Exhibit 10.55
NationsBank of Texas, N.A. Pledge Agreement
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BANK/SECURED PARTY: PLEDGOR(S)/DEBTOR(S):
NationsBank of Texas, N.A., American Physicians Service Group, Inc.,
a national banking association a Texas corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 1301 Capital of Texas Highway
11th Floor C-300
Austin, Texas 78701 ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ County, Texas
(Street address including county) (Name and street address including county)
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Pledgor/Debtor is: [ ] Individual [X] Corporation [ ] Partnership [ ] Other
Address is Pledgor's/Debtor's: [ ] Residence [ ] Place of Business
[X] Chief Executive Office if more than one place of business
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Capitalized terms not otherwise defined in this Pledge Agreement (this
"Agreement") have the same meaning as assigned in the Loan Agreement
(hereinafter defined).
1. SECURITY INTEREST. For good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor/Debtor (hereinafter referred
to as "Pledgor") pledges, assigns and grants to Bank a security interest and
lien in the Collateral (hereinafter defined) to secure the payment and the
performance of the Obligation (hereinafter defined).
2.
3. COLLATERAL. The
security interest is granted in the following collateral (the "Collateral"):
4.
A. DESCRIPTION OF COLLATERAL.
B.
C. SPECIFIC INVESTMENT PROPERTY/SECURITIES: The
following investment property and/or securities, together with all investment
property and/ or securities hereafter delivered to Bank in substitution therefor
or in addition thereto:
D. i. 500,000 shares of Common Stock, $.01 par value
(together with any other shares of Common Stock of Prime pledged hereunder from
time to time, the "Prime Pledged Shares") of Prime Medical Services, Inc., a
Delaware corporation ("Prime"). ii. iii. a. 1,000 shares of Common Stock, $.10
par value of APS Financial Corporation, a Colorado corporation; iv. v. b. 800
shares of Common Stock, $.10 par value, APS Insurance Services, Inc., a Delaware
corporation; vi. vii. c. 1,874,600 shares of Common Stock, $.001 par value of
APS Practice Management, Inc., a Texas corporation; viii. ix. x. d. 1,000 shares
of Common Stock, $.10 par value of Syntera Technologies, Inc., a Delaware
corporation; and
xi.
xii. e. 1,000 shares of Common Stock, $1.00 par value of
APS Realty, Inc., a Texas corporation (the Prime Pledged Shares and the shares
described in this Subsection 2.A.ii are collectively referred to herein as the
"Pledged Shares").
xiii.
xiv. all cash, securities, dividends, increases,
distributions and profits received from or on the Pledged Shares, including
distributions or payments in partial or complete liquidation or redemption, or
as a result of reclassifications, readjustments, reorganizations or changes in
the capital structure of the Issuer and any other property at any time and from
time to time received, receivable or otherwise distributed or delivered to Bank,
and all rights and privileges pertaining thereto.
xv.
xvi. It is contemplated by
the parties that Pledgor may provide additional collateral from time to time
hereunder as additional security for the Obligation, and may from time to time
with the prior written consent of Bank sell or otherwise dispose of any
Collateral provided that Pledgor provides Bank with substitute collateral. At
the time of each addition or substitution of Collateral, the securities added or
substituted shall be identified on a Pledge Certificate, substantially in the
form of Schedule II attached hereto (the "Pledge Certificate"), and delivered to
Bank. Bank has no obligation to make any advances requested in connection
therewith unless (i) such additional and/or substituted Collateral is
satisfactory to Bank and (ii) the perfected security interest granted to Bank
therein is completed to the satisfaction of Bank. All such additional and/or
substituted Collateral shall be Collateral for purposes of this Agreement, and
shall secure the Obligation in the same manner as the Collateral for which it is
added to and/or substituted.
xvii.
E. PROCEEDS. All additions, substitutes and
replacements for and proceeds of the above Collateral (including all income and
benefits resulting from any of the above, such as dividends payable or
distributable in cash, property or stock; interest, premium and principal
payments; redemption proceeds and subscription rights; and shares or other
proceeds of conversions or splits of any securities in the Collateral). Any
investment property and/or securities received by Pledgor, which shall comprise
such additions, substitutes and replacements for, or proceeds of, the
Collateral, shall be held in trust for Bank and shall be delivered immediately
to Bank. Any cash proceeds shall be held in trust for Bank and upon request
shall be delivered immediately to Bank.
F.
G. DEPOSIT ACCOUNTS. The balance of
every deposit account of Pledgor maintained with Bank and any other claim of
Pledgor against Bank, now or hereafter existing, liquidated or unliquidated, and
all money, instruments, investment property, securities, documents, chattel
paper, credits, claims, demands, income, and any other property, rights and
interests of Pledgor which at any time shall come into the possession or custody
or under the control of Bank or any of its agents or affiliates, for any
purpose, and the proceeds of any thereof. Bank shall be deemed to have
possession of any of the Collateral in transit to or set apart for it or any of
its agents or affiliates.
1. OBLIGATION.
2.
