Document:

ex10-4

 

EXHIBIT 10.4

THE WASHINGTON POST COMPANY

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(Effective as of January 1, 1989)

Amended and restated through March 14, 2002

 

 

THE WASHINGTON POST COMPANY

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

         Section 1. Purpose. The Washington Post Company Supplemental Executive
Retirement Plan (the “Plan”) is an unfunded plan established for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees, as referred to in Sections 201(a)(2), 301(a)(3) and
401(a)(1) of ERISA, in order to induce employees of outstanding ability to join
or continue in the employ of the Company or an Affiliate of the Company and to
increase their efforts for its welfare by providing them with supplemental
benefits notwithstanding the limitations imposed by the Internal Revenue Code
on retirement and other benefits from tax qualified plans.

         This Plan is strictly a voluntary undertaking on the part of the Company
and shall not be deemed to constitute a contract of employment or part of a
contract between the Company and any employee or any employee of an Affiliate,
nor shall it be deemed to give any employee the right to be retained in the
employ of the Company or an Affiliate, as the case be made, or to interfere
with the right of the Company or an Affiliate, as the case may be, to discharge
any employee at any time, nor shall this Plan interfere with the right of the
Company or an Affiliate, as the case may be, to establish the terms and
conditions of employment of any employee.

         Benefits under this Plan shall be payable solely from the general assets
of the Company and participants herein shall not be entitled to look to any
source for payment of such benefits other than the general assets of the
Company.

         Section 2. Definitions. As used in this Plan, the following words shall
have the following meanings:

         (a)    “Actual Salary” means the regular basic compensation paid or payable
to an employee during a calendar year by the Company or an Affiliate (including
tax-deferred contributions, otherwise payable to an employee, elected by the
employee under any

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 Savings Plan and including earnings not payable by application of a salary
reduction election made pursuant to Section 125 of the Internal Revenue Code),
but excluding any other items of compensation such as (i) bonuses and
commissions, (ii) overtime, (iii) transportation benefit plan deferrals, (iv)
compensation under the terms of the long-term component of the Incentive
Compensation Plan of the Company paid during such Plan Year, (v) Workers’
Compensation, (vi) amounts paid by the Company for insurance, retirement or
other benefits, (vii) contributions or payments made by the Company or an
Affiliate (other than tax-deferred contributions elected by the employee) under
any Retirement Plan, any Savings Plan, this Plan or other benefits, or (viii)
dismissal or other payments made to an employee as a result of termination of
employment. The Actual Salary of an employee will include any payment made
under any short-term disability income plan of the Company or an Affiliate.

         (b)    “Affiliate” means any corporation (other than the Company) 50% or more
of the outstanding stock of which is directly or indirectly owned by the
Company and any unincorporated trade or business which is under common control
with the Company as determined in accordance with Section 414(c) of the
Internal Revenue Code and the regulations issued thereunder.

         (c)    “Applicable Percentage” shall have the meaning set forth in Section 4.

         (d)    “Committee” means the Compensation Committee of the Board of Directors
of the Company.

         (e)    “Company” means The Washington Post Company, a Delaware corporation,
and any successors in interest thereto.

         (f)    “Compensation” means the Actual Salary of an employee plus, starting
in 1988, bonuses awarded under the annual component of the Incentive
Compensation Plan of the Company during a calendar year by the Company or an
Affiliate. Bonuses awarded under the annual component of the Incentive
Compensation Plan of the Company will be considered as part of Compensation for
the year in which they are paid to the Employee, or

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 would otherwise be paid but for the Employee’s election to defer receipt
of payment under the Company’s Deferred Compensation Plan.

         (g)    “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.

         (h)    “Executive Participant” means an employee of the Company or an
Affiliate recommended by the Company’s senior management and designated a
participant in this Plan by the Committee, who is within the category of a
select group of management or highly compensated employees as referred to in
Sections 201(a)(2), 301(a)(3) and 401(a)(1) of ERISA for any Plan Year and who
either holds or held the office of a Vice President of the Company or an
Affiliate or any office senior thereto or a position of equivalent
responsibility or importance, during the current Plan Year or the prior Plan
Year, and was covered under the Company’s long-term component of the Incentive
Compensation Plan or any successor programs. An Executive Participant shall be
designated as being eligible to participate in Section 3 benefits or Section 4
benefits or both as determined in the sole discretion of the Committee.

         (i)    “415 Limitations” means Retirement Plan and Savings Plan provisions
adopted pursuant to Section 415 of the Internal Revenue Code to limit (i)
annual Retirement Plan benefits pursuant to Section 415(b) thereof, (ii) annual
additions to a Savings Plan pursuant to Section 415(c) thereof and (iii) the
aggregate of annual Retirement Plan benefits and additions to Savings Plans
pursuant to Section 415(e) thereof. The 415 Limitations will not apply after
December 31, 1999.

