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EXHIBIT 10.4
THIRD AMENDMENT TO
SECOND AMENDED AND RESTATED LOAN AGREEMENT
THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
(this "Amendment") is executed as of June 30, 2000, by and among MONARCH DENTAL
CORPORATION, a Delaware corporation ("Borrower"), BANK OF AMERICA, N.A., a
national banking association ("Administrative Agent"), as administrative agent,
and the entities from time to time designated as "Lenders" under the Loan
Agreement (herein defined) ("Lenders"), and is consented to by the GUARANTORS
listed on the signature pages attached hereto.
WITNESSETH:
WHEREAS, Borrower, Administrative Agent and Lenders entered into that
certain Second Amended and Restated Loan Agreement, dated as of June 30, 1999,
pursuant to which Lenders agreed to make the Credit Facility (as therein
defined) available to Borrower (as heretofore or hereafter amended, the "Loan
Agreement")(each capitalized term used but not otherwise defined herein shall
have the same meaning given to it in the Loan Agreement); and
WHEREAS, Borrower has requested that Administrative Agent and Lenders
amend the Loan Agreement to (i) extend the deadline for Borrower to raise the
Required Institutional Debt and (ii) permit the sale of all of the outstanding
capital stock of Borrower to Code, Xxxxxxxx & Xxxxxxx IV, L.P. ("Proposed
Purchaser") by way of a cash merger (the "Proposed Sale"); and
WHEREAS, subject to the terms and conditions contained herein,
Administrative Agent and the Lenders have agreed to such request.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which are all hereby acknowledged,
Borrower, Administrative Agent and Lenders hereby covenant and agree as
follows:
ARTICLE I - AMENDMENTS
Section 1.1. Corporate Restructure; Required Institutional Debt.
Section 8.1(k) of the Loan Agreement is hereby replaced with the following:
(k) The failure of Borrower to raise either (i) Permitted
Institutional Debt in an amount not less than $25,000,000 (at least
$10,000,000 of which shall be Permitted Subordinate Institutional
Debt), or (ii) Permitted Subordinate Institutional Debt in an
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amount not less than $15,000,000 (the "Required Institutional Debt")
on or before December 15, 2000.
A new Section 8.1(m) is hereby added to the Loan Agreement as follows:
(m) The failure of Borrower to provide to Administrative
Agent and the Lenders the following items and information by the date
indicated, which deliveries shall be in form and substance acceptable
to Required Lenders in their sole discretion:
Item to be delivered Delivery Date
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A definitive signed merger agreement for the Proposed Sale July 31, 2000
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Binding commitments from financing sources, and on terms,
acceptable to Required Lenders for the Proposed Purchaser to obtain July 31, 2000
financing sufficient to repay the Credit Facilities and the Short
Term Loan at the closing of the Proposed Sale
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Evidence satisfactory to Required Lenders that Borrower has filed a
preliminary proxy statement with the Securities Exchange Commission
relating to the Proposed Sale, and that the Securities Exchange
Commission has no further comments on such proxy and that Borrower
October 31, 2000 is free to mail such proxy to its shareholders of
record
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Evidence satisfactory to Required Lenders that Borrower has filed
the final proxy statement with the Securities Exchange Commission November 7, 2000
and mailed such proxy statement to its shareholders of record
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Evidence satisfactory to Required Lenders that the Proposed Sale
was approved by requisite vote of Borrower's shareholders and that December 15, 2000
the Proposed Sale has been consummated
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In the event that Borrower's discussions with the Proposed Purchaser
are terminated, Borrower shall have a period of 30 days to present
either (i) an alternative refinancing structure or (ii) a substitute
proposed purchaser to the Lenders. Upon written approval of a new
proposed purchaser by Required Lenders, the defined term "Proposed
Purchaser" herein shall be deemed to refer to such new proposed
purchaser for all purposes. The failure of Borrower to comply with the
foregoing agreements within said 30 day period shall constitute a
Default hereunder.
