EXHIBIT 10.23
BUSINESS LOAN AGREEMENT
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Principal Loan Date Maturity Loan No. Call Collateral Officer
$600,000.00 08-20-1997 06-01-1998 06200058706 A100 36 Account 0521 Initials
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
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Borrower: Dental Care Alliance, Inc. Lender: Xxxxxxx Bank, N.A.
0000 Xxxx Xxxxxx, 0xx Xxxxx X.X. Xxx 00000
Xxxxxxxx, XX 34236 Xxxxxxxxxxxx, XX 00000-0000
THIS BUSINESS LOAN AGREEMENT between Dental Care Alliance, Inc. ("Borrower") and
XXXXXXX BANK, N.A. ("Lender") is made and executed on the following terms and
conditions. Borrower has received prior commercial loans from Lender or has
applied to Lender for a commercial loan or loans or other financial
accommodations, including those which may be described on any exhibit or
schedule attached to this Agreement. All such loans and financial
accommodations, together with all future loans and financial accommodations from
Lender to Borrower, are referred to in this Agreement individually as the "Loan"
and collectively as the "Loans." Borrower understands and agrees that: (a) in
granting, renewing, or extending any Loan, Lender is relying upon Borrower's
representations, warranties, and agreements, as set forth in this Agreement; (b)
the granting, renewing, or extending of any Loan by Lender at all times shall be
subject to Lender's sole judgment and discretion; and (c) all such Loans shall
be and shall remain subject to the following terms and conditions of this
Agreement.
TERM. This Agreement shall be effective as of August 20, 1997, and shall
continue thereafter until all indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
AGREEMENT. The word "Agreement" means this Business Loan Agreement, as
this Business Loan Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached to this
Business Loan Agreement from time to time.
BORROWER. The word "Borrower" means Dental Care Alliance, Inc.
CERCLA. The word "CERCLA" means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
COLLATERAL. The word "Collateral" means and includes without limitation
all property and assets granted as collateral security for a loan,
whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted
in the form of a security interest, mortgage, deed of trust,
assignment, pledge, chattel mortgage, chattel trust, factor's lien,
equipment trust, conditional sale, trust receipt, lien, charge, lien or
title retention contract, lease or consignment intended as a security
device, or any other security or lien interest whatsoever, whether
created by law, contract, or otherwise.
ERISA. The word "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time and the regulations and
published interpretation thereof.
EVENT OF DEFAULT. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section
titled "EVENTS OF DEFAULT."
GAAP. The word "GAAP" means generally accepted accounting principles
consistently applied.
08-20-1997 BUSINESS LOAN AGREEMENT PAGE 2
LOAN NO. 06200058706 (CONTINUED)
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GRANTOR. The word "Grantor" means and includes without limitation each
and all of the persons or entities granting a Security Interest in any
Collateral for the indebtedness, including without limitation all
Borrowers granting such a Security Interest.
GUARANTOR. The word "Guarantor" means and includes without limitation
each and all of the guarantors, sureties, and accommodation parties in
connection with any Indebtedness.
INDEBTEDNESS. The word "Indebtedness" means and includes without
limitation all Loans, together with all other obligations, debts and
liabilities of Borrower to Lender, or any one or more of them, as well
as all claims by Lender against Borrower, or any one or more of them;
whether now existing, contemporaneously with or hereafter incurred or
created and any renewals, modifications, extensions, substitutions or
consolidations hereof, voluntary or involuntary incurred, secured or
unsecured, absolute or contingent, liquidated or unliquidated;
determined or undetermined, whether Borrower may be liable individually
or jointly with others, or primarily or secondarily, or as guarantor,
surety, or otherwise; whether recovery upon the Indebtedness may be or
hereafter may become barred by any statute or limitations; and whether
such Indebtedness may be or hereafter may become otherwise
unenforceable.
LENDER. The word "Lender" means XXXXXXX BANK, N.A., its successors and
assigns.
LOAN. The word "Loan" or "Loans" means and includes any and all loans,
advances, interest, costs, fees, documentary stamp tax and/or
intangible taxes, debts, overdraft Indebtedness, leases, drafts,
letters of credit, credit cards, and business services from Lender to
Borrower, whether now existing, contemporaneously with, or hereafter
incurred or created and any renewals, modification, extensions,
substitutions or consolidations thereof, and however evidenced,
including without limitation those loans and financial accommodations
described herein or described on any exhibit or schedule attached to
this Agreement from time to time.