         (j)    “401(a)(17) Limitations” means Retirement Plan and Savings Plan
provisions adopted pursuant to Section 401(a)(17) of the Internal Revenue Code
to limit earnings considered for purposes of computing Retirement Plan benefits
and Savings Plan contributions to $200,000 (or such greater amount permitted
for such year in accordance with regulations promulgated by the Secretary of
the Treasury or his or her delegate) for each Plan Year ending on or before
December 31, 1993 and then as of January 1, 1994 to

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 $150,000 (or such greater amount permitted for such year in accordance
with regulations promulgated by the Secretary of the Treasury or his or her
delegate).

         (k)    “Investment Election” means an election made by the
Executive Participant selecting the investment credit factor(s)
that will be applicable to the Executive Participant’s Supplemental
Savings Account. The Committee shall determine the manner in which
Investment Elections may be made and the frequency with which such
elections may be prospectively changed.

         (l)    “Kaplan Key Employee Participant” means an Executive Participant or a
Key Employee Participant with respect to such employee’s years of Service with
Kaplan, Inc. or an affiliate of Kaplan, Inc.

         (m)    “Key Employee Participant” means an employee of the Company or an
Affiliate recommended by the Company’s senior management and designated a
participant in this Plan by the Committee, who is within the category of a
select group of management or highly compensated employees as referred to in
Sections 201(a)(2), 301(a)(3) and 401(a)(1) of ERISA for any Plan Year and who
holds or held a key position during the current Plan Year or the prior Plan
Year. A Key Employee Participant shall be designated as being eligible to
participate in Section 3 benefits as determined in the sole discretion of the
Committee.

         (n)    “Normal Retirement Date” means the first day of the calendar month
following the month in which a person’s 65th birthday occurs.

         (o)    “Participant” means an Executive Participant or a Key Employee
Participant, as applicable.

         (p)    “Plan Year” means the calendar year.

         (q)    “Retirement Plans” means The Retirement Plan for Washington Post
Companies, The Washington Post Washington-Baltimore Newspaper Guild Retirement
Income Plan and such other tax qualified, defined benefit retirement plans as
may be

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 sponsored by the Company or its Affiliates and designated for inclusion
hereunder by the Committee.

         (r)    “Savings Plan” means The Washington Post Tax Deferral and Savings
Plan, Post-Newsweek Stations, Inc. Tax Deferred Savings Plan, The Employees’
Savings Plan of Newsweek, Inc., The Savings and Retirement Plan of Affiliated
Post Companies and such other tax qualified savings and profit-sharing plans as
may be sponsored by the Company or its Affiliates and designated for inclusion
hereunder by the Committee.

         (s)    “Service” means the period of employment by the Company or an
Affiliate (excluding both service prior to the time an Affiliate became such
and service after the time an Affiliate is no longer such, except to the extent
required by Section 414(a) of the Code and the regulations promulgated
thereunder).

         (t)    “Supplemental Retirement Benefit” shall have the meaning set forth in
Section 3.

         (u)    “Supplemental Retirement Benefit Cash Balance Account” means the
Supplemental Retirement Benefit applicable to a Participant who is covered by
the Cash Balance provisions of the Retirement Plan.

         (v)    “Supplemental Basic Contributions,” “Supplemental Savings Account” and
“Supplemental Savings Award” shall have the meanings set forth in Section 4.

         (w)    “Surviving Spouse” means the surviving husband or wife of an employee
of the Company or an Affiliate, who has been married to the employee throughout
the one-year period ending on the date of the death of such employee.

         (x)    “Vesting Year” means each calendar year in which a Participant has at
least 1,000 hours of Service with the Company or an Affiliate. Service with a
predecessor company prior to becoming an Affiliate will not be counted in
calculating Vesting Years.

         Section 3. Supplemental Retirement Benefits.

