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Exhibit 10.3
SECURITY AGREEMENT
(All Assets)
Fleet National Bank
with a mailing address of:
Xxx Xxxxxxx Xxxxxx Xxxxxx, XX 00000
Xxxxxx and Xxxxxx, D.M.D., P.C.
First New England Dental Centers, Inc.
on behalf of themselves and any successors or assigns (collectively, the
"Borrower") and Fleet National Bank its successors and assigns (the "Bank") are
the parties to this Agreement. In consideration of the Bank extending or having
extended loans and/or other financial considerations to the Borrower on this
date or on one or more occasions, the Borrower agrees with the Bank as follows:
SECTION 1. SECURITY INTEREST: As security for the payment and performance of all
Obligations, as hereinafter defined, now existing or hereafter arising of the
Borrower to the Bank, including a $5,000,000 Revolving Line of Credit, and a
$5,000,000 Revolving Credit Note, both of even date herewith, whether arising by
future advances or otherwise, Borrower hereby grants a security interest to the
Bank in all Borrower's assets of every sort whatsoever, including without
limitation the following property, wherever located, and in all proceeds and
products of such property:
1.01 ALL INVENTORY of Borrower now existing or hereafter arising,
meaning all goods, merchandise, raw materials, supplies, goods in
process, finished goods, and other tangible personal property held
by the Borrower for processing, sale, or other business purpose, or
to be used or consumed in Borrower's business.
1.02 ALL ACCOUNTS AND ACCOUNTS RECEIVABLE of Borrower now existing or
hereafter arising; meaning all accounts receivable, papers, notes,
drafts, acceptances, and all other debts, obligations, and
liabilities in whatever form owing to Borrower from any person,
firm, corporation, or any other legal entity ("Account Debtors")
and all proceeds thereof, including returned or repossessed goods.
1.03 ALL DOCUMENTS of Borrower now existing or hereafter arising;
meaning all documents of title, including bills of lading, dock
warrants, dock receipts, warehouse receipts, and orders for the
delivery of goods, and also any other document which in the regular
course of business or financing is treated as adequately evidencing
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that the person in possession of it is entitled to receive, hold,
and dispose of the document and goods it covers.
1.04 ALL INSTRUMENTS of Borrower now existing or hereafter arising;
meaning all negotiable instruments, securities, and any other
writings which evidence a right to payment of money and are not
themselves security agreements or leases and are of a type which
are in the ordinary course of business transferred by delivery with
any necessary endorsement or assignment.
1.05 ALL OTHER RIGHTS of Borrower to the payment of money, including
without limitation amounts due from affiliated parties, tax refunds
of every sort including loss carryback refunds, insurance proceeds
and all rights to deposits or advance payments.
1.06 ALL CHATTEL PAPER of Borrower now existing or hereafter arising,
including all additions thereto and substitutions therefor; meaning
a writing or writings which evidence both a monetary obligation and
a security interest in or a lease of specific goods.
1.07 ALL GENERAL INTANGIBLES, including, but not limited to, choses in
action of Borrower now existing or hereafter arising, meaning any
personal property other than goods, accounts, chattel papers,
documents, and instruments and general intangibles of the following
description or type: goodwill, trade secrets and other proprietary
rights, literary rights, contract rights and rights to performance,
copyrights, trade names, trade-marks, patents, mask works,
applications for any of the foregoing, software licenses (including
Borrower's interest as either licensor or licensee and including
all enhancements, upgrades and improvements) and related
documentation and materials (e.g., source codes, flow charts, file
layouts, program documentation, output descriptions, user manuals,
operations manuals, screen layouts and detailed implementation
schedules).
1.08 ALL FILES, RECORDS (including without limitation computer programs,
disks, tapes and related electronic data processing media) and
writings in anyway related to the foregoing property and all rights
of Borrower to retrieval from third parties of information
pertaining to any such property.
1.09 ALL OTHER GOODS of Borrower, wherever located, now existing or
hereafter acquired; meaning all motor vehicles, equipment,
machinery, and other tangible
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personal property, whether fixtures or not, any and all records
relating to any of the Collateral, together with all additions,
substitutions, repairs, replacements, accessions, attachments and
accessories thereto.
