**Exhibit 4.1**

 

AMENDMENT NO. 11 TO CREDIT AGREEMENT(1999 Credit Agreement)

 

This AMENDMENTNO. 11 TO CREDIT AGREEMENT, effective as of April 30, 2003 (this “Agreement”),is entered into by and among INTERDENT SERVICE CORPORATION, a Washingtoncorporation (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 hereinafterdefined).

 

RECITALS

 

A.                                   Referenceis hereby made to that certain Amended and Restated Credit Agreement dated asof June 15, 1999 (as heretofore amended and as may be further amended, modifiedor supplemented from time to time the “Credit Agreement”), among theBorrower, the Guarantor, the financial institutions from time to time partythereto****(collectively,the “Lenders”), BNY Asset Solutions LLC, successor to Union Bank ofCalifornia, N.A., as administrative agent for the Lenders (in such capacity,the “Administrative Agent”), and JPMorgan Chase Bank, formerly known asThe Chase Manhattan Bank, as syndication agent for the Lenders (in suchcapacity, the “Syndication Agent”).

 

B.                                     TheBorrower has requested that the Lenders modify the principal payment due onApril 30, 2003 under the Credit Agreement.

 

C.                                     TheLenders have agreed to the modification requested by the Borrower on the termsand subject to the conditions set forth herein.

 

AGREEMENT

 

NOW,THEREFORE, the Borrower, the Guarantor, the Lenders and Agents hereby agree asfollows:

 

# SECTION 1.                                DEFINED TERMS.  Capitalized terms used herein and notdefined shall have the respective meanings assigned to such terms in the CreditAgreement.

#  

# SECTION 2.                                AMENDMENT OF CREDIT AGREEMENT.

 

## 2.1                                 The definition of “Interest Margin”set forth in Section 1 of the Credit Agreement shall be amended and restated toread 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 AlternativeBase 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 Marginsshall be increased by 1.00%, and (b) effective during the period April 1,2003, to and including May 9, 2003, each of the foregoing Interest Marginsshall be further increased by 2.00%.

 

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## 2.2                                 Section 1 of the Credit Agreementshall be amended to include the definition of “Eleventh Amendment SellerPayment Amount” and shall read as follows:

 

“Eleventh Amendment Seller Payment Amount” shall mean an amount not toexceed $192,000.

 

## 2.3                                 Section 1 of the Credit Agreementshall be amended to include the definition of “Eleventh Amendment Date” andshall read as follows:

##  

“Eleventh Amendment Date” shall mean April 30, 2003.

 

## 2.4                                 The last paragraph of Section2.02(e) of the Credit Agreement shall be amended and restated to read in itsentirety as follows:

##  

Notwithstanding the preceding provisions ofthis Section 2.02(e), or anything in this Agreement or the other Loan Documentsto the contrary, as of the Eleventh Amendment Date, the Borrower shall nolonger have the right to (x) convert all or any portion of any Eurodollar Loaninto an Alternate Base Loan, (y) convert the Interest Period with respect toall 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 InterestPeriod.  As of the last day of eachInterest Period applicable to any Eurodollar Loan which is outstanding as ofthe Tenth Amendment Date, such Eurodollar Loan shall automatically be convertedinto an Alternate Base Loan without any further act or conduct on the part ofBorrower.

 

## 2.5                                 The payment specified to be made onApril 30, 2003 in Section 2.04(c) of the Credit Agreement in the amount of$5,983,026.87 is hereby deleted, and the following is inserted in lieu thereof:

 

| May 9, 2003 |   | $ | 5,983,026.87 |   |
|-------------|--------|---|--------------|--------|

 

## 2.6                                 Section 7.17(a) of the CreditAgreement shall be amended and restated to read in its entirety as follows:

 

SECTION 7.17                    Payment, Prepaymentor Modification of Indebtedness; Modification of Charter Documents, etc.(a)  Make any cash payment(s) or remitother consideration, directly or indirectly, in respect of any SubordinatedIndebtedness, other than payments in respect of Seller Notes and EarnoutArrangements in an aggregate amount not to exceed the Eleventh Amendment SellerPayment Amount, or directly or indirectly prepay, redeem, purchase or retireany Indebtedness, including, without limitation, any Subordinated Indebtedness,other than Indebtedness incurred hereunder and under the 2000 Credit Agreementon a pro rata basis, provided the Convertible Subordinated Notes may beretired upon conversion thereof, in accordance with their terms.

