AMENDMENT TO CREDIT AGREEMENT
This is an Amendment to Credit Agreement (this "Amendment") between
SAFEGUARD HEALTH ENTERPRISES, INC. ("Borrower"), a Delaware corporation, and
XXXXXXXX X. XXXXXXXXX, DMD ("Lender"). The parties agree as follows:
1. BACKGROUND. Borrower is the borrower under a Secured Convertible
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Promissory Note (the "Original Note"), in the original principal amount of
$2,625,000.00, which was made by Borrower in favor of Lender in connection with
the Stock Purchase Agreement dated as of April 24, 2002, among Borrower, Lender
and Paramount Dental Plan, Inc. (the "Stock Purchase Agreement" and together
with the other agreements and instruments executed in connection with the Stock
Purchase Agreement, the "Credit Agreement"), as previously amended. As of
December 1, 2003, Borrower has reduced the principal balance of the Original
Note to $1,601,629.53 through scheduled monthly payments. Borrower and Lender
have agreed to amend and restate the terms of the Original Note pursuant to the
terms and conditions of an Amended and Restated Secured Convertible Promissory
Note (the "Note"), in the original principal amount of $1,601,629.53, made by
Borrower in favor of Lender dated the same day as this Amendment. This
Amendment further amends the Credit Agreement and terminates the Registration
Rights Agreement.
2. AMENDMENT TO THE CREDIT AGREEMENT. The terms "Convertible Note" and
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"Note" as used in the Credit Agreement are hereinafter deemed to refer to the
Note.
3. TERMINATION OF REGISTRATION RIGHTS AGREEMENT. The Registration Rights
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Agreement dated as of August 30, 2002, between Borrower and Lender is terminated
and of no further force and effect.
4. REPRESENTATIONS AND WARRANTIES. Borrower represents to Lender the
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following as of the effective date of this Amendment:
(a) Borrower has all requisite power, authority, and legal right to
execute, deliver and perform this Amendment;
(b) The execution, delivery, and performance of this Amendment and
the Note by Borrower has been duly authorized by all requisite corporate
action and will not (i) violate any Law, (ii) conflict with the articles of
incorporation or bylaws of Borrower, (iii) accelerate the maturity of, or
result in any lien, penalty, security interest, or encumbrance in, on, or
under, any mortgage, indebtedness, security agreement, or contingent
obligation, (iv) result in a default or breach of any material order,
lease, contract, indenture, mortgage, judgment, promissory note, or other
agreement or instrument to which Borrower is a party or any of Borrower's
property is subject, or (v) require any filing with, or consent, license,
authorization, or approval of, any Person;
(c) Borrower has complied with all the terms and conditions of the
Credit Agreement, that there does not exist any fact or event that
constitutes, or with notice or
lapse of time or both would constitute, an event of default under the Note
or the Credit Agreement;
(d) This Amendment and the Note are valid and binding obligations of
Borrower legally enforceable by Lender against Borrower in accordance with
their terms; and
(e) There has been no material adverse change in the condition,
financial or other, of Borrower, from such condition as it existed on the
date of the Original Note.
5. OTHER PROVISIONS. All capitalized terms that are used but not
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expressly defined in this Amendment have the respective meanings ascribed to
them in the Stock Purchase Agreement, and the definitions of those terms in the
Credit Agreement are incorporated by reference in this Amendment. This
Amendment and the documents contemplated by it record the final, complete, and
exclusive understanding between Lender and Borrower regarding the modification
of the Credit Agreement and the termination of the Registration Rights
Agreement. Except as amended and modified by this Amendment, the terms of the
Credit Agreement remain in full force and effect in accordance with their
respective terms and this Amendment shall not constitute a novation. Borrower
acknowledges that the Credit Agreement and Note are not subject to any defenses,
counterclaims, or rights of set-off. Lender has not waived, and does not waive,
any of its rights under the Credit Agreement. This Amendment will become
effective when it or a counterpart of it has been executed by Lender and
Borrower.
6. COUNTERPARTS. This Amendment may be executed in counterparts. Each
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executed counterpart will constitute an original document, and all executed
counterparts, together, will constitute the same agreement.
EFFECTIVE: As of December 1, 2003.
SAFEGUARD HEALTH ENTERPRISES, INC. ("Borrower")
By: ______________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President and Secretary
_______________________________________
XXXXXXXX X. XXXXXXXXX, DMD ("Lender")
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