It is Borrower's express intention that the continuing grant of this security
interest remain as security for payment and performance of all of Borrower's
Obligations, whether now existing, or which may hereinafter be incurred by
future advances, or otherwise, and whether or not such Obligations are related
to any transactions described in this Agreement, by class or kind, or whether or
not contemplated by the parties at the time of the granting of this security
interest. The notice of the continuing grant of this security interest therefore
shall not be required to be stated on the face of any document representing any
of the Borrower's Obligations nor otherwise identify it as being secured hereby.
To the extent any Accounts due from any federal agency or entity or otherwise
administered by the federal government or its agencies may not be legally
assigned then said Accounts shall not be deemed a part of the Collateral.
SECTION 2. DEFINITIONS: All types of Collateral mentioned in Section 1 shall
have the meanings given to them under Chapter 106 of the Massachusetts General
Laws unless specifically defined otherwise in that section or elsewhere in this
Agreement. In addition, as used herein, the following terms shall have the
following respective meanings:
2.01 OBLIGATIONS means all liabilities of the Borrower to the Bank of
every kind and description, direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter
arising, regardless of how they arise or by what agreement or
instrument they may be evidenced, including those arising under
this Agreement, or whether evidenced by any agreement or
instrument, including obligations to perform acts and refrain from
taking action as well as obligations to pay money, including
without limitation, under a certain $5,000,000 Revolving Line of
Credit and a $5,000,000 Revolving Line of Credit Note entered into
in connection therewith, all of even date herewith.
2.02 COLLATERAL means any and all property of the Borrower in which the
Bank now has, by this Agreement, or hereafter acquires a security
interest.
SECTION 3. BORROWER'S REPRESENTATIONS, WARRANTIES AND COVENANTS:
To induce the Bank to enter into this Agreement the Borrower represents,
warrants, agrees, and covenants that:
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3.01 CORPORATE EXISTENCE AND AUTHORITY:
(a) Xxxxxx and Xxxxxx, D.M.D., P.C. is a corporation duly organized and
validly existing under the laws of the Commonwealth of
Massachusetts.
(b) First New England Dental Centers, Inc. is a corporation duly
organized validly existing under the laws of the State of Delaware.
(c) Borrower is duly qualified and in good standing in every state in
which it is doing business.
(d) The execution, delivery and performance of this Agreement and all
other notes, agreements and documents contemplated by this
Agreement are valid, legal and binding obligations of the Borrower,
are within Borrower's corporate powers, have been duly authorized
by all necessary corporate action, and are not and will not be in
contravention of law, or will not result in any event of default
under the terms of Borrower's charter, by-laws, or other corporate
powers, or of any indenture, agreement, or undertaking to which the
Borrower is or may be a party or by which it is or may be bound.
(e) The consent or approval of any governmental body, agency, or
authority is not required in order for the Borrower to execute,
deliver and perform this Agreement and all other notes, agreements
and documents contemplated by this Agreement.
(f) All issued and outstanding capital stock of Borrower has been
properly issued, and all books and records, particularly minute
books, by-laws and books of account are accurate, and up to date
and will be so maintained.
3.02 BORROWER OWNS ASSETS: Borrower owns all its assets, as represented
on any papers furnished to the Bank and has and will have the
exclusive right and authority to grant security interests in the
Collateral.
3.03 ASSETS FREE OF ENCUMBRANCES: All the Collateral, is and will be
kept in good condition and clear of all security interests,
mortgages, liens, and encumbrances, except those granted or allowed
under this Agreement, and the Borrower has marketable title to all
Collateral and shall defend the same against the claims and demands
of all persons. The Bank has the right but not the duty to
discharge any Liability giving rise to a lien on Collateral,
including liens of any taxing authority, and the Borrower shall
repay the Bank immediately for all
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amounts paid by the Bank to discharge such Liabilities.
3.04 LOCATION OF COLLATERAL:
(a) Tangible Collateral, including, but not limited to, equipment,
inventory, and fixtures, and if the Bank permits the Borrower to
retain possession thereof, instruments, documents, and chattel
paper, will be kept in possession of the Borrower at its place of
business named above or at such other locations as set forth on
Schedule A attached hereto.
(b) The location or locations of such Collateral shall not be changed
without the prior written consent of the Bank. In no event shall
such Collateral be located outside the United States.
(c) Immediately upon the Bank's request, whether or not the Borrower is
in default with respect to any Obligation to the Bank, the Borrower
will turn over to the Bank all instruments, documents and chattel
paper which are Collateral under this Agreement.
