SECOND AMENDMENT TO
CREDIT AGREEMENT
BY AND AMONG
CASTLE DENTAL CENTERS, INC.,
as Borrower,
CASTLE DENTAL CENTERS OF FLORIDA, INC.,
CASTLE DENTAL CENTERS OF TENNESSEE, INC.,
CASTLE DENTAL CENTERS OF TEXAS, INC.,
CDC OF CALIFORNIA, INC.
CASTLE DENTAL CENTERS OF CALIFORNIA, L.L.C.
DENTAL WORLD, INC.
and
JHCDDS, INC.
as Guarantors,
NATIONSBANK OF TEXAS, N.A.,
as Agent,
and
THE LENDERS SIGNATORY HERETO
Effective as of March __, 1998
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS
Section 1.01 TERMS DEFINED ABOVE.............................................1
Section 1.02 TERMS DEFINED IN CREDIT AGREEMENT...............................1
Section 1.03 OTHER DEFINITIONAL PROVISIONS...................................2
ARTICLE II. AMENDMENTS TO CREDIT AGREEMENT
Section 2.01 AMENDMENTS AND SUPPLEMENTS TO DEFINITIONS.......................2
Section 2.02 AMENDMENT TO ARTICLE II ........................................6
Section 2.03 SUPPLEMENT TO ARTICLE VI .......................................7
Section 2.04 SUPPLEMENT TO ARTICLE VIII .....................................7
Section 2.05 AMENDMENT TO ARTICLE IX.........................................8
ARTICLE III. CONDITIONS
Section 3.01 LOAN DOCUMENTS..................................................8
Section 3.02 CORPORATE PROCEEDINGS OF LOAN PARTIES...........................9
Section 3.03 REPRESENTATIONS AND WARRANTIES..................................9
Section 3.04 NO DEFAULT......................................................9
Section 3.05 NO CHANGE.......................................................9
Section 3.06 SECURITY INSTRUMENTS............................................9
Section 3.07 OTHER INSTRUMENTS OR DOCUMENTS..................................9
ARTICLE IV. MISCELLANEOUS
Section 4.01 ADOPTION, RATIFICATION AND CONFIRMATION OF CREDIT AGREEMENT.....9
Section 4.02 RATIFICATION AND AFFIRMATION OF GUARANTY.......................10
Section 4.03 SUCCESSORS AND ASSIGNS.........................................10
Section 4.04 COUNTERPARTS...................................................10
Section 4.05 NUMBER AND GENDER..............................................10
Section 4.06 ENTIRE AGREEMENT...............................................10
Section 4.07 INVALIDITY.....................................................10
Section 4.08 TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS...................10
Section 4.09 GOVERNING LAW..................................................11
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SECOND AMENDMENT TO
CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "SECOND AMENDMENT")
executed effective as of the ___ day of March, 1998 (the "EFFECTIVE DATE"), is
by and among CASTLE DENTAL CENTERS, INC., a Delaware corporation ("BORROWER"),
CASTLE DENTAL CENTERS OF FLORIDA, INC., a Florida corporation, CASTLE DENTAL
CENTERS OF TENNESSEE, INC., a Tennessee corporation, CASTLE DENTAL CENTERS OF
TEXAS, INC., a Texas corporation, DENTAL WORLD, INC., a Texas corporation, CDC
OF CALIFORNIA, INC., a Delaware corporation, CASTLE DENTAL CENTERS OF
CALIFORNIA, L.L.C., a Delaware limited liability company, and JHCDDS, INC., a
Texas corporation (individually, "GUARANTOR", and collectively, "GUARANTORS");
NATIONSBANK OF TEXAS, N.A., a national banking association (in its individual
capacity, "NATIONSBANK"), as agent (in such capacity, "AGENT") for each of the
lenders that is a signatory hereto or which becomes a signatory hereto and to
the hereinafter described Credit Agreement as provided in Section 12.06 of the
Credit Agreement (individually, together with its successors and assigns,
"LENDER" and collectively, "LENDERS").
