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 ("PMOI"), Prime/BDR Acquisition, L.L.C.,
a Delaware limited liability company ("Prime") (PMOI and Prime are referred to
herein, jointly and severally, as "Secured Party") and Xxxxx X. Xxxxx III and
Xxxx X. Xxxxx (collectively referred to as the "Debtor").
RECITALS:
A. Debtor and Secured Party have executed and delivered that certain
Stock Purchase Agreement dated as of September 1, 1999 (the "Purchase
Agreement"), pursuant to which Secured Party purchased from Debtor certain
shares of the $0.01 par value common stock of Horizon Vision Center, Inc, a
Nevada corporation ("Horizon").
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 indemnity
obligations arising under the Purchase Agreement.
C. Debtor desires to enter into this Agreement as a material inducement to
Secured Party's purchase of Debtor's shares of Horizon under the Purchase
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) Shares of Horizon. From and after the date of this
Agreement, (i) all shares of the common stock of Horizon owned or acquired in
any manner by Debtor or Secured Party, (collectively, the "Shares"), (ii) any
replacements, substitutions, or exchanges of the certificates representing the
Shares, and (iii) any and all options, rescission rights, registration rights,
conversion rights, subscription rights, contractual or quasi-contractual rights,
warrants, redemption rights, redemption proceeds, calls, preemptive rights and
all other rights and benefits pertaining to the Shares;
(b) Accounts. All accounts and rights now or hereafter
attributable to any of the Collateral described in (a) above, and all rights of
Debtor now or hereafter arising under any agreement pertaining to the Collateral
described in (a) 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) above;
(c) 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 of the
Collateral described in this Section 1.1: (i) any stock 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 of shares, 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 of the Collateral
described in this Section 1.1; (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
(d) 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), or (c) 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
(including, without limitation, any principal, interest, fees and other amounts,
and any indemnity obligations) under and pursuant to the Purchase Agreement,
this Agreement and/or any other contract or agreement between Secured Party and
Debtor or any affiliate of Debtor (collectively, "Other Agreements"; and
(b) (i) all indebtedness, obligations and liabilities of
Debtor and/or any affiliate of Debtor to 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 Purchase Agreement or
any Other Agreement, or any other document, agreement, or instrument executed in
connection either of them, (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 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 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 to Debtor, or expended by Secured Party for the account of Debtor or
otherwise owing by Debtor to Secured Party, in respect of the Obligations, and
all other sums expended or advanced by Secured Party 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 Shares 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 solvent;
(ii) the fair saleable value of Debtor's assets exceeds Debtor's liabilities
(both fixed and contingent); (iii) Debtor has 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 the Purchase Agreement and each Other Agreement.
No further consent or approval is required as a condition to the validity of
this Agreement, the Purchase 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, the Purchase Agreement and each
Other Agreement constitute valid and legally binding obligations of Debtor, in
accordance with their terms, subject to (a) the applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (b) restrictions imposed by any court of competent
jurisdiction on the enforcement of non-competition and exclusive use restrictive
covenants imposed under the Purchase Agreement or any Other Agreement.
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, the Purchase
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, the Purchase 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(c) 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
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. Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, Debtor (i) shall comply with his obligations under
the Purchase Agreement and each Other Document, and (ii) may consent to any
issuance of shares of Horizon if such issuance has been approved by a majority
of the Board of Directors of Horizon.
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 Shares 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 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.
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 Purchase Agreement (including, without limitation, the indemnity
provisions contained therein), or any other amount which Debtor may now or
hereafter owe to Secured Party under any Other Agreement or otherwise, within
(15) calendar days after such amount is due;
(b) The failure of Debtor to pay any Obligation within (15) calendar days
after such amount is due; and
(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.
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.
(b) 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.
(c) 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 an intrastate offering under Section 3(a)(11) of the Securities
Act of 1933, and no sale so made in good faith by Secured Party shall be deemed
to be not "commercially reasonable" because so made.
(d) 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 Purchase 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 Purchase
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 the Purchase Agreement or 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, ITS
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 UNINTENTIONAL ACT OR
OMISSION (OR INTENTIONAL ACT OR OMISSION SO LONG AS SUCH ACT OR OMISSION DOES
NOT CONSTITUTE NEGLIGENCE) OF SECURED PARTY (OR ANYONE ACTING ON BEHALF OF
SECURED PARTY) IN CONNECTION WITH THE COLLATERAL. 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 the Purchase Agreement or 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 the Purchase Agreement, 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.
8.14 Relationship Among Secured Party. Either or both of Secured Party
are entitled to enforce any and all rights granted to Secured Party in this
Agreement, and to take any other action allowed to be taken by Secured Party
under this Agreement. Neither Secured Party is under any obligation to act
jointly or in concert with the other Secured Party pursuant to this Agreement.
Any action required to be taken by Debtor, or notice required to be given by
Debtor, shall be taken or given with respect to both of Secured Party.
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: Xxxxx X. Xxxxx III and Xxxx X. Xxxxx
0000 Xxxxxx Xxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
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 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 AND THE PURCHASE 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]
S-1
SIGNATURE PAGE TO
ASSIGNMENT AND
SECURITY AGREEMENT
EXECUTED this 1st day of September, 1999.
DEBTOR:
/s/ Xxxxx Xxxxx
Printed Name: Xxxxx Xxxxx
/s/ Xxxx X. Xxxxx
Printed Name: Xxxx X. Xxxxx
SECURED PARTY: Prime Medical Operating, Inc.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
Prime/BDR Acquisition, L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
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 ("PMOI"), Prime/BDR Acquisition, L.L.C.,
a Delaware limited liability company ("Prime") (PMOI and Prime are referred to
herein, jointly and severally, as "Secured Party") and Xxxx Xxxxxx Xxxxxxx,
M.D., Family Revocable Trust dated February 8, 1991 (the "Debtor").
RECITALS:
A. Debtor and Secured Party have executed and delivered that certain
Stock Purchase Agreement dated as of September 1, 1999 (the "Purchase
Agreement"), pursuant to which Secured Party purchased from Debtor certain
shares of the $0.01 par value common stock of Horizon Vision Center, Inc, a
Nevada corporation ("Horizon").
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 indemnity
obligations arising under the Purchase Agreement.