(d) The Bank may in its discretion charge to the Borrower the amount
represented to be owing on any liability in whatever form owing to
the Borrower from whatever source, if said liability serves as
collateral under this Agreement and if any merchandise giving rise
to any such liability is returned, rejected, lost or damaged, or if
any dispute arises between Borrower and an Account Debtor in
respect of any collateral. Until such debit is made, Borrower shall
hold any such returned merchandise segregated in trust for the Bank
subject to its exclusive disposition. Borrower shall promptly
notify the Bank of any such return, rejection, loss or damage.
3.05 RECORDS AND INFORMATION WITH RESPECT TO BORROWER AND COLLATERAL:
(a) The Borrower will make written records with respect to all
Collateral, containing all information which the Bank may desire.
All such records will be kept by the Borrower at its place of
business named above. The Bank shall have access to the place where
such records are kept and the right to inspect all such records at
any time the Bank deems necessary during normal business hours upon
prior notice.
(b) The Borrower will furnish all other information, financial or
otherwise, that a duly authorized lending
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officer of the Bank deems necessary to inform the Bank properly
with respect to Collateral or the condition of the Borrower. The
Borrower will inform the Bank immediately in the event of any
material change in the Borrower's financial condition or in the
event of any breach of this Agreement or in the event that any of
the representations and warranties herein contained do not continue
to be true and correct in any material respect as though
continuously made to the Bank.
(c) Neither this Agreement nor any financial statements, reports,
schedules, certificates or other documents which have been or will
be delivered to the Bank contain any misrepresentation or untrue
statement of fact or omit to state any material facts necessary to
make this Agreement or such financial statements, reports,
schedules, certificates or other documents not misleading. All such
statements have been prepared in accordance with generally accepted
accounting principles.
(d) The Borrower will execute upon the request of the Bank such
financing statements and like papers as the Bank deems necessary to
protect properly Collateral and its security interest therein and
will pay the cost of filing them in such offices as the Bank
requests. Such papers include, without limitation, those required
under the Federal Assignment of Claims Act, for recordation of a
security interest in patents or trademarks with the United States
Patent and Trademark Office and for recordation of a security
interest in copyrights with the Library of Congress.
(e) The Bank may from time to time audit the Collateral and Borrower's
records and operations during normal business hours upon written
notice. The Bank may require the Borrower to pay for said audit in
an amount to be agreed upon prior to said audit. So long as
Borrower is not in default hereunder, the Bank shall conduct such
an audit no more than once a year.
3.06 FIXTURES: If any machinery, equipment, or other property serving as
Collateral under this Agreement is or will be attached to any real
estate, the Borrower will furnish the Bank with a description of
such real estate with a disclaimer, signed by all persons having an
interest in said real estate, of any interest in the Collateral
which has or may have priority over the Bank's interest, and will
notify the Bank in writing of any intended sale, mortgage, or
conveyance of such real estate, and will give written notice of the
terms and conditions of this Agreement to any prospective
purchaser, mortgagee, or grantee of such realty.
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3.07 LIABILITIES OWING TO BORROWER:
(a) Any liabilities in whatever form owing to the Borrower from any
person, firm, or other legal entity serving as Collateral are and
will be good and valid indebtedness not subject to any defenses,
set-offs, claims, counter-claims or agreements under which any
deduction or discount may be made thereon, except as specified to
the Bank on a statement or invoice made available to the Bank on or
prior to the date hereof.
(b) Upon default under the Obligations, full payment of all such
liabilities in whatever form owing to the Borrower shall, upon
demand by the Bank any time after the due date thereof, be paid in
full to the Bank or, in the alternative, if the Bank so decides the
full amount of said liabilities may be deemed to be fully due and
payable to the Bank by the Borrower pursuant to the terms of this
Agreement at any time after the due date of said liabilities.
3.08 TAXES:
(a) The Borrower will pay any sales or other taxes owed by Borrower
which may become due and payable with respect to a sale or other
transaction giving rise to any Collateral.
(b) The Borrower has filed all federal and state tax returns required
by law to be filed by it and has paid all taxes shown to be due
thereon which are required to have been paid and has paid all other
taxes known to be due and payable, and all additional assessments
except for such as are being contested in good faith by appropriate
legal or administrative proceedings, and there shall be set aside
on the books of the Borrower such reserves as may be deemed
adequate by independent certified public accountants with respect
thereto.
3.09 CHATTEL PAPER: The Borrower agrees to label all chattel paper
serving as Collateral under this agreement with the words, "Subject
to the security interest of Fleet National Bank".
