Pledge and Security Agreement
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (the "Agreement") dated as of
January 31, 2000, is by and between OHIO LITHO, INC., a Delaware corporation
("Pledgor"), whose street address is 0000 Xxxxxxx xx Xxxxx Xxxxxxx, Xxxxx X-000,
Xxxxxx, Xxxxx 00000-0000, for the benefit of BANK OF AMERICA, N.A., a national
banking association ("B of A"), whose street address is 000 Xxxx Xxxxxx, Xxxxxx,
Xxxxx 00000, not in its individual capacity but solely as administrative agent
for itself and each of the other banks or lending institutions (each, a "Lender"
and collectively, the "Lender") which is or may from time to time become a party
to the Loan Agreement (as hereinbelow defined) (in such capacity, together with
its successors in such capacity, the "Administrative Agent").
R E C I T A L S:
A. Prime Medical Services, Inc., a Delaware corporation ("Borrower"), has
entered into that certain Fourth Amended and Restated Loan Agreement dated as of
the date hereof with B of A as Administrative Agent and as a Lender, BankBoston,
N.A., as Documentation Agent and as a Lender, and the other Lenders from time to
time party thereto, as amended, waived, restated, and supplemented from time to
time ("Loan Agreement").
B. Pledgor and certain other guarantors have executed that certain
Guaranty Agreement dated as of the date hereof (as the same may be amended,
supplemented or modified from time to time, the "Guaranty"), pursuant to which
Pledgor has guaranteed to the Agents (as defined in the Loan Agreement) and the
Lenders the full and complete payment and performance of the liabilities,
obligations, and indebtedness of the Borrower to the Agents and the Lenders
under the Loan Documents (as defined in the Loan Agreement).
C. As a condition to entering into the Loan Agreement, Pledgor must execute
and deliver this Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor agrees with the Administrative Agent as follows:
ARTICLE I
DEFINITIONS
(a) Each term used herein and defined in the Loan Agreement shall have
the meaning assigned to it in the Loan Agreement, unless otherwise defined
herein or the context otherwise requires.
(b) In addition, as used herein, the following terms shall, unless
otherwise indicated, have the following meanings:
"Borrower" has the meaning set forth in the recitals.
"Code" shall mean the Uniform Commercial Code as in effect in the State
of Texas.
Pledge and Security Agreement
3
"Collateral" shall mean the assets and interests of Pledgor identified
in Section 2.1 hereof.
"Event of Default" shall have the meaning assigned to such term in
Section 5.1.
"Guaranty" shall mean that certain Guaranty Agreement dated as of the
date hereof, executed by Pledgor and certain other guarantors for the benefit of
the Agents and the Lenders, guaranteeing the full payment and performance of the
Obligations, as amended, modified, confirmed, and extended from time to time.
"Partnerships" shall mean (a) those partnerships and limited liability
companies listed on Exhibit A attached hereto and incorporated herein by
reference, as such partnerships or limited liability companies exist or may
hereinafter be restated, amended or restructured, (b) any partnership, joint
venture, or limited liability company in which Pledgor shall, at any time,
become a limited or general partner, venturer, or member, or (c) any
partnership, joint venture or corporation formed as a result of the restructure,
reorganization or amendment of the Partnerships.
"Partnership Agreements" shall mean (a) those agreements listed on
Exhibit B attached hereto and incorporated herein by reference (together with
any modifications, amendments or restatements thereof), and (b) partnership
agreements, joint venture agreements, or organizational agreements for any of
the partnerships, joint ventures, or limited liability companies described in
clause (b) of the definition of "Partnerships" above (together with any
modifications, amendments or restatements thereof), and "Partnership Agreement"
means any one of the Partnership Agreements.
"Pledged Partnership Interests" shall mean all of Pledgor's partnership
interests, whether general or limited, venture, or membership interests, in the
Partnerships, including, without limitation, all of Pledgor's right, title and
interest now or hereafter accruing under the Partnership Agreements with respect
to any interest now owned or hereafter acquired or owned by Pledgor in the
Partnerships, and including all distributions, allocations, proceeds, fees,
preferences, payments or other benefits, which Pledgor now is or may hereafter
become entitled to receive with respect to such interests in the Partnerships
and with respect to the repayment of all loans now or hereafter made by Pledgor
to the Partnerships, and Pledgor's undivided percentage interest in the assets
of the Partnerships.
"Secured Indebtedness" shall have the meaning assigned to such term in
Section 2.1(c) hereof.
"Security Interests" shall mean the pledge, collateral assignment, and
security interests securing the Secured Indebtedness, including (i) the pledge
and security interest in the Pledged Partnership Interests granted in this
Agreement and (ii) all other security interests created or assigned as
additional security for the Secured Indebtedness pursuant to the provisions of
this Agreement.
(c) Whenever the context so requires, the neuter gender includes the
masculine and feminine, and the singular number includes the plural and vice
versa.
ARTICLE II
COLLATERAL AND OBLIGATION
SECTION 2.1 Grant of Security Interest.
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(a) As collateral security for Secured Indebtedness, Pledgor hereby
pledges and grants to the Administrative Agent, for the benefit of the Lenders,
a first priority lien on and security interest in and to, and agrees and
acknowledges that the Administrative Agent has, and shall continue to have, a
security interest in and to, and assigns, transfers, pledges and conveys to the
Administrative Agent, all of Pledgor's right, title and interest in and to the
following described collateral (the "Collateral") now owned or hereafter
acquired, wherever located, howsoever arising or created, and whether now
existing or hereafter arising, existing or created:
(i) the Pledged Partnership Interests and all rights of
Pledgor with respect thereto and all proceeds, income
and profits therefrom;
(ii) all of Pledgor's distribution rights, income rights,
liquidation interest, accounts, contract rights,
general intangibles, notes, instruments, drafts and
documents relating to the Pledged Partnership
Interests;
(iii) to the extent attributable to the Pledged Partnership
Interests, all promissory notes, notes receivable,
accounts, accounts receivable and instruments owned
or held by Pledgor or, in which Pledgor owns or holds
an interest, evidencing obligations of the
Partnerships;
(iv) all liens, security interests, collateral, property
and assets securing any of the promissory notes,
notes receivables, instruments, accounts receivable
and other claims and interest described in clause
(iii) above;
(v) all books, files, computer records, computer software,
electronic information and other files, records or
information relating to any or all of the foregoing;
and
(vi) all substitutions, replacements, products, proceeds,
income and profits arising from any of the foregoing;
including without limitation insurance proceeds.
(b) The Security Interests are granted and the Collateral is
collaterally assigned as security only and shall not subject the Administrative
Agent or any holder of the Secured Indebtedness to, or transfer or in any way
affect or modify, any obligation or liability of Pledgor with respect to any of
the Collateral.
(c) The Collateral shall secure the following obligations,
indebtedness, and liabilities (whether at stated maturity, by acceleration or
otherwise) (all such obligations, indebtedness, and liabilities being
hereinafter sometimes called the "Secured Indebtedness"):
(i) the Obligations and the obligations, liabilities and
indebtedness of Pledgor to the Agents and the Lenders
under the Guaranty;
(ii) all reasonable costs and expenses, including, without
limitation, all reasonable attorneys' fees and legal
expenses, incurred by any of the Agents or any Lender
to preserve and maintain the Collateral, collect the
obligations herein described, and enforce this
Agreement; and
(iii)all extensions, renewals, and modifications of any of the
foregoing.
SECTION 2.2 Consent. To the extent any Partnership Agreement requires the
consent or agreement of Pledgor to the transfer, conveyance, or encumbrance as
security for the Secured Indebtedness of all or any portion of the Pledged
Partnership Interests, Pledgor hereby irrevocably consents to (a) the grant of
the security interest described in Section 2.1 of this Agreement, and (b) any
transfer or conveyance of the Pledged Partnership Interests pursuant to the
Administrative Agent's exercise of its rights and remedies under Section 5.4 of
this Agreement or under any other Loan Document.
