Management Service Agreement Termination Events, could reasonably
be expected to have a Material Adverse Effect.

 

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(c) Subject to any restrictions under applicable law, except as set forth on
Schedule 7.20, all of the Management Service Agreements are freely assignable to
third parties and collaterally assignable to the Administrative Agent, for the
benefit of the Lenders and the other parties secured under the Security
Documents, without the consent of any party to such Management Service
Agreement.

 

Section 7.21. Malpractice Insurance. The senior management of the Borrower and
each of its Subsidiaries has concluded, after the exercise of reasonable
business judgment, that such entities are not engaged in the practice of
dentistry and are not required to maintain malpractice insurance and if such
senior management concludes after the Closing Date that such entities are
required to maintain malpractice insurance, the Borrower covenants and agrees
to, and will require each of its Subsidiaries to, obtain and maintain
comprehensive malpractice insurance against bodily injury and death with
financially sound and reputable insurance companies in such amounts and against
such risks as are usually carried by owners of similar businesses and properties
in the same general areas in which the Borrower and its Subsidiaries operate.

 

ARTICLE VIII.

 

AFFIRMATIVE COVENANTS

 

The Borrower hereby covenants and agrees that on the Closing Date and thereafter
so long as this Agreement is in effect and until such time as the Total
Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder and
under the other Credit Documents, have been paid in full:

 

Section 8.1. Reporting Requirements. The Borrower will furnish to each Lender
and the Administrative Agent:

 

(a) Annual Financial Statements. As soon as available and in any event within 90
days after the close of each fiscal year of the Borrower, the consolidated and
consolidating (by region consistent with the Borrower’s past accounting
practices) balance sheets of the Borrower and its consolidated Subsidiaries as
at the end of such fiscal year and the related consolidated and consolidating
(by region consistent with the Borrower’s past accounting practices) statements
of income, of stockholders’ equity and of cash flows for such fiscal year, in
each case setting forth comparative figures for the preceding fiscal year, all
in reasonable detail and accompanied by the opinion with respect to such
consolidated financial statements of independent public accountants of
recognized national standing selected by the Borrower, which opinion shall be
unqualified and shall (i) state that such accountants audited such consolidated
financial statements in accordance with generally accepted auditing standards,
that such accountants believe that such audit provides a reasonable basis for
their opinion, and that in their opinion such consolidated financial statements
present fairly, in all material respects, the consolidated financial position of
the Borrower and its consolidated subsidiaries as at the end of such fiscal year
and the consolidated results of their operations and cash flows for such fiscal
year in conformity with generally accepted accounting principles, or (ii)
contain such statements as are customarily included in unqualified reports of
independent accountants in conformity with the recommendations and requirements
of the American Institute of Certified Public Accountants (or any successor
organization).

 

(b) Quarterly Financial Statements. As soon as available and in any event within
45 days after the close of each of the quarterly accounting periods in each
fiscal year of the Borrower, the unaudited consolidated and consolidating (by
region consistent with the Borrower’s past accounting practices) balance sheets
of the Borrower and its consolidated Subsidiaries as at the end of such
quarterly period and the related unaudited consolidated and consolidating (by
region consistent with the Borrower’s

 

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past accounting practices) statements of income and of cash flows for such
quarterly period and/or for the fiscal year to date, and setting forth, in the
case of such unaudited consolidated statements of income and of cash flows,
comparative figures for the related periods in the prior fiscal year, and which
shall be certified on behalf of the Borrower by an Authorized Officer of the
Borrower, subject to changes resulting from normal year-end audit adjustments.

 

(c) Officer’s Compliance Certificates. At the time of the delivery of the
financial statements provided for in Sections 8.1(a) and (b), a certificate on
behalf of the Borrower of an Authorized Officer of the Borrower to the effect
that no Default or Event of Default exists or, if any Default or Event of
Default does exist, specifying the nature and extent thereof and the actions the
Borrower proposes to take with respect thereto, which certificate shall set
forth the calculations required to establish compliance with the provisions of
Section 9.7 of this Agreement.

 

(d) Budgets and Forecasts. Not later than 120 days after the commencement of any
fiscal year of the Borrower and its Subsidiaries, consolidated projections and
budget in reasonable detail for each of the four fiscal quarters of such fiscal
year, and (if and to the extent prepared by management of the Borrower) for any
subsequent fiscal years, as approved by the Borrower’s Board of Directors
setting forth, with appropriate discussion, the forecasted balance sheet, income
statement, operating cash flows and capital expenditures of the Borrower and its
Subsidiaries for the period covered thereby, and the principal assumptions upon
which forecasts and budget are based.

 

(e) Notice of Default, Litigation, Violation of Material Agreement. Promptly,
and in any event within three Business Days after the Borrower or any of its
Subsidiaries obtains knowledge thereof, notice of

 

(i) the occurrence of any event that constitutes a Default or Event of Default,
which notice shall specify the nature thereof, the period of existence thereof
and what action the Borrower proposes to take with respect thereto;

 

(ii) the commencement of, or any other material development concerning, any
litigation, governmental or regulatory proceeding pending against the Borrower
or any of its Subsidiaries, or any other event if the same involves any
reasonable possibility of having a Material Adverse Effect; or

 

(iii) the occurrence of any Management Service Agreement Termination Event or
the termination of any Management Service Agreement.

 

(f) ERISA. Promptly, and in any event within 10 days after the Borrower, any
Subsidiary or any ERISA Affiliate knows of the occurrence of any of the
following, the Borrower will deliver to each of the Lenders a certificate on
behalf of the Borrower of an Authorized Officer of the Borrower setting forth
the full details as to such occurrence and the action, if any, that the
Borrower, such Subsidiary or such ERISA Affiliate is required or proposes to
take, together with any notices required or proposed to be given to or filed
with or by the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto: (i) that a
Reportable Event has occurred with respect to any Plan; (ii) the institution of
any steps by the Borrower, any ERISA Affiliate, the PBGC or any other person to
terminate any Plan; (iii) the institution of any steps by the Borrower or any
ERISA Affiliate to withdraw from any Plan; (iv) the institution of any steps by
the Borrower or any Subsidiary to withdraw from any Multiemployer Plan or
Multiple Employer Plan, if such withdrawal could result in withdrawal liability
(as described in Part 1 of Subtitle E of Title IV of ERISA) in excess of
$1,000,000; (v) a non-exempt “prohibited transaction” within the meaning of
Section 406 of ERISA in connection with any Plan; (vi) that a Plan has an
Unfunded Current Liability exceeding $1,000,000; (vii) any material

 

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increase in the contingent liability of the Borrower or any Subsidiary with
respect to any post-retirement welfare liability; or (ix) the taking of any
action by, or the threatening of the taking of any action by, the Internal
Revenue Service, the Department of Labor or the PBGC with respect to any of the
foregoing.

 

(g) Environmental Matters. Promptly upon, and in any event within 10 Business
Days after, an officer of the Borrower or any of its Subsidiaries obtains actual
knowledge thereof, notice of one or more of the following environmental matters:
(i) any pending or threatened material Environmental Claim against the Borrower
or any of its Subsidiaries or any Real Property owned or operated by the
Borrower or any of its Subsidiaries; (ii) any condition or occurrence on or
arising from any Real Property owned or operated by the Borrower or any of its
Subsidiaries that (A) results in material noncompliance by the Borrower or any
of its Subsidiaries with any applicable Environmental Law or (B) would
reasonably be expected to form the basis of a material Environmental Claim
against the Borrower or any of its Subsidiaries or any such Real Property; (iii)
any condition or occurrence on any Real Property owned, leased or operated by
the Borrower or any of its Subsidiaries that could reasonably be expected to
cause such Real Property to be subject to any material restrictions on the
ownership, occupancy, use or transferability by the Borrower or any of its
Subsidiaries of such Real Property under any Environmental Law; and (iv) the
taking of any material removal or remedial action in response to the actual or
alleged presence of any Hazardous Material on any Real Property owned, leased or
operated by the Borrower or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative agency. All such
notices shall describe in reasonable detail the nature of the Environmental
Claim, the Borrower’s or such Subsidiary’s response thereto and, to the extent
reasonably ascertainable, the potential exposure in dollars of the Borrower and
its Subsidiaries with respect thereto.

 

(h) SEC Reports and Registration Statements. Promptly after transmission thereof
or other filing with the SEC, copies of all registration statements (other than
the exhibits thereto and any registration statement on Form S-8 or its
equivalent) and all annual, quarterly or current reports that the Borrower or
any of its Subsidiaries files with the SEC on Form 10-K, 10-Q or 8-K (or any
successor forms).

 

(i) Annual and Quarterly Reports, Proxy Statements and other Reports Delivered
to Stockholders Generally. Promptly after transmission thereof to its
stockholders, copies of all annual, quarterly and other reports and all proxy
statements that the Borrower furnishes to its stockholders generally.

 

(j) Auditors’ Internal Control Comment Letters, etc. Promptly upon receipt
thereof, a copy of each letter or memorandum commenting on internal accounting
controls and/or accounting or financial reporting policies followed by the
Borrower and/or any of its Subsidiaries that is submitted to the Borrower by its
independent accountants in connection with any annual or interim audit made by
them of the books of the Borrower or any of its Subsidiaries.

 

(k) Other Information. Promptly, but in any event within 10 Business Days upon
request therefor, such other information or documents (financial or otherwise)
relating to the Borrower or any of its Subsidiaries as the Administrative Agent
or any Lender may reasonably request from time to time.

 

Section 8.2. Books, Records and Inspections. Subject to Section 12.14, the
Borrower will, and will cause each of its Subsidiaries to, (i) keep proper books
of record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Borrower or such
Subsidiaries, as the case may be, in accordance with GAAP; and (ii) permit, upon
at least two Business Days’ notice to the Chief Financial Officer of the
Borrower, officers and designated representatives of the Administrative Agent or
any of the Lenders to visit and inspect any of the properties or assets of the
Borrower and any of its Subsidiaries in whomsoever’s possession (but only to

 

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the extent the Borrower or such Subsidiary has the right to do so to the extent
in the possession of another person), to examine the books of account of the
Borrower and any of its Subsidiaries, and make copies thereof and take extracts
therefrom, and to discuss the affairs, finances and accounts of the Borrower and
of any of its Subsidiaries with, and be advised as to the same by, its and their
officers and independent accountants and independent actuaries, if any, all at
such reasonable times and intervals and to such reasonable extent as the
Administrative Agent or any of the Lenders may request.

 

Section 8.3. Insurance.

 

(a) The Borrower will, and will cause each of its Subsidiaries to, (i) maintain
insurance coverage by such insurers and in such forms and amounts and against
such risks as are generally consistent with the insurance coverage maintained by
the Borrower and its Subsidiaries at the date hereof, and (ii) forthwith upon
any Lender’s written request, furnish to such Lender such information about such
insurance as such Lender may from time to time reasonably request, which
information shall be prepared in form and detail satisfactory to such Lender and
certified by an Authorized Officer of the Borrower.

 

(b) The Borrower will, and will cause each of its Subsidiaries that is a Credit
Party to, at all times keep their respective property that is subject to the
Lien of any Security Document insured in favor of the Administrative Agent, and
all policies or certificates (or certified copies thereof) with respect to such
insurance (and any other insurance maintained by the Borrower or any such
Subsidiary) (i) shall be endorsed to the Administrative Agent’s satisfaction for
the benefit of the Administrative Agent (including, without limitation, by
naming the Administrative Agent as an additional loss payee (with respect to
Collateral) or, to the extent permitted by applicable law, as an additional
insured as its interests may appear), (ii) shall state that such insurance
policies shall not be canceled, reduced or expire without 30 days’ prior written
notice thereof (or 10 days’ prior written notice in the case of cancellation for
the non-payment of premiums) by the respective insurer to the Administrative
Agent, (iii) shall provide that the respective insurers irrevocably waive any
and all rights of subrogation with respect to the Administrative Agent and the
Lenders, (iv) shall in the case of any such certificates or endorsements in
favor of the Administrative Agent, be delivered to or deposited with the
Administrative Agent, and (v) shall provide that the interests of the
Administrative Agent shall not be invalidated by an act or negligence of the
Borrower or any Subsidiary or any person having an interest in any facility
owned, leased or used by the Borrower or any of its Subsidiaries nor by
occupancy or use of any facility owned, leased or used by the Borrower or any
Subsidiary for purposes more hazardous than permitted by such policy nor by any
foreclosure or other proceedings relating to any facility owned, leased or used
by the Borrower or any Subsidiary. The Borrower shall deliver to the
Administrative Agent contemporaneously with the expiration or replacement of any
policy of insurance required to be maintained by this Agreement a certificate as
to the new or renewal policy. The Borrower shall advise the Administrative Agent
promptly upon the cancellation, reduction or amendment of any policy. If
requested to do so by the Administrative Agent at any time, the Borrower shall
deliver copies of all insurance policies maintained by it as required by this
Agreement. The Administrative Agent shall deliver copies of any certificates of
insurance to a Lender upon such Lender’s reasonable request.