         (a)    (i) Each designated person (other than a Kaplan Key Employee Participant
with respect to years of Service with Kaplan or a Kaplan affiliate), who is an
Executive

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Participant as of December 3, 1993, or becomes an Executive Participant or a
Key Employee Participant after December 3, 1993, for purposes of being
eligible to receive benefits under this Section and has ten or more Vesting
Years upon termination of Service and to whom benefits become payable under any
of the Retirement Plans, shall be paid a supplemental annual retirement benefit
(the “Supplemental Retirement Benefits”) under this Plan equal in amount to the
difference between (i) the aggregate annual benefits paid to such person under
the Retirement Plans and (ii) the aggregate annual benefits that would be
payable to such person under the Retirement Plans if the 415 and 401(a)(17)
Limitations were not contained therein (the “Unrestricted Benefit”). If such a
Participant’s Surviving Spouse is entitled to and is receiving a spouse’s
benefit under any of the Retirement Plans, the Surviving Spouse shall be paid a
benefit hereunder equal to the difference between (i) the aggregate spouse’s
benefits payable to such Surviving Spouse under the Retirement Plans and (ii)
the aggregate spouse’s benefit that would be payable to such Surviving Spouse
under the Retirement Plans if the 415 and 401(a)(17) Limitations were not
contained therein(the “Unrestricted Spouse’s Benefit”).

         (ii)    Each designated person, who is a Kaplan Key Employee Participant for
purposes of being eligible to receive benefits under this Section and has ten
or more Vesting Years upon termination of Service and to whom benefits become
payable under any of the Retirement Plans, shall be paid a Supplemental
Retirement Benefit under this Plan for his or her years of Service with Kaplan
equal in amount to the difference between (i) the Unrestricted Benefit
calculated as if he or she were covered by the TWPC Retirement Benefit Schedule
of The Retirement Plan for Washington Post Companies during his or her years of
Service with Kaplan and (ii) the aggregate annual benefits related to his or
her years of Service with Kaplan payable to such person under the Kaplan Cash
Balance Retirement Benefits Schedule of The Retirement Plan for Washington Post
Companies. If such a Kaplan Key Employee Participant’s Surviving Spouse is
entitled to and is receiving a spouse’s benefit thereunder, the Surviving
Spouse shall be paid a benefit hereunder equal to the difference between (i)
the Unrestricted Spouse’s Benefit payable as

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 if the Kaplan Key Employee Participant had been covered under the TWPC
Retirement Benefits Schedule to The Retirement Plan for Washington Post
Companies and (ii) the aggregate spouse’s benefit payable to such Surviving
Spouse under the Kaplan Cash Balance Retirement Benefits Schedule of The
Retirement Plan for Washington Post Companies.

         (iii)   For purposes of calculating the Supplemental Retirement Benefit or the
Surviving Spouse’s benefit hereunder for (i) an Executive Participant or the
Surviving Spouse of an Executive Participant, or (ii) a Kaplan Key Employee
Participant or the Surviving Spouse of a Kaplan Key Employee Participant with
respect solely to years of Service at Kaplan, Inc. or any affiliate of Kaplan,
Inc., as the case may be, Compensation rather than Actual Salary will be used.

         (b)    (i) Except as provided below, the Supplemental Retirement Benefits
provided by this Plan shall be paid to the Participant (or to any beneficiary
designated by him or her in accordance with the Retirement Plans, or to his or
her Surviving Spouse if eligible for and receiving a spouse’s benefit under the
Retirement Plans) concurrently with the payment of the benefits payable under
the applicable Retirement Plan in which he or she was participating at the date
of termination and/or in which he or she had a vested right on such date and
shall be payable in the same form as such Retirement Plan benefits are being
paid thereunder.

         (ii)    Notwithstanding the above, with respect to a Participant covered by
the Cash Balance Pension provisions of The Retirement Plan for Washington Post
Companies, the single life annuity available shall be determined using the GATT
Interest Rate (as defined in such Retirement Plan) plus 2%. In the event the
Supplemental Retirement Benefit commences prior to Normal Retirement Date or is
payable in a form other than an annuity for the life of the former employee
only, the Supplemental Retirement Benefit shall be actuarially adjusted in the
same manner as are benefits payable under the Retirement Plan in which he or
she was participating at the time of termination and/or in which he or she had
a vested right on such date. The Committee may, however, in its sole
discretion direct

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 that the Supplemental Retirement Benefit payable with respect to a former
employee be paid as an actuarially equivalent single sum payment; provided,
that (except for a distribution to pay taxes as provided in Section 5) no such
payment may be made prior to termination of Service or prior to the date that
benefits may become payable under any of the Retirement Plans, and provided,
further, that in determining actuarial equivalency of a single sum payment in
cash, there shall be used the same actuarial assumptions as are applicable for
the calculation of a single sum payment under the applicable Retirement Plan.
Further notwithstanding the above and except in the case of a Kaplan Key
Employee Participant, if the Participant elects a lump sum payment in
accordance with the Cash Balance Pension provisions of The Retirement Plan for
Washington Post Companies, the benefits under the Supplemental Retirement Plan
will also be payable in a lump sum amount which shall be equal to his or her
Supplemental Benefit Cash Balance Account as of the date of the lump sum
payment. A Kaplan Key Employee Participant cannot elect to receive the amount
of his or her Supplemental Benefit in a lump sum regardless of his or her
election to receive a lump sum payment in accordance with the Kaplan Cash
Balance Retirement Benefits Schedule of The Retirement Plan for Washington Post
Companies.

