EXHIBIT 10.23
THIRD AMENDMENT
TO CREDIT AGREEMENT
This Third Amendment To Credit Agreement (the "Amendment")is entered into
this 19TH day of May, 1997, by and among XXXXXXX BANK, N.A., a national banking
corporation ("Bank"); XXXXXXX EDUCATION GROUP, INC., f/k/a Xxxxxxx Medical
Corp., a New Jersey corporation ("Borrower" or "You"); and XXXXXXX XXXXX, M.D.,
an individual, (hereinafter referred to as the "Guarantor").
WHEREAS, the parties hereto entered into a Credit Agreement dated April 11,
1996, as amended by amendment dated August 14th, 1996, and as further amended by
amendment dated October 31, 1996 (collectively the "Credit Agreement"), pursuant
to which the Bank provided to You a Term Loan in the principal amount of
$6,000,000.00 to refinance existing obligations and a Revolving Loan in the
principal amount of $5,500,000.00 to finance working capital and for general
corporate purposes; and
WHEREAS, the parties hereto wish to amend certain provisions of the Credit
Agreement effective as of May 19, 1997;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Any capitalized terms not defined herein shall have the same meaning as
given those terms in the Credit Agreement.
2. Section 1. of the Credit Agreement, DEFINITIONS AND ACCOUNTING MATTERS,
is hereby amended as follows:
"REVOLVER NOTE" shall mean that certain Amended, Restated and Consolidated
Renewal Revolver Note from the Borrower to the Bank in the principal amount of
$7,500,000.00, which renews and consolidates a Revolver Note dated April 11,
1996 in the principal amount of $2,500,000.00, a Revolver Note dated October 31,
1996 in the principal amount of $3,000,000.00 and a Revolver Note of even date
herewith in the principal amount of $2,000,000.
3. Section 2.1(b) of the Credit Agreement, REVOLVING LOAN, is hereby
amended in its entirety and shall read as follows:
(i) PRINCIPAL. $7,500,000.00, which shall be evidenced by a promissory note
in like amount in substantially the form attached to this Agreement (the
"Amended and Restated Revolver Note").
(ii) INTEREST. Interest shall accrue on the Revolving Loan from the date of
the first advance until repayment
1
in full. Interest shall be paid monthly in arrears commencing one month
from the date of the first advance. The applicable interest rate per annum shall
be selected by Borrower on the date of each advance from the following two
options.
Prime Rate Option: a) The Prime Rate, changing when and as the Prime Rate
changes, minus 125 basis points; or
LIBOR Rate Option: b) The LIBOR Rate, plus 125 basis points.
The basis for determining the interest rate with respect to any Loan may be
changed from time to time pursuant to Section 2.4(c) hereinafter.
(iii) Purpose. The proceeds of the Revolving Loan shall be used for general
corporate purposes and to finance working capital. Provided no Event of Default
has occurred and is continuing, the Borrower may borrow, repay and reborrow up
to an amount not to exceed at any time and from time to time $7,500,000.00 until
April 14, 1999.
(iv) Repayment. The Borrower agrees to pay the principal indebtedness
evidenced by and outstanding under the Revolver Note in full on or before April
14, 1999.
4. Section 6.2 of the Credit Agreement, Certificate of Compliance,is hereby
amended and shall read as follows:
6.2 Certificate of Compliance. The Guarantor agrees to deliver to the Bank
annually a certificate of compliance in substantially the form attached to this
Agreement as Exhibit C (the "Certificate of Compliance") attesting that he is in
compliance with the provisions of Section 13 of the Guarantee Agreement,
certifying that so long as any Indebtedness of Borrower to Bank exists, the
Guarantor agrees to maintain, at a minimum, (i) unencumbered cash and/or
marketable securities having an aggregate value of no less than $100,000,000.00
and (ii) a net worth of $200,000,000.00. As used herein, (i) the term
"marketable securities" shall mean publicly traded stocks and bonds (rated A or
better by Standard & Poor's) trading at a price equal to or higher than $5.00
per share and (ii) the term "net worth" shall mean assets less direct and
contingent liabilities.
2
5. Section 6.4(b) of the Credit Agreement, Minimum Marketable Securities,
is hereby amended and shall read as follows:
f. Minimum Marketable Securities. The Guarantor agrees to maintain, at a
minimum, unencumbered cash and/or marketable securities having an aggregate
market value of no less than $100,000,000.00. As used herein, the term
"marketable securities" shall mean publicly traded stocks trading at a price
equal to or higher than $5.00 per share and bonds (rated A or better by Standard
& Poor's).
6. Except as otherwise provided herein, all other terms and conditions of
the Credit Agreement are hereby restated, affirmed and incorporated by reference
in their entirety.
7. This Amendment shall be governed by and interpreted in accordance with
the laws of the State of Florida.
8. This Amendment may be executed by one or more of the parties to this
Amendment in any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
9. In consideration of the amendment to the Credit Agreement contemplated
hereby, Borrower shall pay the reasonable fees and expenses of Coll Davidson
Xxxxxx Xxxxx Xxxxxx & Xxxxxxx, P.A., Florida counsel to the Bank, incurred in
connection with the preparation of this Amendment, contemporaneously with the
execution thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by the proper and duly authorized officers as of the
day and year first above written.
BANK:
XXXXXXX BANK, N.A.
By: /S/ XXXXXXXXX XXXXXXXX
====================================
Xxxxxxxxx Xxxxxxxx
Vice President
BORROWER:
XXXXXXX EDUCATION GROUP, INC.
By:/S/XXXXX X. XXXXX
====================================
Xxxxx X. Xxxxx
President
GUARANTOR hereby acknowledges and agrees that the Continuing Unlimited
Guarantee, dated April 23, 1996, executed by Guarantor for the benefit of Bank,
extends to the Credit Agreement, as amended hereby, and all indebtedness now or
hereafter outstanding under the Amended, Restated and Consolidated Renewal
Revolver Note dated May 19, 1997.
GUARANTOR:
/S/ XXXXXXX XXXXX
====================================
XXXXXXX XXXXX, M.D.
4