C. Debtor desires to enter into this Agreement as a material inducement to
Secured Party's purchase of Debtor's shares of Horizon under the Purchase
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) Shares of Horizon. From and after the date of this
Agreement, (i) all shares of the common stock of Horizon owned or acquired in
any manner by Debtor or Secured Party, (collectively, the "Shares"), (ii) any
replacements, substitutions, or exchanges of the certificates representing the
Shares, and (iii) any and all options, rescission rights, registration rights,
conversion rights, subscription rights, contractual or quasi-contractual rights,
warrants, redemption rights, redemption proceeds, calls, preemptive rights and
all other rights and benefits pertaining to the Shares;
(b) Accounts. All accounts and rights now or hereafter
attributable to any of the Collateral described in (a) above, and all rights of
Debtor now or hereafter arising under any agreement pertaining to the Collateral
described in (a) 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) above;
(c) 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 of the
Collateral described in this Section 1.1: (i) any stock 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 of shares, 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 of the Collateral
described in this Section 1.1; (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
(d) 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), or (c) 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
(including, without limitation, any principal, interest, fees and other amounts,
and any indemnity obligations) under and pursuant to the Purchase Agreement,
this Agreement and/or any other contract or agreement between Secured Party and
Debtor or any affiliate of Debtor (collectively, "Other Agreements"; and
(b) (i) all indebtedness, obligations and liabilities of
Debtor and/or any affiliate of Debtor to 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 Purchase Agreement or
any Other Agreement, or any other document, agreement, or instrument executed in
connection either of them, (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 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 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 to Debtor, or expended by Secured Party for the account of Debtor or
otherwise owing by Debtor to Secured Party, in respect of the Obligations, and
all other sums expended or advanced by Secured Party 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 Shares 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 solvent;
(ii) the fair saleable value of Debtor's assets exceeds Debtor's liabilities
(both fixed and contingent); (iii) Debtor has 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 the Purchase Agreement and each Other Agreement.
No further consent or approval is required as a condition to the validity of
this Agreement, the Purchase 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, the Purchase Agreement and each
Other Agreement constitute valid and legally binding obligations of Debtor, in
accordance with their terms, subject to (a) the applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (b) restrictions imposed by any court of competent
jurisdiction on the enforcement of non-competition and exclusive use restrictive
covenants imposed under the Purchase Agreement or any Other Agreement.
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, the Purchase
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, the Purchase 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(c) 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
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. Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, Debtor (i) shall comply with his obligations under
the Purchase Agreement and each Other Document, and (ii) may consent to any
issuance of shares of Horizon if such issuance has been approved by a majority
of the Board of Directors of Horizon.
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 Shares 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 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.
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 Purchase Agreement (including, without limitation, the indemnity
provisions contained therein), or any other amount which Debtor may now or
hereafter owe to Secured Party under any Other Agreement or otherwise, within
(15) calendar days after such amount is due;
(b) The failure of Debtor to pay any Obligation within (15) calendar days
after such amount is due; and
(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.
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.
(b) 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.
(c) 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 an intrastate offering under Section 3(a)(11) of the Securities
Act of 1933, and no sale so made in good faith by Secured Party shall be deemed
to be not "commercially reasonable" because so made.
(d) 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 Purchase 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 Purchase
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 the Purchase Agreement or 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, ITS
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 UNINTENTIONAL ACT OR
OMISSION (OR INTENTIONAL ACT OR OMISSION SO LONG AS SUCH ACT OR OMISSION DOES
NOT CONSTITUTE NEGLIGENCE) OF SECURED PARTY (OR ANYONE ACTING ON BEHALF OF
SECURED PARTY) IN CONNECTION WITH THE COLLATERAL. 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 the Purchase Agreement or 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 the Purchase Agreement, 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.
8.14 Relationship Among Secured Party. Either or both of Secured Party
are entitled to enforce any and all rights granted to Secured Party in this
Agreement, and to take any other action allowed to be taken by Secured Party
under this Agreement. Neither Secured Party is under any obligation to act
jointly or in concert with the other Secured Party pursuant to this Agreement.
Any action required to be taken by Debtor, or notice required to be given by
Debtor, shall be taken or given with respect to both of Secured Party.
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: Xxxx Xxxxxx Xxxxxxx, M.D., Trustee under the
Family Revocable Trust dated February 8, 1991
0000 Xxxx Xxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
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 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 AND THE PURCHASE 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]
S-1
SIGNATURE PAGE TO
ASSIGNMENT AND
SECURITY AGREEMENT
EXECUTED this 1st day of September, 1999.
DEBTOR: /s/ Xxxx Xxxxxx Xxxxxxx, M.D., Trustee
Printed Name: Xxxx Xxxxxx Xxxxxxx, M.D.,
Trustee under the Xxxx Xxxxxx Xxxxxxx, M.D.
Family Revocable Trust dated February 8, 1991
SECURED PARTY: Prime Medical Operating, Inc.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
Prime/BDR Acquisition, L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
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 ("PMOI"), Prime/BDR Acquisition, L.L.C.,
a Delaware limited liability company ("Prime") (PMOI and Prime are referred to
herein, jointly and severally, as "Secured Party") and Xxxxxxxxx X. Xxx, M.D.
(the "Debtor").
RECITALS:
A. Debtor and Secured Party have executed and delivered that certain
Stock Purchase Agreement dated as of September 1, 1999 (the "Purchase
Agreement"), pursuant to which Secured Party purchased from Debtor certain
shares of the $0.01 par value common stock of Horizon Vision Center, Inc, a
Nevada corporation ("Horizon").
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 indemnity
obligations arising under the Purchase Agreement.
C. Debtor desires to enter into this Agreement as a material inducement to
Secured Party's purchase of Debtor's shares of Horizon under the Purchase
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) Shares of Horizon. From and after the date of this
Agreement, (i) all shares of the common stock of Horizon owned or acquired in
any manner by Debtor or Secured Party, (collectively, the "Shares"), (ii) any
replacements, substitutions, or exchanges of the certificates representing the
Shares, and (iii) any and all options, rescission rights, registration rights,
conversion rights, subscription rights, contractual or quasi-contractual rights,
warrants, redemption rights, redemption proceeds, calls, preemptive rights and
all other rights and benefits pertaining to the Shares;
(b) Accounts. All accounts and rights now or hereafter
attributable to any of the Collateral described in (a) above, and all rights of
Debtor now or hereafter arising under any agreement pertaining to the Collateral
described in (a) 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) above;
(c) 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 of the
Collateral described in this Section 1.1: (i) any stock 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 of shares, 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 of the Collateral
described in this Section 1.1; (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
(d) 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), or (c) 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
(including, without limitation, any principal, interest, fees and other amounts,
and any indemnity obligations) under and pursuant to the Purchase Agreement,
this Agreement and/or any other contract or agreement between Secured Party and
Debtor or any affiliate of Debtor (collectively, "Other Agreements"; and
(b) (i) all indebtedness, obligations and liabilities of
Debtor and/or any affiliate of Debtor to 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 Purchase Agreement or
any Other Agreement, or any other document, agreement, or instrument executed in
connection either of them, (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 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 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 to Debtor, or expended by Secured Party for the account of Debtor or
otherwise owing by Debtor to Secured Party, in respect of the Obligations, and
all other sums expended or advanced by Secured Party 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 Shares 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 solvent;
(ii) the fair saleable value of Debtor's assets exceeds Debtor's liabilities
(both fixed and contingent); (iii) Debtor has 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 the Purchase Agreement and each Other Agreement.