         (iii)    For purposes of the Supplemental Retirement Benefits provided by
this Plan to be paid to a Kaplan Key Employee Participant (or to his or her
Surviving Spouse if eligible for and receiving a spouse’s benefit under the
Retirement Plans) with respect to his or her years of Service with Kaplan, Inc.
or an affiliate of Kaplan, Inc., the Unrestricted Benefit or the Unrestricted
Spouse’s Benefit shall be calculated as an annuity. If a Kaplan Key Employee
Participant elects to receive a lump sum benefit from his or her Cash Balance
Account under The Retirement Plan for Washington Post Companies, then the
Supplemental Retirement Benefit for such Participant will be paid in the form
of a single life annuity beginning at the same time the payment is commenced
under The Retirement Plan for Washington Post Companies, but in no case prior
to age 55.

         Section 4. Supplemental Savings Plan Benefits.

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         (a)    In the event that the Actual Salary of an Executive Participant
designated as eligible to receive benefits under this Section 4 for 1989 or any
subsequent Plan Year exceeds the 401(a)(17) Limitations for such Plan Year,
such Executive Participant shall be eligible to make additional salary
reduction contributions under this Plan and receive a Supplemental Savings
Award under this Plan for such Plan Year; provided, that such Executive
Participant is then participating in his or her employer’s Savings Plan and
making (i) the maximum allowable basic, matchable tax-deferred contributions to
such Savings Plan and (ii) the maximum allowable after-tax contributions which
can result in a matching employer contribution, as permitted under such Savings
Plan, after taking into account the application of the non-discrimination rules
of Sections 401(k) and (m) of the Internal Revenue Code for such Plan Year. In
order to compute the amount of such Supplemental Savings Award, a determination
will be made of the dollar amount of contributions the Executive Participant is
able to make to his or her employer’s Savings Plan which result in matching
employer contributions for such Executive Participant under the terms of such
Savings Plan. This dollar amount will then be expressed as a percentage (the
“Applicable Percentage”) of the amount of compensation which can be recognized
for purposes of the Savings Plan under Section 401(a)(17) of the Internal
Revenue Code for the then-current Plan Year. Prior to the beginning of each
Plan Year, the Executive Participant will be provided with the opportunity to
elect to irrevocably defer under this Plan the Applicable Percentage (or any
whole lower percentage) of the Executive Participant’s Actual Salary earned in
excess of the 401(a)(17) Limitations for such Plan Year. Such a salary
reduction is referred to as a “Supplemental Basic Contribution.” In the event
that an Executive Participant elects to make a Supplemental Basic Contribution
under this Plan and, to the extent the Company is not his or her employer, his
or her employer forwards on a timely basis such Supplemental Basic Contribution
to the Company, such individual will receive a Supplemental Savings Award under
this Plan in the form of (i) a matching contribution equal to the product of
the Executive Participant’s Supplemental Basic Contribution times the matching
employer contribution percentage

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 under the terms of the applicable Savings Plan and (ii) to the extent such
Participant’s employer makes an unmatched contribution to the applicable
Savings Plan on behalf of such Participant, a contribution equal to the
difference between the amount of such unmatched contribution actually made
under such Savings Plan on behalf of such Participant and the amount of such
unmatched contribution such Participant would have received under such Savings
Plan if the 401(a)(17) Limitations had not been in effect (the “Supplemental
Savings Award”). The Supplemental Savings Award for any Plan Year shall be
made as of the first day of the following year or on such other basis as may be
approved by the Committee.

         (b)    The amount of an Executive Participant’s supplemental savings plan
benefits under this Plan shall be the aggregate amount of the Supplemental
Savings Awards and the Supplemental Basic Contributions together with
investment credits accrued thereon (the “Supplemental Savings Account”).
Investment credits shall be credited on the amount of an Executive
Participant’s Supplemental Savings Account at the end of such Plan Year or on
such other basis as may be approved by the Committee in accordance with the
Executive Participant’s Investment Election.

         In the event an Executive Participant fails to complete a valid Investment
Election, his or her Supplemental Savings Account will be credited with the
investment credit amounts equivalent to the rates of return generated by the
money market option under the Company’s 401(k) plan.

         (c)    The Compensation Committee shall establish the investment credit
factors that will be available in any Plan Year.

         (d)    Supplemental Savings Awards and the investment credits thereon shall
be fully vested and nonforfeitable.