SECTION 2.3 Pledgor Remains Liable. Notwithstanding anything to the
contrary contained herein, (a) Pledgor shall remain liable under the Partnership
Agreements to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed (b) the exercise by the Administrative Agent of any of its rights
hereunder shall not release Pledgor from any of its duties or obligations under
the contracts and agreements included in the Collateral, and (c) neither the
Administrative Agent nor any Lender shall have any obligation or liability under
the Partnership Agreements by reason of this Agreement, nor shall the
Administrative Agent or any Lender be obligated to perform any of the
obligations or duties of Pledgor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Pledgor hereby represents and warrants to the Administrative Agent as
follows:
(a) Pledgor has good and indefeasible title to the Pledged Partnership
Interests and other Collateral free and clear of any Lien except for the
Security Interests created by this Agreement and the security interests granted
in favor of Bank of America, N.A., as Administrative Agent ("Refractive
Administrative Agent") under the Loan Agreement dated the date hereof (the
"Refractive Loan Agreement") among Prime Refractive Management, L.L.C.,
Refractive Administrative Agent, BankBoston, N.A., as documentation agent, and
the lenders from time to time party thereto ("Refractive Lenders"), and has all
necessary authority to pledge and collaterally assign the Pledged Partnership
Interests and other Collateral as security for the Secured Obligations and such
assignment and transfer is not contrary to or in conflict with the Partnership
Agreements or any other agreement;
(b) No financing statement or other instrument similar in effect
covering all or any part of the Collateral is on file in any recording office,
except such as may have been filed in favor of the Administrative Agent relating
to this Agreement or those in favor of Refractive Administrative Agent;
(c) This Agreement has been duly executed and delivered by Pledgor and is
the legal and binding obligation of Pledgor enforceable in accordance with its
terms;
(d) Upon execution of this Agreement and an appropriate financing
statement by Pledgor and the recording of the financing statement in the
appropriate office, the Administrative Agent will have a valid, first and prior
perfected security interest in the Collateral;
(e) Neither the execution and delivery of this Agreement, nor the
consummation of any of the transactions hereby contemplated, nor compliance with
the terms and provisions hereof, will contravene or materially conflict with (i)
any material provision of law, statute or regulation to which Pledgor or the
Partnerships is subject or (ii) any judgment, license, order or permit
applicable to Pledgor or the Partnerships. No consent, approval, authorization
or order of any court, governmental authority, partner or third party is
required that has not been received or taken (i) for the grant by Pledgor of the
Security Interests, (ii) for the execution, delivery or performance of this
Agreement by Pledgor, (iii) for the perfection of the Security Interests, or
(iv) except for such notices as are required by the Code or the Loan Agreement,
for the exercise by the Administrative Agent of its rights and remedies
hereunder (provided, however, that the purchaser of the Collateral at any sale
thereof pursuant to Section 5.4 hereof may be required to obtain the consent of
the partners in the Partnerships and/or satisfy other conditions set forth in
the Partnership Agreements prior to such purchaser's admission as a partner in
the Partnership);
(f) The chief executive office and principal place of business of Pledgor
is in Xxxxxx, Xxxxxx County, Texas; and
(g) To the best knowledge and belief of Pledgor, Pledgor has fully
performed each and every one of his obligations and duties under the Partnership
Agreements on or prior to the date due; Pledgor has not received any notice of
any default in the performance of his obligations under the Partnership
Agreements or of any situation which could give rise to such an event of default
thereunder.
ARTICLE IV
PLEDGOR'S COVENANTS
Pledgor hereby covenants and agrees with the Administrative Agent that
until the Secured Indebtedness is paid and performed in full:
(a) Pledgor will not cause, permit or consent to any amendment or
modification to the Partnership Agreements in effect as of the date hereof
except as permitted in the Loan Agreement;
(b) Pledgor will pay and discharge promptly when due all taxes,
assessments, forced contributions, governmental charges, fines, penalties, and
any other lawful claims, of every description, payable by Pledgor with respect
to (or which, if not paid could result in an encumbrance upon) any of the
Collateral, except as otherwise permitted by the terms of the Loan Agreement. In
the event that Pledgor should, for any reason, fail to pay and discharge
promptly any taxes, assessments, forced contributions, governmental charges,
fines, or penalties when due (subject to the provisions of the Loan Agreement),
then the Administrative Agent shall be authorized, but shall not be obligated,
to pay the same, with full subrogation to all rights of any Person by reason of
such payment, and the amounts so paid, together with interest thereon as
provided herein, shall be secured by the Security Interests;
(c) Pledgor will not sell, transfer, mortgage or otherwise encumber any
Collateral in any manner, except for the security interest in favor of
Refractive Administrative Agent, without first obtaining the written consent of
the Administrative Agent. Any written consent to any such sale, mortgage,
transfer or encumbrance shall not be construed to be a waiver of this provision
in respect of any subsequent proposed sale, mortgage, transfer or encumbrance;
(d) Pledgor will, at its expense and in such manner and form as the
Administrative Agent may from time to time reasonably require, execute, deliver,
file and record any financing statement, specific assignment or other
instruments, certificates or papers and take any other action that may be
necessary or desirable, or that the Administrative Agent may from time to time
reasonably request, in order to create, preserve, perfect or validate any
Security Interest or to enable the Administrative Agent to exercise and enforce
its rights hereunder with respect to any of the Collateral. In the event, for
any reason, that the law of any jurisdiction other than the State of Texas
becomes or is applicable to the Collateral, or any part thereof, Pledgor agrees
to execute and deliver all such instruments and to do all such other things that
may be necessary or appropriate to preserve, protect and enforce the Security
Interests of the Administrative Agent under the law of such other jurisdiction,
to at least the same extent that the Security Interests would be protected under
the Code. To the extent permitted by applicable law, Pledgor hereby authorizes
the Administrative Agent to execute and file, in the name of Pledgor or
otherwise, Uniform Commercial Code financing statements that the Administrative
Agent in its sole discretion may deem necessary or appropriate to further
perfect the Security Interests;
(e) If Pledgor receives, by virtue of being or having been an owner of
any of the Collateral, any notes, other instruments, options, cash distributions
or any other distribution, resulting from a Capital Event (hereinafter defined)
Pledgor shall receive the same in trust for the benefit of the Administrative
Agent, shall immediately notify the Administrative Agent of such receipt and
shall immediately take all such actions and execute all such documents as the
Administrative Agent deems necessary or appropriate to continue or create as
first and prior perfected Liens, in favor of the Administrative Agent covering
such notes, other instruments, options, cash distributions. As used herein, the
term "Capital Event" shall mean any event generating or resulting in revenues
not attributable to the normal business operations of the Partnerships including
without limitation, any mortgaging of assets, refinancing of existing
indebtedness of any Partnership, condemnation of any assets of any Partnership,
sale or transfer of any assets of any Partnership outside the ordinary course of
business, or payment of insurance proceeds. At all times other than during the
continuance of an Event of Default, Pledgor shall be entitled to receive free
from the security interest hereof any note, other instrument, option, cash
distribution or any other distribution resulting from any event other than a
Capital Event;
(f) Pledgor will notify the Administrative Agent in writing prior to
the removal of Pledgor's chief executive office or principal place of business
from the State of Texas;
(g) Pledgor shall cause to be obtained any and all waivers and consents
necessary to make effective the grant contained in and to perfect the security
interest granted to the Administrative Agent pursuant to Section 2.1 hereof,
including without limitation, all necessary waivers and consents from the other
partners, if any, of each Partnership;
(h) Pledgor shall perform fully all obligations imposed upon it by any
agreements or instruments concerning all or any part of the Collateral,
including without limitation the Partnership Agreements and shall maintain in
full force and effect all such agreements and instruments, and shall not amend
or modify, or consent to the amendment or modification of such agreements or
instruments, without the prior written consent of the Administrative Agent; and
(i) Pledgor shall promptly notify the Administrative Agent of any
material adverse change in any material fact or material circumstance warranted
or represented by Pledgor in this Agreement or in any other writing furnished by
Pledgor to the Administrative Agent in connection with the Collateral or the
Secured Indebtedness, and shall promptly notify the Administrative Agent of any
claim, action or proceeding affecting title to the Collateral, or any part
thereof, or the Security Interests herein, and, at the request of the
Administrative Agent, shall appear and defend, at Pledgor's expense, any such
action or proceeding.
ARTICLE V
GENERAL AUTHORITY AND POWERS AND REMEDIES
SECTION 5.1 Events of Default.
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Pledgor shall be in default under this Agreement upon the happening of
any of the following events or conditions (hereinafter called an "Event of
Default"):
(a) An Event of Default under the Loan Agreement shall occur; or
(b) The ownership of any of the Collateral becomes vested in a person or
entity other than Pledgor, except as permitted hereunder; or
(c) The Administrative Agent's Liens in any of the Collateral should become
unenforceable, or cease to be first priority Liens.
SECTION 5.2 Right to Receive Distributions. The Administrative Agent
shall have the right, at any time following the occurrence and during the
continuation of an Event of Default, to receive all payments and distributions
made to Pledgor upon or with respect to the Collateral and Pledgor agrees to
take all such action as the Administrative Agent may reasonably deem necessary
or appropriate to give effect to such right.