 

## 2.7                                 Section 7.21 of the Credit Agreementshall be amended and restated to read in its entirety as follows:

 

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SECTION 7.21                    Payments toPotential Investors.  During theperiod of April 1, 2003, to and including May 9, 2003, pay any deal fee, break-upfee, 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 toinvest, in any Loan Party, in each case without the express prior writtenconsent of the Required Lenders.

 

## 2.8                                 Article VIII, (g) and (o) of theCredit Agreement shall be amended by adding at the end of (g) and (o) thefollowing: “provided, however, that during the period of April29, 2003, to and including May 9, 2003, the failure of any Loan Party to payany Seller Note or earn-out arrangement shall not constitute an Event ofDefault, provided, and only if, any such failure does nottrigger, or otherwise result in, a default or event of default under theConvertible Subordinated Notes and Senior Subordinated Note;”

 

SECTION 3.                                CONDITIONSPRECEDENT.  This Agreement shallbecome effective upon (i) the execution and delivery of counterpartshereof by the Borrower, the Guarantor, each Lender and the Agents and (ii) theexecution and delivery of counterparts of the Amendment No. 8 to the 2000Credit Agreement, dated of even date herewith, by the Borrower, the Guarantor,each Lender (as that term is defined in the 2000 Credit Agreement) and theAgents under the 2000 Credit Agreement.

 

# SECTION 4.                                CONFIRMATION OF LOAN DOCUMENTS.  Each of the Borrower and Guarantor, by itsexecution and delivery of this Agreement, irrevocably and unconditionallyconfirms in favor of the Agents and each of the Lenders that each Loan Documentto which it is a party shall continue in full force and effect in accordancewith its terms and is and shall continue to be applicable to all of theObligations, except as expressly modified hereby.

 

# SECTION 5.                                MISCELLANEOUS.

 

In order to further induce the Agents andeach of the Lenders to enter into this Agreement, each of the Borrower and theGuarantor, by its execution of a counterpart of this Agreement, reaffirms andrestates the representations and warranties set forth in Article IV of theCredit Agreement and by such reaffirmation and restatement represents andwarrants that all such representations and warranties are and shall be true andcorrect in all material respects on and as of the date hereof (except insofaras such representations and warranties relate expressly to an earlier date).

 

## 5.1                                 To further induce the Agents andeach of the Lenders to enter into this Agreement, each of the Borrower andGuarantor, by its execution of a counterpart of this Agreement, represents andwarrants (which representations and warranties shall survive the execution anddelivery hereof) to the Agents and each of the Lenders that:

 

### (a)                                  It has the corporate power and authority to execute, deliverand carry out the terms and provisions of this Agreement and the transactionscontemplated hereby and has taken or caused to be taken all necessary corporateaction to authorize the execution, delivery and performance of this Agreementand the transactions contemplated hereby;

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### (b)                                 No consent of any other person (including, withoutlimitation, stockholders or creditors of the Borrower or the Guarantor), and noaction of, or filing

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### with any governmental or public body or authority isrequired to authorize, or is otherwise required in connection with theexecution, delivery and performance of this Agreement;

 

### (c)                                  This Agreement has been duly executed and delivered on behalfof each of the Borrower and the Guarantor by a duly authorized officer,respectively, and constitutes a legal, valid and binding obligation of theBorrower and the Guarantor enforceable in accordance with its terms, subject tobankruptcy, reorganization, insolvency, moratorium and other similar lawsaffecting the enforcement of creditors’ rights generally and the exercise ofjudicial discretion in accordance with general principles of equity;

 

### (d)                                 The execution, delivery and performance of this Agreementwill not violate any law, statute or regulation, or any order or decree of anycourt or governmental instrumentality, or conflict with, or result in thebreach of, or constitute a default under any contractual obligation of theBorrower or the Guarantor;

 

### (e)                                  There exists no Default or Event of Default; and

 

### (f)                                    No Loan Party is in default, and no event of default hasoccurred, under any contract, agreement, license, lease, commitment orarrangement which results, would result or is reasonably likely to result, in aMaterial Adverse Effect.

 

## 5.2                                 Except as herein expressly amended,the Credit Agreement is ratified and confirmed in all respects and shall remainin full force and effect in accordance with its terms, including, withoutlimitation, the provisions set forth in Section 11.04 of the Credit Agreement.

 

## 5.3                                 All references to the CreditAgreement contained in the Credit Agreement and the other Loan Documents andthe other documents and instruments delivered pursuant to or in connectiontherewith shall mean the Credit Agreement, as may in the future be amended,restated, supplemented or modified from time to time.

 

## 5.4                                 This Agreement may be executed bythe 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 andthe same agreement.