         (e)    No withdrawal of funds in an Executive Participant’s Supplemental
Savings Account for hardship or any other reason may be made while an Executive
Participant remains employed by the Company or an Affiliate. The Supplemental
Savings Account shall be paid in cash as soon as practicable following
termination of Service.

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         (f)    An Executive Participant shall designate a beneficiary to receive the
unpaid portion of his or her Supplemental Savings Account in the event of his
or her death. The designation shall be made in a writing filed with the
Committee on a form approved by it and signed by the Executive Participant. If
no effective designation of beneficiary shall be on file with the Committee
when supplemental savings benefits would otherwise be distributable to a
beneficiary, then such benefits shall be distributed to the Surviving Spouse of
the Executive Participant or, if there is no Surviving Spouse, to his or her
estate.

         Section 5. Funding. Benefits under this Plan shall not be funded in
order that the Plan may be exempt from the provisions of Parts 2, 3 and 4 of
Title I of ERISA. The Committee shall maintain records of Supplemental Savings
Accounts and records for the calculation of supplemental retirement benefits.
In the event benefits are hereafter determined to be taxable for Participants
prior to actual receipt thereof, a payment may be made to such Participants in
an amount sufficient to pay such taxes notwithstanding that the Participant may
not then have terminated Service or that the payment is being made prior to the
date that benefits would otherwise be paid under any of the Retirement Plans.
Amounts so paid (i) with respect to supplemental savings benefits shall reduce
the Executive Participant’s Supplemental Savings Account and (ii) with respect
to Supplemental Retirement Benefits shall be used as an offset to the
Supplemental Retirement Benefits, if any, thereafter payable.

         Section 6. Administration. This Plan shall be administered by the
Committee. All decisions and interpretations of the Committee shall be
conclusive and binding on the Company, and the Participants. The Plan may be
amended or terminated by the Board of Directors of the Company at any time and
any Participant may have his or her designation as such terminated by the
Committee at any time; provided, however, that no such amendment or termination
or change in designation shall deprive any Participant of supplemental
retirement or savings benefits accrued to the date of such amendment or

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 termination or modify the last two sentences of Section 5 in a manner
adverse to any Participant.

         Section 7. Loss of Benefits. Notwithstanding any other section of this
Plan, if a Participant is discharged by the Company or an Affiliate because of
conduct that the Participant knew or should have known was detrimental to
legitimate interests of the Company or its Affiliates, dishonesty, fraud,
misappropriation of funds or confidential, secret or proprietary information
belonging to the Company or an Affiliate or commission of a crime, such
Participant’s rights to any benefits under this Plan shall be forfeited; except
that such Participant shall be entitled to receive the aggregate amount of his
or her Supplemental Basic Contributions, without any interest, in such event.

         Section 8. Nonassignability. No Participant, or beneficiary shall have
the right to assign, pledge or otherwise dispose of any benefits payable to him
or her hereunder nor shall any benefit hereunder be subject to garnishment,
attachment, transfer by operation of law, or any legal process.

         Section 9. Limitation of Liability. The Company’s sole obligation under
this Plan is to pay the benefits provided for herein and neither the
Participant nor any other person shall have any legal or equitable right
against the Company, an Affiliate, the Boards of Directors thereof, the
Committee or any officer or employee of the Company or an Affiliate other than
the right against the Company to receive such payments from the Company as
provided herein.

         Section 10. Use of Masculine and Feminine; Singular and Plural. Wherever
used in this Plan, the masculine gender will include the feminine gender and
the singular will include the plural, unless the context indicates otherwise.

12<PAGE>
                                                                   EXHIBIT 10.12

                       FIRST AMENDMENT TO CREDIT AGREEMENT
                              AND CREDIT DOCUMENTS

      THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND CREDIT DOCUMENTS, dated as of
the 17th day of February, 2000 (this "Amendment"), is made among ORTHODONTIC
CENTERS OF AMERICA, INC., a Delaware corporation with its principal offices in
Ponte Vedra Beach, Florida ("OCA"), the Subsidiaries (as defined in the Credit
Agreement referred to below) of OCA listed on the signature pages hereto, the
Required Lenders (as defined in the Credit Agreement referred to below), FIRST
UNION NATIONAL BANK, as agent for the Lenders (in such capacity, the "Agent"),
BANK OF AMERICA, FSB, as Documentation Agent (in such capacity, the
"Documentation Agent"), and CITIBANK, N.A., as Syndication Agent (in such
capacity, the "Syndication Agent").