 

(c) If the Borrower or any of its Subsidiaries shall fail to maintain any
insurance in accordance with this Section 8.3, or if the Borrower or any of its
Subsidiaries shall fail to so endorse and deliver or deposit all endorsements or
certificates with respect thereto, the Administrative Agent shall have the right
(but shall be under no obligation), upon prior written notice to the Borrower,
to procure such insurance and the Borrower agrees to reimburse the
Administrative Agent on demand, for all actual costs and expenses of procuring
such insurance.

 

Section 8.4. Payment of Taxes and Claims. The Borrower will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or

 

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levies imposed upon it or upon its income or profits, or upon any properties
belonging to it, prior to the date on which penalties attach thereto, and all
lawful claims that, if unpaid, might become a Lien or charge upon any properties
of the Borrower or any of its Subsidiaries; provided that neither the Borrower
nor any of its Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim that is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with GAAP. Without limiting the generality of the foregoing, the
Borrower will, and will cause each of its Subsidiaries to, pay in full all of
its wage obligations to its employees in accordance with the Fair Labor
Standards Act (29 U.S.C. Sections 206-207) and any comparable provisions of
applicable law.

 

Section 8.5. Corporate Franchises. The Borrower will do, and will cause each of
its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its corporate existence, rights and authority,
provided that nothing in this Section 8.5 shall be deemed to prohibit any
transaction permitted by Section 9.2.

 

Section 8.6. Good Repair. The Borrower will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever’s possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements, thereto, to the extent and in the manner customary for
companies in similar businesses.

 

Section 8.7. Compliance with Statutes, etc. The Borrower will, and will cause
each of its Subsidiaries to, comply, in all material respects, with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all Governmental Authorities in respect of the conduct of its
business and the ownership of its property, other than those the noncompliance
with which would not have, and that would not be reasonably expected to have, a
Material Adverse Effect.

 

Section 8.8. Compliance with Environmental Laws. Without limitation of the
covenants contained in Section 8.7 hereof,

 

(a) The Borrower will comply, and will cause each of its Subsidiaries to comply,
in all material respects, with all Environmental Laws applicable to the
ownership, lease or use of all Real Property now or hereafter owned, leased or
operated by the Borrower or any of its Subsidiaries, and will promptly pay or
cause to be paid all costs and expenses incurred in connection with such
compliance, except to the extent that such compliance with Environmental Laws is
being contested in good faith and by appropriate proceedings and for which
adequate reserves have been established to the extent required by GAAP, and an
adverse outcome in such proceedings is not reasonably expected to have a
Material Adverse Effect.

 

(b) The Borrower will keep or cause to be kept, and will cause each of its
Subsidiaries to keep or cause to be kept, all such Real Property free and clear
of any Liens imposed pursuant to such Environmental Laws that are not permitted
under Section 9.3.

 

(c) Neither the Borrower nor any of its Subsidiaries will generate, use, treat,
store, release or dispose of, or permit the generation, use, treatment, storage,
release or disposal of, Hazardous Materials on any Real Property now or
hereafter owned, leased or operated by the Borrower or any of its Subsidiaries
or transport or permit the transportation of Hazardous Materials to or from any
such Real Property other than in compliance with applicable Environmental Laws
and in the ordinary course of business, except for such noncompliance as would
not have, and that would not be reasonably expected to have, a Material Adverse
Effect.

 

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(d) If required to do so under any applicable order of any Governmental
Authority, the Borrower will undertake, and cause each of its Subsidiaries to
undertake, any clean up, removal, remedial or other action necessary to remove
and clean up any Hazardous Materials from any Real Property owned, leased or
operated by the Borrower or any of its Subsidiaries in accordance with, in all
material respects, the requirements of all applicable Environmental Laws and in
accordance with, in all material respects, such orders of all Governmental
Authorities, except to the extent that the Borrower or such Subsidiary is
contesting such order in good faith and by appropriate proceedings and for which
adequate reserves have been established to the extent required by GAAP.

 

(e) At the written request of the Administrative Agent or the Required Lenders,
which request shall specify in reasonable detail the basis therefor, at any time
and from time to time after the Lenders receive notice under Section 8.1(g) for
any Environmental Claim involving potential expenditures by the Borrower or any
of its Subsidiaries in excess of $500,000 in the aggregate for any Real
Property, the Borrower will provide, at its sole cost and expense, an
environmental site assessment report concerning any such Real Property now or
hereafter owned, leased or operated by the Borrower or any of its Subsidiaries,
prepared by an environmental consulting firm reasonably acceptable to the
Administrative Agent, indicating the presence or absence of Hazardous Materials
and the potential cost of any removal or a remedial action in connection with
any Hazardous Materials on such Real Property. If the Borrower fails to provide
the same within 90 days after such request was made, the Administrative Agent
may order the same, and the Borrower shall grant and hereby grants, to the
Administrative Agent and the Lenders and their agents, access to such Real
Property and specifically grants the Administrative Agent and the Lenders an
irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment, all at the Borrower’s expense.

 

Section 8.9. Fiscal Years, Fiscal Quarters. The Borrower shall not change its or
any of its Subsidiaries’ fiscal years or fiscal quarters (other than the fiscal
year or fiscal quarters of a person that becomes a Subsidiary, made at the time
such person becomes a Subsidiary to conform to the Borrower’s fiscal year and
fiscal quarters).

 

Section 8.10. Certain Subsidiaries to Join in Subsidiary Guaranty.

 

(a) In the event that at any time after the Closing Date (x) the Borrower
creates, holds, acquires or at any time has any Subsidiary (other than the
Excluded Subsidiary and other than a Foreign Subsidiary as to which Section
8.10(b) applies) that is not a party to the Subsidiary Guaranty, or (y) an Event
of Default shall have occurred and be continuing and the Borrower has any
Subsidiary that is not a party to the Subsidiary Guaranty, the Borrower will
immediately, but in any event within 5 Business Days, notify the Administrative
Agent in writing of such event, identifying the Subsidiary in question and
referring specifically to the rights of the Administrative Agent and the Lenders
under this Section. The Borrower will, within 15 days following request therefor
from the Administrative Agent (who may give such request on its own initiative
or upon request by the Required Lenders), cause such Subsidiary to deliver to
the Administrative Agent, in sufficient quantities for the Lenders, (i) a
joinder supplement, reasonably satisfactory in form and substance to the
Administrative Agent, duly executed by such Subsidiary, pursuant to which such
Subsidiary joins in the Subsidiary Guaranty as a guarantor thereunder, and (ii)
if such Subsidiary is a corporation, resolutions of the Board of Directors of
such Subsidiary, certified by the Secretary or an Assistant Secretary of such
Subsidiary as duly adopted and in full force and effect, authorizing the
execution and delivery of such joinder supplement, or if such Subsidiary is not
a corporation, such other evidence of the authority of such Subsidiary to
execute such joinder supplement as the Administrative Agent may reasonably
request. Notwithstanding the foregoing, in the event the Excluded Subsidiary
shall cease to be an inactive Subsidiary or shall acquire any material assets or
liabilities, the Borrower will immediately, and in any event within 5 Business
Days, notify the Administrative Agent in writing of such event, referring
specifically to the rights of the Administrative

 

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Agent and the Lenders under this Section. The Borrower will, within 15 days
following request therefor from the Administrative Agent (who may give such
request on its own initiative or upon request by the Required Lenders), cause
the Excluded Subsidiary to deliver to the Administrative Agent, in sufficient
quantities for the Lenders, (i) a joinder supplement, reasonably satisfactory in
form and substance to the Administrative Agent, duly executed by the Excluded
Subsidiary, pursuant to which the Excluded Subsidiary joins in the Subsidiary
Guaranty as a guarantor thereunder, and (ii) such other evidence of the
authority of the Excluded Subsidiary to execute such joinder supplement as the
Administrative Agent may reasonably request.

 

(b) Notwithstanding the foregoing or the provisions of Section 8.10 hereof, the
Borrower shall not, unless an Event of Default shall have occurred and be
continuing, be required to pledge (or cause to be pledged) more than 65% of the
stock or other equity interests in any first tier Foreign Subsidiary, or any of
the stock or other equity interests in any other Foreign Subsidiary, or to cause
a Foreign Subsidiary to join in the Subsidiary Guaranty or to become a party to
the Security Agreement or any other Security Document, if (i) to do so would
subject the Borrower to liability for additional United States income taxes by
virtue of Section 956 of the Code in an amount the Borrower considers material,
and (ii) the Borrower provides the Administrative Agent with documentation,
including computations prepared by the Borrower’s internal tax officer, its
independent accountants or tax counsel, reasonably acceptable to the Required
Lenders, in support thereof.

 

Section 8.11. Additional Security; Further Assurances.

 

(a) In the event that at any time after the Closing Date

 

(i) the Borrower or any Subsidiary acquires, or a person that has become a
Subsidiary owns or holds, an interest in assets, stock, securities or any other
property or interest, located in the United States or arising out of business
conducted in or from the United States, that is not at the time included in the
Collateral and is not subject to a Permitted Lien securing Indebtedness, the
Borrower will notify the Administrative Agent in writing of such event,
identifying the property or interests in question and referring specifically to
the rights of the Administrative Agent and the Lenders under this Section, or

 

(ii) an Event of Default shall have occurred and be continuing and the Borrower
or any Subsidiary at any time owns or holds an interest in any assets, stock,
securities or any other property or interest, located within or outside of the
United States or arising out of business conducted from any location within or
outside the United States, that is not at the time included in the Collateral
and is not subject to a Permitted Lien securing Indebtedness,

 

subject to Section 8.10(b) hereof, the Borrower will, or will cause such
Subsidiary to, within 30 days, grant the Administrative Agent for the benefit of
the Secured Creditors (as defined in the Security Documents) security interests
and mortgages or deeds of trust, pursuant to an “Additional Security Document”)
or joinder in any existing Security Document, in such assets, interests or
properties of the Borrower or any Subsidiary, subject to obtaining any required
consents from third parties (including third party lessors and co-venturers)
necessary to be obtained for the granting of a Lien on the interests or assets
involved (with the Borrower hereby agreeing to use its reasonable best efforts
to obtain such consents), provided that notwithstanding the foregoing, the
Borrower need not notify the Administrative Agent under this Section 8.11(a) of
any Leasehold that is acquired or held by the Borrower or any Subsidiary unless
the same involves a nominal or bargain purchase price option.

 

(b) Each Additional Security Document: (i) shall be granted pursuant to
documentation reasonably satisfactory in form and substance to the
Administrative Agent, which documentation shall in

 

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the case of Real Property owned in fee be accompanied by such Phase I
environmental reports or assessments, a mortgage policy of title insurance
(subject to a standard survey exception), and other supporting documentation
requested by and reasonably satisfactory in form and substance to the
Administrative Agent; and (ii) shall constitute a valid and enforceable
perfected Lien upon the interests or properties so included in the Collateral,
superior to and prior to the rights of all third persons and subject to no other
Liens except Permitted Liens or otherwise agreed by the Administrative Agent at
the time of perfection thereof and (in the case of Real Property or interests
therein) such other encumbrances as may be set forth in the mortgage policy, if
any, relating to such Additional Security Document which shall be delivered to
the Administrative Agent together with such Additional Security Document and
which shall be satisfactory in form and substance to the Administrative Agent
and the Administrative Agent. The Borrower, at its sole cost and expense, will
cause each Additional Security Document or instruments related thereto to be
duly recorded or filed in such manner and in such places as are required by law
to establish, perfect, preserve and protect the Liens created thereby required
to be granted pursuant to the Additional Security Document, and will pay or
cause to be paid in full all taxes, fees and other charges payable in connection
therewith. Furthermore, the Borrower shall cause to be delivered to the
Administrative Agent such opinions of local counsel, appraisals, title
insurance, surveys, environmental assessments, consents of landlords, lien
waivers from landlords or mortgagees and other related documents as may be
reasonably requested by the Administrative Agent or any other Agent in
connection with the execution, delivery and recording of any Additional Security
Document, all of which documents shall be in form and substance reasonably
satisfactory to the Administrative Agent and the Administrative Agent.