A. DESCRIPTION OF OBLIGATION. The following obligations ("Obligation") are
secured by this Agreement:
i. ALL DEBT: All debts, obligations, liabilities and agreements of Pledgor to
Bank, now or hereafter existing, arising directly or indirectly between Pledgor
and Bank whether absolute or contingent, joint and several, joint or several,
secured or unsecured, due or not due, liquidated or unliquidated, arising by
operation of law or otherwise, and all renewals, extensions and rearrangements
of any of the above; including, without limitation, all debts, obligations,
liabilities and agreements of Pledgor now or hereafter arising under, or
governed by, that certain Revolving Credit Loan Agreement dated as of the date
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hereof, by and between Pledgor and Bank, and any renewal, extension,
modification or restatement thereof or therefor (the "Loan Agreement").
ii.
iii. PROMISSORY NOTE: All debt arising under that certain promissory note dated
as of the date hereof in the principal face amount of $10,000,000 executed by
Pledgor payable to the order of Bank, and any and all renewals, extensions,
modifications and rearrangements thereof; iv. v. All costs and expenses incurred
by Bank, including attorney's fees, to obtain, preserve, perfect, enforce and
defend this Agreement and maintain, preserve, collect and realize upon the
Collateral, together with interest thereon at the default rate provided in the
Loan Agreement; and vi. vii. All amounts which may be owed to Bank pursuant to
all other loan documents executed in connection with the indebtedness described
in subpart i. above. viii. In the event any amount paid to Bank on any
Obligation is subsequently recovered from Bank in or as a result of any
bankruptcy, insolvency or fraudulent conveyance proceeding involving an obligor
of the Obligation other than Pledgor, Pledgor shall be liable to Bank for the
amounts so recovered up to the fair market value of the Collateral whether or
not the Collateral has been released or the security interest terminated. In the
event the Collateral has been released or the security interest terminated, the
fair market value of the Collateral shall be determined, at Bank's option, as of
the date the Collateral was released, the security interest terminated, or said
amounts were recovered.
A. USE OF PROCEEDS. The proceeds of any indebtedness or obligation secured by
the Collateral will not be used directly or indirectly to purchase or carry any
"margin stock" as that term is defined in Regulation U of the Board of Governors
of the Federal Reserve System, or extend credit to or invest in other parties
for the purpose of purchasing or carrying any such "margin stock," or to reduce
or retire any indebtedness incurred for such purpose or otherwise in a manner
which would violate Regulations G, T or U.
1. PLEDGOR'S WARRANTIES. Pledgor hereby represents and warrants to Bank as
follows: 2. A. Financing Statements. Except as may be noted by schedule attached
hereto and incorporated herein by reference, no financing statement covering the
Collateral is or will be on file in any public office, except the financing
statements relating to this security interest, and no security interest, other
than the one herein created, has attached or been perfected in the Collateral or
any part thereof.
B.
C. OWNERSHIP. Pledgor owns the Collateral free from any setoff, claim,
restriction, lien, security interest or encumbrance except liens for taxes not
yet due and payable and the security interest hereunder, the applicability of
certain federal and state securities laws, including Rule 144 of the General
Regulations under the Securities Act of l933, and as to the common stock of APS
Insurance Services, Inc., the agreements described in Section 6.E. below, and
Pledgor represents and warrants that Pledgor has held the Prime Pledged Shares
and any other Prime Shares which may from time to time be pledged hereunder free
and clear of all liens (except for liens, encumbrances and debt held by Bank or
described above), encumbrances and debt, and borne the full economic risk
thereof since October 12, 1989.
D.
E. POWER AND AUTHORITY. Pledgor has full
power and authority to make this Agreement, and all necessary consents and
approvals of any persons, entities, governmental or regulatory authorities and
securities exchanges have been obtained to effectuate the validity of this
Agreement.
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F.
G. PLEDGED SHARE CHARACTERISTICS. The Pledged Shares which have
been pledged by Pledgor to Bank under this Agreement, or may hereafter be
pledged under this Agreement, satisfy and shall satisfy each of the requirements
and characteristics set forth on Schedule I hereto.
H.
I. The delivery at any
time by Pledgor to Bank of additional Pledged Shares shall constitute a
representation and warranty by Pledgor that, with respect to such Pledged
Shares, in each item thereof, the matters heretofore warranted in Clauses (A)
through (D) immediately above are true and correct at, and as if they were made
at, the date of such delivery.
J.
3. PLEDGOR'S COVENANTS. Until full payment and
performance of all of the Obligation and termination or expiration of any
obligation or commitment of Bank to make advances or loans to Pledgor, unless
Bank otherwise consents in writing:
4.
A. OBLIGATION AND THIS AGREEMENT. Pledgor
shall perform all of its agreements herein and in any other agreements between
it and Bank.
B.
C. OWNERSHIP OF COLLATERAL. Pledgor shall defend the Collateral
against all claims and demands of all persons at any time claiming any interest
therein adverse to Bank. Pledgor shall keep the Collateral free from all liens
and security interests except those for taxes not yet due and payable and the
security interest hereby created.
D.