                                    RECITALS

      A.    OCA, certain banks and other financial institutions, the Agent, the
Documentation Agent and the Syndication Agent are parties to a Credit Agreement,
dated as of October 8, 1998 (the "Credit Agreement"), providing for the
availability of certain credit facilities to OCA and certain other borrowers
from time to time parties thereto upon the terms and conditions set forth
therein. Capitalized terms used herein without definition shall have the
meanings given to them in the Credit Agreement.

      B.    OCA has requested certain amendments to the Credit Agreement, and
the Required Lenders have agreed to make such amendments, upon the terms and
conditions set forth herein.

                             STATEMENT OF AGREEMENT

      NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

      1.    Defined Terms.

      (a)   The following defined terms are hereby added to the Credit Agreement
in proper alphabetical order:

            "`Consolidated Indebtedness' shall mean, as of any date of
      determination, the aggregate (without duplication) of all Indebtedness of
      OCA and its Subsidiaries as of such date, determined on a consolidated
      basis in accordance with GAAP."

            "`Permitted Additional Note' shall mean a Promissory Note in the
      principal amount of $3,000,000, to be made by OCA in favor of First Union
      for the purpose of funding account overdrafts, as the same may be amended,
      modified, supplemented or replaced from time to time."

      (b)   The definition of "Credit Documents" in Section 1.1 of the Credit
Agreement is hereby amended to delete therefrom the words "any Hedge Agreement
to which OCA and any Lender are parties and that is permitted or required to be
entered into by OCA hereunder."

      (c)   The definition of "Foreign Currency Sublimit" in Section 1.1 of the
Credit Agreement is hereby amended and restated in its entirety as follows:

            " `Foreign Currency Sublimit' shall mean $16,000,000 or, if less,
      the aggregate Commitments at the time of determination, as such amount may
      be reduced at or prior to such time pursuant to the terms hereof."
<PAGE>
      2.    Indebtedness. Section 8.2 of the Credit Agreement is hereby amended
by (a) deleting the word "and" at the end of clause (viii) thereof, (b) adding
the word "and" to the end of clause (ix) thereof, and (c) adding the following
clause (x) to the end thereof:

            "(x) Indebtedness under the Permitted Additional Note."

      3.    Amendments, Waivers, etc. The proviso at the end of Section 12.6 of
the Credit Agreement is hereby amended to delete therefrom the words "and any
Hedge Agreement to which any Lender is a party."

      4.    Amendments to Subsidiary Guaranty, OCA Pledge Agreement.

      (a)   Clause (i) of Section 1(a) of the Subsidiary Guaranty is hereby
amended and restated in its entirety as follows:

            "(i) guarantees (a) to the Lenders (including the Issuing Lender in
      its capacity as such) and the Agent (together with any Lender in the
      capacity described in clause (b) or clause (c) below, collectively, the
      "Guaranteed Parties") the full and prompt payment, at any time and from
      time to time as and when due (whether at the stated maturity, by
      acceleration or otherwise), of all Obligations of OCA and the other
      Borrowers under the Credit Agreement and the other Credit Documents,
      including, without limitation, all principal of and interest on the Loans,
      all Reimbursement Obligations in respect of Letters of Credit, all fees,
      expenses, indemnities and other amounts payable by OCA or any other
      Borrower under the Credit Agreement or any other Credit Document
      (including interest accruing after the filing of a petition or
      commencement of a case by or with respect to OCA or any other Borrower
      seeking relief under any Insolvency Laws (as hereinafter defined), whether
      or not the claim for such interest is allowed in such proceeding), and all
      Obligations that, but for the operation of the automatic stay under
      Section 362(a) of the Bankruptcy Code, would become due, (b) to each
      applicable Lender in its capacity as a counterparty to any Hedge Agreement
      with OCA required or permitted under the Credit Agreement, all obligations
      of OCA under such Hedge Agreement, and (c) to First Union National Bank
      ("First Union"), in its capacity as lender under the Permitted Additional
      Note, all principal of and interest on the loans and advances made by
      First Union thereunder and all other obligations and amounts payable by
      OCA thereunder (including interest accruing after the filing of a petition
      or commencement of a case by or with respect to OCA seeking relief under
      any Insolvency Laws, whether or not the claim for such interest is allowed
      in such proceeding), and all such obligations that, but for the operation
      of the automatic stay under Section 362(a) of the Bankruptcy Code, would
      become due, in each case under (a), (b) and (c) whether now existing or
      hereafter created or arising and whether direct or indirect, absolute or
      contingent, due or to become due (all liabilities and obligations
      described in this clause (i), collectively, the "Guaranteed Obligations");
      and"

      (b)   The first parenthetical in Section 1 of the OCA Pledge Agreement is
hereby amended and restated in its entirety as follows:

            "(including the Issuing Lender in its capacity as such, and
      including any Lender in its capacity as a counterparty to any Hedge
      Agreement with OCA required or permitted under the Credit Agreement)"