3.10 INSURANCE:
(a) The Borrower agrees at its or his own expense to keep all
Collateral insured to the full value thereof against such risks and
by policies of insurance issued by such companies as the Bank may
designate or approve, and the policies evidencing such insurance
shall be duly endorsed
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in favor of the Bank with such loss payable rider as the Bank may
designate, and said policies shall be delivered to the Bank.
(b) All policies of insurance shall provide for ten (10) days minimum
written cancellation notice to the Bank.
(c) Should the Borrower fail for any reason to furnish the Bank with
such insurance, the Bank shall have the right but is under no
obligation to obtain the same and charge any costs in connection
therewith to the Borrower.
(d) The Bank may require any proceeds of such insurance policies to be
paid to it and apply the same to any liabilities of the Borrower
then owing to it and hold any excess amounts as further security
for any Obligations then outstanding or which may arise under this
Agreement.
(e) The Bank shall have no risk, liability, or responsibility in
connection with payment or non-payment of any loss, the sole
obligation of the Bank being to credit the Borrower with the net
proceeds of any insurance payments received on account of any loss.
3.11 SALE OF COLLATERAL: Unless otherwise allowed by this Agreement, the
Borrower will not sell any Collateral without the prior written
consent of the Bank. So long as the Borrower has not received
notice of a default hereunder the Borrower shall have the right to
sell inventory, which may be Collateral, in the ordinary course of
its business. A sale in the ordinary course of business shall not
include a transfer in total or partial satisfaction of a debt,
other than a debt which has arisen solely as a result of prepayment
or deposit by customers of the Borrower for items of inventory
subsequently to be purchased or delivered.
3.12 BANK'S RIGHT TO POSSESSION:
(a) Unless otherwise Provided by law, the Bank shall have the right at
all times upon an event of default to the immediate possession of
all Collateral and its products and proceeds, and in its sole
discretion may operate and use said Collateral, complete work in
process, and sell Collateral without being liable to the Borrower
on account of any losses, damage, or depreciation that may occur as
a result thereof so long as the Bank shall act in good faith.
(b) Unless otherwise provided by law, upon an event of default the Bank
may, at the expense of the Borrower,
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maintain possession of the Borrower's premises by the use of a
custodian or custodians, or in such other manner as the Bank may
determine.
(c) Unless otherwise provided by law, upon an event of default the Bank
may at all times, at the expense of the Borrower, enter upon any
premises on which Collateral may be situated and remove any such
Collateral to such other places as the Bank determines.
(d) Unless otherwise provided by law, upon an event of default the Bank
may at any time transfer any Collateral into its own name or that
of its nominee and receive the income thereon and hold the same as
security for Obligations or apply it to principal or interest due
on the Obligations.
3.13 BORROWER'S DUTY TO COMPLY WITH LAWS: The Borrower has complied and
will comply with the material terms and conditions of any leases
covering premises wherein any Collateral is located, and any
orders, ordinances, laws, or statutes of any city, state, or other
governmental department having jurisdiction with respect to such
premises or the conduct of business thereon.
3.14 POSSESSES ALL PATENTS: The Borrower possesses and will continue to
maintain all patents, patent rights, or licenses, trademarks,
trademark rights, trade names, trade name rights, mask works and
copyrights which are required to conduct its business as now
conducted without known conflict with the rights of others.
Borrower agrees to notify the Bank upon submission of an
application for any patent, copyright or trademark or similar
protection for intellectual property and shall further notify the
Bank upon the granting of any such protection.
3.15 NO DEFAULT: The Borrower is not in default in the performance,
observance or fulfillment of any of the material obligations,
covenants or conditions contained in any agreement, instrument,
judgment, order, decree, writ, rule or regulation to which it is a
party or by which it or any of its property is subject.
3.16 NO KNOWN OR THREATENED LITIGATION: Except as otherwise previously
disclosed to the Bank, there are no known actions, suits, or
proceedings pending or, to the knowledge of the Borrower,
threatened against or affecting the Borrower, at law or in equity,
or before or by any federal, state, municipal, or other
governmental department, commission, board, bureau, agency, or
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instrumentality which may result in any material adverse change in
the business, properties, or assets, or in the condition, financial
or otherwise, of the Borrower.
3.17 OTHER OBLIGATIONS: The Borrower will not, without the prior written
consent of the Bank, incur, create, assume, or permit to exist
other indebtedness for borrowed money, or sell any accounts
receivable; or lend money, including loans to the Borrower's
officers, directors, shareholders or partners, or mortgage, assign,
or encumber any of the Borrower's assets except to the Bank; or
guaranty, endorse, or otherwise become surety for or upon the
obligations of others, except endorsing instruments for deposit or
collection in the ordinary course of business.