No further consent or approval is required as a condition to the validity of
this Agreement, the Purchase 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, the Purchase Agreement and each
Other Agreement constitute valid and legally binding obligations of Debtor, in
accordance with their terms, subject to (a) the applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (b) restrictions imposed by any court of competent
jurisdiction on the enforcement of non-competition and exclusive use restrictive
covenants imposed under the Purchase Agreement or any Other Agreement.
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, the Purchase
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, the Purchase 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(c) 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
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. Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, Debtor (i) shall comply with his obligations under
the Purchase Agreement and each Other Document, and (ii) may consent to any
issuance of shares of Horizon if such issuance has been approved by a majority
of the Board of Directors of Horizon.
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 Shares 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 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.
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 Purchase Agreement (including, without limitation, the indemnity
provisions contained therein), or any other amount which Debtor may now or
hereafter owe to Secured Party under any Other Agreement or otherwise, within
(15) calendar days after such amount is due;
(b) The failure of Debtor to pay any Obligation within (15) calendar days
after such amount is due; and
(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.
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.
(b) 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.
(c) 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 an intrastate offering under Section 3(a)(11) of the Securities
Act of 1933, and no sale so made in good faith by Secured Party shall be deemed
to be not "commercially reasonable" because so made.
(d) 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 Purchase 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 Purchase
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 the Purchase Agreement or 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, ITS
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 UNINTENTIONAL ACT OR
OMISSION (OR INTENTIONAL ACT OR OMISSION SO LONG AS SUCH ACT OR OMISSION DOES
NOT CONSTITUTE NEGLIGENCE) OF SECURED PARTY (OR ANYONE ACTING ON BEHALF OF
SECURED PARTY) IN CONNECTION WITH THE COLLATERAL. 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 the Purchase Agreement or 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 the Purchase Agreement, 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.
8.14 Relationship Among Secured Party. Either or both of Secured Party
are entitled to enforce any and all rights granted to Secured Party in this
Agreement, and to take any other action allowed to be taken by Secured Party
under this Agreement. Neither Secured Party is under any obligation to act
jointly or in concert with the other Secured Party pursuant to this Agreement.
Any action required to be taken by Debtor, or notice required to be given by
Debtor, shall be taken or given with respect to both of Secured Party.
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: Xxxxxxxxx X. Xxx, M.D.
00 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
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 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 AND THE PURCHASE 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]
S-1
SIGNATURE PAGE TO
ASSIGNMENT AND
SECURITY AGREEMENT
EXECUTED this 1st day of September, 1999.
DEBTOR: /s/ Xxxxxxxxx X. Xxx, M.D.
Printed Name: Xxxxxxxxx X. Xxx, M.D.
SECURED PARTY: Prime Medical Operating, Inc.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
Prime/BDR Acquisition, L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Secretary and Manager
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 ("PMOI"), Prime/BDR Acquisition, L.L.C.,
a Delaware limited liability company ("Prime") (PMOI and Prime are referred to
herein, jointly and severally, as "Secured Party") and Xxxx X. Xxxxxx, M.D.,
Trustee under the Trust Agreement dated April 12, 1989 (the "Debtor").
RECITALS:
A. Debtor and Secured Party have executed and delivered that certain
Stock Purchase Agreement dated as of September 1, 1999 (the "Purchase
Agreement"), pursuant to which Secured Party purchased from Debtor certain
shares of the $0.01 par value common stock of Horizon Vision Center, Inc, a
Nevada corporation ("Horizon").
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 indemnity
obligations arising under the Purchase Agreement.
C. Debtor desires to enter into this Agreement as a material inducement to
Secured Party's purchase of Debtor's shares of Horizon under the Purchase
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) Shares of Horizon. From and after the date of this
Agreement, (i) all shares of the common stock of Horizon owned or acquired in
any manner by Debtor or Secured Party, (collectively, the "Shares"), (ii) any
replacements, substitutions, or exchanges of the certificates representing the
Shares, and (iii) any and all options, rescission rights, registration rights,
conversion rights, subscription rights, contractual or quasi-contractual rights,
warrants, redemption rights, redemption proceeds, calls, preemptive rights and
all other rights and benefits pertaining to the Shares;
(b) Accounts. All accounts and rights now or hereafter
attributable to any of the Collateral described in (a) above, and all rights of
Debtor now or hereafter arising under any agreement pertaining to the Collateral
described in (a) 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) above;
(c) 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 of the
Collateral described in this Section 1.1: (i) any stock 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 of shares, 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 of the Collateral
described in this Section 1.1; (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
(d) 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), or (c) 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
(including, without limitation, any principal, interest, fees and other amounts,
and any indemnity obligations) under and pursuant to the Purchase Agreement,
this Agreement and/or any other contract or agreement between Secured Party and
Debtor or any affiliate of Debtor (collectively, "Other Agreements"; and
(b) (i) all indebtedness, obligations and liabilities of
Debtor and/or any affiliate of Debtor to 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 Purchase Agreement or
any Other Agreement, or any other document, agreement, or instrument executed in
connection either of them, (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 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 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 to Debtor, or expended by Secured Party for the account of Debtor or
otherwise owing by Debtor to Secured Party, in respect of the Obligations, and
all other sums expended or advanced by Secured Party 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 Shares 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 solvent;
(ii) the fair saleable value of Debtor's assets exceeds Debtor's liabilities
(both fixed and contingent); (iii) Debtor has 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 the Purchase Agreement and each Other Agreement.
No further consent or approval is required as a condition to the validity of
this Agreement, the Purchase 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, the Purchase Agreement and each
Other Agreement constitute valid and legally binding obligations of Debtor, in
accordance with their terms, subject to (a) the applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (b) restrictions imposed by any court of competent
jurisdiction on the enforcement of non-competition and exclusive use restrictive
covenants imposed under the Purchase Agreement or any Other Agreement.
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, the Purchase
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, the Purchase 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(c) 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
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. Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, Debtor (i) shall comply with his obligations under
the Purchase Agreement and each Other Document, and (ii) may consent to any
issuance of shares of Horizon if such issuance has been approved by a majority
of the Board of Directors of Horizon.
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 Shares 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 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.
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 Purchase Agreement (including, without limitation, the indemnity
provisions contained therein), or any other amount which Debtor may now or
hereafter owe to Secured Party under any Other Agreement or otherwise, within
(15) calendar days after such amount is due;
(b) The failure of Debtor to pay any Obligation within (15) calendar days
after such amount is due; and
(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.
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.
(b) 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.
(c) 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 an intrastate offering under Section 3(a)(11) of the Securities
Act of 1933, and no sale so made in good faith by Secured Party shall be deemed
to be not "commercially reasonable" because so made.
(d) 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 Purchase 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 Purchase
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 the Purchase Agreement or 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, ITS
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 UNINTENTIONAL ACT OR
OMISSION (OR INTENTIONAL ACT OR OMISSION SO LONG AS SUCH ACT OR OMISSION DOES
NOT CONSTITUTE NEGLIGENCE) OF SECURED PARTY (OR ANYONE ACTING ON BEHALF OF
SECURED PARTY) IN CONNECTION WITH THE COLLATERAL. 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 the Purchase Agreement or 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 the Purchase Agreement, 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.