W I T N E S S E T H:
WHEREAS, the Borrower, Agent and Lenders are parties to that certain
Credit Agreement dated as of November 7, 1997 (as the same may be amended from
time to time, including without limitation that certain First Amendment to
Credit Agreement, effective as of February 11, 1998, the "CREDIT AGREEMENT"),
pursuant to which the Lenders agreed to make loans to and extensions of credit
on behalf of the Borrower; and
WHEREAS, the Borrower and Lenders desire to amend the Credit Agreement
in the particulars hereinafter provided.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
Section 1.01 TERMS DEFINED ABOVE. As used in this Second Amendment, each
of the terms "BORROWER", "CREDIT AGREEMENT", "EFFECTIVE DATE", "SECOND
AMENDMENT", "GUARANTORS", "NATIONSBANK", and "LENDERS" shall have the meaning
assigned to such term hereinabove.
Section 1.02 TERMS DEFINED IN CREDIT AGREEMENT. Each term defined in the
Credit Agreement and used herein without definition shall have the meaning
assigned to such term in the Credit Agreement, unless expressly provided to the
contrary.
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Section 1.03 OTHER DEFINITIONAL PROVISIONS.
(a) The words "hereby", "herein", "hereinafter", "hereof",
"hereto" and "hereunder" when used in this Second Amendment shall refer
to this Second Amendment as a whole and not to any particular Article,
Section, subsection or provision of this Second Amendment.
(b) Section, subsection and Exhibit references herein are to such
Sections, subsections and Exhibits to this Second Amendment unless
otherwise specified.
ARTICLE II. AMENDMENTS TO CREDIT AGREEMENT
Borrower, Guarantors, Agent and Lenders agree that the Credit Agreement
is hereby amended, effective as of the Effective Date, in the following
particulars.
Section 2.01 AMENDMENTS AND SUPPLEMENTS TO DEFINITIONS.
(a) The following terms, which are defined in Section 1.02 of the Credit
Agreement, are hereby amended in their entirety to read as follows:
"AGREEMENT" shall mean this Credit Agreement, as amended and
supplemented by the First Amendment, the Second Amendment, and as the
same may from time to time be further amended or supplemented.
(b) Section 1.02 of the Credit Agreement is hereby further amended and
supplemented by adding the following new definitions where alphabetically
appropriate, which read in their entirety as follows:
"ADJUSTED AGGREGATE CASTLE WEST EBITDA" shall mean Aggregate
Castle West EBITDA plus the Pro Forma MSO Fees of the Castle West
Acquired Clinics; PROVIDED, HOWEVER, that the Adjusted Aggregate Castle
West EBITDA shall not include the results of operations, cost of capital
and Castle West Debt arising from any CDC Approved Expansion.
"AGGREGATE CASTLE WEST EBITDA" shall be equal to (a) the pro
forma aggregate earnings of DCS and the Existing PCs for the year ended
December 31, 1997, adjusted to reverse charges thereto made for
interest, federal and state income and franchise taxes, depreciation and
amortization (such amounts to be determined based upon actual 1997
performance as if any portion of any Existing PC not owned by DCS on
January 1, 1997, were acquired by DCS on January 1, 1997), PLUS (b) an
amount equal to the unusual and non-recurring expenses incurred during
1997 in connection with the transactions contemplated by the Master
Contribution Agreement, and an adjustment for (c) any difference between
the 1997 operations of DCS and anticipated Castle West employees or
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increased expenses related to additional staffing necessary to operate
the Castle West Acquired Clinics (with any increase in 1998 levels to
reduce Aggregate Castle West EBITDA and any decrease in 1998 levels to
increase Aggregate Castle West EBITDA) as agreed upon by the Borrower
and DCS; PROVIDED, HOWEVER, that for purposes of calculating Aggregate
Castle West EBITDA, the 1997 pro forma EBITDA for Burbank shall be
deemed to be $300,000, regardless of Burbank's actual results of
operations.
