Exhibit 4.1.12
AMENDMENT NO. 10 TO CREDIT AGREEMENT
(1999 Credit Agreement)
This AMENDMENT NO. 10 TO CREDIT AGREEMENT, effective as of March 31,
2003 (this "Agreement"), is entered into by and among INTERDENT SERVICE
CORPORATION, a Washington corporation (the "Borrower"), INTERDENT, INC., a
Delaware corporation (the "Guarantor"), the Administrative Agent (as hereinafter
defined), the Syndication Agent (as hereinafter defined) and the Lenders (as
hereinafter defined).
RECITALS
A. Reference is hereby made to that certain Amended and Restated Credit
Agreement dated as of June 15, 1999 (as heretofore amended and as may be further
amended, modified or supplemented from time to time the "Credit Agreement"),
among the Borrower, the Guarantor, the financial institutions from time to time
party thereto (collectively, the "Lenders"), BNY Asset Solutions LLC, successor
to Union Bank of California, N.A., as administrative agent for the Lenders (in
such capacity, the "Administrative Agent"), and JPMorgan Chase Bank, formerly
known as The Chase Manhattan Bank, as syndication agent for the Lenders (in such
capacity, the "Syndication Agent").
B. The Borrower has requested that the Lenders modify the principal
payment due on April 1, 2003 under the Credit Agreement.
C. The Lenders have agreed to the modification requested by the
Borrower on the terms and subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, the Borrower, the Guarantor, the Lenders and Agents
hereby agree as follows:
SECTION 1. DEFINED TERMS. Capitalized terms used herein and not defined shall
have the respective meanings assigned to such terms in the Credit Agreement.
SECTION 2. AMENDMENT OF CREDIT AGREEMENT.
2.1 Section 1 of the Credit Agreement shall be amended to include the definition
of "Existing Key Employee Retention Program" and shall read as follows:
"Existing Key Employee Retention Program" shall mean the 2003
Senior Management Retention Plan adopted by the Borrower on
December 6, 2002.
2.2 The definition of "Interest Margin" set forth in Section 1 of the Credit
Agreement shall be amended and restated to read in its entirety as follows:
"Interest Margin" shall mean, effective on the Eighth
Amendment Date, with respect to any Eurodollar Loan, 7.50% or,
with respect to any Alternative Base Loan, 5.75% plus in each
case the PIK Interest Rate. Notwithstanding the foregoing, (a)
effective on October 1, 2002, each of the foregoing Interest
Margins shall be increased by 1.00%, and (b) effective during
the period April 1, 2003, to and including April 30, 2003,
each of the foregoing Interest Margins shall be further
increased by 2.00%.
2.3 Section 1 of the Credit Agreement shall be amended to include the definition
of "Tenth Amendment Date" and shall read as follows:
"Tenth Amendment Date" shall mean April 1, 2003.
2.4 Section 1 of the Credit Agreement shall be amended to include the definition
of "Tenth Amendment Seller Payment Amount" and shall read as follows:
"Tenth Amendment Seller Payment Amount" shall mean an amount
not to exceed $600,000 in the aggregate.
2.5 Section 1 of the Credit Agreement shall be amended to include the definition
of "Tenth Amendment Side Letter" and shall read as follows:
"Tenth Amendment Side Letter" shall mean that certain letter
agreement, dated as of March 31, 2003, by the Borrower and the
Guarantor in favor of the Agents and each of the Lenders in
the form and substance of which is to be acceptable to the
Lenders in their sole and absolute discretion.
2.6 Section 2.02(c) of the Credit Agreement shall be amended by adding at the
end of the first sentence of such Section "provided, that, effective as of the
Tenth Amendment Date, no additional Eurodollar Loans shall be made or issued,
and the Borrower's sole option thereafter shall be to receive Alternate Base
Loans."
2.7 Section 2.02(e) of the Credit Agreement shall be amended to add a new
paragraph at the end of such Section, which shall read as follows:
Notwithstanding the preceding provisions of this Section
2.02(e), or anything in this Agreement or the other Loan Documents to
the contrary, as of the Tenth Amendment Date, the Borrower shall no
longer have the right to (x) convert all or any portion of any
Eurodollar Loan into an Alternate Base Loan, (y) convert the Interest
Period with respect to all or any portion of any Eurodollar Loan to any
other Interest Period, or (z) continue all or any portion of any
Eurodollar Loans into a subsequent Interest Period. As of the last day
of each Interest Period applicable to any Eurodollar Loan which is
outstanding as of the Tenth Amendment Date, such Eurodollar Loan shall
automatically be converted into an Alternate Base Loan without any
further act or conduct on the part of Borrower.
2.8 The first sentence of Section 2.04(c) of the Credit Agreement shall be
amended by adding at the end of such sentence: "provided, that the quarterly
installment which would otherwise be payable on the first Business Day of April
2003 shall be payable on the dates and in the amounts set forth below."