NOTE. The word "Note" means Borrower's promissory note or notes, if
any, evidencing Borrower's Loan obligations in favor of Lender, as well
as any renewal, extension, modification, consolidation, substitute,
replacement or refinancing note or notes therefor.
PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and
security interests securing Indebtedness owed by Borrower to Lender:
(b) liens for taxes, assessments, or similar charges either not yet due
or being contested in good faith; (c) liens of materialmen, mechanics,
warehousemen, or carriers, or other like liens arising in the ordinary
course of business and securing obligations which are not yet
delinquent; (d) purchase money liens or purchase money security
interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure Indebtedness outstanding on the
date of this Agreement or permitted to be incurred under the paragraph
of this Agreement titled "Indebtedness and Liens"; (e) liens and
security interests which, as of the date of this Agreement, have been
disclosed to and approved by the Lender in writing; and (f) those liens
and security interests which in the aggregate constitute an immaterial
and insignificant monetary amount with respect to the net value of
Borrower's assets.
RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
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LOAN NO. 06200058706 (CONTINUED)
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SECURITY AGREEMENT. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract,
or otherwise, evidencing, governing, representing, or creating a
Security Interest.
SECURITY INTEREST. The words "Security Interest" mean and include
without limitation any type of collateral security, whether in the form
of a lien, charge, mortgage, deed of trust, assignment, pledge, chattel
trust, factor's lien, equipment trust, conditional sale, trust receipt,
lien or title retention, contract, lease or consignment intended as a
security device, or any other security or lien interest whatsoever,
whether created by law, contract, or otherwise.
XXXX. The word "XXXX" means the Superfund Amendments and
Reauthorization Act of 1986 as now or hereafter amended.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and all times any Indebtedness exists:
ORGANIZATION. Borrower is a corporation which is duly organized,
validly existing, and in good standing under the laws of the state of
Borrower's Incorporation and is validly existing and in good standing
in all states in which Borrower is doing business. Borrower has the
full power and authority to own its properties and to transact the
businesses in which it is presently engaged or presently proposes to
engage. Borrower also is duly qualified as a foreign corporation and is
in good standing in all states in which the failure to so qualify would
have a material adverse effect on its businesses or financial
condition.
AUTHORIZATION. The execution, delivery, and performance of this
Agreement and all Related Documents by Borrower, to the extent to be
executed, delivered or performed by Borrower, have been duly authorized
by all necessary action by Borrower, do not require the consent or
approval of any other person, regulatory authority or governmental
body; and do not conflict with, result in a violation of, or constitute
a default under (a) any provision of its articles of incorporation or
organization, or bylaws, or any agreement or other instrument binding
upon Borrower or (b) any law, governmental regulation, court decree, or
order applicable to Borrower.
FINANCIAL INFORMATION. Each financial statement of Borrower and each
information, exhibit or report supplied to Lender by Borrower, its
agents or accountants truly and completely disclosed Borrower's
financial condition as of the date of the statement in accordance with
GAAP, and there has been no material adverse change in Borrower's
financial or business condition or operations subsequent to the date of
the most recent financial statement supplied to Lender and none are
imminent or threatened. Borrower has no material contingent obligations
except as disclosed in such financial statements. Borrower acknowledges
and agrees that Lender is relying on all such financial information in
entering into, continuing, renewing or extending any Loan.
LEGAL EFFECT. This Agreement constitutes, and any instrument or
agreement required hereunder to be given by Borrower when delivered
will constitute, legal, valid and binding obligations of Borrower
enforceable against Borrower in accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender
and as accepted by Lender, and except for property tax liens for taxes
not presently due and payable, Borrower owns and has good title to all
of Borrower's properties free and clear of all Security Interests, and
has not executed any security documents or financing statements
relating to such properties. All of Borrower's properties are titled in
Borrower's legal name, and Borrower has not
08-20-1997 BUSINESS LOAN AGREEMENT PAGE 4
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used, or filed a financing statement under, any other name for at least
the last five (5) years. Additionally, Borrower and Borrower's real and
personal properties comply fully with all laws, ordinances, statutes,
codes and requirements of the Americans with Disabilities Act of 1990.
HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous
substance," "disposal," "release," and "threatened releases," as used
in this Agreement, shall have the same meanings as set forth in the
"CERCLA," "XXXX," the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq., the Resource Conservation and Recovery Act, 49
U.S.C. Section 6901, et seq., or other applicable state or Federal
laws, rules, or regulations adopted pursuant to any of the foregoing.
Except as disclosed to and acknowledged by Lender in writing, Borrower
represents and warrants that: (a) During the period of Borrower's
ownership, lease or use of any real or personal properties and the
Collateral, there has been no use, generation, manufacturer, storage,
treatment, disposal, release or threatened release of any hazardous
waste or substance by any person on, under, or about any of the
properties, (b) Borrower has no knowledge of, or reason to believe that
there has been (i) any use, generation, manufacture, storage,
treatment, disposal, release, or threatened release of any hazardous
waste or substance by any prior owners or occupants of any of the
properties or the Collateral, or (ii) any actual or threatened
litigation or claims of any kind by any person relating to such
matters, (c) Neither Borrower nor any tenant, contractor, agent or
other authorized user of any of the properties or the Collateral shall
use, generate, manufacture, store, treat, dispose of, or release any
hazardous waste or substance on, under, or about any of the properties
or the Collateral; and any such activity shall be conducted in
compliance with all applicable federal, state, and local laws,
regulations, and ordinances, including without limitation those laws,
regulations and ordinances described above. Borrower authorizes Lender
and its agents to enter upon the properties to make such inspections
and tests as Lender may deem appropriate to determine compliance of the
properties with this section of the Agreement. Any inspections or tests
made by Lender shall be at Borrower's expense and for Lender's purposes
only and shall not be construed to create any responsibility or
liability on the part of Lender to Borrower or to any other person. The
representations and warranties contained herein are based on Borrower's
due diligence in investigating the Collateral and the properties for
hazardous wastes and substances. Borrower hereby (a) releases and
waives any future claims against Lender for indemnity or contribution
in the event Borrower becomes liable for cleanup or other costs under
any such laws, and (b) agrees to fully and promptly pay, perform,
discharge and defend, indemnify and hold harmless Lender against any
and all claims, orders, demands, causes of action, proceedings,
judgments, losses, liabilities, damages, penalties, and expenses which
Lender may directly or indirectly sustain or suffer resulting from a
breach of this section of the Agreement or as a consequence of any use,
generation, manufacture, storage, disposal, release or threatened
release occurring prior to Borrower's ownership or interest in the
properties or the Collateral, whether or not the same was or should
have been known to Borrower. The provisions of this section of the
Agreement, including the obligation to Indemnify, shall survive the
payment of the Indebtedness and the termination or expiration of this
Agreement and shall not be affected by Lender's acquisition of any
interest in any of the properties, whether by foreclosure or otherwise.
LITIGATION AND CLAIMS. No litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid
taxes) against Borrower is pending or threatened, and no other event
has occurred which may materially adversely affect Borrower's financial
condition or properties, other than litigation, claims, or other
events, if any, that have been disclosed to and acknowledged by Lender
in writing.
TAXES. To the best of Borrower's knowledge, all tax returns and reports
of Borrower that are or were required to be filed, have been filed, and
all taxes, assessments and other governmental charges have been paid in
full, except those presently being or to be contested by Borrower in
good faith in the ordinary course of business and for which adequate
reserves have been provided.
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LIEN PRIORITY. Unless otherwise previously disclosed to Lender in
writing, Borrower has not entered into or granted any Security
Agreements, or permitted the filing or attachment of any Security
Interests on or affecting any of the Collateral directly or indirectly
securing repayment of Borrower's Loan and Note, that would be prior or
that may in any way be superior to Lender's Security Interests and
rights in and to such Collateral.
BINDING EFFECT. This Agreement, the Note and all Security Agreements
directly or indirectly securing repayment of Borrower's Loan and Note
are binding upon Borrower as well as upon Borrower's successors,
representatives and assigns, and are legally enforceable in accordance
with their respective terms.
PERMITS. Borrower possesses and will continue to possess all permits,
licenses, copyrights, trademarks, trade names, patents and rights
thereto to conduct its business and its business does not conflict or
violate any valid rights of others with respect to the foregoing.
COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely
for business or commercial related purposes and will not purchase or
carry margin stock (within the meaning of Regulations G, T and U of the
Board of Governors of the Federal Reserve System).
Employee Benefit Plans. Each employee benefit plan as to which Borrower
may have any liability complies in all material respects with all
applicable requirements of law and regulations, and (i) no Reportable
Event nor Prohibited Transaction (as defined in ERISA) has occurred
with respect to any such plan, (ii) Borrower has not withdrawn from any
such plan or initiated steps to do so, (iii) no steps have been taken
to terminate any such plan, and (iv) there are no unfunded liabilities
other than those previously disclosed to Lender in writing.
LOCATION OF BORROWER'S OFFICES AND RECORDS. The chief place of business
of Borrower and the office or offices where Borrower keeps its records
concerning the Collateral is located at 0000 Xxxx Xxxxxx, 0xx Xxxxx,
Xxxxxxxx, XX 00000.
INFORMATION. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender
will be, true and accurate in every material respect on the date as of
which such information is dated or certified; and none of such
information is dated or certified; and none of such information is or
will be incomplete by omitting to state any material fact necessary to
make such information not misleading.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and
agrees that Lender, without independent investigation, is relying upon
the above representations and warranties in extending Loan Advances to
Borrower. Borrower further agrees that the foregoing representations
and warranties shall be continuing in nature and shall remain in full
force and effect until such time as Borrower's Indebtedness shall be
paid in full, or until this Agreement shall be terminated in the manner
provided above, whichever is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
LITIGATION. Promptly inform Lender in writing of (a) all material
adverse changes in Borrower's financial condition, and (b) all
litigation and claims and all threatened litigation and claims
affecting Borrower or
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LOAN NO. 06200058706 (CONTINUED)
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any Guarantor which could materially affect the financial condition of
Borrower or the financial condition of any Guarantor.
UPDATES. Promptly inform Lender in writing of details of all
litigation, legal or administrative proceedings, investigation or other
action of similar nature, pending or threatened against Borrower, at
any time during the term of this Agreement, which in part or in whole
may or will render any of the above representations and warranties no
longer true, accurate and correct in each and every respect. Borrower
will bring such details to Lender's attention, in writing, within
thirty (30) days from the date Borrower acquires knowledge of same.
FINANCIAL RECORDS. Maintain its books and records in accordance with
GAAP and permit Lender to examine and audit Borrower's books and
records at all reasonable times.
FINANCIAL STATEMENTS. Furnish Lender with, as soon as available, but in
no event later than ninety (90) days after the end of each fiscal year,
Borrower's balance sheet and income statement of cash flow and notes to
statements for the year ended, compiled by a certified public
accountant satisfactory to Lender, and, as soon as available, but in no
event later than thirty (30) days after the end of each fiscal quarter,
Borrower's balance sheet and profit and loss statement for the period
ended, prepared and certified as correct to the best knowledge and
belief by Borrower's chief financial officer or person acceptable to
Lender. All financial reports required to be provided under this
Agreement shall be prepared in accordance with GAAP and certified by
Borrower as being true and correct. Provide to Lender annually for each
Individual Borrower and Guarantor, if any, signed and dated personal
financial statements on Lender's forms, and, immediately after filing,
the personal income tax return filed for the past calendar year.
Simultaneously with the financial information required herein of
Borrower, the same information of all corporate or partnership
guarantors, if any, prepared in accordance with GAAP.
Promptly after the furnishing thereof, provide Lender with copies of
any statement or report furnished to any other party pursuant to the
terms of any Indenture, loan, credit, or similar agreement and not
otherwise required to be furnished to Lender pursuant to any other
section of this Agreement.
Promptly after the sending or filing thereof, provide Lender with
copies of all proxy statements, financial statements and reports which
Borrower sends to its stockholder, and copies of all regular, periodic,
special reports, and all registration statements which Borrower files
with the Securities and Exchange Commission or any governmental
authority which may be submitted therefor, or with any national
securities exchange.
ADDITIONAL INFORMATION. Furnish such additional information and
statements, lists of assets and liabilities, agings of receivables and
payables, inventory schedules, budgets, forecasts, tax returns, and
other reports with respect to Borrower's financial condition and
business operations as Lender may request from time to time.
