EXHIBIT 10.65
FIRST 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.,
and
JHCDDS, INC.
as Guarantors,
NATIONSBANK OF TEXAS, N.A.,
as Agent,
and
THE LENDERS SIGNATORY HERETO
Effective as of February 11, 1998
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TABLE OF CONTENTS
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 AMENDMENTS AND SUPPLEMENTS TO ARTICLE VIII .................................3
Section 2.03 AMENDMENTS AND SUPPLEMENTS TO ARTICLE IX....................................3
Section 2.04 AMENDMENTS AND SUPPLEMENTS TO ATTACHMENTS...................................3
ARTICLE III. CONDITIONS
Section 3.01 LOAN DOCUMENTS..............................................................4
Section 3.02 CORPORATE PROCEEDINGS OF LOAN PARTIES.......................................4
Section 3.03 REPRESENTATIONS AND WARRANTIES..............................................4
Section 3.04 NO DEFAULT..................................................................4
Section 3.05 NO CHANGE...................................................................5
Section 3.06 SECURITY INSTRUMENTS........................................................5
Section 3.07 OTHER INSTRUMENTS OR DOCUMENTS..............................................5
ARTICLE IV. MISCELLANEOUS
Section 4.01 ADOPTION, RATIFICATION AND CONFIRMATION OF CREDIT AGREEMENT.................5
Section 4.02 RATIFICATION AND AFFIRMATION OF GUARANTY....................................5
Section 4.03 SUCCESSORS AND ASSIGNS......................................................5
Section 4.04 COUNTERPARTS................................................................5
Section 4.05 NUMBER AND GENDER........................... ...............................5
Section 4.06 ENTIRE AGREEMENT............................................................6
Section 4.07 INVALIDITY..................................................................6
Section 4.08 TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS................................6
Section 4.09 NOTICE INFORMATION..........................................................6
Section 4.10 GOVERNING LAW...............................................................6
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FIRST AMENDMENT TO
CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this "FIRST AMENDMENT")
executed effective as of the 11th day of February, 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, 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 (the "CREDIT AGREEMENT"), pursuant
to which the Lenders agreed to make loans to and extensions of credit on behalf
of Borrower;
WHEREAS, Borrower, among other things, has requested that the Lenders
increase the Revolving Credit Commitment to $42,500,000 and the Lenders have
agreed to such request upon the terms and conditions set forth herein; 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 First Amendment, each
of the terms "BORROWER", "CREDIT AGREEMENT", "EFFECTIVE DATE", "FIRST
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.
Section 1.03 OTHER DEFINITIONAL PROVISIONS.
(a) The words "hereby", "herein", "hereinafter", "hereof",
"hereto" and "hereunder" when used in this First Amendment shall refer
to this First Amendment as a whole and not to any particular Article,
Section, subsection or provision of this First Amendment.
(b) Section, subsection and Exhibit references herein are to
such Sections, subsections and Exhibits to this First 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 and as the same may from time to
time be further amended or supplemented.
"AGGREGATE MAXIMUM REVOLVING CREDIT AMOUNTS" at any time shall
equal the sum of the Maximum Revolving Credit Amounts of the Lenders
($42,500,000), as the same may be reduced pursuant to Section 2.03(b)
or increased pursuant to Section 2.03(d).
(b) Section 1.02 of the Credit Agreement is hereby further
amended and supplemented by adding the following new definition where
alphabetically appropriate, which reads in its entirety as follows:
"FIRST AMENDMENT" shall mean that certain First Amendment to
Credit Agreement dated as of February 11, 1998, by and among the
Borrower, Guarantors, Agent and Lenders.
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Section 2.02 AMENDMENTS AND SUPPLEMENTS TO ARTICLE VIII .
(a) Article VIII is hereby supplemented by adding the
following new Section 8.11:
"Section 8.11 COVENANT TO SWAP INTEREST RATES. The
Borrower hereby covenants and agrees that if, at any time,
Total Funded Debt exceeds $25,000,000, the Borrower shall,
within twenty Business Days after such occurrence, enter into
a Hedging Agreement with one of the Lenders, or with another
party reasonably acceptable to the Majority Lenders, whereby
the Borrower will swap the floating interest rate relating to
the amount of Total Funded Debt exceeding $25,000,000 for a
fixed interest rate on such amount."
Section 2.03 AMENDMENTS AND SUPPLEMENTS TO ARTICLE IX.
(a) Section 9.03(g)(ii) of the Credit Agreement is hereby
amended by deleting the phrase "prior written approval of the Agent" in
the 7th line thereof, and inserting the phrase "prior written approval
of the Majority Lenders" in lieu thereof.
(b) Section 9.15 of the Credit Agreement is hereby amended by
deleting the phrase "Agent" and inserting the phrase "Majority Lenders"
in lieu thereof.