"BURBANK" shall mean X.X. Xxxxxxxxx, DMD, Inc., a California
professional corporation d.b.a. Burbank Dental.
"BURBANK ADJUSTMENT" shall have the definition ascribed thereto
in the Master Contribution Agreement.
"CAPITAL COST RATE" shall mean, with respect to any Loan, (i) if
such Loan is a Base Rate Loan, the Base Rate PLUS the Applicable Margin
PLUS .25%, or (ii) if such Loan is a Eurodollar Loan, the Eurodollar
Rate PLUS the Applicable Margin PLUS .25%.
"CASTLE WEST" shall mean Castle Dental Centers of California,
L.L.C., a Delaware limited liability company and a Subsidiary of the
Borrower.
"CASTLE WEST ACQUIRED CLINICS" shall mean each business (or
allocated portion thereof) with which Castle West enters into an MSO
agreement during the 12-month period following the Closing Date (as
defined in the Master Contribution Agreement) and with respect to which
an Acquisition Purchase Price Adjustment (as defined in the Master
Contribution Agreement) is required to be made.
"CASTLE WEST DEBT" shall mean the debt of the Borrower and Castle
West that is directly related to Castle West's business and operations
(excluding debt related to the acquisition of DCS, the Existing PCs, the
Castle West Acquired Clinics and any CDC Approved Expansion).
"CASTLE WEST EBITDA" shall only be used in calculating the
Put/Call Reserve Amount, and shall, for any period, be equal to Castle
West's earnings for such period, determined in accordance with GAAP
adjusted to reverse charges thereto made for interest, federal and state
income and franchise taxes, depreciation and amortization, to the extent
included in the calculation of earnings; PROVIDED, HOWEVER, that Castle
West EBITDA shall be determined prior to any deduction of the Incentive
Payment from earnings and without any deduction for overhead,
management, or similar fees paid by Castle West to any Affiliate of the
Borrower or otherwise allocated to Castle West.
"CASTLE WEST INCREMENTAL EBITDA" shall be equal to the amount by
which the Castle West EBITDA for the prior four fiscal quarters ending
immediately prior to delivery of a C Merger Notice or the CDC Call
Notice exceeds the Adjusted Aggregate Castle West EBITDA; PROVIDED,
HOWEVER, that the Projected Castle West Incremental
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EBITDA shall exclude the Castle West EBITDA, Castle West Debt, and
Common Stock capital costs relating to any acquisitions completed in the
three-month period immediately preceding the delivery of either the C
Merger Notice or the CDC Call Notice.
"C MERGER CONSIDERATION" shall be equal to the aggregate Pro Rata
Share of the Corporate C Members of the Holdings Old Value PLUS the
aggregate Pro Rata Share of the Corporate C Members of the Holdings New
Value LESS the aggregate Pro Rata Share of the Corporate C Members of
the Holdings Indebtedness.
"C MERGER NOTICE" shall mean the notice given by the Corporate C
Members to the CDC California of their respective intent to exercise the
Corporate C Member's Merger Option.
"CDC APPROVED EXPANSION" shall mean any expansion, acquisition,
or other opportunity that is approved by the Board of Directors of
Castle West if none of the Class C Interest Directors affirmatively
voted to approve such expansion, acquisition, or other opportunity.
"CDC CALIFORNIA" shall mean CDC of California, Inc., a Delaware
corporation and a wholly-owned Subsidiary of the Borrower.
"CDC CALL NOTICE" shall mean the notice given by CDC California
to the Corporate C Members of its intent to exercise the CDC Call
Option.
"CDC CALL OPTION" shall mean the option of CDC California to
cause each of the Corporate C Members to merge with and into CDC
California pursuant to Section 8.2 of the Master Contribution Agreement.
