SECOND AMENDMENT TO LOAN AGREEMENT
EXHIBIT 10.1
SECOND AMENDMENT TO LOAN AGREEMENT
This Second Amendment to Loan Agreement (“Amendment”) is made effective the 21st day of May,
2009, between GRAYMARK HEALTHCARE, INC., an Oklahoma corporation (“GRMH”), SDC HOLDINGS, LLC, an
Oklahoma limited liability company (“SDC”) and APOTHECARYRx, LLC, an Oklahoma limited liability
company (“ARx” together with GRMH and SDC, jointly and severally the “Borrowers” and each a
“Borrower”), XXXXXX COMPANY HOLDINGS, LLC, an Oklahoma limited liability company (“OCH), XXX X.
XXXXXX, an individual (“Xxxxxx”), XXXXXXX X. XXXXXX, an individual (“Xxxxxx”), XXX X. XXXXXX, as
Trustee of the Xxx X. Xxxxxx Revocable Trust dated June 15, 2004 (the “Trust”), XXXXX XXXXXXXX, an
individual (“Salalati”), XXXXX XXXXX, an individual (“Xxxxx”) XXXXX XXX, an individual (“Xxx”) and
XXXXX X. XXXXXXX, an individual (“Xxxxxxx” and together with OCH, Oliver, Nelson, Trustee,
Salalati, Lewis and Xxx, the “Guarantors”) and ARVEST BANK, an Arkansas banking corporation (the
“Bank”).
WHEREAS, the Borrower, Guarantors and Bank have heretofore entered into that certain Loan
Agreement dated effective May 21, 2008, as amended by means of that certain Amendment to Loan
Agreement dated effective May 21, 2008 (the “Loan Agreement”) and related Loan Documents; and
WHEREAS, the Borrower, Guarantors and Bank desire to further amend the Loan Agreement and Loan
Documents by means of this Amendment as set forth herein; and
WHEREAS, this Amendment is executed by each Guarantor and delivered to the Bank to reflect the
Guarantors consent to the Amendment, to induce the Bank to amend the Loan and in satisfaction of a
material condition precedent to such amendment by the Bank. Except as otherwise defined herein, all
defined terms shall have the meaning prescribed in the Loan Agreement or other Loan Documents.
NOW, THEREFORE, in consideration of the mutual covenants among the parties
hereto, it is agreed as follows:
I. Definitions.
1.1 Paragraph 1.7 Replaced. Paragraph 1.7 of the Loan Agreement is hereby deleted and replaced
in its entirety with the following:
1.7 Debt Service Coverage Ratio. For any period, the ratio of: (A) the
net income of GRMH (i) increased (to the extent deducted in
determining net income) by the sum, without duplication, of (a)
all interest expense of GRMH, (1) amortization, (e) depreciation,
and (d) non-recurring expenses as approved by the Bank, and (ii)
decreased (to the extent included in determining net income and
without duplication) by the amount of minority interest share of
net income and distributions to minority interests for taxes, if
any, to (B) annual
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debt service including interest expense and current maturities of indebtedness as determined in accordance with generally accepted
accounting principles. If an acquisition of a new company (or its
business) occurs and GRMH incurs additional debt associated with
the purchase, the net income of the acquired company (or its
business) and GRMH’s new debt service associated with acquiring
the company (or its business) may both be excluded from the Debt
Service Coverage Ratio calculation
for a period of six months, at the option of GRMH. Also, any
non-recurring expenses associated with an acquisition will be
added back to the net income of GRMH, subject to itemization and
approval by the bank.
1.2 Paragraph 1.15 Amended. Paragraph 1.15 of the Loan Agreement is hereby amended by
replacing the date “June 30, 2008” with “September 30, 2009” and no other changes.
2. Interest Rate Floor. As of the effective date of this Agreement, the minimum interest rate on
the Term Note and Acquisition Note will be set at five percent (5%) per annum as set forth in this
section.
2.1 Term Note. Paragraph 3.1.2 of the Loan Agreement is hereby deleted and replaced in its
entirety, with the corresponding amendment to the Term Note attached hereto as Schedule 1.20(a)
which is incorporated by reference, with the following:
3.1.2 Interest. Prior to Default, the unpaid principal balance of the Term
Note will bear interest from the date of advance at the per annum
rate equal to the greater of (a) the WSJ Prime Rate, as adjusted;
or (b) five percent (5%) per annum. The WSJ Prime Rate will be
adjusted, without notice, on an annual basis to the WSJ Prime Rate
then in effect as of each anniversary date of this Note, or the
first business day following such date if the anniversary date
occurs on a weekend or holiday that there is no such rate
determined or published. After Default, all amounts due under the
Term Note will bear interest at the per annum rate equal to the
greater of: (a) fifteen percent (I5%); or (b) the WSJ Prime Rate
plus five percent (5%). Interest will be computed on a per diem
charge based on a three hundred sixty (360) day year,
2.2 Acquisition Note. Paragraph 3.2.2 of the Loan Agreement is hereby deleted and replaced in
its entirety, with the corresponding amendment to the Term Note attached hereto as Schedule 1.20(b) which is incorporated by reference, with the following:
3.2.2 Interest. Prior to Default, the unpaid principal balance of each
Tranche of the Acquisition Note will bear interest from the
date of advance at the per annum rate equal to the greater of (a)
the WSJ Prime Rate, as adjusted for any changes to the WSJ Prime
Rate on each anniversary date: or (b) five percent (5%) per annum.