SECTION 5.3 General Authority. Pledgor hereby irrevocably appoints the
Administrative Agent, and its successors and assigns, the true and lawful
attorney-in-fact of Pledgor, with full power of substitution, in the name of
Pledgor, for the sole use and benefit of the Administrative Agent, but at
Pledgor's expense, to the extent permitted by law to exercise, at any time and
from time to time following the occurrence and during the continuance of an
Event of Default, all or any of the following powers with respect to all or any
of the Collateral:
(a) to ask, demand, xxx for, collect, receive and give acquittance and
receipts for any and all monies due or to become due upon or by virtue thereof;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper,
in connection with clause (a) preceding;
(c) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto;
(d) subject to Section 5.4 hereof, to sell, transfer, assign or
otherwise deal in or with the same or the proceeds thereof as fully and
effectually as if the Administrative Agent were the absolute owner thereof; and
(e) to extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto.
In addition, the Administrative Agent, at any time, either before or after an
Event of Default, shall have the right, together with such accountants and other
agents or representatives as they may from time to time designate, to visit and
inspect the Partnerships' properties, assets, books, records and documents and
to discuss the Partnerships' affairs, finances and accounts with Pledgor's and
the Partnerships' representatives, officers or directors, during all business
hours as the Administrative Agent may designate, and to make and take away
copies of the Partnerships' records at the Administrative Agent's expense.
Pledgor shall furnish to Administrative Agent any information reasonably
requested by the Administrative Agent in connection with the Collateral. Pledgor
will maintain complete and accurate books and records regarding the Collateral.
SECTION 5.4 Remedies Upon Default.
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(a) If any Event of Default shall have occurred and is continuing, the
Administrative Agent, at its option, without demand, presentment, notice of
acceleration, intention to accelerate or other notice (which are fully waived)
may:
(1) exercise all the rights of a secured party under the Code
(whether or not the Code is in effect in the jurisdiction where such
rights are exercise, unless prohibited by applicable law).
(2) apply the cash, if any, then held by the Administrative Agent
as Collateral as specified in Section 5.6.
(3) sell all of the Collateral or any part thereof at public
or private sale or at any broker's board or on any securities exchange,
for cash, upon credit or for future delivery, and at such price or
prices as the Administrative Agent may reasonably deem satisfactory.
Upon the Administrative Agent's demand, Pledgor will take all steps
necessary to prepare the Collateral for and otherwise assist in any
proposed disposition of the Collateral. Any holder of the Secured
Indebtedness may be the purchaser of any or all of the Collateral so
sold at any public sale (or, if the Collateral is of a type customarily
sold in a recognized market or is of a type which is the subject of
widely distributed standard price quotations, at any private sale) and
thereafter hold the same absolutely, free from any right or claim of
whatsoever kind. Any holder of the Secured Indebtedness shall have the
right to offset the amount of its bid against an equal amount of the
Secured Indebtedness held by such holder.
Pledgor agrees that, because of the Securities Act of 1933, as amended,
or any other laws or regulations, and for other reasons, there may be
legal and/or practical restrictions or limitations affecting the
Administrative Agent in any attempts to dispose of certain portions of
the Collateral and for the enforcement of their rights. For these
reasons, the Administrative Agent is hereby authorized by Pledgor, but
not obligated, upon the occurrence and during the continuation of an
Event of Default, to sell all or any part of the Collateral at private
sale, subject to investment letter or in any other manner which will
not require the Collateral, or any part thereof, to be registered in
accordance with the Securities Act of 1933, as amended, or the rules
and regulations promulgated thereunder, or any other laws or
regulations, at a reasonable price at such private sale or other
distribution in the manner mentioned above. Pledgor understands that
the Administrative Agent may in its discretion approach a limited
number of potential purchasers and that a sale under such circumstances
may yield a lower price for the Collateral, or any part or party
thereof, than would otherwise be obtainable if such collateral were
either afforded to a larger number or potential purchasers, or
registered or sold in the open market. Pledgor agrees that such private
sale shall be deemed to have been made in a commercially reasonable
manner, and that the Administrative Agent has no obligation to delay
sale of any Collateral to permit the issuer thereof to register it for
public sale under any applicable federal or state securities laws.
The Administrative Agent is authorized, in connection with any such
sale (i) to restrict the prospective bidders on or purchasers of any of
the Collateral to a limited number of sophisticated investors who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any of
such Collateral and (ii) to impose such other limitations or conditions
in connection with any such sale as the Administrative Agent reasonably
deems necessary in order to comply with applicable law. Pledgor
covenants and agrees that it will execute and deliver such documents
and take such other action as the Administrative Agent reasonably deems
necessary in order that any such sale may be made in compliance with
applicable law. Upon any such sale the Administrative Agent shall have
the right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold absolutely, free from any claim or right of Pledgor
of whatsoever kind, including any equity or right of redemption of
Pledgor. Pledgor, to the extent permitted by applicable law, hereby
specifically waives all rights of redemption, stay or appraisal which
it has or may have under any law now existing or hereafter enacted.
Pledgor agrees that five (5) days' written notice from the
Administrative Agent to Pledgor of the Administrative Agent's intention
to make any such public or private sale or sale at a broker's board or
on a securities exchange shall constitute "reasonable notification"
within the meaning of Section 9-504(c) of the Code. Such notice shall
(1) in case of a public sale, state the time and place fixed for such
sale, (2) in case of sale at a broker's board or on a securities
exchange, state the board or exchange at which such a sale is to be
made and the day on which the Collateral, or the portion thereof so
being sold, will first be offered to sale at such board or exchange and
(3) in the case of a private sale, state the day after which such sale
may be consummated. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as the
Administrative Agent may fix in the notice of such sale. At any such
sale, the Collateral may be sold in one lot as an entirety or in
separate parcels, as the Administrative Agent may reasonably determine.
The Administrative Agent shall not be obligated to make any such sale
pursuant to any such notice. The Administrative Agent may, without
notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or
place to which the same may be so adjourned.
In case of any sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by the
Administrative Agent until the selling price is paid by the purchaser
thereof, but the Administrative Agent shall not incur any liability in
case of the failure of such purchaser to take up and pay for the
Collateral so sold and in case of any such failure, such Collateral may
again be sold upon like notice. The Administrative Agent, instead of
exercising the power of sale herein conferred upon it, may proceed by a
suit or suits at law or in equity to foreclose the Security Interests
and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.
(b) Without the limiting the foregoing, or imposing upon the
Administrative Agent any obligations or duties not required by applicable law,
Pledgor acknowledges and agrees that, in foreclosing upon any of the Collateral,
or exercising any other rights or remedies provided the Administrative Agent
hereunder or under applicable law, the Administrative Agent may, but shall not
be required to (1) qualify or restrict prospective purchasers of the Collateral
by requiring evidence of sophistication and/or creditworthiness, and requiring
the execution and delivery of confidentiality agreements or other documents and
agreements as a condition to such prospective purchasers' receipt of information
regarding the Collateral or participation in any public or private foreclosure
sale process; (2) provide to prospective purchasers the Partnership Agreements
and business and financial information regarding the Partnerships available in
the files of the Administrative Agent at the time of commencing the foreclosure
process, without the requirement that the Administrative Agent obtain, or seek
to obtain, any updated business or financial information or Partnership
Agreements, or verify, or certify to prospective purchasers, the accuracy of any
such business or financial information or Partnership Agreements; (3) sell at
foreclosure all, or a portion but not all, of the rights, titles and interests
of Pledgor in a particular Partnership or group of Partnerships; it being
further specifically acknowledged by Pledgor that limitations or potential
limitations on the transfer of certain Collateral under the Partnership
Agreements or other applicable agreements or law may limit the Administrative
Agent's right or ability to foreclose upon or sell certain rights, titles and
interests of Pledgor in the Partnerships; (4) offer for sale, and sell,
partnership interests either with, or without, first employing an appraiser,
investment banker, or broker with respect to the evaluation of Collateral, the
solicitation of purchasers for Collateral, or the manner of sale of Collateral.
(c) The Administrative Agent shall have all rights, remedies and
recourse granted in the Loan Agreement and the other Loan Documents or existing
at common law or equity (including specifically those granted by the Code), and
such rights and remedies (1) shall be cumulative and concurrent, (2) may be
pursued separately, successively or concurrently against Pledgor and any party
obligated to pay or perform the Obligations, any of the Collateral, or any other
security for any of the Obligations, at the sole discretion of the
Administrative Agent, and (3) may be exercised as often as occasion therefor
shall arise, it being agreed by Pledgor that the exercise or failure to exercise
any such rights or remedies shall in no event be construed as a waiver or
release thereof or of any other right, remedy or recourse.