E. BANK'S COSTS. Pledgor shall pay all
costs necessary to obtain, preserve, perfect, defend and enforce the security
interest created by this Agreement, collect the Obligation, and preserve,
defend, enforce and collect the Collateral, including but not limited to taxes,
assessments, reasonable attorney's fees, legal expenses and expenses of sales.
Whether the Collateral is or is not in Bank's possession, and without any
obligation to do so and without waiving Pledgor's default for failure to make
any such payment, Bank at its option may pay any such costs and expenses and
discharge encumbrances on the Collateral, and such payments shall be a part of
the Obligation and bear interest at the rate set out in the Obligation. Pledgor
agrees to reimburse Bank on demand for any costs so incurred.
F.
G. INFORMATION AND INSPECTION. Pledgor shall (i) promptly furnish Bank any
information with
respect to the Collateral requested by Bank; (ii) allow Bank or its
representatives to inspect and copy, or furnish Bank or its representatives with
copies of, all records relating to the Collateral and the Obligation; and (iii)
promptly furnish Bank or its representatives with any other information Bank may
reasonably request.
H.
I. ADDITIONAL DOCUMENTS. Pledgor shall sign and deliver
any papers furnished by Bank which are necessary or desirable in the judgment of
Bank to obtain, maintain and perfect the security interest hereunder and to
enable Bank to comply with any federal or state law in order to obtain or
perfect Bank's interest in the Collateral or to obtain proceeds of the
Collateral.
J.
K. NOTICE OF CHANGES. Pledgor shall notify Bank immediately of
(i) any material change in the Collateral, (ii) a change in Pledgor's residence
or location, (iii) a change in any matter warranted or represented by Pledgor in
this Agreement, or in any of the Loan Documents relating to the Obligation or
furnished to Bank pursuant to this Agreement, and (iv) the occurrence of an
Event of Default under this Agreement or any other Loan Document.
▇.
▇.POSSESSION OF COLLATERAL. Pledgor shall deliver a copy of this Agreement (or
other notice acceptable to Bank) to any Broker, financial intermediary, or any
other person in possession of any of the Collateral or on whose books the
interest of Pledgor in the Collateral appears, and such delivery shall
constitute notice to such person of Bank's security interest in the Collateral
and shall constitute Pledgor's
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instruction to such person to note Bank's
security interest on their books and records, or deliver to Bank certificates or
other evidence of the Collateral promptly upon Bank's request. Pledgor shall
deliver all investment securities and other instruments and documents which are
a part of the Collateral and in Pledgor's possession to Bank immediately, or if
hereafter acquired, immediately following acquisition, in a form suitable for
transfer by delivery or accompanied by duly executed instruments of transfer or
assignment in blank with signatures appropriately guaranteed in form and
substance suitable to Bank.
N.
O. POWER OF ATTORNEY. Pledgor appoints Bank and
any officer thereof as Pledgor's special attorney-in-fact with limited power in
Pledgor's name and on Pledgor's behalf, to perform only those acts that Pledgor
is obligated to do or may be required to do hereunder. Nothing in this paragraph
shall be construed to obligate Bank to take any action hereunder nor shall Bank
be liable to Pledgor for failure to take any action hereunder. This appointment
shall be deemed a power coupled with an interest and shall not be terminable as
long as the Obligation is outstanding and shall not terminate on the disability
or incompetence of Pledgor. Without limiting the ability to perform any acts
authorized by the foregoing, Bank shall have the right and power to receive,
endorse and collect all checks and other orders for the payment of money made
payable to Pledgor but only to the extent that such checks or payments represent
any dividend, interest payment or other distribution payable in respect of the
Collateral or any part thereof. Bank will notify Pledgor after Bank has
exercised the power, and Bank shall deliver to Pledgor copies of any documents
executed by Bank pursuant to the power. Upon payment of the entire Obligation,
the power described in this Section shall be deemed to be terminated.
P.
Q. OTHER PARTIES AND OTHER COLLATERAL. No renewal or extensions of or any other
indulgence with respect to the Obligation or any part thereof, no modification
of the document(s) evidencing the Obligation, no release of any security, no
release of any person (including any maker, indorser, guarantor or surety)
liable on the Obligation, no delay in enforcement of payment, and no delay or
omission or lack of diligence or care in exercising any right or power with
respect to the Obligation or any security therefor or guaranty thereof or under
this Agreement shall in any manner impair or affect the rights of Bank under any
law, hereunder, or under any other agreement pertaining to the Collateral. Bank
need not file suit or assert a claim for personal judgment against any person
for any part of the Obligation or seek to realize upon any other security for
the Obligation, before foreclosing or otherwise realizing upon the Collateral.
Pledgor waives any right that can be waived to the benefit of or to require or
control application of any other security or proceeds thereof, and agrees that
Bank shall have no duty or obligation to Pledgor to apply to the Obligation any
such other security or proceeds thereof.
R.