"CLASS III REPURCHASE OBLIGATION" shall mean the amount of any
outstanding obligation, if any, of Holdings to the former holder of the
Class III Interest in Holdings (as defined in the Holdings Limited
Agreement) arising out of the previous exercise of Holding's option to
purchase the Class III Interest pursuant to Section 5.5(c) of the
Holdings Limited Agreement; PROVIDED, HOWEVER, that in no event shall
CDC California, as a Member of Holdings, be deemed to have any interest
in, or direct or indirect obligation to pay, the Class III Repurchase
Obligation.
"COMMON STOCK" the common stock, $.001 par value, of the
Borrower.
"COMMON STOCK MARKET MULTIPLE" shall be determined by multiplying
the average closing price of the Common Stock on the principal exchange
or quotation system therefor over the 30-day period ending on the date
immediately prior to delivery of a C Merger Notice or the CDC Call
Notice by the weighted average fully diluted number of shares of Common
Stock outstanding over the one-year period ending on such date, and
dividing the product by EBITDA for the prior four fiscal quarters
preceding such date.
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"CORPORATE C MEMBERS" shall have the definition ascribed thereto
in the Master Contribution Agreement.
"CORPORATE C MEMBER'S MERGER OPTION" shall mean the option of
each of the Corporate C Members to cause such Corporate C Member to
merge with and into CDC California pursuant to Section 8.1 of the Master
Contribution Agreement.
"DCS" shall mean Dental Consulting Services, L.L.C., a California
limited liability company.
"EXISTING PCS" means Xxxxxx Xxxxxxxxx, DDS, Inc., a California
professional corporation d.b.a. Hawthorne Family Dental Group; Xxxxxx
Xxxxxxxxx, DDS, Inc., a California professional corporation d.b.a.
Broadway Dental; Xxxxxx Xxxxxxx, DDS, Inc., a California professional
corporation d.b.a. South Gate Dental Center; Xxxxxx Xxxxxxx, DDS, Inc.,
a California professional corporation d.b.a. Lincoln Dental Center, and
Burbank.
"HOLDINGS" shall mean Castle West Holdings, L.L.C., a California
limited liability company.
"HOLDINGS AGREEMENT" shall mean the limited liability company
agreement of Holdings.
"HOLDINGS INDEBTEDNESS" shall mean, at the time of determination,
all outstanding indebtedness of Holdings to any person, including,
without limitation, the Class III Repurchase Obligation. In no event
shall CDC California, as a member of Holdings, be deemed to have any
interest in or direct or indirect obligation to pay the Holdings
Indebtedness.
"HOLDINGS NEW VALUE" shall be equal to 20% of (A) the Castle West
Incremental EBITDA PLUS the Projected Castle West Incremental EBITDA,
(B) multiplied by the Common Stock Market Multiple (C) multiplied by
90%; PROVIDED, HOWEVER, that the Holdings New Value shall be calculated
subject to the following:
1. The Holdings New Value shall be reduced, without duplication,
by (i) the aggregate capital costs related to Common Stock
invested in Castle West acquisitions or expansions (excluding
DCS, the Existing PCs and the Castle West Acquired Clinics), and
(ii) a percentage of 20% of the Castle West Debt, determined as
follows:
Castle West Annual Growth Rate Percentage of 20% of Castle West Debt
from January 1, 1999 Allocated to the Holdings New Value
Less than 26% 100%
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26% or more but less than 27% 90%
27% or more but less than 28% 80%
28% or more but less than 29% 70%
29% or more but less than 30% 60%
30% or more but less than 31% 50%
31% or more but less than 32% 40%
32% or more but less than 33% 30%
33% or more but less than 34% 20%
34% or more but less than 35% 10%
More than 35% 0%
2. The aggregate capital costs related to Common Stock invested
in Castle West acquisitions or expansions shall be based upon the
valuation given to such Common Stock pursuant to the agreements
pursuant to which such acquisitions or expansions were
consummated multiplied by the Capital Cost Rate; and
3. The outstanding Castle West Debt used to determine the
Holdings New Value shall exclude the Castle West EBITDA, Castle
West Debt, and Common Stock capital costs relating to any
acquisitions completed in the three-month period immediately
preceding the delivery of either the C Merger Notice or the CDC
Call Notice.
