--------------------------------------------------------------------------------

EXHIBIT 10.1
 
FIRST AMENDMENT TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT

THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this "First
Amendment"), executed as of June 28, 2013, is by and between BIRNER DENTAL
MANAGEMENT SERVICES, INC., a Colorado corporation ("Borrower"), and KEYBANK
NATIONAL ASSOCIATION, a national banking association ("Lender").
 
R E C I T A L S

A.            Borrower and Lender are parties to a Third Amended and Restated
Credit Agreement, dated as of June 29, 2012 (the "Credit Agreement").

B.            Borrower desires to modify certain terms and conditions of the
Credit Agreement, and Lender is willing to agree to the modifications contained
in this First Amendment, on the terms and conditions set forth herein.

C.            Capitalized terms used in this First Amendment and not defined
herein shall have the meanings assigned to those terms in the Credit Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties hereto covenant and agree as follows:

1.            AMENDMENTS TO CREDIT AGREEMENT.  The Credit Agreement is hereby
amended as follows:
 
   (a)         Addition of First Amendment.

(1)            The following definition of "First Amendment" shall be added to
Section 1.1 of the Credit Agreement and shall read in its entirety as follows:
 
"First Amendment" shall mean the First Amendment to this Agreement, dated as of
June 28, 2013.
 
(2) The following definition of "First Amendment Closing Date" shall be added to
Section 1.1 of the Credit Agreement and shall read in its entirety as follows:

"First Amendment Closing Date" shall mean June 28, 2013.

(b)            Extension and Decrease of Revolving Credit.

(1)            The definition of "Revolving Credit Maturity Date" contained in
Section 1.1 of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:

--------------------------------------------------------------------------------

"Revolving Credit Maturity Date" shall mean June 30, 2015.

(2)            The definition of "Revolving Maximum Amount" contained in Section
1.1 of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
 
"Revolving Maximum Amount" shall mean $5,000,000.

(c)            Revision of Definition of Total Fixed Charges.  The definition of
"Total Fixed Charges" contained in Section 1.1 of the Credit Agreement is hereby
amended and restated to read in its entirety as follows:

“Total Fixed Charges” for any period shall mean the sum of interest expense,
plus lease expense, plus scheduled principal payments on amortizing debt
(including the principal payment component of capital leases), plus Unfinanced
Capital Expenditures, in each case for such period; provided, however, that for
the periods indicated in the table below, the Unfinanced Capital Expenditures
incurred in the period(s) opposite to such date shall not be included in the
calculation of “Total Fixed Charges”:

Period
Unfinanced Capital Expenditures Period
 
 
Twelve months ending June 30, 2013
Three months ending September 30, 2012, and three months ending June 30, 2013
Twelve months ending September 30, 2013
Three months ending June 30, 2013, and three months ending September 30, 2013
Twelve months ending December 31, 2013
Three months ending June 30, 2013, three months ending September 30, 2013, and
three months ending December 31, 2013
Twelve months ending March 31, 2014
Three months ending June 30, 2013, three months ending September 30, 2013, and
three months ending December 31, 2013
Twelve months ending June 30, 2014
Three months ending September 30, 2013, and three months ending December 31,
2013
Twelve months ending September 30, 2014
Three months ending December 31, 2013
Twelve months ending December 31, 2014 and twelve months ending each fiscal
quarter thereafter
None

(d)            Modification of Term Loan.
2

--------------------------------------------------------------------------------

(1)            The definition of "Term Loan Maturity Date" contained in Section
1.1 of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:

"Term Loan Maturity Date" shall mean September 30, 2017.

            (2)            The definition of "Term Note" contained in Section
1.1 of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:

“Term Loan Note” shall mean the Amended and Restated Term Loan Note of the
Borrower evidencing the Term Loan, in substantially the form of Exhibit A to the
First Amendment.

(3)            Section 2.1(b) of the Credit Agreement shall be deleted in its
entirety and replaced with the following:

"Term Loan.  On June 29, 2012, Lender made an advance to Borrower in the amount
of $2,000,000, and as of the First Amendment Closing Date, the outstanding
balance of such advance was $1,700,000. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, Lender agrees
to make an additional advance in the amount of up to $2,000,000 (the “Term
Loan”) to the Borrower on the First Amendment Closing Date, resulting in an
outstanding principal balance of the Term Loan of $3,700,000 immediately
following the First Amendment Closing Date. The Borrower shall use the proceeds
of such advance only to repay a portion of the balance of the Revolving Loans."