3.18 MERGERS, SALES OF ASSETS, CHANGES IN CORPORATE STRUCTURE: Except as
approved by the Bank in writing, the Borrower will not sell, lease,
transfer or otherwise dispose of (whether in one or a series of
transactions) all or any substantial part of its assets, whether
now owned or hereafter acquired. If the Borrower is a corporation,
it will not without the prior written consent of the Bank, pay any
dividends (except stock dividends) on any outstanding shares, or
make any other distribution on or in respect to any of its shares,
or redeem, purchase or otherwise acquire, directly or indirectly,
any of its shares now or hereafter outstanding, or alter or amend
its capital structure, or become a party to any merger or
consolidation (in which the Borrower is not the surviving
corporation and which is not undertaken as an acquisition or merger
in the ordinary course of Borrower's business, which shall include
by definition of the acquisition of dental practices).
3.19 ERISA: The Borrower has not incurred nor will it incur any material
accumulated funding deficiency within the meaning of the Employee
Retirement Income Security Act of 1974 ("ERISA") or any liability
to the Pension Benefit Guaranty Corporation ("PBGC") established
under ERISA, or to any successor to PBGC under ERISA, in connection
with any employee benefit plan established or maintained by the
Borrower. No Reportable Event (as defined in ERISA) has occurred.
The Borrower will comply with all requirements of ERISA applicable
to it and will furnish to the Bank as soon as possible and in any
event within thirty days after the Borrower or any plan
administrator know or has any reason to know that any Reportable
Event has occurred, a statement describing the Reportable Event and
any action the Borrower proposes to take with respect thereto.
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SECTION 4. COLLECTION:
4.01 (a) The Bank may at any time upon an event of default notify
Account Debtors on any Collateral, or require the Borrower to
notify such Account Debtors, that they shall make all payments on
their account or accounts with the Borrower directly to the Bank;
or require the Borrower to hold all proceeds received from
collection in trust for the Bank without commingling the same with
other funds of the Borrower, and to turn the same over to the Bank
immediately upon receipt in the identical form received, at which
time the Bank may at its option either apply such proceeds to the
Obligations of the Borrower, in accordance with Section 4.03, or
release such proceeds to the Borrower for use in its or his
business.
(b) The Bank has the right at any time upon an event of default,
directly or through its agent, to collect proceeds directly from
Account Debtors on any Collateral and for that purpose to do all
acts and things necessary or incident thereto, including the right
to xxx on such accounts, and to sell, transfer, set over,
compromise, discharge, or extend the whole or any part of the
accounts.
4.02 Until the Bank exercises the rights contained in Section 4.01, the
Borrower may continue to collect proceeds from Account Debtors on any
Collateral and use the proceeds in the ordinary course of its or his
business.
4.03 The Bank shall credit to the Borrower the proceeds obtained from Account
Debtors of the Borrower, such credits to be entered within three (3)
business days after receipt of the proceeds. Such credits, however, are
conditional upon final payment to the Bank at its office in cash or
solvent credits of the items giving rise to them, and, if any item is not
so paid, the amount of a credit given with respect to any of the
Borrower's Obligations shall be reversed or, in the discretion of the
Bank, it shall be charged to any deposit accounts of the Borrower with
the Bank, whether or not the item is returned.
SECTION 5. DEFAULT AND ACCELERATION: Any or all of the Obligations of the
Borrower to the Bank shall, at the option of the Bank and notwithstanding any
time or credit allowed by any instrument evidencing an Obligation, be
immediately due and payable without notice or demand upon the occurrence of any
of the following events of default, which in the case of a default in payment to
the Bank has not been cured by Borrower within ten (10) days of its receipt of
written notice from Bank and which in the
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case of any other default has not been cured by Borrower within thirty (30) days
of its receipt of written notice from Bank:
5.01 Default in the payment or performance, when due or payable, of any
Obligation of the Borrower, or of any endorser, guarantor or surety for
any Obligation of the Borrower to the Bank;
5.02 Failure of the Borrower to pay when due any tax unless Borrower has filed
an extension or otherwise contested the same in good faith;
5.03 The service upon the Bank of a writ in which the Bank is named as Trustee
for Borrower or any guarantor or surety for Borrower.
