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EXHIBIT 10.17
PEDIATRIX MEDICAL GROUP
SECURITY AGREEMENT
Dated as of November 1, 2000
FLEET NATIONAL BANK, as Agent
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TABLE OF CONTENTS
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1. Reference to Credit Agreement; Definitions; Certain Rules of Construction.....................................1
2. Security......................................................................................................2
2.1. Credit Security.....................................................................................2
2.1.1. Tangible Personal Property..............................................................2
2.1.2. Rights to Payment of Money..............................................................2
2.1.3. Intangibles.............................................................................2
2.1.4. Pledged Stock...........................................................................3
2.1.5. Pledged Rights..........................................................................3
2.1.6. Pledged Indebtedness....................................................................3
2.1.7. Chattel Paper, Instruments, etc.........................................................3
2.1.8. Leases..................................................................................3
2.1.9. Deposit Accounts........................................................................3
2.1.10. Collateral.............................................................................3
2.1.11. Books and Records......................................................................4
2.1.12. Insurance..............................................................................4
2.1.14. All Other Property.....................................................................4
2.1.15. Proceeds and Products..................................................................4
2.1.16. Excluded Property......................................................................4
2.2. Additional Credit Security.........................................................................5
2.2.1. Real Property...........................................................................5
2.2.2. Motor Vehicles and Aircraft.............................................................5
2.3. Certain Covenants with Respect to Credit Security..................................................5
2.3.1. Pledged Stock...........................................................................5
2.3.2. Accounts and Pledged Indebtedness.......................................................6
2.3.3. No Liens or Restrictions on Transfer or Change of Control...............................6
2.3.4. Jurisdiction of Organization............................................................6
2.3.5. Location of Credit Security.............................................................6
2.3.6. Trade Names.............................................................................7
2.3.7. Insurance...............................................................................7
2.3.8. Intellectual Property...................................................................8
2.3.9. Deposit Accounts........................................................................8
2.3.10. Modifications to Credit Security.......................................................8
2.3.11. Delivery of Documents..................................................................9
2.3.12. Perfection of Credit Security..........................................................9
2.4. Administration of Credit Security.................................................................10
2.4.1. Use of Credit Security.................................................................10
2.4.2. Accounts...............................................................................10
2.4.3. Distributions on Pledged Securities....................................................10
2.4.4. Voting Pledged Securities..............................................................10
2.5. Right to Realize upon Credit Security.............................................................11
2.5.1. Assembly of Credit Security; Receiver..................................................11
2.5.2. General Authority......................................................................11
2.5.3. Marshaling, etc........................................................................12
2.5.4. Sales of Credit Security...............................................................13
2.5.5. Sale without Registration..............................................................13
2.5.6. Application of Proceeds................................................................14
2.6. Custody of Credit Security........................................................................14
3. General.................................................................................................15
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SECURITY AGREEMENT
This Agreement, dated as of November 1, 2000, is among Pediatrix
Medical Group, Inc., a Florida corporation (the "COMPANY"), the Related Entities
of the Company from time to time party hereto and Fleet National Bank, as agent
(the "AGENT") for itself and the other Lenders under the Credit Agreement (as
defined below). The parties agree as follows:
1. REFERENCE TO CREDIT AGREEMENT; DEFINITIONS; CERTAIN RULES OF CONSTRUCTION.
REFERENCE IS MADE TO THE AMENDED AND RESTATED CREDIT AGREEMENT AMENDED AND
RESTATED AS OF THE DATE HEREOF, AS FROM TIME TO TIME IN EFFECT (THE "CREDIT
AGREEMENT"), AMONG THE COMPANY, THE RELATED ENTITIES OF THE COMPANY FROM TIME TO
TIME PARTY THERETO, THE LENDERS AND THE AGENT. CAPITALIZED TERMS DEFINED IN THE
CREDIT AGREEMENT AND NOT OTHERWISE DEFINED HEREIN ARE USED HEREIN WITH THE
MEANINGS SO DEFINED. CERTAIN OTHER CAPITALIZED TERMS ARE USED IN THIS AGREEMENT
AS SPECIFICALLY DEFINED BELOW IN THIS SECTION 1. EXCEPT AS THE CONTEXT OTHERWISE
EXPLICITLY REQUIRES, (A) THE CAPITALIZED TERM "SECTION" REFERS TO SECTIONS OF
THIS AGREEMENT, (B) THE CAPITALIZED TERM "EXHIBIT" REFERS TO EXHIBITS TO THIS
AGREEMENT, (C) REFERENCES TO A PARTICULAR SECTION SHALL INCLUDE ALL SUBSECTIONS
THEREOF, (D) THE WORD "INCLUDING" SHALL BE CONSTRUED AS "INCLUDING WITHOUT
LIMITATION", (E) TERMS DEFINED IN THE UCC AND NOT OTHERWISE DEFINED HEREIN HAVE
THE MEANING PROVIDED UNDER THE UCC; PROVIDED, HOWEVER, THAT TERMS CONTAINED IN
SECTION 2.1.13 AND DEFINED IN REVISED ARTICLE 9 SHALL BE USED IN SUCH SECTION
WITH THE MEANINGS SO DEFINED, (F) REFERENCES TO A PARTICULAR STATUTE OR
REGULATION INCLUDE ALL RULES AND REGULATIONS THEREUNDER AND ANY SUCCESSOR
STATUTE, REGULATION OR RULES, IN EACH CASE AS FROM TIME TO TIME IN EFFECT AND
(G) REFERENCES TO A PARTICULAR PERSON INCLUDE SUCH PERSON'S SUCCESSORS AND
ASSIGNS TO THE EXTENT NOT PROHIBITED BY THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS. REFERENCES TO "THE DATE HEREOF" MEAN THE DATE FIRST SET FORTH ABOVE.