      (c)   Section 2 of the OCA Pledge Agreement is hereby amended and restated
in its entirety as follows:

            "2. Security for Secured Obligations. This Agreement and the
      Collateral secure the full and prompt payment, at any time and from time
      to time as and when due (whether at the stated maturity, by acceleration
      or otherwise), of (i) in the case of OCA and the other Borrowers, (y) all
      Obligations, including, without limitation, all principal of and interest
      on the Loans, all fees, expenses, indemnities and other amounts payable by
      OCA or any other Borrower under the Credit Agreement, this Agreement, the
      Subsidiary Guaranty or any other Credit Document, and all liabilities and
      obligations of OCA under the Permitted Additional Note (including, in each
      case

                                        2
<PAGE>
      under this clause (y), interest accruing after the filing of a petition or
      commencement of a case by or with respect to OCA or any other Borrower
      seeking relief under any applicable federal and state laws pertaining to
      bankruptcy, reorganization, arrangement, moratorium, readjustment of
      debts, dissolution, liquidation or other debtor relief, specifically
      including, without limitation, the Bankruptcy Code and any fraudulent
      transfer and fraudulent conveyance laws, whether or not the claim for such
      interest is allowed in such proceeding), and (z) all liabilities and
      obligations of OCA under any Hedge Agreement required or permitted under
      the Credit Agreement and to which OCA and any Lender are parties, and (ii)
      in the case of any Subsidiary of OCA, all of its liabilities and
      obligations (if any) as a Guarantor (as defined in the Subsidiary
      Guaranty) in respect of the Obligations; and in each case under (i) and
      (ii) above, (a) all such liabilities and obligations that, but for the
      operation of the automatic stay under Section 362(a) of the Bankruptcy
      Code, would become due, and (b) all fees, costs and expenses payable by
      the Pledgors under SECTION 11; and in each case under (i) and (ii) above,
      whether now existing or hereafter incurred, created or arising and whether
      direct or indirect, absolute or contingent, due or to become due (the
      liabilities and obligations described in this SECTION 2, collectively, the
      "Secured Obligations")."

      5.    Representations and Warranties. OCA hereby represents and warrants
as follows:

      (a)   Each of the representations and warranties contained in the Credit
Agreement and in the other Credit Documents is true and correct on and as of the
date hereof and will be true and correct on and as of the Amendment Effective
Date (as hereinafter defined) and after giving effect to this Amendment with the
same effect as if made on and as of such date (except to the extent any such
representation or warranty is expressly stated to have been made as of a
specific date, in which case such representation or warranty is true and correct
as of such date).

      (b)   On and as of the date hereof, no Default or Event of Default has
occurred and is continuing, and on and as of the Amendment Effective Date and
after giving effect to this Amendment, no Default or Event of Default will have
occurred and be continuing.

      (c)   The Subsidiaries of OCA listed on the signature pages to this
Amendment comprise all of the Subsidiaries that, as of the date hereof, are
required to be a party to the Subsidiary Guaranty pursuant to the terms of the
Credit Agreement.

      6.    Effect of Amendment. From and after the effective date of the
amendments to the Credit Agreement and the other Credit Documents set forth
herein, all references to any such Credit Document set forth in any other Credit
Document or other agreement or instrument shall, unless otherwise specifically
provided, be references to such Credit Document as amended by this Amendment and
as may be further amended, modified, restated or supplemented from time to time.
This Amendment is limited as specified and shall not constitute or be deemed to
constitute an amendment, modification or waiver of any provision of the Credit
Agreement or any other Credit Document except as expressly set forth herein.
Except as expressly amended hereby, the Credit Agreement and each of the other
Credit Documents shall remain in full force and effect in accordance with its
terms.

      7.    Governing Law. This Amendment shall be governed by and construed and
enforced in accordance with the laws of the State of Florida (without regard to
the conflicts of law provisions thereof).

      8.    Severability. To the extent any provision of this Amendment is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in any such jurisdiction, without prohibiting or
invalidating such provision in any other jurisdiction or the remaining
provisions of this Amendment in any jurisdiction.

      9.    Successors and Assigns. This Amendment shall be binding upon, inure
to the benefit of and be enforceable by the respective successors and assigns of
the parties hereto.

                                       3
<PAGE>
      10.   Construction. The headings of the various sections and subsections
of this Amendment have been inserted for convenience only and shall not in any
way affect the meaning or construction of any of the provisions hereof.

      11.   Counterparts; Effectiveness. This Amendment may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. This Amendment
shall become effective on the date (the "Amendment Effective Date") upon which
the Agent shall have received an executed counterpart hereof from each of OCA,
the Subsidiaries listed on the signature pages hereto, and the Required Lenders.

