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EXHIBIT 10(d)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT
BE TRANSFERRED IN VIOLATION OF SUCH ACT.
VALLEY FORGE DENTAL ASSOCIATES, INC.
9% Subordinated Note due September 18, 2005
$80,000 King of Prussia, Pennsylvania
September 18, 1995
SECTION 1. General. VALLEY FORGE DENTAL ASSOCIATES, INC., a
Delaware corporation (herein called the "Corporation"), for value received,
hereby promises to pay to BUSINESS DEVELOPMENT CAPITAL LIMITED PARTNERSHIP-III,
a Massachusetts limited partnership (herein called "BDC-III"), or order, the
principal amount of Eighty Thousand Dollars, ($80,000), in full on September 18,
2005 (subject to prepayment in whole or in part in the manner hereinafter in
Section 3 hereof provided), in such coin or currency of the United States of
America as at the time of payment shall be legal tender therein for the payment
of public and private debts, and to pay interest on the unpaid balance of the
principal hereof from the date hereof, at the rate of 9% per annum, in like coin
or currency, quarterly on March 31, June 30, September 30 and December 31 each
year commencing September 30, 1995 (the payment due on such date to include all
accrued interest from the date hereof), and to pay interest at the rate of 10%
per annum on any overdue principal and (to the extent permitted by law) on any
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overdue interest, from the due date thereof until the obligation of the
Corporation with respect to the payment thereof shall be discharged; all
payments and prepayments of principal of this Note and all payments of interest
on this Note to be made to the holder hereof at the office of such holder at c/o
Foster Management Company, 0000 Xxxx Xxxxx Xxxxxx, Xxxx xx Xxxxxxx, Xxxxxxxxxxxx
00000 or such other office hereafter designated by such holder. Interest hereon
for any period other than a full quarterly period shall be computed on the basis
of a 360-day year of twelve 30-day months.
SECTION 2. Definitions. As used herein, the following terms
shall have the following respective meanings:
"Note" and "Notes" refer to this Note and to any Note or Notes
executed and delivered by the Corporation in exchange or replacement thereof
pursuant to Section 9 hereof. Unless the context otherwise requires, the term
"holder" is used herein to mean the person named as payee in Section 1 hereof
(herein sometimes called the "payee named herein") or any other person who shall
at the time be the registered holder of this Note.
"Corporation" shall mean VALLEY FORGE DENTAL ASSOCIATES, INC.,
a Delaware corporation, the maker of this Note, and shall also mean any
successor corporation which
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shall become such in the manner prescribed in Section 6 hereof.
The term "corporation" shall include, except for the purposes
of Section 6 hereof, an association, joint stock company, business trust or
other similar organization.
The term "person" shall mean an individual, a corporation, a
partnership, a trust, an unincorporated organization and a government or any
department, agency or political subdivision thereof.
"Subsidiary" shall mean any present or future corporation at
least a majority of the outstanding voting stock of which shall at the time be
owned by the Corporation. For purposes hereof, outstanding voting stock shall be
deemed to be capital stock of any class or classes, however designated, having
ordinary voting power for the election of the members of the board of directors
or other governing body of such corporation, other than stock having such power
only upon the happening of a contingency.
"Senior Debt" shall mean the principal of, premium, if any,
and interest on and other amounts due on all indebtedness of the Corporation,
whether outstanding on the date of this Note or hereafter created or incurred:
(a) for money borrowed by the Corporation,
and
(b) for money borrowed by others and
guaranteed by the Corporation
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from any bank, insurance company or other institutional lender created or
evidenced by notes, bonds, debentures, guarantees or similar instruments or by a
loan agreement or loan agreements (excluding any of such indebtedness which by
the terms of the instrument creating or evidencing the payment is subordinated
to or pari passu with this Note).
SECTION 3. Prepayment. The Corporation may at any time prepay
the whole or any part of the unpaid principal amount of this Note, without
penalty or premium, but with interest accrued to the date fixed for prepayment.