2.9 The payment specified to be made on April 1, 2003 in Section 2.04(c) of the
Credit Agreement in the amount of $6,428,571.42 is hereby deleted, and the
following is inserted in lieu thereof:
April 1, 2003 $445,544.55
April 30, 2003 $5,983,026.87
2.10 Section 6.05(m) of the Credit Agreement shall be amended and restated to
read in its entirety as follows:
every week, commencing with the week beginning March 31, 2003,
by the close of business on Wednesday of such week (i) the status of
and plans for negotiations of deferments of Earnout Arrangements and
Seller Notes, including a narrative report describing the steps taken
and to be taken to comply with Section 6.17 and (ii) the status of and
plans for any sales of assets and New Capital Transactions;
2.11 Section 6.05(o) of the Credit Agreement shall be amended and restated to
read in its entirety as follows:
every week, commencing with the week beginning March 31, 2003,
by the close of business on Wednesday of such week, a written report
regarding the progress with respect to restructuring discussions
conducted by the Borrowers or their financial advisors; and
2.12 Section 6.05 of the Credit Agreement shall be amended to add a new
sub-section (p) which shall read as follows:
SECTION 6.05(p) the written reports and other information in
accordance with the Tenth Amendment Side Letter.
2.13 Section 7.17(a) of the Credit Agreement shall be amended and restated to
read in its entirety as follows:
SECTION 7.17 Payment, Prepayment or Modification of
Indebtedness; Modification of Charter Documents, etc. (a) Make any cash
payment(s) or remit other consideration, directly or indirectly, in
respect of any Subordinated Indebtedness, other than payments in
respect of Seller Notes and Earnout Arrangements in an aggregate amount
not to exceed the Tenth Amendment Seller Payment Amount, or directly or
indirectly prepay, redeem, purchase or retire any Indebtedness,
including, without limitation, any Subordinated Indebtedness, other
than Indebtedness incurred hereunder and under the 2000 Credit
Agreement on a pro rata basis, provided the Convertible Subordinated
Notes may be retired upon conversion thereof, in accordance with their
terms
2.14 The Credit Agreement shall be amended to add a new Section 7.21, which
shall read as follows:
SECTION 7.21 Payments to Potential Investors. During the
period of April 1, 2003, to and including April 30, 2003, pay any deal
fee, break-up fee, or other fee or compensation of any kind on behalf
of any Loan Party to, or for the benefit of, any person investing, or
considering or committing to invest, in any Loan Party including, but
not limited to, Xxxxxxx X. Xxxxx Investments, LLC, CAI Capital Partners
I, L.P. and CAI Capital Partners II, L.P., in each case without the
express prior written consent of the Required Lenders.
2.15 The Credit Agreement shall be amended to add a new Section 7.22, which
shall read as follows:
SECTION 7.22 Stay or Retention Bonuses to Employees and
Affiliated Dental Practices. Pay or agree to pay any "stay" or
"retention bonus" or other cash compensation of any kind on behalf of
any Loan Party to, or for the benefit of, any employee of any Loan
Party or any Affiliated Dental Practice (including any employee of any
Affiliated Dental Practice), in each case in excess of amounts owed to
such parties as of the date hereof in the ordinary course of such Loan
Party's business, for the purpose of inducing any such employee or
Affiliated Dental Practice (including the employees thereof) to remain
with any Loan Party either as an employee or, in the case of the
Affiliated Dental Practices (including the employees thereof) in
accordance with the terms set forth in, or as otherwise contemplated in
connection with, the Management Agreements, in each such case without
the express prior written consent of the Required Lenders; provided,
however, that nothing in this Section 7.22 prohibits, or should be
construed as prohibiting, the Borrower or any of its subsidiaries from
making any and all payments in accordance with the terms of the
Existing Key Employee Retention Plan as, and when, such payment
obligations become due and owing, but not including any prepayment of
any obligation under the Existing Key Employee Retention Plan.
