ASSIGNMENT AND SECURITY AGREEMENT
THIS ASSIGNMENT AND SECURITY AGREEMENT (this "Agreement") is made and
entered into as of the 1st day of September, 1999, by and between Prime Medical
Operating, Inc., a Delaware corporation (the "Secured Party") and Prime/BDR
Acquisition, L.L.C., a Delaware limited liability company (the "Debtor").
RECITALS:
A. Debtor and Secured Party have executed and delivered that certain
Contribution Agreement dated effective September 1, 1999, between and among
Debtor, Secured Party, Prime Medical Services, Inc., a Delaware corporation,
Prime/BDEC Acquisition, L.L.C., a Delaware limited liability company, Barnet
Xxxxxxx Eye Center, P.L.L.C., an Arizona professional limited liability company,
LASIK Investors L.L.C., a Delaware limited liability company, Xxxxx X. Xxxxxxx,
M.D., Xxxxxx X. Xxxxxx, M.D., and Xxxx Xxxxxxxxx (the "Contribution Agreement"),
and that certain Loan Agreement, dated September 1, 1999 (the "Loan Agreement"),
pursuant to which Secured Party agrees to make certain loans to Debtor on the
terms and subject to the conditions provided therein.
B. Secured Party has requested that Debtor pledge the Collateral (as
defined below) to secure certain obligations and liabilities that Debtor may now
or hereafter have to Secured Party, including, without limitation, any
obligations arising under loans made pursuant to the Loan Agreement.
C. Debtor desires to enter into this Agreement as a material inducement to
Secured Party's extension of credit under the Loan Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which Debtor acknowledges, Debtor and Secured Party
agree as follows:
ARTICLE I
COLLATERAL AND SECURED OBLIGATIONS
1.1 Grant of Security Interest. Debtor hereby assigns, transfers, and
pledges to Secured Party, and Debtor hereby grants to Secured Party a security
interest in, the following described collateral (collectively, the
"Collateral"):
(a) Interest in Subsidiary. All ownership interests of Debtor in Horizon
Vision Center, Inc., a Nevada corporation ("Horizon"), whether now existing or
hereafter acquired and including, without limitation, that certain 60% interest
in Horizon (the "Interests").
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(b) Interest in Acquisition Agreements. All of Debtor's interest and rights
(but not any obligations) under those certain Stock Purchase Agreements by and
between Debtor and the Shareholders of Horizon;
(c) Accounts. All accounts and rights now or hereafter
attributable to any of the Collateral described in (a) and (b)above, and all
rights of Debtor now or hereafter arising under any agreement pertaining to the
Collateral described in (a) and (b) above, including without limitation all
distributions, proceeds, fees, dividends, preferences, payments or other
benefits of whatever nature which Debtor is now or may hereafter become entitled
to receive with respect to any Collateral described in (a) and (b) above;
(d) Additional Property. "Collateral" shall also include the
following property (collectively, the "Additional Property") which Debtor
becomes entitled to receive or shall receive in connection with any other
Collateral: (i) any stock or other ownership certificate, including without
limitation, any certificate representing a stock dividend or any certificate in
connection with any recapitalization, reclassification, merger, consolidation,
conversion, sale of assets, combination, stock split, reverse stock split, or
spin-off; (ii) any option, warrant, subscription or right, whether as an
addition to or in substitution of any other Collateral; (iii) any dividends or
distributions of any kind whatsoever, whether distributable in cash, stock or
other property; (iv) any interest, premium or principal payments; and (v) any
conversion or redemption proceeds; and
(e) Proceeds. All proceeds (cash and non-cash) arising out of
the sale, exchange, collection or other disposition of all or any portion of the
Collateral described in (a), (b), (c) or (d) above, including without limitation
proceeds in the form of stock, accounts, chattel paper, instruments, documents,
goods, inventory and equipment.
The security interest in the Collateral hereby granted by Debtor to Secured
Party may sometimes be referred to in this Agreement as the "Security Interest".
