EXHIBIT 10.23
PLEDGE AND SECURITY AGREEMENT
(ACCOUNTS, CHATTEL PAPER, EQUIPMENT,
STOCKS AND OTHER SECURITIES, INSTRUMENTS,
GENERAL INTANGIBLES, AND OTHER PROPERTY)
BETWEEN
STAT HEALTHCARE, INC.,
AS DEBTOR
AND
SOUTHWEST BANK OF TEXAS, N.A.,
AS SECURED PARTY
AUGUST 29, 1996
PLEDGE AND SECURITY AGREEMENT
ACCOUNTS, CHATTEL PAPER, EQUIPMENT,
STOCKS AND OTHER SECURITIES, INSTRUMENTS,
GENERAL INTANGIBLES, AND OTHER PROPERTY
THIS PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT") is made as of
August 29, 1996, between STAT HEALTHCARE, INC., a Delaware corporation with
principal offices at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
("DEBTOR") and SOUTHWEST BANK OF TEXAS, N.A., a national banking association
with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, as Agent ("SECURED PARTY")
for itself and the Lenders (hereinafter defined) parties to the Credit Agreement
referred to below.
RECITALS
A. On even date herewith, Debtor, Secured Party, and The Boatmen's
National Bank of St. Louis (together with Secured Party, the "LENDERS") are
executing a Credit Agreement (such agreement, as may from time to time be
amended or supplemented, being hereinafter called the "CREDIT AGREEMENT")
pursuant to which, upon the terms and conditions stated therein, the Lenders
agree to make loans to Debtor.
B. The Lenders have conditioned their obligations under the Credit
Agreement upon the execution and delivery by Debtor of this Agreement, and
Debtor has agreed to enter into this Agreement.
C. Therefore, in order to comply with the terms and conditions of the
Credit Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Debtor hereby agrees with Secured
Party as follows:
ARTICLE 1
SECURITY INTEREST
Section 1.01 GRANT OF SECURITY INTEREST. Debtor hereby assigns and
grants to Secured Party, as Agent for the Lenders, a security interest in and
right of set-off against the assets referred to in Section 1.02 (the
"COLLATERAL") to secure the prompt payment and performance of the "OBLIGATIONS"
(as defined in Section 2.02) and the performance by Debtor of this
Agreement.
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PLEDGE AND SECURITY AGREEMENT
August 29, 1996
Section 1.02 COLLATERAL. The Collateral consists of the following types
or items of property (including property hereafter acquired by Debtor as well as
property which Debtor now owns or in which Debtor has rights):
(a) All of Debtor's accounts, chattel paper, equipment,
documents, instruments, and general intangibles including, without
limitation, accounts arising from governmental or private healthcare
insurance for healthcare services rendered.
(b) The following securities: all capital stock now or hereafter
owned by the Debtor in its Subsidiaries, together with stock
certificates and irrevocable stock powers in the Subsidiaries, including
but not limited to: Old STAT, Inc., STAT Dialysis Corporation, and STAT
Management Corporation (the "PLEDGED SECURITIES").
(c) (i) The certificates or instruments, if any, representing the
securities described in item (b) above, (ii) all dividends (cash, stock,
or otherwise), cash, instruments, rights to subscribe, purchase, or
sell, and all other rights and property from time to time received,
receivable, or otherwise distributed in respect of or in exchange for
any or all of such securities, (iii) any related or additional property
from time to time delivered to or deposited with Secured Party by or for
the account of Debtor; (iv) all property used or usable in connection
with any property referred to in this Section 1.02; (v) all proceeds,
replacements, additions to, and substitutions for any of the property
referred to in this Section 1.02 and claims against third parties; and
(vi) all books and records related to any of the property referred to in
this Section 1.02, including, without limitation, any and all books of
account, customer lists, payor lists, and other records relating in any
way to the accounts, chattel paper, or instruments referred to in this
Section 1.02.
(d) All general intangibles related to any property referred to
in this Section 1.02, including, without limitation, all (i) letters of
credit, bonds, guaranties, purchase or sales agreements, and other
contractual rights (including but not limited to the Designated
Contracts), rights to performance, and claims for damages, refunds
(including tax refunds), or other monies due or to become due; (ii)
orders, franchises, permits, certificates, licenses, consents,
exemptions, variances, authorizations, or other approvals by any
governmental agency or court; (iii) business records, computer tapes,
and computer software; (iv) goodwill; and (v) other intangible personal
property, whether similar or dissimilar to the property referred to in
this Section 1.02.
It is expressly contemplated that additional property may from time to time be
pledged, assigned, or granted to Secured Party as additional security for the
Obligations, and the term "COLLATERAL" as used herein shall be deemed for all
purposes hereof to include all such additional property, together with all other
property of the types described above related thereto.
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PLEDGE AND SECURITY AGREEMENT
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Section 1.03 TRANSFER OF COLLATERAL. All certificates or instruments
representing or evidencing the Pledged Securities shall be delivered to and held
pursuant hereto by Secured Party and shall be indorsed to Secured Party or
indorsed in blank by an effective indorsement, all in form, manner, and
substance satisfactory to Secured Party. Notwithstanding the preceding sentence,
at Secured Party's discretion, all Pledged Securities must be delivered or
transferred in such manner as to permit Secured Party to be a "protected
purchaser" to the extent of its security interest as provided in Section 8.303
of the Code and to have "control" of such Pledged Securities as provided in
Section 8.106 of the Code. Secured Party shall have the right, at any time in
its discretion and without notice to Debtor, to transfer to or to register in
the name of Secured Party or any of its nominees any or all of the Pledged
Securities. In addition, Secured Party shall have the right at any time to
exchange certificates or instruments representing or evidencing Pledged
Securities for certificates or instruments of smaller or larger denominations.
Debtor shall execute and deliver to Secured Party, simultaneously with Debtor's
delivery of this Agreement, a financing statement describing the Collateral, in
form and substance satisfactory to Secured Party, to be filed in the Office of
the Secretary of State of the State of Texas.