"ACCOUNTS" is defined in Section 2.1.2.
"AGREEMENT" means this Security Agreement as from time to time in
effect.
"INTELLECTUAL PROPERTY" is defined in Section 2.3.8.
"OBLIGORS" is defined in Section 2.1.
"PLEDGED INDEBTEDNESS" is defined in Section 2.1.6.
"PLEDGED RIGHTS" is defined in Section 2.1.5.
"PLEDGED SECURITIES" means the Pledged Stock, the Pledged Rights and
the Pledged Indebtedness, collectively.
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"PLEDGED STOCK" is defined in Section 2.1.4.
"REVISED ARTICLE 9" means revised Article 9 of the Uniform Commercial
Code in the form approved by the American Law Institute and the National
Conference of Commissions on Uniform State Law as contained in the 1999 Official
Text of the Uniform Commercial Code.
"UCC" means the Uniform Commercial Code as in effect in Massachusetts
on the date hereof; PROVIDED, HOWEVER, that with respect to the perfection of
the Agent's Lien on the Credit Security and the effect of nonperfection thereof,
the term "UCC" means the Uniform Commercial Code as in effect in any
jurisdiction the laws of which are made applicable by section 9-103 of the
Uniform Commercial Code as in effect in Massachusetts.
2. SECURITY.
2.1. CREDIT SECURITY. As security for the payment and performance of
the Credit Obligations, each of the Company and the Related Entities of the
Company party hereto (each an "Obligor", and collectively, the "Obligors")
mortgages, pledges and collaterally grants and assigns to the Agent for the
benefit of the Lenders and the holders from time to time of any Credit
Obligation, and creates a security interest in favor of the Agent for the
benefit of the Lenders and such holders in, all of such Obligor's right, title
and interest in and to (but none of its obligations or liabilities with respect
to) the items and types of present and future property described in Sections
2.1.1 through 2.1.15 (subject, however, to Section 2.1.16), whether now owned or
hereafter acquired, all of which shall be included in the term "CREDIT
SECURITY":
2.1.1. TANGIBLE PERSONAL PROPERTY. All goods, machinery,
equipment, inventory and all other tangible personal property of any
nature whatsoever, wherever located, including raw materials, work in
process, finished parts and products, supplies, spare parts,
replacement parts, merchandise for resale, computers, tapes, disks and
computer equipment.
2.1.2. RIGHTS TO PAYMENT OF MONEY. All rights to receive the
payment of money, including accounts and receivables, rights to receive
the payment of money under contracts, franchises, licenses, permits,
subscriptions or other agreements (whether or not earned by
performance), and rights to receive payments from any other source (all
such rights, other than Financing Debt, being referred to herein as
"ACCOUNTS").
2.1.3. INTANGIBLES. All of the following (to the extent not
included in Section 3.1.2): (a) contracts, franchises, licenses,
permits, subscriptions and other agreements and all rights thereunder;
(b) rights granted by others which permit such Obligor to sell or
market items of personal property; (c) United States and foreign common
law and
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statutory copyrights and rights in literary property and rights and
licenses thereunder; (d) trade names, United States and foreign
trademarks, service marks, internet domain names, registrations of any
of the foregoing and related good will; (e) United States and foreign
patents and patent applications; (f) computer software, designs,
models, know-how, trade secrets, rights in proprietary information,
formulas, customer lists, backlog, orders, subscriptions, royalties,
catalogues, sales material, documents, good will, inventions and
processes; (g) judgments, causes in action and other claims, whether or
not inchoate, and (h) all other general intangibles and intangible
property and all rights thereunder, including such items set forth from
time to time on exhibit 7.3 to the Credit Agreement or any supplements
thereto provided pursuant to sections 6.4.1 or 6.4.2 thereof.
2.1.4. PLEDGED STOCK. (a) All shares of capital stock or other
evidence of beneficial interest in any corporation, business trust or
limited liability company, (b) all limited partnership interests in any
limited partnership, (c) all general partnership interests in any
general or limited partnership, (d) all joint venture interests in any
joint venture and (e) all options, warrants and similar rights to
acquire such capital stock or such interests. All such capital stock,
interests, options, warrants and other rights are collectively referred
to as the "PLEDGED STOCK".
2.1.5. PLEDGED RIGHTS. All rights to receive profits or
surplus of, or other Distributions (including income, return of capital
and liquidating distributions) from, any partnership, joint venture or
limited liability company, including any distributions by any such
Person to partners, joint venturers or members. All such rights are
collectively referred to as the "PLEDGED RIGHTS".
2.1.6. PLEDGED INDEBTEDNESS. All Financing Debt from time to
time owing to such Obligor from any Person (all such Financing Debt
being referred to as the "PLEDGED INDEBTEDNESS").
2.1.7. CHATTEL PAPER, INSTRUMENTS, ETC. All chattel paper,
non-negotiable instruments, negotiable instruments, documents and
investment property.
2.1.8. LEASES. All leases of personal property, whether such
Obligor is the lessor or the lessee thereunder.
2.1.9. DEPOSIT ACCOUNTS. All general or special deposit
accounts, including any demand, time, savings, passbook or similar
account maintained by such Obligor with any
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bank, trust company, savings and loan association, credit union or
similar organization, and all money, cash and cash equivalents of such
Obligor, whether or not deposited in any such deposit account.
2.1.10. COLLATERAL. All collateral granted by third parties
to, or held by, such Obligor with respect to the Accounts, Pledged
Securities, chattel paper, instruments, leases and other items of
Credit Security.
2.1.11. BOOKS AND RECORDS. All books and records, including
books of account and ledgers of every kind and nature, all
electronically recorded data (including all computer programs, disks,
tapes, electronic data processing media and software used in connection
with maintaining such Obligor's books and records), all files,
correspondence and all containers for the foregoing.
