ASSIGNMENT AGREEMENT
AND
SECOND AMENDMENT TO CONTRIBUTION AGREEMENT
This Assignment Agreement and Second Amendment to Contribution Agreement
(this "Agreement"), dated as of April 1, 2000 (the "Effective Date"), is by and
between Prime Medical Services, Inc. a Delaware corporation ("PMSI"), Prime
Medical Operating, Inc., a Delaware corporation ("PMOI"), Prime RVC, Inc., a
Delaware corporation ("Prime RVC"), Prime Refractive Management, L.L.C., a
Delaware limited liability company ("Prime Management"), Barnet ▇▇▇▇▇▇▇ Eye
Center, P.L.L.C., an Arizona professional limited liability company ("BDEC"),
LASIK Investors, L.L.C., a Delaware limited liability company ("LASIK"),
Prime/BDR Acquisition, L.L.C., a Delaware limited liability company ("Prime
BDR"), Prime/BDEC Acquisition, L.L.C., a Delaware limited liability company
("Prime BDEC"), Prime Refractive, L.L.C., a Delaware limited liability company
("Prime Refractive"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D. ("▇▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
("Barnet"), and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"). All of the foregoing parties other
than Prime RVC are hereinafter referred to as the "Existing Parties".
Preliminary Statements
LASIK and Prime BDR are each a party to that certain Contribution
Agreement, dated as of September 1, 1999, among PMSI, PMOI, Prime Management,
BDEC, LASIK, Prime BDR, Prime BDEC, Prime Refractive, Dulaney, Barnet, and
▇▇▇▇▇▇▇▇▇, as amended by that certain First Amendment to Contribution Agreement
dated as of January 31, 2000 (the "Contribution Agreement").
The parties to this Agreement desire that LASIK transfer to PMOI all of
LASIK's ownership in Prime BDR, including, without limitation, that certain
forty percent (40%) membership interest received by LASIK in connection with the
consummation of the transactions contemplated by the Contribution Agreement (the
"Prime BDR Interest").
The parties to this Agreement desire that Prime Refractive transfer to
Prime RVC all of Prime Refractive's ownership in Caster One, L.L.C., a Delaware
limited liability company and partially owned subsidiary of Prime Refractive
("Caster One"), including, without limitation, that certain sixty percent (60%)
membership interest owned Prime Refractive (collectively the "Caster Interest"
and, together with the Prime BDR Interest, the "Transferred Interests").
In partial consideration of the assignment of the Transferred
Interests, PMSI desires to issue certain Warrants described herein.
The Existing Parties also desire that, effective upon transfer of the
Transferred Interests, Prime RVC shall assume all obligations for any and all
amounts owed by Prime Refractive to Prime Management under that certain
Promissory Note executed by Prime Refractive and dated March 1, 2000 in the
principal amount of $5,828,724 (the "Promissory Note"), and Prime Refractive
shall thereupon be released from any obligation under the Promissory Note.
Statement of Agreement
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good, valuable and binding consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
ARTICLE I.
ASSIGNMENT OF INTEREST
Section 1.1 Assignment and Grant of Warrants.
--------------------------------
(a) Prime BDR Interest. LASIK hereby conveys, transfers and
assigns to PMOI, and PMOI hereby acquires from LASIK all right, title and
interest in and to the Prime BDR Interest, such that on the Effective Date,
LASIK shall not own (i) any ownership or other interest in Prime BDR or (ii) any
rights or securities exercisable or exchangeable for, or convertible into,
ownership or other interests in Prime BDR.
(b) Caster One Interest. As allowed by Section 2.5(i) of
Caster One's Limited Liability Company Agreement, Prime Refractive hereby
conveys, transfers and assigns to Prime RVC, and Prime RVC hereby acquires from
Prime Refractive all right, title and interest in and to the Caster Interest,
such that on the Effective Date, Prime Refractive shall not own (i) any
ownership or other interest in Caster One or (ii) any rights or securities
exercisable or exchangeable for, or convertible into, ownership or other
interests in Caster One.
(c) Warrants. In partial consideration of the assignment of
the Transferred Interests, PMSI agrees to deliver warrants to LASIK (or any
combination of the principals of LASIK provided in written instructions
delivered to PMSI within 5 days of the execution of this Agreement), such
warrants to be in substantially the form attached hereto as Exhibit K (the
"Warrants"). The Warrants delivered in partial consideration of the transfer of
the Prime BDR Interest shall entitle the holder(s) thereof to purchase, upon the
terms and conditions contained in the Warrants, a collective total of 81,263
shares of $0.01 par value common stock of PMSI, at a per share purchase price of
$10.38. The Warrants delivered in partial consideration of the transfer of the
Caster Interest shall entitle the holder(s) thereof to purchase, upon the terms
and conditions contained in the Warrants, a collective total of 43,715 shares of
$0.01 par value common stock of PMSI, at a per share purchase price of $8.25.