Section 1.04 LOCATION OF COLLATERAL. The Collateral is located or
(except as set forth in Section 1.03 or as otherwise permitted by Section 4.01)
shall be located only in the places specified in SCHEDULE 1.04 (provided that
the Collateral shall be subject to the security interest created by this
Agreement irrespective of whether or not the Collateral is located in the such
places).
ARTICLE 2
DEFINITIONS
Section 2.01 TERMS DEFINED ABOVE OR IN THE CREDIT AGREEMENT. As used in
this Agreement, the terms defined above shall have the meanings respectively
assigned to them. Other capitalized terms which are defined in the Credit
Agreement but which are not defined herein shall
have the same meanings as defined in the Credit Agreement.
Section 2.02 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:
"ACCOUNTS" means all accounts, chattel paper, and instruments (as
such terms are defined in the Code) at any time included in the
Collateral.
"ACCOUNT DEBTOR" means any Person liable (whether directly or
indirectly, primarily or secondarily) for the payment or performance of
any obligations included in the Collateral, whether as an account debtor
(as defined in the Code), obligor on an
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PLEDGE AND SECURITY AGREEMENT
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instrument, issuer of documents or securities, guarantor, or otherwise,
including, without limitation, governmental and private healthcare
insurance providers.
"AGREEMENT" means this Security Agreement, as the same may from
time to time be amended or supplemented.
"CODE" means the Uniform Commercial Code as presently in effect
in the State of Texas, Business and Commerce Code, Chapters 1 through 9.
Unless otherwise indicated by the context herein, all uncapitalized
terms herein which are defined in the Code shall have their respective
meanings as used in Chapter 9 of the Code.
"EVENT OF DEFAULT" means any event specified in Section 6.01.
"OBLIGATIONS" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and indebtedness of Debtor
to Secured Party, and any and all renewals, extensions for any period,
rearrangements or enlargements thereof, whether evidenced by any note or
other instrument or agreement, whether arising by an extension of
credit, letter of credit, overdraft, endorsement, loan, guaranty,
indemnification, or otherwise, whether direct or indirect, including,
without limitation, any of the foregoing acquired by assignment or
participation, absolute or contingent, due or to become due, including,
without limitation, Revolving Credit Loans under the Revolving Credit
Notes issued by Debtor in favor of each of the Lenders, dated August 29,
1996, each in the original principal amount of $1,500,000.00 and Term
Loans under the Term Notes issued by Debtor in favor of each of the
Lenders, dated August 29, 1996, each in the original principal amount of
$1,750,000.00. The Obligations shall also include all interest, charges,
expenses, attorneys' or other fees, and any other sums payable to or
incurred by Secured Party in connection with the execution,
administration, or enforcement of Secured Party's rights and remedies
hereunder or any other agreement with Debtor.
"OBLIGOR" means any Person, other than Debtor, liable (whether
directly or indirectly, primarily or secondarily) for the payment or
performance of any of the Obligations whether as maker, co-maker,
endorser, guarantor, accommodation party, general partner, or otherwise.
"PLEDGED SECURITIES" means all of the securities and other
property (whether or not the same constitutes a "security" under the
Code) referred to in Sections 1.02(b), (c)(i), and (c)(ii) and all
additional securities (as that term is defined in the Code), if any,
constituting Collateral under this Agreement.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
In order to induce Secured Party to accept this Agreement, Debtor
represents and warrants to Secured Party (which representations and warranties
will survive the creation and payment of
the Obligations) that:
Section 3.01 OWNERSHIP OF COLLATERAL; ENCUMBRANCES. Debtor is the legal
and beneficial owner of the Collateral free and clear of any adverse claim,
lien, security interest, option or other charge or encumbrance except for the
security interest created by this Agreement, and Debtor has full right, power,
and authority to assign and grant a security interest in the Collateral to
Secured Party. This Agreement constitutes a legal, valid, and binding obligation
of Debtor enforceable against Debtor in accordance with its terms (except as
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application relating to or affecting creditors' rights and general
principles of equity (whether considered in a proceeding in equity or at law)).
The execution, delivery and performance of this Agreement will not violate the
terms of any contract, agreement, law, regulation, order, injunction, judgment,
decree, or writ to which Debtor is subject and does not require the consent or
approval of any other Person.
Section 3.02 NO REQUIRED CONSENT. No authorization, consent, approval,
or other action by, and no notice to or filing with, any governmental authority
or regulatory body (other than the filing of financing statements) is required
for (i) the due execution, delivery, and performance by Debtor of this
Agreement, (ii) the grant by Debtor of the security interest granted by this
Agreement, (iii) the perfection of such security interest or (iv) the exercise
by Secured Party of its rights and remedies under this Agreement.
Section 3.03 FIRST PRIORITY SECURITY INTEREST. The grant of the security
interest in the Collateral pursuant to this Agreement creates a valid and
perfected first priority security interest in the Collateral, enforceable
against Debtor and all third parties (except as limited by bankruptcy,
insolvency, reorganization, moratorium, or similar laws of general application
relating to or affecting creditors' rights and general principles of equity
(whether considered in a proceeding in equity or at law)) and securing payment
of the Obligations. None of the Pledged Securities are subject to any
restrictions to transfer imposed by the issuer thereof.
Section 3.04 NO FILINGS BY THIRD PARTIES. No financing statement or
other public notice or recording covering the Collateral is on file in any
public office (other than any financing statement or other public notice or
recording naming Secured Party as the secured party therein), and Debtor will
not execute any such financing statement or other public notice or recording so
long as any of the Obligations are outstanding.
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PLEDGE AND SECURITY AGREEMENT
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Section 3.05 PLEDGED SECURITIES. The Pledged Securities have been duly
authorized and validly issued, and are fully paid and non-assessable. The
Pledged Securities constitute one hundred percent (100%) of the issued and
outstanding shares of capital stock of the issuer
thereof.