S. WAIVERS BY PLEDGOR. Pledgor
waives notice of the creation, advance, increase, existence, extension or
renewal of, and of any indulgence with respect to, the Obligation; waives
presentment, demand, notice of dishonor, and protest; waives notice of the
amount of the Obligation outstanding at any time, notice of any change in
financial condition of any person liable for the Obligation or any part thereof,
notice of any Event of Default, and all other notices respecting the Obligation;
and agrees that maturity of the Obligation and any part thereof may be
accelerated, extended or renewed one or more times by Bank in its discretion,
without notice to Pledgor. Pledgor waives any right to require that any action
be brought against any other person or to require that resort be had to any
other security or to any balance of any deposit account. Pledgor further waives
any right of subrogation or to enforce any right of action against any other
pledgor until the Obligation is paid in full.
T.
U. RULE 144 RIDER. Pledgor
acknowledges that the Collateral is, or may be in the future, comprised in whole
or in part of control or restricted securities, which shall be subject to the
additional terms and provisions described on the Rule 144 Rider attached hereto
and made a part hereof for all purposes.
V.
5. MAINTENANCE OF COLLATERAL.
6.
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A.
MAINTENANCE OF COLLATERAL. At all times during the term of this Agreement,
Pledgor agrees to maintain as security for the Obligation, Prime Pledged Shares
with an Adjusted Collateral Value (as determined herein) in excess of 182% of
the unpaid principal balance of the Obligation (the "Maintenance Margin"). The
Adjusted Collateral Value shall be determined by multiplying the number of Prime
Pledged Shares (including any Additional Shares) by the per share price of such
Prime stock at the most recent close of trading on a trading exchange for the
Prime stock. In the event that Prime Pledged Shares are not traded on an
exchange, the Adjusted Collateral Value of the Prime Pledged Shares shall be
determined by obtaining the quoted value of such Prime Pledged Shares from a
reputable brokerage firm selected by Bank. If no such quote is available, the
value will be determined by Bank in its sole discretion.
B.
C. No Borrowing (as
defined in the Loan Agreement) requested by Pledgor shall be made to Pledgor if
the sum of (i) the outstanding principal balance of the Obligation plus (ii) the
amount of the Borrowing requested, equals or exceeds 50% of the Adjusted
Collateral Value (the "Original Advance Percentage").
D.
E. BREACH OF COLLATERAL MAINTENANCE. Pledgor agrees that the failure to maintain
Collateral with an Adjusted Collateral Value as set forth above shall constitute
an Event of Default under this Agreement. In such event, the Pledgor shall have
five Business Days (as defined in the Loan Agreement) from the date Pledgor is
notified by Bank (in writing or orally) of such noncompliance, to either pledge
additional shares of Prime stock satisfactory to Bank, in its sole discretion,
or reduce the unpaid principal balance of the Obligation such that, in either
case, the Adjusted Collateral Value shall be not less than the Maintenance
Margin. In the event Pledgor fails to comply with the terms hereof, Bank may,
without any further notice of any kind, exercise any of the following rights and
remedies, at Bank's option:
F.
(a) The rights and remedies set out in Section 8.B. of this
Agreement, including without limitation the right to
accelerate the Obligation and liquidate the Collateral.
(b) Sell all or any part of the Collateral and apply the proceeds
of such sale to the Obligation to bring the Obligation back
into compliance (that is, to reduce the unpaid principal of
the Obligation such that the unpaid principal of the
Obligation is less than Original Advance Percentage of the
Prime Pledged Shares.
If an Event of Default exists hereunder and the Collateral is declining in value
or threatens to decline speedily in value, Bank shall have no obligation to
notify Pledgor of the failure to maintain Prime Pledged Shares with an Adjusted
Collateral Value as set forth in subparagraph A above or to provide Pledgor with
an opportunity to cure such noncompliance, and in such case Pledgor agrees that
Bank may immediately at Bank's sole option (i) declare amounts due under the
Obligation to be immediately due and payable, and/or (ii) sell all or any part
of the Collateral and apply the proceeds of such Collateral to the Obligation.
A. ADDITIONAL PLEDGE PROVISION. Notwithstanding the provisions of 6A and 6B, in
the event the per share price of the Prime Pledged Shares on any day is less
than $8.25, than all shares of Prime owned by Pledgor (other than 500,000 shares
of common stock of Prime which shall be excluded) (the "Prime Stock") shall
become Additional Collateral hereunder, and Pledgor shall, immediately, upon
demand of Bank, execute and deliver a Pledge Certificate covering such Prime
Stock shares to Bank, together with the original stock certificates and blank
stock powers.
B.