5.04 An injunction or attachment against property of the Borrower remaining
undischarged for a period of thirty (30) days;
5.05 Calling of a meeting of creditors, appointment of a committee of
creditors or liquidating agents, or offering a composition or extension
to creditors by, for, or of the Borrower, or application by the Borrower
for or consent to the appointment of a receiver or trustee of the
Borrower;
5.06 The Borrower or any guarantor admitting in writing its inability to pay
its debts as they mature; the filing or institution by or against the
Borrower or by an endorser, guarantor, or surety for any Liability of the
Borrower to the Bank, of a petition in bankruptcy, or of any other
proceedings under federal or state law relating to bankruptcy,
insolvency, the relief of debtors, or the readjustment, reorganization,
or extension of any indebtedness of the Borrower.
5.07 Such a change in the condition or affairs (financial or otherwise) of the
Borrower or of any endorser, guarantor, or surety for any Obligation of
the Borrower to the Bank as, in the reasonable opinion of a duly
authorized lending officer of the Bank, materially impairs the Bank's
security or materially increases its risk, including the liquidation,
termination, dissolution or death of any Borrower or Guarantor; or
5.08 The material breach by the Borrower of any warranty, representation, or
agreement contained in this Agreement, or any other agreement relative to
the loans secured hereby; or if any warranty, representation, agreement,
report, certificate, financial statement, or other
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instrument furnished in connection with this Agreement or the borrowings
secured hereby shall prove to be false or misleading in any material
respect.
SECTION 6. BANK'S REMEDIES:
In addition to acceleration as hereinbefore provided, upon the occurrence of any
of the events of default the Bank shall have the following remedies:
6.01 The Bank shall have all the rights and remedies of a secured party under
Chapter 106, of the Massachusetts General Laws (Article Nine of the
Uniform Commercial Code), in addition to all other rights and remedies
mentioned in this Agreement. Borrower agrees that where reasonable notice
is required, such requirement shall be satisfied by mailing notice seven
(7) days prior to the sale or other disposition, postage prepaid, to the
address last known to the Bank of each party entitled to notice.
6.02 Unless otherwise provided by law, the Bank may require the Borrower to
assemble any tangible personal property constituting Collateral and make
it available to the Bank at a place to be designated by the Bank which is
reasonably convenient to both parties.
6.03 In the event of a default, Borrower agrees that a real estate attachment
will be necessary and reasonable to the Bank's protection and that the
Bank may complete any contracts entered into by the Borrower and assume
all rights earned by such completion.
6.04 The Borrower hereby grants to the Bank a nonexclusive irrevocable license
in connection with the Bank's exercise of its rights hereunder, to use,
apply and affix any trademark, tradename, logo or the like in which the
Borrower now or hereafter has rights, which license may be used upon the
occurrence of any of the events of default.
6.05 The Bank may buy at any public sale, and if the Collateral is of a type
customarily sold on a recognized market or the subject of widely
distributed standard price quotations the Bank may buy at private sale.
Proceeds of any sale shall be applied first to all costs and expenses of
sale, including attorney's fees, and then to payment of the Liabilities
secured hereby.
SECTION 7. BANK'S RIGHT OF SET-OFF: The Borrower agrees that any deposits or
other sums at any time credited by or due from the Bank
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to the Borrower, or to any obligor or guarantor of any Obligations of the
Borrower in the possession of the Bank, may at all times be held and treated as
Collateral for any Obligations of the Borrower or any such obligor or guarantor
to the Bank. The Bank may apply or set-off such deposits or other sums against
said Obligations at any time after an event of default.