Section 3.06 NO NAME CHANGES. Debtor has not, during the preceding five
(5) years, entered into any contract, agreement, security instrument, or other
document using a name other than, or been known by or otherwise used any name
other than "New STAT, Inc." or the name
used by Debtor herein.
Section 3.07 LOCATION OF DEBTOR AND COLLATERAL. Debtor's chief executive
office and Debtor's records concerning the Collateral are located at the address
or location set forth in the opening paragraph hereof. The Collateral (other
than the Pledged Securities) is located a Debtor's address set forth in the
opening paragraph hereof or at the location(s), if any, specified in SCHEDULE
1.04. Any Collateral not at such location(s) nevertheless remains subject to
Secured Party's security interest.
Section 3.08 COLLATERAL. All statements or other information provided by
Debtor to Secured Party describing or with respect to the Collateral is or (in
the case of subsequently furnished information) will be when provided correct
and complete in all material respects. The delivery at any time by Debtor to
Secured Party of additional Collateral or of additional descriptions of
Collateral shall constitute a representation and warranty by Debtor to Secured
Party hereunder that the representations and warranties of this Article 3 are
correct insofar as they would pertain to such Collateral or the descriptions
thereof.
Section 3.09 ACCOUNTS.
(a) Each Account represents the genuine, valid, and legally enforceable
indebtedness of an Account Debtor (except as limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws of general application relating to
or affecting creditors' rights and general principles of equity (whether
considered in a proceeding in equity or at law)) arising from the sale, lease or
rendition by Debtor of services and is not and will not be subject to contra
accounts, set-offs, defenses, counterclaims, allowances or adjustments (other
than discounts for prompt payment shown on the invoice), or objections or
complaints by the Account Debtor concerning its liability on the Account.
(b) The amount shown as to each Account on Debtor's books is or will be
the true and undisputed amount owing and unpaid thereon. Each Account arose or
shall have arisen in the ordinary course of Debtor's business; PROVIDED,
HOWEVER, that any Accounts which arose or hereafter arise outside the ordinary
course of Debtor's business shall nevertheless be included as part of the
Collateral. Debtor has no knowledge of any bankruptcy, insolvency, or other
action affecting creditors' rights with respect to any Account Debtor.
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PLEDGE AND SECURITY AGREEMENT
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(c) Each invoice or agreement evidencing the Accounts is or will be due
and payable not more than one hundred twenty (120) days from the date thereof;
PROVIDED, HOWEVER, that any Accounts not so due and payable shall nevertheless
be included as part of the Collateral.
Section 3.10 DELIVERY OF LETTERS OF CREDIT. With respect to Collateral
covered by one or more certificates of title or other documents evidencing
ownership or possession thereof, and with respect to any Accounts or other
Collateral supported by letters of credit, each of such certificates, documents,
or letters of credit has been delivered to Secured Party (provided that all
letters of credit referred to in Section 1.02 shall be subject to the security
interest created by this Agreement irrespective of whether or not such delivery
shall have been made).
ARTICLE 4
COVENANTS AND AGREEMENTS
Debtor will at all times comply with the covenants and agreements
contained in this Article 4, from the date hereof and for so long as any part of
the Obligations are outstanding.
Section 4.01 CHANGE IN LOCATION OF DEBTOR. Except as to Pledged
Securities that are in the Possess of the Secured Party, Debtor will notify
Secured Party on or before the date of any change in location of the Collateral
to a location other than that specified in SCHEDULE
1.04.
Debtor will give Secured Party thirty (30) days' prior written notice of (i) the
opening or closing of any place of Debtor's business or (ii) any change in the
location of Debtor's chief executive
office or address.
Section 4.02 CHANGE IN DEBTOR'S NAME OR CORPORATE STRUCTURE. Debtor will
not change its name, identity or corporate structure (including, without
limitation, any merger, consolidation, or sale of substantially all of its
assets) without notifying Secured Party of such change in writing at least
thirty (30) days prior to the effective date of such change. Without the express
written consent of Secured Party, however, Debtor will not engage in any other
business or transaction under any name other than Debtor's name hereunder.
Section 4.03 DELIVERY OF LETTERS OF CREDIT AND INSTRUMENTS. Debtor will
deliver each letter of credit, if any, included in the Collateral to Secured
Party, in each case forthwith upon receipt by or for the account of Debtor. If
any Account becomes evidenced by a promissory note, trade acceptance, or any
other instrument for the payment of money (other than checks or drafts in
payment of Accounts collected by Debtor in the ordinary course of business prior
to notification by Secured Party under Section 6.02(h)), Debtor will immediately
deliver such instrument to Secured Party appropriately endorsed and, regardless
of the form of presentment, demand, notice
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PLEDGE AND SECURITY AGREEMENT
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of dishonor, protest, and notice of protest with respect thereto, Debtor will
remain liable thereon until such instrument is paid in full.
Section 4.04 SALE, DISPOSITION OR ENCUMBRANCE OF COLLATERAL. Debtor will
not in any way encumber any of the Collateral (or permit or suffer any of the
Collateral to be encumbered) or sell, assign, lend, or otherwise dispose of or
transfer any of the Collateral to or in favor of any Person other than Secured
Party.
Section 4.05 DIVIDENDS OR DISTRIBUTIONS. So long as no Event of Default
shall have occurred and be continuing, Debtor shall be entitled to receive and
retain any and all dividends and interest paid in respect of the Collateral;
PROVIDED, HOWEVER, that any and all
(a) dividends and interest paid or payable other than in cash in
respect of, and instruments and other property received, receivable, or
otherwise distributed in respect of, or in exchange for (including,
without limitation, any certificate or share purchased or exchanged in
connection with a tender offer or merger agreement), any Collateral,
(b) dividends and other distributions paid or payable in cash in
respect of any Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital,
capital surplus, or paid-in surplus, or reclassification, and
(c) cash paid, payable, or otherwise distributed in respect of
principal of, or in redemption of, or in exchange for, any Collateral,
shall be, and shall be forthwith delivered to Secured Party to hold as,
Collateral and shall, if received by Debtor, be received in trust for the
benefit of Secured Party, be segregated from the other property or funds of
Debtor, and be forthwith delivered to Secured Party as Collateral in the same
form as so received (with any necessary indorsement).