(4)            Section 2.4(c) of the Credit Agreement shall be deleted in its
entirety and replaced with the following:

"Repayment of Term Loan.  The principal balance of the Term Loan Note shall be
repayable as follows:

(1)            An amount equal to $100,000 shall be due and payable on June 30,
2013;

(2)            In equal quarterly installments of $225,000 each, which
installments shall be due beginning on September 30, 2013, and on the last day
of each quarter thereafter; and

(3)            Upon the Term Loan Maturity Date or upon the earlier termination
of this Agreement, the entire outstanding principal balance of the Term Loan
Note, together with all accrued but unpaid interest thereon and all other sums
due hereunder, shall be due and payable in full."

(e)            Modification of Total Fixed Charge Covenant Ratio.  Section 6.11
of the Credit Agreement shall be deleted in its entirety and replaced with the
following:
3

--------------------------------------------------------------------------------

"Borrower shall not permit the ratio of Operating Cash Flow to Total Fixed
Charges, calculated for any period set forth in the table below, to be less than
the ratio set forth opposite such date:
 

 
Period
Minimum Operating Cash
Flow to Total Fixed Charges
 
Twelve months ending June 30, 2013
1.10 to 1.00
Twelve months ending September 30, 2013
1.10 to 1.00
Twelve months ending December 31, 2013
1.25 to 1.00
Twelve months ending March 31, 2014
1.05 to 1.00
Twelve months ending June 30, 2014
1.05 to 1.00
Twelve months ending September 30, 2014
1.05 to 1.00
Twelve months ending December 31, 2014 and twelve months ending each fiscal
quarter thereafter"
1.05 to 1.00

(f)            Addition of Unfinanced Capital Expenditure Covenant.  A new
Section 6.13 shall be added to the Credit Agreement to read in its entirety as
follows:

"Unfinanced Capital Expenditures. Borrower shall not permit the cumulative
amount of Unfinanced Capital Expenditures for the nine-month period ending
December 31, 2013 to exceed $3,124,000.”

(g)            Compliance Certificate.

(1)            The Compliance Certificate attached to the Credit Agreement as
Exhibit D is hereby deleted and replaced in its entirety by the Compliance
Certificate attached to this First Amendment as Exhibit B.

(2)            Section 5.4(c) of the Credit Agreement shall be deleted in its
entirety and replaced with the following:

"(c)  within 45 days after each calendar month, and concurrently with any
delivery of the quarterly or year-end financial statements under (a) or (b)
above, a certificate (substantially in the form attached hereto as Exhibit B) of
the Financial Officer opining on or certifying as follows: (i) that no Event of
Default or Default has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto and (ii) setting forth
computations in reasonable detail satisfactory to the Lender demonstrating
compliance with the covenants specified therein, for the time periods specified
therein;"

(h)            Notice Address.

(2)            Section 8.1(b) of the Credit Agreement shall be deleted in its
entirety and replaced with the following:
4

--------------------------------------------------------------------------------

"(b)            if to the Lender, to it at 1675 Broadway, Suite 300, Denver,
Colorado  80202, Attention of Timothy Ulrich, Telecopy No. 720-904-4515, with a
copy to Mark Oveson, Brownstein Hyatt Farber Schreck, LLP, 410 17th  Street,
22nd Floor, Denver, Colorado 80202, Telecopy No. 303-223-1111."
 
2.            LOAN DOCUMENT AMENDMENTS.  Each of the other Loan Documents is
hereby amended to conform to the amendments to the Credit Agreement as set forth
in Paragraph 1.

3.            DOCUMENT RATIFICATION.  Subject to the amendments set forth in
Paragraph 1 above, all of the terms and conditions contained in the Credit
Agreement and the other Loan Documents shall remain unmodified and in full force
and effect.