"HOLDINGS OLD VALUE" shall be equal to (i) 20% of the Adjusted
Aggregate Castle West EBITDA multiplied by 6.5, LESS (ii) 20% of the
purchase price of the Castle West Acquired Clinics, LESS (iii) 25% of
the Burbank Adjustment:
"MASTER CONTRIBUTION AGREEMENT" shall mean the Master
Contribution and Combination Agreement, dated as of January 30, 1998, by
and among, the Borrower, CDC California, Dental Consulting Services,
L.L.C., Castle Dental Centers of California, L.L.C., Castle West
Holdings, L.L.C., each of the DCS Members listed on Schedule A attached
thereto, each of the Holding Members (as defined therein), each of the
Corporate B Members (as defined therein) and each of the Corporate C
Members.
"MSO" means Management Services Organization.
"PRO FORMA MSO FEES" shall mean, with respect to any Castle West
Acquired Clinic, the MSO fees (determined upon actual operating results)
that would have been paid to Castle West (over the 12-month period
ending prior to the acquisition with respect to which the Castle West
Acquired Clinic was valued by Castle West and the Castle West
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Acquired Clinic for purposes of Castle West's acquisition thereof) if
the MSO agreement with respect to such Castle West Acquired Clinic had
been in effect at the beginning of such period.
"PROJECTED CASTLE WEST INCREMENTAL EBITDA" shall be equal to (A)
the Castle West Incremental EBITDA plus the Adjusted Aggregate Castle
West EBITDA, ADJUSTED to take into consideration a 25% compounded growth
rate for the period from the date of determination to the later to occur
of (i) the first date on which either a Corporate C Member's Merger
Option or the CDC Call Option could be exercised or (ii) the date that
is 365 days from the date of determination, LESS (B) the Adjusted
Aggregate Castle West EBITDA plus the Castle West Incremental EBITDA.
"PRO RATA SHARE" shall have the definition ascribed thereto in
the Master Contribution Agreement.
"PUT/CALL RESERVE AMOUNT" shall be equal to the greater of
$2,698,000 or 25% of the C Merger Consideration.
"SECOND AMENDMENT" shall mean that certain Second Amendment to
Credit Agreement dated as of March __, 1998, by and among the Borrower,
Guarantors, Agent and Lenders.
Section 2.02 AMENDMENT TO ARTICLE II . Article II of the Credit
Agreement is hereby amended by deleting Section 2.01(a) thereof in its entirety
and inserting the following in lieu thereof:
"(a) REVOLVING CREDIT LOANS. Each Lender severally agrees, on the terms
and conditions of this Agreement, to make loans to the Borrower during
the Revolving Credit Period in an aggregate principal amount at any one
time outstanding up to, but not exceeding, the amount of such Lender's
Revolving Credit Commitment as then in effect; PROVIDED, HOWEVER, that
the aggregate principal amount of all such Revolving Credit Loans by all
Lenders hereunder at any one time outstanding, PLUS the LC Exposure,
PLUS the principal balance of the Term Loan at any one time outstanding,
PLUS THE PUT/CALL RESERVE AMOUNT (UNLESS EITHER THE CORPORATE C MERGER
OPTION OR THE CDC CALL OPTION HAS BEEN EXERCISED) shall not exceed the
Aggregate Revolving Credit Commitments. Subject to the terms of this
Agreement, during the Revolving Credit Period, the Borrower may borrow,
repay and reborrow the amount described in this Section 2.01(a)."