Section 4.06 PROCEEDS OF COLLATERAL. Except as permitted by Section
4.10, Debtor will deliver to Secured Party promptly upon receipt all proceeds
delivered to Debtor from the sale or disposition of any Collateral. If chattel
paper, documents, or instruments are received as proceeds, which are required to
be delivered to Secured Party, they will be, immediately upon receipt, properly
endorsed or assigned and delivered to Secured Party as Collateral. This Section
4.06 shall not be construed to permit sales or dispositions of Collateral except
as may be elsewhere expressly permitted by this Agreement.
Section 4.07 RECORDS AND INFORMATION. Debtor shall keep accurate and
complete records of the Collateral (including proceeds). These records shall
reflect all facts concerning each Account. Secured Party may upon reasonable
prior notice have access to, examine, audit, make extracts from, and inspect
without hindrance or delay Debtor's records, files, and the Collateral
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during normal business hours. Debtor will promptly provide written notice to
Secured Party of all information known to Debtor which in any way relates to or
affects the filing of any financing statement or other public notices or
recordings, or the delivery and possession of items of Collateral for the
purpose of perfecting a security interest in the Collateral. Debtor will also
promptly furnish such information as Secured Party may from time to time
reasonably request regarding (i) the business, affairs, or financial condition
of Debtor or (ii) the Collateral or Secured Party's rights or remedies with
respect thereto.
Section 4.08 REIMBURSEMENT OF EXPENSES. Debtor will pay to Secured Party
all reasonable advances, charges, costs, and expenses (including, without
limitation, all costs and expenses of retaking, holding, preparing for sale and
selling, collecting, or otherwise realizing upon the Collateral if an Event of
Default occurs and all attorneys' fees, legal expenses and court costs) incurred
by Secured Party in connection with the exercise of Secured Party's rights and
remedies hereunder. Debtor hereby assumes all liability for the Collateral, the
security interests created hereunder and any use, possession, maintenance,
management, enforcement, or collection of any or all of the Collateral. Debtor
agrees to indemnify and hold Secured Party harmless from and against and
covenants to defend Secured Party against any and all losses, damages, claims,
costs, penalties, liabilities, and expenses, including, without limitation,
court costs and attorneys' fees, incurred because of, incident to, or with
respect to the Collateral (including, without limitation, any use, possession,
maintenance, or management thereof), but excluding any losses, damages, claims,
costs, penalties, liabilities, or expenses arising solely by reason of the gross
negligence or willful misconduct of the Secured Party or the Lenders. All
amounts for which Debtor is liable pursuant to this Section 4.08 shall be due
and payable by Debtor to Secured Party upon demand. If Debtor fails to make such
payment upon demand (or if demand is not made due to an injunction or stay
arising from bankruptcy or other proceedings) and Secured Party pays such
amount, the same shall be due and payable by Debtor to Secured Party, plus
interest thereon from the date of Secured Party's demand (or from the date of
Secured Party's payment if demand is not made due to such proceedings) at the
Default Rate.
Section 4.09 FURTHER ASSURANCES. Upon the request of Secured Party,
Debtor shall (at Debtor's expense) execute and deliver all such assignments,
certificates, financing statements, or other documents and give further
assurances and do all other acts and things as Secured Party may reasonably
request to perfect Secured Party's interest in the Collateral or to protect,
enforce, or otherwise effect Secured Party's rights and remedies hereunder.
Section 4.10 ACCOUNTS.
(a) Prior to notification by Secured Party under Section 6.02(g), Debtor
will collect the Accounts in the ordinary course of its business and may retain
the proceeds of such collections
(subject to Section 4.03).
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(b) Debtor will not modify, extend, or substitute any contract, the
terms of which shall at any time have given rise to an Account, except in the
ordinary course of business or with the prior written consent of Secured Party.
Debtor will not re-date any invoice or sale or make sales with an extended
payment date beyond that customary in the industry, and in no event longer than
120 days. Debtor shall not adjust, settle, discount, or compromise any of the
Accounts, except in the ordinary course of business or with the prior written
consent of Secured Party.
(c) Debtor will duly perform or cause to be performed all of Debtor's
obligations with respect to the Accounts and the underlying transactions giving
rise to the Accounts
Section 4.11 STOCK POWERS. Debtor shall furnish to Secured Party such
stock powers and other instruments as may reasonably be required by Secured
Party to assure the transferability of the Collateral when and as often as may
reasonably be requested by Secured Party.
Section 4.12 RIGHTS TO SELL. If Secured Party shall determine to
exercise its rights to sell all or any of the Collateral pursuant to its rights
hereunder, Debtor agrees that, upon request of Secured Party, Debtor will, at
its own expense:
(a) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by
Secured Party;
(b) use its best efforts to cause each such issuer to make
available to its security holders, as soon as practicable, an earnings
statement which will satisfy the provisions of Section 11(a) of the
Securities Act; and
(c) use its best efforts to do or cause to be done all such
others acts and things as may be necessary to make such sale of the
Collateral or any part thereof valid and
binding and in compliance with applicable law.
Debtor further acknowledges the impossibility of ascertaining the amount of
damages which would be suffered by Secured Party and the Lenders by reason of
the failure by Debtor to perform any of the covenants contained in this Section
4.12 and consequently agrees that if Debtor shall fail to perform any of such
covenants, it shall pay, as liquidated damages, and not as penalty, an amount
equal to the value of the Collateral on the date the Secured Party shall demand
compliance with this Section 4.12.
Section 4.13 VOTING AND OTHER CONSENSUAL RIGHTS. Except to the extent
otherwise provided in subsection 6.06(d), Debtor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the Collateral or
any part thereof for any purpose not inconsistent with the terms of this
Agreement; PROVIDED, HOWEVER, that Debtor shall not exercise or refrain
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August 29, 1996
from exercising any such right if such action would have a material adverse
effect on the value of the Collateral or any part thereof; PROVIDED FURTHER that
upon request of Secured Party at any time or from time to time, Debtor shall
give Secured Party prompt written notice of the manner in which Debtor has
exercised, or the reasons for refraining from exercising, any such right.