(d) Notwithstanding a foreclosure upon any of the Collateral or
exercise of any other remedy by the Administrative Agent in connection with an
Event of Default, Pledgor shall not be subrogated thereby to any rights of the
Administrative Agent against the Collateral or any other security for any of the
Obligations. Pledgor shall not be deemed to be the owner of any interest in any
of the Obligations until all of the Obligations have been paid to the
Administrative Agent and are fully performed and discharged.
(e) All recitals in any instrument of assignment or any other
instrument executed by the Administrative Agent incident to the sale, transfer,
assignment or other disposition or utilization of the Collateral or any part
thereof hereunder shall be presumptive evidence of the matters stated therein
and all prerequisites of such sale or other action contained in such recitals
shall be presumed to have been performed or to have occurred.
SECTION 5.5 Waivers by Pledgor. In case of any Event of Default,
neither Pledgor nor anyone claiming by, through or under Pledgor, to the extent
Pledgor may lawfully so agree, shall or will set up, claim or seek to take
advantage of any appraisement, valuation, stay, extension or redemption law now
or hereafter in force in any locality where any of the Collateral is situated
for purposes of applicable law, in order to prevent or hinder the enforcement of
this Agreement, or the absolute sale of the Collateral, or the final and
absolute putting into possession thereof, immediately after such sale, of the
purchaser thereof; and Pledgor in Pledgor's own right and for all who may claim
under Pledgor, hereby waives, to the fullest extent that Pledgor may lawfully do
so, the benefit of any and all right to have the Collateral marshaled upon any
enforcement of the Security Interests herein granted, and Pledgor agrees that
the Administrative Agent or any court having jurisdiction to enforce the
Security Interests may sell the Collateral in parts or as an entirety.
SECTION 5.6 Application of Proceeds. The Administrative Agent shall
apply the proceeds of any foreclosure sale or other realization upon the
Collateral as follows (as modified, if necessary, by the requirements of
applicable law):
(a) First, to the payment of all reasonable costs and expenses of any
foreclosure and collection hereunder and all proceedings in connection
therewith, including reasonable compensation to Administrative Agent's counsel;
(b) Then, to the reimbursement of the Administrative Agent for all
disbursements made by the Administrative Agent for taxes, assessments or liens
superior to the Security Interests and which the Administrative Agent shall deem
expedient to pay;
(c) Then, to the reimbursement of the Administrative Agent for any other
disbursements made by, or reasonable expenses incurred by, the Administrative
Agent in accordance with the terms hereof;
(d) Then, to the Secured Indebtedness, in any manner determined by the
Administrative Agent in its sole discretion;
(e) Then, to the Refractive Administrative Agent until all secured
obligations of Pledgor to it and Refractive Lenders have been paid; and
(f) The remainder of such proceeds, if any, shall be paid to Pledgor.
The foregoing application provisions shall apply not only to proceeds
resulting from foreclosure but also to proceeds or distributions resulting from
any other claim, (including claims made in bankruptcy proceedings), action or
proceeding to enforce or protect the Administrative Agent's lien in the
Collateral.
SECTION 5.7 Enforcement of Secured Indebtedness. Nothing in this
Agreement shall affect or impair the unconditional and absolute right of the
Administrative Agent to enforce the Secured Indebtedness as and when the same
shall become due in accordance with the terms of the Loan Documents whether by
acceleration or otherwise.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Terms Commercially Reasonable. The terms of this Agreement
shall be deemed commercially reasonable within the meaning of the Uniform
Commercial Code in effect and applicable hereto.
SECTION 6.2 Headings. The headings of articles and sections herein are
inserted only for convenience and shall in no way define, describe or limit the
scope or intent of any provision of this Agreement.
SECTION 6.3 Amendments. No change, amendment, modification,
cancellation or discharge of any provision of this Agreement shall be valid
unless consented to in writing by the Administrative Agent and Pledgor (subject
to the terms of the Loan Agreement).
SECTION 6.4 Assignment of the Administrative Agent's Rights. The
Administrative Agent shall have the right to assign all or any portion of its
rights under this Agreement to any subsequent holder or holders of the
Obligations.
SECTION 6.5 Parties in Interest. As and when used herein, the term
"Pledgor" shall mean and include Pledgor herein named and his successors and
permitted assigns, and the term "Administrative Agent" shall mean and include
the Administrative Agent herein named and his successors and assigns, and all
covenants and agreements herein shall be binding upon and inure to the benefit
of Pledgor and the Administrative Agent and their respective assigns, provided
that Pledgor shall have no right to assign his rights hereunder to any other
Person except in connection with a transfer of the Collateral permitted
hereunder.
SECTION 6.6 APPLICABLE LAWS. THIS AGREEMENT SHALL BE CONSTRUED,
INTERPRETED AND ENFORCED UNDER AND PURSUANT TO THE LAWS OF THE STATE OF TEXAS
AND APPLICABLE FEDERAL LAW. IF ANY PROVISION OF THIS AGREEMENT IS HELD TO BE
INVALID OR UNENFORCEABLE, THE VALIDITY AND ENFORCEABILITY OF THE OTHER
PROVISIONS OF THIS AGREEMENT SHALL REMAIN UNAFFECTED.
SECTION 6.7 Notices. Any notices or other communications required or
permitted to be given by this Agreement or any other documents and instruments
referred to herein must be given in accordance with Section 11 of the Loan
Agreement, to the address of such party as follows:
If to the Administrative Agent:
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx
If to Pledgor:
0000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, Xxxxx 00000-0000
Attn: Treasurer
SECTION 6.8 Financing Statement. The Administrative Agent shall be
entitled at any time to file a photographic or other reproduction of this
Agreement as a financing statement, but the failure of the Administrative Agent
to do so shall not impair the validity or enforceability of this Agreement.
SECTION 6.9 Obligations Absolute. All rights and remedies of the
Administrative Agent hereunder, and all obligations of the Pledgor hereunder,
shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Loan Agreement or
any of the other Loan Documents or any other agreement or instrument
relating to any of the foregoing;
(b) any change in the time, manner, or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Loan Agreement or any of
the other Loan Documents;
(c) any exchange, release, or nonperfection of any Collateral, or any
release or amendment or waiver of or consent to any departure from any
guarantee, for all or any of the Obligations; or
(d) any other circumstance (other than payment in full of the
Obligations) that might otherwise constitute a defense available to, or
a discharge of, Pledgor.
SECTION 6.10 Confirmation of Liens. Pledgor acknowledges that this
Agreement has been given in amendment, renewal, restatement, and confirmation of
Pledgor's obligations, covenants, and agreements contained in the Pledge and
Security Agreements previously executed by Pledgor in favor of Administrative
Agent and the Lenders, including, without limitation, that dated April 26, 1996
(the "Previous Pledge"). Pledgor further confirms and agrees that neither the
execution of the Loan Agreement or any other Loan Document, or the consummation
of the transactions described therein, shall in any way affect the liens granted
under the Previous Pledge or the perfection or priority thereof, and the
obligations evidenced by the Previous Pledge shall continue in full force and
effect as modified, amended and restated by the terms contained herein.
SECTION 6.11 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument, and in making proof of this
Agreement it shall not be necessary to produce or account for more than one such
counterpart.
SECTION 6.12 ENTIRE AGREEMENT. THIS AGREEMENT EMBODIES THE FINAL,
ENTIRE AGREEMENT OF PLEDGOR, THE AGENTS AND THE LENDERS WITH RESPECT TO
PLEDGOR'S PLEDGE OF THE PLEDGED PARTNERSHIP INTERESTS AND RESTATES ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF. THIS AGREEMENT IS
INTENDED BY PLEDGOR, THE AGENTS AND THE LENDERS AS A FINAL AND COMPLETE
EXPRESSION OF THE TERMS OF THIS AGREEMENT, AND NO COURSE OF DEALING BETWEEN
PLEDGOR, THE AGENTS OR THE LENDERS, NO COURSE OF PERFORMANCE, NO TRADE
PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE
USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS AGREEMENT. THERE
ARE NO ORAL AGREEMENTS AMONG PLEDGOR, THE AGENTS AND THE LENDERS.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.]
Pledge and Security Agreement
IN WITNESS WHEREOF, Pledgor has executed this Agreement as of the day
and year first above written.
PLEDGOR:
OHIO LITHO, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Treasurer
Exhibit A
EXHIBIT A
PARTNERSHIPS
Ohio Mobile Lithotripter, Ltd.
Ohio Mobile Lithotripter II, Ltd.
Exhibit B
EXHIBIT B
PARTNERSHIP AGREEMENTS
First Amended and Restated Agreement of Limited Partnership of Ohio Mobile
Lithotripter, Ltd. dated August 1, 1991, as amended by First Amendment to First
Amended and Restated Agreement of Limited Partnership dated as of December 31,
1992
Certificate of Limited Partnership of Ohio Mobile Lithotripter, Ltd. dated May
21, 1991
First Amended and Restated Agreement of Limited Partnership of Ohio Mobile
Lithotripter II, Ltd.
