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EXHIBIT 10.7
SEVENTH AMENDMENT TO
SECOND AMENDED AND RESTATED LOAN AGREEMENT
THIS SEVENTH AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AGREEMENT (this
"Amendment") is executed as of October 18, 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, Administrative Agent and Lenders amended the Loan
Agreement pursuant to that certain Third Amendment to Second Amended and
Restated Loan Agreement dated as of June 30, 2000 (the "Third Amendment") which
(i) extended the deadline for Borrower to raise the Required Institutional Debt
and (ii) permitted the sale of all of the outstanding capital stock of Borrower
to the Proposed Purchaser identified therein; and
WHEREAS, Borrower, Administrative Agent and Lenders amended the Loan
Agreement pursuant to that certain Fourth Amendment to Second Amended and
Restated Loan Agreement dated as of August 11, 2000 (the "Fourth Amendment")
which provided for a substitute Proposed Purchaser, and extended the timeframe
for certain delivery requirements contained in the Third Amendment; and
WHEREAS, Borrower, Administrative Agent and Lenders amended the Loan
Agreement pursuant to that certain Fifth Amendment to Second Amended and
Restated Loan Agreement dated as of September 1, 2000 (the "Fifth Amendment")
which restructured and extended the timeframe for certain delivery requirements
set forth in the Fourth Amendment; and
WHEREAS, Borrower, Administrative Agent and Lenders amended the Loan
Agreement pursuant to that certain Sixth Amendment to Second Amended and
Restated Loan Agreement dated as of October 2, 2000 (the "Sixth Amendment")
which restructured and extended the timeframe for certain delivery requirements
set forth in the Fifth Amendment; and
WHEREAS, Borrower has requested that such delivery requirements be amended
to delete a requirement of a bank book for a refinance of the Credit Facility;
and
SEVENTH AMENDMENT TO SECOND AMENDED
AND RESTATED LOAN AGREEMENT (Monarch Dental) Page 1
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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. Debt Restructure. In lieu of the requirements previously set
forth in Section 1.1 of the Sixth Amendment, Borrower hereby covenants and
agrees that:
(a) On or before November 3, 2000, Borrower shall deliver to
Administrative Agent, an Offering Memorandum to be delivered to potential
lenders and/or investors for not less than $15,000,000 of unsecured
Permitted Subordinate Institutional Debt (the "Subordinate Debt"), along
with a complete list of potential lenders and/or investors (with
addresses, phone numbers and contact names) to which such Offering
Memorandum has been delivered contemporaneously with the delivery to
Administrative Agent.
(b) On or before December 4, 2000, Borrower shall deliver to
Administrative Agent, written commitments from lenders and/or investors
for the Subordinate Debt (the "Financing Commitments"). Additionally, on
or before December 4, 2000, Borrower shall deliver to Administrative Agent
a time line in detail satisfactory to Required Lenders (the "Time Line")
of the significant actions (e.g. execution of definitive financing
agreements and a due diligence schedule) which will be necessary to cause
the transactions contemplated by the Financing Commitments (the
"Refinancing Transactions") to be consummated on or before December 15,
2000.
(c) Borrower shall consummate the Refinancing Transactions on or
before December 15, 2000.
Borrower understands and agrees that Borrower's failure to consummate the
actions above set forth by the date indicated or to comply with the terms of
this Section 1.1 shall constitute a default under the Credit Facility and the
Short Term Loan for which Borrower shall not be entitled to a cure period.
Section 1.2. Wisconsin Acquisition. Lenders hereby consent to the
Acquisition by Borrower (directly or through one or more Subsidiaries) of
substantially all of the assets of Xxxx X. Xxx Xxxxxxxxxxx, DDS, S.C, a dental
practice located in Bloomer, Wisconsin, for total Acquisition consideration of
$50,000.00.
Section 1.3. Resignation of Chief Executive. Borrower has informed
Administrative Agent that Xxxx Xxxx, its Chief Executive Officer, has resigned
effective this date. Required
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AND RESTATED LOAN AGREEMENT (Monarch Dental) Page 2
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Lenders hereby consent to such resignation and waive any default or Event of
Default which may have resulted from such resignation under the Loan Documents;
provided that Xxxxxx Tygart succeeds to, and continues to hold, the offices of
Chairman of the Board of Directors and Chief Executive Officer.
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 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.
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AND RESTATED LOAN AGREEMENT (Monarch Dental) Page 3
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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.
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
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AND RESTATED LOAN AGREEMENT (Monarch Dental) Page 4
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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 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.
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AND RESTATED LOAN AGREEMENT (Monarch Dental) Page 5
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AND RESTATED LOAN AGREEMENT (Monarch Dental) Page 6
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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:
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Name:
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Title:
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ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., a national banking
association, as Administrative Agent
By:
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Name:
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Title:
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LENDERS:
BANK OF AMERICA, N.A., a national banking
association,
By:
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Name:
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Title:
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AND RESTATED LOAN AGREEMENT (Monarch Dental) Page 7
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FLEET NATIONAL BANK,
a national banking association
By:
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Name:
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Title:
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COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "Rabobank Nederland",
New York Branch
By:
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Name:
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Title:
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By:
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Name:
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Title:
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AND RESTATED LOAN AGREEMENT (Monarch Dental) Page 8
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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 18th day of October, 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:
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Name:
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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:
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Name:
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Title:
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AND RESTATED LOAN AGREEMENT (Monarch Dental) Page 9
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Monarch Dental Associates, L.P.,
a Texas limited partnership
By: Monarch Dental Management, Inc., a Texas
corporation, its general partner
By:
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Name:
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Title:
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Monarch Dental (Press) Associates, L.P.,
a Texas limited partnership
By: Monarch Dental Management, Inc.,
a Texas corporation, its general partner
By:
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Name:
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Title:
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Monarch Dental Associates (Midland/Odessa),
L.P., a Texas limited partnership
By: Monarch Dental Management, Inc., a Texas
corporation, its general partner
By:
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Name:
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Title:
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Monarch Dental Associates (Abilene), L.P.,
a Texas limited partnership
By: Monarch Dental Management, Inc., a Texas
corporation, its general partner
By:
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Name:
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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:
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Title:
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Partners Dental Corporation,
a Delaware corporation
By:
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Name:
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Title:
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Valley Forge Dental Associates, Inc.,
a Delaware corporation
By:
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Name:
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Title:
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VFD of Pennsylvania, Inc.,
a Delaware corporation
By:
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Name:
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Title:
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Horizon Group International, Inc.,
an Ohio corporation
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:
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Name:
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Title:
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VFD of Pittsburgh, Inc.,
a Pennsylvania corporation
By:
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Name:
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Title:
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Pro Dent, Inc.,
a Pennsylvania corporation
By:
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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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