Section 4.14 PLEDGED SECURITIES PERCENTAGE. The Pledged Securities will
at all times constitute one hundred (100) percent of the issued and outstanding
shares of capital stock of the issuer thereof.
ARTICLE 5
RIGHTS, DUTIES, AND POWERS OF SECURED PARTY
The following rights, duties, and powers of Secured Party are applicable
irrespective of whether an Event of Default occurs and is continuing (except as
such rights, duties, and powers
may otherwise be limited as specifically set forth below):
Section 5.01 DISCHARGE ENCUMBRANCES. Secured Party may, at its option,
discharge any taxes, liens, security interests, or other encumbrances at any
time levied or placed on the Collateral, may pay for insurance on the Collateral
and may pay for the maintenance and preservation of the Collateral. Debtor
agrees to reimburse Secured Party upon demand for any payment so made, plus
interest thereon from the date of Secured Party's demand at the Highest Lawful
Rate.
Section 5.02 TRANSFER OF COLLATERAL. Secured Party may transfer any or
all of the Obligations, and upon any such transfer Secured Party may transfer
its interest in any or all of the Collateral and shall be fully discharged
thereafter from all liability therefor. Any transferee of the Collateral shall
be vested with all rights, powers, and remedies of Secured Party hereunder.
Section 5.03 CUMULATIVE AND OTHER RIGHTS. The rights, powers, and
remedies of Secured Party hereunder are in addition to all rights, powers and
remedies given by law or in equity.
The
exercise by Secured Party of any one or more of the rights, powers, and remedies
herein shall not be construed as a waiver of any other rights, powers, and
remedies, including, without limitation, any other rights of set-off. If any of
the Obligations are given in renewal, extension for any period, or
rearrangement, or applied toward the payment of debt secured by any lien,
Secured Party shall be, and is hereby, subrogated to all the rights, titles,
interests, and liens securing the debt so renewed, extended, rearranged, or
paid.
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Section 5.04 DISCLAIMER OF CERTAIN DUTIES.
(a) The powers conferred upon Secured Party by this Agreement are to
protect its interest in the Collateral and shall not impose any duty upon
Secured Party to exercise any such powers. Debtor hereby agrees that Secured
Party shall not be liable for, nor shall the indebtedness evidenced by the
Obligations be diminished by, Secured Party's delay or failure to collect upon,
foreclose, sell, take possession of, or otherwise obtain value for the
Collateral.
(b) Secured Party shall be under no duty whatsoever to make or give any
presentment, notice of dishonor, protest, demand for performance, notice of
non-performance, notice of intent to accelerate, notice of acceleration, or
other notice or demand in connection with any Collateral or the Obligations, or
to take any steps necessary to preserve any rights against any Obligor, Account
Debtor or other Person. Debtor waives any right of marshaling in respect of any
and all Collateral, and waives any right to require Secured Party to proceed
against any Obligor, Account Debtor, or other Person, exhaust any Collateral, or
enforce any other remedy which Secured Party now has or may hereafter have
against any Obligor or other Person.
Section 5.05 MODIFICATION OF OBLIGATIONS; OTHER SECURITY. Debtor waives
(i) any and all notice of acceptance, creation, modification, rearrangement,
renewal, or extension for any period of any instrument executed by any Obligor
in connection with the Obligations and (ii) any defense of any Obligor by reason
of disability, lack of authorization, cessation of the liability of any Obligor,
or for any other reason. Debtor authorizes Secured Party, without notice or
demand and without any reservation of rights against Debtor and without
affecting Debtor's liability hereunder or on the Obligations, from time to time
to (x) take and hold other property, other than the Collateral, as security for
the Obligations, and exchange, enforce, waive, and release any or all of the
Collateral, (y) during the occurrence and continuance of an Event of Default
only, apply the Collateral in the manner permitted by this Agreement, and (z)
during the occurrence and continuance of an Event of Default only, renew, extend
for any period, accelerate, amend or modify, supplement, enforce, compromise,
settle, waive, or release the obligations of any Obligor or any instrument or
agreement of such other Person with respect to any or all of the Obligations or
Collateral.
Section 5.06 CUSTODY AND PRESERVATION OF THE COLLATERAL. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which comparable secured parties accord
comparable collateral, it being understood and agreed, however, that none of
Secured Party nor any Lender shall have responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities,
tenders, or other matters relative to any Collateral, whether or not Secured
Party has or is deemed to have knowledge of such matters, or (ii) taking any
necessary steps to preserve rights against Persons or entities with respect to
any Collateral.
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PLEDGE AND SECURITY AGREEMENT
August 29, 1996
ARTICLE 6
EVENTS OF DEFAULT
Section 6.01 EVENTS. It shall constitute an Event of Default under this
Agreement if an Event of Default occurs and is continuing under the Credit
Agreement.
Section 6.02 REMEDIES. Upon the occurrence and during the continuance of
any Event of Default, Secured Party may take any or all of the following actions
without notice (except where expressly required below or in the Credit
Agreement) or demand to Debtor:
(a) Declare all or part of the indebtedness pursuant to the
Obligations immediately due and payable and enforce payment of the same
by Debtor or any Obligor.
(b) Take possession of the Collateral, or at Secured Party's
request Debtor shall, at Debtor's cost, assemble the Collateral and make
it available at a location to be specified by Secured Party which is
reasonably convenient to Debtor and Secured Party. Secured Party may, at
its option, render any equipment unusable that may be included in the
Collateral, or, at Secured Party's request, Debtor will render it
unusable. In any event, Debtor shall bear the risk of accidental loss or
damage to or diminution in value of the Collateral, and neither Secured
Party nor any Lender will have any liability whatsoever for failure to
obtain or maintain insurance, nor to determine whether any insurance
ever in force is adequate as to amount or as to risk insured.