 

(c) The Borrower will, and will cause each of its Subsidiaries to, at the
expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Administrative Agent from time to time such conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
and other assurances or instruments and take such further steps relating to the
Collateral covered by any of the Security Documents as the Administrative Agent
or any other Agent may reasonably require. If at any time the Administrative
Agent determines, based on applicable law, that all applicable taxes (including,
without limitation, mortgage recording taxes or similar charges) were not paid
in connection with the recordation of any mortgage or deed of trust, the
Borrower shall promptly pay the same upon demand.

 

(d) The Borrower will if requested by any Lender at any time, in order to meet
any legal requirement applicable to such Lender, provide to the Administrative
Agent and the Lenders, at the sole cost and expense of the Borrower, appraisals
and other supporting documentation relating to any mortgage or deed of trust
delivered as an Additional Security Document hereunder, as specified by any
Lender, meeting the appraisal and other documentation requirements of the Real
Estate Reform Amendments of the Financial Institution Reform, Recovery and
Enforcement Act of 1989, as amended, or any other legal requirements applicable
to any Lender, which in the case of any such appraisal shall be prepared by one
or more valuation firms of national standing, acceptable to the Required
Lenders, utilizing appraisal standards satisfying such Amendments, Act or other
legal requirements.

 

(e) The Borrower will promptly upon request of the Administrative Agent obtain,
and will maintain in effect, waivers from landlords and mortgagees having any
interest in any Real Property on which any items of Collateral are located, in
form and substance reasonably acceptable to the Administrative Agent.

 

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Section 8.12. Casualty and Condemnation.

 

(a) The Borrower will promptly (and in any event within 10 days) furnish to the
Administrative Agent and the Lenders written notice of any Event of Loss
involving any property included in the Collateral that is reasonably believed to
be in excess of $250,000.

 

(b) If any Event of Loss results in Net Cash Proceeds (whether in the form of
insurance proceeds, a condemnation award or otherwise), a portion or all of
which is required to be applied as a prepayment of the Loans or to the
rebuilding or restoration of any affected property pursuant to Section 5.2, the
Administrative Agent is authorized to collect such Net Cash Proceeds and, if
received by any Credit Party, the Borrower will, or will cause any applicable
Credit Party, to pay over such Net Cash Proceeds to the Administrative Agent.

 

Section 8.13. Most Favored Covenant Status. If any Credit Party at any time
after the Closing Date, issues or guarantees any Indebtedness in an aggregate
amount exceeding $5,000,000 (to the extent, if any, that any such Credit Party
is permitted to do so under Section 9.4 hereof) pursuant to a loan agreement,
credit agreement, note purchase agreement, indenture, guaranty or other similar
instrument, which agreement, indenture, guaranty or instrument, includes
affirmative or negative business or financial covenants (or any events of
default or other type of restriction that would have the practical effect of any
affirmative or negative business or financial covenant, including, without
limitation, any “put” or mandatory prepayment of such Indebtedness upon the
occurrence of a “change of control”) that are applicable to any Credit Party,
other than those set forth herein or in any of the other Credit Documents, the
Borrower shall promptly so notify the Administrative Agent and the Lenders and,
if the Administrative Agent shall so request by written notice to the Borrower
(after a determination has been made by the Required Lenders that any of the
above-referenced documents or instruments contain any such provisions, that
either individually or in the aggregate, are more favorable to the holders of
such unsecured Indebtedness than any of the provisions set forth herein), the
Borrower, the Administrative Agent and the Lenders shall promptly amend this
Agreement to incorporate some or all of such provisions, in the discretion of
the Administrative Agent and the Required Lenders, into this Agreement and, to
the extent necessary and reasonably desirable to the Administrative Agent and
the Required Lenders, into any of the other Credit Documents, all at the
election of the Administrative Agent and the Required Lenders.

 

Section 8.14. Senior Debt. The Borrower will at all times ensure that (i) the
claims of the Lenders in respect of the Obligations of the Borrower will not be
subordinate to, and will in all respects rank senior to the claims of every
unsecured creditor of the Borrower, and (ii) any Indebtedness of the Borrower
that is subordinated in any manner to the claims of any other creditor of the
Borrower will be subordinated in like manner to such claims of the Lenders.

 

Section 8.15. Management Service Agreements.

 

(a) The Borrower and each of its Subsidiaries shall comply in all respects with
all of their material obligations under each Management Service Agreement and
shall promptly enforce and diligently pursue all of their material rights under
each Management Service Agreement.

 

(b) Promptly, and in any event within five Business Days, after (i) the Borrower
or any of its Subsidiaries enters into any Management Service Agreement on or
after the Closing Date, or (ii) amends or otherwise modifies any of the terms or
provisions of any Management Service Agreement, the Borrower shall, in each
case, provide a copy of such Management Service Agreement or amendment or other
modification to the Administrative Agent, who shall promptly deliver a copy of
the same to the Lenders. The Borrower shall, and shall cause each of its
Subsidiaries to, ensure that each Management Service Agreement entered into on
or after the Closing Date is in substantially the same form as previously
delivered to the Administrative Agent and shall not enter into, or permit any of
its Subsidiaries

 

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to enter into, any amendment or other modification to any Management Service
Agreement that results in such Management Service Agreement not being in
substantially the same form as the form of Management Service Agreement
previously delivered to the Administrative Agent; provided, however, that the
Borrower and its Subsidiaries shall be permitted to make non-material amendments
or other modifications to any Management Service Agreement so long as such
amendment or other modification does not adversely affect (i) the Lenders or any
of their rights under the Credit Documents or (ii) any of the Collateral or any
of the Lenders’ rights in or to any of the Collateral.

 

ARTICLE IX.

 

NEGATIVE COVENANTS

 

The Borrower hereby covenants and agrees that on the Closing Date and thereafter
for so long as this Agreement is in effect and until such time as the Total
Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder and
under the other Credit Documents, have been paid in full:

 

Section 9.1. Changes in Business. Neither the Borrower nor any of its
Subsidiaries will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Borrower and its Subsidiaries, would be substantially changed from the
general nature of the business engaged in by the Borrower and its Subsidiaries
on the Closing Date.

 

Section 9.2. Consolidation, Merger, Acquisitions, Asset Sales, etc. The Borrower
will not, and will not permit any Subsidiary to, (1) wind up, liquidate or
dissolve its affairs, (2) enter into any transaction of merger or consolidation,
(3) make or otherwise effect any Acquisition, (4) sell or otherwise dispose of
any of its property or assets outside the ordinary course of business, or
otherwise make or otherwise effect any Asset Sale, or (5) agree to do any of the
foregoing at any future time, except that the following shall be permitted:

 

(a) Certain Intercompany Mergers, etc. If no Default or Event of Default shall
have occurred and be continuing or would result therefrom, each of the following
shall be permitted: (i) the merger, consolidation or amalgamation of any
Domestic Subsidiary with or into the Borrower, provided the Borrower is the
surviving or continuing or resulting corporation; (ii) the merger, consolidation
or amalgamation of any Domestic Subsidiary with or into any Subsidiary
Guarantor, provided that the surviving or continuing or resulting corporation is
a Subsidiary Guarantor; and (iii) the transfer or other disposition of any
property by the Borrower to any Subsidiary Guarantor or by any Subsidiary
Guarantor to the Borrower or any other Subsidiary Guarantor;

 

(b) Acquisitions. The Borrower or any Subsidiary Guarantor may make any
Acquisition that is a Permitted Acquisition, provided that all of the conditions
contained in the definition of the term Permitted Acquisition are satisfied;

 

(c) Permitted Dispositions. If no Default or Event of Default shall have
occurred and be continuing or would result therefrom, the Borrower or any of its
Subsidiaries may consummate any Asset Sale, provided that (i) the consideration
for such transaction represents fair value (as determined by any Authorized
Officer of the Borrower), and at least 90% of such consideration consists of
cash; (ii) the cumulative aggregate consideration for all such transactions
completed during any fiscal year does not exceed $1,000,000; (iii) in the case
of any such transaction involving consideration in excess of $500,000, at least
five Business Days prior to the date of completion of such transaction the
Borrower shall have

 

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delivered to the Administrative Agent an officer’s certificate executed on
behalf of the Borrower by an Authorized Officer of the Borrower, which
certificate shall contain (1) a description of the proposed transaction, the
date such transaction is scheduled to be consummated, the estimated purchase
price or other consideration for such transaction, and (2) a certification that
no Default or Event of Default has occurred and is continuing, or would result
from consummation of such transaction, and (iv) contemporaneously with the
completion of such transaction the Borrower prepays its Loans as and to the
extent required by Section 5.2 hereof;

 

(d) Leases. The Borrower or any of its Subsidiaries may enter into leases of
property or assets not constituting Acquisitions in the ordinary course of
business, provided such leases are not otherwise in violation of this Agreement;

 

(e) Capital Expenditures: The Borrower and it Subsidiaries shall be permitted to
make any Consolidated Capital Expenditures permitted pursuant to Section 9.7;
and

 

(f) Permitted Investments. The Borrower and it Subsidiaries shall be permitted
to make and dispose of the investments permitted pursuant to Section 9.5.

 

Section 9.3. Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or any such Subsidiary whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with or without
recourse to the Borrower or any of its Subsidiaries, other than for purposes of
collection of delinquent accounts in the ordinary course of business) or assign
any right to receive income, or file or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute, except that the foregoing restrictions shall not
apply to:

 

(a) Standard Permitted Liens: Standard Permitted Liens;

 

(b) Existing Liens, etc.: Liens (i) in existence on the Closing Date that are
listed, and the Indebtedness secured thereby and the property subject thereto on
the Closing Date described, in Schedule 9.3, and (ii) arising out of the
refinancing, extension, renewal or refunding of any Indebtedness secured by any
such Liens, provided that the principal amount of such Indebtedness is not
increased and such Indebtedness is not secured by any additional assets;

 

(c) Purchase Money Liens: Liens (i) that are placed upon fixed or capital
assets, acquired, constructed or improved by the Borrower or any Subsidiary,
provided that (A) such Liens secure Indebtedness permitted by Section 9.4(c),
(B) such Liens and the Indebtedness secured thereby are incurred prior to or
within 120 days after such acquisition or the completion of such construction or
improvement, (C) the Indebtedness secured thereby does not exceed 90% of the
cost of acquiring, constructing or improving such fixed or capital assets, and
(D) such Liens shall not apply to any other property or assets of the Borrower
or any Subsidiary; or (ii) arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any such Liens, provided that the
principal amount of such Indebtedness is not increased and such Indebtedness is
not secured by any additional assets; and

 

(d) Liens on Acquired Properties: any Lien (i) existing on any fixed assets
prior to the acquisition thereof by the Borrower or any Subsidiary, or existing
on any property or asset of any person that becomes a Subsidiary after the date
hereof prior to the time such person becomes a Subsidiary; provided that (A)
such Lien secures Indebtedness permitted by Section 9.4(c), (B) such Lien is not
created

 

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in contemplation of or in connection with such acquisition or such person
becoming a Subsidiary, as the case may be, (C) such Lien shall not attach or
apply to any other property or assets of the Borrower or any Subsidiary, and (D)
such Lien shall secure only those obligations that it secures on the date of
such acquisition or the date such person becomes a Subsidiary, as the case may
be; or (ii) arising out of the refinancing, extension, renewal or refunding of
any Indebtedness secured by any such Liens, provided that the principal amount
of such Indebtedness is not increased and such Indebtedness is not secured by
any additional assets.