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Section 2.03 SUPPLEMENT TO ARTICLE VI . Article VI of the Credit
Agreement is hereby supplemented by adding the following new Sections
6.02(b)(vii) and 6.02(b)(viii):
"(vii) The Agent shall have received a Compliance Certificate in
the form of EXHIBIT C attached hereto.
(viii) The Agent shall have received a completed Put/Call Reserve
Amount Certificate in the form of EXHIBIT I attached hereto, unless each
Corporate C Member has exercised the Corporate C Member's Merger Option
or the CDC Call Option has been exercised."
Section 2.04 SUPPLEMENT TO ARTICLE VIII . Article VIII of the Credit
Agreement is hereby supplemented by adding the following new Section 8.01(o):
"(o) PUT/CALL RESERVE AMOUNT CERTIFICATE Within 45 days after
each June 30 and December 31 of each calendar year until the earlier to
occur of the Final Maturity Date or the exercise of either the last
Corporate C Member's Merger Option or the CDC Call Option, a completed
Put/Call Reserve Certificate in the form of EXHIBIT I attached hereto."
Section 2.05 AMENDMENT AND SUPPLEMENT TO ARTICLE IX.
(a) Article IX of the Credit Agreement is hereby amended by deleting
Section 9.14 thereof in its entirety and inserting the following in lieu
thereof:
"Section 9.14 FIXED CHARGE COVERAGE RATIO. The Borrower will not
permit its Fixed Charge Coverage Ratio as of the end of any fiscal
quarter (calculated on a rolling four quarter basis; PROVIDED, HOWEVER,
the first quarter test shall be for the quarter ended March 31, 1997 and
the following rolling cumulative tests will begin with such quarter
ending March 31, 1997 until a full four quarter test can be achieved) to
be less than 1.25 to 1.0. For purposes of this Section 9.16, "FIXED
CHARGE COVERAGE RATIO" shall mean the ratio for the relevant period of
(i) EBITDA, LESS taxes payable in cash, PLUS lease and rental expense to
(ii) lease and rental expense, PLUS interest (OTHER THAN INTEREST PAID
ON SUBORDINATED DEBT THAT WAS INCURRED BY THE BORROWER PRIOR TO
SEPTEMBER 30, 1997), PLUS, during the Revolving Credit Period, one-fifth
(1/5) of the then-outstanding principal balance of the Revolving Credit
Loans, PLUS, without duplication, current maturities of long-term debt,
PLUS capital leases. For any calculation period which would include one
or more quarters prior to any Stock Purchase or any Asset Purchase or
any other future acquisition of an entity, the "rolling four quarters"
shall include the "pro forma" EBITDA of the applicable Acquired Entity
for such prior periods adjusted to reflect costs and expenses which such
Acquired Entity would have included had the Management Services
Agreements between Borrower and/or any Subsidiary and such Acquired
Entity been in effect (adding back appropriate executive salaries and
non-cash charge offs relating to this transaction)."
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(b) Article IX of the Credit Agreement is hereby supplemented by
inserting the following Section 9.22:
"9.22 AMENDMENT OF CASTLE WEST LLC AGREEMENT. Until such time as each of
the Corporate C Members has exercised its Corporate C Member's Merger Option or
CDC California has exercised the CDC Call Option, neither the Borrower nor any
Subsidiary shall make or permit any material amendment or modification of the
Limited Liability Company Agreement of Castle West without the prior written
consent of the Agent."
ARTICLE III. CONDITIONS
The enforceability of this Second Amendment against the Agent and the
Lenders is subject to the satisfaction of the following conditions precedent:
Section 3.01 LOAN DOCUMENTS. The Agent shall have received the
following:
(a) multiple original counterparts, as requested by the Agent, of
this Second Amendment, executed and delivered by a duly authorized
officer of the Borrower, Guarantors, Agent, and each Lender, as
applicable; and
(b) a favorable written opinion of Xxxxxxxxx & Xxxxxxxxx L.L.P.,
counsel to the Borrower and the Guarantors (other than CDC of
California, Castle West, and Dental World), in form and substance
satisfactory to the Agent, as to such matters incident to the
transactions herein contemplated as the Agent may reasonably request.