1.2 Obligations. This Agreement and the Security Interest shall secure
full and punctual payment and performance of the following indebtedness, duties
and obligations (collectively, the "Obligations"):
(a) All liabilities and obligations of Debtor to Secured Party
or any subsidiary of Secured Party (including, without limitation, any
principal, interest, fees and other amounts, and any other obligations) under
and pursuant to this Agreement and/or the Contribution Agreement, the Loan
Agreement, each promissory note issued pursuant to the Loan Agreement
(collectively, the "Note"), and/or any other contract or agreement between
Secured Party (or any of its subsidiaries) and Debtor or any affiliate of Debtor
(collectively, including the Contribution Agreement, the Loan Agreement and the
Note, the "Other Agreements"); and
(b) (i) all indebtedness, obligations and liabilities of
Debtor and/or any affiliate of Debtor to Secured Party or any subsidiary of
Secured Party of any kind or character, now existing or hereafter arising,
whether direct, indirect, related, unrelated, fixed, contingent, liquidated,
unliquidated, joint, several or joint and several, arising from, connected with,
or related to the Other Agreements, or any other document, agreement, or
instrument executed in connection therewith, (ii) all accrued but unpaid
interest on any of the indebtedness described in (i) above, (iii) all
obligations of Debtor and/or any affiliate of Debtor to Secured Party or any
subsidiary of Secured Party under any documents or agreements evidencing,
securing, governing and/or pertaining to all or any part of the indebtedness
described in (i) and (ii) above, (iv) all costs and expenses incurred by Secured
Party or its subsidiaries in connection with the collection and administration
of all or any part of the indebtedness and obligations described in (i), (ii)
and (iii) above or the protection or preservation of, or realization upon, the
collateral securing all or any part of such indebtedness and obligations,
including without limitation all attorneys' fees, and (v) all renewals,
extensions, modifications and rearrangements of the indebtedness and obligations
described in (i), (ii), (iii) and (iv) above.
(c) All sums now or hereafter loaned or advanced by Secured
Party or any subsidiary of Secured Party to Debtor or any affiliate of Debtor,
or expended by Secured Party or its subsidiaries for the account of Debtor or
its affiliates or otherwise owing by Debtor or its affiliates to Secured Party
or its subsidiaries, in respect of the Obligations, and all other sums expended
or advanced by Secured Party or its subsidiaries pursuant to any term or
provision of this Agreement or any Other Agreement (i) to collect and/or enforce
the Obligations or (ii) to maintain, protect and preserve the Collateral.
ARTICLE II
DEBTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO COLLATERAL
Debtor hereby represents and warrants to Secured Party as follows:
2.1 Ownership of Collateral. Debtor has good and marketable title to
the Collateral free and clear of any liens, security interests, shareholders
agreement, calls, charge, or encumbrance, except for this Security Interest. 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 as may have
been filed in favor of Secured Party relating to this Agreement.
2.2 Power & Authority. Debtor has the lawful right, power, and
authority to grant the Security Interest in the Collateral. This Agreement,
together with all filings and other actions necessary or desirable to perfect
and protect such security interest, which have been duly taken, create a valid
and perfected first priority security interest in the Collateral securing the
payment and performance of the Obligations.
2.3 No Agreements. The Interests are not subject to any right of
redemption, or any call or put options, voting trust, proxy, shareholders
agreement, right of first refusal, or any other document or agreement which
would in any way impair or adversely affect this Security Interest or the rights
of Secured Party under this Agreement.
2.4 Securities. Any certificates evidencing securities pledged as
Collateral are valid and genuine and have not been altered. All securities
pledged as Collateral have been duly authorized and validly issued, are fully
paid and non-assessable, and were not issued in violation of the preemptive
rights of any party or of any agreement by which Debtor or the issuer thereof is
bound. No restrictions or conditions exist with respect to the transfer or
voting of any securities pledged as Collateral.
ARTICLE III
DEBTOR'S OTHER REPRESENTATIONS AND WARRANTIES
3.1 Solvency of Debtor. As of the date hereof, (i) Debtor is and will
be solvent; (ii) the fair saleable value of Debtor's assets exceeds and will
continue to exceed Debtor's liabilities (both fixed and contingent); (iii)
Debtor has and will have sufficient capital to satisfy all of Debtor's
obligations as they become due; (iv) no receiver, trustee, or custodian has been
appointed for, or taken possession of, all or substantially all of the assets of
Debtor, either in a proceeding brought by Debtor or in a proceeding brought
against Debtor; (v) Debtor is not the subject of a petition for relief under the
United States Bankruptcy Code or any similar federal or state insolvency law,
including without limitation a petition filed by Debtor or a petition filed by a
third party seeking relief against Debtor; and (vi) Debtor has no intention of
filing a petition for relief under the United States Bankruptcy Code or any
similar federal or state insolvency law, or of seeking any other form of
creditor relief, within the two-year period immediately following the date of
this Agreement.
3.2 Authority and Compliance. Debtor has full power and authority to
enter into this Agreement. Debtor has full power and authority to enter into and
perform its obligations under each Other Agreement. No further consent or
approval is required as a condition to the validity of this Agreement or any
Other Agreement. Debtor is in compliance with all applicable laws, ordinances,
statutes, orders, regulations, judgments, writs, or decrees of any governmental
entity to which it is subject.
3.3 Binding Agreement. This Agreement and each Other Agreement
constitute valid and legally binding obligations of Debtor, in accordance with
their terms, subject to the applicable bankruptcy, insolvency, reorganization,
moratorium, and similar laws affecting creditors' rights generally.