                                       4
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers as of the date first above written.

                        FIRST UNION NATIONAL BANK, as Agent
                        and as a Lender

                        By:    /s/ Joyce Barry

                        Title: Senior Vice President

                        CITIBANK, N.A., as Syndication Agent and as
                        a Lender

                        By:    /s/ Larry Farley

                        Title: Director

                        BANK OF AMERICA, FSB, as Documentation
                        Agent and as a Lender

                        By:    /s/ Brian K. Keeney

                        Title: Vice President

                        BANK ONE, TEXAS, N.A.

                        By:    _______________________________

                        Title: _______________________________

                        WACHOVIA BANK, N.A.

                        By:    /s/ Kimberly A. Bruce

                        Title: Vice President

                                       5
<PAGE>
                             [signatures continued]

                        ORTHODONTIC CENTERS OF AMERICA, INC.

                        By:    /s/ Bartholomew F. Palmisano, Jr.

                        Title: Secretary

                        ORTHODONTIC CENTERS OF ALABAMA, INC.
                        ORTHODONTIC CENTERS OF ARKANSAS, INC.
                        ORTHODONTIC CENTERS OF ARIZONA, INC.
                        ORTHODONTIC CENTERS OF CALIFORNIA, INC.
                        ORTHODONTIC CENTERS OF COLORADO, INC.
                        ORTHODONTIC CENTERS OF CONNECTICUT, INC.
                        ORTHODONTIC CENTERS OF FLORIDA, INC.
                        ORTHODONTIC CENTERS OF GEORGIA, INC.
                        ORTHODONTIC CENTERS OF HAWAII, INC.
                        ORTHODONTIC CENTERS OF ILLINOIS, INC.
                        ORTHODONTIC CENTERS OF INDIANA, INC.
                        ORTHODONTIC CENTERS OF KANSAS, INC.
                        ORTHODONTIC CENTERS OF KENTUCKY, INC.
                        ORTHODONTIC CENTERS OF LOUISIANA, INC.
                        ORTHODONTIC CENTERS OF MAINE, INC.
                        ORTHODONTIC CENTERS OF MARYLAND, INC.
                        ORTHODONTIC CENTERS OF MASSACHUSETTS, INC.
                        ORTHODONTIC CENTERS OF MICHIGAN, INC.
                        ORTHODONTIC CENTERS OF MINNESOTA, INC.
                        ORTHODONTIC CENTERS OF MISSISSIPPI, INC.
                        ORTHODONTIC CENTERS OF MISSOURI, INC.
                        ORTHODONTIC CENTERS OF NEVADA, INC.
                        ORTHODONTIC CENTERS OF NEW HAMPSHIRE, INC.
                        ORTHODONTIC CENTERS OF NEW JERSEY, INC.
                        ORTHODONTIC CENTERS OF NEW MEXICO, INC.
                        ORTHODONTIC CENTERS OF NEW YORK, INC.
                        ORTHODONTIC CENTERS OF NORTH CAROLINA, INC.
                        ORTHODONTIC CENTERS OF NORTH DAKOTA, INC.
                        ORTHODONTIC CENTERS OF OHIO, INC.
                        ORTHODONTIC CENTERS OF OKLAHOMA, INC.
                        ORTHODONTIC CENTERS OF OREGON, INC.
                        ORTHODONTIC CENTERS OF PENNSYLVANIA, INC.
                        ORTHODONTIC CENTERS OF PUERTO RICO, INC.
                        ORTHODONTIC CENTERS OF RHODE ISLAND, INC.
                        ORTHODONTIC CENTERS OF SOUTH CAROLINA, INC.
                        ORTHODONTIC CENTERS OF TENNESSEE, INC.
                        ORTHODONTIC CENTERS OF TEXAS, INC.
                        ORTHODONTIC CENTERS OF UTAH, INC.
                        ORTHODONTIC CENTERS OF VIRGINIA, INC.
                        ORTHODONTIC CENTERS OF WASHINGTON, INC.
                        ORTHODONTIC CENTERS OF WASHINGTON, D.C., INC.
                        ORTHODONTIC CENTERS OF WEST VIRGINIA, INC.
                        ORTHODONTIC CENTERS OF WISCONSIN, INC.
                        ORTHODONTIC CENTERS OF WYOMING, INC.
                        OCA KENTUCKY MERGERCO, INC.
                        ORTHODONTIC CENTERS OF WISCONSIN
                          MERGER COMPANY, INC.

                        By:    /s/ Bartholomew F. Palmisano, Jr.

                        Title: Secretary

                                       6

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