Certificate of Limited Partnership of Ohio Mobile Lithotripter II, Ltd. dated
August 23, 1995
Pledge and Security Agreement
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (the "Agreement") dated as of
January 31, 2000, is by and between OHIO LITHO, INC., a Delaware corporation
("Pledgor"), whose street address is 0000 Xxxxxxx xx Xxxxx Xxxxxxx, Xxxxx X-000,
Xxxxxx, Xxxxx 00000-0000, for the benefit of BANK OF AMERICA, N.A., a national
banking association ("B of A"), whose street address is 000 Xxxx Xxxxxx, Xxxxxx,
Xxxxx 00000, not in its individual capacity but solely as administrative agent
for itself and each of the other banks or lending institutions (each, a "Lender"
and collectively, the "Lender") which is or may from time to time become a party
to the Loan Agreement (as hereinbelow defined) (in such capacity, together with
its successors in such capacity, the "Administrative Agent").
R E C I T A L S:
A. Prime Refractive Management, L.L.C., a Delaware limited liability
company ("Borrower"), has entered into that certain Loan Agreement dated as of
the date hereof with B of A as Administrative Agent and as a Lender, BankBoston,
N.A., as Documentation Agent and as a Lender, and the other Lenders from time to
time party thereto, as amended, waived, restated, and supplemented from time to
time ("Loan Agreement").
B. Pledgor and certain other guarantors have executed that certain
Guaranty Agreement dated as of the date hereof (as the same may be amended,
supplemented or modified from time to time, the "Guaranty"), pursuant to which
Pledgor has guaranteed to the Agents (as defined in the Loan Agreement) and the
Lenders the full and complete payment and performance of the liabilities,
obligations, and indebtedness of the Borrower to the Agents and the Lenders
under the Loan Documents (as defined in the Loan Agreement).
C. As a condition to entering into the Loan Agreement, Pledgor must execute
and deliver this Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor agrees with the Administrative Agent as follows:
ARTICLE I
DEFINITIONS
(a) Each term used herein and defined in the Loan Agreement shall have
the meaning assigned to it in the Loan Agreement, unless otherwise defined
herein or the context otherwise requires.
(b) In addition, as used herein, the following terms shall, unless
otherwise indicated, have the following meanings:
"Borrower" has the meaning set forth in the recitals.
"Code" shall mean the Uniform Commercial Code as in effect in the State
of Texas.
"Collateral" shall mean the assets and interests of Pledgor identified
in Section 2.1 hereof.
Pledge and Security Agreement
12
"Event of Default" shall have the meaning assigned to such term in
Section 5.1.
"Guaranty" shall mean that certain Guaranty Agreement dated as of the
date hereof, executed by Pledgor and certain other guarantors for the benefit of
the Agents and the Lenders, guaranteeing the full payment and performance of the
Obligations, as amended, modified, confirmed, and extended from time to time.
"Partnerships" shall mean (a) those partnerships and limited liability
companies listed on Exhibit A attached hereto and incorporated herein by
reference, as such partnerships or limited liability companies exist or may
hereinafter be restated, amended or restructured, (b) any partnership, joint
venture, or limited liability company in which Pledgor shall, at any time,
become a limited or general partner, venturer, or member, or (c) any
partnership, joint venture or corporation formed as a result of the restructure,
reorganization or amendment of the Partnerships.
"Partnership Agreements" shall mean (a) those agreements listed on
Exhibit B attached hereto and incorporated herein by reference (together with
any modifications, amendments or restatements thereof), and (b) partnership
agreements, joint venture agreements, or organizational agreements for any of
the partnerships, joint ventures, or limited liability companies described in
clause (b) of the definition of "Partnerships" above (together with any
modifications, amendments or restatements thereof), and "Partnership Agreement"
means any one of the Partnership Agreements.
"Pledged Partnership Interests" shall mean all of Pledgor's partnership
interests, whether general or limited, venture, or membership interests, in the
Partnerships, including, without limitation, all of Pledgor's right, title and
interest now or hereafter accruing under the Partnership Agreements with respect
to any interest now owned or hereafter acquired or owned by Pledgor in the
Partnerships, and including all distributions, allocations, proceeds, fees,
preferences, payments or other benefits, which Pledgor now is or may hereafter
become entitled to receive with respect to such interests in the Partnerships
and with respect to the repayment of all loans now or hereafter made by Pledgor
to the Partnerships, and Pledgor's undivided percentage interest in the assets
of the Partnerships.
"Secured Indebtedness" shall have the meaning assigned to such term in
Section 2.1(c) hereof.
"Security Interests" shall mean the pledge, collateral assignment, and
security interests securing the Secured Indebtedness, including (i) the pledge
and security interest in the Pledged Partnership Interests granted in this
Agreement and (ii) all other security interests created or assigned as
additional security for the Secured Indebtedness pursuant to the provisions of
this Agreement.
(c) Whenever the context so requires, the neuter gender includes the
masculine and feminine, and the singular number includes the plural and vice
versa.
ARTICLE II
COLLATERAL AND OBLIGATION
SECTION 2.1 Grant of Security Interest.
--------------------------
(a) As collateral security for Secured Indebtedness, Pledgor hereby
pledges and grants to the Administrative Agent, for the benefit of the Lenders,
a lien on and security interest in and to, and agrees and acknowledges that the
Administrative Agent has, and shall continue to have, a security interest in and
to, and assigns, transfers, pledges and conveys to the Administrative Agent, all
of Pledgor's right, title and interest in and to the following described
collateral (the "Collateral") now owned or hereafter acquired, wherever located,
howsoever arising or created, and whether now existing or hereafter arising,
existing or created, subject to a first lien in favor of Bank of America, N.A.,
as Administrative Agent ("Prime Administrative Agent") under the Fourth Amended
and Restated Loan Agreement dated the date hereof (the "Prime Loan Agreement")
among Prime Medical Services, Inc., Prime Administrative Agent, BankBoston,
N.A., as documentation agent, and the lenders ("Prime Lenders") from time to
time thereunder:
(i) the Pledged Partnership Interests and all rights of
Pledgor with respect thereto and all proceeds, income
and profits therefrom;
(ii) all of Pledgor's distribution rights, income rights,
liquidation interest, accounts, contract rights,
general intangibles, notes, instruments, drafts and
documents relating to the Pledged Partnership
Interests;
(iii) to the extent attributable to the Pledged Partnership
Interests, all promissory notes, notes receivable,
accounts, accounts receivable and instruments owned
or held by Pledgor or, in which Pledgor owns or holds
an interest, evidencing obligations of the
Partnerships;
(iv) all liens, security interests, collateral, property
and assets securing any of the promissory notes,
notes receivables, instruments, accounts receivable
and other claims and interest described in clause
(iii) above;
(v) all books, files, computer records, computer software,
electronic information and other files, records or
information relating to any or all of the foregoing;
and
(vi) all substitutions, replacements, products, proceeds,
income and profits arising from any of the foregoing;
including without limitation insurance proceeds.
(b) The Security Interests are granted and the Collateral is
collaterally assigned as security only and shall not subject the Administrative
Agent or any holder of the Secured Indebtedness to, or transfer or in any way
affect or modify, any obligation or liability of Pledgor with respect to any of
the Collateral.
(c) The Collateral shall secure the following obligations,
indebtedness, and liabilities (whether at stated maturity, by acceleration or
otherwise) (all such obligations, indebtedness, and liabilities being
hereinafter sometimes called the "Secured Indebtedness"):
(i) the Obligations and the obligations, liabilities and
indebtedness of Pledgor to the Agents and the Lenders
under the Guaranty;
(ii) all reasonable costs and expenses, including, without
limitation, all reasonable attorneys' fees and legal
expenses, incurred by any of the Agents or any Lender
to preserve and maintain the Collateral, collect the
obligations herein described, and enforce this
Agreement; and
(iii)all extensions, renewals, and modifications of any of
the foregoing.
SECTION 2.2 Consent. To the extent any Partnership Agreement requires
the consent or agreement of Pledgor to the transfer, conveyance, or encumbrance
as security for the Secured Indebtedness of all or any portion of the Pledged
Partnership Interests, Pledgor hereby irrevocably consents to (a) the grant of
the security interest described in Section 2.1 of this Agreement, and (b) any
transfer or conveyance of the Pledged Partnership Interests pursuant to the
Administrative Agent's exercise of its rights and remedies under Section 5.4 of
this Agreement or under any other Loan Document.