4.            RELEASE.  The execution of this First Amendment by Lender does not
and shall not constitute a waiver of any rights or remedies to which Lender is
entitled pursuant to the Credit Agreement or the other Loan Documents, nor shall
the same constitute a waiver of any default now existing or which may occur in
the future with respect to the Credit Agreement or the other Loan Documents.
 Borrower hereby agrees that Lender has fully performed its obligations pursuant
to the Credit Agreement and the other Loan Documents through the date hereof and
hereby waives, releases and relinquishes any and all claims whatsoever, known or
unknown, that it may have against Lender with respect to the Credit Agreement or
the other Loan Documents through the date hereof.

5.            PAYMENT OF COSTS AND FEES. Borrower shall pay all out-of-pocket
expenses incurred by Lender in connection with the preparation of this First
Amendment, including, without limitation, reasonable attorneys' fees.

6.            CONDITIONS PRECEDENT.  Notwithstanding anything to the contrary
set forth herein, the terms and provisions of this First Amendment shall not be
effective unless and until all of the following shall have occurred:

(a)            Borrower shall have executed and delivered to Lender this First
Amendment, and such other documents, instruments, resolutions and other items as
may be required by Lender, in form satisfactory to Lender.

(b)            Borrower shall have executed and delivered to Lender the Amended
and Restated Term Loan Note, in substantially the form of Exhibit A to this
First Amendment.

(c)            Borrower shall have paid to Lender a fully earned, non-refundable
fee of $17,500 to induce Lender to enter into this First Amendment.

7.            REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER.  Borrower
represents, warrants and covenants to Lender:

(a)            No default or event of default under any of the Loan Documents as
modified herein, nor any event, that, with the giving of notice or the passage
of time or both, would be a default or an event of default under the Loan
Documents as modified herein has occurred and is continuing.
5

--------------------------------------------------------------------------------

(b)            There has been no material adverse change in the financial
condition of Borrower or any other person whose financial statement has been
delivered to Lender in connection with the Loan from the most recent financial
statement received by Lender.

(c)            Each and all representations and warranties of Borrower in the
Loan Documents are accurate on the date hereof.

(d)            Borrower has no claims, counterclaims, defenses, or set-offs with
respect to the Loan or the Loan Documents as modified herein.

(e)            The Loan Documents as modified herein are the legal, valid, and
binding obligation of Borrower, enforceable against Borrower in accordance with
their terms.

(f)            Borrower shall execute, deliver, and provide to Lender such
additional agreements, documents, and instruments as reasonably required by
Lender to effectuate the intent of this First Amendment.

8.             CONTROLLING LAW.  The terms and provisions of this First
Amendment shall be construed in accordance with and governed by the laws of the
State of Colorado.

 
9.              BINDING EFFECT.  This First Amendment shall be binding upon and
inure to the benefit of the parties hereto, their successors and assigns.

10.           CAPTIONS.  The paragraph captions utilized herein are in no way
intended to interpret or limit the terms and conditions hereof, rather, they are
intended for purposes of convenience only.

11.           COUNTERPARTS.  This First Amendment may be executed in any number
of counterparts, each of which shall be effective only upon delivery and
thereafter shall be deemed an original, and all of which shall be taken to be
one and the same instrument, for the same effect as if all parties hereto had
signed the same signature page.  Any signature page of this First Amendment may
be detached from any counterpart of this First Amendment without impairing the
legal effect of any signatures thereon and may be attached to another
counterpart of this First Amendment identical in form hereto but having attached
to it one or more additional signature pages.

[Signatures appear on following page]
6

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment as of
the day and year first above written.

 
BORROWER:
 
 
 
 
 
 
BIRNER DENTAL MANAGEMENT SERVICES, INC., a Colorado corporation
 
 
 
 
 
 
By:
 
 
 
 
Dennis Genty, Chief Financial Officer
 
 
 
 
 
 
LENDER:
 
 
 
 
 
KEYBANK NATIONAL ASSOCIATION,
 
 
a national banking association
 
 
 
 
 
 
By:
 
 
 
Name:
 
 
Title:
 

SIGNATURE PAGE TO FIRST AMENDMENT TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
7

--------------------------------------------------------------------------------

Exhibit A

Amended and Restated Term Loan Note

(attached)