2.1.12. INSURANCE. All insurance policies which insure against
any loss or damage to any other Credit Security or which are otherwise
owned by such Obligor.
REVISED ARTICLE 9 ITEMS. The following categories of assets as defined in
Revised Article 9 (whether or not also included in the other provisions of this
Section 2.1): goods (including inventory, equipment and any accessions thereto),
instruments (including promissory notes), documents, accounts (including health
care receivables), chattel paper (whether tangible or electronic), deposit
accounts, letter of credit rights (whether or not the letter of credit is
evidenced by a writing), commercial tort claims, securities and all other
investment property, general intangibles (including payment intangibles and
software) and supporting obligations.
2.1.13. ALL OTHER PROPERTY. All other property, assets and
items of value of every kind and nature, tangible or intangible,
absolute or contingent, legal or equitable.
2.1.14. PROCEEDS AND PRODUCTS. All proceeds, including
insurance proceeds, and products of the items of Credit Security
described or referred to in Sections 2.1.1 through 2.1.14 and, to the
extent not included in the foregoing, all Distributions with respect to
the Pledged Securities.
2.1.15. EXCLUDED PROPERTY. Notwithstanding Sections 2.1.1
through 2.1.15, the payment and performance of the Credit Obligations
shall not be secured by:
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(a) any contract, license, permit or franchise that validly
prohibits the creation by such Obligor of a security interest in such
contract, license, permit or franchise (or in any rights or property
obtained by such Obligor under such contract, license, permit or
franchise); PROVIDED, HOWEVER, that the provisions of this Section
2.1.16 shall not prohibit the security interests created by this
Agreement from extending to the proceeds of such contract, license,
permit or franchise (or such rights or property) or to the monetary
value of the good will and other general intangibles of the Obligors
relating thereto;
(b) any rights or property to the extent that any valid and
enforceable law or regulation applicable to such rights or property
prohibits the creation of a security interest therein; PROVIDED,
HOWEVER, that the provisions of this Section 2.1.16 shall not prohibit
the security interests created by this Agreement from extending to the
proceeds of such rights or property or to the monetary value of the
good will and other general intangibles of the Obligors relating
thereto;
(c) more than 66% of the outstanding voting stock or other
voting equity in any Foreign Subsidiary to the extent that the pledge
of voting stock or other voting equity above such amount would result
in a repatriation of a material amount of foreign earnings under the
Code (including the "deemed dividend" provisions of section 956 of the
Code); or
(d) the items described in Section 2.2 (but only in the event
and to the extent the Agent has not specified that such items be
included in the Credit Security pursuant thereto).
In addition, in the event any Obligor disposes of assets to third
parties in a transaction permitted by section 6.12 of the Credit Agreement, such
assets, but not the proceeds or products thereof, shall be released from the
Lien of the Credit Security.
2.2. ADDITIONAL CREDIT SECURITY. As additional Credit Security, each
Obligor covenants that it will mortgage, pledge and collaterally grant and
assign to the Agent for the benefit of the Lenders and the holders from time to
time of any Credit Obligation, and will create a security interest in favor of
the Agent for the benefit of the Lenders and such holders in, all of its right,
title and interest in and to (but none of its obligations with respect to) such
of the following present or future items as the Agent may from time to time
specify by notice to such Obligor, whether now owned or hereafter acquired, and
the proceeds and products thereof, except to the extent consisting of rights or
property of the types referred to in Section 2.1.16(a) through (c), subject only
to Liens permitted by Section 2.3.3, all of which shall thereupon be included in
the term "CREDIT SECURITY":
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2.2.1. REAL PROPERTY. All real property and immovable property
and fixtures, leasehold interests and easements wherever located,
together with all estates and interests of such Obligor therein,
including lands, buildings, stores, manufacturing facilities and other
structures erected on such property, fixed plant, fixed equipment and
all permits, rights, licenses, benefits and other interests of any kind
or nature whatsoever in respect of such real and immovable property.
2.2.2. MOTOR VEHICLES AND AIRCRAFT. All motor vehicles and
aircraft.
2.3. CERTAIN COVENANTS WITH RESPECT TO CREDIT SECURITY. Each Obligor
covenants that:
2.3.1. PLEDGED STOCK. All shares of capital stock, limited
partnership interests, membership interests and similar securities
included in the Pledged Stock shall be at all times duly authorized,
validly issued, fully paid and (in the case of capital stock and
limited partnership interests) nonassessable. Each Obligor will deliver
to the Agent certificates representing any Pledged Stock held by such
Obligor, accompanied by a stock transfer power executed in blank and,
if the Agent so requests, with the signature guaranteed, all in form
and manner reasonably satisfactory to the Agent. Pledged Stock that is
not evidenced by a certificate held by such Obligor will be described
in appropriate control statements and UCC financing statements provided
to the Agent, all in form and substance reasonably satisfactory to the
Agent. Upon the occurrence and during the continuance of an Event of
Default, the Agent may transfer into its name or the name of its
nominee any Pledged Stock. In the event the Pledged Stock includes any
Margin Stock, the Obligors will furnish to the Lenders Federal Reserve
Form U-1 and take such other action as the Agent may reasonably request
to ensure compliance with applicable laws.
2.3.2. ACCOUNTS AND PLEDGED INDEBTEDNESS. Each Obligor will,
immediately upon the receipt thereof, deliver to the Agent any
promissory note or similar instrument representing any Account or
Pledged Indebtedness, after having endorsed such promissory note or
instrument in blank.