SECTION 2.3 Pledgor Remains Liable. Notwithstanding anything to the
contrary contained herein, (a) Pledgor shall remain liable under the Partnership
Agreements to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed (b) the exercise by the Administrative Agent of any of its rights
hereunder shall not release Pledgor from any of its duties or obligations under
the contracts and agreements included in the Collateral, and (c) neither the
Administrative Agent nor any Lender shall have any obligation or liability under
the Partnership Agreements by reason of this Agreement, nor shall the
Administrative Agent or any Lender be obligated to perform any of the
obligations or duties of Pledgor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Pledgor hereby represents and warrants to the Administrative Agent as
follows:
(a) Pledgor has good and indefeasible title to the Pledged Partnership
Interests and other Collateral free and clear of any Lien except for the
Security Interests created by this Agreement and the security interests granted
in favor of Prime Administrative Agent, and has all necessary authority to
pledge and collaterally assign the Pledged Partnership Interests and other
Collateral as security for the Secured Obligations and such assignment and
transfer is not contrary to or in conflict with the Partnership Agreements or
any other agreement;
(b) No financing statement or other instrument similar in effect
covering all or any part of the Collateral is on file in any recording office,
except such as may have been filed in favor of the Administrative Agent relating
to this Agreement or those in favor of Prime Administrative Agent;
(c) This Agreement has been duly executed and delivered by Pledgor and is
the legal and binding obligation of Pledgor enforceable in accordance with its
terms;
(d) Upon execution of this Agreement and an appropriate financing
statement by Pledgor and the recording of the financing statement in the
appropriate office, the Administrative Agent will have a valid, perfected
security interest in the Collateral, subject only to the prior lien of Prime
Administrative Agent;
(e) Neither the execution and delivery of this Agreement, nor the
consummation of any of the transactions hereby contemplated, nor compliance with
the terms and provisions hereof, will contravene or materially conflict with (i)
any material provision of law, statute or regulation to which Pledgor or the
Partnerships is subject or (ii) any judgment, license, order or permit
applicable to Pledgor or the Partnerships. No consent, approval, authorization
or order of any court, governmental authority, partner or third party is
required that has not been received or taken (i) for the grant by Pledgor of the
Security Interests, (ii) for the execution, delivery or performance of this
Agreement by Pledgor, (iii) for the perfection of the Security Interests, or
(iv) except for such notices as are required by the Code or the Loan Agreement,
for the exercise by the Administrative Agent of its rights and remedies
hereunder (provided, however, that the purchaser of the Collateral at any sale
thereof pursuant to Section 5.4 hereof may be required to obtain the consent of
the partners in the Partnerships and/or satisfy other conditions set forth in
the Partnership Agreements prior to such purchaser's admission as a partner in
the Partnership);
(f) The chief executive office and principal place of business of Pledgor
is in Xxxxxx, Xxxxxx County, Texas; and
(g) To the best knowledge and belief of Pledgor, Pledgor has fully
performed each and every one of his obligations and duties under the Partnership
Agreements on or prior to the date due; Pledgor has not received any notice of
any default in the performance of his obligations under the Partnership
Agreements or of any situation which could give rise to such an event of default
thereunder.
ARTICLE IV
PLEDGOR'S COVENANTS
Pledgor hereby covenants and agrees with the Administrative Agent that
until the Secured Indebtedness is paid and performed in full:
(a) Pledgor will not cause, permit or consent to any amendment or
modification to the Partnership Agreements in effect as of the date hereof
except as permitted in the Prime Loan Agreement;
(b) Pledgor will pay and discharge promptly when due all taxes,
assessments, forced contributions, governmental charges, fines, penalties, and
any other lawful claims, of every description, payable by Pledgor with respect
to (or which, if not paid could result in an encumbrance upon) any of the
Collateral, except as otherwise permitted by the terms of the Loan Agreement. In
the event that Pledgor should, for any reason, fail to pay and discharge
promptly any taxes, assessments, forced contributions, governmental charges,
fines, or penalties when due (subject to the provisions of the Prime Loan
Agreement), then the Administrative Agent shall be authorized, but shall not be
obligated, to pay the same, with full subrogation to all rights of any Person by
reason of such payment, and the amounts so paid, together with interest thereon
as provided herein, shall be secured by the Security Interests;
(c) Pledgor will not sell, transfer, mortgage or otherwise encumber any
Collateral in any manner, except for the security interest in favor of Prime
Administrative Agent, without first obtaining the written consent of the
Administrative Agent. Any written consent to any such sale, mortgage, transfer
or encumbrance shall not be construed to be a waiver of this provision in
respect of any subsequent proposed sale, mortgage, transfer or encumbrance;
(d) Pledgor will, at its expense and in such manner and form as the
Administrative Agent may from time to time reasonably require, execute, deliver,
file and record any financing statement, specific assignment or other
instruments, certificates or papers and take any other action that may be
necessary or desirable, or that the Administrative Agent may from time to time
reasonably request, in order to create, preserve, perfect or validate any
Security Interest or to enable the Administrative Agent to exercise and enforce
its rights hereunder with respect to any of the Collateral. In the event, for
any reason, that the law of any jurisdiction other than the State of Texas
becomes or is applicable to the Collateral, or any part thereof, Pledgor agrees
to execute and deliver all such instruments and to do all such other things that
may be necessary or appropriate to preserve, protect and enforce the Security
Interests of the Administrative Agent under the law of such other jurisdiction,
to at least the same extent that the Security Interests would be protected under
the Code. To the extent permitted by applicable law, Pledgor hereby authorizes
the Administrative Agent to execute and file, in the name of Pledgor or
otherwise, Uniform Commercial Code financing statements that the Administrative
Agent in its sole discretion may deem necessary or appropriate to further
perfect the Security Interests;
(e) If Pledgor receives, by virtue of being or having been an owner of
any of the Collateral, any notes, other instruments, options, cash distributions
or any other distribution, resulting from a Capital Event (hereinafter defined)
Pledgor shall receive the same in trust for the benefit of the Administrative
Agent, shall immediately notify the Administrative Agent of such receipt and
shall immediately take all such actions and execute all such documents as the
Administrative Agent deems necessary or appropriate to continue or create as
perfected Liens, in favor of the Administrative Agent covering such notes, other
instruments, options, cash distributions, subject ony to the prior lien in favor
of the Prime Administrative Agent. As used herein, the term "Capital Event"
shall mean any event generating or resulting in revenues not attributable to the
normal business operations of the Partnerships including without limitation, any
mortgaging of assets, refinancing of existing indebtedness of any Partnership,
condemnation of any assets of any Partnership, sale or transfer of any assets of
any Partnership outside the ordinary course of business, or payment of insurance
proceeds. At all times other than during the continuance of an Event of Default,
Pledgor shall be entitled to receive free from the security interest hereof any
note, other instrument, option, cash distribution or any other distribution
resulting from any event other than a Capital Event;
(f) Pledgor will notify the Administrative Agent in writing prior to
the removal of Pledgor's chief executive office or principal place of business
from the State of Texas;
(g) Pledgor shall cause to be obtained any and all waivers and consents
necessary to make effective the grant contained in and to perfect the security
interest granted to the Administrative Agent pursuant to Section 2.1 hereof,
including without limitation, all necessary waivers and consents from the other
partners, if any, of each Partnership;
(h) Pledgor shall perform fully all obligations imposed upon it by any
agreements or instruments concerning all or any part of the Collateral,
including without limitation the Partnership Agreements and shall maintain in
full force and effect all such agreements and instruments, and shall not amend
or modify, or consent to the amendment or modification of such agreements or
instruments, without the prior written consent of the Administrative Agent; and
(i) Pledgor shall promptly notify the Administrative Agent of any
material adverse change in any material fact or material circumstance warranted
or represented by Pledgor in this Agreement or in any other writing furnished by
Pledgor to the Administrative Agent in connection with the Collateral or the
Secured Indebtedness, and shall promptly notify the Administrative Agent of any
claim, action or proceeding affecting title to the Collateral, or any part
thereof, or the Security Interests herein, and, at the request of the
Administrative Agent, shall appear and defend, at Pledgor's expense, any such
action or proceeding.
ARTICLE V
GENERAL AUTHORITY AND POWERS AND REMEDIES
SECTION 5.1 Events of Default.
-----------------
Pledgor shall be in default under this Agreement upon the happening of
any of the following events or conditions (hereinafter called an "Event of
Default"):
(a) An Event of Default under the Loan Agreement shall occur; or
(b) The ownership of any of the Collateral becomes vested in a person or
entity other than Pledgor, except as permitted hereunder; or
(c) The Administrative Agent's Liens in any of the Collateral should
become unenforceable, or cease to be first priority Liens, subject only to the
prior lien of Prime Administrative Agent.
