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EXHIBIT 10.36
SEVENTH AMENDMENT TO LOAN DOCUMENTS
THIS SEVENTH AMENDMENT TO LOAN DOCUMENTS (this "Seventh Amendment"),
made as of the 24th day of March, 2000, is between ▇▇▇▇▇▇ DENTAL MANAGEMENT
SERVICES, INC., a Colorado corporation ("Borrower") and KEYBANK NATIONAL
ASSOCIATION, a national banking association ("Lender").
R E C I T A L S:
1. ▇▇▇▇▇▇ has made a loan (the "Revolving Loan") to Borrower,
which Revolving Loan is evidenced and/or secured by (i) a Promissory Note (the
"Original Note") dated as of October 31, 1996 in the original principal amount
of $800,000.00 executed by ▇▇▇▇▇▇▇▇ and payable to the order of Lender, (ii) an
Amended and Restated Promissory Note (the "Amended Note") dated as of December
31, 1998 in the amended principal amount of $20,000,000.00 (the Original Note
and Amended Note shall be collectively referred to herein as the "Note"), (iii)
a Security Agreement (the "Security Agreement") dated as of October 31, 1996
from Borrower for the benefit of Lender also securing payment of the Note, (iv)
a Credit Agreement (the "Credit Agreement") dated as of October 31, 1996 between
Borrower and Lender, and (v) certain other documents or instruments (the Note,
the Security Agreement, the Credit Agreement and such other documents and
instruments, as same may from time to time be amended or replaced, are sometimes
collectively referred to herein as the "Loan Documents"). The Revolving Loan was
modified by (i) a Second Amendment to Loan Documents dated November 18, 1997
(the "Second Amendment"), (ii) a Third Amendment to Loan Documents dated
September 30, 1998 (the "Third Amendment"), (iii) a Fourth Amendment to Loan
Documents dated December 31, 1998 (the "Fourth Amendment"), (iv) a Fifth
Amendment to Loan Documents dated May 28, 1999 (the "Fifth Amendment"), and (v)
a Sixth Amendment to Loan Documents dated September 20, 1999 (the "Sixth
Amendment"). The Credit Agreement, Second Amendment, Third Amendment, Fourth
Amendment, Fifth Amendment and Sixth Amendment shall be collectively referred to
herein as the "Amendment".
2. Borrower and Lender desire to further amend the Credit
Agreement, Security Agreement, Note and other Loan Documents under the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged, the parties hereto hereby covenant and agree as
follows:
1. CREDIT AGREEMENT AMENDMENTS. The Credit Agreement is hereby
amended as follows:
a. The amount of the Revolving Loan shall be decreased
from $20,000,000 to $10,000,000.
b. The following definitions set forth in Article I of
the Credit Agreement shall be amended to read in their entirety as follows:
"ADJUSTED LIBOR RATE" means, for any day, a rate per
annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to the applicable LIBOR Rate plus
the following percentages, as applicable, based on
the ratio of Consolidated Senior Debt to Consolidated
EBITDA at the time of calculation:
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Senior Debt/EBITDA LIBOR Rate Margin
------------------ -----------------
greater than 3.0 2.75%
between 2.5 and 3.0 2.5%
between 2.0 and 2.5 2.25%
between 1.5 and 2.0 2.0%
less than 1.5 1.5%
"BASE RATE" means, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of
1%) equal to the Prime Rate in effect on such day,
plus the following percentages, as applicable, based
on the ratio of Consolidated Senior Debt to
Consolidated EBITDA at the time of calculation:
Senior Debt/EBITDA Base Rate Margin
------------------ ----------------
greater than 3.0 1.5%
between 2.5 and 3.0 1.25%
between 2.0 and 2.5 1.0%
between 1.5 and 2.0 .75%
less than 1.5 .25%
"BORROWING BASE" means, (i) through February 29,
2000, 3.5 times the Consolidated EBITDA of the
Borrower for the previous twelve (12) month period,
(ii) through March 31, 2000, 3.85 times the
Consolidated EBITDA of the Borrower for the previous
twelve (12) month period, (iii) through April 30,
2000, 3.75 times the Consolidated EBITDA of the
Borrower for the previous twelve (12) month period,
(iv) through May 31, 2000, 3.60 times the
Consolidated EBITDA of the Borrower for the previous
twelve (12) month period, (v) through June 30, 2000,
3.30 times the Consolidated EBITDA of the Borrower
for the previous twelve (12) month period and (vi)
through July 31, 2000 for the previous twelve (12)
month period and through the Maturity Date for the
previous twelve (12) month period, the Borrowing Base
shall mean 3 times the Consolidated EBITDA of the
Borrower.