2.3.3. NO LIENS OR RESTRICTIONS ON TRANSFER OR CHANGE OF
CONTROL. All Credit Security shall be free and clear of any Liens and
restrictions on the transfer thereof, including contractual provisions
which prohibit the assignment of rights under contracts, except for
Liens permitted by section 6.8 of the Credit Agreement or by this
Section 2.3.3. Without limiting the generality of the foregoing, each
Obligor will in good faith attempt to exclude from agreements,
instruments, deeds or leases to which it becomes a
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party after the date hereof provisions that would prevent such Obligor
from creating a security interest in such agreement, instrument, deed
or lease or any rights or property acquired thereunder as contemplated
hereby. None of the Pledged Stock shall be subject to any option to
purchase or similar rights of any Person. Except with the written
consent of the Agent, which consent will not be unreasonably withheld,
each Obligor will in good faith attempt to exclude from any agreement,
instrument, deed or lease provisions that would restrict the change of
control or ownership of the Company or any of its Subsidiaries, or the
creation of a security interest in the ownership of the Company or any
of its Subsidiaries.
2.3.4. JURISDICTION OF ORGANIZATION. Each Obligor shall at all
times maintain its jurisdiction of organization as set forth in exhibit
7.1 to the Credit Agreement as in effect on the date hereof or, so long
as such Obligor shall have taken all steps reasonably necessary to
perfect the Lenders' security interest in the Credit Security with
respect to such new jurisdiction, in such other jurisdiction as such
Obligor may specify by notice actually received by the Agent not less
than 10 Banking Days prior to such change of jurisdiction of
organization.
2.3.5. LOCATION OF CREDIT SECURITY. Each Obligor shall at all
times keep its records concerning the Accounts at its chief executive
office and principal place of business, which office and place of
business shall be as set forth in exhibit 7.1 to the Credit Agreement
(as from time to time supplemented in accordance with sections 6.4.1
and 6.4.2 of the Credit Agreement) or, so long as such Obligor shall
have taken all steps reasonably necessary to perfect the Lenders'
security interest in the Credit Security with respect to such new
address, at such other address as such Obligor may specify by notice
actually received by the Agent not less than 10 Banking Days prior to
such change of address. No Obligor shall at any time keep tangible
personal property of the type referred to in Section 2.1.1 in any
jurisdiction other than the jurisdictions specified in such exhibit 7.1
(as so supplemented) or, so long as such Obligor shall have taken all
steps reasonably necessary to perfect the Lenders' security interest in
the Credit Security with respect to such other jurisdiction, other
jurisdictions as such Obligor may specify by notice actually received
by the Agent not less than 10 days prior to moving such tangible
personal property into such other jurisdiction.
2.3.6. TRADE NAMES. No Obligor will adopt or do business under
any name other than its name or names designated in exhibit 7.1 to the
Credit Agreement (as from time to time supplemented in accordance with
sections 6.4.1 and 6.4.2 of the Credit Agreement) or any other name
specified by notice actually received by the Agent not less than 10
Banking Days prior to the conduct of business under such additional
name. Since its inception, no Obligor has changed its name or adopted
or conducted business under any trade name other than a name specified
in such exhibit 7.1 (as so supplemented).
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2.3.7. INSURANCE. Each insurance policy included in, or
insuring against loss or damage to, the Credit Security shall name the
Agent as additional insured party or as loss payee. No such insurance
policy shall be cancelable or subject to termination or reduction in
amount or scope of coverage until after at least 30 days' prior written
notice from the insurer to the Agent. At least 10 days prior to the
expiration of any such insurance policy for any reason, each Obligor
shall furnish the Agent with reasonably satisfactory evidence of a
renewal or replacement policy and payment of the premiums therefor to
the extent due. Each Obligor grants to the Agent full power and
authority as its attorney-in-fact, effective upon notice to such
Obligor after the occurrence and during the continuance of an Event of
Default, to obtain, cancel, transfer, adjust and settle any such
insurance policy and to endorse any drafts thereon. Any amounts that
the Agent receives under any such policy (including return of unearned
premiums) insuring against loss or damage to the Credit Security when
no Event of Default has occurred and is continuing shall be delivered
to the Obligors for the replacement, restoration and maintenance of the
Credit Security. Any such amounts that the Agent receives after the
occurrence and during the continuance of an Event of Default shall, at
the Agent's option, be applied to payment of the Credit Obligations or
to the replacement, restoration and maintenance of the Credit Security.
If any Obligor fails to provide insurance as required by this
Agreement, the Agent may, at its option, purchase such insurance, and
such Obligor will on demand pay to the Agent the amount of any payments
made by the Agent or the Lenders for such purpose, together with
interest on the amounts so disbursed from five Banking Days after the
date demanded until payment in full thereof at the Overdue
Reimbursement Rate.
2.3.8. INTELLECTUAL PROPERTY. Exhibit 2.3 hereto shall set
forth the following items (collectively, the "INTELLECTUAL PROPERTY"):
(a) all copyrights owned by the Obligors that are registered
with the United States Copyright Office (or any office maintaining
registration of copyrights in any foreign jurisdiction) and all
applications for such registration and
(b) all trademarks, tradenames, service marks, service names
and patents owned by the Obligors that are registered with the United
States Patent and Trademark Office (or any office maintaining
registration of such items in any state of the United States of America
or any foreign jurisdiction) and all applications for such
registration.
(c) all internet domain names owned by the Obligors and the
registry office on which such domain names are registered.
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The Obligors shall duly authorize, execute and deliver to the Agent
separate memoranda of security interests provided by the Agent with
respect to the foregoing Intellectual Property for filing in the
offices described above. Upon the registration of any additional
Intellectual Property (or the filing of applications therefor) in the
offices described above, the Obligors shall notify the Agent and duly
authorize, execute and deliver to the Agent separate memoranda of
security interests covering such additional Intellectual Property for
filing in such offices.