SECTION 5.2 Right to Receive Distributions. The Administrative Agent
shall have the right, at any time following the occurrence and during the
continuation of an Event of Default, to receive all payments and distributions
made to Pledgor upon or with respect to the Collateral and Pledgor agrees to
take all such action as the Administrative Agent may reasonably deem necessary
or appropriate to give effect to such right.
SECTION 5.3 General Authority. Pledgor hereby irrevocably appoints the
Administrative Agent, and its successors and assigns, the true and lawful
attorney-in-fact of Pledgor, with full power of substitution, in the name of
Pledgor, for the sole use and benefit of the Administrative Agent, but at
Pledgor's expense, to the extent permitted by law to exercise, at any time and
from time to time following the occurrence and during the continuance of an
Event of Default, all or any of the following powers with respect to all or any
of the Collateral:
(a) to ask, demand, xxx for, collect, receive and give acquittance and
receipts for any and all monies due or to become due upon or by virtue thereof;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) preceding;
(c) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto;
(d) subject to Section 5.4 hereof, to sell, transfer, assign or
otherwise deal in or with the same or the proceeds thereof as fully and
effectually as if the Administrative Agent were the absolute owner thereof; and
(e) to extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto.
In addition, the Administrative Agent, at any time, either before or after an
Event of Default, shall have the right, together with such accountants and other
agents or representatives as they may from time to time designate, to visit and
inspect the Partnerships' properties, assets, books, records and documents and
to discuss the Partnerships' affairs, finances and accounts with Pledgor's and
the Partnerships' representatives, officers or directors, during all business
hours as the Administrative Agent may designate, and to make and take away
copies of the Partnerships' records at the Administrative Agent's expense.
Pledgor shall furnish to Administrative Agent any information reasonably
requested by the Administrative Agent in connection with the Collateral. Pledgor
will maintain complete and accurate books and records regarding the Collateral.
SECTION 5.4 Remedies Upon Default.
---------------------
(a) If any Event of Default shall have occurred and is continuing, the
Administrative Agent, at its option, without demand, presentment, notice of
acceleration, intention to accelerate or other notice (which are fully waived)
may:
(1) exercise all the rights of a secured party under the Code
(whether or not the Code is in effect in the jurisdiction where such
rights are exercise, unless prohibited by applicable law).
(2) apply the cash, if any, then held by the Administrative Agent as
Collateral as specified in Section 5.6.
(3) sell all of the Collateral or any part thereof at public
or private sale or at any broker's board or on any securities exchange,
for cash, upon credit or for future delivery, and at such price or
prices as the Administrative Agent may reasonably deem satisfactory.
Upon the Administrative Agent's demand, Pledgor will take all steps
necessary to prepare the Collateral for and otherwise assist in any
proposed disposition of the Collateral. Any holder of the Secured
Indebtedness may be the purchaser of any or all of the Collateral so
sold at any public sale (or, if the Collateral is of a type customarily
sold in a recognized market or is of a type which is the subject of
widely distributed standard price quotations, at any private sale) and
thereafter hold the same absolutely, free from any right or claim of
whatsoever kind. Any holder of the Secured Indebtedness shall have the
right to offset the amount of its bid against an equal amount of the
Secured Indebtedness held by such holder.
Pledgor agrees that, because of the Securities Act of 1933, as amended,
or any other laws or regulations, and for other reasons, there may be
legal and/or practical restrictions or limitations affecting the
Administrative Agent in any attempts to dispose of certain portions of
the Collateral and for the enforcement of their rights. For these
reasons, the Administrative Agent is hereby authorized by Pledgor, but
not obligated, upon the occurrence and during the continuation of an
Event of Default, to sell all or any part of the Collateral at private
sale, subject to investment letter or in any other manner which will
not require the Collateral, or any part thereof, to be registered in
accordance with the Securities Act of 1933, as amended, or the rules
and regulations promulgated thereunder, or any other laws or
regulations, at a reasonable price at such private sale or other
distribution in the manner mentioned above. Pledgor understands that
the Administrative Agent may in its discretion approach a limited
number of potential purchasers and that a sale under such circumstances
may yield a lower price for the Collateral, or any part or party
thereof, than would otherwise be obtainable if such collateral were
either afforded to a larger number or potential purchasers, or
registered or sold in the open market. Pledgor agrees that such private
sale shall be deemed to have been made in a commercially reasonable
manner, and that the Administrative Agent has no obligation to delay
sale of any Collateral to permit the issuer thereof to register it for
public sale under any applicable federal or state securities laws.
The Administrative Agent is authorized, in connection with any such
sale (i) to restrict the prospective bidders on or purchasers of any of
the Collateral to a limited number of sophisticated investors who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any of
such Collateral and (ii) to impose such other limitations or conditions
in connection with any such sale as the Administrative Agent reasonably
deems necessary in order to comply with applicable law. Pledgor
covenants and agrees that it will execute and deliver such documents
and take such other action as the Administrative Agent reasonably deems
necessary in order that any such sale may be made in compliance with
applicable law. Upon any such sale the Administrative Agent shall have
the right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold absolutely, free from any claim or right of Pledgor
of whatsoever kind, including any equity or right of redemption of
Pledgor. Pledgor, to the extent permitted by applicable law, hereby
specifically waives all rights of redemption, stay or appraisal which
it has or may have under any law now existing or hereafter enacted.
Pledgor agrees that five (5) days' written notice from the
Administrative Agent to Pledgor of the Administrative Agent's intention
to make any such public or private sale or sale at a broker's board or
on a securities exchange shall constitute "reasonable notification"
within the meaning of Section 9-504(c) of the Code. Such notice shall
(1) in case of a public sale, state the time and place fixed for such
sale, (2) in case of sale at a broker's board or on a securities
exchange, state the board or exchange at which such a sale is to be
made and the day on which the Collateral, or the portion thereof so
being sold, will first be offered to sale at such board or exchange and
(3) in the case of a private sale, state the day after which such sale
may be consummated. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as the
Administrative Agent may fix in the notice of such sale. At any such
sale, the Collateral may be sold in one lot as an entirety or in
separate parcels, as the Administrative Agent may reasonably determine.
The Administrative Agent shall not be obligated to make any such sale
pursuant to any such notice. The Administrative Agent may, without
notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or
place to which the same may be so adjourned.
In case of any sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by the
Administrative Agent until the selling price is paid by the purchaser
thereof, but the Administrative Agent shall not incur any liability in
case of the failure of such purchaser to take up and pay for the
Collateral so sold and in case of any such failure, such Collateral may
again be sold upon like notice. The Administrative Agent, instead of
exercising the power of sale herein conferred upon it, may proceed by a
suit or suits at law or in equity to foreclose the Security Interests
and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.
(b) Without the limiting the foregoing, or imposing upon the
Administrative Agent any obligations or duties not required by applicable law,
Pledgor acknowledges and agrees that, in foreclosing upon any of the Collateral,
or exercising any other rights or remedies provided the Administrative Agent
hereunder or under applicable law, the Administrative Agent may, but shall not
be required to (1) qualify or restrict prospective purchasers of the Collateral
by requiring evidence of sophistication and/or creditworthiness, and requiring
the execution and delivery of confidentiality agreements or other documents and
agreements as a condition to such prospective purchasers' receipt of information
regarding the Collateral or participation in any public or private foreclosure
sale process; (2) provide to prospective purchasers the Partnership Agreements
and business and financial information regarding the Partnerships available in
the files of the Administrative Agent at the time of commencing the foreclosure
process, without the requirement that the Administrative Agent obtain, or seek
to obtain, any updated business or financial information or Partnership
Agreements, or verify, or certify to prospective purchasers, the accuracy of any
such business or financial information or Partnership Agreements; (3) sell at
foreclosure all, or a portion but not all, of the rights, titles and interests
of Pledgor in a particular Partnership or group of Partnerships; it being
further specifically acknowledged by Pledgor that limitations or potential
limitations on the transfer of certain Collateral under the Partnership
Agreements or other applicable agreements or law may limit the Administrative
Agent's right or ability to foreclose upon or sell certain rights, titles and
interests of Pledgor in the Partnerships; (4) offer for sale, and sell,
partnership interests either with, or without, first employing an appraiser,
investment banker, or broker with respect to the evaluation of Collateral, the
solicitation of purchasers for Collateral, or the manner of sale of Collateral.
(c) The Administrative Agent shall have all rights, remedies and
recourse granted in the Loan Agreement and the other Loan Documents or existing
at common law or equity (including specifically those granted by the Code), and
such rights and remedies (1) shall be cumulative and concurrent, (2) may be
pursued separately, successively or concurrently against Pledgor and any party
obligated to pay or perform the Obligations, any of the Collateral, or any other
security for any of the Obligations, at the sole discretion of the
Administrative Agent, and (3) may be exercised as often as occasion therefor
shall arise, it being agreed by Pledgor that the exercise or failure to exercise
any such rights or remedies shall in no event be construed as a waiver or
release thereof or of any other right, remedy or recourse.