C. RELEASE OF PRIME PLEDGED SHARES.
D.
i. In the event the
price per share of the Prime Pledged Shares increases so that the Adjusted
Collateral Value is in excess of 250% of the Obligation, then upon receipt of
Pledgor's written
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request to Bank requesting release of certain Prime Pledged
Shares, and provided no Default or Event of Default has occurred and is
continuing under the Loan Agreement, Bank shall as soon as reasonably possible
(but in any event no earlier than ten Business Days following receipt of the
request) release certain Prime Pledged Shares, so long as the Adjusted
Collateral Value of the remaining Prime Pledged Shares is not less than 200% of
the Obligation.
ii.
iii. In the event Pledgor has pledged all of its Prime Stock
shares to Bank as required pursuant to Section 6C above, then if the per share
price of the Prime Pledged Shares exceeds $8.50 during any ninety (90)
consecutive days, and Pledgor delivers a written request to Bank requesting
release of certain Prime Pledged Shares, provided no Default or Event of Default
has occurred and is continuing under the Loan Agreement, then Bank shall as soon
as reasonably possible (but in any event no earlier than ten Business Days
following receipt of the request) release certain Prime Pledged Shares, so long
as the Adjusted Collateral Value of the remaining Prime Pledged Shares is not
less than 200% of the Obligation.
iv.
v. Nothing in this Section 6D. shall
relieve Pledgor of its continuing obligations under Sections 6A, 6B and 6D. vi.
E. RELEASE OF OTHER COLLATERAL.
F.
i. In the event that FPIC Insurance Group,
Inc. ("FPIC") exercises its option to purchase additional shares of common stock
of APS Insurance Services, Inc., a Delaware corporation ("APS Insurance") as set
forth in the Stock Purchase and Stock Option Agreement entered into as of April
6, 1997 and in the Shareholders Agreement entered into on June 30, 1997 among
APS Insurance, Pledgor and FPIC, Bank shall release its lien and security
interest in the Collateral consisting of the pledged shares of APS Insurance
upon receipt by Bank of the purchase price therefor.
ii.
iii. The Bank also
agrees that provided no Event of Default (hereinafter defined) has occurred and
is continuing, shares of common stock of APS Practice Management, Inc.
("Practice Management") will be released from the lien and security interest of
this Agreement upon not less than ten (10) Business Days written notice to the
Bank, setting forth the number of shares to be released, the name of the
purchaser to whom the shares are to be transferred and the reason therefor.
iv.
2. RIGHTS AND POWERS OF BANK.
3.
A. GENERAL. Bank, before or after default,
without liability to Pledgor may: take control of proceeds, including stock
received as dividends or by reason of stock splits; release the Collateral in
its possession to any Pledgor, temporarily or otherwise; require additional
Collateral; reject as unsatisfactory any property hereafter offered by Pledgor
as Collateral; take control of funds generated by the Collateral, such as cash
dividends, interest and proceeds, and use same to reduce any part of the
Obligation and exercise all other rights which an owner of such Collateral may
exercise, except the right to vote or dispose of the Collateral before an Event
of Default; and at any time transfer any of the Collateral or evidence thereof
into its own name or that of its nominee. Other than the exercise of reasonable
care to ensure the safe custody of the Collateral in Bank's possession, Bank
shall have no obligation, duty or responsibility for the Collateral and
specifically, without limiting the foregoing, shall have no obligation, duty or
responsibility to collect any amounts payable, or exercise any right or option,
in respect of the Collateral or to sell all or any portion of the Collateral to
avoid market loss. Bank shall not be liable for failure to collect any account
or instruments, or for any act or omission on the part of Bank, its officers,
agents or employees, except for its or their own willful misconduct or gross
negligence. The foregoing rights and powers of Bank will be in addition to, and
not a limitation upon, any rights and powers of Bank given by law, elsewhere in
this Agreement, or otherwise.
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B.
C. CONVERTIBLE COLLATERAL. Bank may present for
conversion any Collateral which is convertible into any other instrument or
investment security or a combination thereof with cash, but Bank shall not have
any duty to present for conversion any Collateral unless it shall have received
from Pledgor detailed written instructions to that effect at a time reasonably
far in advance of the final conversion date to make such conversion possible.
D.
E. VOTING RIGHTS. Subject to the following sentence, the Pledgor shall be
entitled to exercise any and all voting and/or consensual rights and powers
relating or pertaining to the Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement. Upon (i) the occurrence after the
date hereof of an Event of Default and (ii) the giving of written notice by Bank
to Pledgor of its intention to (A) foreclose upon or otherwise dispose of the
Collateral or (B) exercise its voting rights pertaining to the Collateral, all
rights of the Pledgor to exercise the voting and/or consensual rights and powers
which it is entitled to exercise hereunder shall cease, at the option of Bank,
and all such rights shall thereupon become vested in Bank who shall have the
sole and exclusive right and authority to exercise such voting and/or consensual
rights and powers.
F.
4. DEFAULT.
5.
A. EVENT OF DEFAULT. An event of default
("Event of Default") shall occur (a) if Pledgor or any other obligor on all or
part of the Obligation shall fail to timely and properly pay or observe, keep or
perform any term, covenant, agreement or condition in this Agreement or in any
other agreement between Pledgor and Bank or between Bank and any other obligor
on the Obligation, including but not limited to any other note or instrument,
loan agreement, security agreement, deed of trust, mortgage, promissory note,
assignment or other agreement or instrument concerning the Obligation; or (b) an
Event of Default shall occur under the Loan Agreement or any other Loan
Document.
