EXHIBIT 10.18
(FORM OF MED CONTROL AGREEMENT)
MED DEPOSIT ACCOUNT CONTROL AGREEMENT
THIS DEPOSIT ACCOUNT CONTROL AGREEMENT (this "Agreement") is made and
entered into as of August 14, 2002, by and among Private Investment Bank
Limited, Nassau, Bahamas ("PIBL" in such capacity, "Creditor"), whose offices
are located at Devonshire House, Queen Street, P.O. Box N-3918, Nassau, Bahamas;
Med Diversified, Inc., a Nevada corporation ("Med" in such capacity, "Debtor"),
whose offices are located at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxxxxx 00000; and Three Rivers Bank & Trust Company or another major U.S.
bank designated by PIBL (including any successor or replacement therefor from
time to time pursuant to Section 16 hereof, "Bank"), whose offices are located
at Pitt-Times Office, The Times Building, 000 0xx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000.
RECITALS:
1. Bank has established a deposit account, number 3293007751, in the name
of Debtor (the "Account").
2. Debtor has granted Creditor a security interest in the Account
pursuant to the terms of that certain Security Agreement, dated as of June 28,
2002 (the "Security Agreement"), by Med, as grantor, in favor of PIBL, as
secured party.
3. Creditor, Debtor and Bank are entering into this Agreement to perfect
the security interest of Creditor in the Account.
AGREEMENT:
In consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound, the parties hereby agree as follows:
1. All parties agree that the Account is a "deposit account" within the
meaning of Article 9 of the Uniform Commercial Code of the State of Nevada (the
"UCC").
2. Bank hereby represents, warrants and covenants to Creditor that Bank
has not agreed and will not agree with any third party to comply with
instructions or other directions concerning the Account or the disposition of
funds in the Account originated by such third party without the prior written
consent of Creditor and Debtor.
3. Bank hereby subordinates all liens, security interests, encumbrances,
claims and rights of setoff it may have, now or in the future, against the
Account or any funds in the Account other than in connection with the payment of
Bank's customary fees and charges pursuant to its account agreement with Debtor
and for the reversal of any provisional credits which includes any checks or
other items that are deposited in the Account and returned to the Bank unpaid. A
copy of the account agreement will be provided to Creditor concurrently with the
execution and delivery hereof.
1
4. Bank will comply with instructions originated by Creditor directing
disposition of the funds in the Account without further consent by Debtor. Bank
may also comply with instructions directing the disposition of funds in the
Account originated by Debtor or its authorized representatives until such time
as Creditor delivers a written notice to Bank that Creditor is thereby
exercising exclusive control over the Account. Such notice is referred to herein
as the "Notice of Exclusive Control", a form of which is attached hereto as
EXHIBIT A. Upon Bank's receipt of a Notice of Exclusive Control, it will cease
complying with instructions concerning the Account or funds on deposit therein
originated by Debtor or its representatives.
5. Bank will send copies of all statements concerning the Account to each
of Debtor and Creditor at their respective addresses set forth in the heading of
this Agreement. Upon receipt of written notice of any lien, encumbrance or
adverse claim against the Account or any funds credited thereto, Bank will make
reasonable efforts to promptly notify Creditor and Debtor thereof.
6. Except for acting on Debtor's instructions in violation of Section 4
above, Bank shall have no responsibility or liability to Creditor for complying
with instructions concerning the Account from Debtor or Debtor's authorized
representatives which are received by Bank before Bank receives a Notice of
Exclusive Control and has had reasonable opportunity to act on it. Bank shall
have no responsibility or liability to Debtor for complying with a Notice of
Exclusive Control or complying with instructions concerning the Account
originated by Creditor, and shall have no responsibility to investigate the
appropriateness of any such instruction or Notice of Exclusive Control, even if
Debtor notifies Bank that Creditor is not legally entitled to originate any such
instruction or Notice of Exclusive Control.
7. In the event of a conflict between this Agreement and any other
agreement between the Bank and the Debtor, the terms of this Agreement will
prevail; provided, however, that this Agreement shall not alter or affect any
mandatory arbitration provision currently in effect between Bank and Debtor
pursuant to a separate agreement.
8. This Agreement shall continue in effect until Creditor has notified
Bank in writing that this Agreement, or its security interest in the Account, is
terminated. Upon receipt of such notice the obligations of Bank hereunder with
respect to the operation and maintenance of the Account after the receipt of
such notice shall terminate, Creditor shall have no further right to originate
instructions concerning the Account and any previous Notice of Exclusive Control
delivered by Creditor shall be deemed to be of no further force and effect.