"MATURITY DATE" shall mean July 1, 2001.
c. Section 2.1 of the Credit Agreement shall be deleted
in its entirety and replaced as follows:
2.1 Commitment. Subject to the terms and conditions
and relying upon the representations and warranties
herein set forth, ▇▇▇▇▇▇ agrees to make Loans to the
Borrower, at any time from time to time and until the
earlier of the Maturity Date and the termination of
the Commitment in accordance with the terms hereof,
in an aggregate principal amount at any time
outstanding not to exceed the lesser of (i)
$10,000,000 or (2) an amount equal to the Borrowing
Base, as defined in this Seventh Amendment, subject
to reductions in the maximum amount of the Commitment
from time to time pursuant to Section 2.8. If the
cumulative amount of the Loans at any time exceeds
the foregoing amount, Borrower shall immediately pay
down the Loan to the extent of such excess amount,
upon demand of the Lender. The Borrower may borrow,
pay or prepay and reborrow Loans on or after the
Closing Date and prior to the Maturity Date, subject
to the terms, conditions and limitations set forth
herein.
d. Section 6.12 of the Credit Agreement shall be amended
in its entirety to read as follows:
6.12 Senior Debt to EBITDA. The ratio of Consolidated
Senior Debt to Consolidated EBITDA shall not be
greater than (i) 3.5 to 1.0 through February 29,
2000, (ii) 3.85 to 1.0 through March 31, 2000, (iii)
3.75 to 1.0 through April 30, 2000, (iv) 3.60 to 1.0
through May 31, 2000, (v) 3.30 to 1.0 through June
30,
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2000 and (vi) 3.0 to 1.0 through July 31, 2000 and
thereafter for the remaining term of the Revolving
Loan.
e. The Facility Fee described in Section 2.5(a) of the
Credit Agreement shall be one of the following percentages, as applicable, based
on the ratio of Consolidated Senior Debt to Consolidated EBITDA at the time the
Facility Fee is incurred, and such Facility Fee shall be based upon the average
unused amount of the Commitment during the previous full calendar quarter:
Senior Debt/EBITDA Facility Fee
------------------ ------------
greater than 3.0 0.50%
between 2.5 and 3.0 0.40%
between 2.0 and 2.5 0.35%
between 1.5 and 2.0 0.30%
less than 1.5 0.25%
f. A new Section 5.4 (h) shall be added to the Credit
Agreement as follows:
"(h) within 120 days after the end of each fiscal
year, the Borrowers shall deliver to Lender a covenant
compliance certificate in form acceptable to Lender (the
"Covenant Compliance Certificate"), confirming that Borrower
is in compliance with all financial covenants to which it is
subject under the terms of this Agreement and which Covenant
Compliance Certificate shall be certified as complete and
correct on behalf of the Borrower by the chief executive
officer, chief financial officer, controller or other
Authorized Officer of the Borrower, respectively. In addition,
each Covenant Compliance Certificate shall have attached to it
such calculations necessary to support the financial covenants
certified to therein by Borrower."
2. PROMISSORY NOTE AMENDMENT. The Borrower simultaneous herewith,
shall execute and deliver to Lender the Second Amended and Restated Promissory
Note in the form attached hereto as EXHIBIT A, which evidences the amendment of
the Revolving Loan amount.
3. OTHER LOAN DOCUMENT AMENDMENTS. Each of the other Loan
Documents are amended to reflect and to incorporate the amendment to the Credit
Agreement as set forth above.
4. DOCUMENT RATIFICATION. Except as set forth in Paragraphs 1, 2
and 3 above, all of the terms and conditions contained in the Credit Agreement,
the Security Agreement and other Loan Documents shall remain the same and in
full force and effect, and are ratified, reaffirmed and republished as of the
Closing Date.