Notices of prepayment shall be given by the Corporation by mail and shall be
mailed to the registered holder of this Note not less than 30 days from the date
fixed for prepayment. In case this Note is to be prepaid in part only, such
notice shall specify the principal amount thereof to be prepaid and shall state
that this Note shall be submitted to the Corporation for notation thereon of the
principal amount thereof to be prepaid. Upon giving of notice of prepayment as
aforesaid, this Note or portion thereof so specified for prepayment shall on the
prepayment date specified in such notice become due and payable; and from and
after the prepayment date so specified (unless the Corporation shall default in
making such prepayment) interest on this Note or portion thereof so specified
for prepayment shall cease to accrue and, on presentation and surrender thereof
to the Corporation for cancellation in the
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case of this Note being prepaid in whole, or for notation thereon of the payment
of the portion of the principal amount thereof being prepaid in the case of a
prepayment of this Note in part only, this Note or portion thereof so specified
for prepayment shall be paid by the Corporation at the prepayment price
aforesaid.
SECTION 4. Subordination. The Corporation hereby agrees, and
the holder of this Note by its acceptance hereof agrees, that the payment of the
principal of and interest on this Note is hereby expressly made subordinate and
junior in right of payment, to the extent set forth in the following paragraphs
(a) and (b), to the prior payment in full of all Senior Debt of the Corporation:
(a) In the event of insolvency or bankruptcy proceedings, or
any receivership, liquidation, reorganization or other similar
proceedings in connection therewith, relative to the Corporation or to
any of the property of the Corporation, or in the event of any
proceedings for voluntary liquidation, dissolution, or other winding-up
of the Corporation, whether or not involving insolvency or bankruptcy,
then the holders of Senior Debt shall be entitled to receive payment in
full of all principal of, and premium, if any, and interest on all
Senior Debt before the holder of this Note shall be entitled to receive
any payment on account of principal of or interest on this Note,
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and to that end the holders of Senior Debt shall be entitled to receive
for application in payment thereof any payment or distribution of any
kind or character, whether in cash or property or securities, which may
be payable or deliverable in any such proceedings in respect of this
Note, except securities of the Corporation which are subordinate and
junior in right of payment to the payment of all Senior Debt then
outstanding.
(b) In the event that the holder of this Note shall have
received written notice to the effect that an event of default shall
have occurred on any Senior Debt and be continuing (under circumstances
in which the provisions of the foregoing paragraph (a) are not
applicable), then, during the continuance of any such event of default,
all principal of and premium, if any, and interest on all Senior Debt
outstanding at the time of such notice shall first be paid in full,
before any payment on account of principal or interest is made upon
this Note. The provisions of this Section 4 are for the purpose of
defining the relative rights of the holders of Senior Debt on the one
hand, and the holder of this Note on the other hand, against the
Corporation and its property; and nothing herein shall impair, as
between the Corporation and the holder of this Note, the obligation of
the Corporation, which is
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unconditional and absolute, to pay to the holder thereof the principal
thereof and interest thereon in accordance with the terms and the
provisions thereof; nor shall anything herein prevent the holder of
this Note from exercising all remedies otherwise permitted by
applicable law or hereunder upon default under this Note, subject to
the rights, if any, under this Section 4 of holders of Senior Debt to
receive cash, property, stock or obligations otherwise payable or
deliverable to the holder of this Note.
SECTION 5. General Covenants. The Corporation covenants and
agrees with the holder of this Note as hereinbelow set forth, namely:
5.1. The Corporation will punctually pay or cause to be paid
the principal of and interest on this Note according to the terms hereof.
5.2. The Corporation will, and will cause each
Subsidiary, if any, to
(a) pay and discharge promptly, or cause to be paid and
discharged promptly, all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or upon any of its property,
real, personal or mixed, or upon any part thereof, as well as all
claims of any kind (including claims for labor, materials and supplies
which, if unpaid, might by law become a lien or charge upon its
property); provided,
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however, that neither the Corporation nor any Subsidiary shall be
required to pay any such tax, assessment, charge, levy or claim if the
amount, applicability or validity thereof shall currently be contested
in good faith by appropriate proceedings and if the Corporation or such
Subsidiary, as the case may be, shall have set aside on its books
reserves (segregated to the extent required by sound accounting
practice) reasonably deemed by it adequate with respect thereto; and
(b) except as otherwise specifically permitted in this Note
and as contemplated by Section 6 hereof, do or cause to be done all
things necessary or appropriate to preserve and keep in full force and
effect its corporate existence, rights and franchises, and use its best
efforts to qualify as a foreign corporation entitled to do business in
every jurisdiction in which the failure so to qualify would materially
adversely affect the Corporation or such Subsidiary; provided, however,
that nothing in this paragraph shall prevent the abandonment or
termination of the corporate existence, rights and franchises of any
Subsidiary if, in the opinion of the Board of Directors of the
Corporation, such abandonment or termination is in the interest of the
Corporation and
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not disadvantageous in any material respect to the holder of this Note.