(c) Sell, in one or more sales and in one or more parcels, or
otherwise dispose of any or all of the Collateral in any commercially
reasonable manner as Secured Party may elect, in a public or private
transaction, at any location as deemed reasonable by Secured Party
either for cash or credit or for future delivery at such price as
Secured Party may deem fair, and (unless prohibited by the Code, as
adopted in any applicable jurisdiction) Secured Party may be the
purchaser of any or all Collateral so sold and may apply upon the
purchase price therefor any Obligations secured hereby. Any such sale or
transfer by Secured Party either to itself or to any other Person shall
be absolutely free from any claim of right by Debtor, including any
equity or right of redemption, stay, or appraisal which Debtor has or
may have under any rule of law, regulation, or statute now existing or
hereafter adopted. Upon any such sale or transfer, Secured Party shall
have the right to deliver, assign, and transfer to the purchaser or
transferee thereof the Collateral so sold or transferred. It shall not
be necessary that the Collateral or any part thereof be present at the
location of any such sale or transfer. Secured Party may, at its
discretion, provide for a public sale, and any such public sale shall be
held at such time or times within ordinary business hours and at such
place or places as Secured Party may fix in the notice of such sale.
Secured Party shall not be obligated to make any sale pursuant
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PLEDGE AND SECURITY AGREEMENT
August 29, 1996
to any such notice. Secured Party may, without notice or publication,
adjourn any public or private sale by announcement at any time and place
fixed for such sale, and such sale may be made at any time or place to
which the same may be so adjourned. In the event any sale or transfer
hereunder is not completed or is defective in the opinion of Secured
Party, such sale or transfer shall not exhaust the rights of Secured
Party hereunder, and Secured Party shall have the right to cause one or
more subsequent sales or transfers to be made hereunder. In the event
that any of the Collateral is sold or transferred on credit, or to be
held by Secured Party for future delivery to a purchaser or transferee,
the Collateral so sold or transferred may be retained by Secured Party
until the purchase price or other consideration is paid by the purchaser
or transferee thereof, but in the event that such purchaser or
transferee fails to pay for the Collateral so sold or transferred or to
take delivery thereof, Secured Party shall incur no liability in
connection therewith. If only part of the Collateral is sold or
transferred such that the Obligations remain outstanding (in whole or in
part), Secured Party's rights and remedies hereunder shall not be
exhausted, waived or modified, and Secured Party is specifically
empowered to make one or more successive sales or transfers until all
the Collateral shall be sold or transferred and all the Obligations are
paid.
(d) Take possession of all books and records of Debtor pertaining
to the Collateral. Secured Party shall have the authority to enter upon
any real property or improvements thereon in order to obtain any such
books or records, or any Collateral located thereon, and remove the same
therefrom without liability.
(e) Apply proceeds of the disposition of the Collateral to the
Obligations in any manner elected by Secured Party and permitted by the
Code or otherwise permitted by law or in equity. Such application may
include, without limitation, the reasonable expenses of retaking,
holding, preparing for sale or other disposition, and the reasonable
attorneys' fees and legal expenses incurred by Secured Party.
(f) Appoint any Person as agent to perform any act or acts
necessary or incident to any sale or transfer by Secured Party of the
Collateral.
(g) Receive, change the address for delivery, open and dispose of
mail addressed to Debtor, and to execute, assign, and endorse negotiable
and other instruments for the payment of money, documents of title, or
other evidences of payment, shipment, or storage for any form of
Collateral on behalf of and in the name of Debtor.
(h) Notify or require Debtor to notify Account Debtors that the
Accounts have been assigned to Secured Party and direct such Account
Debtors to make payments on the Accounts directly to Secured Party and
take all other action as may be necessary to effectuate such assignment.
To the extent Secured Party does not so elect, Debtor shall
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PLEDGE AND SECURITY AGREEMENT
August 29, 1996
continue to collect the Accounts. Secured Party or its designee shall
also have the right, in its own name or in the name of Debtor, to do any
of the following: (i) to demand, collect, receipt for, settle,
compromise any amounts due, give acquittances for, prosecute or defend
any action which may be in relation to any monies due or to become due
by virtue of, the Accounts; (ii) to sell, transfer, assign or otherwise
deal in the Accounts or the proceeds thereof, as fully and effectively
as if Secured Party were the absolute owner thereof; (iii) to extend the
time of payment of any of the Accounts, to grant waivers and make any
allowance or other adjustment with reference thereto; (iv) to endorse
the name of Debtor on notes, checks, or other evidences of payments on
Collateral that may come into possession of Secured Party; (v) to take
control of cash and other proceeds of any Collateral; (vi) to sign the
name of Debtor on any invoice relating to any Collateral, or any drafts
against Account Debtors or other persons making payment with respect to
Collateral; (vii) to send a request for verification of Accounts to any
Account Debtor; and (viii) to do all other acts and things necessary to
carry out the intent of this Agreement.
(i) Exercise all other rights and remedies permitted by law or
in equity.
Section 6.03 ATTORNEY-IN-FACT. Upon the occurrence and during the
continuance of an Event of Default only, Debtor hereby irrevocably appoints
Secured Party as Debtor's attorney-in-fact, with full authority in the place and
stead of Debtor and in the name of Debtor or otherwise, from time to time in
Secured Party's discretion upon the occurrence and during the continuance of an
Event of Default, but at Debtor's cost and expense and without notice to Debtor:
(a) To obtain, adjust, sell, and cancel any insurance with
respect to the Collateral, and endorse any draft drawn by insurers of
the Collateral. Secured Party may apply any proceeds or unearned
premiums of such insurance to the Obligations (whether
or not due).
(b) To take any action and to execute any assignment,
certificate, financing statement, notification, document, or instrument
which Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to receive,
endorse, and collect all instruments made payable to Debtor representing
any payment or other distribution in respect of the Collateral or any
part thereof and to give full discharge for the same.