 

Section 9.4. Indebtedness. The Borrower will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness of the Borrower or any of its Subsidiaries, except:

 

(a) Credit Documents: Indebtedness incurred under this Agreement and the other
Credit Documents;

 

(b) Existing Indebtedness: The Indebtedness set forth on Schedule 9.4 hereto,
and any refinancing, extension, renewal or refunding of any such Indebtedness
not involving an increase in the principal amount thereof or a reduction of more
than 10% in the remaining weighted average life to maturity thereof (computed in
accordance with standard financial practice);

 

(c) Certain Priority Debt: To the extent not permitted by the foregoing clauses,
(i) Indebtedness consisting of Capital Lease Obligations of the Borrower and its
Subsidiaries, (ii) Indebtedness consisting of obligations under Synthetic Leases
of the Borrower and its Subsidiaries, (iii) Indebtedness secured by a Lien
referred to in Section 9.3(c) or 9.3(d), and (iv) any refinancing, extension,
renewal or refunding of any such Indebtedness not involving an increase in the
principal amount thereof or a reduction of more than 10% in the remaining
weighted average life to maturity thereof (computed in accordance with standard
financial practice), provided that (A) at the time of any incurrence thereof
after the date hereof, and after giving effect thereto, the Borrower would be in
compliance with Section 9.7 hereof and no Default or Event of Default shall have
occurred and be continuing or would result therefrom; and (B) the aggregate
outstanding principal amount (using Capitalized Lease Obligations in lieu of
principal amount, in the case of any Capital Lease, and using the present value,
based on the implicit interest rate, in lieu of principal amount, in the case of
any Synthetic Lease) of Indebtedness permitted by this clause (c), when taken
together with any outstanding Indebtedness permitted by clause (b) above that is
represented by a Capital Lease or a Synthetic Lease or that is secured by any
Lien, shall not exceed $5,000,000 at any time;

 

(d) Intercompany Debt: (i) unsecured Indebtedness of the Borrower owed to any
Subsidiary Guarantor, provided such Indebtedness constitutes Subordinated
Indebtedness; and (ii) unsecured Indebtedness of any Subsidiary Guarantor to the
Borrower or to another Subsidiary Guarantor;

 

(e) Hedge Agreements: Indebtedness of the Borrower and its Subsidiaries under
Hedge Agreements;

 

(f) Guaranty Obligations: any Guaranty Obligations permitted by Section 9.5;

 

(g) Certain Subordinated Debt. Subordinated Indebtedness incurred in connection
with a Permitted Acquisition in an aggregate amount not to exceed $8,000,000 at
any time after the Closing Date; and

 

(h) Other Unsecured Debt: other unsecured Indebtedness of the Borrower to the
extent not permitted by any of the foregoing clauses provided that: (i) at the
time of any incurrence thereof after the

 

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date hereof, and after giving effect thereto, the Borrower would be in
compliance with Section 9.7 hereof and no Default or Event of Default shall have
occurred and be continuing or would result therefrom; (ii) the aggregate
outstanding principal amount of Indebtedness permitted by this clause (g) shall
not exceed $5,000,000 at any time; and (iii) contemporaneously with the receipt
of any proceeds from the issuance of such Indebtedness, the Borrower prepays the
Loans as and to the extent required by Section 5.2 hereof.

 

Section 9.5. Investments and Guaranty Obligations. The Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly, (1) make or
commit to make any Investment or (2) be or become obligated under any Guaranty
Obligations, except:

 

(a) the Borrower or any of its Subsidiaries may invest in cash and Cash
Equivalents;

 

(b) any endorsement of a check or other medium of payment for deposit or
collection, or any similar transaction in the normal course of business;

 

(c) the Borrower and its Subsidiaries may acquire and hold receivables owing to
them in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms;

 

(d) investments acquired by the Borrower or any of its Subsidiaries (i) in
exchange for any other investment held by the Borrower or any such Subsidiary in
connection with or as a result of a bankruptcy, workout, reorganization or
recapitalization of the issuer of such other investment, or (ii) as a result of
a foreclosure by the Borrower or any of its Subsidiaries with respect to any
secured investment or other transfer of title with respect to any secured
investment in default;

 

(e) loans and advances to employees for business-related travel expenses, moving
expenses, costs of replacement homes, business machines or supplies, automobiles
and other similar expenses, in each case incurred in the ordinary course of
business;

 

(f) to the extent not permitted by the foregoing clauses, Investments existing
as of the Closing Date and described on Schedule 9.5 hereto;

 

(g) any Guaranty Obligations in favor of the Lenders and any other benefited
creditors under any Designated Hedge Agreements pursuant to the Credit
Documents;

 

(h) investments of the Borrower and its Subsidiaries in Hedge Agreements;

 

(i) existing investments in any Subsidiaries and any additional investments in
any Subsidiary Guarantor;

 

(j) intercompany loans and advances permitted by Section 9.4(d);

 

(k) the Acquisitions permitted by Section 9.2;

 

(l) any unsecured Guaranty Obligation incurred by any Credit Party with respect
to Indebtedness of another Credit Party which Indebtedness is permitted under
Section 9.4; and

 

(m) other Investments made after the Closing Date and not permitted pursuant to
the foregoing clauses, provided that (i) at the time of making any such
Investment no Default or Event of Default shall have occurred and be continuing,
or would result therefrom, and (ii) the maximum cumulative amount of all such
Investments that are so made pursuant to this clause (m) and outstanding at any
time shall not exceed the aggregate of $1,000,000, taking into account the
repayment of any loans or advances comprising such Investments.

 

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Section 9.6. Dividends and Other Restricted Payments. The Borrower will not, and
will not permit any of its Subsidiaries to, declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment, except:

 

(a) the Borrower or any of its Subsidiaries may declare and pay or make Capital
Distributions that are payable solely in additional shares of its common stock
(or warrants, options or other rights to acquire additional shares of its common
stock);

 

(b) any Subsidiary may declare and pay or make Capital Distributions to the
Borrower or any Subsidiary Guarantor;

 

(c) the Borrower may declare any pay or make Capital Distributions, provided
that (i) no Default or Event of Default shall have occurred and be continuing or
would result therefrom, (ii) the Borrower is in compliance with the financial
covenants set forth in Section 9.7 hereof after giving pro forma effect to each
such Capital Distribution, and (iii) the aggregate amount of all Capital
Distributions made by the Borrower pursuant to this clause shall not exceed (A)
during any fiscal year of the Borrower an amount equal to 50% of the
Consolidated Net Income for the most recently completed fiscal year of the
Borrower, to the extent positive and (B) $10,000,000 in the aggregate on and
after the Closing Date;

 

(d) the Borrower may make Share Repurchases, provided that (i) prior to or
contemporaneously with any such Share Repurchase, the Borrower shall provide
written evidence to the Administrative Agent and the Lenders of compliance on a
pro forma basis with the covenants contained in Section 9.7, (ii) no Default or
Event of Default shall have occurred and be continuing or shall result therefrom
and (iii) the aggregate amount of all such Share Repurchases made on or after
the Closing Date shall not exceed $12,505,950; and

 

(e) the Borrower and its Subsidiaries may make prepayments of the Prepaid
Subordinated Indebtedness provided that at the time any such prepayment is made,
(i) such prepayment, when added together with all other prepayments of Prepaid
Subordinated Indebtedness, will not exceed the Permitted Prepayment Amount, and
(ii) no Default or Event of Default exists or will occur immediately thereafter.

 

Section 9.7. Financial Covenants.

 

(a) Consolidated Net Worth. The Borrower will not permit its Consolidated Net
Worth at any time to be less than the sum of (i) $70,867,050 plus (ii) 50% of
Consolidated Net Income (to the extent a positive number) for each fiscal
quarter ending after September 30, 2004 plus (iii) 100% of the proceeds of any
equity offering (or any debt offering to the extent converted into equity) by
the Borrower.

 

(b) Leverage Ratio. The Borrower will not at any time permit the Leverage Ratio
to exceed (i) 3.00 to 1.00 from the Closing Date through December 31, 2006, and
(ii) 2.75 to 1.00 at all times thereafter.

 

(c) Fixed Charge Coverage Ratio. The Borrower will not at any time permit the
Fixed Charge Coverage Ratio to be less than 1.25 to 1:00.

 

(d) Consolidated Capital Expenditures. The Borrower will not, and will not
permit any of its Subsidiaries to, make or incur Consolidated Capital
Expenditures during any fiscal year of the Borrower in excess of $15,000,000
(the “Annual Cap Ex Limit”), provided that in the event actual Consolidated

 

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Capital Expenditures for any fiscal year are less than such amount, 100% of the
difference may be carried over to the next fiscal year (the “Carryover”), but
not any subsequent fiscal year, provided, further that in any given year, the
Annual Cap Ex Limit shall be deemed used before using the Carryover.

 

Section 9.8. Limitation on Certain Restrictive Agreements. The Borrower will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
enter into, incur or permit to exist or become effective, any “negative pledge”
covenant or other agreement, restriction or arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of the Borrower or any
Subsidiary to create, incur or suffer to exist any Lien upon any of its property
or assets as security for Indebtedness, (b) the ability of any such Subsidiary
to make Capital Distributions or any other interest or participation in its
profits owned by the Borrower or any Subsidiary, or pay any Indebtedness owed to
the Borrower or a Subsidiary, or to make loans or advances to the Borrower or
any of the Borrower’s other Subsidiaries, or transfer any of its property or
assets to the Borrower or any of the Borrower’s other Subsidiaries, or (c) make
any Share Repurchases, except for such restrictions existing under or by reason
of (i) applicable law, (ii) this Agreement and the other Credit Documents, (iii)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest, (iv) customary provisions restricting assignment of any
licensing agreement entered into in the ordinary course of business, (v)
customary provisions restricting the transfer or further encumbering of assets
subject to Liens permitted under Section 9.3(b) or 9.3(c), (vi) restrictions
contained in the agreements relating to the Indebtedness set forth on Schedule
9.4 hereto as in effect on the Closing Date (and any similar restrictions
contained in any agreement governing any refinancing or refunding thereof not
prohibited by this Agreement), (vii) customary restrictions affecting only a
Subsidiary under any agreement or instrument governing any of the Indebtedness
of a Subsidiary permitted pursuant to Section 9.4, (viii) restrictions affecting
any Foreign Subsidiary under any agreement or instrument governing any
Indebtedness of such Foreign Subsidiary permitted pursuant to Section 9.4, and
customary restrictions contained in “comfort” letters and guarantees of any such
Indebtedness, (ix) any document relating to Indebtedness secured by a Lien
permitted by Section 9.3, insofar as the provisions thereof limit grants of
junior liens on the assets securing such Indebtedness, and (x) any Operating
Lease or Capital Lease, insofar as the provisions thereof limit grants of a
security interest in, or other assignments of, the related leasehold interest to
any other person.

 

Section 9.9. Prepayments and Refinancings of Other Debt, etc. The Borrower will
not, and will not permit any of its Subsidiaries to, make (or give any notice in
respect thereof) any voluntary or optional payment or prepayment or redemption
or acquisition for value of (including, without limitation, by way of depositing
with the trustee with respect thereto money or securities before due for the
purpose of paying when due) or exchange of, or refinance or refund, any
Indebtedness of the Borrower or its Subsidiaries that has an outstanding
principal balance (or Capitalized Lease Obligation, in the case of a Capital
Lease, or present value, based on the implicit interest rate, in the case of a
Synthetic Lease) greater than $1,000,000 (other than the Obligations and
intercompany loans and advances among the Borrower and its Subsidiaries);
provided that the Borrower or any Subsidiary may refinance or refund any such
Indebtedness (other than any Subordinated Indebtedness) if the aggregate
principal amount thereof (or Capitalized Lease Obligation, in the case of a
Capital Lease, or present value, based on the implicit interest rate, in the
case of a Synthetic Lease) is not increased and the weighted average life to
maturity thereof (computed in accordance with standard financial practice) is
not reduced by more than 10%; provided further that the Borrower and its
Subsidiaries may make prepayments of the Prepaid Subordinated Indebtedness so
long as at the time any such prepayment is made, (i) such prepayment, when added
together with all other prepayments of Prepaid Subordinated Indebtedness, will
not exceed the Permitted Prepayment Amount, and (ii) no Default or Event of
Default exists or will occur immediately thereafter.

 

Section 9.10. Transactions with Affiliates. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
with any Affiliate (other than, in the case

 

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of the Borrower, any Subsidiary, and in the case of a Subsidiary, the Borrower
or another Subsidiary) other than in the ordinary course of business of and
pursuant to the reasonable requirements of the Borrower’s or such Subsidiary’s
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than would obtain in a comparable arm’s-length transaction with
a person other than an Affiliate, except (i) sales of goods to an Affiliate for
use or distribution outside the United States that in the good faith judgment of
the Borrower complies with any applicable legal requirements of the Code, or
(ii) agreements and transactions with and payments to officers, directors and
shareholders that are either (A) entered into in the ordinary course of business
and not prohibited by any of the provisions of this Agreement, or (B) entered
into outside the ordinary course of business, approved by the directors or
shareholders of the Borrower, and not prohibited by any of the provisions of
this Agreement. Nothing in this Section 9.10 shall be construed to prohibit any
action otherwise permitted by Section 9.6.