A. RIGHTS AND REMEDIES. If any Event of Default shall occur, then, in each and
every such case, Bank may, without (a) presentment, demand, or protest, (b)
notice of default, dishonor, demand, non-payment, or protest, (c) notice of
intent to accelerate all or any part of the Obligation, (d) notice of
acceleration of all or any part of the Obligation, or (e) notice of any other
kind, all of which Pledgor hereby expressly waives (except for any notice
required under this Agreement, any other Loan Document or which may not be
waived under applicable law), at any time thereafter exercise and/or enforce any
of the following rights and remedies, at Bank's option:
B.
i. ACCELERATION. The
Obligation shall, at Bank's option, become immediately due and payable, and the
obligation, if any, of Bank to permit further borrowings under the Obligation
shall at Bank's option immediately cease and terminate.
ii.
iii. LIQUIDATION OF
COLLATERAL. Sell, or instruct any agent or broker to sell, all or any part of
the Collateral in a public or private sale, direct any agent or broker to
liquidate all or any part of any account and deliver all proceeds thereof to
Bank, and apply all proceeds to the payment of any or all of the Obligation in
such order and manner as Bank shall, in its discretion, choose. Bank is
authorized, at any sale of the Collateral, if it deems it advisable, to restrict
the prospective bidders of Purchasers to those persons who will represent and
agree that they are purchasing for their own account, for investment, and not
with a view to distribution or sale of any of the Collateral. Pledgor agrees
that, because of the Securities Act of 1933, as amended, or any other laws or
regulations, and for other reasons, there may be legal and/or practical
restrictions or limitations affecting Bank in any attempts to dispose of certain
portions of the Collateral and for the enforcement of their rights. For these
reasons, Bank is hereby authorized by Pledgor, but not obligated, upon the
occurrence and during the continuation of an Event of Default, to sell all or
any part of the Collateral at private sale, subject to investment letter or in
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any other manner which will not require the Collateral, or any part thereof, to
be registered in accordance with the Securities Act of 1933, as amended, or the
rules and regulations promulgated thereunder, or any other laws or regulations,
at a reasonable price at such private sale or other distribution in the manner
mentioned above. Pledgor understands that Bank may in its discretion approach a
limited number of potential purchasers and that a sale under such circumstances
may yield a lower price for the Collateral, or any part or party thereof, than
would otherwise be obtainable if such collateral were either afforded to a
larger number or potential purchasers, or registered or sold in the open market.
Pledgor agrees that such private sale shall be deemed to have been made in a
commercially reasonable manner, and that Bank has no obligation to delay sale of
any Collateral to permit the issuer thereof to register it for public sale under
any applicable federal or state securities laws. Bank is authorized, in
connection with any such sale (i) to restrict the prospective bidders on or
purchasers of any of the Collateral to a limited number of sophisticated
investors who will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or sale of any of
such Collateral and (ii) to impose such other limitations or conditions in
connection with any such sale as Bank reasonably deems necessary in order to
comply with applicable law. Pledgor covenants and agrees that he will execute
and deliver such documents and take such other action as Bank reasonably deems
necessary in order that any such sale may be made in compliance with applicable
law. Upon any such sale, Bank shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold. Each purchaser at any
such sale shall hold the Collateral so sold absolutely, free from any claim or
right of Pledgor of whatsoever kind, including any equity or right of redemption
of Pledgor. Pledgor, to the extent permitted by applicable law, hereby
specifically waives all rights of redemption, stay or appraisal which he has or
may have under any law now existing or hereafter enacted.
iv.
v. In addition,
and without limiting the foregoing, Pledgor agrees that Bank may, in its
discretion, advertise, prepare for, and conduct a foreclosure sale of the
Collateral pursuant to newspaper advertisements or other public advertisements,
in accordance with (and subject to conditions set forth in) no action letters,
pronouncements and requirements of the Securities and Exchange Commission, in
order to comply with the Securities Act of 1933, as amended, or any other laws
or regulations.
vi.
vii. UNIFORM COMMERCIAL CODE. All of the rights, powers and
remedies of a secured creditor under the Uniform Commercial Code ("UCC") as
adopted in the jurisdiction to which Bank is subject under this Agreement.
viii.
ix. RIGHT OF SET OFF. Without notice or demand to Pledgor, set off and apply
against any and all of the Obligation any and all deposits (general or special,
time or demand, provisional or final) and any other indebtedness, at any time
held or owing by Bank or by any of Bank's affiliates or correspondents to or for
the credit of the account of Pledgor or any guarantor or indorser of Pledgor's
Obligation.
x.
xi. Pledgor specifically understands and agrees that any sale by
Bank of all or part of the Collateral pursuant to the terms of this Agreement
may be effected by Bank at times and in manners which could result in the
proceeds of such sale as being significantly and materially less than might have
been received if such sale had occurred at different times or in different
manners, and Pledgor hereby releases Bank and its officers and representatives
from and against any and all obligations and liabilities arising out of or
related to the timing or manner of any such sale.
xii.
xiii. If, in the opinion
of Bank, there is any question that a public sale or distribution of any
Collateral will violate any state or federal securities law, Bank may offer and
sell such Collateral in a transaction exempt from registration under federal
securities law, and any such sale made in good faith by Bank shall be deemed
"commercially reasonable."
