LOAN AGREEMENT
August 10, 2000
Park Pharmacy Corporation
Attention: Mr. Thomas R. Baker, President
10711 Preston Road, Suite 250
Dallas, Texas 75230
Dougherty's Pharmacy, Inc.
Attention: Mr. Thomas R. Baker, President
10711 Preston Road Suite 250
Dallas, Texas 75230
RX-Pro.Com, Inc.
Attention: Mr. Jim Moncrief, President
10711 Preston Road, Suite 250
Dallas, Texas 75230
Ravens Pharmacy, Inc.
Attention: Mr. Thomas R. Baker, President
10711 Preston Road, Suite 250
Dallas, Texas 75230
Total Pharmacy Supply, Inc.
Attention: Mr. Thomas R. Baker, President
10711 Preston Road, Suite 250
Dallas, Texas 75230
Park Infusion Services, LP
Attention: Mr. Thomas R. Baker
10711 Preston Road, Suite 250
Dallas, Texas 75230
Gentlemen:
This Loan Agreement (the "Loan Agreement"), when
countersigned by an authorized officer or representative of each
entity, Park Pharmacy Corporation ("Park"), a Colorado
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corporation, Dougherty's Pharmacy, Inc. ("Dougherty"), a Texas
corporation, RX-Pro.Com, Inc. ("RX"), a Texas corporation, Ravens
Pharmacy, Inc. ("Ravens"), a Texas corporation, Total Pharmacy
Supply, Inc. ("Total"), a Texas corporation and Park Infusion
Services, LP ("PIS"), a Texas limited partnership (hereinafter
for convenience sometimes collectively, jointly or singly
referred to as "Borrower"), will set forth the terms of a
multiple obligation credit facility by and between Borrower and
BANK OF TEXAS, N.A.("Bank").
1. Credit Facility. Subject to the terms and conditions set
forth in this Loan Agreement and the other agreements,
instruments and documents evidencing, governing, and/or
pertaining to the Loan, as hereinafter defined (collectively,
together with the Loan Agreement, referred to hereinafter as the
"Loan Documents"), which includes but is not limited to execution
of all required documentation, payment of all fees and expenses
of Bank, and tender of all enumerated documentation relating to
each Borrower, Bank hereby agrees to provide to Borrower the
credit facility hereinbelow described (the "Credit Facility") and
more particularly set forth in the Loan Documents:
a. $1,500,000.00 Revolving Line of Credit. Subject to
the terms and conditions set forth herein and
satisfaction of all of Borrower's obligations under the
Loan Documents, Bank agrees to lend to Borrower on a
revolving basis from time to time during the period
commencing on the date hereof and continuing through
August 10, 2001, the maturity date of the $1,500,000.00
Revolving Line of Credit Note (the "Revolving Line of
Credit Note"), such amounts as Borrower may request
hereunder; provided, however, (i) the total principal
amount outstanding at any time shall not exceed
$1,500,000.00 (the "Revolving Line of Credit" or the
"Maximum LOC Commitment Amount"), and (ii)
notwithstanding anything to the contrary herein,
amounts outstanding on the Revolving Line of Credit
Note and all other debt of Borrower under this Credit
Facility shall not exceed the Borrowing Base Amount.
Subject to the terms and conditions of the Revolving
Line of Credit , Borrower may borrow, repay and
reborrow amounts thereunder. Collateral for the
Revolving Line of Credit Note shall be a first and
prior lien and security interest in and to all assets
of Borrower. The sums advanced under the Revolving
Line of Credit Note shall be used by the Borrower to
provide (i) working capital support for Borrower and
(ii) refinancing of existing debt owed by any one or
more of the entities comprising Borrower, including
without limitation part or all of the amounts owed by
members of Borrower to Bank under a prior credit
facility hereafter referred to as the "March 6, 2000
Credit Facility."
b. $1,300,000.00 Term Note. Subject to the terms and
conditions set forth herein and satisfaction of all
obligations of the Borrower in the Loan Documents, Bank
agrees to lend Borrower on a term basis beginning on
the date hereof and continuing for a term of four (4)
years, in a single advancement of $1,300,000.00.