8

--------------------------------------------------------------------------------

AMENDED AND RESTATED TERM LOAN NOTE

$3,700,000
Denver, Colorado
 
June 28, 2013

 
FOR VALUE RECEIVED, the undersigned, BIRNER DENTAL MANAGEMENT SERVICES, INC., a
Colorado corporation ("Borrower"), whose address is 1777 South Harrison Street,
Suite 1400, Denver, Colorado 80210, promises to pay to the order of KEYBANK
NATIONAL ASSOCIATION ("Lender"), at its office at 1675 Broadway, Suite 300,
Denver, Colorado 80202 (or at such other place as Lender shall designate in
writing), in lawful money of the United States of America, the principal sum of
Three Million Seven Hundred Thousand Dollars ($3,700,000) or so much thereof as
may be advanced by Lender and remain unpaid from time to time, pursuant to the
terms of that certain Third Amended and Restated Credit Agreement dated June 29,
2012, to which the Borrower and Lender are parties (as the same may from time to
time be amended or supplemented, the "Credit Agreement"), together with interest
on said principal sum or such part thereof advanced by Lender, from the date of
each advance made by Lender (an "Advance") until repaid in full, at the rate and
at the times set forth in the Credit Agreement.

1.             Credit Agreement.  This Note (the "Note") is the Term Loan Note
referred to in the Credit Agreement and is entitled to the benefits thereof.
 The proceeds of this Note have been advanced for the uses specified in the
Credit Agreement.  Capitalized terms used herein, unless otherwise defined
herein, shall have the meanings given them in the Credit Agreement.

2.             Interest and Payments.  The outstanding principal balance of this
Note shall bear interest, from the date of each Advance made by Lender until
repaid in full, at the rate specified in the Credit Agreement, which interest
shall be due and payable, in arrears, as provided in the Credit Agreement.
 Principal payments shall be due and payable as provided in the Credit
Agreement.  Upon the Term Loan Maturity Date or upon the earlier termination of
the Credit Agreement, the entire outstanding principal balance of this Note,
together with all accrued but unpaid interest thereon and all other sums due
hereunder, shall be due and payable in full.  The Borrower shall have the right
to prepay the outstanding principal balance of this Note, together with all
accrued but unpaid interest thereon and all other sums due hereunder, in full or
in part, as set forth in the Credit Agreement.  All payments of principal,
interest and any other sums on this Note due from the Borrower to Lender shall
be made to Lender in lawful money of the United States of America in the manner
set forth in the Credit Agreement.

3.             Application of Proceeds.  All payments hereunder by Borrower
shall be applied by Lender:

First, to the payment of all reimbursable expenses, liabilities and advances
made or incurred by Lender in connection herewith including reasonable attorneys
fees incurred in connection with any enforcement action taken with respect to
this Note;

Second, to the payment of any other amounts due (other than principal and
interest) under this Note or the Credit Agreement;
9

--------------------------------------------------------------------------------

Third, to the payment of all interest accrued and unpaid on the outstanding
indebtedness; and

Fourth, to the payment of the outstanding principal balance of the outstanding
indebtedness.

4.             Default.  Time is of the essence hereof.  The occurrence of any
Event of Default under the Credit Agreement shall be a default hereunder and,
upon the occurrence of any such default, the payment of all principal, interest
and any other sums due in accordance with the terms of this Note shall, at the
option of Lender, be accelerated and such principal, interest and other sums
shall be immediately due and payable without notice or demand, and Lender shall
have the option to foreclose or to require foreclosure of any or all liens and
security interests securing the payment hereof and/or to exercise any other
rights and remedies available to Lender hereunder or under the Credit Agreement.
 From and after an Event of Default, the outstanding principal balance shall
accrue interest at the Default Rate.

5.             Governing Law.  As additional consideration for the extension of
credit, Borrower understands and agrees that the loan evidenced by this Note is
made in the State of Colorado and the provisions hereof will be construed in
accordance with the laws of the State of Colorado.  The parties consent to the
personal jurisdiction of the courts and the venue specified in the Credit
Agreement.