5. REPRESENTATION OF BORROWER. Borrower hereby confirms that, as
of the date hereof, (i) Borrower is in compliance with each of the
representations, warranties and covenants of Borrower set forth in the Loan
Documents, (ii) no Event of Default exists under the Loan Documents and (iii) no
fact or condition exists, which with the passage of time and/or giving of
notice, would constitute an Event of Default under the Loan Documents.
6. ACKNOWLEDGMENT OF PARTIES. Borrower and ▇▇▇▇▇▇ acknowledge and
agree that as of the date hereof, there are no known claims or defaults by
either party against the other, nor are there any existing covenant violations
arising from or under the Credit Agreement.
7. CONTROLLING LAW. The terms and provisions of this Seventh
Amendment shall be construed in accordance with and governed by the laws of the
State of Colorado.
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8. BINDING EFFECT. This Seventh Amendment shall be binding upon
and inure to the benefit of the parties hereto, their successors and assigns.
9. CAPTIONS. The paragraph captions utilized herein are in no way
intended to interpret or limit the terms and conditions hereof, rather, they are
intended for purposes of convenience only.
10. COUNTERPARTS. This Seventh Amendment may be executed in any
number of counterparts, each of which shall be effective only upon delivery and
thereafter shall be deemed an original, and all of which shall be taken to be
one and the same instrument, for the same effect as if all parties hereto had
signed the same signature page. Any signature page of this Seventh Amendment may
be detached from any counterpart of this Seventh Amendment without impairing the
legal effect of any signatures thereon and may be attached to another
counterpart of this Seventh Amendment identical in form hereto but having
attached to it one or more additional signature pages.
IN WITNESS WHEREOF, the parties hereto have executed this Seventh
Amendment as of the day and year first above written.
LENDER:
KEYBANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Senior Vice President
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BORROWER:
▇▇▇▇▇▇ DENTAL MANAGEMENT SERVICES, INC., a
Colorado corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
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Title: CFO
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EXHIBIT A
SECOND AMENDED AND RESTATED PROMISSORY NOTE
$10,000,000.00 Denver, Colorado
March 24, 2000
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇ DENTAL MANAGEMENT SERVICES,
INC., a Colorado corporation ("Borrower"), whose address is ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, promises to pay to the order of KEYBANK
NATIONAL ASSOCIATION ("Lender"), at its office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or at such other place as Lender shall designate
in writing), in lawful money of the United States of America, the principal sum
of Ten Million and No/100 Dollars ($10,000,000.00) or so much thereof as may be
advanced by Lender and remain unpaid from time to time, pursuant to the terms of
that certain Credit Agreement dated October 31, 1996, as amended, to which the
Borrower and Lender are parties (as the same may from time to time be amended or
supplemented, the "Credit Agreement"), together with interest on said principal
sum or such part thereof advanced by ▇▇▇▇▇▇, from the date of each advance made
by Lender (an "Advance") until repaid in full, at the rate and at the times set
forth in the Credit Agreement. The loan evidenced by this Note is a revolving
loan, whereby the Borrower may borrow, repay and reborrow the principal
indebtedness evidenced hereby.
1. Credit Agreement. This Note (the "Note") is the Second Amended
and Restated Promissory Note referred to in the Seventh Amendment to Loan
Documents of even date herewith (the "Seventh Amendment") and is entitled to the
benefits thereof. The proceeds of this Note have been advanced for the uses
specified in the Credit Agreement. Capitalized terms used herein, unless
otherwise defined herein, shall have the meanings given them in the Credit
Agreement.
2. Interest and Payments. The outstanding principal balance of
this Note shall bear interest, from the date of each Advance made by Lender
until repaid in full, at the Base Rate or the LIBOR Rate as specified in the
Credit Agreement and/or the Seventh Amendment, as applicable, which interest
shall be due and payable, in arrears, as provided in the Credit Agreement. Upon
the Maturity Date or earlier upon termination of the Credit Agreement, the
entire outstanding principal balance of this Note, together with all accrued but
unpaid interest thereon and all other sums due hereunder, shall be due and
payable in full. The Borrower shall have the right to prepay the outstanding
principal balance of this Note, together with all accrued but unpaid interest
thereon and all other sums due hereunder, in full or in part, as set forth in
the Credit Agreement. All payments of principal, interest and any other sums on
this Note due from the Borrower to Lender shall be made to Lender in lawful
money of the United States of America in the manner set forth in the Credit
Agreement.
3. Application of Proceeds. All payments hereunder by ▇▇▇▇▇▇▇▇
shall be applied by ▇▇▇▇▇▇:
First, to the payment of all reimbursable expenses,
liabilities and advances made or incurred by ▇▇▇▇▇▇ in connection
herewith including reasonable attorneys fees incurred in connection
with any enforcement action taken with respect to this Note;
Second, to the payment of any other amounts due
(other than principal and interest) under this Note or the Credit
Agreement;
Third, to the payment of all interest accrued and
unpaid on the outstanding indebtedness; and
Fourth, to the payment of the outstanding principal
balance of the outstanding indebtedness.
4. Default. Time is of the essence hereof. The occurrence of any
Event of Default under the Credit Agreement shall be a default hereunder and,
upon the occurrence of any such default, the payment of all principal,
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interest and any other sums due in accordance with the terms of this Note shall,
at the option of Lender, be accelerated and such principal, interest and other
sums shall be immediately due and payable without notice or demand, and Lender
shall have the option to foreclose or to require foreclosure of any or all liens
and security interests securing the payment hereof and/or to exercise any other
rights and remedies available to Lender hereunder or under the Credit Agreement.
From and after an Event of Default, the outstanding principal balance shall
accrue interest at the Default Rate.
5. Governing Law. As additional consideration for the extension
of credit, ▇▇▇▇▇▇▇▇ understands and agrees that the loan evidenced by this Note
is made in the State of Colorado and the provisions hereof will be construed in
accordance with the laws of the State of Colorado. The parties consent to the
personal jurisdiction of the courts and the venue specified in the Credit
Agreement.
6. Maximum Interest. The provisions of this Note are hereby
expressly limited so that in no event whatsoever, whether by reason of demand or
acceleration of the maturity of this Note or otherwise, shall the amount paid,
or agreed to be paid ("Interest"), to Lender for the use, forbearance or
retention of the money loaned hereunder exceed the maximum amount permissible
under applicable law. If, from any circumstance whatsoever, performance or
fulfillment of any provision of this Note shall, at the time of performance or
fulfillment of such provision shall be due, exceed the limit for Interest
prescribed by law, then ipso facto the obligation to be performed or fulfilled
shall be reduced to such limit and if, from any circumstance whatsoever, Lender
shall ever receive anything of value deemed Interest by applicable law in excess
of the maximum lawful amount, an amount equal to any excessive Interest shall be
applied to the reduction of the principal (whether or not then due) or at the
option of Lender be paid over to the Borrower, and not to the payment of
Interest.
7. Miscellaneous Provisions.
(a) The Borrower hereby waives demand for payment, of
acceleration of maturity, diligence in taking any action to collect sums owing
hereunder and all duty or obligation of Lender to effect, protect, perfect,
retain or presentment for payment, protest, notice of protest, notice of
dishonor, notice of nonpayment, notice enforce any security for the payment of
this Note or to proceed against any collateral before otherwise enforcing this
Note.
(b) This Note and each payment of principal and interest
hereunder shall be paid when due without deduction or setoff of any kind or
nature or for any costs whatsoever.
(c) The Borrower agrees to reimburse Lender upon demand
for all reasonable out-of-pocket expenses, including, without limitation,
reasonable attorneys' fees and costs, incurred in connection with ▇▇▇▇▇▇'s
collection of payments due from Borrower hereunder.
(d) The Borrower agrees that ▇▇▇▇▇▇ may from time to time
extend the maturity of this Note or the time any payment is due under this Note
and may accept further security or release security for the payment of this
Note, without in any way affecting any obligations of the Borrower to Lender.
(e) This Second Amended and Restated Promissory Note
restates and replaces in its entirety the Amended and Restated Promissory Note
dated December 31, 1998 in the principal amount of $20,000,000.
IN WITNESS WHEREOF, the Borrower has executed this Note to be
effective as of the day and year first-above written.
▇▇▇▇▇▇ DENTAL MANAGEMENT SERVICES, INC., a
Colorado corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
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Title: CFO
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