2.3.9. DEPOSIT ACCOUNTS. Each Obligor shall keep all its
principal bank and deposit accounts only with the Agent, other Lenders
or the financial institutions listed on Exhibit 2.3 hereto. Each
Obligor shall use reasonable efforts to cause such financial
institutions (other than the Lenders and the Agent) to enter into
account control agreements with the Agent in form and substance
reasonably satisfactory to the Agent.
2.3.10. MODIFICATIONS TO CREDIT SECURITY. Except with the
prior written consent of the Agent, which consent will not be
unreasonably withheld, no Obligor shall amend or modify, or waive any
of its rights under or with respect to, any material Accounts, general
intangibles, Pledged Securities or leases which are part of the Credit
Security if the effect of such amendment, modification or waiver would
be to reduce the amount of any such items or to extend the time of
payment thereof, to waive any default by any other party thereto, or to
waive or impair any remedies of the Obligors or the Lenders under or
with respect to any such Accounts, general intangibles, Pledged
Securities or leases which are part of the Credit Security, in each
case other than consistent with past practice in the ordinary course of
business and on an arm's-length basis. Each Obligor will promptly give
the Agent written notice of any request by any Person for any material
credit or adjustment with respect to any Account, general intangible,
Pledged Securities or leases.
2.3.11. DELIVERY OF DOCUMENTS. Upon the Agent's reasonable
request, each Obligor shall deliver to the Agent, promptly upon such
Obligor's receipt thereof, copies of any agreements, instruments,
documents or invoices comprising or relating to the Credit Security.
Pending such request, such Obligor shall keep such items at its chief
executive office and principal place of business (as specified pursuant
to Section 2.3.5).
2.3.12. PERFECTION OF CREDIT SECURITY.
(a) This Agreement creates and shall create in favor of the
Agent, for the benefit of the Lenders, a legal, valid and enforceable
first priority security interest in the
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Credit Security described herein, subject only (in the case of Credit
Security other than Pledged Stock) to Liens permitted by section 6.8 of
the Credit Agreement.
(b) The Agent may at any time and from time to time execute
and file UCC financing statements, continuation statements and
amendments thereto that describe the Credit Security and contain any
information required by Part 5 of Revised Article 9 or the applicable
filing office with respect to any such UCC financing statement,
continuation statement or amendment thereof.
(c) Upon the Agent's reasonable request from time to time, the
Obligors will execute and deliver, and file and record in the proper
filing and recording places, all such instruments, including UCC
financing statements, collateral assignments of copyrights, trademarks
and patents, mortgages or deeds of trust, notations on certificates of
title and written confirmation of the grant of a security interest in
commercial tort claims, and will take all such other action, as the
Agent deems reasonably necessary for perfecting or otherwise confirming
to it the Credit Security or to carry out any other purpose of this
Agreement or any other Credit Document, whether in anticipation of the
effectiveness of Revised Article 9 or otherwise.
(d) In furtherance of the foregoing, the Obligors shall use
reasonable efforts to obtain (i) a written acknowledgment, in form and
substance reasonably satisfactory to the Agent, from any bailee having
possession of any Credit Security that such bailee holds such Credit
Security for the benefit of the Agent and (ii) control of any
investment property, deposit accounts, letter of credit rights or
electronic chattel paper (each such term as defined in Revised Article
9), with any agreements establishing such control to be in form and
substance reasonably satisfactory to the Agent.
2.4. ADMINISTRATION OF CREDIT SECURITY. The Credit Security shall be
administered as follows, and if an Event of Default shall have occurred and be
continuing, Section 2.5 shall also apply.
2.4.1. USE OF CREDIT SECURITY. Until the Agent provides
written notice to the contrary, each Obligor may use, commingle and
dispose of any part of the Credit Security in the ordinary course of
its business, all subject to section 6.12 of the Credit Agreement.
2.4.2. ACCOUNTS. To the extent specified by prior written
notice from the Agent after the occurrence and during the continuance
of an Event of Default, all sums collected or received and all property
recovered or possessed by any Obligor in connection with
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any Credit Security shall be received and held by such Obligor in trust
for and on the Lenders' behalf, shall be segregated from the assets and
funds of such Obligor, and shall be delivered to the Agent for the
benefit of the Lenders. Without limiting the foregoing, upon the
Agent's request after the occurrence and during the continuance of an
Event of Default, each Obligor shall institute depository collateral
accounts, lock-box receipts and similar credit procedures providing for
the direct receipt of payment on Accounts at a separate address, the
segregation of such proceeds for direct payment to the Agent and
appropriate notices to Account debtors. Upon the Agent's request after
the occurrence and during the continuance of an Event of Default, each
Obligor will cause its accounting books and records to be marked with
such legends and segregated in such manner as the Agent may specify.
2.4.3. DISTRIBUTIONS ON PLEDGED SECURITIES.
(a) Until an Event of Default shall occur and be continuing,
the respective Obligors shall be entitled, to the extent permitted by
the Credit Documents, to receive all Distributions on or with respect
to the Pledged Securities (other than Distributions constituting
additional Pledged Securities or liquidating Distributions). All
Distributions constituting additional Pledged Securities or liquidating
Distributions will be retained by the Agent (or if received by any
Obligor shall be held by such Person in trust and shall be immediately
delivered by such Person to the Agent in the original form received,
endorsed in blank) and held by the Agent as part of the Credit
Security.
(b) If an Event of Default shall have occurred and be
continuing all Distributions on or with respect to the Pledged
Securities shall be retained by the Agent (or if received by any
Obligor shall be held by such Person in trust and shall be immediately
delivered by it to the Agent in the original form received, endorsed in
blank) and held by the Agent as part of the Credit Security or applied
by the Agent to the payment of the Credit Obligations in accordance
with Section 2.5.6.
2.4.4. VOTING PLEDGED SECURITIES.
(a) Until an Event of Default shall occur and be continuing
and the Agent shall have delivered a notice contemplated by clause (b)
below, the respective Obligors shall be entitled to vote or consent
with respect to the Pledged Securities in any manner not inconsistent
with the terms of any Credit Document, and the Agent will, if so
requested, execute appropriate revocable proxies therefor.