 

Section 9.11. Plan Terminations, Minimum Funding, etc. The Borrower will not,
and will not permit any ERISA Affiliate to, (i) terminate any Plan or Plans so
as to result in liability of the Borrower or any ERISA Affiliate to the PBGC in
excess of, in the aggregate, the amount that is equal to the greater of (x)
$250,000, or (y) 5% of the Borrower’s Consolidated Net Worth as of the date of
the then most recent financial statements furnished to the Lenders pursuant to
the provisions of this Agreement, (ii) permit to exist one or more events or
conditions that reasonably present a material risk of the termination by the
PBGC of any Plan or Plans with respect to which the Borrower or any ERISA
Affiliate would, in the event of such termination, incur liability to the PBGC
in excess of such amount in the aggregate, or (iii) fail to comply with the
minimum funding standards of ERISA and the Code with respect to any Plan.

 

ARTICLE X.

 

EVENTS OF DEFAULT

 

Section 10.1. Events of Default. Any of the following specified events shall
constitute an Event of Default (each an “Event of Default”):

 

(a) Payments: the Borrower shall (i) default in the payment when due (whether at
maturity, on a date fixed for a scheduled repayment, on a date on which a
required prepayment is to be made, upon acceleration or otherwise) of any
principal of the Loans or any reimbursement obligation in respect of any Unpaid
Drawing; or (ii) default, and such default shall continue for five or more
Business Days, in the payment when due of any interest on the Loans or any Fees
or any other amounts owing hereunder or under any other Credit Document; or

 

(b) Representations, etc.: any representation, warranty or statement made by the
Borrower or any other Credit Party herein or in any other Credit Document or in
any statement or certificate delivered or required to be delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or

 

(c) Certain Negative Covenants: the Borrower shall default in the due
performance or observance by it of any term, covenant or agreement contained in
Sections 8.1, 8.2(ii), 8.10, 8.11, 8.12, 8.13 or 8.14 or Article IX of this
Agreement; or

 

(d) Other Covenants: the Borrower shall default in the due performance or
observance by it of any term, covenant or agreement contained in this Agreement
or any other Credit Document, other than those referred to in Section 10.1(a) or
(b) or (c) above, and such default is not remedied within 30 days after the
earlier of (i) an officer of the Borrower obtaining knowledge of such default or
(ii) the Borrower receiving written notice of such default from the
Administrative Agent or the Required Lenders (any such notice to be identified
as a “notice of default” and to refer specifically to this paragraph); or

 

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(e) Cross Default Under Other Agreements: the Borrower or any of its
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) having an unpaid principal amount or Capitalized
Lease Obligation of $250,000 or greater, and such default shall continue after
the applicable grace period, if any, specified in the agreement or instrument
relating to such Indebtedness, or (ii) default in the observance or performance
of any agreement or condition relating to any such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto (and all
grace periods applicable to such observance, performance or condition shall have
expired), or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause any such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of the Borrower or any of its Subsidiaries
shall be declared to be due and payable, or shall be required to be prepaid
(other than by a regularly scheduled required prepayment or redemption, prior to
the stated maturity thereof); or (iii) without limitation of the foregoing
clauses, the Borrower or any of its Subsidiaries shall default in any payment
obligation under a Designated Hedge Agreement, and such default shall continue
after the applicable grace period, if any, specified in such Designated Hedge
Agreement or any other agreement or instrument relating thereto; or

 

(f) Invalidity of Loan Documents. any material provision of any Credit Document,
at any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or under such Credit Document or satisfaction in
full of all the Obligations, ceases to be in full force and effect; or any
Credit Party or any other person contests in any manner the validity or
enforceability of any provision of any Credit Document; or any Credit Party
denies that it has any or further liability or obligation under any Credit
Document, or purports to revoke, terminate or rescind any Credit Document; or

 

(g) Judgments: (i) one or more judgments, orders or decrees shall be entered
against the Borrower and/or any of its Subsidiaries involving a liability (other
than a liability covered by insurance, as to which the carrier has adequate
claims paying ability and has not effectively reserved its rights) of $500,000
or more in the aggregate for all such judgments, orders and decrees for the
Borrower and its Subsidiaries, and any such judgments or orders or decrees shall
not have been vacated, discharged or stayed or bonded pending appeal within 30
days (or such longer period, not in excess of 60 days, during which enforcement
thereof, and the filing of any judgment lien, is effectively stayed or
prohibited) from the entry thereof; or (ii) one or more judgments, orders or
decrees shall be entered against the Borrower and/or any of its Subsidiaries
involving a required divestiture of any material properties, assets or business
reasonably estimated to have a fair value in excess of $500,000, and any such
judgments, orders or decrees shall not have been vacated, discharged or stayed
or bonded pending appeal within 30 days (or such longer period, not in excess of
60 days, during which enforcement thereof, and the filing of any judgment lien,
is effectively stayed or prohibited) from the entry thereof; or

 

(h) Bankruptcy, etc.: any of the following shall occur:

 

(i) the Borrower or any of its Subsidiaries (the Borrower and each of such other
Subsidiary, each a “Principal Party”) shall commence a voluntary case concerning
itself under Title 11 of the United States Code entitled “Bankruptcy,” as now or
hereafter in effect, or any successor thereto (the “Bankruptcy Code”); or

 

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(ii) an involuntary case is commenced against any Principal Party under the
Bankruptcy Code and the petition is not controverted within 10 days, or is not
dismissed within 60 days, after commencement of the case; or

 

(iii) a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of any Principal Party; or

 

(iv) any Principal Party commences (including by way of applying for or
consenting to the appointment of, or the taking of possession by, a
rehabilitator, receiver, custodian, trustee, conservator or liquidator
(collectively, a “conservator”) of itself or all or any substantial portion of
its property) any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency, liquidation,
rehabilitation, conservatorship or similar law of any jurisdiction whether now
or hereafter in effect relating to such Principal Party; or

 

(v) any such proceeding of the type set forth in clause (iv) above is commenced
against any Principal Party to the extent such proceeding is consented by such
person or remains undismissed for a period of 60 days; or

 

(vi) any Principal Party is adjudicated insolvent or bankrupt; or

 

(vii) any order of relief or other order approving any such case or proceeding
is entered; or

 

(viii) any Principal Party suffers any appointment of any conservator or the
like for it or any substantial part of its property that continues undischarged
or unstayed for a period of 60 days; or

 

(ix) any Principal Party makes a general assignment for the benefit of creditors
or generally does not pay its debts as such debts become due; or

 

(x) any corporate (or similar organizational) action is taken by any Principal
Party for the purpose of effecting any of the foregoing; or

 

(i) ERISA: (i) any of the events described in clauses (i) through (viii) of
Section 8.1(f) shall have occurred; or (ii) there shall result from any such
event or events the imposition of a Lien, the granting of a security interest,
or a liability or a material risk of incurring a liability; and (iii) any such
event or events or any such Lien, security interest or liability, individually,
and/or in the aggregate, in the opinion of the Required Lenders, has had, or
could reasonably be expected to have, a Material Adverse Effect;

 

(j) Material Adverse Effect: a Material Adverse Effect shall occur;

 

(k) Exclusion from Reimbursement Programs: the Borrower or any Subsidiary
becomes excluded from any material healthcare reimbursement program; or

 

(l) Change of Control: there occurs a Change of Control.

 

Section 10.2. Acceleration, etc. Upon the occurrence of any Event of Default,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required
Lenders, by written notice to the Borrower, take any or all of the

 

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following actions, without prejudice to the rights of the Administrative Agent,
or any Lender to enforce its claims against the Borrower or any other Credit
Party in any manner permitted under applicable law:

 

(a) declare the Total Commitment terminated, whereupon the Commitment of each
Lender shall forthwith terminate immediately without any other notice of any
kind;

 

(b) declare the principal of and any accrued interest in respect of all Loans,
all Unpaid Drawings and all other Obligations owing hereunder and thereunder to
be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower;

 

(c) terminate any Letter of Credit that may be terminated in accordance with its
terms;

 

(d) direct the Borrower to pay (and the Borrower hereby agrees that on receipt
of such notice or upon the occurrence of an Event of Default with respect to the
Borrower under Section 10.1(h), it will pay) to the Administrative Agent an
amount of cash equal to the aggregate Stated Amount of all Letters of Credit
then outstanding (such amount to be held as security for the Borrower’s (and any
Subsidiary that is an account party) reimbursement obligations in respect
thereof); and/or

 

(e) exercise any other right or remedy available under any of the Credit
Documents or applicable law;

 

provided that, if an Event of Default specified in Section 10.1(h) shall occur
with respect to the Borrower, the result that would occur upon the giving of
written notice by the Administrative Agent as specified in clauses (a) and/or
(b) above shall occur automatically without the giving of any such notice.

 

Section 10.3. Application of Liquidation Proceeds. All monies received by the
Administrative Agent or any Lender from the exercise of remedies hereunder or
under the other Credit Documents or under any other documents relating to this
Agreement shall, unless otherwise required by the terms of the other Credit
Documents or by applicable law, be applied as follows:

 

(a) first, to the payment of all expenses (to the extent not otherwise paid by
the Borrower or any of the other Credit Parties) incurred by the Administrative
Agent and the Lenders in connection with the exercise of such remedies,
including, without limitation, all reasonable costs and expenses of collection,
reasonable documented attorneys’ fees, court costs and any foreclosure expenses;

 

(b) second, to the payment pro rata of interest then accrued on the outstanding
Loans;

 

(c) third, to the payment pro rata of any fees then accrued and payable to the
Administrative Agent, any Letter of Credit Issuer or any Lender under this
Agreement in respect of the Loans or the Letter of Credit Outstandings;

 

(d) fourth, to the payment pro rata of (A) the principal balance then owing on
the outstanding Loans, (B) the amounts then due under Designated Hedge
Agreements to creditors of the Borrower or any Subsidiary, subject to
confirmation by the Administrative Agent of any calculations of termination or
other payment amounts being made in accordance with normal industry practice,
and (C) the Stated Amount of the Letter of Credit Outstandings (to be held and
applied by the Administrative Agent as security for the reimbursement
obligations in respect thereof);

 

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(e) fifth, to the payment to the Lenders of any amounts then accrued and unpaid
under Sections 2.6, 2.7, 3.5 and 5.4 hereof, and if such proceeds are
insufficient to pay such amounts in full, to the payment of such amounts pro
rata;

 

(f) sixth, to the payment pro rata of all other amounts owed by the Borrower to
the Administrative Agent, to any Letter of Credit Issuer or any Lender under
this Agreement or any other Credit Document, and to any counterparties under
Designated Hedge Agreements of the Borrower and its Subsidiaries, and if such
proceeds are insufficient to pay such amounts in full, to the payment of such
amounts pro rata; and

 

(g) finally, any remaining surplus after all of the Obligations have been paid
in full, to the Borrower or to whomsoever shall be lawfully entitled thereto.

 

ARTICLE XI.

 

THE ADMINISTRATIVE AGENT

 

Section 11.1. Appointment. Each Lender hereby irrevocably designates and
appoints KeyBank as Administrative Agent to act as specified herein and in the
other Credit Documents, and each such Lender hereby irrevocably authorizes
KeyBank as the Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Credit Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent agrees to act as such upon the express conditions
contained in this Article 11. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in the other
Credit Documents, nor any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent.
The provisions of this Article 11 are solely for the benefit of the
Administrative Agent, and the Lenders, and the Borrower and its Subsidiaries
shall not have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement, the
Administrative Agent shall act solely as agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation or relationship of
agency or trust with or for the Borrower or any of its Subsidiaries.

 

Section 11.2. Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by Section 11.3.

 

Section 11.3. Exculpatory Provisions. Neither the Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such person under or in connection with this Agreement or any
other Credit Document (except for its or such person’s own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any of its Subsidiaries or any of their respective officers contained in this
Agreement, any other Credit Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Credit Document
or for any failure of the Borrower or any

 

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Subsidiary or any of their respective officers to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of the Borrower or any
of its Subsidiaries. The Administrative Agent shall not be responsible to any
Lender for the effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any Credit Document or for
any representations, warranties, recitals or statements made herein or therein
or made in any written or oral statement or in any financial or other
statements, instruments, reports, certificates or any other documents in
connection herewith or therewith furnished or made by the Administrative Agent
to the Lenders or by or on behalf of the Borrower or any of its Subsidiaries to
the Administrative Agent or any Lender or be required to ascertain or inquire as
to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default.