SECTION 6. Consolidation, Merger or Disposition of Assets. The
Corporation will not consolidate with, merge into, or sell or otherwise dispose
of all or substantially all its properties as an entirety to, any person unless:
(a) the successor formed by or resulting from such
consolidation or merger or to which such sale or other disposition
shall have been made shall be a corporation organized under the laws of
the United States of America or any State, district or territory
thereof;
(b) such successor corporation shall expressly assume the due
and punctual payment of the principal of and interest on this Note
according to its tenor, and the due and punctual performance and
observance of all the covenants, agreements and conditions of this Note
to be performed or observed by the Corporation to the same extent as if
such successor corporation had been the original maker of this Note
(and such assumption shall, upon the request of the holder of this
Note, be evidenced by the endorsing of an appropriate legend upon this
Note, and each Note executed pursuant to Section 9 hereof after such
assumption shall, unless executed in the name of such corporation, have
a similar legend endorsed thereon); and
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(c) immediately after such consolidation, merger, sale or
other disposition, such successor corporation shall not be in default
in the performance of any of the covenants, agreements or conditions
contained in this Note.
SECTION 7. Registered Holders. The Corporation may deem and
treat the registered holder of this Note as the absolute owner of this Note for
the purpose of receiving payment hereon or on account hereof and for all other
purposes, and the Corporation shall not be affected by any notice to the
contrary.
SECTION 8. Events of Default and Remedies.
8.1. The entire unpaid principal amount of this
Note, together with all accrued interest thereon, shall, at the option of the
holder hereof exercised by written notice to the Corporation at its principal
executive offices, forthwith become and be due and payable if any one or more of
the following events (herein called "Events of Default") shall have occurred
(for any reason whatsoever and whether such happening shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body) and be continuing at
the time of such notice, that is to say:
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(a) if default shall be made in the due and punctual payment
of the principal of this Note when and as the same shall become due and
payable, whether at maturity, by acceleration or otherwise;
(b) if default shall be made in the due and punctual payment
of any interest on this Note when and as such interest shall become due
and payable, and such default shall have continued for a period of 10
days;
(c) if default shall be made in the performance or observance
of any covenant, agreement or condition contained in Section 6 hereof;
(d) if default shall be made in the performance or observance
of any of the other covenants, agreements or conditions of the
Corporation contained in this Note, and such default shall have
continued for a period of 30 days;
(e) if the Corporation or any Subsidiary shall default beyond
any period of grace provided with respect thereto in the payment of
principal of or interest on any obligation in respect of borrowed money
when due, whether by acceleration or otherwise; or if the Corporation
or any Subsidiary shall default in the performance or observance of any
other agreement, term or condition contained in such obligation or in
any agreement under which any such obligation is created, if the effect
of any such default is to cause or permit
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the holder or holders of such obligations (or a trustee on behalf of
such holder or holders) to cause such obligation to become due prior to
the date of its stated maturity, unless such holder or holders or
trustee shall have waived such default after its occurrence or unless
such holder or holders or trustee shall have failed to give any notice
required to create a default thereunder;
(f) if the Corporation or any Subsidiary shall:
(i) admit in writing its inability to pay its
debts generally as they become due;
(ii) file a petition in bankruptcy or a petition
to take advantage of any insolvency act;
(iii) make an assignment for the benefit of
creditors;
(iv) consent to the appointment of a receiver of
itself or of the whole or any substantial part of its
property;
(v) on a petition in bankruptcy filed against
it, be adjudicated a bankrupt; or
(vi) file a petition or answer seeking
reorganization or arrangement under the federal bankruptcy
laws or any other applicable law or statute of the United
States of America or any State, district or territory thereof;
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(g) if a court of competent jurisdiction shall enter an order,
judgment, or decree appointing, without the consent of the Corporation
or any Subsidiary, a receiver of the Corporation or any Subsidiary or of
the whole or any substantial part of its property, or approving a
petition filed against it seeking reorganization or arrangement of the
Corporation or any Subsidiary under the federal bankruptcy laws or any
other applicable law or statute of the United States of America or any
State, district or territory thereof, and such order, judgment or decree
shall not be vacated or set aside or stayed within 60 days from the date
of entry thereof;
(h) if, under the provisions of any other law for the relief or
aid of debtors, any court of competent jurisdiction shall assume custody
or control of the Corporation or any Subsidiary or of the whole or any
substantial part of its property and such custody or control shall not
be terminated or stayed within 60 days from the date of assumption of
such custody or control; or
(i) if final judgment for the payment of money in excess of
$50,000 shall be rendered by a court of record against the Corporation
or any Subsidiary and the Corporation or such Subsidiary shall not
discharge the same or provide for its discharge in accordance with its
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terms, or shall not procure a stay of execution thereon within 60 days
from the date of entry thereof and within the period during which
execution of such judgment shall have been stayed, appeal therefrom, and
cause the execution thereof to be stayed during such appeal.