Section 1.2. Consent. Required Lenders hereby consent to the Proposed
Sale on the following terms and conditions:
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(i) the Proposed Sale is consummated pursuant to a definitive merger
agreement approved by Required Lenders in their sole discretion; and
(ii) at the closing of the Proposed Sale, the Obligations, the Credit
Facilities and the Short Term Loan shall be repaid in full.
ARTICLE II - MISCELLANEOUS
Section 2.1. Closing. The closing (the "Closing") of the transactions
contemplated by this Amendment shall occur on and as of the date that all
conditions hereto contained in Section 2.2 of this Amendment have been
satisfied (the "Modification Closing Date").
Section 2.2. Conditions to the Closing. As conditions precedent to the
Closing, Borrower, each Guarantor and Required Lenders shall have executed and
delivered this Amendment.
Section 2.3. Continuing Effect. Except as modified and amended hereby,
the Loan Agreement and other Loan Documents are and shall remain in full force
and effect in accordance with their terms.
Section 2.4. Representations and Warranties. Borrower hereby
represents and warrants to Administrative Agent and the Lenders that (i) except
as has been disclosed by Borrower to Administrative Agent in writing, all
representations and warranties made by Borrower in the Loan Agreement as of the
date thereof are true and correct as of the date hereof, as if such
representations and warranties were recited herein in their entirety and (ii)
Borrower is not in default of any covenant or agreement contained in the Loan
Agreement.
Section 2.5. Payment of Expenses. Borrower agrees to pay to
Administrative Agent the reasonable attorneys' fees and expenses of
Administrative Agent's counsel and other expenses incurred by Administrative
Agent in connection with this Amendment.
Section 2.6. Binding Agreement. This Amendment shall be binding upon,
and shall inure to the benefit of, the parties' respective representatives,
successors and assigns.
Section 2.7. Ratification. Except as otherwise expressly modified by
this Amendment, all terms and provisions of the Loan Agreement, the Notes and
the other Loan Documents, shall remain unchanged and hereby are ratified and
confirmed and shall be and shall remain in full force and effect, enforceable
in accordance with their terms.
Section 2.8. No Defenses. Borrower and each Guarantor, by its
execution of this Amendment, hereby declares that it has no set-offs,
counterclaims, defenses or other causes of action against Administrative Agent
or any Lender arising out of the Credit Facility, the modification of the
Credit Facility, any documents mentioned herein or otherwise; and, to the
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extent any such set-offs, counterclaims, defenses or other causes of action may
exist, whether known or unknown, such items are hereby waived by Borrower and
each Guarantor.
Section 2.9. Further Assurances. The parties hereto shall execute such
other documents as may be necessary or as may be required, in the opinion of
counsel to Administrative Agent, to effect the transactions contemplated hereby
and the liens and/or security interests of all other collateral instruments, as
modified by this Amendment. Borrower also agrees to provide to Administrative
Agent such other documents and instruments as Lenders reasonably may request in
connection with the modification of the Credit Facility effected hereby.
Section 2.10. Usury Savings Clause. Notwithstanding anything to the
contrary in this Amendment, the Notes or any other Loan Document, or in any
other agreement entered into in connection with the Notes or securing the
indebtedness evidenced by the Notes, whether now existing or hereafter arising
and whether written or oral, it is agreed that the aggregate of all interest
and other charges constituting interest, or adjudicated as constituting
interest, and contracted for, chargeable or receivable under the Notes or
otherwise in connection with the Notes shall under no circumstances exceed the
maximum rate of interest permitted by applicable law. In the event the maturity
of the Notes is accelerated by reason of an election by any of the holders
thereof resulting from a default thereunder or under any other document
executed as security therefor or in connection therewith, or by voluntary
prepayment by the maker, or otherwise, then earned interest may never include
more than the maximum rate of interest permitted by applicable law. If from any
circumstance any holder of any of the Notes shall ever receive interest or any
other charges constituting interest, or adjudicated as constituting interest,
the amount, if any, which would exceed the maximum rate of interest permitted
by applicable law shall be applied to the reduction of the principal amount
owing on such Notes or on account of any other principal indebtedness of the
maker to the holders of such Notes, and not to the payment of interest, or if
such excessive interest exceeds the unpaid balance of principal thereof and
such other indebtedness, the amount of such excessive interest that exceeds the
unpaid balance of principal thereof and such other indebtedness shall be
refunded to the maker. All sums paid or agreed to be paid to the holders of the
Notes for the use, forbearance or detention of the indebtedness of the maker to
the holders of such Notes shall be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full for the
purpose of determining the actual rate on such indebtedness is uniform
throughout the term thereof.