ARTICLE II.
AMENDMENT
Section 2.1 Amendments to Contribution Agreement.
------------------------------------
(a) The Existing Parties hereby agree to amend Section 4.3(a)
of the Contribution Agreement to replace the reference to "Loan Agreement" with
a reference instead to "Development Facility".
(b) The Existing Parties hereby agree to amend Section 4.3(e)
of the Contribution Agreement to replace the two references to "Loan Agreement
or Development Facility" with references instead to "Development Facility", and
to delete the reference to "(as applicable)".
(c) The Existing Parties hereby agree to amend Section 4.3(f) of the
Contribution Agreement to read in its entirety as follows:
(a) The parties agree that all of the loan
agreements, promissory notes, guarantees, security agreements,
assignment and security agreements and other agreements,
documents or instruments executed by any party in connection
with the Development Facility are hereinafter collectively
referred to as the "Credit Documents."
(d) The Existing Parties hereby agree to amend Section 8.2(c)
of the Contribution Agreement to replace the reference to "Exhibit A" with a
reference instead to "Exhibit K".
(e) The Existing Parties hereby agree to amend the TABLE OF EXHIBITS to the
Contribution Agreement to add at the bottom:
Exhibit K Form of Target Center Warrants
(f) The Existing Parties hereby agree to amend the
Contribution Agreement to add as Exhibit K, immediately following Exhibit J, the
Form of Target Center Warrant attached to this Agreement as Exhibit K.
Section 2.2 Assumption of Promissory Note. Prime RVC hereby assumes, as
of the Effective Date, all of the obligations arising under the Promissory Note,
and Prime Management agrees that Prime Refractive is hereby released from any
and all obligations it may have under the Promissory Note, regardless of whether
such obligations are past due. Notwithstanding the foregoing, the parties agree
that all amounts previously paid under the Promissory Note are non-refundable,
and each party to this agreement agrees that it will not take any action to
recover any such amount. Prime Management further agrees that it shall
irrevocably cancel the Promissory Note following the assumption thereof by Prime
RVC. The existence of and amounts advanced under the Promissory Note shall not
reduce the maximum principal amount of the Development Facility from
$29,165,000.
ARTICLE III.
REPRESENTATIONS
Section 3.1 All Parties. Each party to this Agreement hereby represents
and warrants that (a) as of the date of this Agreement, it has full and lawful
power and authority to execute and deliver this Agreement and to consummate and
perform the transactions contemplated in this Agreement, (b) assuming due
execution and delivery by the other parties hereto, this Agreement is
enforceable against it, and constitutes its valid and legally binding
obligation, (c) except as provided herein, it is not required to obtain any
consent from or approval or action of, or make any filing with or give notice
to, any person, public authority or entity, in connection with the execution and
delivery of this Agreement, and (d) by virtue of its direct or indirect partial
ownership of or involvement with Prime BDR and Caster One, it has personal and
detailed knowledge of the operations and assets of Prime BDR and Caster One, and
it has neither requested nor relied on any additional information from any other
party to this Agreement (or any agent or representative of any other party to
this Agreement).
Section 3.2 Representations of LASIK. LASIK hereby represents and
warrants to the parties to this Agreement that the Prime BDR Interest is hereby
conveyed to PMOI free and clear of any and all liens, claims, encumbrances and
restrictions of any kind whatsoever (other than those expressly set forth in the
Contribution Agreement or the Limited Liability Company Agreement of Prime BDR).
Section 3.3 Representations of Prime Refractive. Prime Refractive
hereby represents and warrants to the parties to this Agreement that the Caster
Interest is hereby conveyed to Prime RVC free and clear of any and all liens,
claims, encumbrances and restrictions of any kind whatsoever (other than those
expressly set forth in the contribution agreement governing Prime Refractive's
acquisition of the Caster Interest or in the Limited Liability Company Agreement
of Caster One).
ARTICLE IV.
Resignations and ENTIRE INTEREST
Each of Barnet, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ hereby resigns from any and all
positions or titles which he may hold or claim to hold with Prime BDR, Caster
One or any entity in which either of the foregoing owns an equity ownership
interest. Each of Barnet, Dulaney, ▇▇▇▇▇▇▇▇▇ and LASIK acknowledges and agrees
that he or it does not now have any right to purchase or otherwise acquire, at
any time subsequent to the Effective Date, any direct or indirect ownership
interests in Prime BDR or Caster One.
ARTICLE V.