8.14 Relationship Among Secured Party. Either or both of Secured Party
are entitled to enforce any and all rights granted to Secured Party in this
Agreement, and to take any other action allowed to be taken by Secured Party
under this Agreement. Neither Secured Party is under any obligation to act
jointly or in concert with the other Secured Party pursuant to this Agreement.
Any action required to be taken by Debtor, or notice required to be given by
Debtor, shall be taken or given with respect to both of Secured Party.
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: Xxxx X. Xxxxxx, M.D., Trustee under Trust
Agreement dated April 12, 1989
000 Xxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxx 00000
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 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 AND THE PURCHASE 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]
S-1
SIGNATURE PAGE TO
ASSIGNMENT AND
SECURITY AGREEMENT
EXECUTED this 1st day of September, 1999.
DEBTOR: /s/ Xxxx X. Xxxxxx, M.D.
Printed Name: Xxxx X. Xxxxxx, M.D.,
under Trustee Agreement dated
April 12, 1989
SECURED PARTY: Prime Medical Operating, Inc.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
Prime/BDR Acquisition, L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
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 ("PMOI"), Prime/BDR Acquisition, L.L.C.,
a Delaware limited liability company ("Prime") (PMOI and Prime are referred to
herein, jointly and severally, as "Secured Party") and D. Xxxxx Xxxx and
Carellyn X. Xxxx (collectively and individually referred to as the "Debtor").
RECITALS:
A. Debtor and Secured Party have executed and delivered that certain
Stock Purchase Agreement dated as of September 1, 1999 (the "Purchase
Agreement"), pursuant to which Secured Party purchased from Debtor certain
shares of the $0.01 par value common stock of Horizon Vision Center, Inc, a
Nevada corporation ("Horizon").
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 indemnity
obligations arising under the Purchase Agreement.
C. Debtor desires to enter into this Agreement as a material inducement to
Secured Party's purchase of Debtor's shares of Horizon under the Purchase
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) Shares of Horizon. From and after the date of this
Agreement, (i) all shares of the common stock of Horizon owned or acquired in
any manner by Debtor or Secured Party, (collectively, the "Shares"), (ii) any
replacements, substitutions, or exchanges of the certificates representing the
Shares, and (iii) any and all options, rescission rights, registration rights,
conversion rights, subscription rights, contractual or quasi-contractual rights,
warrants, redemption rights, redemption proceeds, calls, preemptive rights and
all other rights and benefits pertaining to the Shares;
(b) Accounts. All accounts and rights now or hereafter
attributable to any of the Collateral described in (a) above, and all rights of
Debtor now or hereafter arising under any agreement pertaining to the Collateral
described in (a) 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) above;
(c) 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 of the
Collateral described in this Section 1.1: (i) any stock 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 of shares, 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 of the Collateral
described in this Section 1.1; (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
(d) 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), or (c) 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
(including, without limitation, any principal, interest, fees and other amounts,
and any indemnity obligations) under and pursuant to the Purchase Agreement,
this Agreement and/or any other contract or agreement between Secured Party and
Debtor or any affiliate of Debtor (collectively, "Other Agreements"; and
(b) (i) all indebtedness, obligations and liabilities of
Debtor and/or any affiliate of Debtor to 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 Purchase Agreement or
any Other Agreement, or any other document, agreement, or instrument executed in
connection either of them, (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 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 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 to Debtor, or expended by Secured Party for the account of Debtor or
otherwise owing by Debtor to Secured Party, in respect of the Obligations, and
all other sums expended or advanced by Secured Party 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 Shares 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 solvent;
(ii) the fair saleable value of Debtor's assets exceeds Debtor's liabilities
(both fixed and contingent); (iii) Debtor has 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 the Purchase Agreement and each Other Agreement.
No further consent or approval is required as a condition to the validity of
this Agreement, the Purchase 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, the Purchase Agreement and each
Other Agreement constitute valid and legally binding obligations of Debtor, in
accordance with their terms, subject to (a) the applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (b) restrictions imposed by any court of competent
jurisdiction on the enforcement of non-competition and exclusive use restrictive
covenants imposed under the Purchase Agreement or any Other Agreement.
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, the Purchase
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, the Purchase 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(c) 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
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. Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, Debtor (i) shall comply with his obligations under
the Purchase Agreement and each Other Document, and (ii) may consent to any
issuance of shares of Horizon if such issuance has been approved by a majority
of the Board of Directors of Horizon.
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 Shares 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 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.
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 Purchase Agreement (including, without limitation, the indemnity
provisions contained therein), or any other amount which Debtor may now or
hereafter owe to Secured Party under any Other Agreement or otherwise, within
(15) calendar days after such amount is due;
(b) The failure of Debtor to pay any Obligation within (15) calendar days
after such amount is due; and
(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.
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.
(b) 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.
(c) 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 an intrastate offering under Section 3(a)(11) of the Securities
Act of 1933, and no sale so made in good faith by Secured Party shall be deemed
to be not "commercially reasonable" because so made.
(d) 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 Purchase 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 Purchase
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 the Purchase Agreement or 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, ITS
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 UNINTENTIONAL ACT OR
OMISSION (OR INTENTIONAL ACT OR OMISSION SO LONG AS SUCH ACT OR OMISSION DOES
NOT CONSTITUTE NEGLIGENCE) OF SECURED PARTY (OR ANYONE ACTING ON BEHALF OF
SECURED PARTY) IN CONNECTION WITH THE COLLATERAL. 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 the Purchase Agreement or 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 the Purchase Agreement, 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.
8.14 Relationship Among Secured Party. Either or both of Secured Party
are entitled to enforce any and all rights granted to Secured Party in this
Agreement, and to take any other action allowed to be taken by Secured Party
under this Agreement. Neither Secured Party is under any obligation to act
jointly or in concert with the other Secured Party pursuant to this Agreement.
Any action required to be taken by Debtor, or notice required to be given by
Debtor, shall be taken or given with respect to both of Secured Party.
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: D. Xxxxx Xxxx and Carellyn X. Xxxx
000 Xxxxxxx Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
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 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 AND THE PURCHASE 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]
S-1
SIGNATURE PAGE TO
ASSIGNMENT AND
SECURITY AGREEMENT
EXECUTED this 1st day of September, 1999.
DEBTOR: /s/ D. Xxxxx Xxxx
Printed Name: D. Xxxxx Xxxx
/s/ Carellyn X. Xxxx
Printed Name: Carellyn X. Xxxx
SECURED PARTY: Prime Medical Operating, Inc.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
Prime/BDR Acquisition, L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
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 ("PMOI"), Prime/BDR Acquisition, L.L.C.,
a Delaware limited liability company ("Prime") (PMOI and Prime are referred to
herein, jointly and severally, as "Secured Party") and Xxxxxxx X. Xxxxxxx, M.D.