The terms "maximum amount" or "maximum rate" as used in this
Amendment or the Notes, or in any other agreement entered into in connection
with the Notes or securing the indebtedness evidenced by the Notes, whether now
existing or hereafter arising and whether written or oral, include, as to
Chapter 303 of the Texas Finance Code (and as same may be incorporated by
reference in other statutes of the State of Texas), but otherwise without
limitation, that rate based upon the "weekly ceiling"; provided, however, that
this designation shall not preclude the rate of interest contracted for,
charged or received in connection with the Credit Facility from being governed
by, or construed in accordance with, any other state or federal law, including
but not limited to, Public Law 96-221.
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Section 2.11. Non-Waiver of Events of Default. Neither this Amendment
nor any other document executed in connection herewith constitutes or shall be
deemed (a) a waiver of, or consent by Administrative Agent or any Lender to,
any default or event of default which may exist or hereafter occur under any of
the Loan Documents, (b) a waiver by Administrative Agent or any Lender of any
of Borrower's obligations under the Loan Documents, or (c) a waiver by
Administrative Agent or any Lender of any rights, offsets, claims, or other
causes of action that any Lender may have against Borrower.
Section 2.12. Enforceability. In the event the enforceability or
validity of any portion of this Amendment, the Loan Agreement, the Notes, or
any of the other Loan Documents is challenged or questioned, such provision
shall be construed in accordance with, and shall be governed by, whichever
applicable federal or Texas law would uphold or would enforce such challenged
or questioned provision.
Section 2.13. Counterparts. This Amendment may be executed in several
counterparts, all of which are identical, each of which shall be deemed an
original, and all of which counterparts together shall constitute one and the
same instrument, it being understood and agreed that the signature pages may be
detached from one or more of such counterparts and combined with the signature
pages from any other counterpart in order that one or more fully executed
originals may be assembled.
Section 2.14. Choice of Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, EXCEPT TO THE
EXTENT FEDERAL LAWS PREEMPT THE LAWS OF THE STATE OF TEXAS.
Section 2.15. Entire Agreement. This Amendment and the other Loan
Documents, contain the entire agreements between the parties relating to the
subject matter hereof and thereof. This Amendment and the other Loan Documents
may be amended, revised, waived, discharged, released or terminated only by a
written instrument or instruments, executed by the party against which
enforcement of the amendment, revision, waiver, discharge, release or
termination is asserted. Any alleged amendment, revision, waiver, discharge,
release or termination which is not so documented shall not be effective as to
any party.
Section 2.16. Partial Execution. This Amendment shall be effective for
all purposes upon execution by Borrower, Guarantors, and Required Lenders (as
defined in the Loan Agreement). If a particular provision of this Amendment is
of the nature described in subsection (b) of the definition of Required Lenders
(a "Material Change"), then that provision shall only be effective upon
execution of all of the Lenders, but the failure of all of the Lenders to so
execute this Amendment shall not affect the effectiveness of those portions of
this Amendment which do not constitute a Material Change.
THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES RELATED TO THE SUBJECT
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MATTER HEREIN CONTAINED AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURES FOUND ON FOLLOWING PAGES.]
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IN WITNESS WHEREOF, this Amendment is executed effective as of the
date first written above.