-11-
14
(b) If an Event of Default shall have occurred and be
continuing, if and to the extent that the Agent shall so notify in
writing the Obligor pledging the Pledged Securities in question, only
the Agent shall be entitled to vote or consent or take any other action
with respect to the Pledged Securities (and any Obligor will, if so
requested, execute appropriate proxies therefor).
2.5. RIGHT TO REALIZE UPON CREDIT SECURITY. Except to the extent
prohibited by applicable law that cannot be waived, this Section 2.5 shall
govern the Lenders' and the Agent's rights to realize upon the Credit Security
if any Event of Default shall have occurred and be continuing. The provisions of
this Section 2.5 are in addition to any rights and remedies available at law or
in equity and in addition to the provisions of any other Credit Document. In the
case of a conflict between this Section 2.5 and any other Credit Document, this
Section 2.5 shall govern.
2.5.1. ASSEMBLY OF CREDIT SECURITY; RECEIVER. Each Obligor
shall, upon the Agent's request, assemble the Credit Security and
otherwise make it available to the Agent. The Agent may have a receiver
appointed for all or any portion of the Obligors' assets or business
which constitutes the Credit Security in order to manage, protect,
preserve, sell and otherwise dispose of all or any portion of the
Credit Security in accordance with the terms of the Credit Documents,
to continue the operations of the Obligors and to collect all revenues
and profits therefrom to be applied to the payment of the Credit
Obligations, including the compensation and expenses of such receiver.
2.5.2. GENERAL AUTHORITY. To the extent specified in written
notice from the Agent to the Obligor in question, each Obligor grants
the Agent full and exclusive power and authority, subject to the other
terms hereof and applicable law, to take any of the following actions
(for the sole benefit of the Agent on behalf of the Lenders and the
holders from time to time of any Credit Obligations, but at such
Obligor's expense):
(a) To ask for, demand, take, collect, xxx for and receive all
payments in respect of any Accounts, general intangibles, Pledged
Securities or leases which such Obligor could otherwise ask for,
demand, take, collect, xxx for and receive for its own use.
(b) To extend the time of payment of any Accounts, general
intangibles, Pledged Securities or leases and to make any allowance or
other adjustment with respect thereto.
-12-
15
(c) To settle, compromise, prosecute or defend any action or
proceeding with respect to any Accounts, general intangibles, Pledged
Securities or leases and to enforce all rights and remedies thereunder
which such Obligor could otherwise enforce.
(d) To enforce the payment of any Accounts, general
intangibles, Pledged Securities or leases, either in the name of such
Obligor or in its own name, and to endorse the name of such Obligor on
all checks, drafts, money orders and other instruments tendered to or
received in payment of any Credit Security.
(e) To notify the third party payor with respect to any
Accounts, general intangibles, Pledged Securities or leases of the
existence of the security interest created hereby and to cause all
payments in respect thereof thereafter to be made directly to the
Agent; PROVIDED, HOWEVER, that whether or not the Agent shall have so
notified such payor, such Obligor will at its expense render all
reasonable assistance to the Agent in collecting such items and in
enforcing claims thereon.
(f) To use, operate, sell, transfer, assign or otherwise deal
in or with any Credit Security or the proceeds thereof, as fully as
such Obligor otherwise could do.
2.5.3. MARSHALING, ETC. Neither the Agent nor the Lenders
shall be required to make any demand upon, or pursue or exhaust any of
their rights or remedies against, any Obligor or any other guarantor,
pledgor or any other Person with respect to the payment of the Credit
Obligations or to pursue or exhaust any of their rights or remedies
with respect to any collateral therefor or any direct or indirect
guarantee thereof. Neither the Agent nor the Lenders shall be required
to marshal the Credit Security or any guarantee of the Credit
Obligations or to resort to the Credit Security or any such guarantee
in any particular order, and all of its and their rights hereunder or
under any other Credit Document shall be cumulative. To the extent it
may lawfully do so, each Obligor absolutely and irrevocably waives and
relinquishes the benefit and advantage of, and covenants not to assert
against the Agent or the Lenders, any valuation, stay, appraisement,
extension, redemption or similar laws now or hereafter existing which,
but for this provision, might be applicable to the sale of any Credit
Security made under the judgment, order or decree of any court, or
privately under the power of sale conferred by this Agreement, or
otherwise. Without limiting the generality of the foregoing, each
Obligor (a) agrees that it will not invoke or utilize any law which
might prevent, cause a delay in or otherwise impede the enforcement of
the rights of the Agent or any Lender in the Credit Security, (b)
waives its rights under all such laws, and (c) agrees that it will not
invoke or raise as a defense to any enforcement by the Agent or any
Lender of any rights and remedies relating to the Credit Security or
the Credit Obligations any legal or contractual requirement with which
the Agent or any Lender may have in good faith
-13-
16
failed to comply. In addition, each Obligor waives any right to prior
notice (except to the extent expressly required by this Agreement) or
judicial hearing in connection with foreclosure on or disposition of
any Credit Security, including any such right which such Obligor would
otherwise have under the Constitution of the United States of America,
any state or territory thereof or any other jurisdiction.