(c) a favorable written opinion of Xxxxx, Xxxxx & Xxxxxx
Incorporated, counsel to CDC of California, Castle West, and Dental
World, in form and substance satisfactory to the Agent, as to such
matters incident to the transactions herein contemplated as the Agent
may reasonably request.
Section 3.02 CORPORATE PROCEEDINGS OF LOAN PARTIES. The Agent shall have
received multiple copies, as requested by the Agent, of the resolutions, in form
and substance reasonably satisfactory to the Agent, of the Boards of Directors
of CDC of California, Castle West, and Dental World, authorizing the execution,
delivery and performance of this Second Amendment, each such copy being attached
to an original certificate of the Secretary or an Assistant Secretary of CDC of
California, Castle West, and Dental World, as applicable, dated as of the
Effective Date, certifying (i) that the resolutions attached thereto are true,
correct and complete copies of resolutions duly adopted by written consents or
at meetings of the Boards of Directors, (ii) that such resolutions constitute
all resolutions adopted with respect to the transactions contemplated hereby,
(iii) that such resolutions have not been amended, modified, revoked or
rescinded as of the Effective Date, (iv) that attached thereto are the
respective articles of incorporation and bylaws of CDC of California, Castle
West, and Dental World, as applicable, and that such articles of incorporation
and bylaws have not been amended or otherwise modified since the effective date
of the Credit Agreement, except pursuant to any amendments attached thereto, and
(v) as to the
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incumbency and signature of the officers of CDC of California, Castle West, and
Dental World, as applicable, executing this Second Amendment.
Section 3.03 REPRESENTATIONS AND WARRANTIES. Except as affected by the
transactions contemplated in the Credit Agreement and this Second Amendment,
each of the representations and warranties made by the Borrower and the
Guarantors in or pursuant to the Credit Agreement and the Security Instruments
shall be true and correct in all material respects as of the Effective Date, as
if made on and as of such date (except to the extent such representations and
warranties are expressly limited to an earlier date).
Section 3.04 NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing as of the Effective Date.
Section 3.05 NO CHANGE. No event shall have occurred since June 30,
1997, which, in the reasonable opinion of the Lenders, could have a Material
Adverse Effect.
Section 3.06 SECURITY INSTRUMENTS. All of the Security Instruments shall
be in full force and effect and provide to the Agent the security intended
thereby to secure the Indebtedness, as amended and supplemented hereby.
Section 3.07 OTHER INSTRUMENTS OR DOCUMENTS. The Agent or any Lender or
counsel to the Agent shall receive such other instruments or documents as they
may reasonably request.
ARTICLE IV. MISCELLANEOUS
Section 4.01 ADOPTION, RATIFICATION AND CONFIRMATION OF CREDIT
AGREEMENT. Each of the Borrower, the Guarantors, the Agent, and the Lenders does
hereby adopt, ratify and confirm the Credit Agreement, as amended hereby, and
acknowledges and agrees that the Credit Agreement, as amended hereby, is and
remains in full force and effect.
Section 4.02 RATIFICATION AND AFFIRMATION OF GUARANTY. Each of the
Guarantors hereby expressly (i) acknowledges the terms of this Second Amendment,
(ii) ratifies and affirms its obligations under its Guaranty Agreement, in favor
of the Agent and the Lenders, as amended, supplemented or otherwise modified,
(iii) acknowledges, renews and extends its continued liability under its
Guaranty Agreement and agrees that said Guaranty Agreement remains in full force
and effect; and (iv) guarantees to the Agent and each Lender to promptly pay
when due all amounts owing or to be owing by it under its Guaranty Agreement
pursuant to the terms and conditions thereof.
Section 4.03 SUCCESSORS AND ASSIGNS. This Second Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted pursuant to the Credit Agreement.