9
1. GENERAL.
2.
A. PARTIES BOUND. Bank's rights hereunder shall inure to the benefit of its
successors and assigns, and in the event of any assignment or transfer of any of
the Obligation or the Collateral, Bank thereafter shall be fully discharged from
any responsibility with respect to the Collateral so assigned or transferred,
but Bank shall retain all rights and powers hereby given with respect to any of
the Obligation or the Collateral not so assigned or transferred. All
representations, warranties and agreements of Pledgor if more than one are joint
and several and all shall be binding upon the personal representatives, heirs,
successors and assigns of Pledgor.
A. WAIVER. No delay of Bank in exercising any power or right shall operate as a
waiver thereof; nor shall any single or partial exercise of any power or right
preclude other or further exercise thereof or the exercise of any other power or
right. No waiver by Bank of any right hereunder or of any default by Pledgor
shall be binding upon Bank unless in writing, and no failure by Bank to exercise
any power or right hereunder or waiver of any default by Pledgor shall operate
as a waiver of any other or further exercise of such right or power or of any
further default. Each right, power and remedy of Bank as provided for herein or
in any of the loan documents related to the Obligation, or which shall now or
hereafter exist at law or in equity or by statute or otherwise, shall be
cumulative and concurrent and shall be in addition to every other such right,
power or remedy. The exercise or beginning of the exercise by Bank of any one or
more of such rights, powers or remedies shall not preclude the simultaneous or
later exercise by Bank of any or all other such rights, powers or remedies.
B.
C. AGREEMENT CONTINUING. This Agreement shall constitute a continuing agreement
applying to all future as well as existing transactions, whether or not of the
character contemplated at the date of this Agreement, and if all transactions
between Bank and Pledgor shall be closed at any time, shall be equally
applicable to any new transactions thereafter. Provisions of this Agreement,
unless by their terms exclusive, shall be in addition to other agreements
between the parties. Time is of the essence of this Agreement.
D.
E. DEFINITIONS. Unless the context indicates otherwise, definitions in the UCC
apply to words and phrases in this Agreement; if UCC definitions conflict,
Article 8 and/or 9 definitions apply.
F.
G. NOTICE. Notice shall be deemed reasonable if it is made (i) in writing and
personally delivered or mailed by prepaid certified or registered mail, or (ii)
made by facsimile transmission delivered or transmitted, to the party to whom
such notice of communication is directed, to the address of such party shown
opposite its name on the signature pages hereof. Any such communication shall be
deemed to have been given (whether actually received or not) on the day it is
personally delivered or, if transmitted by facsimile transmission, on the day
that such communication is transmitted.
H.
I. MODIFICATIONS. No provision hereof
shall be modified or limited except by a written agreement expressly referring
hereto and to the provisions so modified or limited and signed by Pledgor and
Bank. The provisions of this Agreement shall not be modified or limited by
course of conduct or usage of trade.
J.
K. PARTIAL INVALIDITY. The
unenforceability or invalidity of any provision of this Agreement shall not
affect the enforceability or validity of any other provision herein, and the
invalidity or unenforceability of any provision of any Loan Document to any
person or circumstance shall not affect the enforceability or validity of such
provision as it may apply to other persons or circumstances.
▇.
▇. APPLICABLE
LAW AND VENUE. This Agreement has been delivered in the State of Texas and shall
be construed in accordance with the laws of that State. It is performable by
Pledgor in the county or city
10
of Bank's address set out above and Pledgor
expressly waives any objection as to venue in any such location. Wherever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Agreement.
N.
O. Financing Statement. To the extent permitted by applicable
law, a carbon, photographic or other reproduction of this Agreement or any
financing statement covering the Collateral shall be sufficient as a financing
statement.
P.
Q. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO
THIS INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR
ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY
TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING AN ACTION, INCLUDING A
SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR
CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH
ACTION.
R.
i. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE COUNTY OF
ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS INSTRUMENT,
AGREEMENT OR DOCUMENT AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN
ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE
ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60
DAYS.
ii.
iii. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL BE
DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR
DOCUMENT; OR (II) BE A WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT BY 12
U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE
RIGHT OF BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED
TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY
COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH
AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT
OF A RECEIVER. BANK MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH
PROPERTY, OR OBTAIN SUCH
11
PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR
AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT, PROVIDED THAT IF BANK SHALL PETITION A COURT
FOR SUCH RELIEF OR REMEDIES, THEN PLEDGOR SHALL BE ENTITLED TO ASSERT IN SUCH
COURT ANY CLAIMS OR DEFENSES RELATED TO THE SUBJECT MATTER OF BANK'S PETITION.
NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE
OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL
CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY
SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
RESORT TO SUCH REMEDIES.
iv.
S. Controlling Document. To the extent that this Agreement conflicts with or
is in any way incompatible with any other loan document concerning the
Obligation, any promissory note shall control over any other document, and if
such promissory note does not address an issue, then each other loan document
shall control to the extent that it deals most specifically with an issue.