3.4 Litigation. There are no proceedings pending or, to the knowledge
of Debtor, threatened before any court or administrative agency which will or
may have a material adverse effect on the financial condition of Debtor or upon
Debtor's ability to perform its obligations under this Agreement or any Other
Agreement.
3.5 No Conflicting Agreements. There are no provisions of any existing
agreement, mortgage, indenture or contract binding on Debtor or affecting its
property, which would conflict with or in any way prevent the execution,
delivery, or carrying out of the terms of this Agreement or any Other Agreement.
3.6 Ownership of Assets. Debtor has good and full title to the
Collateral, and the Collateral is owned free and clear of liens, charges,
claims, security interests, and other encumbrances.
3.7 Taxes. Debtor has filed all tax returns required to be filed by Debtor.
ARTICLE IV
DEBTOR'S COVENANTS WITH RESPECT TO COLLATERAL
Debtor covenants and agrees that from the date hereof and until the
payment and performance in full of the Obligations unless Secured Party
otherwise consents in writing:
4.1 Delivery of Instruments and/or Certificates. Contemporaneously
herewith, Debtor covenants and agrees to deliver to Secured Party any
certificates, documents, or instruments representing or evidencing the
Collateral, with Debtor's endorsement thereon and/or accompanied by property
instruments of transfer and assignment duly executed in blank with, if requested
by Secured Party, signatures guaranteed by a member or member organization in
good standing of an authorized Securities Transfer Agents Medallion Program, all
in form and substance satisfactory to Secured Party.
4.2 Further Assurances. Debtor will contemporaneously with the
execution hereof and from time to time thereafter at its expense promptly
execute and deliver all further instruments and documents and take all further
action necessary or appropriate or that Secured Party may request in order (i)
to perfect and protect the security interest created or purported to be created
hereby and the first priority of such security interest, (ii) to enable Secured
Party to exercise and enforce its rights and remedies hereunder in respect of
the Collateral, and (iii) to otherwise effect the purposes of this Agreement,
including without limitation: (A) executing and filing any financing or
continuation statements, or any amendments thereto; (B) obtaining written
confirmation from the issuer of any securities pledged as Collateral of the
pledge of such securities, in form and substance satisfactory to Secured Party;
(C) cooperating with Secured Party in registering the pledge of any securities
pledged as Collateral with the issuer of such securities; (D) delivering notice
of Secured Party's security interest in any securities pledged as Collateral to
any securities or financial intermediary, clearing corporation or other party
required by Secured Party, in form and substance satisfactory to Secured Party;
and (E) obtaining written confirmation of the pledge of any securities
constituting Collateral from any securities or financial intermediary, clearing
corporation or other party required by Secured Party, in form and substance
satisfactory to Secured Party.
4.3 Additional Property. All Additional Property, as defined in Section
1.1(d) above, received by Debtor shall be received in trust for the benefit of
Secured Party. All Additional Property and all certificates or other written
instruments or documents evidencing and/or representing the Additional Property
that is received by Debtor, together with such instruments of transfer as
Secured Party may request, shall immediately be delivered to or deposited with
Secured Party and held by Secured Party as Collateral under the terms of this
Agreement. If the Additional Property received by Debtor and delivered to
Secured Party pursuant to this Section shall be shares of stock or other
securities, such shares of stock or other securities shall be duly endorsed in
blank or accompanied by proper instruments of transfer and assignment duly
executed in blank with, if requested by Secured Party, signatures guaranteed by
a member or member organization in good standing of an authorized Securities
Transfer Agents Medallion Program, all in form and substance satisfactory to
Secured Party. Secured Party shall be deemed to have possession of any
Collateral in transit to Secured Party or its agent.
4.4 Sale, Transfer, Encumbrance. Debtor will not sell, transfer,
mortgage, or otherwise encumber any Collateral or impair the value thereof in
any manner without Secured Party's prior written consent, including without
limitation by purchase, lease, barter, trade, payment deferral, or the creation,
assumption or guarantee of indebtedness or other lending of credit. Secured
Party's written consent to any sale, mortgage, transfer, or encumbrance shall
not be construed to be a waiver of this provision in respect to any subsequent
proposed sale, mortgage, transfer, or encumbrance.
4.5 Liens. Neither Debtor nor any person acting on Debtor's behalf has,
or shall have any right, power, or authority to and shall not create, incur, or
permit to be placed or imposed, upon the Collateral, any lien of any type or
nature whatsoever, other than the liens in favor of Secured Party.
4.6 Matters or Occurrences Affecting Collateral or this Agreement.
Debtor will promptly notify Secured Party of any and all matters or occurrences
that may have a material adverse effect on the status or value of the Collateral
or this Agreement, including without limitation the occurrence of an Event of
Default, or an event which, with giving of notice or lapse of time, or both,
would constitute an Event of Default.
4.7 Agreements Pertaining to Collateral. Debtor will not enter into any
type of contract or agreement pertaining to any of the Collateral or in any way
transfer any voting rights pertaining to the Collateral to any person or entity.
4.8 Dilution of Ownership. As to any securities pledged as Collateral,
Debtor will not consent to or approve of the issuance of (i) any additional
interests or shares of any class of securities of such issuer, (ii) any
instrument convertible voluntarily by the holder thereof or automatically upon
the occurrence or non-occurrence of any event or condition into, or exchangeable
for, any such securities, or (iii) any warrants, options, contracts or other
commitments entitling any third party to purchase or otherwise acquire any such
securities.
4.9 Restrictions on Securities. Debtor will not enter into any
agreement creating, or otherwise permit to exist, any restriction or condition
upon the transfer, voting or control of any securities pledged as Collateral,
except as consented to in writing by Secured Party. As to any securities pledged
as collateral, Debtor will not consent to or approve of any stock split, reverse
stock split, stock dividend, reclassification, or other similar act or
transaction regarding the Interests unless consented to in writing by Secured
Party.
ARTICLE V
DEBTOR'S AFFIRMATIVE COVENANTS
Until payment and performance of all Obligations, Debtor covenants and
agrees that it shall (i) promptly advise Secured Party in writing of any
litigation filed against Debtor and of any condition, event or act which comes
to its attention that would or might have a material adverse effect on Debtor's
financial condition or on Debtor's ability to perform the Obligations, (ii)
except as expressly contemplated in Section 4.3(e)(i) and (ii) of the
Contribution Agreement, pay all available funds toward repayment of the Note,
regardless of whether payment of such amounts exceeds the required payments
under the Note and (iii) if Borrower uses any proceeds from the Note, to
acquire, directly or indirectly, a one hundred percent (100%) interest in a
Target Center (as defined in the Contribution Agreement), Borrower shall cause
such Target Center to execute a security agreement, acceptable in form and
substance to Lender, granting to Lender or one of Lender's subsidiaries the
highest available priority security interest in all of the assets of such Target
Center.
ARTICLE VI
NEGATIVE COVENANTS
Until payment and performance of all Obligations, Debtor covenants and
agrees that Debtor will not, without the prior written consent of Secured Party:
6.1 Liens. Grant, suffer, or permit liens on, or security interests in, the
Collateral.
6.2 Violate Other Covenants. Violate or fail to comply with any
covenants or agreements regarding other debt which will or would with the
passage of time or upon demand cause the maturity of any other debt to be
accelerated.
ARTICLE VII
DEFAULT AND REMEDIES
7.1 Events of Default. An Event of Default (herein so called) shall exist
if any one or more of the following events shall occur:
(a) The failure of Debtor to pay any amount required to be
paid under the Loan Agreement (including, without limitation, principal,
interest and fees due thereunder), or any other amount which Debtor may now or
hereafter owe to Secured Party under any Other Agreement or otherwise, within
ten (10) calendar days after such amount is due;
(b) The failure of Debtor to pay any Obligation after such
amount is due (and, if applicable under the terms of any contractual agreement
creating or governing such Obligation, after the expiration of any cure period
expressly required);
(c) Debtor's breach of a covenant in this Agreement or any other failure to
perform its obligations under this Agreement or any Other Agreement;
(d) Any representation or warranty made by Debtor in this
Agreement or any Other Agreement between Debtor and Secured Party shall be false
or materially misleading, as determined in the reasonable discretion of Secured
Party;
(e) Any event of default shall occur under the terms of the
Loan Agreement and shall not be cured within the time expressly provided for
with respect thereto in the Loan Agreement;
(f) If Debtor or any other party obligated to pay any portion
of the Obligations: (i) becomes insolvent, or makes a transfer in fraud of
creditors, or makes an assignment for the benefit of creditors, or admits in
writing its inability to pay its debts as they become due; (ii) generally is not
paying its debts as such debts become due and Secured Party, in good faith,
determines that such event or condition could lead to a material impairment of
the Collateral, or any part thereof, or of any other payment security for any of
the Obligations; (iii) has a receiver, trustee or custodian appointed for, or
take possession of, all or substantially all of the assets of such party or any
of the Collateral, either in a proceeding brought by such party or in a
proceeding brought against such party and such appointment is not discharged or
such possession is not terminated within sixty (60) days after the effective
date thereof or such party consents to or acquiesces in such appointment or
possession; (iv) files a petition for relief under the United States Bankruptcy
Code or any other present or future federal or state insolvency, bankruptcy or
similar laws (all of the foregoing hereinafter collectively called "Applicable
Bankruptcy Law") or an involuntary petition for relief is filed against such
party under any Applicable Bankruptcy Law and such involuntary petition is not
dismissed within sixty (60) days after the filing thereof, or an order for
relief naming such party is entered under any Applicable Bankruptcy Law, or any
composition, rearrangement, extension, reorganization or other relief of debtors
now or hereafter existing is requested or consented to by such party; (v) fails
to have discharged within a period of sixty (60) days any attachment,
sequestration or similar writ levied upon, or any claim against or affecting,
any property of such party; or (vi) fails to pay within ninety (90) days any
final money judgment against such party; or
(g) The issuer of any securities constituting Collateral files
a petition for relief under any Applicable Bankruptcy Law, an involuntary
petition for relief is filed against any such issuer under any Applicable
Bankruptcy Law and such involuntary petition is not dismissed within thirty (30)
days after the filing thereof, or an order for relief naming any such issuer is
entered under any Applicable Bankruptcy Law.
7.2 Secured Party's Remedies. Upon the occurrence of an Event of Default:
(a) Secured Party may declare the Obligations in whole or part
immediately due and may enforce payment and performance of the same and exercise
any rights under the Texas UCC, rights and remedies of Secured Party under this
Agreement, or otherwise.
(b) Secured Party may, at Secured Party's option and at the
expense of Debtor, either in Secured Party's own right or in the name of Debtor
and in the same manner and to the same extent that Debtor might reasonably so
act if this Agreement had not been made: (i) do all things requisite,
convenient, or necessary to enforce the performance and observance of all
rights, remedies and privileges of Debtor arising from the Collateral, or any
part thereof, including without limitation compromising, waiving, excusing, or
in any manner releasing or discharging any obligation of any party to or arising
from the Collateral; (ii) take possession of the books, papers, chattel paper,
documents of title, and accounts of Debtor, wherever located, relating to the
Collateral; (iii) xxx or otherwise collect and receive money attributable to the
Collateral; and (iv) exercise any other lawfully available powers or remedies,
and do all other things which Secured Party deems requisite, convenient or
necessary or which the Secured Party deems proper to protect the Security
Interest.
(c) Secured Party may foreclose this Agreement in the manner
now or hereafter provided or permitted by law and may upon such reasonable
notification prior thereto as may be required by applicable law (Debtor hereby
agreeing that ten days' notice is commercially reasonable), sell, assign,
transfer, or otherwise dispose of the Collateral at public or private sale, in
whole or in part, and Secured Party may, in its own name or as Debtor's
attorney-in-fact effectively assign and transfer the Collateral, or any part
thereof, absolutely, and execute and deliver all necessary assignments,
conveyances, bills of sale, and other instruments with power to substitute one
or more persons or corporations with like power. Any such foreclosure sale,
assignment, transfer, or other disposition shall, to the extent permitted by
law, be a perpetual bar, both at law and in equity, against Debtor and all
persons and corporations lawfully claiming by or through or under Debtor. Any
such foreclosure sale may be adjourned from time to time. Upon any sale, Secured
Party may bid for and purchase the Collateral, or any part thereof, and upon
compliance with the terms of sale may hold, retain, possess and dispose of the
Collateral, in its absolute right without further accountability. Secured Party
shall have the right to be credited on the amount of its bid a corresponding
amount of the Obligations as of the date of such sale.
(d) If, in the opinion of Secured Party, there is any question
that a public sale or distribution of any Collateral will violate any state or
federal securities law, Secured Party (i) may offer and sell securities
privately to purchasers who will agree to take them for investment purposes and
not with a view to distribution and who will agree to imposition of restrictive
legends on the certificates representing the security, or (ii) may sell such
securities in any type of offering which complies with, or is exempt from the
registration requirements of, the Securities Act of 1933 and any applicable
state securities laws, and no sale so made in good faith by Secured Party shall
be deemed to be not "commercially reasonable" because so made.
(e) Not in limitation of any other provision of this
Agreement, Secured Party shall have all rights and remedies of a secured party
under the Texas UCC.
7.3 Application of Proceeds. Secured Party may apply the proceeds of
any foreclosure sale hereunder or from any other permitted disposition of the
Collateral or any part thereof as follows: (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 attorneys' fees;
(b) then, to the reimbursement of Secured Party for all disbursements made by
Secured Party for taxes, assessments or liens superior to the Security Interest
and which Secured Party shall deem expedient to pay; (c) then, to the
reimbursement of Secured Party of any other disbursements made by Secured Party
in accordance with the terms hereof or under the Contribution Agreement or any
Other Agreement; (d) then, to or among the amounts of fees, interest and
principal then owing and unpaid in respect of the Obligations, in such priority
as Secured Party may determine in its discretion; and (e) the remainder of such
proceeds, if any, shall be paid to Debtor. If such proceeds shall be
insufficient to discharge the entire Obligations, Secured Party shall have any
other available legal recourse against Debtor under, or for the performance of,
the Contribution Agreement and any Other Agreement between Debtor and Secured
Party, for the deficiency, together with interest thereon at the maximum rate
permitted under applicable law.
7.4 Enforcement of Obligations. Nothing in this Agreement or in any
other document or agreement shall affect or impair the unconditional and
absolute right of Secured Party to enforce the Obligations as and when the same
shall become due in accordance with the terms of any Other Agreement.
ARTICLE VIII
RIGHTS OF SECURED PARTY
8.1 Subrogation. Upon the occurrence of an Event of Default, Secured
Party, at its election, may subrogate to all of the interest, rights and
remedies of the Debtor, in respect to any of the Collateral or agreements
pertaining thereto.
8.2 Secured Party Appointed Attorney-in-Fact. Debtor hereby appoints
Secured Party as attorney-in-fact of Debtor, with full authority in the place
and stead of Debtor and in the name of Debtor, Secured Party or otherwise, from
time to time on Secured Party's discretion and upon the occurrence of an Event
of Default, to take any action and to execute any instrument which Secured Party
may deem necessary or advisable to accomplish the purposes of this Agreement,
including without limitation: (a) to ask, demand, collect, xxx for, recover,
compound, receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral; (b) to receive, endorse, and
collect any drafts or other instruments, documents and chattel paper, in
connection with clause (a) of this Section 8.2; (c) to file any claims or take
any action or institute any proceeding which Secured Party may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce
the rights of Secured Party against any of the Collateral; and (d) to assign and
transfer the Collateral, or any part thereof, absolutely and to execute and
deliver endorsements, assignments, conveyances, bills of sale and other
instruments with power to substitute one or more persons or corporation with
like power.
8.3 Performance by Secured Party. If Debtor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause the
performance of, such agreement, and the reasonable expenses of Secured Party
incurred in connection therewith shall be payable by Debtor under Section 8.8.
In no event, however, shall Secured Party have any obligation or duties
whatsoever to perform any covenant or agreement of Debtor contained herein, and
any such performance by Secured Party shall be wholly discretionary with Secured
Party.
8.4 Duties of Secured Party. The powers conferred upon Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession and the accounting for money actually
received by it hereunder, Secured Party shall have no duty as to any Collateral
or as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral. Without limiting the
generality of the foregoing, Secured Party shall not have any obligation, duty
or responsibility to do any of the following: (a) ascertain any maturities,
calls, conversions, exchanges, offers, tenders or similar matters relating to
the Collateral or informing Debtor with respect to any such matters; (b) fix,
preserve or exercise any right, privilege or option (whether conversion,
redemption or otherwise) with respect to the Collateral; (c) collect any amounts
payable in respect of the Collateral; (d) sell all or any portion of the
Collateral, for any reason; or (e) hold the Collateral for or on behalf of any
party other than Debtor.
8.5 No Liability of Secured Party. Neither the acceptance of this
Agreement by Secured Party, nor the exercise of any rights hereunder by Secured
Party, shall be construed in any way as an assumption by Secured Party of any
obligations, responsibilities, or duties of Debtor arising in connection with
the Collateral assigned hereunder or otherwise bind Secured Party to the
performance of any obligations respecting the Collateral, it being expressly
understood that Secured Party shall not be obligated to perform, observe, or
discharge any obligation, responsibility, duty, or liability of Debtor in
respect of any of the Collateral, including without limitation appearing in or
defending any action, expending any money or incurring any expense in connection
therewith. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, DEBTOR SHALL AND
DOES AGREE TO INDEMNIFY, PROTECT, DEFEND AND HOLD HARMLESS SECURED PARTY AND ITS
SUBSIDIARIES, AND EACH OF THEIR OFFICERS, DIRECTORS, REPRESENTATIVES, AGENTS,
EMPLOYEES, LENDERS, SUCCESSORS AND ASSIGNS, FROM AND AGAINST ALL LIABILITIES,
CLAIMS, DAMAGES, LOSSES, FINES, PENALTIES, CAUSES OF ACTIONS, SUITS, JUDGMENTS
AND EXPENSES (INCLUDING COURT COSTS, ATTORNEY'S FEES AND COST OF INVESTIGATION)
OF ANY NATURE, KIND OR DESCRIPTION OF ANY PERSON OR ENTITY, DIRECTLY OR
INDIRECTLY, ARISING OUT OF, CAUSED BY OR RESULTING FROM (IN WHOLE OR IN PART),
ANY ACT OR OMISSION OF SECURED PARTY, OR ANYONE ACTING ON BEHALF OF SECURED
PARTY, IN CONNECTION WITH THE COLLATERAL, INCLUDING WITHOUT LIMITATION ANY
MARKET FLUCTUATIONS IN THE COLLATERAL AS A RESULT OF SECURED PARTY'S SALE OF, OR
FAILURE TO SELL, THE INTERESTS AT ANY PARTICULAR TIME WHEN IT HAS THE RIGHT TO
DO SO. THE FOREGOING INDEMNITY SHALL SURVIVE THE EXPIRATION OR EARLIER
TERMINATION OF THIS AGREEMENT.