2.16 Article VIII, Section (d) of the Credit Agreement shall be amended by
adding at the end of the first sentence of such Section "provided, however, that
during the period of April 1, 2003, to and including April 30, 2003, the failure
by any Loan Party to observe or perform any obligation (i) to file any annual,
periodic or other report with the Securities and Exchange Commission pursuant to
the requirements of the Securities Act of 1933 or the Securities Exchange Act of
1934 or (ii) under Section 6.05(a) of this Agreement shall not constitute an
Event of Default;"
2.17 Section 11.04(a) of the Credit Agreement shall be amended and restated to
read in its entirety as follows:
The Borrower agrees to pay all reasonable out-of-pocket
expenses incurred by the Agents in connection with the preparation of
the Credit Agreement and the other Loan Documents (whether or not the
transactions hereby contemplated shall be consummated) or incurred by
either of the Agents and any of the Lenders in connection with any
amendments, modifications, waivers, extensions, renewals,
renegotiations or "workouts" or the enforcement or protection of its
rights in connection with the Credit Agreement or any of the other Loan
Documents or with the Loans made or the Notes issued thereunder, or in
connection with any pending or threatened action, proceeding, or
investigation relating to any of the foregoing, including, but not
limited to, the reasonable fees and disbursements of counsel and other
professional advisors (including, but not limited to, financial
advisors) for each of the Agents and each of the Lenders arising out
of, in connection with or otherwise relating to any of the foregoing
matters referred to in this Section 11.04(a), ongoing field examination
expenses and any and all other charges, expenses and costs of the
Agents or any of the Lenders reasonably related to the foregoing. The
Borrower further indemnifies the Agents and Lenders from and agrees to
hold them harmless against any documentary taxes, assessments or
charges made by any governmental authority by reason of the execution
and delivery of this Agreement or the Notes. Without limiting the
generality of the foregoing, the Borrower agrees to pay the reasonable
fees and expenses of (i) O'Melveny & Xxxxx LLP, as former counsel to
the Lenders; (ii) Xxxx Xxxxxxx LLP, as counsel to the Administrative
Agent, (iii) Xxxxxx & Xxxxxxx LLP, both as former counsel to the
Lenders and as counsel to JPMorgan Chase Bank, formerly known as The
Chase Manhattan Bank, U.S. Bank National Association, and Fleet Capital
Corporation, (iv) Pachulski, Stang, Ziehl, Young, Xxxxx & Xxxxxxxxx,
P.C., as counsel for Pleasant Street Investors, LLC, (v) Xxxxxxx,
Xxxxxxxx & Xxxxx, P.C., as counsel for B IV Capital Partners, L.P., B
III-A Capital Partners, L.P. and State Street Bank & Trust in its
capacity as Custodian for General Motors Employees Global Pension
Trust, as a Lender (as directed by DDJ Capital Management, LLC, the
"DDJ Capital Entities") and (vi) FTI Consulting, Inc., as financial
advisor to the Lenders or in any subsequent capacity as an advisor to
any, or certain, of the Lenders, in each case in arising out of, in
connection with or otherwise relating to any of the matters referred to
in this Section 11.04 undertaken at the request of the Agents or any of
the Lenders, in each case as and to the extent applicable.
SECTION 3. CONDITIONS PRECEDENT. This Agreement shall become effective upon (i)
the execution and delivery of counterparts hereof by the Borrower, the
Guarantor, each Lender and the Agents, (ii) the execution and delivery of
counterparts of the Amendment No. 7 to the 2000 Credit Agreement, dated of even
date herewith, by the Borrower, the Guarantor, each Lender (as that term is
defined in the 2000 Credit Agreement) and the Agents under the 2000 Credit
Agreement (iii) the execution and delivery of counterparts of the Release
(defined in Section 5 of this Agreement) by the Borrower and Guarantor, (iv) the
execution and delivery of counterparts of the Tenth Amendment Side Letter by the
Borrower and the Guarantor and (v) receipt by the Administrative Agent of the
principal payment required to be made hereunder and under the 2000 Credit
Agreement (as amended by Amendment No. 7) on April 1, 2003, which in the
aggregate total $500,000.00.
SECTION 4. CONFIRMATION OF LOAN DOCUMENTS. Each of the Borrower and Guarantor,
by its execution and delivery of this Agreement, irrevocably and unconditionally
confirms in favor of the Agents and each of the Lenders that each Loan Document
to which it is a party shall continue in full force and effect in accordance
with its terms and is and shall continue to be applicable to all of the
Obligations, except as expressly modified hereby.
SECTION 5. RELEASE. In order to induce the Agents and each of the Lenders to
enter into this Agreement, the Borrower and the Guarantor agree to execute the
release in the form attached hereto as Schedule "5" (the "Release").
SECTION 6. MISCELLANEOUS.
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In order to further induce the Agents and each of the Lenders
to enter into this Agreement, each of the Borrower and the Guarantor, by its
execution of a counterpart of this Agreement, reaffirms and restates the
representations and warranties set forth in Article IV of the Credit Agreement
and by such reaffirmation and restatement represents and warrants that all such
representations and warranties are and shall be true and correct in all material
respects on and as of the date hereof (except insofar as such representations
and warranties relate expressly to an earlier date).