Section 6.04 ACCOUNT DEBTORS. Any payment or settlement of an Account
made by an Account Debtor will be, to the extent of such payment or to the
extent provided under such settlement, a release, discharge, and acquittance of
the Account Debtor with respect to such Account, and Debtor shall take any
action as may be required by Secured Party in connection therewith. No Account
Debtor on any Account will ever be bound to make inquiry as to the
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PLEDGE AND SECURITY AGREEMENT
August 29, 1996
termination of this Agreement or the rights of Secured Party to act hereunder,
but shall be fully protected by Debtor in making payment directly to Secured
Party.
Section 6.05 LIABILITY FOR DEFICIENCY. If any sale or other disposition
of Collateral by Secured Party or any other action of Secured Party hereunder
results in reduction of the Obligations, such action will not release Debtor
from its liability to Secured Party for any unpaid Obligations, including costs,
charges and expenses incurred in the liquidation of Collateral, together with
interest thereon, and the same shall be immediately due and payable to Secured
Party at Secured Party's address set forth in the opening paragraph hereof.
Section 6.06 REASONABLE NOTICE. If any applicable provision of any law
requires Secured Party to give reasonable notice of any sale or disposition or
other action, Debtor hereby agrees that ten days' prior written notice shall
constitute reasonable notice thereof. Such notice, in the case of public sale,
shall state the time and place fixed for such sale and, in the case of private
sale, the time after which such sale is to be made.
Section 6.07 NON-JUDICIAL ENFORCEMENT. To the extent permitted by law,
(i) Secured Party may enforce its rights hereunder without prior judicial
process or judicial hearing, and (ii) Debtor expressly waives any and all legal
rights which might otherwise require Secured Party
to enforce its rights by judicial process.
Section 6.08 PLEDGED SECURITIES. Upon the occurrence and during the
continuance of an Event of Default:
(a) All rights of Debtor to receive the dividends and interest
payments which it would otherwise be authorized to receive and retain
pursuant to Section 4.05 shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the
sole right to receive and hold as Collateral such dividends and interest
payments, but Secured Party shall have no duty to receive and hold such
dividends and interest payments and shall not be responsible for any
failure to do so or delay in so doing.
(b) All dividends and interest payments which are received by
Debtor contrary to the provisions of this Section 6.08 shall be received
in trust for the benefit of Secured Party, shall be segregated from
other funds of Debtor and shall be forthwith paid over to Secured Party
as Collateral in the same form as so received (with any necessary
indorsement).
(c) Secured Party may exercise any and all rights of conversion,
exchange, subscription, or any other rights, privileges, or options
pertaining to any of the Pledged Securities as if it were the absolute
owner thereof, including without limitation, the right to exchange at
its discretion, any and all of the Pledged Securities upon the merger,
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PLEDGE AND SECURITY AGREEMENT
August 29, 1996
consolidation, reorganization, recapitalization, or other readjustment
of any issuer of such Pledged Securities or upon the exercise by any
such issuer or Secured Party of any right, privilege, or option
pertaining to any of the Pledged Securities, and in connection
therewith, to deposit and deliver any and all of the Pledged Securities
with any committee, depository, transfer agent, registrar, or other
designated agency upon such terms and conditions as it may reasonably
determine, all without liability except to account for property actually
received by it, but Secured Party shall have no duty to exercise any of
the aforesaid rights, privileges, or options and shall not be
responsible for any failure to do so or delay in so doing.
(d) If the issuer of any Pledged Securities is the subject of
bankruptcy, insolvency, receivership, custodianship, or other
proceedings under the supervision of any court or governmental agency or
instrumentality, then all rights of Debtor to exercise the voting and
other consensual rights which Debtor would otherwise be entitled to
exercise pursuant to Section 4.13 with respect to the Pledged Securities
issued by such issuer shall cease, and all such rights shall thereupon
become vested in Secured Party who shall thereupon have the sole right
to exercise such voting and other consensual rights, but Secured Party
shall have no duty to exercise any such voting or other consensual
rights and shall not be responsible for any failure to do so or delay in
so doing.
ARTICLE 7
MISCELLANEOUS PROVISIONS
Section 7.01 NOTICES. Any notice required or permitted to be given under
or in connection with this Agreement shall be given in accordance with the
notice provisions of the Credit Agreement.
Section 7.02 AMENDMENTS AND WAIVERS. Secured Party's acceptance of
partial or delinquent payments or any forbearance, failure or delay by Secured
Party in exercising any right, power or remedy hereunder shall not be deemed a
waiver of any obligation of Debtor or any Obligor, or of any right, power, or
remedy of Secured Party; and no partial exercise of any right, power, or remedy
shall preclude any other or further exercise thereof. Secured Party may remedy
any Event of Default hereunder or in connection with the Obligations without
waiving the Event of Default so remedied. Debtor hereby agrees that if Secured
Party agrees to a waiver of any provision hereunder, or an exchange of or
release of the Collateral, or the addition or release of any Obligor or other
Person, any such action shall not constitute a waiver of any of Secured Party's
other rights or of Debtor's obligations hereunder. This Agreement may be amended
only by an instrument in writing executed jointly by Debtor and Secured Party
and may be
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PLEDGE AND SECURITY AGREEMENT
August 29, 1996
supplemented only by documents delivered or to be delivered in accordance with
the express terms hereof.
Section 7.03 COPY AS FINANCING STATEMENT. A photocopy or other
reproduction of this Agreement or any financing statement covering the
Collateral is sufficient as a financing statement, and the same may be filed
with any appropriate filing authority for the purpose of perfecting Secured
Party's security interest in the Collateral.
Section 7.04 POSSESSION OF COLLATERAL. Secured Party shall be deemed to
have possession of any Collateral in transit to it or set apart for it (or, in
either case, any of its agents, affiliates or correspondents).
Section 7.05 REDELIVERY OF COLLATERAL. If any sale or transfer of
Collateral by Secured Party results in full satisfaction of the Obligations, and
after such sale or transfer and discharge there remains a surplus of proceeds,
Secured Party will deliver to Debtor such excess proceeds in a commercially
reasonable time; PROVIDED, HOWEVER, that Secured Party shall not be liable for
any interest, cost, or expense in connection with any delay in delivering such
proceeds to Debtor.