(the "Debtor").
RECITALS:
A. Debtor and Secured Party have executed and delivered that certain
Stock Purchase Agreement dated as of September 1, 1999 (the "Purchase
Agreement"), pursuant to which Secured Party purchased from Debtor certain
shares of the $0.01 par value common stock of Horizon Vision Center, Inc, a
Nevada corporation ("Horizon").
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 indemnity
obligations arising under the Purchase Agreement.
C. Debtor desires to enter into this Agreement as a material inducement to
Secured Party's purchase of Debtor's shares of Horizon under the Purchase
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) Shares of Horizon. From and after the date of this
Agreement, (i) all shares of the common stock of Horizon owned or acquired in
any manner by Debtor or Secured Party, (collectively, the "Shares"), (ii) any
replacements, substitutions, or exchanges of the certificates representing the
Shares, and (iii) any and all options, rescission rights, registration rights,
conversion rights, subscription rights, contractual or quasi-contractual rights,
warrants, redemption rights, redemption proceeds, calls, preemptive rights and
all other rights and benefits pertaining to the Shares;
(b) Accounts. All accounts and rights now or hereafter
attributable to any of the Collateral described in (a) above, and all rights of
Debtor now or hereafter arising under any agreement pertaining to the Collateral
described in (a) 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) above;
(c) 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 of the
Collateral described in this Section 1.1: (i) any stock 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 of shares, 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 of the Collateral
described in this Section 1.1; (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
(d) 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), or (c) 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
(including, without limitation, any principal, interest, fees and other amounts,
and any indemnity obligations) under and pursuant to the Purchase Agreement,
this Agreement and/or any other contract or agreement between Secured Party and
Debtor or any affiliate of Debtor (collectively, "Other Agreements"; and
(b) (i) all indebtedness, obligations and liabilities of
Debtor and/or any affiliate of Debtor to 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 Purchase Agreement or
any Other Agreement, or any other document, agreement, or instrument executed in
connection either of them, (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 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 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 to Debtor, or expended by Secured Party for the account of Debtor or
otherwise owing by Debtor to Secured Party, in respect of the Obligations, and
all other sums expended or advanced by Secured Party 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 Shares 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 solvent;
(ii) the fair saleable value of Debtor's assets exceeds Debtor's liabilities
(both fixed and contingent); (iii) Debtor has 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 the Purchase Agreement and each Other Agreement.
No further consent or approval is required as a condition to the validity of
this Agreement, the Purchase 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, the Purchase Agreement and each
Other Agreement constitute valid and legally binding obligations of Debtor, in
accordance with their terms, subject to (a) the applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (b) restrictions imposed by any court of competent
jurisdiction on the enforcement of non-competition and exclusive use restrictive
covenants imposed under the Purchase Agreement or any Other Agreement.
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, the Purchase
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, the Purchase 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(c) 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
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. Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, Debtor (i) shall comply with his obligations under
the Purchase Agreement and each Other Document, and (ii) may consent to any
issuance of shares of Horizon if such issuance has been approved by a majority
of the Board of Directors of Horizon.
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 Shares 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 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.
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 Purchase Agreement (including, without limitation, the indemnity
provisions contained therein), or any other amount which Debtor may now or
hereafter owe to Secured Party under any Other Agreement or otherwise, within
(15) calendar days after such amount is due;
(b) The failure of Debtor to pay any Obligation within (15) calendar days
after such amount is due; and
(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.
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.
(b) 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.
(c) 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 an intrastate offering under Section 3(a)(11) of the Securities
Act of 1933, and no sale so made in good faith by Secured Party shall be deemed
to be not "commercially reasonable" because so made.
(d) 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 Purchase 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 Purchase
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 the Purchase Agreement or 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, ITS
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 UNINTENTIONAL ACT OR
OMISSION (OR INTENTIONAL ACT OR OMISSION SO LONG AS SUCH ACT OR OMISSION DOES
NOT CONSTITUTE NEGLIGENCE) OF SECURED PARTY (OR ANYONE ACTING ON BEHALF OF
SECURED PARTY) IN CONNECTION WITH THE COLLATERAL. 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 the Purchase Agreement or 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 the Purchase Agreement, 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.
8.14 Relationship Among Secured Party. Either or both of Secured Party
are entitled to enforce any and all rights granted to Secured Party in this
Agreement, and to take any other action allowed to be taken by Secured Party
under this Agreement. Neither Secured Party is under any obligation to act
jointly or in concert with the other Secured Party pursuant to this Agreement.
Any action required to be taken by Debtor, or notice required to be given by
Debtor, shall be taken or given with respect to both of Secured Party.
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: Xxxxxxx X. Xxxxxxx, M.D.
000 Xxxxx Xx Xxxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000-0000
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 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 AND THE PURCHASE 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]
S-1
SIGNATURE PAGE TO
ASSIGNMENT AND
SECURITY AGREEMENT
EXECUTED this 1st day of September, 1999.
DEBTOR: /s/ Xxxxxxx X. Xxxxxxx, M.D.
Printed Name: Xxxxxxx X. Xxxxxxx, M.D.
SECURED PARTY: Prime Medical Operating, Inc.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
Prime/BDR Acquisition, L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Secretary and Manager
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 ("PMOI"), Prime/BDR Acquisition, L.L.C.,
a Delaware limited liability company ("Prime") (PMOI and Prime are referred to
herein, jointly and severally, as "Secured Party") and the Severin Family Trust
(the "Debtor").
RECITALS:
A. Debtor and Secured Party have executed and delivered that certain
Stock Purchase Agreement dated as of September 1, 1999 (the "Purchase
Agreement"), pursuant to which Secured Party purchased from Debtor certain
shares of the $0.01 par value common stock of Horizon Vision Center, Inc, a
Nevada corporation ("Horizon").
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 indemnity
obligations arising under the Purchase Agreement.