6.1 To further induce the Agents and each of the Lenders to enter into this
Agreement, each of the Borrower and Guarantor, by its execution of a counterpart
of this Agreement, represents and warrants (which representations and warranties
shall survive the execution and delivery hereof) to the Agents and each of the
Lenders that:
(a) It has the corporate power and authority to execute, deliver and carry
out the terms and provisions of this Agreement and the transactions
contemplated hereby and has taken or caused to be taken all necessary
corporate action to authorize the execution, delivery and performance
of this Agreement and the transactions contemplated hereby;
(b) No consent of any other person (including, without limitation,
stockholders or creditors of the Borrower or the Guarantor), and no
action of, or filing with any governmental or public body or authority
is required to authorize, or is otherwise required in connection with
the execution, delivery and performance of this Agreement;
(c) This Agreement has been duly executed and delivered on behalf of each
of the Borrower and the Guarantor by a duly authorized officer,
respectively, and constitutes a legal, valid and binding obligation of
the Borrower and the Guarantor enforceable in accordance with its
terms, subject to bankruptcy, reorganization, insolvency, moratorium
and other similar laws affecting the enforcement of creditors' rights
generally and the exercise of judicial discretion in accordance with
general principles of equity;
(d) The execution, delivery and performance of this Agreement will not
violate any law, statute or regulation, or any order or decree of any
court or governmental instrumentality, or conflict with, or result in
the breach of, or constitute a default under any contractual obligation
of the Borrower or the Guarantor;
(e) There exists no Default or Event of Default;
(f) As of March 28, 2003, the Borrower has made Seller/Earnout Payments in
the aggregate amount of $7,742,608; and
(g) No Loan Party is in default, and no event of default has occurred,
under any contract, agreement, license, lease, commitment or
arrangement which results, would result or is reasonably likely to
result, in a Material Adverse Effect.
6.2 Except as herein expressly amended, the Credit Agreement is ratified and
confirmed in all respects and shall remain in full force and effect in
accordance with its terms, including, without limitation, the provisions set
forth in Section 11.04 of the Credit Agreement.
6.3 All references to the Credit Agreement contained in the Credit Agreement and
the other Loan Documents and the other documents and instruments delivered
pursuant to or in connection therewith shall mean the Credit Agreement, as may
in the future be amended, restated, supplemented or modified from time to time.
6.4 This Agreement may be executed by the parties hereto individually or in
combination, in one or more counterparts, each of which shall be an original and
all of which shall constitute one and the same agreement.
6.5 Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement, provided however that the foregoing does not excuse the duty of
each party to deliver a manually executed counterpart of a signature page to
this Agreement.
6.6 THIS AGREEMENT CONSENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CHOICE
OR CONFLICT OF LAW PRINCIPLES THEREOF.
6.7 The parties hereto shall, at any time and from time to time following the
execution of this Agreement, execute and deliver all such further instruments,
including amendments to other Loan Documents, and take all such further actions
as may be reasonably necessary or appropriate in order to carry out the
provisions of this Agreement.
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IN WITNESS WHEREOF, the Borrower, Guarantor, the Agents, and the
Lenders have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
INTERDENT SERVICE CORPORATION, as the Borrower
By: /s/ XXXXXX XXXX
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Name: Xxxxxx Xxxx
Title: President
INTERDENT, INC., as the Guarantor
By: /s/ XXXXXX XXXX
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Name: Xxxxxx Xxxx
Title: Vice President
Lenders and Agents: BNY ASSET SOLUTIONS LLC, as Administrative Agent
By: /s/ XXXXXXX XXXXXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Managing Director
U.S. BANK NATIONAL ASSOCIATION, as a Lender
By: /s/ XXXXXX X. XXXXXXX
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President
FLEET CAPITAL CORPORATION, as a Lender
By: /s/ XXXX XXXXXXXXXXXX
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Name: Xxxx Xxxxxxxxxxxx
Title: Vice President
JPMORGAN CHASE BANK, formerly known as THE CHASE
MANHATTAN BANK, as Syndication Agent and as a Lender
By: /s/ XXXXXX X. XXXX
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Name: Xxxxxx X. Xxxx
Title: Vice President
B III-A CAPITAL PARTNERS, L.P.
By: GP Capital III-A, LLC, its General Partner
By: DDJ Capital Management, LLC, Manager, as a Lender
By: /s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
Title: Member
B IV CAPITAL PARTNERS, L.P.
By: GP Capital IV, LLC, its General Partner
By: DDJ Capital Management, LLC, Manager, as a Lender
By: /s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
Title: Member
STATE STREET BANK & TRUST, solely in its capacity as
Custodian for General Motors Employees Global Group
Pension Trust as directed by DDJ Capital Management,
LLC, and not in its individual capacity, as a Lender
By: /s/ XXXXXX XXXXX
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Name: Xxxxxx Xxxxx
Title: AVP
PLEASANT STREET INVESTORS, LLC, as a Lender
By: /s/ XXXXXX XXXXXXX
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Name: Xxxxxx Xxxxxxx
Title:
