EXHIBIT 10.10
AMENDMENT TO FORBEARANCE AGREEMENT
This Amendment to Forbearance Agreement (this "Amendment") is dated as
of May 15, 2003, and is entered into by and among Xxxx X. Xxxxxxx, D.M.D
("Xxxxxxx DMD"), Xxxx X. Xxxxxxx, D.M.D, Inc., a California corporation
("Xxxxxxx Inc."), and Xxxxxxx Acquisition Company, a California corporation
("Xxxxxxx Acquisition"; Xxxxxxx Acquisition, together with Xxxxxxx DMD and
Xxxxxxx Inc., "Xxxxxxx"); and CDC of California, Inc, a Delaware corporation
(the "Corporation"), and Castle Dental Centers of California, L.L.C., a Delaware
limited liability company (the "LLC", the LLC, together with the Corporation,
collectively referred to at times as "Castle").
RECITALS
WHEREAS, on July 17, 2002, Xxxxxxx and Castle executed and delivered
that certain Forbearance Agreement (the "Forbearance Agreement"; capitalized
terms which are used but not otherwise defined in this Amendment shall have the
respective meanings ascribed thereto in the Forbearance Agreement) by and among
each of them, pursuant to which Xxxxxxx agreed to forbear from further efforts
to collect, realize and enforce the Claim and the asserted Judgment Lien; and
WHEREAS, Castle has informed Xxxxxxx that liabilities and obligations
owing by Castle and Castle Dental Centers, Inc., a Delaware corporation ("Castle
Dental") to the "Original Bank Group" (as defined in the Forbearance Agreement
as amended hereby) are being satisfied and that Castle and Castle Dental are
obtaining a credit facility from the "Bank Group" (as defined in the Forbearance
Agreement, as amended hereby); and
WHEREAS, Xxxxxxx and Castle desire to amend the Forbearance Agreement as
follows.
NOW therefore, the parties hereto, having exchanged good, valuable and
adequate consideration, the sufficiency of which is acknowledged, hereby agree
as follows:
AGREEMENTS
1. ESTOPPEL AND RATIFICATION. Each party hereto hereby agrees the
Forbearance Agreement, as amended by this Amendment, remains in full force and
effect in accordance with its terms. Castle represents to Xxxxxxx that, as of
the date of this Amendment, no default or event of default has arisen or, based
upon facts or circumstances in existence as of the date of this Amendment, could
arise with the passage of time under the Forbearance Agreement after giving
effect to this Amendment, and Xxxxxxx represents to Castle that Xxxxxxx is not
aware of any facts or circumstances in existence as of the date of this
Amendment under which a default or event has risen or which, with the passage of
time, could arise under the Forbearance Agreement after giving effect to this
Amendment. Each party hereto hereby ratifies and confirms its liabilities,
obligations and agreements under the Forbearance Agreement, as amended by this
Amendment.
2. AMENDMENTS TO FORBEARANCE AGREEMENT. Subject to satisfaction of
the conditions precedent set forth in Section 3 below:
2.1 PARAGRAPH 2.b. Paragraph 2.b of the Forbearance Agreement is
hereby amended by adding the following sentence to the end of that paragraph as
a new last sentence thereof: "Notwithstanding the foregoing, commencing with the
monthly payment due for May 2003, the amount of the monthly payments described
in the first sentence of this paragraph shall be increased to $35,000.00."
2.2 PARAGRAPH 2.c. Paragraph 2.c of the Forbearance Agreement is
hereby amended by deleting the phrase "in the amount of $25,000.00 per month"
and inserting in its place the phrase "in the amount of $30,000.00 per month."
2.3 PARAGRAPH 4.a. Paragraph 4.a of the Forbearance Agreement is
hereby amended by inserting the following language after the term LLC: "other
than a pledge or encumbrance of the stock of the Corporation or the equity
interest in the LLC in favor of the Bank Group; provided, however, such pledge
or encumbrance shall not have greater priority with respect to the Judgment Lien
than did the previous pledge or encumbrance of the stock of the Corporation or
the equity interest in the LLC in favor of the Original Bank Group."
2.4 PARAGRAPH 4.h. Paragraph 4.h of the Forbearance Agreement is
hereby amended by inserting in the second sentence of that paragraph,
immediately after the phrase "between Xxxxxxx and the Bank Group" the words "or
between Xxxxxxx and the 'Original Bank Group.'" In addition, the following shall
be added as a new last sentence of Paragraph 4 (h): "For the purposes of this
Agreement, the 'Original Bank Group' shall mean Bank of America, N. A., as Agent
for the Original Bank Group, Banc of America Strategic Solutions, Inc., Fleet
National Bank, Amsouth Bank and Xxxxxx Financial, Inc. as lenders under that
certain Amended and Restated Credit Agreement dated December 18, 1998 as amended
on July 20, 1999, September 30, 1999, October 31, 1999 and January 31, 2000."
2.5 PARAGRAPH 4.i. Paragraph 4.i of the Forbearance Agreement is
hereby amended by deleting such Paragraph in its entirety and substituting the
following language therefor:
" i. Nothing contained in this Agreement shall be deemed or
construed to prevent Xxxxxxx from perfecting and maintaining the
validity, effectiveness and priority of the Xxxxxxx Claim, the
judgment therefore or the Judgment Lien, except as provided in
Paragraph 4(a) and in the proviso included at the end of this
sentence, nor shall anything contained herein prevent the Bank Group
from taking steps to perfect and maintain the validity, effectiveness
and priority of any security interests, pledges, liens or other
encumbrances of or in: (i) the stock or other equity interests of
Castle or (ii) the assets and real and personal property of Castle;
provided, however, such security interests, pledges, liens or other
encumbrances shall not have greater priority with respect to the
Judgment Lien than did the previous security interests, pledges, liens
or other encumbrances in favor of the Original Bank Group."