C. Debtor desires to enter into this Agreement as a material inducement to
Secured Party's purchase of Debtor's shares of Horizon under the Purchase
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) Shares of Horizon. From and after the date of this
Agreement, (i) all shares of the common stock of Horizon owned or acquired in
any manner by Debtor or Secured Party, (collectively, the "Shares"), (ii) any
replacements, substitutions, or exchanges of the certificates representing the
Shares, and (iii) any and all options, rescission rights, registration rights,
conversion rights, subscription rights, contractual or quasi-contractual rights,
warrants, redemption rights, redemption proceeds, calls, preemptive rights and
all other rights and benefits pertaining to the Shares;
(b) Accounts. All accounts and rights now or hereafter
attributable to any of the Collateral described in (a) above, and all rights of
Debtor now or hereafter arising under any agreement pertaining to the Collateral
described in (a) 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) above;
(c) 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 of the
Collateral described in this Section 1.1: (i) any stock 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 of shares, 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 of the Collateral
described in this Section 1.1; (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
(d) 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), or (c) 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
(including, without limitation, any principal, interest, fees and other amounts,
and any indemnity obligations) under and pursuant to the Purchase Agreement,
this Agreement and/or any other contract or agreement between Secured Party and
Debtor or any affiliate of Debtor (collectively, "Other Agreements"; and
(b) (i) all indebtedness, obligations and liabilities of
Debtor and/or any affiliate of Debtor to 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 Purchase Agreement or
any Other Agreement, or any other document, agreement, or instrument executed in
connection either of them, (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 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 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 to Debtor, or expended by Secured Party for the account of Debtor or
otherwise owing by Debtor to Secured Party, in respect of the Obligations, and
all other sums expended or advanced by Secured Party 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 Shares 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 solvent;
(ii) the fair saleable value of Debtor's assets exceeds Debtor's liabilities
(both fixed and contingent); (iii) Debtor has 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 the Purchase Agreement and each Other Agreement.
No further consent or approval is required as a condition to the validity of
this Agreement, the Purchase 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, the Purchase Agreement and each
Other Agreement constitute valid and legally binding obligations of Debtor, in
accordance with their terms, subject to (a) the applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (b) restrictions imposed by any court of competent
jurisdiction on the enforcement of non-competition and exclusive use restrictive
covenants imposed under the Purchase Agreement or any Other Agreement.
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, the Purchase
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, the Purchase 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(c) 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
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. Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, Debtor (i) shall comply with his obligations under
the Purchase Agreement and each Other Document, and (ii) may consent to any
issuance of shares of Horizon if such issuance has been approved by a majority
of the Board of Directors of Horizon.
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 Shares 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 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.
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 Purchase Agreement (including, without limitation, the indemnity
provisions contained therein), or any other amount which Debtor may now or
hereafter owe to Secured Party under any Other Agreement or otherwise, within
(15) calendar days after such amount is due;
(b) The failure of Debtor to pay any Obligation within (15) calendar days
after such amount is due; and
(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.
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.
(b) 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.
(c) 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 an intrastate offering under Section 3(a)(11) of the Securities
Act of 1933, and no sale so made in good faith by Secured Party shall be deemed
to be not "commercially reasonable" because so made.
(d) 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 Purchase 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 Purchase
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 the Purchase Agreement or 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, ITS
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 UNINTENTIONAL ACT OR
OMISSION (OR INTENTIONAL ACT OR OMISSION SO LONG AS SUCH ACT OR OMISSION DOES
NOT CONSTITUTE NEGLIGENCE) OF SECURED PARTY (OR ANYONE ACTING ON BEHALF OF
SECURED PARTY) IN CONNECTION WITH THE COLLATERAL. 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 the Purchase Agreement or 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 the Purchase Agreement, 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.
8.14 Relationship Among Secured Party. Either or both of Secured Party
are entitled to enforce any and all rights granted to Secured Party in this
Agreement, and to take any other action allowed to be taken by Secured Party
under this Agreement. Neither Secured Party is under any obligation to act
jointly or in concert with the other Secured Party pursuant to this Agreement.
Any action required to be taken by Debtor, or notice required to be given by
Debtor, shall be taken or given with respect to both of Secured Party.
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: The Severin Family Trust
Xxxxxxx X. Xxxxxxx, Trustee
0000 XxXxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
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 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 AND THE PURCHASE 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]
S-1
SIGNATURE PAGE TO
ASSIGNMENT AND
SECURITY AGREEMENT
EXECUTED this 1st day of September, 1999.
DEBTOR: /s/ Xxxxxxx X. Xxxxxxx, Trustee
Printed Name: Xxxxxxx X. Xxxxxxx,
Trustee under the Severin Family Trust
SECURED PARTY: Prime Medical Operating, Inc.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
Prime/BDR Acquisition, L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
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 ("PMOI"), Prime/BDR Acquisition, L.L.C.,
a Delaware limited liability company ("Prime") (PMOI and Prime are referred to
herein, jointly and severally, as "Secured Party") and the Xxxxxxx and Xxxxxx
Xxxxxx Family Trust (the "Debtor").
RECITALS:
A. Debtor and Secured Party have executed and delivered that certain
Stock Purchase Agreement dated as of September 1, 1999 (the "Purchase
Agreement"), pursuant to which Secured Party purchased from Debtor certain
shares of the $0.01 par value common stock of Horizon Vision Center, Inc, a
Nevada corporation ("Horizon").
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 indemnity
obligations arising under the Purchase Agreement.
C. Debtor desires to enter into this Agreement as a material inducement to
Secured Party's purchase of Debtor's shares of Horizon under the Purchase
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) Shares of Horizon. From and after the date of this
Agreement, (i) all shares of the common stock of Horizon owned or acquired in
any manner by Debtor or Secured Party, (collectively, the "Shares"), (ii) any
replacements, substitutions, or exchanges of the certificates representing the
Shares, and (iii) any and all options, rescission rights, registration rights,
conversion rights, subscription rights, contractual or quasi-contractual rights,
warrants, redemption rights, redemption proceeds, calls, preemptive rights and
all other rights and benefits pertaining to the Shares;
(b) Accounts. All accounts and rights now or hereafter
attributable to any of the Collateral described in (a) above, and all rights of
Debtor now or hereafter arising under any agreement pertaining to the Collateral
described in (a) 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) above;
(c) 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 of the
Collateral described in this Section 1.1: (i) any stock 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 of shares, 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 of the Collateral
described in this Section 1.1; (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
(d) 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), or (c) 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
(including, without limitation, any principal, interest, fees and other amounts,
and any indemnity obligations) under and pursuant to the Purchase Agreement,
this Agreement and/or any other contract or agreement between Secured Party and
Debtor or any affiliate of Debtor (collectively, "Other Agreements"; and
(b) (i) all indebtedness, obligations and liabilities of
Debtor and/or any affiliate of Debtor to 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 Purchase Agreement or
any Other Agreement, or any other document, agreement, or instrument executed in
connection either of them, (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 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 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 to Debtor, or expended by Secured Party for the account of Debtor or
otherwise owing by Debtor to Secured Party, in respect of the Obligations, and
all other sums expended or advanced by Secured Party 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 Shares 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 solvent;
(ii) the fair saleable value of Debtor's assets exceeds Debtor's liabilities
(both fixed and contingent); (iii) Debtor has 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 the Purchase Agreement and each Other Agreement.
No further consent or approval is required as a condition to the validity of
this Agreement, the Purchase 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, the Purchase Agreement and each
Other Agreement constitute valid and legally binding obligations of Debtor, in
accordance with their terms, subject to (a) the applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (b) restrictions imposed by any court of competent
jurisdiction on the enforcement of non-competition and exclusive use restrictive
covenants imposed under the Purchase Agreement or any Other Agreement.