8.6 Right of Secured Party to Defend Action Affecting Security. Secured
Party may, at the expense of Debtor, appear in and defend any action or
proceeding at law or in equity purporting to affect Secured Party's Security
Interest under this Agreement.
8.7 Right of Secured Party to Prevent or Remedy Default. If Debtor
shall fail to perform any of the covenants, conditions and agreements required
to be performed and observed by Debtor under any Other Agreement, or in respect
of the Collateral (subject to any applicable default cure period), Secured Party
(a) may but shall not be obligated to take any action Secured Party deems
necessary or desirable to prevent or remedy any such default by Debtor or
otherwise to protect the Security Interest, and (b) shall have the absolute and
immediate right to take possession of the Collateral or any part thereof (to the
extent Secured Party has not previously taken possession) to such extent and as
often as the Secured Party, in its sole discretion, deems necessary or desirable
in order to prevent or to cure any such default by Debtor, or otherwise to
protect the security of this Agreement. Secured Party may advance or expend such
sums of money for the account of Debtor as Secured Party in its sole discretion
deems necessary for any such purpose.
8.8 Secured Party's Expenses. All reasonable advances, costs, expenses,
charges and attorneys' fees which Secured Party may make, pay or incur under any
provision of this Agreement for the protection of its security or for the
enforcement of any of its rights hereunder, including, without limitation, in
foreclosure proceedings commenced and subsequently abandoned or in any dispute
or litigation in which Secured Party or the holder of any of the Obligations may
become involved by reason of or arising out of any Other Agreement or the
Collateral, shall be a part of the Obligations and shall be paid by Debtor to
Secured Party, upon demand, and shall bear interest until paid at the maximum
rate of interest permitted by applicable law, from the date incurred by Secured
Party until repaid by Debtor.
8.9. Convertible Collateral. Secured Party may present for conversion
any Collateral which is convertible into any other instrument or investment
security or a combination thereof with cash, but Secured Party shall not have
any duty to present for conversion any Collateral unless it shall have received
from Debtor detailed written instructions to that effect at a time reasonably
far in advance of the final conversion date to make such conversion possible.
8.10 Secured Party's Right of Set-Off. Upon the happening of any event
entitling Secured Party to pursue any remedy provided herein, or if Secured
Party shall be served with garnishment process in which Debtor shall be named as
defendant, whether or not Debtor shall be in default hereunder at the time,
Secured Party may, but shall not be required to, set-off any indebtedness owing
by Secured Party to Debtor against any of the Obligations without first
resorting to the security hereunder and without prejudice to any other rights or
remedies of Secured Party or its Security Interest.
8.11 Remedies. No right or remedy herein reserved to Secured Party is
intended to be exclusive of any other right or remedy, but each and every such
remedy shall be cumulative, not in lieu of, but in addition to any other rights
or remedies given under this Agreement and all other security documents. Any and
all of Secured Party's rights and remedies may be exercised from time to time
and as often as such exercise as deemed necessary or desirable by Secured Party.
8.12 Debtor's Waivers. Debtor waives notice of the creation, advance,
increase, existence, extension, or renewal of, and of any indulgence with
respect to, the Obligations; waives notice of intent to accelerate, notice of
acceleration, notice of intent to demand, presentment, demand, notice of
dishonor, and protest; waives notice of the amount of the Obligations
outstanding at any time, notice of any change in financial condition of any
person liable for the Obligations or any part thereof, notice of any Event of
Default, and all other notices respecting the Obligations; and agrees that
maturity of the Obligations and any part thereof may be accelerated, extended,
or renewed one or more times by Secured Party in its discretion, without notice
to Debtor.
8.13 Other Parties and Other Collateral. No renewal or extension of or
any other indulgence with respect to the Obligations or any part thereof, no
release of any security, no release of any person (including any maker,
endorser, guarantor, or surety) liable on the Obligations, no delay in
enforcement of payment, and no delay or admission or lack of diligence or care
in exercising any right or power with respect to the Obligations or any security
therefor or guaranty thereof or under this Agreement shall in other manner
impair or affect the rights of Secured Party under the law, under this
Agreement, or under any other document or agreement pertaining to the other
security for the Obligations, before foreclosing upon the Collateral for the
purpose of paying the Obligations. Debtor waives any right to the benefit of or
to require or control application of any other security or proceeds thereof, and
Debtor agrees that Secured Party shall have no duty or obligation to Debtor to
apply to the Obligations any such other security or proceeds thereof.