GENERAL
Section 5.1 Subsequent Amendment of Prime BDR Governance Documents. The
parties hereby agree that Prime RVC and PMOI may, at any time on or after the
Effective Date, (a) amend, supplement or replace entirely the Certificate of
Formation, Limited Liability Company Agreement or any other organizational
document of Prime BDR, in any manner they desire and (b) subject to applicable
law, dissolve Prime BDR and distribute its assets in any manner they desire.
Section 5.2 Transaction Document. This Agreement shall be considered a
"Transaction Document" under the Contribution Agreement.
Section 5.3 No Assumption of Liabilities. Except as expressly provided
in Section 2.3 above, none of PMSI, PMOI, Prime RVC or Prime Management hereby
assumes any debt, obligation or liability of any other party to this Agreement.
Section 5.4 Ratification by Members of Prime Refractive. Each party to
this Agreement agrees that by executing this Agreement, it is deemed to be
voting its ownership interest (if any) in Prime Refractive to authorize Prime
Refractive to enter into and perform this Agreement and any other document or
agreement to which Prime Refractive is a party and that is contemplated by or
executed in connection with this Agreement. Each such party hereby consents (in
all capacities for which it is entitled to or required to give consent) to the
transfer of the Transferred Interests, and further agrees to execute such
resolutions and written consents, and take such other actions, in their
capacities as members of Prime Refractive, as any other party hereto shall
reasonably require after the date of this Agreement in order to have Prime
Refractive ratify and adopt this Agreement.
Section 5.5 Ratification by Members of LASIK. Each party to this
Agreement agrees that by executing this Agreement, it is deemed to be voting its
ownership interest (if any) in LASIK to authorize LASIK to enter into and
perform this Agreement and any other document or agreement to which LASIK is a
party and that is contemplated by or executed in connection with this Agreement.
Each such party hereby consents (in all capacities for which it is entitled to
or required to give consent) to the transfer of the Transferred Interests, and
further agrees to execute such resolutions and written consents, and take such
other actions, in their capacities as members of LASIK, as any other party
hereto shall reasonably require after the date of this Agreement in order to
have LASIK ratify and adopt this Agreement.
Section 5.6 Ratification by Members of Prime BDR. Each party to this
Agreement agrees that by executing this Agreement, it is deemed to be voting its
ownership interest (if any) in Prime BDR to authorize Prime BDR to enter into
and perform this Agreement and any other document or agreement to which Prime
BDR is a party and that is contemplated by or executed in connection with this
Agreement. Each such party hereby consents (in all capacities for which it is
entitled to or required to give consent) to the transfer of the Transferred
Interests, and further agrees to execute such resolutions and written consents,
and take such other actions, in their capacities as members of Prime BDR, as any
other party hereto shall reasonably require after the date of this Agreement in
order to have Prime BDR ratify and adopt this Agreement.
Section 5.7 Effect on Existing Agreements.
-----------------------------
(a) Contribution Agreement. This Agreement is incorporated
into the Contribution Agreement by reference. Other than as provided in this
Agreement and that certain First Amendment to Contribution Agreement dated
January 31, 2000 among of the Existing Parties, the Contribution Agreement
(including Exhibits and Schedules) has not been modified or amended and is in
full force and effect. Each of the Existing Parties hereby affirms that it
remains a party to the Contribution Agreement (as amended by this Agreement)
after the execution of this Agreement. The Contribution Agreement may be
restated as amended hereby for the convenience of the parties hereto.
(b) Financing Documents. The parties to this Agreement hereby
terminate that certain Assignment and Security Agreement (the "Security
Agreement") dated as of September 1, 1999 originally between PMOI and LASIK,
securing LASIK's obligations under the Loan Agreement (as such term is defined
in the Contribution Agreement prior to the effect of the amendments contained in
this Agreement). PMOI and Prime RVC agree to promptly file with the appropriate
offices a release of all financing statements securing only those obligations of
Prime BDR under the Loan Agreement. Notwithstanding the foregoing provisions of
this subsection, the parties to this Agreement acknowledge that the Security
Agreement and such financing statements have been collaterally assigned to one
or more lenders of PMSI, and that the consent of such lenders will be required
in order to fully effect the termination and releases described in this
subsection. PMOI and Prime RVC hereby agree to exercise all reasonable efforts
to promptly have such lenders provide the consents necessary to effect the
provisions of this subsection.
Section 5.8 Cooperation and Further Assurance. From time to time, as
and when reasonably requested by another party after the date of this Agreement,
each party hereto agrees to (at the expense of the requesting party) execute and
deliver, or cause to be executed and delivered, all such documents, instruments
and consents, and to use reasonable efforts to take all such other actions, as
may be reasonably requested or necessary to carry out the intent and purposes of
this Agreement and vest in Prime RVC good title to, possession of and control of
the Transferred Interests. Without limiting the foregoing, the parties agree
that the last paragraph of Section 9.3 of the Contribution Agreement as it
relates to LASIK's disposition of the Prime BDR Interest hereunder shall only
deal with the return of Proprietary Information, credit cards, keys, equipment,
supplies and other materials that are specific only to Prime BDR, and shall not
(as a result of the disposition of the Prime BDR Interest hereunder) require the
return of Proprietary Information and such items that relate both to Prime BDR
and either of Prime Refractive or Prime BDEC.