Section 7.06 GOVERNING LAW; JURISDICTION. This Agreement and the
security interest granted hereby shall be construed in accordance with and
governed by the laws of the State of Texas (except to the extent that the laws
of any other jurisdiction govern the perfection and priority of the security
interests granted hereby). Debtor consents to and submits to in personam
jurisdiction and venue in the state district and county courts of the county
wherein Secured Party's offices are located at the address specified in the
opening paragraph hereof, and in the Federal District Courts of the district
wherein such offices of Secured Party are located. This submission to
jurisdiction is nonexclusive and does not preclude Secured Party or any Lender
from obtaining jurisdiction over Debtor or the Collateral in any court having
jurisdiction.
Section 7.07 CONTINUING SECURITY AGREEMENT.
(a) Except as may be expressly applicable pursuant to Section 9.505 of
the Code, no action taken or omission to act by Secured Party hereunder,
including, without limitation, any action taken or inaction pursuant to Section
6.02, shall be deemed to constitute a retention of the Collateral in
satisfaction of the Obligations or otherwise to be in full satisfaction of the
Obligations, and the Obligations shall remain in full force and effect, until
Secured Party shall have applied payments (including, without limitation,
collections from Collateral) towards the Obligations in the full amount then
outstanding or until such subsequent time as is hereinafter provided in
subsection (b) below.
(b) To the extent that any payments on the Obligations or proceeds of
the Collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be
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PLEDGE AND SECURITY AGREEMENT
August 29, 1996
repaid to a trustee, debtor in possession, receiver or other Person under any
bankruptcy law, common law, or equitable cause, then to such extent the
Obligations so satisfied shall be revived and continue as if such payment or
proceeds had not been received by Secured Party, and Secured Party's security
interests, rights, powers, and remedies hereunder shall continue in full force
and effect. In such event, this Agreement shall be automatically reinstated if
it shall theretofore have been terminated pursuant to Section 7.08.
Section 7.08 TERMINATION. The grant of a security interest hereunder and
all of Secured Party's rights, powers, and remedies in connection therewith
shall remain in full force and effect until Secured Party has retransferred and
delivered all Collateral in its possession to Debtor, and executed a written
release or termination statement and reassigned to Debtor without recourse or
warranty any remaining Collateral and all rights conveyed hereby. Upon the
complete payment of the Obligations and the compliance by Debtor with all
covenants and agreements hereof, Secured Party, at the written request and
expense of Debtor, will release, reassign and transfer the Collateral to Debtor
and declare this Agreement to be of no further force or effect. Notwithstanding
the foregoing, the reimbursement and indemnification provisions of Section 4.08
and the provisions of subsection 7.07(b) shall survive the termination of this
Agreement.
Section 7.09 COUNTERPARTS, EFFECTIVENESS. This Agreement may be executed
in two or more counterparts. Each counterpart is deemed an original, but all
such counterparts taken together constitute one and the same instrument. This
Agreement becomes effective upon the execution hereof by Debtor and delivery of
the same to Secured Party, and it is not necessary for Secured Party to execute
any acceptance hereof or otherwise signify or express its acceptance hereof.
DEBTOR: STAT HEALTHCARE, INC.
By:
▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Financial Officer
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PLEDGE AND SECURITY AGREEMENT
August 29, 1996
FINANCING STATEMENT
This Financing Statement is presented to a filing officer for filing
pursuant to the Uniform Commercial Code.
1. The name and address of the Debtor is:
STAT HEALTHCARE, INC.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
2. The name and address of the Secured Party is:
SOUTHWEST BANK OF TEXAS, N.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
3. This Financing Statement covers the following Collateral:
(a) All of Debtor's accounts, chattel paper, equipment,
documents, instruments, and general intangibles, including, without
limitation, accounts arising from governmental or private healthcare
insurances for healthcare services rendered.
(b) The following securities: all capital stock now or hereafter
owned by the Debtor in its Subsidiaries, together with stock
certificates and irrevocable stock powers in the Subsidiaries, including
but not limited to: Old STAT, Inc., STAT Dialysis Corporation and STAT
Management Corporation.
(c) (i) The certificates or instruments, if any, representing the
securities described in item (b) above, (ii) all dividends (cash, stock,
or otherwise), cash, instruments, rights to subscribe, purchase, or
sell, and all other rights and property from time to time received,
receivable, or otherwise distributed in respect of or in exchange for
any or all of such securities, (iii) any related or additional property
from time to time delivered to or deposited with Secured Party by or for
the account of Debtor; (iv) all property used or usable in connection
with any property referred to in this Paragraph 3; (v) all proceeds,
replacements, additions to and substitutions for any of the property
referred to in this Paragraph 3 and claims against third parties; and
(vi) all books and records related to any of the property referred to in
this Paragraph 3, including, without limitation, any and all books of
account, customer lists, payor lists, and other records
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PLEDGE AND SECURITY AGREEMENT
August 29, 1996
relating in any way to the accounts, chattel paper, or instruments
referred to in this Paragraph 3.
(d) All general intangibles related to any property referred to
in this Paragraph 3, including, without limitation, all (i) letters of
credit, bonds, guaranties, purchase or sales agreements, and other
contractual rights (including but not limited to the Designated
Contracts), rights to performance, and claims for damages, refunds
(including tax refunds), or other monies due or to become due; (ii)
orders, franchises, permits, certificates, licenses, consents,
exemptions, variances, authorizations, or other approvals by any
governmental agency or court; (iii) business records, computer tapes,
and computer software; (iv) goodwill; and (v) other intangible personal
property, whether similar or dissimilar to the property referred to in
this Paragraph 3.
DEBTOR: STAT HEALTHCARE, INC.
By:
▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Financial Officer
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PLEDGE AND SECURITY AGREEMENT
August 29, 1996