 

Section 11.4. Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, e-mail or other electronic transmission, facsimile transmission, telex
or teletype message, statement, order or other document or conversation believed
by it, in good faith, to be genuine and correct and to have been signed, sent or
made by the proper person or persons and upon advice and statements of legal
counsel (including, without limitation, counsel to the Borrower or any of its
Subsidiaries), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Credit
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Credit Documents in
accordance with a request of the Required Lenders (or all of the Lenders, or all
of the Lenders (other than any Defaulting Lender), as applicable, as to any
matter that, pursuant to Section 12.11, can only be effectuated with the consent
of all Lenders, or all Lenders (other than any Defaulting Lender), as the case
may be), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders.

 

Section 11.5. Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default.” In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.

 

Section 11.6. Non-Reliance. Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates have made any representations or warranties to
it and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower or any of its Subsidiaries, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations,

 

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property, financial and other conditions, prospects and creditworthiness of the
Borrower and its Subsidiaries and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Administrative Agent, or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement, and to make
such investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and its Subsidiaries. The Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, operations, assets, property,
financial and other conditions, prospects or creditworthiness of the Borrower or
any of its Subsidiaries that may come into the possession of the Administrative
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.

 

Section 11.7. Indemnification. The Lenders agree to indemnify the Administrative
Agent and its Related Persons ratably according to their respective Loans and
Commitment Percentages of the Unutilized Total Commitment, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, reasonable expenses or disbursements of any kind
whatsoever that may at any time (including, without limitation, at any time
following the payment of the Obligations) be imposed on, incurred by or asserted
against the Administrative Agent or such Related Person in any way relating to
or arising out of this Agreement or any other Credit Document, or any documents
contemplated by or referred to herein or the transactions contemplated hereby or
any action taken or omitted to be taken by the Administrative Agent or such
Related Person under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by the Borrower, provided that no
Lender shall be liable to the Administrative Agent or any Related Person for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting solely from the Administrative Agent’s or such Related Person’s
gross negligence or willful misconduct. If any indemnity furnished to the
Administrative Agent or any Related Person for any purpose shall, in the opinion
of the Administrative Agent, be insufficient or become impaired, the
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The agreements in this Section 11.7 shall survive the payment of all
Obligations.

 

Section 11.8. The Administrative Agent in Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower, its Subsidiaries
and their Affiliates as though not acting as Administrative Agent hereunder.
With respect to the Loans made by it and all Obligations owing to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms “Lender” and “Lenders” shall include the Administrative
Agent in its individual capacity.

 

Section 11.9. Successor Administrative Agent. The Administrative Agent may
resign at any time upon not less than 30 days notice to the Lenders, each Letter
of Credit Issuer and the Borrower. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the
Lenders, appoint a successor Administrative Agent, provided that if the
Administrative Agent shall notify the Borrower and the Lenders that no such
successor is willing to accept such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (i) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Credit Documents (except that in the case of any
collateral security held by the Administrative Agent on

 

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behalf of the Lenders or any Letter of Credit Issuer under any of the Credit
Documents, the retiring Administrative Agent shall continue to hold such
collateral security until such time as a successor Administrative Agent is
appointed) and (ii) all payments, communications and determinations provided to
be made by, to or through the Administrative Agent shall instead be made by or
to each Lender and the Issuing Bank directly, until such time as the Required
Lenders appoint a successor Administrative Agent as provided for above in this
paragraph. Upon the acceptance of a successor’s appointment as Administrative
Agent hereunder, such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Credit
Documents (if not already discharged therefrom as provided above in this
paragraph). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the retiring Administrative
Agent’s resignation hereunder and under the other Credit Documents, the
provisions of this Article and Section 12.1 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.

 

Section 11.10. Other Agents. Any Lender identified herein as a Co-Agent,
Syndication Agent, Documentation Agent, Managing Agent, Manager, Lead Arranger,
Arranger or any other corresponding title, other than “Administrative Agent,”
shall have no right, power, obligation, liability, responsibility or duty under
this Agreement or any other Credit Document except those applicable to all
Lenders as such. Each Lender acknowledges that it has not relied, and will not
rely, on any Lender so identified in deciding to enter into this Agreement or in
taking or not taking any action hereunder.

 

Section 11.11. No Reliance on Administrative Agent’s Customer Identification
Program. Each Lender acknowledges and agrees that neither such Lender, nor any
of its Affiliates, participants or assignees, may rely on Administrative Agent
to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer
identification program, or other obligations required or imposed under or
pursuant to the USA Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereinafter amended or replaced, the
“CIP Regulations”), or any other Anti-Terrorism Law, including any programs
involving any of the following items relating to or in connection with the
Borrower or any of its Subsidiaries, any of its respective Affiliates or agents,
the Credit Documents or the transactions hereunder: (a) any identity
verification procedures, (b) any record keeping, (c) any comparisons with
government lists, (d) any customer notices or (e) any other procedures required
under the CIP Regulations or such other laws.

 

Section 11.12. USA Patriot Act. Each Lender or assignee or participant of a
Lender that is not organized under the laws of the United States of America or a
state thereof (and is not excepted from the certification requirement contained
in Section 313 of the USA Patriot Act and the applicable regulations because it
is both (a) an affiliate of a depository institution or foreign bank that
maintains a physical presence in the United States or foreign country, and (b)
subject to supervision by a banking authority regulating such affiliated
depository institution or foreign bank), shall deliver to Administrative Agent
the certification, or, if applicable, re-certification, certifying that such
Lender is not a “shell” and certifying to other matters as required by Section
313 of the USA Patriot Act and the applicable regulations, (i) within 10 days
after the Closing Date, and (ii) at such other times as are required under the
USA Patriot Act.

 

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ARTICLE XII.

 

MISCELLANEOUS

 

Section 12.1. Payment of Expenses etc.

 

(a) Whether or not the transactions contemplated hereby are consummated, the
Borrower agrees to pay (or reimburse the Administrative Agent for) all
reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with the negotiation, preparation, syndication, administration and
execution and delivery of the Credit Documents and the documents and instruments
referred to therein and the syndication of the Commitments, including, without
limitation, the reasonable fees and disbursements of Jones Day, special counsel
to the Administrative Agent.

 

(b) The Borrower agrees to pay (or reimburse the Administrative Agent, the
Lenders and their Affiliates for) all reasonable out-of-pocket costs and
expenses of the Administrative Agent, the Lenders and their Affiliates in
connection with any amendment, waiver, consent or other modification of or
relating to any of the Credit Documents, including, without limitation, the
reasonable fees and disbursements of Jones Day, special counsel to the
Administrative Agent.

 

(c) The Borrower agrees to pay (or reimburse the Administrative Agent, the
Lenders and their Affiliates for) all reasonable out-of-pocket costs and
expenses of the Administrative Agent, the Lenders and their Affiliates in
connection with the enforcement of any of the Credit Documents or the other
documents and instruments referred to therein, including, without limitation,
(i) the reasonable fees and disbursements of Jones Day, special counsel to the
Administrative Agent, and (ii) the reasonable fees and disbursements of any
individual counsel to any Lender (including allocated costs of internal
counsel).

 

(d) Without limitation of the preceding Section 12.1(c), in the event of the
bankruptcy, insolvency, rehabilitation or other similar proceeding in respect of
the Borrower or any of its Subsidiaries, the Borrower agrees to pay all costs of
collection and defense, including reasonable attorneys’ fees in connection
therewith and in connection with any appellate proceeding or post-judgment
action involved therein, which shall be due and payable together with all
required service or use taxes.

 

(e) The Borrower agrees to pay and hold the Administrative Agent and each of the
Lenders harmless from and against any and all present and future stamp and other
similar taxes with respect to the foregoing matters and save the Administrative
Agent and each of the Lenders harmless from and against any and all liabilities
with respect to or resulting from any delay or omission (other than to the
extent attributable to any such indemnified person) to pay such taxes.

 

(f) The Borrower agrees to indemnify the Administrative Agent, each Lender, and
their respective Related Person’s and Affiliates (collectively, the
“Indemnitees”) from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses reasonably incurred by any of them as a
result of, or arising out of, or in any way related to, or by reason of

 

(i) any investigation, litigation or other proceeding (whether or not any Lender
is a party thereto) related to the entering into and/or performance of any
Credit Document or the use of the proceeds of any Loans hereunder or the
consummation of any transactions contemplated in any Credit Document, other than
any such investigation, litigation or proceeding arising out of transactions
solely between any of the Lenders or the Administrative Agent, transactions
solely involving the assignment by a Lender of all or a portion of its Loans and
Commitments, or the granting of participations therein, as provided in this
Agreement, or arising solely out of any examination of a Lender by any
regulatory or other governmental authority having jurisdiction over it, or

 

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(ii) the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any Real Property owned,
leased or at any time operated by the Borrower or any of its Subsidiaries, the
release, generation, storage, transportation, handling or disposal of Hazardous
Materials at any location, whether or not owned or operated by the Borrower or
any of its Subsidiaries, if the Borrower or any such Subsidiary could have or is
alleged to have any responsibility in respect thereof, the non-compliance of any
such Real Property with foreign, federal, state and local laws, regulations and
ordinances (including applicable permits thereunder) applicable thereto, or any
Environmental Claim asserted against the Borrower or any of its Subsidiaries, in
respect of any such Real Property,

 

including, in each case, without limitation, the reasonable documented fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the person to be indemnified or of any other
Indemnitee who is such person or an Affiliate of such person). To the extent
that the undertaking to indemnify, pay or hold harmless any person set forth in
the preceding sentence may be unenforceable because it is violative of any law
or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities that is
permissible under applicable law.

 

Section 12.2. Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Lender is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to the Borrower
or to any other person, any such notice being hereby expressly waived, to set
off and to appropriate and apply any and all deposits (general or special) and
any other Indebtedness at any time held or owing by such Lender (including,
without limitation, by branches, agencies and Affiliates of such Lender wherever
located) to or for the credit or the account of the Borrower against and on
account of the Obligations and liabilities of the Borrower to such Lender under
this Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations the Borrower purchased by such Lender
pursuant to Section 12.4(c), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Lender shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured. Each Lender agrees to promptly notify the Borrower
after any such set off and application, provided, however, that the failure to
give such notice shall not affect the validity of such set off and application.

 

Section 12.3. Notices.

 

(a) Generally. Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in subparagraph (c)
below), all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopier as follows:

 

(i) if to the Borrower, to it at 201 Edgewater Drive, Suite 285, Wakefield,
Massachusetts 01880, Attention: Chief Financial Officer (Telecopier No. (781)
224-4216; Telephone No. (781) 224-0880), with a courtesy copy to Gary A. Wadman,
Esq., Baker & Hostetler LLP, 65 East State Street, Suite 2100, Columbus, Ohio
43215 (Telecopier No. (614) 462-2616; Telephone No. (614) 462-2678);

 

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(ii) if to any Credit Party other than the Borrower, to it c/o of American
Dental Partners, Inc., 201 Edgewater Drive, Suite 285, Wakefield, Massachusetts
01880, Attention: Chief Financial Officer (Telecopier No. (781) 224-4216;
Telephone No. (781) 224-0880);

 

(iii) if to the Administrative Agent, to KeyBank National Association at
KeyCenter, 127 Public Square, Cleveland, Ohio 44114, Attention: J.T. Taylor
(Telecopier No. (216) 689-8329; Telephone No.(216) 689-4490); and

 

(iv) if to a Lender, to it at its address (or telecopier number) set forth on
Schedule 1 hereto or, in the case of any Lender that becomes a party to this
Agreement by way of assignment under Section 12.4 of this Agreement, to it at
the address set forth in the Assignment Agreement to which it is a party;

 

(b) Receipt of Notices. Notices and communications sent by hand or overnight
courier service, or mailed by certified or registered mail, shall be deemed to
have been given when received; notices sent by telecopier shall be deemed to
have been given when sent and receipt has been confirmed by telephone. Notices
delivered through electronic communications to the extent provided in
subparagraph (c) below, shall be effective as provided in said subparagraph (c).

 

(c) Electronic Communications. Notices and other communications to the
Administrative Agent, a Letter of Credit Issuer or any Lender hereunder and
required to be delivered pursuant to Sections 8.1(a), (b), (c), (d), (h), (i)
and (k) may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications. Unless the Administrative Agent otherwise prescribes, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if such notice or
other communication is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at the
opening of business on the next business day for the recipient, and (ii) notices
or communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor.