The
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WSJ Prime Rate will be adjusted. without notice, on an annual
basis to the WSJ Prime Rate then in effect as of each anniversary
date of each Tranche of the Acquisition Note, or the first
business day following such date if the anniversary date occurs on
a weekend or holiday that there is no such rate determined or
published. After Default, all amounts due under the Acquisition
Note will bear interest at the per annum rate equal to the greater
of: (a) fifteen percent (I5%); or (b) the WSJ Prime Rate plus five
percent (5%). Interest will be computed on a per diem charge based
on a three hundred sixty (360) day year.
3. Negative Covenants.
3.1 Paragraph 8.11 Replaced. Paragraph 8.11 of the Loan Agreement is hereby deleted and
replaced in its entirety with the following:
8.11 Debt Service Coverage Ratio. Commencing with the Quarter ending
June 30. 2010 and thereafter during the term of the Loan, based on the
latest four rolling quarters, Borrowers will continuously maintain a
Debt Service Coverage Ratio of not less than 1.25 to 1.
4. Guarantor’s Consent. Each Guarantor hereby consents to this Amendment and the transactions
contemplated herein and agrees that such Guarantor’s liability under any of the Guaranties in favor
of the Bank will not be released, reduced, impaired or affected by this Amendment or the
transactions contemplated herein.
5, Ratification. Except as amended by this Amendment, all of the terms and provisions of the Loan
Agreement and Loan Documents will continue in full force and effect, uninterrupted and unabated,
and the Loan Agreement and Loan Documents as herein expressly amended, is hereby ratified, approved
and confirmed in every respect.
6. Modification Fee. As reimbursement for processing of this Agreement and a modification of the
Loan, the Borrower shall pay a non-refundable fee to the Bank in the amount of Fifty-Six Thousand
Two Hundred Fifty Dollars ($56,250.00) payable on July 1, 2009.
7. Authority. Each party represents and warrants to the other that: (a) all necessary corporate
action on the part of each party to be taken in connection with the execution, delivery and
performance of this Amendment has been duly and effectively taken; and (b) the execution, delivery
and performance by each party of this Amendment does not constitute a violation or breach of such
party’s articles of incorporation, by-laws or any other agreement or law by which such party is
bound.
8. Counterparts. This Amendment may be executed in multiple counterparts, each of which will be an
original instrument, but all of which will constitute one agreement.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Agreement effective the
date first above written.
| GRAYMARK HEALTHCARE, INC., an Oklahoma Corporation |
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| By: | /S/ XXXXXXX XXXXXX | |||
| Xxxxxxx X. Xxxxxx, CEO | ||||
| APOTHECARYRx LLC, an Oklahoma limited liability company BY: GRAYMARK HEALTHCARE, INC., an Oklahoma Corporation, MANAGER |
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| By: | /S/ XXXXXXX XXXXXX | |||
| Xxxxxxx X. Xxxxxx, CEO | ||||
| SDC HOLDINGS, LLC, an Oklahoma limited liability company |
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| BY: GRAYM ARK HEALTHCARE, INC., an Oklahoma
Corporation, MANAGER (the “Borrowers”) |
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| XXXXXX COMPANY HOLDINGS, LLC, an Oklahoma limited
liability company |
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| By: | /S/ XXX X. XXXXXX | |||
| Xxx X. Xxxxxx, Manager | ||||
| /S/ XXX X. XXXXXX | ||||
| XXX X. XXXXXX, individually | ||||
| THE XXX X. XXXXXX REVOCABLE TRUST DATED JUNE 15, 2004 |
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| /S/ XXX X. XXXXXX | ||||
| XXX X. XXXXXX, Trustee | ||||
| /S/ XXXXXXX XXXXXX | ||||
| XXXXXXX X. XXXXXX, individually | ||||
| /S/ XXXXX XXXXXXXX | ||||
| XXXXX XXXXXXXX, individually | ||||
| /S/ XXXXX XXXXX | ||||
| XXXXX XXXXX, individually | ||||
| /S/ XXXXX XXX | ||||
| XXXXX XXX, individually | ||||
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| /S/ XXXXX X. XXXXXXX | ||||
| XXXXX X. XXXXXXX, | ||||
(the “Guarantors”) |
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| ARVEST BANK, an Arkansas banking corporation |
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| By: | /S/ XXXXX XXXX | |||
| Xxxxx Xxxx, Senior Vice President | ||||
| (the “Bank”) | ||||
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