Section 5.9 GOVERNING LAW AND CONSTRUCTION. THIS AGREEMENT IS PERFORMABLE
IN ▇▇▇▇▇▇ COUNTY, TEXAS, AND IS GOVERNED BY THE LAWS OF TEXAS.
Section 5.10 ARBITRATION. ANY CONTROVERSY BETWEEN THE PARTIES REGARDING
THIS AGREEMENT AND ANY CLAIMS ARISING OUT OF THIS AGREEMENT OR A BREACH
HEREUNDER SHALL BE SUBMITTED TO ARBITRATION BY THE PARTIES IN ACCORDANCE WITH
AND GOVERNED BY SECTION 10.11 OF THE CONTRIBUTION AGREEMENT.
Section 5.11 Severability. If any provision of this Agreement is
rendered or declared illegal or unenforceable by reason of any existing or
subsequently enacted statute, rule or regulation, or by order of or judgment of
a court, any and all other terms and provisions hereof shall remain in full
force and effect as stated and set forth herein. Furthermore, in lieu of such
illegal or unenforceable provision, there shall be added automatically as part
of this Agreement, a provision as similar in effect to the result intended by
such illegal or unenforceable provision as may be possible and still be legal
and enforceable.
Section 5.12 Miscellaneous. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective heirs,
executors, administrators, successors and permitted assigns. This Agreement may
be executed in multiple counterparts, each of which shall be an original, but
all of which shall constitute one and the same instrument. This Agreement has
been negotiated by the parties and their respective counsel and will be fairly
interpreted in accordance with its terms and without any strict construction in
favor of or against any party. When the context requires, the gender of all
words used herein shall include the masculine, feminine and neuter and the
number of all words shall include the singular and plural. The captions in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect any of the terms or provisions hereof. There are no third-party
beneficiaries to this Agreement. This Agreement may not be modified, altered or
amended except by a writing signed by all of the parties hereto. No waiver of
any provisions hereof shall be effective unless contained in a writing signed by
the person to be bound thereby.
[Signature page follows]
S-4
SIGNATURE PAGE
TO
ASSIGNMENT AGREEMENT
AND
SECOND AMENDMENT TO CONTRIBUTION AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the day and year first above written.
PMSI: PRIME MEDICAL SERVICES, INC.
▇▇▇▇▇ ▇▇▇▇▇▇, Treasurer
PMOI: PRIME MEDICAL OPERATING, INC.
▇▇▇▇▇ ▇▇▇▇▇▇, Treasurer
PRIME RVC: PRIME RVC, INC.
▇▇▇▇▇ ▇▇▇▇▇▇, Treasurer
PRIME MANAGEMENT: PRIME REFRACTIVE MANAGEMENT, L.L.C.
▇▇▇▇▇ ▇▇▇▇▇▇, Treasurer
BDEC: Barnet ▇▇▇▇▇▇▇ Eye CENTER, P.L.L.C.
By:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D., manager
LASIK: LASIK INVESTORS, L.L.C.
By:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D., manager
By:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D., manager
PRIME BDR: PRIME/BDR ACQUISITION, L.L.C.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D., signing as a manager of Prime BDR,
and on behalf of LASIK as a member of Prime BDR
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D., signing as a manager of Prime BDR,
and on behalf of LASIK as a member of Prime BDR
▇▇▇▇▇ ▇▇▇▇▇▇, signing as a manager of Prime BDR,
and on behalf of PMOI as a member of Prime BDR
PRIME BDEC: PRIME/BDEC ACQUISITION, L.L.C.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D., signing as a manager of Prime BDEC,
and on behalf of LASIK as a member of Prime BDEC
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D., signing as a manager of Prime BDEC,
and on behalf of LASIK as a member of Prime BDEC
▇▇▇▇▇ ▇▇▇▇▇▇, signing as a manager of Prime BDEC,
and on behalf of PMOI as a member of Prime BDEC
PRIME REFRACTIVE: PRIME REFRACTIVE, L.L.C.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D., signing as a manager of Prime Refractive,
and on behalf of LASIK as a member of Prime Refractive
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D., signing as a manager of Prime Refractive,
and on behalf of LASIK as a member of Prime Refractive
▇▇▇▇▇ ▇▇▇▇▇▇, signing as a manager of Prime Refractive,
and on behalf of PMOI as a member of Prime Refractive
▇▇▇▇▇▇▇:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
BARNET:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇▇▇:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