2.5.4. SALES OF CREDIT SECURITY. All or any part of the Credit
Security may be sold for cash or other value in any number of lots at
public or private sale, without demand, advertisement or notice;
PROVIDED, HOWEVER, that unless the Credit Security to be sold threatens
to decline speedily in value or is of a type customarily sold on a
recognized market, the Agent shall give the Obligor granting the
security interest in such Credit Security 10 days' prior written notice
of the time and place of any public sale, or the time after which a
private sale may be made, which notice each of the Obligors and the
Agent agrees to be reasonable. At any sale or sales of Credit Security,
any Lender or any of its respective officers acting on its behalf, or
such Lender's assigns, may bid for and purchase all or any part of the
property and rights so sold, may use all or any portion of the Credit
Obligations owed to such Lender as payment for the property or rights
so purchased, and upon compliance with the terms of such sale may hold
and dispose of such property and rights without further accountability
to the respective Obligors, except for the proceeds of such sale or
sales pursuant to Section 2.5.6. The Obligors acknowledge that any such
sale will be made by the Agent on an "as is" basis with disclaimers of
all warranties, whether express or implied (including warranties with
respect to title, possession, quiet enjoyment and other similar
warranties). The respective Obligors will execute and deliver or cause
to be executed and delivered such instruments, documents, assignments,
waivers, certificates and affidavits, will supply or cause to be
supplied such further information and will take such further action, as
the Agent shall reasonably request in connection with any such sale.
2.5.5. SALE WITHOUT REGISTRATION. If, at any time when the
Agent shall determine to exercise its rights hereunder to sell all or
part of the securities included in the Credit Security, the securities
in question shall not be effectively registered under the Securities
Act (or other applicable law), the Agent may, in its sole discretion,
sell such securities by private or other sale not requiring such
registration in such manner and in such circumstances as the Agent may
deem necessary or advisable in order that such sale may be effected in
accordance with applicable securities laws without such registration
and the related delays, uncertainty and expense. Without limiting the
generality of the foregoing, in any event the Agent may, in its sole
discretion, (a) approach and negotiate with a single purchaser or one
or more possible purchasers to effect such sale, (b) restrict such sale
to one or more purchasers each of whom will represent and agree that
such purchaser is purchasing for its own account, for investment and
not with a view to the distribution or sale of such securities and (c)
cause to be placed on certificates representing the securities in
question a legend to the effect that such securities have not
-14-
17
been registered under the Securities Act (or other applicable law) and
may not be disposed of in violation of the provisions thereof. Each
Obligor agrees that such manner of disposition is commercially
reasonable, that it will upon the Agent's request give any such
purchaser access to such information regarding the issuer of the
securities in question as the Agent may reasonably request and that the
Agent and the Lenders shall not incur any responsibility for selling
all or part of the securities included in the Credit Security at any
private or other sale not requiring such registration, notwithstanding
the possibility that a substantially higher price might be realized if
the sale were deferred until after registration under the Securities
Act (or other applicable law) or until made in compliance with certain
other rules or exemptions from the registration provisions under the
Securities Act (or other applicable law). Each Obligor acknowledges
that no adequate remedy at law exists for breach by it of this Section
2.5.5 and that such breach would not be adequately compensable in
damages and therefore agrees that this Section 2.5.5 may be
specifically enforced.
2.5.6. APPLICATION OF PROCEEDS. The proceeds of all sales and
collections in respect of any Credit Security or other assets of any
Obligor, all funds collected from the Obligors and any cash contained
in the Credit Security, the application of which is not otherwise
specifically provided for herein, shall be applied as follows:
(a) First, to the payment of the costs and expenses of such
sales and collections, the reasonable expenses of the Agent and the
reasonable fees and expenses of its special counsel;
(b) Second, any surplus then remaining to the payment of the
Credit Obligations in such order and manner as the Agent may in its
reasonable discretion determine; PROVIDED, HOWEVER, that any such
payment shall be distributed to the Lenders in accordance with the
Credit Agreement and the other Credit Documents; and
(c) Third, any surplus then remaining shall be paid to the
Obligors, subject, however, to any rights of the holder of any then
existing Lien who has duly presented to the Agent an authenticated
demand for proceeds before the Agent's distribution of the proceeds is
completed.
2.6. CUSTODY OF CREDIT SECURITY. Except as provided by applicable law
that cannot be waived, the Agent will have no duty as to the custody and
protection of the Credit Security, the collection of any part thereof or of any
income thereon or the preservation or exercise of any rights pertaining thereto,
including rights against prior parties, except for the use of reasonable care in
the custody and physical preservation of any Credit Security in its possession.
The Lenders will not be liable or responsible for any loss or damage to any
Credit Security, or for any diminution in the value thereof, by reason of the
act or omission of any agent selected by the Agent acting in good faith.
-15-
18
3. GENERAL. ADDRESSES FOR NOTICES, CONSENT TO JURISDICTION, JURY TRIAL WAIVER,
DEFEASANCE AND NUMEROUS OTHER PROVISIONS APPLICABLE TO THIS AGREEMENT ARE
CONTAINED IN THE CREDIT AGREEMENT. THE INVALIDITY OR UNENFORCEABILITY OF ANY
PROVISION HEREOF SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER
PROVISION HEREOF, AND ANY INVALID OR UNENFORCEABLE PROVISION SHALL BE MODIFIED
SO AS TO BE ENFORCEABLE TO THE MAXIMUM EXTENT OF ITS VALIDITY OR ENFORCEABILITY.
THE HEADINGS IN THIS AGREEMENT ARE FOR CONVENIENCE OF REFERENCE ONLY AND SHALL
NOT LIMIT, ALTER OR OTHERWISE AFFECT THE MEANING HEREOF. THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING OF THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ALL PRIOR AND
CURRENT UNDERSTANDINGS AND AGREEMENTS, WHETHER WRITTEN OR ORAL. THIS AGREEMENT
IS A CREDIT DOCUMENT AND MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS, WHICH
TOGETHER SHALL CONSTITUTE ONE INSTRUMENT. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS (OTHER THAN THE CONFLICT OF LAWS
RULES) OF THE COMMONWEALTH OF MASSACHUSETTS, EXCEPT AS MAY BE REQUIRED BY THE
UCC OF OTHER JURISDICTIONS WITH RESPECT TO MATTERS INVOLVING THE PERFECTION OF
THE AGENT'S LIEN ON THE CREDIT SECURITY LOCATED IN SUCH OTHER JURISDICTIONS.