9. This Agreement and the instructions and notices required or permitted
to be executed and delivered hereunder set forth the entire agreement of the
parties with respect to the subject matter hereof, and, subject to Section 7
above supersede any prior agreement and contemporaneous oral agreements of the
parties concerning its subject matter.
10. No amendment, modification or (except as otherwise specified in
Section 8 above) termination of this Agreement, nor any assignment of any rights
hereunder (except to the extent contemplated under Section 12 below), shall be
binding on any party hereto unless it is in
2
writing and is signed by each of the parties hereto, and any attempt to so
amend, modify, terminate or assign except pursuant to such a writing shall be
null and void. No waiver of any rights hereunder shall be binding on any party
hereto unless such waiver is in writing and signed by the party against whom
enforcement is sought.
11. If any term or provision set forth in this Agreement shall be invalid
or unenforceable, the remainder of this Agreement, other than those provisions
held invalid or unenforceable, shall be construed in all respects as if such
invalid or unenforceable term or provision were omitted.
12. The terms of this Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto and their respective successors or heirs and
personal representatives. This Agreement may be assigned by Creditor to any
successor of Creditor under the Security Agreement with Debtor, provided that
written notice thereof is given by Creditor to Bank.
13. Except as otherwise expressly provided herein, any notice, order,
instruction, request or other communication required or permitted to be given
under this Agreement shall be in writing and deemed to have been properly given
when delivered in person, or when sent by telecopy or other electronic means and
electronic confirmation of error-free receipt is received or upon receipt of
notice sent by certified or registered United States mail, return receipt
requested, postage prepaid, addressed to the party at the address set forth next
to such party's name at the heading of this Agreement. Any party may change its
address for notices in the manner set forth above.
14. This Agreement may be executed in any number of counterparts, all of
which shall constitute one and the same instrument, and any party hereto may
execute this Agreement by signing and delivering one or more counterparts.
Signatures may be exchanged by facsimile and each party hereto agrees to be
bound by its own facsimile signature and to accept the facsimile signature of
each of the other parties hereto.
15. This Agreement shall be governed by and construed in accordance with
the law of the State of Nevada. The parties agree that Nevada is the "Bank's
jurisdiction" for purposes of the UCC.
16. From time to time after the date hereof, the depositary institution
serving as Bank hereunder may, in connection with the resignation of such Bank
or otherwise, be replaced with another major U.S. bank designated as a successor
or replacement therefor by PIBL (or another agent for the Holders of the Amended
Debentures designated by the Holders in writing to ARL from time to time).
17. The Bank does not have to pay uncollected funds. The Bank does not
have to make funds available to Debtor or Creditor before it is required to do
so under federal law. The Bank may comply with all applicable laws, regulations,
rules, court orders and other legal process.
18. The Debtor agrees to indemnify and hold Bank harmless from and against
any and all losses, liabilities, damages, actions, costs, expenses,
compensation, attorneys fees (including claims for incidental and consequential
damages) ("Claims") resulting from or in any way arising out of Bank's
compliance with this Agreement.
3
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement by
their duly authorized representatives as of the day and year first above
written.
PRIVATE INVESTMENT BANK LIMITED
By:
---------------------------
Name:
Title:
MED DIVERSIFIED, INC.
By:
---------------------------
Name:
Title:
THREE RIVERS BANK & TRUST COMPANY
By:
---------------------------
Name:
Title:
[SIGNATURE PAGE TO MED DEPOSIT ACCOUNT CONTROL AGREEMENT]
4
EXHIBIT A
NOTICE OF EXCLUSIVE CONTROL
Dated:
-------------------------
FROM:
Private Investment Bank Limited
Xxxxxxxxxx Xxxxx
Xxxxx Xxxxxx
X.X. Xxx X-0000
Nassau, Bahamas
TO:
Three Rivers Bank & Trust Company
Pitt-Times Office
The Times Building
000 0xx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx
Attn: Xxxxx Xxxxxx, Assistant Vice President
Fax: (000) 000-0000
Re: Account No. 3293007751
To whom it may concern:
Pursuant to Section 4 of that certain MED DEPOSIT ACCOUNT CONTROL
AGREEMENT, dated as of August 14, 2002 (the "Control Agreement"), by and among
Private Investment Bank Limited, Nassau, Bahamas ("PIBL"), Med Diversified,
Inc., a Nevada corporation ("Med"), and Three Rivers Bank & Trust Company (the
"Bank"), notice is hereby given that PIBL is exercising exclusive control over
the Account, as such term is defined in the Control Agreement. We respectfully
request that the Bank cease complying with instructions concerning the Account
or funds on deposit therein originated by Med or its representatives.
Very truly yours,
5