 

(d) Change of Address, Etc. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
each of the other parties hereto.

 

Section 12.4. Benefit of Agreement.

 

(a) Successors and Assigns Generally. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns, provided that the Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of all the Lenders (other than any Defaulting Lender), and, provided,
further, that any assignment by a Lender of its rights and obligations hereunder
shall be effected in accordance with Section 12.4(c).

 

(b) Participations. Notwithstanding the foregoing, each Lender may at any time
grant participations in any of its rights hereunder or under any of the Notes to
any person (other than a natural person or the Borrower or any of its
Affiliates), provided that in the case of any such participation,

 

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(i) the participant shall not have any rights under this Agreement or any of the
other Credit Documents, including rights of consent, approval or waiver (the
participant’s rights against such Lender in respect of such participation to be
those set forth in the agreement executed by such Lender in favor of the
participant relating thereto),

 

(ii) such Lender’s obligations under this Agreement (including, without
limitation, its Commitment hereunder) shall remain unchanged,

 

(iii) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations,

 

(iv) such Lender shall remain the holder of any Note for all purposes of this
Agreement, and

 

(v) the Borrower, the Administrative Agent, and the other Lenders shall continue
to deal solely and directly with the selling Lender in connection with such
Lender’s rights and obligations under this Agreement, and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation, except that the participant shall be entitled to the benefits of
Sections 2.6 and 2.7 of this Agreement to the extent that such Lender would be
entitled to such benefits if the participation had not been entered into or
sold,

 

and, provided further, that no Lender shall transfer, grant or sell any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (w) extend the final scheduled
maturity of the Loans in which such participant is participating, or reduce the
rate or extend the time of payment of interest or Fees thereon (except in
connection with a waiver of the applicability of any post-default increase in
interest rates), or reduce the principal amount thereof, or increase such
participant’s participating interest in any Commitment over the amount thereof
then in effect (it being understood that a waiver of any Default or Event of
Default shall not constitute a change in the terms of any such Commitment), (x)
release all or any substantial portion of the Collateral, or release any
guarantor from its guaranty of any of the Obligations, except strictly in
accordance with the terms of the Credit Documents, or (y) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement.

 

(c) Assignments by Lenders. Any Lender may assign all, or if less than all, a
fixed portion, of its Loans and/or Commitment and its rights and obligations
hereunder to one or more Eligible Assignees (so long as after giving effect to
each such assignment, such Lender’s Commitment shall not be less than
$5,000,000), each of which shall become a party to this Agreement as a Lender by
execution of an Assignment Agreement, provided that

 

(i) except in the case (x) of an assignment of the entire remaining amount of
the assigning Lender’s Loans and/or Commitment or (y) an assignment to another
Lender, an Affiliate of such Lender or an Approved Fund with respect to such
Lender, the aggregate amount of the Commitment (which for this purpose includes
the Loans outstanding thereunder), shall not be less than $5,000,000,

 

(ii) in the case of any assignment to an Eligible Assignee at the time of any
such assignment the Lender Register shall be deemed modified to reflect the
Commitments of such new Lender and of the existing Lenders,

 

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(iii) upon surrender of the old Notes, if any, upon request of the new Lender,
new Notes will be issued, at the Borrower’s expense, to such new Lender and to
the assigning Lender, such new Notes to be in conformity with the requirements
of Section 2.4(d) (with appropriate modifications) to the extent needed to
reflect the revised Commitments,

 

(iv) unless waived by the Administrative Agent, the Administrative Agent shall
receive at the time of each such assignment, from the assigning or assignee
Lender, the payment of a non-refundable assignment fee of $3,500,

 

and, provided further, that such transfer or assignment will not be effective
until the Assignment Agreement in respect thereof is recorded by the
Administrative Agent on the Lender Register maintained by it as provided herein.

 

To the extent of any assignment pursuant to this Section 12.4(c) the assigning
Lender shall be relieved of its obligations hereunder with respect to its
assigned Commitments.

 

At the time of each assignment pursuant to this Section 12.4(c) to a person that
is not already a Lender hereunder and that is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Lender shall provide to the Borrower and the
Administrative Agent the appropriate Internal Revenue Service Forms (and, if
applicable an Exemption Certificate) described in Section 5.4(b). To the extent
that an assignment of all or any portion of a Lender’s Commitment and related
outstanding Obligations pursuant to this Section 12.4(c) would, at the time of
such assignment, result in increased costs under Section 2.6 from those being
charged by the respective assigning Lender prior to such assignment, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).

 

Nothing in this Section 12.4(c) shall prevent or prohibit (i) any Lender that is
a bank, trust company or other financial institution from pledging its Notes or
Loans to a Federal Reserve Bank in support of borrowings made by such Lender
from such Federal Reserve Bank, or (ii) any Lender that is a trust, limited
liability company, partnership or other investment company from pledging its
Notes or Loans to a trustee or agent for the benefit of holders of certificates
or debt securities issued by it. No such pledge, or any assignment pursuant to
or in lieu of an enforcement of such a pledge, shall relieve the transferor
Lender from its obligations hereunder.

 

(d) No SEC Registration or Blue Sky Compliance. Notwithstanding any other
provisions of this Section 12.4, no transfer or assignment of the interests or
obligations of any Lender hereunder or any grant of participation therein shall
be permitted if such transfer, assignment or grant would require the Borrower to
file a registration statement with the SEC or to qualify the Loans under the
“Blue Sky” laws of any State.

 

(e) Representations of Lenders. Each Lender initially party to this Agreement
hereby represents, and each person that became a Lender pursuant to an
assignment permitted by this Section 12.4 will, upon its becoming party to this
Agreement, represent that it is a commercial lender, other financial institution
or other “accredited” investor (as defined in SEC Regulation D) that makes or
acquires loans in the ordinary course of its business and that it will make or
acquire Loans for its own account in the ordinary course of such business,
provided that subject to the preceding Sections 12.4(b) and (c), the disposition
of any promissory notes or other evidences of or interests in Indebtedness held
by such Lender shall at all times be within its exclusive control.

 

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Section 12.5. No Waiver; Remedies Cumulative. No failure or delay on the part of
the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower and the Administrative Agent or any Lender shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. No notice to 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 or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default or Event of Default, regardless of whether
the Administrative Agent, any Lender or the Letter of Credit Issuer may have had
notice or knowledge of such Default or Event of Default at the time. The rights
and remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies that the Administrative Agent or any Lender would otherwise
have.

 

Section 12.6. Payments Pro Rata; Sharing of Setoffs, etc.

 

(a) The Administrative Agent agrees that promptly after its receipt of each
payment from or on behalf of the Borrower in respect of any Obligations, it
shall distribute such payment to the Lenders (other than any Lender that has
expressly waived in writing its right to receive its pro rata share thereof) pro
rata based upon their respective shares, if any, of the Obligations with respect
to which such payment was received. As to any such payment received by the
Administrative Agent prior to 1:00 P.M. (local time at the Payment Office) in
funds that are immediately available on such day, the Administrative Agent will
use all reasonable efforts to distribute such payment in immediately available
funds on the same day to the Lenders as aforesaid.

 

(b) Each of the Lenders agrees that, if it should receive any amount hereunder
(whether by voluntary payment, by realization upon security, by the exercise of
the right of setoff or banker’s lien, by counterclaim or cross action, by the
enforcement of any right under the Credit Documents, or otherwise) that is
applicable to the payment of the principal of, or interest on, the Loans or
Fees, of a sum that with respect to the related sum or sums received by other
Lenders is in a greater proportion than the total of such Obligation then owed
and due to such Lender bears to the total of such Obligation then owed and due
to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations to such Lenders
in such amount as shall result in a proportional participation by all of the
Lenders in such amount, provided that (i) if all or any portion of such excess
amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest, and (ii) the provisions of this Section 12.6(b) shall not be
construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement, or any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in
any of its Loans or participations in Letters of Credit to any assignee or
participant pursuant to Section 12.4, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this Section
12.6(b) shall apply). The Borrower consents to the foregoing and agrees, to the
extent it may effectively do so under applicable law, that any Lender acquiring
a participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.

 

(c) Notwithstanding anything to the contrary contained herein, the provisions of
the preceding Sections 12.6(a) and (b) shall be subject to the express
provisions of this Agreement that require, or permit, differing payments to be
made to Lenders that are not Defaulting Lenders, as opposed to Defaulting
Lenders.

 

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(d) If any Lender shall fail to make any payment required to be made by it to
the Administrative Agent pursuant to Section 2.3(b) or 3.4(c), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision of this Agreement), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations to the Administrative Agent under such Sections until all such
unsatisfied obligations are fully paid.

 

Section 12.7. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury
Trial.

 

(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF OHIO. TO THE FULLEST EXTENT PERMITTED
BY LAW, THE BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO
ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF OHIO GOVERNS
THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS. Any legal action or
proceeding with respect to this Agreement or any other Credit Document may be
brought in the Court of Common Pleas of Cuyahoga County, Ohio, or of the United
States for the Northern District of Ohio, and, by execution and delivery of this
Agreement, the Borrower hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the jurisdiction of the aforesaid
courts. The Borrower hereby further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to the Borrower at its address for notices pursuant to Section 12.3,
such service to become effective 30 days after such mailing or at such earlier
time as may be provided under applicable law. Nothing herein shall affect the
right of the Administrative Agent or any Lender to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against the Borrower in any other jurisdiction.

 

(b) The Borrower hereby irrevocably waives any objection that it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in Section 12.7(a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.

 

(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS (INCLUDING,
WITHOUT LIMITATION, ANY AMENDMENTS, WAIVERS OR OTHER MODIFICATIONS RELATING TO
ANY OF THE FOREGOING), OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY HERETO HEREBY (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 BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS PARAGRAPH.

 

Section 12.8. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and

 

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delivered shall be an original, but all of which shall together constitute one
and the same agreement. A set of counterparts executed by all the parties hereto
shall be lodged with the Borrower and the Administrative Agent.

 

Section 12.9. Integration. This Agreement, the other Credit Documents and any
separate letter agreements with respect to fees payable to the Administrative
Agent, for its own account and benefit and/or for the account, benefit of, and
distribution to, the Lenders, constitute the entire contract among the parties
relating to the subject matter hereof and thereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof or thereof.

 

Section 12.10. Headings Descriptive. The headings of the several Sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.

 

Section 12.11. Amendment or Waiver.

 

(a) Neither this Agreement nor any other Credit Document, nor any terms hereof
or thereof, may be amended, changed, waived or otherwise modified unless such
amendment, change, waiver or other modification is in writing and signed by the
Borrower and the Administrative Agent, and also signed (or consented to in
writing by) the Required Lenders, provided that

 

(i) no change in, or waiver or other modification otherwise affecting, the
amount or time of any scheduled reduction in the Total Commitment provided for
in Section 4.3(a) to which a Lender shall be entitled, shall be made without the
written consent of each Lender;

 

(ii) no change, waiver or other modification shall:

 

(A) increase the Commitment of any Lender hereunder, without the written consent
of such Lender;

 

(B) extend or postpone the Facility Termination Date or the maturity date
provided for herein that is applicable to any Loan of any Lender, extend or
postpone the expiration date of any Letter of Credit as to which such Lender is
a Participant pursuant to Section 3.4 beyond the latest expiration date for a
Letter of Credit provided for herein, or extend or postpone any scheduled
expiration or termination date provided for herein that is applicable to a
Commitment of any Lender, without the written consent of such Lender;

 

(C) reduce the principal amount of any Loan made by any Lender, or reduce the
rate or extend the time of payment of, or excuse the payment of, interest
thereon (other than as a result of waiving the applicability of any post-default
increase in interest rates), without the written consent of such Lender;

 

(D) reduce the amount of any Unpaid Drawing as to which any Lender is a
Participant as provided in Section 3.4, or reduce the rate or extend the time of
payment of, or excuse the payment of, interest thereon (other than as a result
of waiving the applicability of any post-default increase in interest rates),
without the written consent of such Lender;

 

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(E) reduce the rate or extend the time of payment of, or excuse the payment of,
any Fees to which any Lender is entitled hereunder, without the written consent
of such Lender; or

 

(F) increase the Total Commitment without the written consent of each Lender;
and

 

(iii) no change, waiver or other modification termination shall, without the
written consent of each Lender (other than a Defaulting Lender) affected
thereby,

 

(A) release the Borrower from any obligations as a guarantor of its
Subsidiaries’ obligations under any Credit Document;

 

(B) release any Credit Party from the Subsidiary Guaranty, except in accordance
with a transaction permitted under this Agreement;

 

(C) release all or any substantial portion of the Collateral;

 

(D) amend, modify or waive any provision of this Section 12.11, Section 10.3, or
Section 12.6 hereof, or any other provision of any of the Credit Documents
pursuant to which the consent or approval of all Lenders, or a number or
specified percentage or other required grouping of Lenders or Lenders having
Commitments, is by the terms of such provision explicitly required;

 

(E) reduce the percentage specified in, or otherwise modify, the definition of
Required Lenders; or

 

(F) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement.