2.6 PARAGRAPH 11. Paragraph 11 of the Forbearance Agreement is
hereby amended by deleting such Paragraph in its entirety and substituting the
following language therefor:
"11. BANK GROUP. For the purposes of this Agreement: (a) the term
"Credit Agreement" means into that certain Credit Agreement dated as of
May __, 2003 by and among Castle Dental Centers, Inc., a Delaware
corporation, General Electric Capital Corporation, a Delaware
corporation, in its capacity as agent ("Agent") for the benefit of all
lenders and individually as a lender (together with all other "Lenders"
thereunder as defined therein, the "Lenders"), and the other Lenders
parties thereto, as the same may be amended, restated, modified or
supplemented and in effect from time to time, and (b) the term "Bank
Group" shall mean Agent and such Lenders."
2.7 PARAGRAPH 13(b). Paragraph 13(b) of the Forbearance Agreement is
hereby amended by deleting such Paragraph in its entirety and substituting the
following language therefor:
"(b) If to Xxxxxxx: Xxxx X. Xxxxxxx
000 X. Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
with a copy to: Peitzman, Glassman, Weg & Kempinsky LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxx Xxxxxxxx, Esq."
3. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment
is subject to each of the following conditions precedent or concurrent:
(a) NO DEFAULT. No default or event of default under the
Forbearance Agreement, as amended hereby, shall have occurred and be continuing;
(b) WARRANTIES AND REPRESENTATIONS. The warranties and
representations of each party to the Forbearance Agreement contained in this
Amendment and the Forbearance Agreement, as amended hereby, shall be true and
correct in all material respects as of the effective date hereof, with the same
effect as though made on such date, unless such representations and warranties
expressly refer to an earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date;
(c) DOCUMENTS. Each party hereto shall execute and deliver
to counsel to General Electric Capital Corporation, Castle, and Xxxxxxx,
respectively, a copy of its duly executed signature page to this Amendment and
such other documents and deliveries as Xxxxxxx or Castle may reasonably request;
and
(d) LEGAL EXPENSES OF XXXXXXX. Castle shall have reimbursed
Xxxxxxx for the costs and expenses of legal counsel to Xxxxxxx incurred in
connection with the execution and delivery of this Amendment; provided, however,
such amount shall not exceed $5,000.00.
4. AUTHORITY. Each party hereto represent to each of the other
parties that (a) such party has all the necessary power and authority to
execute, deliver, and perform its respective obligations under the Forbearance
Agreement and this Amendment; (b) the execution, delivery and performance by
such party of its obligations under this Amendment have been duly authorized by
all necessary corporate or limited liability company action on its part (if
necessary); (c) the person executing this Amendment on such person's behalf is
duly authorized to do so; and (d) the Forbearance Agreement and this Amendment
constitutes the legal, valid and binding obligation of such party enforceable in
accordance with its terms.
5. NO FURTHER AMENDMENTS; RATIFICATION OF LIABILITY. Each party
hereto hereby agrees the Forbearance Agreement, as amended by this Amendment,
shall remain in full force and effect in accordance with its terms. Each party
hereto hereby ratifies and confirms its liabilities, obligations and agreements
under the Forbearance Agreement, as amended by this Amendment. No party's
agreement to the terms of this Amendment or any other amendment shall not be
deemed to establish or create a custom or course of dealing among any of the
parties hereto.
6. COUNTERPARTS. This Amendment may be executed in one of more
counterparts, each of which shall be deemed to be an original, and all of which,
when taken together, shall constitute one and the same instrument.
7. GOVERNING LAW. This Amendment shall be a contract made under and
governed by the laws of the State of California, without regard to conflict of
laws principles.
9. SEVERABILITY. In the event that any provision of this Amendment
is deemed to be invalid by reason of the operation of any law or by reason of
the interpretation placed thereon by any court or governmental authority, this
Amendment shall be construed as not containing such provision and the invalidity
of such provision shall not affect the validity of any other provisions hereof,
and any and all other provisions hereof which otherwise are lawful and valid
shall remain in full force and effect.
10. HEADINGS. The paragraph headings used in this Amendment are for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Amendment.
11. RECITALS. The foregoing recitals are hereby incorporated herein
by this reference thereto.
12. NO STRICT CONSTRUCTION. The language used in this Amendment
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party hereto.
- Remainder of Page Intentionally Blank -
[Signature Page Follows]
Signed and executed by the parties hereto as of the date first set
forth above.
Xxxx X. Xxxxxxx, D.M.D. CDC of California, Inc.
By:
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Its:
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Xxxx X Xxxxxxx, D.M.D., Inc. Castle Dental Centers of California, L.L.C.
By: By:
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Its: Its:
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Xxxxxxx Acquisition Company
By:
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Its:
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CONSENT TO FORBEARANCE AGREEMENT, AS AMENDED
General Electric Credit Corporation, as "Agent," on behalf of itself as
"Agent" for the Bank Group (as defined above), as of the year and date first
written above, hereby: (a) agrees to the provisions contained in Xxxxxxxxxx 0,
0.x, 0.x, 0.x, 6 and 11 of the Forbearance Agreement, as amended hereby; and (b)
represents and warrants to Xxxxxxx that it has authority to execute this Consent
on behalf of itself as Agent and Lender and the other Lenders under the Credit
Agreement.
GENERAL ELECTRIC CAPITAL CORPORATION,
a Delaware corporation, as Agent and as a Lender
By:
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Name:
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Its: Duly Authorized Signatory