INSURANCE. Maintain fire and other risk insurance, business
interruption, theft, public liability insurance, and such other
insurance in such amounts and covering such risks as are usually
covered by businesses engaged in the same or a similar business and
similarly situated with respect to Borrower's properties and
operations, in form, coverages and with insurance companies reasonably
acceptable to Lender. Borrower, upon request of Lender, will deliver to
Lender from time to time the policies or certificates of insurance in
form satisfactory to Lender, including stipulations that coverages will
not be canceled or diminished without at least thirty (30) days' prior
written notice to Lender. In connection with all policies covering
assets in which Lender holds or is offered a security interest for the
Loans, Borrower will provide Lender with such loss payable or other
endorsements as Lender may require.
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LOAN NO. 06200058706 (CONTINUED)
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INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports
on each existing insurance policy showing such information as Lender
may reasonably request, including without limitation the following: (a)
the name of the Insurer; (b) the risks insured; (c) the amount of the
policy; (d) the properties insured; (e) the then current property
values on the basis of which insurance has been obtained, and the
manner of determining those values; and (f) the expiration date of the
policy. In addition, upon request of Lender (however not more often
than annually), Borrower will have an independent appraiser
satisfactory to Lender determine, as applicable, the actual cash value
or replacement cost of any Collateral. The cost of such appraisal shall
be paid by Borrower.
GUARANTIES. Prior to disbursement of any Loan proceeds, furnish
executed guaranties of the Loans in favor of Lender, on Lender's forms,
and in the amount and by the guarantor named below:
GUARANTOR AMOUNT
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Xxxxxx X. Xxxxxxx Unlimited
OTHER AGREEMENTS. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any
other party and notify Lender immediately in writing of any default in
connection with any other such agreements.
LOAN PROCEEDS. Use all Loan proceeds solely for the following specific
purposes: Dental practice acquisition.
TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens, of every
kind and nature, imposed upon Borrower or its properties, income, or
profits, prior to the date on which penalties would attach, and all
lawful claims that, if unpaid, might become a lien or charge upon any
of Borrower's properties, income, or profits. Provided however,
Borrower will not be required to pay and discharge any such assessment,
tax, charge, xxxx, xxxx or claim so long as (a) the legality of the
same shall be contested in good faith by appropriate proceedings, and
(b) Borrower shall have established on its books adequate reserves with
respect to such contested assessment, tax, charge, levy, lien, or claim
in accordance with generally accepted accounting practices. Borrower,
upon demand of Lender, will furnish to Lender evidence of payment of
the assessments, taxes, charges, levies, liens and claims and will
authorize the appropriate governmental official to deliver to Lender at
any time a written statement of any assessments, taxes, charges,
levies, liens and claims against Borrower's properties, income, or
profits.
PERFORMANCE. Perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in the Related Documents in
a timely manner, and promptly notify Lender if Borrower learns of the
occurrence of any event which constitutes an Event of Default under
this Agreement or under any of the Related Documents.
OPERATIONS. Substantially maintain its present executive and management
personnel; conduct its business affairs in a reasonable and prudent
manner and in compliance with all applicable federal, state and
municipal laws, ordinances, rules and regulations respecting its
properties, chargers, businesses and operations, including without
limitation, compliance with the Americans With Disabilities Act and
with all minimum funding standards and other requirements of ERISA and
other laws applicable to Borrower's employee benefit plans, and
continue to engage in an efficient and economical manner in a business
of the same general type as now conducted by it, provided, however,
that nothing contained in this Agreement shall prevent Borrower from
discontinuing any part of Borrower's business, if in Borrower's
opinion, this discontinuance is in the best interests of Borrower and
not disadvantageous to Lender.
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MAINTENANCE. Maintain, keep and preserve Borrower's buildings and
properties and every part thereof in good repair, working order, and
condition and from time to time make all needful and proper repairs,
renewals, replacements, additions, betterments and improvements
thereto, so that at all times the efficiency thereof shall be fully
preserved and maintained, ordinary wear and tear excepted.
INSPECTION. Permit employees or agents of Lender at any reasonable time
to inspect any and all collateral for the Loan or Loans and Borrower's
other properties and to examine or audit Borrower's books, accounts and
records and to make copies and memoranda of Borrower's books accounts
and records. If Borrower now or at any time hereafter maintains any
records (including without limitation computer generated records and
computer software programs for the generation of such records) in the
possession of a third party, Borrower, upon request of Lender, shall
notify such party to permit Lender free access to such records at all
reasonable times and to provide Lender with copies of any records it
may request, all at Borrower's expense, and discuss the affairs,
finances and accounts of Borrower with Lender.
COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide
Lender upon Lender's request a compliance certificate executed by
Borrower's chief financial officer, or other officer or person
acceptable to Lender, certifying that the representations and
warranties set forth in this Agreement are true and correct as of the
date of the certificate and further certifying that, as of the date of
the certificate, no default or Event of Default has occurred, or has
occurred and is continuing under this Agreement.
ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all
respects with all environmental protection federal, state and local
laws, statutes, regulations and ordinances; not cause or permit to
exist, as a result of an intentional or unintentional action or
omission on its part or on the part of any third party, on property
owned and/or occupied by Borrower, any environmental activity where
damage may result to the environment, unless such environmental
activity is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within
thirty (30) days after receipt thereof a copy of any notice, summons,
lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrower's part in connection with
any environmental activity whether or not there is damage to the
environment and/or other natural resources.
ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
financing statements, instruments, documents and other agreements as
Lender or its attorneys may reasonably request to evidence and secure
the Loans and to perfect all Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that
while this Agreement is in effect, Borrower shall not, without the
prior written consent of Lender.
INDEBTEDNESS. Except for trade debt incurred in the normal course of
business, and indebtedness to Lender contemplated by this Agreement,
create, incur or assume indebtedness for borrowed money, including
capital leases.
CONTINUITY OF OPERATIONS. (a) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (b) cease operations, wind up, liquidate, merge, reorganize,
transfer, acquire or consolidate with any other entity, change
ownership, dissolve, transfer or sell or acquire Collateral or assets
out of the ordinary course of business, or (c) pay, declare, set aside,
or allocate any dividends in cash or other property, on Borrower's
stock (however, if Borrower is a Subchapter S corporation, Borrower may
make distributions to each shareholder which is necessary to pay for
any personal income tax liability incurred by that shareholder as a
direct result of profits generated by the
08-20-1997 BUSINESS LOAN AGREEMENT PAGE 9
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Subchapter S corporation) or purchase or retire any of Borrower's
outstanding shares or alter or amend Borrower's capital structure.
LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance
money or assets, (b) purchase, create or acquire any interest in any
other enterprise or entity, or (c) assume, endorse, be liable for or
incur any agreement or obligation as surety or guarantor.
CESSATION OF ADVANCES. If Lender has made any commitment to make any
Loan to Borrower whether under this Agreement or under any other
agreement, Lender shall have no obligation to make Loan Advances or to
disburse Loan proceeds if: (a) Borrower or any Guarantor is in default
under the terms of this Agreement or any of the Related Documents or
any other agreement that Borrower or any Guarantor has with Lender; (b)
Borrower or any Guarantor becomes insolvent, has a petition in
bankruptcy or similar proceedings, or is adjudged a bankrupt; (c) there
occurs a material adverse change in Borrower's financial condition, in
the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; (d) any Guarantor seeks, claims or
otherwise attempts to limit, modify or revoke such Guarantor's guaranty
of the Loan or any other loan with Lender; or (e) Lender in good xxxxx
xxxxx itself insecure even though no Event of Default shall have
occurred.
CONDITIONS PRECEDENT ADVANCE. Borrower shall provide financial
information on the dental practice(s) to be acquired to include at a
minimum the immediate past two year-end tax returns and/or CPA compiled
financial statements plus a company prepared interim financial
statement if more than 180 days have passed since the year-end. Based
on the information provided, the "to be acquired" practice must
generate sufficient cash flows to have a debt service coverage of 1.25
times at a minimum for all proposed debt.
Any advance shall not exceed 80% of the cost of the acquiring each
practice, as evidenced by the Purchase Agreement.
Any fundings will be limited to the purchase of tangible assets only.
RIGHT OF SETOFF. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge, withdraw or setoff all sums owing on this
Agreement against any and all the accounts set forth below in the
Accounts section without prior demand or notice to Borrower.