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, the Purchase
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, the Purchase 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(c) 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
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. Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, Debtor (i) shall comply with his obligations under
the Purchase Agreement and each Other Document, and (ii) may consent to any
issuance of shares of Horizon if such issuance has been approved by a majority
of the Board of Directors of Horizon.
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 Shares 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 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.
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 Purchase Agreement (including, without limitation, the indemnity
provisions contained therein), or any other amount which Debtor may now or
hereafter owe to Secured Party under any Other Agreement or otherwise, within
(15) calendar days after such amount is due;
(b) The failure of Debtor to pay any Obligation within (15) calendar days
after such amount is due; and
(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.
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.
(b) 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.
(c) 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 an intrastate offering under Section 3(a)(11) of the Securities
Act of 1933, and no sale so made in good faith by Secured Party shall be deemed
to be not "commercially reasonable" because so made.
(d) 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 Purchase 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 Purchase
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 the Purchase Agreement or 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, ITS
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 UNINTENTIONAL ACT OR
OMISSION (OR INTENTIONAL ACT OR OMISSION SO LONG AS SUCH ACT OR OMISSION DOES
NOT CONSTITUTE NEGLIGENCE) OF SECURED PARTY (OR ANYONE ACTING ON BEHALF OF
SECURED PARTY) IN CONNECTION WITH THE COLLATERAL. 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 the Purchase Agreement or 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 the Purchase Agreement, 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.
8.14 Relationship Among Secured Party. Either or both of Secured Party
are entitled to enforce any and all rights granted to Secured Party in this
Agreement, and to take any other action allowed to be taken by Secured Party
under this Agreement. Neither Secured Party is under any obligation to act
jointly or in concert with the other Secured Party pursuant to this Agreement.
Any action required to be taken by Debtor, or notice required to be given by
Debtor, shall be taken or given with respect to both of Secured Party.
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: Xxxxxxx and Xxxxxx Xxxxxx Family Trust
000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
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 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 AND THE PURCHASE 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]
S-1
SIGNATURE PAGE TO
ASSIGNMENT AND
SECURITY AGREEMENT
EXECUTED this 1st day of September, 1999.
DEBTOR: /s/ Xxxxxxx X. Xxxxxx, M.D.
Printed Name: Xxxxxxx X. Xxxxxx, M.D.
Trustee under the Xxxxxxx and Xxxxxx
Xxxxxx Family Trust
/s/ Xxxxxx X. Xxxxxx
Printed Name: Xxxxxx X. Xxxxxx
Trustee under the Xxxxxxx and Xxxxxx
Xxxxxx Family Trust
SECURED PARTY: Prime Medical Operating, Inc.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
Prime/BDR Acquisition, L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
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 ("PMOI"), Prime/BDR Acquisition, L.L.C.,
a Delaware limited liability company ("Prime") (PMOI and Prime are referred to
herein, jointly and severally, as "Secured Party") and Xxxxxxx Xxxxxxxx, M.D.
(the "Debtor").
RECITALS:
A. Debtor and Secured Party have executed and delivered that certain
Stock Purchase Agreement dated as of September 1, 1999 (the "Purchase
Agreement"), pursuant to which Secured Party purchased from Debtor certain
shares of the $0.01 par value common stock of Horizon Vision Center, Inc, a
Nevada corporation ("Horizon").
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 indemnity
obligations arising under the Purchase Agreement.
C. Debtor desires to enter into this Agreement as a material inducement to
Secured Party's purchase of Debtor's shares of Horizon under the Purchase
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) Shares of Horizon. From and after the date of this
Agreement, (i) all shares of the common stock of Horizon owned or acquired in
any manner by Debtor or Secured Party, (collectively, the "Shares"), (ii) any
replacements, substitutions, or exchanges of the certificates representing the
Shares, and (iii) any and all options, rescission rights, registration rights,
conversion rights, subscription rights, contractual or quasi-contractual rights,
warrants, redemption rights, redemption proceeds, calls, preemptive rights and
all other rights and benefits pertaining to the Shares;
(b) Accounts. All accounts and rights now or hereafter
attributable to any of the Collateral described in (a) above, and all rights of
Debtor now or hereafter arising under any agreement pertaining to the Collateral
described in (a) 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) above;
(c) 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 of the
Collateral described in this Section 1.1: (i) any stock 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 of shares, 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 of the Collateral
described in this Section 1.1; (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
(d) 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), or (c) 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
(including, without limitation, any principal, interest, fees and other amounts,
and any indemnity obligations) under and pursuant to the Purchase Agreement,
this Agreement and/or any other contract or agreement between Secured Party and
Debtor or any affiliate of Debtor (collectively, "Other Agreements"; and
(b) (i) all indebtedness, obligations and liabilities of
Debtor and/or any affiliate of Debtor to 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 Purchase Agreement or
any Other Agreement, or any other document, agreement, or instrument executed in
connection either of them, (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 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 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 to Debtor, or expended by Secured Party for the account of Debtor or
otherwise owing by Debtor to Secured Party, in respect of the Obligations, and
all other sums expended or advanced by Secured Party 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 Shares 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 solvent;
(ii) the fair saleable value of Debtor's assets exceeds Debtor's liabilities
(both fixed and contingent); (iii) Debtor has 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 the Purchase Agreement and each Other Agreement.
No further consent or approval is required as a condition to the validity of
this Agreement, the Purchase 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, the Purchase Agreement and each
Other Agreement constitute valid and legally binding obligations of Debtor, in
accordance with their terms, subject to (a) the applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (b) restrictions imposed by any court of competent
jurisdiction on the enforcement of non-competition and exclusive use restrictive
covenants imposed under the Purchase Agreement or any Other Agreement.
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, the Purchase
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, the Purchase 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(c) 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
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. Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, Debtor (i) shall comply with his obligations under
the Purchase Agreement and each Other Document, and (ii) may consent to any
issuance of shares of Horizon if such issuance has been approved by a majority
of the Board of Directors of Horizon.
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 Shares 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 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.
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 Purchase Agreement (including, without limitation, the indemnity
provisions contained therein), or any other amount which Debtor may now or
hereafter owe to Secured Party under any Other Agreement or otherwise, within
(15) calendar days after such amount is due;
(b) The failure of Debtor to pay any Obligation within (15) calendar days
after such amount is due; and
(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.
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.
(b) 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.
(c) 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 an intrastate offering under Section 3(a)(11) of the Securities
Act of 1933, and no sale so made in good faith by Secured Party shall be deemed
to be not "commercially reasonable" because so made.
(d) 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 Purchase 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 Purchase
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 the Purchase Agreement or 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, ITS
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 UNINTENTIONAL ACT OR
OMISSION (OR INTENTIONAL ACT OR OMISSION SO LONG AS SUCH ACT OR OMISSION DOES
NOT CONSTITUTE NEGLIGENCE) OF SECURED PARTY (OR ANYONE ACTING ON BEHALF OF
SECURED PARTY) IN CONNECTION WITH THE COLLATERAL. 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 the Purchase Agreement or 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 the Purchase Agreement, 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.