(d) Notwithstanding a foreclosure upon any of the Collateral or
exercise of any other remedy by the Administrative Agent in connection with an
Event of Default, Pledgor shall not be subrogated thereby to any rights of the
Administrative Agent against the Collateral or any other security for any of the
Obligations. Pledgor shall not be deemed to be the owner of any interest in any
of the Obligations until all of the Obligations have been paid to the
Administrative Agent and are fully performed and discharged.
(e) All recitals in any instrument of assignment or any other
instrument executed by the Administrative Agent incident to the sale, transfer,
assignment or other disposition or utilization of the Collateral or any part
thereof hereunder shall be presumptive evidence of the matters stated therein
and all prerequisites of such sale or other action contained in such recitals
shall be presumed to have been performed or to have occurred.
SECTION 5.5 Waivers by Pledgor. In case of any Event of Default,
neither Pledgor nor anyone claiming by, through or under Pledgor, to the extent
Pledgor may lawfully so agree, shall or will set up, claim or seek to take
advantage of any appraisement, valuation, stay, extension or redemption law now
or hereafter in force in any locality where any of the Collateral is situated
for purposes of applicable law, in order to prevent or hinder the enforcement of
this Agreement, or the absolute sale of the Collateral, or the final and
absolute putting into possession thereof, immediately after such sale, of the
purchaser thereof; and Pledgor in Pledgor's own right and for all who may claim
under Pledgor, hereby waives, to the fullest extent that Pledgor may lawfully do
so, the benefit of any and all right to have the Collateral marshaled upon any
enforcement of the Security Interests herein granted, and Pledgor agrees that
the Administrative Agent or any court having jurisdiction to enforce the
Security Interests may sell the Collateral in parts or as an entirety.
SECTION 5.6 Application of Proceeds. The Administrative Agent shall
apply the proceeds of any foreclosure sale or other realization upon the
Collateral as follows (as modified, if necessary, by the requirements of
applicable law):
(a) First, to the payment of all reasonable costs and expenses of any
foreclosure and collection hereunder and all proceedings in connection
therewith, including reasonable compensation to Administrative Agent's counsel;
(b) Then, to the reimbursement of the Administrative Agent for all
disbursements made by the Administrative Agent for taxes, assessments or liens
superior to the Security Interests and which the Administrative Agent shall deem
expedient to pay;
(c) Then, to the reimbursement of the Administrative Agent for any other
disbursements made by, or reasonable expenses incurred by, the Administrative
Agent in accordance with the terms hereof;
(d) Then, to the Prime Administrative Agent until all secured obligations
of Pledgor to it and the Prime Lenders are paid;
(e) Then, to the Secured Indebtedness, in any manner determined by the
Administrative Agent in its sole discretion; and
(f) The remainder of such proceeds, if any, shall be paid to Pledgor.
The foregoing application provisions shall apply not only to proceeds
resulting from foreclosure but also to proceeds or distributions resulting from
any other claim, (including claims made in bankruptcy proceedings), action or
proceeding to enforce or protect the Administrative Agent's lien in the
Collateral.
SECTION 5.7 Enforcement of Secured Indebtedness. Nothing in this
Agreement shall affect or impair the unconditional and absolute right of the
Administrative Agent to enforce the Secured Indebtedness as and when the same
shall become due in accordance with the terms of the Loan Documents whether by
acceleration or otherwise.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Terms Commercially Reasonable. The terms of this Agreement
shall be deemed commercially reasonable within the meaning of the Uniform
Commercial Code in effect and applicable hereto.
SECTION 6.2 Headings. The headings of articles and sections herein are
inserted only for convenience and shall in no way define, describe or limit the
scope or intent of any provision of this Agreement.
SECTION 6.3 Amendments. No change, amendment, modification,
cancellation or discharge of any provision of this Agreement shall be valid
unless consented to in writing by the Administrative Agent and Pledgor (subject
to the terms of the Loan Agreement).
SECTION 6.4 Assignment of the Administrative Agent's Rights. The
Administrative Agent shall have the right to assign all or any portion of its
rights under this Agreement to any subsequent holder or holders of the
Obligations.
SECTION 6.5 Parties in Interest. As and when used herein, the term
"Pledgor" shall mean and include Pledgor herein named and his successors and
permitted assigns, and the term "Administrative Agent" shall mean and include
the Administrative Agent herein named and his successors and assigns, and all
covenants and agreements herein shall be binding upon and inure to the benefit
of Pledgor and the Administrative Agent and their respective assigns, provided
that Pledgor shall have no right to assign his rights hereunder to any other
Person except in connection with a transfer of the Collateral permitted
hereunder.
SECTION 6.6 APPLICABLE LAWS. THIS AGREEMENT SHALL BE CONSTRUED,
INTERPRETED AND ENFORCED UNDER AND PURSUANT TO THE LAWS OF THE STATE OF TEXAS
AND APPLICABLE FEDERAL LAW. IF ANY PROVISION OF THIS AGREEMENT IS HELD TO BE
INVALID OR UNENFORCEABLE, THE VALIDITY AND ENFORCEABILITY OF THE OTHER
PROVISIONS OF THIS AGREEMENT SHALL REMAIN UNAFFECTED.
SECTION 6.7 Notices. Any notices or other communications required or
permitted to be given by this Agreement or any other documents and instruments
referred to herein must be given in accordance with Section 11 of the Loan
Agreement, to the address of such party as follows:
If to the Administrative Agent: 000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx
If to Pledgor: 0000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, Xxxxx 00000-0000
Attn: Treasurer
SECTION 6.8 Financing Statement. The Administrative Agent shall be
entitled at any time to file a photographic or other reproduction of this
Agreement as a financing statement, but the failure of the Administrative Agent
to do so shall not impair the validity or enforceability of this Agreement.
SECTION 6.9 Obligations Absolute. All rights and remedies of the
Administrative Agent hereunder, and all obligations of the Pledgor hereunder,
shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Loan Agreement
or any of the other Loan Documents or any other agreement or
instrument relating to any of the foregoing;
(b) any change in the time, manner, or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Loan
Agreement or any of the other Loan Documents;
(c) any exchange, release, or nonperfection of any Collateral, or
any release or amendment or waiver of or consent to any departure from
any guarantee, for all or any of the Obligations; or
(d) any other circumstance (other than payment in full of the
Obligations) that might otherwise constitute a defense available to, or
a discharge of, Pledgor.
SECTION 6.10 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument, and in making proof of this
Agreement it shall not be necessary to produce or account for more than one such
counterpart.
SECTION 6.11 ENTIRE AGREEMENT. THIS AGREEMENT EMBODIES THE FINAL,
ENTIRE AGREEMENT OF PLEDGOR, THE AGENTS AND THE LENDERS WITH RESPECT TO
PLEDGOR'S PLEDGE OF THE PLEDGED PARTNERSHIP INTERESTS AND RESTATES ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF. THIS AGREEMENT IS
INTENDED BY PLEDGOR, THE AGENTS AND THE LENDERS AS A FINAL AND COMPLETE
EXPRESSION OF THE TERMS OF THIS AGREEMENT, AND NO COURSE OF DEALING BETWEEN
PLEDGOR, THE AGENTS OR THE LENDERS, NO COURSE OF PERFORMANCE, NO TRADE
PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE
USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS AGREEMENT. THERE
ARE NO ORAL AGREEMENTS AMONG PLEDGOR, THE AGENTS AND THE LENDERS.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.]
Pledge and Security Agreement
IN WITNESS WHEREOF, Pledgor has executed this Agreement as of the day
and year first above written.
PLEDGOR:
OHIO LITHO, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Treasurer
Exhibit A
EXHIBIT A
PARTNERSHIPS
Ohio Mobile Lithotripter, Ltd.
Ohio Mobile Lithotripter II, Ltd.
Exhibit B
EXHIBIT B
PARTNERSHIP AGREEMENTS
First Amended and Restated Agreement of Limited Partnership of Ohio Mobile
Lithotripter, Ltd. dated August 1, 1991, as amended by First Amendment to First
Amended and Restated Agreement of Limited Partnership dated as of December 31,
1992
Certificate of Limited Partnership of Ohio Mobile Lithotripter, Ltd. dated May
21, 1991
First Amended and Restated Agreement of Limited Partnership of Ohio Mobile
Lithotripter II, Ltd.
Certificate of Limited Partnership of Ohio Mobile Lithotripter II, Ltd. dated
August 23, 1995