T.
U. Notice of Final Agreement. THIS WRITTEN AGREEMENT AND ANY OTHER DOCUMENTS
EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
V.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized representatives as of February 10, 1998.
Bank/Secured Party: Pledgor(s)/Debtor(s):
NATIONSBANK OF TEXAS, N.A. AMERICAN PHYSICIANS SERVICE
GROUP, INC.,
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------
▇▇▇▇▇ ▇▇▇▇▇▇, Name: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
Vice President Title: Sr VP Finance
SCHEDULE I
TO
PLEDGE AGREEMENT
Type of Collateral:
Shares of common stock, described in Section 2.A. of the Agreement, and
which
(1) are validly issued, fully paid and non-assessable;
(2) are owned of record and beneficially by Pledgor, and
represented by stock certificates issued in the name of Pledgor
properly endorsed to Bank;
(3) may be sold by Bank, pursuant to the terms of the
Pledge Agreement; and
(4) have been delivered and pledged to Bank pursuant to the
Pledge Agreement.
i
SCHEDULE II
PLEDGE CERTIFICATE
Reference is hereby made to that certain Pledge Agreement dated as of
February , 1998 ("Pledge Agreement"), between American Physicians Service Group,
Inc., a Texas corporation ("Pledgor") and NationsBank of Texas, N.A., a national
banking association ("Bank"). This Pledge Certificate is delivered pursuant to
Section 2 of the Pledge Agreement. All capitalized terms used and not otherwise
defined herein shall have their respective meanings as set forth in the Pledge
Agreement.
Pledgor hereby certifies that concurrently with the delivery of this
Pledge Certificate,
[X] Pledgor is delivering to Bank the following items of Collateral as
additional Collateral for the Obligation (collectively, the "Additional
Collateral"): ______ shares of Common Stock, $.01 par value of Prime
Medical Services, Inc., a Delaware corporation.
Pledgor hereby acknowledges that Pledgor has granted to Bank a security
interest in the Additional Collateral pursuant to the Pledge Agreement to secure
the Obligation and that the Collateral covered by the Pledge Agreement includes,
without limitation, Additional Collateral. Pledgor hereby represents and
warrants that all of the representations and warranties contained in the Pledge
Agreement are true and correct in all material respects, including with respect
to the Additional Collateral, on the date hereof as though made as of the date
hereof.
EXECUTED this 10th day of February, 1998.
Pledgor(s)/Debtor(s):
AMERICAN PHYSICIANS SERVICE GROUP, INC.,
By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
Title: Sr VP Finance
i
RULE 144 RIDER
This Rule 144 Rider is made this 10th day of February, 1998, and is
incorporated into and shall be deemed to supplement the Pledge Agreement
("Agreement") of the same date given by Pledgor to secure the Obligation to
Bank. Terms used and not otherwise defined in this Rider which are defined in
the Agreement have the meanings given them in the Agreement.
1. The securities listed on Exhibit A hereto, which Exhibit is made a
part of this Rider and the Agreement for all purposes, are or may be
deemed (check one or more boxes):
[X] Restricted securities
[X] Control securities
for purposes of Rule 144 of the General Regulations under the
Securities Act of 1933 ("Rule 144") promulgated by the Securities and
Exchange Commission. These securities ("Rule 144 Securities") comprise
all or part of the Collateral held by Bank presently subject to the
terms and conditions of the Agreement and this Rider.
2. Pledgor represents and warrants that Pledgor has held the Rule 144
Securities free and clear of all liens (except for liens, encumbrances
and debt held by Bank) encumbrances and debt, and borne the full
economic risk thereof since October 12, 1989.
3. Pledgor covenants and agrees that:
a. After an Event of Default, Pledgor will cooperate fully
with Bank with respect to any sale by Bank of any of the Rule
144 Securities, including full and complete compliance with
all requirements of Rule 144, and will give to Bank all
information and will do all things necessary, including the
execution of all documents, forms, instruments and other
items, to comply with Rule 144 for the complete and
unrestricted sale and/or transfer of the Rule 144 Securities
and will exercise its best efforts to have the issuer of such
securities, upon the request of Bank, take all such action as
may be required to satisfy the public information requirements
of Rule 144(c).
b. Pledgor will not approve or consent to any amendment of the
articles of incorporation or charter of any issuer of the Rule
144 Securities that may materially adversely affect the value
of the Rule 144 Securities, or that permit any issuer of the
Rule 144 Securities to merge or consolidate with or into any
corporation or other person, without the prior written consent
of Bank.
c. Pledgor will use all reasonable efforts, upon Bank's
written request, to have issuer publish all information
necessary to satisfy Rule 144 in the event any issuer of the
Rule 144 Securities is not current in its filings under the
Securities Exchange Act of 1934 at the time of a foreclosure
sale by Bank.
By signing below, Pledgor accepts and agrees to the terms and covenants
contained in this Rider.
Pledgor(s)/Debtor(s):
AMERICAN PHYSICIANS SERVICE
GROUP, INC.,
/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
Title: Sr VP Finance