 

## 5.5                                 Delivery of an executed counterpartof a signature page to this Agreement by telecopier shall be effective asdelivery of a manually executed counterpart of this Agreement, provided howeverthat the foregoing does not excuse the duty of each party to deliver a manuallyexecuted counterpart of a signature page to this Agreement.

 

## 5.6                                 **THIS AGREEMENTCONSENT 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 LAWPRINCIPLES THEREOF.**

 

## 5.7                                 The parties hereto shall, at anytime and from time to time following the execution of this Agreement, executeand deliver all such further instruments, including

 

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## amendments to otherLoan Documents, and take all such further actions as may be reasonablynecessary or appropriate in order to carry out the provisions of thisAgreement.

 

[Continued on Next Page]

 

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IN WITNESSWHEREOF, the Borrower, Guarantor, the Agents, and the Lenders have caused thisAgreement to be duly executed by their respective authorized officers as of theday and year first above written.

 
|                 |   | INTERDENT  SERVICE CORPORATION, as  the Borrower   |
|----------------------|--------|----------------------------------------------------|
|                 |   |                                               |   |   |
|                 |   |                                               |   |   |
|                 |   | By:                                                | /s/ ROBERT  HILL |   |
|                 |   | Name:                                              | Robert Hill |   |
|                 |   | Title:                                             | President |   |
|                 |   |                                               |   |   |
|                 |   | INTERDENT,  INC., as the Guarantor                 |   |
|                 |   |                                               |   |   |
|                 |   |                                               |   |   |
|                 |   | By:                                                | /s/ ROBERT  HILL |   |
|                 |   | Name:                                              | Robert Hill |   |
|                 |   | Title:                                             | Vice  President |   |
|                 |   |                                               |   |   |
| Lenders and  Agents: |   | BNY ASSET  SOLUTIONS LLC, as Administrative  Agent |
|                 |   |                                               |
|                 |   |                                               |   |   |
|                 |   | By:                                                | /s/ LOREE  CONRAD |   |
|                 |   | Name:                                              | Loree Conrad |   |
|                 |   | Title:                                             | Managing  Director |   |
|                 |   |                                               |   |   |
|                 |   | U.S. BANK  NATIONAL ASSOCIATION, as  a Lender      |
|                 |   |                                               |
|                 |   |                                               |   |   |
|                 |   | By:                                                | /s/ DANIEL  FALSTAD |   |
|                 |   | Name:                                              | Daniel J.  Falstad |   |
|                 |   | Title:                                             | Vice  President |   |
|                 |   |                                               |   |   |
|                 |   | FLEET  CAPITAL CORPORATION, as a  Lender           |
|                 |   |                                               |   |   |
|                 |   |                                               |   |   |
|                 |   | By:                                                | /s/ KALI  RAMACHANDRAN |   |
|                 |   | Name:                                              | Kali  Ramachandran |   |
|                 |   | Title:                                             | Vice  President |   |
|                      |        |                                                    |  |  |  |  |

 

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|   |   | JPMORGAN  CHASE BANK, formerly known  as THE CHASE MANHATTAN BANK, as  Syndication Agent and as a Lender                                |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                    |   |   |
|   |   |                                                                                                                                    |   |   |
|   |   | By:                                                                                                                                     | /s/ BILLIE  J. PRUE |   |
|   |   | Name:                                                                                                                                   | Billie J.  Prue |   |
|   |   | 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/ JUDY K.  MENCHER |   |
|   |   | Name:                                                                                                                                   | Judy K. Mencher |   |
|   |   | 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/ JUDY K.  MENCHER |   |
|   |   | Name:                                                                                                                                   | Judy K.  Mencher |   |
|   |   | Title:                                                                                                                                  | Member |   |
|        |        |                                                                                                                                         |  |  |  |

 

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|   |   | 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/ JOSEPH  GESTER |   |
|   |   | Name:                                                                                                                                                                                                                       | Joseph  Gester |   |
|   |   | Title:                                                                                                                                                                                                                      | Assistant  Vice President |   |
|   |   |                                                                                                                                                                                                                        |   |   |
|   |   |                                                                                                                                                                                                                        |   |   |
|   |   | PLEASANT  STREET INVESTORS, LLC, as a Lender                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                        |   |   |
|   |   | By:                                                                                                                                                                                                                         | /s/ STEVE  HARTMAN |   |
|   |   | Name:                                                                                                                                                                                                                       | Steve  Hartman |   |
|   |   | Title:                                                                                                                                                                                                                      |   |   |
|        |        |                                                                                                                                                                                                                             |  |  |  |  |

 

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