6.             Maximum Interest.  The provisions of this Note are hereby
expressly limited so that in no event whatsoever, whether by reason of demand or
acceleration of the maturity of this Note or otherwise, shall the amount paid,
or agreed to be paid ("Interest"), to Lender for the use, forbearance or
retention of the money loaned hereunder exceed the maximum amount permissible
under applicable law.  If, from any circumstance whatsoever, performance or
fulfillment of any provision of this Note shall, at the time of performance or
fulfillment of such provision shall be due, exceed the limit for Interest
prescribed by law, then ipso facto the obligation to be performed or fulfilled
shall be reduced to such limit and if, from any circumstance whatsoever, Lender
shall ever receive anything of value deemed Interest by applicable law in excess
of the maximum lawful amount, an amount equal to any excessive Interest shall be
applied to the reduction of the principal (whether or not then due) or at the
option of Lender be paid over to the Borrower, and not to the payment of
Interest.

7.             Miscellaneous Provisions.

(a)            The Borrower hereby waives demand for payment, presentment for
payment, protest, notice of protest, notice of dishonor, notice of nonpayment,
notice of acceleration of maturity, diligence in taking any action to collect
sums owing hereunder and all duty or obligation of Lender to effect, protect,
perfect, retain or enforce any security for the payment of this Note or to
proceed against any collateral before otherwise enforcing this Note.

(b)            This Note and each payment of principal and interest hereunder
shall be paid when due without deduction or setoff of any kind or nature or for
any costs whatsoever.
10

--------------------------------------------------------------------------------

(c)            The Borrower agrees to reimburse Lender upon demand for all
reasonable out-of-pocket expenses, including, without limitation, reasonable
attorneys' fees and costs, incurred in connection with Lender's collection of
payments due from Borrower hereunder.

(d)            The Borrower agrees that Lender may from time to time extend the
maturity of this Note or the time any payment is due under this Note and may
accept further security or release security for the payment of this Note,
without in any way affecting any obligations of the Borrower to Lender.

(e)            This Amended and Restated Term Loan Note is given in replacement
of and substitution for, but not in repayment of, the Term Loan Note dated June
29, 2012 in the principal amount of $2,000,000.

IN WITNESS WHEREOF, the Borrower has executed this Note to be effective as of
the day and year first-above written.

 
 
BIRNER DENTAL MANAGEMENT SERVICES, INC., a Colorado corporation
 
 
 
 
 
 
By:
 
 
 
 
Dennis Genty, Chief Financial Officer
 

11

--------------------------------------------------------------------------------

Exhibit B

Birner Dental Management Services, Inc.
COVENANT COMPLIANCE CERTIFICATE
As of ____________

The undersigned financial officer of Birner Dental Management Services, Inc.
hereby certifies that the following is a true and accurate calculation of the
Covenants as of the date specified above, determined in accordance with the
requirements of the Third Amended and Restated Credit Agreement dated June 29,
2012, between Birner Dental Management Services, Inc. (“Borrower”) and KeyBank
National Association (“Lender”).

 
   
 
Name:  
 
Title:
 
 
Date:  

Quarterly Covenants

Section 6.8           Total Funded Debt to EBITDA Ratio
  (Calculated on a rolling four quarters)
 
A. Funded Debt
$
____________
B. EBITDA
$
____________
Actual A / B
 
____________
Required A / B
 
2.00 to 1.00 or less

Section 6.10       Acquisition of Dental Practices:                    (Y/N)
___________
 
  A.  Adverse effect on ability to satisfy financial covenants:  
                 (Y/N)___________(Attach calculations evidencing same)
 
Section 6.11       Total Fixed Charge Covenant Ratio
  (Calculated on a rolling four quarters)
 
A. Operating Cash Flow
$
__________
B. Total Fixed Charges
$
__________
Actual A / B
__________
Required A / B
See table in Section 6.11

Section 6.12        Change in Management
 
  A.            No Change in Management
12

--------------------------------------------------------------------------------

Monthly Covenant (until December 31, 2013)

Section 6.13        Unfinanced Capital Expenditures
 
  Cumulative Unfinanced Capital Expenditures for the period beginning April 1,
2013 through the date of this Certificate:
 
   $____________
 
 
13

--------------------------------------------------------------------------------