ARTICLE IX
MISCELLANEOUS
9.1 Terms Commercially Reasonable. The terms of this Agreement shall be
deemed commercially reasonable within the meaning of the Texas UCC.
9.2 Notices. Any notices or demands required or permitted to be given
hereunder shall be deemed sufficiently given if in writing and personally
delivered or mailed (with all postage and charges prepaid), addressed to Secured
Party or to Debtor their respective addresses set forth below, or at such other
address as the above parties may from time to time designate by written notice
to the other given in accordance with this Section 9.2. Any such notice, if
personally delivered or transmitted by telex or telegram, shall be deemed to
have been given on the date so delivered or transmitted or, if mailed, be deemed
to have been given on the day after such notice is placed in the United States
mail in accordance with this Section 9.2.
Secured Party: 0000 Xxxxxxx xx Xxxxx Xxx., Xxxxx X-000
Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000
Attn: President
with copy to: Xxxxxxx X. XxXxxx, Esq.
Akin, Gump, Strauss, Xxxxx & Xxxx,L.L.P.
1900 Frost Bank Plaza
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Debtor: Prime/BDR Acquisition, L.L.C.
0000 Xxxxxxx xx Xxxxx Xxx., Xxxxx X-000
Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000
Attn: President
9.3 Parties Bound. Secured Party's rights under this Agreement and the
Security Interest shall inure to the benefits of its successors and assigns, and
in the event of any assignment or transfer of any of the Obligations or the
Collateral, Secured Party thereafter shall be fully discharged from any
responsibility with respect to the Collateral so assigned or transferred, but
Secured Party shall retain all rights and powers hereby given with respect to
any of the Obligations or Collateral not so assigned or transferred. All
representations, warranties, and agreements of Debtor if more than one are joint
and several, and all shall be binding upon the personal representatives, heirs,
successors, and assigns of Debtor.
9.4 Waiver. No delay of Secured Party in exercising any power or right
shall operate as a waiver thereof; nor shall any single or partial exercise of
any power or right preclude other or further exercise thereof or the exercise of
any other power or right. No waiver by Secured Party of any right hereunder of
any default by Debtor shall be binding upon Secured Party unless in writing, and
no failure by Secured Party to exercise any power or right hereunder or waiver
of any default by Debtor shall operate as a waiver of any other or further
exercise of such right or power of any further default.
9.5 Agreement Continuing. This Agreement shall constitute a continuing
agreement, applying to all future as well as existing transactions, whether or
not of the character contemplated at the date of this Agreement, and if all
transactions between Secured Party and Debtor shall be closed at any time, shall
be equally applicable to any new transactions thereafter. Provisions of this
Agreement, unless by their terms exclusive, shall be in addition to those
contained in any Other Agreement.
9.6 Definitions. Unless the context indicated otherwise, definitions in
the Texas Business and Commerce Code ("Texas UCC") apply to words and phrases in
this Agreement; if Texas UCC definitions conflict, Chapter 9 definitions apply.
9.7 Miscellaneous. In this Agreement, whenever the context so requires,
the neuter gender includes the masculine and feminine, and the singular number
includes the plural and vice versa. The headings of paragraphs herein are
inserted only for convenience and shall in no way define, describe or limit the
scope of intent of any provisions of this Agreement. No change, amendment,
modification, cancellation, or discharge of any provision of this Agreement
shall be valid unless consented to in writing by Secured Party.
9.8 Assignment of Secured Party's Interest. Secured Party shall have
the right to assign all or any portion of its rights in this Agreement without
approval or consent. Debtor acknowledges that Lender intends to make a
collateral assignment of its rights under this Agreement for the benefit of one
or more of its lenders. Debtor may not assign this Agreement or any of its
rights or obligations hereunder without the express prior written consent of
Secured Party in each instance.
9.9 Applicable Laws. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA.
9.10 ENTIRE AGREEMENT. THIS AGREEMENT, THE LOAN AGREEMENT, THE NOTE AND THE
CONTRIBUTION AGREEMENT REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
[Signature page follows]
SIGNATURE PAGE TO
ASSIGNMENT AND
SECURITY AGREEMENT
EXECUTED this 1 day of September, 1999.
DEBTOR: Prime/BDR Acquisition, L.L.C.
By: /s/ Xxxxx Xxxxxxx, M.D.
Printed Name: Xxxxx Xxxxxxx, M.D.
Title:Manager, Prime/BRD Acquisition, L.L.C.
SECURED PARTY: Prime Medical Operating, Inc.
By: /s/ Xxxxxx Xxxxxxxx
Printed Name: Xxxxxx Xxxxxxxx
Title: Vice President