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Section 4.04 COUNTERPARTS. This Second Amendment may be executed by one
or more of the parties hereto in any number of separate counterparts, and all of
such counterparts taken together shall be deemed to constitute one and the same
instrument and shall be enforceable as of the Effective Date upon the execution
of one or more counterparts hereof by the Borrower, the Guarantors, the Agent
and the Lenders. In this regard, each of the parties hereto acknowledges that a
counterpart of this Second Amendment containing a set of counterpart execution
pages reflecting the execution of each party hereto shall be sufficient to
reflect the execution of this Second Amendment by each necessary party hereto
and shall constitute one instrument.
Section 4.05 NUMBER AND GENDER. Whenever the context requires,
reference herein made to the single number shall be understood to include the
plural; and likewise, the plural shall be understood to include the singular.
Words denoting sex shall be construed to include the masculine, feminine and
neuter, when such construction is appropriate; and specific enumeration shall
not exclude the general but shall be construed as cumulative. Definitions of
terms defined in the singular or plural shall be equally applicable to the
plural or singular, as the case may be, unless otherwise indicated.
Section 4.06 ENTIRE AGREEMENT. This Second Amendment constitutes the
entire agreement among the parties hereto with respect to the subject hereof.
All prior understandings, statements and agreements, whether written or oral,
relating to the subject hereof are superseded by this Second Amendment.
Section 4.07 INVALIDITY. In the event that any one or more of the
provisions contained in this Second Amendment shall for any reason be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Second Amendment.
Section 4.08 TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS. All titles or
headings to Articles, Sections, subsections or other divisions of this Second
Amendment or the exhibits hereto, if any, are only for the convenience of the
parties and shall not be construed to have any effect or meaning with respect to
the other content of such Articles, Sections, subsections, other divisions or
exhibits, such other content being controlling as the agreement among the
parties hereto.
Section 4.09 GOVERNING LAW. This Second Amendment shall be deemed to be
a contract made under and shall be governed by and construed in accordance with
the internal laws of the State of Texas.
THIS SECOND AMENDMENT, THE CREDIT AGREEMENT, AS SUPPLEMENTED AND AMENDED
HEREBY, THE NOTES, AND THE OTHER SECURITY INSTRUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
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THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be duly executed and delivered by their proper and duly authorized officers
as of the Effective Date.
BORROWER: CASTLE DENTAL CENTERS, INC.
By:
Name:
Title:
GUARANTORS: CASTLE DENTAL CENTERS OF FLORIDA, INC.
By:
Name:
Title:
CASTLE DENTAL CENTERS OF TENNESSEE, INC.
By:
Name:
Title:
CASTLE DENTAL CENTERS OF TEXAS, INC.
By:
Name:
Title:
CDC OF CALIFORNIA, INC.
By:
Name:
Title:
X-0
XXXXXX XXXXXX XXXXXXX XX XXXXXXXXXX,
L.L.C.
By: CAPITAL WEST HOLDINGS, L.L.C., it
Managing Member
By:__________________________________
Name: ______________________________
Title: ___________________________
DENTAL WORLD, INC.
By:__________________________________
Name: ______________________________
Title: ___________________________
JHCDDS, INC.
By:__________________________________
Name: ______________________________
Title: ___________________________
S-2
LENDER AND AGENT: NATIONSBANK OF TEXAS, N.A.
By:_________________________________
Xxxxxxxx X. Xxxxxxxx
Senior Vice President
LENDERS: THE SUMITOMO BANK, LIMITED
By:_________________________________
Xxxxxxx Xxxxxxxx
Vice President
By:_________________________________
Xxxxx Xxxxxxxx
Vice President & Manager
BANKBOSTON, N.A.
By:_________________________________
Xxxxxxx Xxxxxx
Vice President
AMSOUTH BANK
By:_________________________________
Xxxxxxx X. Xxxxx
Assistant Vice President
S-3