SECTION 8. POWER OF ATTORNEY: The Borrower hereby irrevocably appoints the Bank
and each of its duly authorized officers the true and lawful attorney of the
Borrower with full power of substitution, in the name of the Bank or in the name
of the Borrower or otherwise, for the sole benefit of the Bank but at the sole
expense of the Borrower, without notice to or demand upon the Borrower, upon an
event of default hereunder: (a) to demand, collect, receive payment of, receipt
for, settle, compromise or adjust, and give discharges and releases in respect
of the Accounts Receivable or any of them; (b) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Accounts Receivable or any of them and to enforce
any other rights in respect thereof or in respect of the goods which have given
rise thereto; (c) to defend any suit, action or proceeding brought against the
Borrower in respect of any Account Receivable or the goods which have given rise
thereto; (d) to settle, compromise or adjust any suit, action or proceeding
described in clause (b) or (c) above and, in connection therewith, to give such
discharges or releases as the Bank may deem appropriate; (e) to endorse checks,
notes, drafts, acceptances, money orders, bills of lading, warehouse receipts or
other instruments or documents evidencing or securing the Accounts Receivable or
any of them; (f) to receive, open and dispose of all mail addressed to the
Borrower and to notify the post office authorities to change the address of
delivery of mail addressed to the Borrower to such address, care of the Bank, as
the Bank may designate; and (g) generally to sell, assign, transfer, pledge,
make any agreement in respect of or otherwise deal with any Account Receivable
or the goods or service which have given rise thereto, as fully and completely
as though the Bank were the absolute owner thereof for all purposes, including
contacting Account Debtors directly for verification or other purposes. The
powers conferred on the Bank by this Agreement are solely to protect the
interest of the Bank and shall not impose any duty upon the Bank to exercise any
such power, and if the Bank shall exercise any such power, it shall be
accountable only for amounts that it actually receives as a result thereof and
shall not be responsible to the Borrower except for gross negligence and willful
misconduct. The Bank shall be under no obligation to take steps necessary to
preserve rights in any other Collateral against prior parties but may do so at
its option. The Bank may at its option transfer at any time to itself or to its
nominee any securities held as Collateral hereunder and receive the income
thereon and hold the same as Collateral hereunder and may at any time notify the
Account Debtors on any
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Accounts Receivable or the obligor on any other Collateral of the Bank's
security interest therein and instruct such Account Debtors and obligors to make
all future payments thereon to the Bank. As its option the Bank may discharge
any taxes, liens, security interests or other encumbrances to which any
Collateral is at any time subject, and may, upon the failure of the Borrower so
to do, purchase insurance on any Collateral and pay for the repair, maintenance
or preservation thereof, and the Borrower agrees to reimburse the Bank on demand
for any payments made or expenses incurred by the Bank pursuant to the foregoing
authorization, and authorizes the Bank to charge the Loan Account as set forth
in the Revolving Loan Agreement for the amount of such payments or expenses. The
Bank may at any time take control of any proceeds of Collateral to which the
Bank is entitled hereunder or under applicable law.
SECTION 9. EXPENSES: The Borrower shall pay or reimburse the Bank on demand for
all reasonable out-of-pocket expenses of every nature which the Bank may incur
in connection with this Agreement and the preparation thereof, the making of any
loan in connection herewith, or the collection of the Borrower's indebtedness
secured under this Agreement, including but not limited to reasonable attorney's
fees, and fees and expenses related to the perfection and protection of any
security interest granted by the Borrower; or the Bank, if it chooses, may
charge any of the Borrower's funds on deposit with the Bank.
SECTION 10. MODIFICATION AND WAIVERS:
10.01 The rights, remedies, powers, privileges and discretions of the
Bank hereunder shall be cumulative and not exclusive of any rights
or remedies which it would otherwise have.
10.02 Any determination that any provision of this Agreement or any
application thereof is invalid, illegal or unenforceable in any
respect in any instance shall not affect the validity, legality and
enforceability of such provision in any other instance, nor the
validity, legality or enforceability of any other provision of this
Agreement.
10.03 No modification of this Agreement will be binding unless in writing
and signed by a duly authorized lending officer of the Bank.
10.04 Any default by the Borrower may be waived by the Bank in writing
signed by a duly authorized lending officer of the Bank, but no
such waiver shall extend to any subsequent default.
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10.05 No delay on the part of the Bank in exercising any of the rights
granted or referred to in this Agreement shall be held to
constitute a waiver.
SECTION 11. NOTICE, ASSIGNMENT, TERMINATION:
11.01 Unless otherwise provided for by law, any demand, notice, or other
communication to the Borrower that the Bank may elect to give shall
be effective if sent by registered mail or delivered to a telegraph
company, addressed to the Borrower at the address shown at the
beginning of this Agreement, or, if the Borrower has notified the
Bank in writing of a change of address, to the Borrower's last
address as so notified. The Borrower shall promptly notify the Bank
in the event that any change is made in the name of the Borrower.
Demands, notices, or other communications addressed to the
Borrower's address at which the Bank customarily communicates with
the Borrower shall also be effective.