8.14 Relationship Among Secured Party. Either or both of Secured Party
are entitled to enforce any and all rights granted to Secured Party in this
Agreement, and to take any other action allowed to be taken by Secured Party
under this Agreement. Neither Secured Party is under any obligation to act
jointly or in concert with the other Secured Party pursuant to this Agreement.
Any action required to be taken by Debtor, or notice required to be given by
Debtor, shall be taken or given with respect to both of Secured Party.
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: Medical Vision Technology Profit Sharing Plan
FBO Xxxxxxx Xxxxxxxx, M.D.
0000 Xxxxxxx Xxxxx
Xxxxxxx Xxx, Xxxxxxxxxx 00000
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 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 AND THE PURCHASE 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]
S-1
SIGNATURE PAGE TO
ASSIGNMENT AND
SECURITY AGREEMENT
EXECUTED this 1st day of September, 1999.
DEBTOR: /s/ Xxxxxxx Xxxxxxxx, M.D.
Printed Name: Xxxxxxx Xxxxxxxx, M.D.
SECURED PARTY: Prime Medical Operating, Inc.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
Prime/BDR Acquisition, L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
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 ("PMOI"), Prime/BDR Acquisition, L.L.C.,
a Delaware limited liability company ("Prime") (PMOI and Prime are referred to
herein, jointly and severally, as "Secured Party") and Medical Vision Technology
Profit Sharing Plan for the benefit of Xxxxxxx Xxxxxxxx, M.D. (the "Debtor").
RECITALS:
A. Debtor and Secured Party have executed and delivered that certain
Stock Purchase Agreement dated as of September 1, 1999 (the "Purchase
Agreement"), pursuant to which Secured Party purchased from Debtor certain
shares of the $0.01 par value common stock of Horizon Vision Center, Inc, a
Nevada corporation ("Horizon").
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 indemnity
obligations arising under the Purchase Agreement.
C. Debtor desires to enter into this Agreement as a material inducement to
Secured Party's purchase of Debtor's shares of Horizon under the Purchase
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) Shares of Horizon. From and after the date of this
Agreement, (i) all shares of the common stock of Horizon owned or acquired in
any manner by Debtor or Secured Party, (collectively, the "Shares"), (ii) any
replacements, substitutions, or exchanges of the certificates representing the
Shares, and (iii) any and all options, rescission rights, registration rights,
conversion rights, subscription rights, contractual or quasi-contractual rights,
warrants, redemption rights, redemption proceeds, calls, preemptive rights and
all other rights and benefits pertaining to the Shares;
(b) Accounts. All accounts and rights now or hereafter
attributable to any of the Collateral described in (a) above, and all rights of
Debtor now or hereafter arising under any agreement pertaining to the Collateral
described in (a) 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) above;
(c) 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 of the
Collateral described in this Section 1.1: (i) any stock 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 of shares, 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 of the Collateral
described in this Section 1.1; (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
(d) 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), or (c) 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
(including, without limitation, any principal, interest, fees and other amounts,
and any indemnity obligations) under and pursuant to the Purchase Agreement,
this Agreement and/or any other contract or agreement between Secured Party and
Debtor or any affiliate of Debtor (collectively, "Other Agreements"; and
(b) (i) all indebtedness, obligations and liabilities of
Debtor and/or any affiliate of Debtor to 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 Purchase Agreement or
any Other Agreement, or any other document, agreement, or instrument executed in
connection either of them, (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 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 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 to Debtor, or expended by Secured Party for the account of Debtor or
otherwise owing by Debtor to Secured Party, in respect of the Obligations, and
all other sums expended or advanced by Secured Party 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 Shares 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 solvent;
(ii) the fair saleable value of Debtor's assets exceeds Debtor's liabilities
(both fixed and contingent); (iii) Debtor has 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 the Purchase Agreement and each Other Agreement.
No further consent or approval is required as a condition to the validity of
this Agreement, the Purchase 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, the Purchase Agreement and each
Other Agreement constitute valid and legally binding obligations of Debtor, in
accordance with their terms, subject to (a) the applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (b) restrictions imposed by any court of competent
jurisdiction on the enforcement of non-competition and exclusive use restrictive
covenants imposed under the Purchase Agreement or any Other Agreement.
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, the Purchase
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, the Purchase 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(c) 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
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. Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, Debtor (i) shall comply with his obligations under
the Purchase Agreement and each Other Document, and (ii) may consent to any
issuance of shares of Horizon if such issuance has been approved by a majority
of the Board of Directors of Horizon.
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 Shares 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 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.
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 Purchase Agreement (including, without limitation, the indemnity
provisions contained therein), or any other amount which Debtor may now or
hereafter owe to Secured Party under any Other Agreement or otherwise, within
(15) calendar days after such amount is due;
(b) The failure of Debtor to pay any Obligation within (15) calendar days
after such amount is due; and
(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.
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.
(b) 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.
(c) 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 an intrastate offering under Section 3(a)(11) of the Securities
Act of 1933, and no sale so made in good faith by Secured Party shall be deemed
to be not "commercially reasonable" because so made.
(d) 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 Purchase 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 Purchase
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 the Purchase Agreement or 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, ITS
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 UNINTENTIONAL ACT OR
OMISSION (OR INTENTIONAL ACT OR OMISSION SO LONG AS SUCH ACT OR OMISSION DOES
NOT CONSTITUTE NEGLIGENCE) OF SECURED PARTY (OR ANYONE ACTING ON BEHALF OF
SECURED PARTY) IN CONNECTION WITH THE COLLATERAL. 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 the Purchase Agreement or 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 the Purchase Agreement, 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.
8.14 Relationship Among Secured Party. Either or both of Secured Party
are entitled to enforce any and all rights granted to Secured Party in this
Agreement, and to take any other action allowed to be taken by Secured Party
under this Agreement. Neither Secured Party is under any obligation to act
jointly or in concert with the other Secured Party pursuant to this Agreement.
Any action required to be taken by Debtor, or notice required to be given by
Debtor, shall be taken or given with respect to both of Secured Party.
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: Xxxxxxx Xxxxxxxx, M.D.
0000 Xxxxxxx Xxxxx
Xxxxxxx Xxx, Xxxxxxxxxx 00000
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 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 AND THE PURCHASE 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]
S-1
SIGNATURE PAGE TO
ASSIGNMENT AND
SECURITY AGREEMENT
EXECUTED this 1st day of September, 1999.
DEBTOR: /s/ Xxxxxxx Xxxxxxxx, M.D.
Printed Name: Xxxxxxx Xxxxxxxx, M.D.,
Trustee under Medical Vision Technology
Profit Sharing Plan for the benefit of
Xxxxxxx Xxxxxxxx, M.D.
SECURED PARTY: Prime Medical Operating, Inc.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
Prime/BDR Acquisition, L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