8.2. In case any one or more of the Events of Default specified
in Section 8.1 hereof shall have occurred and be continuing, the holder of this
Note may proceed to protect and enforce its rights either by suit in equity
and/or by action at law, whether for the specific performance of any covenant or
agreement contained in this Note or in aid of the exercise of any power granted
in this Note, or the holder of this Note may proceed to enforce the payment of
all sums due upon this Note or to enforce any other legal or equitable right of
the holder of this Note.
8.3. No remedy herein conferred upon the holder hereof is
intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
8.4. No course of dealing between the Corporation and the holder
hereof or any delay on the part of the holder hereof in exercising any rights
hereunder shall operate as a waiver of any rights of any holder hereof.
SECTION 9. Exchange or Replacement of Notes.
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(a) The holder of any Note or Notes, at its option, may in
person or by duly authorized attorney surrender one or more thereof for
exchange, at the principal executive offices of the Corporation, and at the
expense of the Corporation receive in exchange therefor a new Note or Notes in
the same aggregate principal amount as the aggregate unpaid principal amount of
the Note or Notes so surrendered and bearing interest at the same annual rate as
the Note or Notes so surrendered, each such new Note to be dated as of the date
to which interest has been paid on the Note or Notes so surrendered and to be in
such principal amount and payable to such person or persons, or order, as such
holder may designate in writing; provided, however, that the Corporation shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any new Note in the name other than
that of the holder of the Note or Notes surrendered in exchange therefor. Five
days' prior written notice of the holder's intention to make such exchange shall
be given to the Corporation.
(b) Upon receipt by the Corporation of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Note, and (in case of
loss, theft or destruction) of indemnity reasonably satisfactory to it (it being
understood that in the case of BDC-III an unsecured written indemnification
agreement shall be satisfactory to
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the Corporation), and upon surrender and cancellation of this Note, if
mutilated, the Corporation, upon reimbursement to it of all reasonable expenses
incidental thereto, will make and deliver a new Note, of like tenor in lieu of
this Note. Any Note made and delivered in accordance with the provisions of this
paragraph (b) shall be dated as of the date to which interest has been paid on
this Note.
SECTION 10. Immunity of Stockholders, Officers and Directors. No
recourse shall be had for the payment of the principal of or interest on this
Note or for any claim based hereon or otherwise in respect hereof against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Corporation or of any predecessor or successor corporation,
either directly or through the Corporation or otherwise, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty, or otherwise, all such liability being by the acceptance
hereof and as part of the consideration for the issue hereof expressly waived
and released; provided, however, that nothing herein contained shall be taken to
prevent recourse to and the enforcement of the liability, if any, of any
stockholder or subscriber to capital stock upon or in respect of shares of
capital stock not fully paid.
SECTION 11. Section Headings. The Section headings contained
herein are for the purpose of convenience
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of reference only and are not intended to define or limit the contents of any
such Section.
SECTION 12. Severability. In the event that one or more of the
provisions of this Note shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Note, but this Note shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
SECTION 13. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
applicable to agreements made and to be performed entirely within such
Commonwealth, except to the extent of the mandatory rules of the State of
Delaware with respect to the formal requisites for authorization of a security
and rights and duties with respect to register of transfer.
VALLEY FORGE DENTAL ASSOCIATES, INC.,
a Delaware corporation
By /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
President