11.02 If at any time or times by assignment or otherwise the Bank assigns
this Agreement, which in its sole discretion the Bank may do, such
assignment shall carry with it the Bank's powers and rights under
this Agreement and the transferee shall become vested with said
powers and rights whether or not they are specifically referred to
in the transfer. If and to the extent the Bank retains any other
Obligation or Collateral, the Bank will continue to have the rights
and powers herein set forth with respect thereto.
11.03 This Agreement shall continue until written notice to terminate is
given to the other party and all Obligations of the Borrower to the
Bank and any obligations of the Bank to the Borrower have been
satisfied, whether existing at the time of termination or arising
thereafter. Until such time, all rights and powers of the Bank
shall remain in full force and effect.
11.04 Any obligations the Bank may have to the Borrower, whether now
existing or hereafter arising, run only to the Borrower and may not
be assigned or transferred by said Borrower without the written
consent of a duly authorized officer of the Bank.
SECTION 12. MISCELLANEOUS:
12.01 Headings preceding the text of the several sections hereof are for
the convenience of reference only and shall not constitute a part
of this Agreement nor shall they affect its meaning, construction,
or effect.
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12.02 It is intended that this Agreement take effect as a sealed
instrument.
12.03 This Agreement, including modifications or additions thereto, will
be governed, interpreted, and construed in accordance with the laws
of the Commonwealth of Massachusetts.
12.04 This Agreement shall be binding upon Borrower and its successors,
assigns, executors and administrators, and shall inure to the
benefit of the Bank and its successors and assigns.
EXECUTED AND SEALED on June 14, 1996.
Xxxxxx and Xxxxxx, D.M.D., P.C
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Its: Treasurer
First New England Dental Centers,
Inc.
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Its: President and Treasurer
Fleet National Bank
By: /s/ Illegible
------------------------------
Its: Vice President
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SCHEDULE A
Other Locations
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FIRST NEW ENGLAND DENTAL CENTERS, INC.
FACILITY LOCATIONS/OPERATIONAL CONTACTS
-------------------------------------------------------------------------------------------------------
LOCATION OPERATIONAL CONTACT TELEPHONE # FACSIMILE #
-------------------------------------------------------------------------------------------------------
BILLERICA Xxxxxxx Xxxxxx (000) 000-0000 (000) 000-0000
Associated Dental Health Center
000 Xxxxxx Xxxx
Xxxxx Xxxxxxxxx, XX 00000
DANVERS Xxxx X'Xxxxx (000) 000-0000 (000) 000-0000
First New England Dental Centers
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
FEDERAL STREET Xxxxxxx Xxxxxxx (000) 000-0000 x000 (000) 000-0000
Watkin Dental Associates
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
FITCHBURG Xxxxxxx Xxxx (000) 000-0000 (000) 000-0000
Xxxxxx X. Xxxx, D.D.S.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
FRAMINGHAM Xxxxx Xxxxxx (000) 000-0000 (000) 000-0000
First New England Dental Centers
0 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
HADLEY Xxxx XxXxxxxxx (000) 000-0000 (000) 000-0000
Hampshire Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
LEOMINSTER Xxxxxx Xxxxxx (000) 000-0000 (000) 000-0000
Leominster Family Dentists Xxxxx Xxxxxxx
00 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
MALDEN Xxxxxx Xxxxxxx (000) 000-0000 (000) 000-0000
Xx. Xxxxxxx Xxxxxx
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
-------------------------------------------------------------------------------------------------------
20
FIRST NEW ENGLAND DENTAL CENTERS, INC.
FACILITY LOCATIONS/OPERATIONAL CONTACTS(CONT.)
-------------------------------------------------------------------------------------------------------
LOCATION OPERATIONAL CONTACT TELEPHONE # FACSIMILE #
-------------------------------------------------------------------------------------------------------
MARSHFIELD Xxxxxx Xxxxxxxxxx (000) 000-0000 (000) 000-0000
Family Dentistry
Xxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
NEWBURY STREET Xxxxxx Xxxxxxx (000) 000-0000 (000) 000-0000
Watkin Dental Associates
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
WATERTOWN Xxxxxx Xxxxxx (000) 000-0000 (000) 000-0000
First New England Dental Centers
Watertown Mall
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
WELLESLEY (000) 000-0000 (000) 000-0000
Watkin Dental Associates
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
WEYMOUTH Xxxxx Xxxxx (000) 000-0000 (000) 000-0000
First New England Dental Centers
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
WORCESTER Xxxx Xxxxxxx (000) 000-0000 (000) 000-0000
First New England Dental Centers
00 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
-------------------------------------------------------------------------------------------------------