[the remainder of this page is intentionally blank]
-16-
19
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first written above.
PEDIATRIX MEDICAL GROUP, INC. (FL)
By /S/ Xxxx X. Xxxxxx
--------------------------------
Title: Chief Financial Officer
PEDIATRIX MEDICAL GROUP OF FLORIDA,
INC.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
PEDIATRIX MEDICAL GROUP, P.C. (WV)
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
-17-
20
PEDIATRIX MEDICAL GROUP, P.C. (VA)
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
PEDIATRIX MEDICAL GROUP, S.P. (PR)
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
PEDIATRIX MEDICAL GROUP, P.A. (NJ)
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
PEDIATRIX MEDICAL GROUP OF KANSAS,
P.A.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
PEDIATRIX MEDICAL GROUP
NEONATOLOGY AND PEDIATRIC INTENSIVE
CARE SPECIALISTS
OF NEW YORK, P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
-18-
21
PEDIATRIX MEDICAL GROUP OF
CALIFORNIA, P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
PEDIATRIX MEDICAL GROUP OF ILLINOIS,
P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
PEDIATRIX MEDICAL GROUP OF MICHIGAN,
P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
PEDIATRIX MEDICAL GROUP OF
PENNSYLVANIA, P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
PEDIATRIX MEDICAL GROUP OF TEXAS,
P.A.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
-19-
22
PEDIATRIX MEDICAL GROUP OF OHIO,
CORP.
By /s/ Xxxx X. Xxxxxx
-----------------------------
Title: Secretary
NEONATAL SPECIALISTS, LTD. (AZ)
By /s/ Xxxx X. Xxxxxx
-----------------------------
Title: Attorney-in-Fact
PEDIATRIX MEDICAL GROUP OF
COLORADO, P.C.
By /s/ Xxxx X. Xxxxxx
-----------------------------
Title: Attorney-in-Fact
ST. XXXXXX NEONATOLOGY
CONSULTANTS, P.A.
By /s/ Xxxx X. Xxxxxx
-----------------------------
Title: Attorney-in-Fact
PERNOLL MEDICAL GROUP OF NEVADA,
LTD.
D/B/A PEDIATRIX MEDICAL GROUP OF
NEVADA
By /s/ Xxxx X. Xxxxxx
-----------------------------
Title: Attorney-in-Fact
-20-
23
PEDIATRIX MEDICAL GROUP OF
SOUTH CAROLINA, P.A.
By /s/ Xxxx X. Xxxxxx
---------------------------
Title: Treasurer
FLORIDA REGIONAL NEONATAL
ASSOCIATES, P.A.
By /s/ Xxxx X. Xxxxxx
---------------------------
Title: Treasurer
PEDIATRIX MEDICAL GROUP, INC.
(Utah)
By /s/ Xxxx X. Xxxxxx
---------------------------
Title: Treasurer
PEDIATRIX MEDICAL GROUP OF NEW
MEXICO, P.C.
By /s/ Xxxx X. Xxxxxx
---------------------------
Title: Treasurer
PEDIATRIX MEDICAL GROUP OF
WASHINGTON, INC., P.C.
By /s/ Xxxx X. Xxxxxx
---------------------------
Title: Treasurer
-21-
24
PEDIATRIX MEDICAL GROUP OF
INDIANA, P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
FORT WORTH NEONATAL ASSOCIATES, P.A.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
PMG ACQUISITION CORP.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
PEDIATRIX MEDICAL GROUP OF
PUERTO RICO, P.S.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
OBSTETRIX MEDICAL GROUP, INC.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
OBSTETRIX MEDICAL GROUP
OF FLORIDA, INC.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
-22-
25
M. XXXXXXX XXXXXXXXXX, M.D.,
A PROFESSIONAL CORPORATION
D/B/A OBSTETRIX MEDICAL GROUP
OF CALIFORNIA, A PROFESSIONAL
CORPORATION
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
XXXXXX X. XXXXXXX, M.D. PROF. CORP.
D/B/A OBSTETRIX MEDICAL GROUP
OF NEVADA, LTD.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
OBSTETRIX MEDICAL GROUP OF ARIZONA,
P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
OBSTETRIX MEDICAL GROUP
OF COLORADO, P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
OBSTETRIX MEDICAL GROUP
OF KANSAS AND MISSOURI, P.A.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
-23-
26
OBSTETRIX MEDICAL GROUP
OF PENNSYLVANIA, P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
OBSTETRIX MEDICAL GROUP
OF PHOENIX, P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
OBSTETRIX MEDICAL GROUP OF TEXAS,
P.A.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
OBSTETRIX MEDICAL GROUP
OF WASHINGTON, INC., P.S.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
PALM BEACH NEO ACQUISITIONS, INC.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
-24-
27
PEDIATRIX MEDICAL GROUP
OF ARKANSAS, P.A.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
PEDIATRIX MEDICAL GROUP OF GEORGIA,
P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Secretary
PEDIATRIX MEDICAL GROUP OF MISSOURI,
P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
PEDIATRIX MEDICAL GROUP
OF OKLAHOMA, P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
PEDIATRIX MEDICAL GROUP
OF TENNESSEE, P.C.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Treasurer
-25-
28
PEDIATRIX OF MARYLAND, P.A.
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Attorney-in-Fact
FLEET NATIONAL BANK, as Agent
By /s/ Xxxxx Xxxxx Castle
--------------------------------
Xxxxx Xxxxx Castle
Director
Fleet National Bank
000 Xxxxxxx Xxxxxx
Mail Stop: MADE 10008E
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
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