ACCOUNTS. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and
transfers to Lender all of Borrower's right, title and interest in and
to, Borrower's deposits, accounts (whether checking, savings, or some
other account), or securities now or hereafter in the possession of or
on deposit with Lender or with any Xxxxxxx Xxxxx, Inc. affiliate or
subsidiary including without limitation all accounts held jointly with
someone else and all accounts Borrower may open in the future,
excluding however all XXX, Xxxxx, and trust accounts.
EVENTS OF DEFAULT. If any of the following events shall occur each
shall constitute an Event of Default under this Agreement:
DEFAULT ON INDEBTEDNESS. An event of default as defined in any Loan or
Note or demand for full payment of any Loan or Note.
OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or
failure of Borrower to comply with or to perform any other term,
obligation, covenant or condition contained in any other agreement
between Lender and Borrower. If any Affirmative Covenant herein is
breached, and if Borrower or Grantor, as the case may be, has not been
given a notice of a similar breach
08-20-1997 BUSINESS LOAN AGREEMENT PAGE 10
LOAN NO. 06200058706 (CONTINUED)
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within the preceding twelve (12) months, it may be cured (and no Event
of Default will have occurred) if Borrower or Grantor, as the case may
be, after receiving written notice from Lender demanding cure of such
failure: (a) cures the failure within thirty (30) days; or (b) if the
cure requires more than thirty (30) days, immediately initiates steps
which Lender deems in Lender's sole discretion to be sufficient to cure
the failure and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably
practical.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower's
property or Borrower's or Borrower's or any Grantor's ability to repay
the Loans or perform their respective obligations under this Agreement
or any of the Related Documents.
FALSE STATEMENTS. Any warranty, representation, or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under
this Agreement or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any Security Agreement to create a valid and perfected Security
Interest) at any time and for any reason.)
INSOLVENCY. The dissolution or termination of Borrower's existence as a
going business, insolvency, appointment of a receiver for any part of
Borrower's property, any assignment for the benefit of creditor, and
type of creditor workout, or the commencement of any proceeding under
any bankruptcy or insolvency laws by or against Borrower.
CREDITOR PROCEEDINGS. Commencement of foreclosure proceedings, whether
by judicial proceeding, self-help, repossession or any other method, by
any creditor of Borrower, any creditor of any grantor of collateral for
the Loan. This includes a garnishment, attachment, or levy on or of any
of Borrower's deposit accounts with Lender. However, this Event of
Default shall not apply if there is a good faith dispute by Borrower or
Grantor, as the case may be, as to the validity or reasonableness of
the claim which is the basis of the creditor proceeding, and if
Borrower or Grantor gives Lender written notice of the creditor
proceeding and furnishes reserves or a surety bond for the creditor
proceeding satisfactory to Lender.
FORFEITURE. The filing of formal charges under any federal or state law
against any Borrower which forfeiture is the penalty. However, this
Event of Default shall not apply if there is a good faith dispute by
Borrower as to the validity or reasonableness of the claim which is the
basis of the proceeding, and if Borrower gives Lender written notice of
the proceeding and furnishes reserves or a surety bond for the
proceeding satisfactory to Lender.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any Guarantor of any of the indebtedness or such Guarantor
dies or becomes incompetent. Lender, at its option, may, but shall not
be required to, permit the Guarantor's estate to assume unconditionally
the obligations arising under the guaranty in a manner satisfactory to
Lender, and, in doing so, cure the Event of Default.
Insecurity, Lender, in good faith, deems itself insecure.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur,
except where otherwise provided in this Agreement or the Related
Documents, all commitments and obligations of Lender under this
Agreement or
08-20-1997 BUSINESS LOAN AGREEMENT PAGE 11
LOAN NO. 06200058706 (CONTINUED)
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the Related Documents or any other agreement immediately will terminate
(including any obligation to make Loan Advances or disbursements), and,
at Lender's option, all indebtedness immediately will become due and
payable, all without notice of any kind to Borrower, except that in the
case of an Event of Default of the type described in the "Insolvency"
subsection above, such acceleration shall be automatic and not
optional. In addition, Lender shall have all the rights and remedies
provided in the Related Documents or available at law, in equity, or
otherwise. Except as may be prohibited by applicable law, all of
Lender's rights and remedies shall be cumulative and may be exercised
singularly or concurrently. Election by Lender to pursue any remedy
shall not exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Borrower or
of any Grantor shall not affect Lender's right to declare a default and
to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement and supersedes all prior
understandings and correspondence, oral or written, with respect to the
subject matter hereof. No alteration of or amendment to this Agreement
shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.
APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define
the provisions of this Agreement.
CONTINUING AGREEMENT. This Agreement is a continuing agreement and
shall continue in effect notwithstanding that from time to time, no
indebtedness may exist.
CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's
sale or transfer, whether now or later, of one or more participation
interests in the Loans to one or more purchasers, whether related or
unrelated to Lender. Lender may provide, without any limitation
whatsoever, to any one or more purchasers, or potential purchasers, any
information or knowledge Lender may have about Borrower or about any
other matte relating tot he Loan, and Borrower hereby waives any rights
to privacy it may have with respect to such matters. Borrower
additionally waives any and all notices of sale of participation
interests, as well as all notices of any repurchase of such
participation interests. Borrower further waives all rights of offset
or counterclaim that it may have now or later against Lender or against
any purchaser of such a participation interest and unconditionally
agrees that either Lender or such purchaser may enforce Borrower's
obligation under the Loan irrespective of the failure or insolvency of
any holder of any interest in the Loans. Borrower further agrees that
the purchaser or any such participation interests may enforce its
interests irrespective of any personal claims or defenses that Borrower
may have against Lender.
COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's
out-of-pocket expenses, including reasonable attorneys' fees, incurred
in connection with the preparation, execution, enforcement and
collection of this Agreement or in connection with the Loans made
pursuant to this Agreement. Lender may pay someone else to help collect
the Loans and to enforce this Agreement, and Borrower will pay that
amount. This includes, subject to any limits under applicable law,
Lender's reasonable attorneys' fees and Lender's legal expenses,
whether or not there is a lawsuit, including reasonable attorneys' fees
for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Borrower also will pay any court
costs, in addition to all other sums provided by law.
08-20-1997 BUSINESS LOAN AGREEMENT PAGE 12
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NOTICES. All notices required to be given under this Agreement shall be
given in writing and shall be effective when actually delivered or when
deposited with a nationally recognized overnight courier or deposited
in the United States registered or certified mail, first class, postage
prepaid, return receipt requested, addressed to the party to whom the
notice is to be given at the address shown above; notification by
facsimile is specifically not allowed. Any party may change its address
for notices under this Agreement by giving formal written notice to the
other parties, specifying that the purpose of the notice is to change
notice to all Borrowers. For notice purposes, Borrower agrees to keep
Lender informed at all times of Borrower's current address(es).
SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemed to be modified to be
within the limits of enforceability or validity; however, if the
offending provision cannot be so modified, it shall be stricken and all
other provisions of this Agreement in all other respects shall remain
valid and enforceable.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall
inure to the benefit of Lender, its successors and assigns. Borrower
shall not, however, have the right to assign its rights under this
Agreement or any interest therein, without the prior written consent of
Lender.
SURVIVAL. All warranties, representations, and covenants made by
Borrower in this Agreement or in any certificate or other instrument
delivered by Borrower to Lender under this Agreement shall be
considered to have been relied upon by Lender and will survive the
making of the Loan and delivery to Lender of the Related Documents,
regardless of any investigation made by Lender or on Lender's behalf.
TIME. Time is of the essence in the performance of this Agreement.
WAIVER. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender.
No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Agreement shall not prejudice or
constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this
Agreement. No prior waiver by Lender, nor any course of dealing between
Lender and Borrower, or between Lender and any Grantor, shall
constitute a waiver of any of Lender's rights or of any obligations of
Borrower or of any Grantor as to any future transactions. Whenever the
consent of Lender is required under this Agreement, the granting of
such consent by Lender in any instance shall not constitute continuing
consent in subsequent instances where such consent is required, and in
all cases such consent may be granted or withheld in the sole
discretion of Lender.
08-20-1997 BUSINESS LOAN AGREEMENT PAGE 13
LOAN NO. 06200058706 (CONTINUED)
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BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
AUGUST 20, 1997.
BORROWER:
DENTAL CARE ALLIANCE, INC.
BY: /s/ XXXXXX X. XXXXXXX
-------------------------
Xxxxxx X. Xxxxxxx, President
LENDER:
XXXXXXX BANK, N.A.
By:
-------------------------
Authorized Officer