 

Any waiver, consent, amendment or other modification with respect to this
Agreement given or made in accordance with this Section 12.11 shall be effective
only in the specific instance and for the specific purpose for which it was
given or made.

 

(b) No provision of Section 3 or 11 may be amended without the consent of (x)
any Letter of Credit Issuer adversely affected thereby or (y) the Administrative
Agent, respectively.

 

(c) To the extent the Required Lenders (or all of the Lenders, or all of the
Lenders (other than any Defaulting Lender), as applicable, as shall be required
by this Section 12.11) waive the provisions of Section 9.2 hereof with respect
to the sale, transfer or other disposition of any Collateral, or any Collateral
is sold, transferred or disposed of as permitted by Section 9.2 hereof, (i) such
Collateral shall be sold, transferred or disposed of free and clear of the Liens
created by the respective Security Documents; (ii) if such Collateral includes
all of the capital stock of a Subsidiary that is a party to the Subsidiary
Guaranty or whose stock is pledged pursuant to the Pledge Agreement, such
capital stock shall be released from the Pledge Agreement and such Subsidiary
shall be released from the Subsidiary Guaranty; and (iii) the Administrative
Agent shall be authorized to take actions deemed appropriate by them in order to
effectuate the foregoing.

 

Section 12.12. Survival of Indemnities. All indemnities set forth herein
including, without limitation, in Section 2.6, 2.7, 3.5, 5.4, 11.7 or 12.1 shall
survive the execution and delivery of this Agreement and the making and
repayment of Loans.

 

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Section 12.13. Domicile of Loans. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, provided that the Borrower shall not be responsible for costs arising
under Section 2.6 resulting from any such transfer (other than a transfer
pursuant to Section 2.8) to the extent not otherwise applicable to such Lender
prior to such transfer.

 

Section 12.14. Confidentiality.

 

(a) Each of the Administrative Agent, each Letter of Credit Issuer and the
Lenders agrees to maintain the confidentiality of all Confidential Information
(as defined below), except that Confidential Information may be disclosed (1) to
its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
persons to whom such disclosure is made will be informed of the confidential
nature of such Confidential Information and instructed to keep such Confidential
Information confidential), (2) to any direct or indirect contractual
counterparty in any swap, hedge or similar agreement (or to any such contractual
counterparty’s professional advisor, so long as such contractual counterparty
(or such professional advisor) agrees to be bound by the provisions of this
Section 12.14, (3) to the extent requested by any regulatory authority, (4) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (5) to any other party to this Agreement, (6) to any
other creditor of the Borrower or any other Credit Party that is a direct or
intended beneficiary of any of the Credit Documents, (7) in connection with the
exercise of any remedies hereunder or under any of the other Credit Documents,
or any suit, action or proceeding relating to this Agreement or any of the other
Credit Documents or the enforcement of rights hereunder or thereunder, (8)
subject to an agreement containing provisions substantially the same as those of
this Section 12.14, to any assignee of or participant in, or any prospective
assignee of or participant in, any of its rights or obligations under this
Agreement, (9) with the consent of the Borrower, or (10) to the extent such
Confidential Information (i) becomes publicly available other than as a result
of a breach of this Section 12.14, or (ii) becomes available to the
Administrative Agent, any Letter of Credit Issuer or any Lender on a
non-confidential basis from a source other than the Borrower.

 

(b) As used in this Section, “Confidential Information” shall mean all
information received from the Borrower relating to the Borrower or its business,
other than any such information that is available to the Administrative Agent,
any Letter of Credit Issuer or any Lender on a non-confidential basis prior to
disclosure by the Borrower, provided that in the case of information received
from the Borrower after the Closing Date, such information is clearly identified
at the time of delivery as confidential. Notwithstanding anything herein to the
contrary, “Confidential Information” shall not include, and the Administrative
Agent and each Lender may disclose to any and all persons, without limitation of
any kind, any information with respect to the U.S. federal income tax treatment
and U.S. federal income tax structure of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are provided to the Administrative Agent or such Lender relating to such tax
treatment and tax structure.

 

(c) Any person required to maintain the confidentiality of Confidential
Information as provided in this Section 12.14 shall be considered to have
complied with its obligation to do so if such person has exercised the same
degree of care to maintain the confidentiality of such Confidential Information
as such person would accord to its own confidential information. The Borrower
hereby agrees that the failure of the Administrative Agent, any Letter of Credit
Issuer or any Lender to comply with the provisions of this Section 12.14 shall
not relieve the Borrower, or any other Credit Party, of any of its obligations
under this Agreement or any of the other Credit Documents.

 

Section 12.15. Lender Register. The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this Section
12.15, to maintain a register (the “Lender Register”) on or in which it will
record the names and addresses of the Lenders, and the Commitments from time to

 

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time of each of the Lenders, the Loans made to the Borrower by each of the
Lenders and each repayment and prepayment in respect of the principal amount of
such Loans of each such Lender. Failure to make any such recordation, or (absent
manifest error) any error in such recordation, shall not affect the Borrower’s
obligations in respect of such Loans. With respect to any Lender, the transfer
of the Commitment of such Lender and the rights to the principal of, and
interest on, any Loan made pursuant to such Commitment shall not be effective
until such transfer is recorded on the Lender Register maintained by the
Administrative Agent with respect to ownership of such Commitment and Loans and
prior to such recordation all amounts owing to the transferor with respect to
such Commitment and Loans shall remain owing to the transferor. The registration
of assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Administrative Agent on the Lender Register only upon the
acceptance by the Administrative Agent of a properly executed and delivered
Assignment Agreement pursuant to Section 12.4(c). The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature that may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 12.15. The Lender Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.

 

Section 12.16. Limitations on Liability of the Letter of Credit Issuers. The
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letters of
Credit. Neither any Letter of Credit Issuer nor any of its officers or directors
shall be liable or responsible for: (a) the use that may be made of any Letter
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
or of any endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (c) payment by a
Letter of Credit Issuer against presentation of documents that do not comply
with the terms of a Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that the Borrower (or a Subsidiary that is the account party
in respect of the Letter of Credit in question) shall have a claim against a
Letter of Credit Issuer, and a Letter of Credit Issuer shall be liable to the
Borrower (or such Subsidiary), to the extent of any direct, but not
consequential, damages suffered by the Borrower (or such Subsidiary) that the
Borrower (or such Subsidiary) proves were caused by (i) such Letter of Credit
Issuer’s willful misconduct or gross negligence in determining whether documents
presented under a Letter of Credit comply with the terms of such Letter of
Credit or (ii) such Letter of Credit Issuer’s willful failure to make lawful
payment under any Letter of Credit after the presentation to it of documentation
strictly complying with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, a Letter of Credit Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation.

 

Section 12.17. General Limitation of Liability. No claim may be made by the
Borrower, any Lender, the Administrative Agent, any Letter of Credit Issuer or
any other person against the Administrative Agent, any Letter of Credit Issuer,
or any other Lender or the Affiliates, directors, officers, employees, attorneys
or agents of any of them for any damages other than actual compensatory damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement or
any of the other Credit Documents, or any act, omission or event occurring in
connection therewith; and each of the Borrower, each Lender, the Administrative
Agent and each Letter of Credit Issuer hereby, to the fullest extent permitted
under applicable law, waives, releases and agrees not to sue or counterclaim
upon any such claim for any special, consequential or punitive damages, whether
or not accrued and whether or not known or suspected to exist in its favor.

 

Section 12.18. No Duty. All attorneys, accountants, appraisers, consultants and
other professional persons (including the firms or other entities on behalf of
which any such person may act)

 

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retained by the Administrative Agent or any Lender with respect to the
transactions contemplated by the Credit Documents shall have the right to act
exclusively in the interest of the Administrative Agent or such Lender, as the
case may be, and shall have no duty of disclosure, duty of loyalty, duty of
care, or other duty or obligation of any type or nature whatsoever to the
Borrower, to any of its Subsidiaries, or to any other person, with respect to
any matters within the scope of such representation or related to their
activities in connection with such representation. The Borrower agrees, on
behalf of itself and its Subsidiaries, not to assert any claim or counterclaim
against any such persons with regard to such matters, all such claims and
counterclaims, now existing or hereafter arising, whether known or unknown,
foreseen or unforeseeable, being hereby waived, released and forever discharged.

 

Section 12.19. Lenders and Agent Not Fiduciary to Borrower, etc. The
relationship among the Borrower and its Subsidiaries, on the one hand, and the
Administrative Agent, each Letter of Credit Issuer and the Lenders, on the other
hand, is solely that of debtor and creditor, and the Administrative Agent, each
Letter of Credit Issuer and the Lenders have no fiduciary or other special
relationship with the Borrower and its Subsidiaries, and no term or provision of
any Credit Document, no course of dealing, no written or oral communication, or
other action, shall be construed so as to deem such relationship to be other
than that of debtor and creditor.

 

Section 12.20. Survival of Representations and Warranties. All representations
and warranties herein shall survive the making of Loans and the issuance of
Letters of Credit hereunder, the execution and delivery of this Agreement, the
Notes and the other documents the forms of which are attached as Exhibits
hereto, the issue and delivery of the Notes, any disposition thereof by any
holder thereof, and any investigation made by the Administrative Agent or any
Lender or any other holder of any of the Notes or on its behalf. All statements
contained in any certificate or other document delivered to the Administrative
Agent or any Lender or any holder of any Notes by or on behalf of the Borrower
or of its Subsidiaries pursuant hereto or otherwise specifically for use in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower hereunder, made as of the
respective dates specified therein or, if no date is specified, as of the
respective dates furnished to the Administrative Agent or any Lender.

 

Section 12.21. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

 

Section 12.22. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action, event, condition or
circumstance is not permitted by any of such covenants, the fact that it would
be permitted by an exception to, or would otherwise be within the limitations or
restrictions of, another covenant, shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or event, condition or
circumstance exists.

 

Section 12.23. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts that are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Base Rate to the date of repayment, shall have been
received by such Lender.

 

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Section 12.24. USA Patriot Act Notification. Each Lender subject to the USA
Patriot Act hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act, it is required to obtain, verify and record information
that identifies the Borrower, which information includes the name and address of
the Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the USA Patriot Act.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above written.

 

AMERICAN DENTAL PARTNERS, INC. By:  

/s/ Ian H. Brock

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Name:   Ian H. Brock Title:   VP, Finance KEYBANK NATIONAL ASSOCIATION,   as a
Lender, a Letter of Credit Issuer and   as the Lead Arranger and Administrative
Agent By:  

/s/ J.T Taylor

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Name:   J.T. Taylor Title:   Vice President

 

[OTHER SIGNATURE PAGES FOLLOW]

 

S-1

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BANKNORTH, N.A. By:  

/s/ Jeff Westling

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Name:   Jeff Westling Title:   SVP

 

 

S-2

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CITIZENS BANK By:  

/s/ Michael Ouellet

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Name:   Michael Ouellet Title:   Vice President

 

 

S-3

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Schedule 1

 

Lenders and Commitments

 

Lender

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   Commitment

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Notice Address

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KeyBank National Association

   $ 30,000,000     

KeyCenter

127 Public Square

Cleveland, Ohio 44114

Fax: (216) 689-8329

Attention: KCIB Healthcare Group

Banknorth, N.A.

   $ 25,000,000     

7 New England Executive Park

10th Floor

Burlington, MA 01803

Fax: (781) 229-5663

Attention: Jeffrey R. Westling

Citizens Bank

   $ 15,000,000     

28 State Street

Boston, MA 02109

Fax: (617) 263-0439

Attention: Michael Ouellet,

                 Vice President

    

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Total:

   $ 70,000,000            

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