BORROWER:
MONARCH DENTAL CORPORATION,
a Delaware corporation
By:
Name:
Title:
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., a national banking
association, as Administrative Agent
By:
Name:
Title:
LENDERS:
BANK OF AMERICA, N.A., a national banking
association,
By:
Name:
Title:
FLEET NATIONAL BANK,
a national banking association
By:
Name:
Title:
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COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "Rabobank Nederland",
New York Branch
By:
Name:
Title:
By:
Name:
Title:
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CONSENT OF GUARANTORS
Each Guarantor hereby (a) acknowledges its consent to this Agreement and the
changes to the Credit Facility effected hereby, (b) ratifies and confirms all
terms and provisions of its respective Guaranty and the security instruments
relating to the Collateral , (c) agrees that such Guaranty and security
instruments are and shall remain in full force and effect, (d) acknowledges
that there are no claims or offsets against, or defenses or counterclaims to,
the terms and provisions of and the obligations created and evidenced by such
Guaranty or security instruments, (e) reaffirms all agreements and obligations
under such Guaranty and such security instruments with respect to the Credit
Facility, the Notes, this Agreement and all other documents, instruments or
agreements governing, securing or pertaining to the Credit Facility, as the
same may be modified by this Agreement, (f) and acknowledges that the
Obligations described in this Agreement are the guaranteed obligations under
such Guaranty and are the obligations secured by such security instruments and
(g) represents and warrants that all requisite corporate or partnership action
necessary for it to execute this Agreement has been taken.
EXECUTED as of the 30th day of June, 2000.
GUARANTORS:
Managed Dental Care Centers, Inc., a Texas corporation
Monarch Dental Associates (Arkansas), Inc., an Arkansas
corporation (f/k/a United Dental Care, Inc.)
Dental Care One (Monarch), Inc., an Ohio corporation
Midwest Dental Management, Inc., a Wisconsin corporation
Dental Centers of Indiana (Monarch), Inc., an Indiana
corporation;
Midwest Dental Care, Mondovi, Inc., a Wisconsin corporation;
Midwest Dental Care, Sheboygan, Inc., a Wisconsin
corporation;
Monarch Dental Management, Inc., a Texas corporation;
Three Peaks Dental Management, Inc., a Colorado corporation;
Monarch Dental Associates (Utah), Inc., a Utah corporation
By:
-----------------------------
Name:
---------------------------
Title:
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MacGregor Dental Associates, L.P., a Texas
limited partnership
By: Monarch Dental Management, Inc., a Texas
corporation, its general partner
By:
-------------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Monarch Dental Associates, L.P., a Texas
limited partnership
By: Monarch Dental Management, Inc., a Texas
corporation, its general partner
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Monarch Dental (Press) Associates, L.P., a
Texas limited partnership
By: Monarch Dental Management, Inc., a Texas
corporation, its general partner
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Monarch Dental Associates (Midland/Odessa),
L.P., a Texas limited partnership
By: Monarch Dental Management, Inc., a Texas
corporation, its general partner
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Monarch Dental Associates (Abilene), L.P., a
Texas limited partnership
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By: Monarch Dental Management, Inc., a Texas
corporation, its general partner
By:
-------------------------------------
Name:
-----------------------------------
Title:
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Monarch Dental Associates (Arizona), L.L.C.,
an Arizona limited liability company
By: Monarch Dental Associates (Utah), Inc.,
a Utah corporation, its manager
By:
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Name:
-----------------------------------
Title:
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Partners Dental Corporation, a Delaware
corporation
By:
----------------------------------------
Name:
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Title:
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Valley Forge Dental Associates, Inc.,
a Delaware corporation
By:
----------------------------------------
Name:
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Title:
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VFD of Pennsylvania, Inc.,
a Delaware corporation
By:
----------------------------------------
Name:
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Title:
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Horizon Group International, Inc.,
an Ohio corporation
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By:
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Name:
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Title:
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Precise Dental Lab, Inc.,
an Ohio corporation
By:
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Name:
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Title:
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VFD of Georgia, Inc.,
a Delaware corporation
By:
----------------------------------------
Name:
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Title:
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VFD of Pittsburgh, Inc.,
a Pennsylvania corporation
By:
----------------------------------------
Name:
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Title:
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Pro Dent, Inc.,
a Pennsylvania corporation
By:
----------------------------------------
Name:
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Title:
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VFD Realty, Inc.,
a Delaware corporation
By:
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Name:
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Title:
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