(c) Article IX is hereby supplemented by adding the following
new Section 9.22:
"Section 9.22 RATIO OF TOTAL FUNDED DEBT TO EBITDA.
The Borrower will not permit its ratio of Total Funded Debt to
EBITDA as of the end of any fiscal quarter to be greater than
4.0 to 1.0."
Section 2.04 AMENDMENTS AND SUPPLEMENTS TO ATTACHMENTS.
(a) ANNEX I to the Credit Agreement is hereby replaced with
ANNEX I attached hereto. Accordingly, all references in the Credit
Agreement to ANNEX I shall be deemed to be references to ANNEX I
attached to this First Amendment.
(b) SCHEDULE 7.14 to the Credit Agreement is hereby replaced
with SCHEDULE 7.14 attached hereto. Accordingly, all references in the
Credit Agreement to SCHEDULE 7.14 shall be deemed to be references to
SCHEDULE 7.14 attached to this First Amendment.
ARTICLE III. CONDITIONS
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The enforceability of this First 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 First Amendment, executed and delivered by a duly authorized
officer of the Borrower, Guarantors, Agent, and each Lender, as
applicable;
(b) replacement Notes, duly completed and executed by the
Borrower; and
(c) a favorable written opinion of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
L.L.P., counsel to the Borrower and the Guarantors, 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 the Borrower and the Guarantors, authorizing the execution,
delivery and performance of this First Amendment and the replacement Notes, each
such copy being attached to an original certificate of the Secretary or an
Assistant Secretary of the Borrower or the Guarantors, 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 the respective articles of
incorporation and bylaws of the Borrower and the Guarantors 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 incumbency
and signature of the officers of the Borrower or the Guarantors, as applicable,
executing this First Amendment and the replacement Notes.
Section 3.03 REPRESENTATIONS AND WARRANTIES. Except as affected by the
transactions contemplated in the Credit Agreement and this First 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.
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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 First Amendment,
including the increase in the amount of Aggregate Maximum Revolving Credit
Amounts to $42,500,000, (ii) ratifies and affirms its obligations under its
Guaranty Agreement dated as of November 7, 1997, 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 First 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.
Section 4.04 COUNTERPARTS. This First 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 First Amendment containing a set of counterpart execution
pages reflecting the execution of each party hereto shall be sufficient to
reflect the execution of this First 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
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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 First 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 First Amendment.
Section 4.07 INVALIDITY. In the event that any one or more of the
provisions contained in this First 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 First Amendment.
Section 4.08 TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS. All
titles or headings to Articles, Sections, subsections or other divisions of this
First 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 NOTICE INFORMATION. The information for notices and other
communications pursuant to Section 12.02 of the Credit Agreement for each of
Bank Boston, N.A. and AmSouth Bank is specified below its name on the signature
pages hereof.
Section 4.10 GOVERNING LAW. This First 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 FIRST 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.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this First 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:
JHCDDS, INC.
By:
Name:
Title:
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LENDER AND AGENT: NATIONSBANK OF TEXAS, N.A.
By:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President
LENDERS: THE SUMITOMO BANK, LIMITED
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
By:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President & Manager
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BANKBOSTON, N.A.
By:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Lending Office for Base Rate Loans and Eurodollar Loans:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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AMSOUTH BANK
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Assistant Vice President
Lending Office for Base Rate Loans and Eurodollar Loans:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ North, SONAT -7th Floor
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇.▇. ▇▇▇ ▇▇▇▇▇
1900 Fifth Avenue North, SONAT -7th Floor
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
S-4
ANNEX I
MAXIMUM REVOLVING CREDIT AMOUNTS AND TERM LOANS
MAXIMUM REVOLVING
NAME OF LENDER PERCENTAGE SHARE CREDIT AMOUNT TERM LOAN
---------------------------------- ---------------- ----------------- -----------
NationsBank of Texas, N.A ........ 35.29% $ 15,000,000 $ 1,058,700
The Sumitomo Bank, Limited ....... 23.53% $ 10,000,000 $ 705,900
BankBoston, N.A .................. 23.53% $ 10,000,000 $ 705,900
AmSouth Bank ..................... 17.65% $ 7,500,000 $ 529,500
================ ================= ===========
Total ................ 100.00% $ 42,500,000 $ 3,000,000
Annex I-1
SCHEDULE 7.14
Subsidiaries and their principal place of business
and chief executive office
Castle Dental Centers of Florida, Inc.
c/o/ Castle Dental Centers, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Castle Dental Centers of Tennessee, Inc.
c/o/ Castle Dental Centers, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Castle Dental Centers of Texas, Inc.
c/o/ Castle Dental Centers, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
JHCDDS, Inc.
c/o/ Castle Dental Centers, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Annex I-2