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Exhibit 4.3
XXXXXXX BANK OF TAMPA
000 Xxxx Xxxxxxx Xxxxxxxxx
December 11, 1996 Post Office Box 30014
Tampa, Florida 33630-3014
813/225-8111
Xx. Xxxxx Xxxxxx
Chairman of the Board
Coast Dental Services, Inc.
0000 Xxxxxxxx Xxxxxxxx Xxxxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Dear Xx. Xxxxxx:
Xxxxxxx Bank, N.A. - Tampa (the "Bank") is pleased to offer the following
credit facility to Coast Dental Services, Inc. (the "Borrower"), subject to
the following terms and conditions:
Borrower: Coast Dental Services, Inc.
Amount: $5,000,000.00 (Renewal and increase of existing Commercial
Revolving Line of Credit).
Type of
Facility: Commercial Revolving Line of Credit.
Maturity: April 30, 1998.
Repayment: Monthly payments of accrued interest; principal payable at
maturity.
Rate: At the election of the Borrower, Xxxxxxx Bank's Prime rate,
floating daily or LIBOR options as follows:
Total Debt/EBITDA LIBOR +
----------------- -------
<1:1 1.75%
from 1:1 to 2:1 2.00%
from 2:1 to 4:1 2.25%
Fees: $13,750.00 Loan Processing fee, $6,875.00 due upon acceptance
of commitment, $6,875.00 due at closing; plus 1/4% p.a.
non-usage fee billed quarterly.
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Xx. Xxxxx Xxxxxx
December 11, 1996
Page Two
Prepayment: Prepayment is permitted at any time without penalty on Prime
rate plus loans. LIBOR based loans will be subject to
customary LIBOR breakage indemnity.
Collateral: Blanket first lien on all corporate assets, including accounts
receivable, inventory, contract rights, equipment and
furnishings.
Guarantors: Coast Florida, P.A. and any other subsequently formed
affiliates or subsidiaries.
OTHER REQUIREMENTS AND CONDITIONS
Contingency: This commitment is contingent upon successful
completion of Xxxxxxxx's Initial Public
Offering with a minimum of $17,500,000 net
proceeds raised no later than March 31, 1997
Use of Proceeds: Draws to be used for building new, expanding existing
or acquiring existing dental offices within the
Southeastern U.S. (Alabama, Tennessee, North
and South Carolina, Georgia and Florida).
Hazard Insurance: Borrower will maintain hazard insurance in an
amount acceptable to Bank on its inventory,
equipment and furnishings naming Bank as loss
payee and will furnish evidence of said
coverage to Bank.
Financial Statements: Borrower will provide a copy of its annual audited
financial statements within 120 days of its fiscal
year end and a copy of its annual federal tax returns
immediately after filing. Borrower will also provide
copies of its monthly interim financial statements
within 30 days after each month end. All guarantors
will provide annual financial statements and copies
of their annual federal tax returns.
Financial Covenants: Borrower's tangible net worth shall not be less than
$5,000,000 at any time.
Borrower's net earnings after taxes shall not
be less than 10% of net revenues, tested
annually.
As of each fiscal quarter, Borrower's debt
service coverage ratio shall not be less than
7:1, defined as the ratio of EBITDA to
Interest Expense plus Current Maturities of
Long Term Debt, as measured on a rolling four
quarter basis.
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Xx. Xxxxx Xxxxxx
December 11, 1996
Page Three
As of each fiscal quarter, Xxxxxxxx's
leverage ratio shall not exceed 1.25:1.
Leverage ratio shall be defined as total
liabilities divided by tangible net worth.
Borrower will not acquire more than
$3,000,000 in dental offices in any one
transaction or more than $6,000,000 in
aggregate per quarter without prior Bank
consent.
Total Liabilities/EBITDA shall not exceed 4:1
at any time.
Expenses: All costs and expenses incidental to closing
the loan shall be paid by the borrower.
These costs include but are not limited to
documentary stamps, intangible taxes,
recording fees, and any legal fees that may
be charged relative to this loan.
This loan will be governed by a loan agreement to include certain
representations and warranties, conditions precedent, affirmative covenants,
negative covenants and events of default. Bank's obligation to lend will arise
only upon the preparation, execution and delivery of documentation satisfactory
in form and substance to the Bank, including, but not limited to the terms set
forth above.
If this commitment is acceptable, please sign below and return a copy of this
letter to me at your earliest convenience. Please remember to include your
check for $6,875.00. If you have any questions or would like to discuss this
matter further, please do not hesitate to call me at 000-0000.
Sincerely, Accepted: Coast Dental Services, Inc.
Xxxxxxx X. Xxxxx By: /s/ Xxxxx Xxxxxx
Vice President -----------------------------------------
Xxxxx Xxxxxx
Guarantor: Coast Florida, P.A.
By: /s/ Xxxx Xxxxxx
-----------------------------------------
Xxxx Xxxxxx