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This Note (the "Term Loan" or "Term Note") will
amortize fully on the basis of a four (4) year mortgage
amortization and mature on August 10, 2004. Collateral
for the Term Loan shall include not only equipment, but
accounts receivable, inventory, general intangibles,
payment intangibles and all other assets as defined
below. No leased or third party owned equipment shall
be included in "assets of Borrower." The monies
advanced on the Term Loan will be used by Borrower to
refinance existing debt owed by any one or more of the
entities comprising Borrower, including without
limitation part or all of the amounts owed by members
of Borrower to Bank under the March 6, 2000 Credit
Facility.
c. $5,000,000.00 Acquisition Line of Credit.
Subject to the terms and conditions set forth herein in
satisfaction of all obligations of the Borrower in the
Loan Documents, Bank agrees to lend to Borrower on a
revolving basis from time to time during the period
commencing on the date hereof and continuing through
August 10, 2001, such amounts as Borrower may request
for accomplishing the purchase of assets of companies
to be acquired including without limitations the assets
of PIS; provided, however, (i) the total principal
amount outstanding at any time shall not exceed
$5,000,000.00 (the "Acquisition Line of Credit") or the
("Maximum Acquisition Commitment Amount"); (ii) within
one hundred and eighty (180) days of the Closing and
funding of an acquisition financed under this facility,
the total acquisition consideration (including all
relevant fees and expenses) must be refinanced by
Borrower on a four (4) year fully amortizing term loan
identical to the terms and provisions for the Term Loan
set forth above; (iii) notwithstanding anything to the
contrary herein, any amounts advanced under the
Acquisition Line of Credit when added to all other
indebtedness owed by Borrower to Bank under the terms
of this Loan Agreement shall not exceed the Borrowing
Base. Amounts refinanced in accordance with the
provisions of Section 1. c.(ii), above shall not be
taken into account for determining the Maximum
Acquisition Commitment Amount, but shall be taken into
account by the Borrower in reporting the conformity of
this Credit Facility and the limit of all borrowings in
relationship to the Borrowing Base. Collateral for the
Acquisition Line of Credit shall be a first and prior
lien and security interest in and to all assets
acquired in any acquisition financed hereby together
with all other assets of Borrower. Subject to the
terms and conditions of the Acquisition Line of Credit,
Borrower may borrow, repay and reborrow amounts
thereunder. The sums advanced under the Acquisition
Line of Credit shall be used by the Borrower to provide
acquisition financing of other pharmacies and/or
pharmaceutical/ medical supply concerns or the assets
thereof.
d. The three (3) notes identified above and any
additional note made by the Borrower in satisfaction of
the requirements of the Acquisition Line of Credit (a
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"Note") or the "Notes") will provide that the
Notes are cross-collateralized and cross-defaulted. As
Borrower meets its obligations under the Acquisition
Line of Credit and refinances the acquisition cost of
the transaction with the proceeds of a term note as
provided above, Borrower shall execute and deliver to
Bank any and all other collateral documentation in form
and substance to the satisfaction of the Bank and pay
all costs and expenses of Bank incurred thereby,
including without limitation Borrower shall deliver (i)
a promissory note of the Borrower in the amount
required; (ii) a written pledge and security agreement
(substantially in the form of the pledge and security
agreements to be executed to secure one or more of the
Notes set forth above granting a lien and security
interest on all assets so acquired, (iii) a written
opinion of counsel containing opinions of the type
delivered by Borrower's current counsel at the closing
thereof and a separate opinion to the effect that the
act of pledging assets in the manner contemplated to
secure the debt of Borrower is not subject to a
fraudulent conveyance claim, (iv) execution and
delivery of all necessary financing statements or other
documentation or agreements required by Bank to perfect
a first and prior security interest in the Additional
Collateral, (v) if applicable, evidence of the
authorization and binding effect of that future
subsidiary's proffered performance under those new
agreements and/or documents, and (vi) payment of all
Bank's costs, including without limitation reasonable
attorney's fees and expenses.
All advances under the Notes and the amounts from time to time
outstanding shall be collectively called the "Loan". Bank
reserves the right to require Borrower to give Bank not less than
three (3) Business Days' prior written notice of each requested
advance under the Revolving Line of Credit Note not advanced at
closing and any subsequent request for an advance under the
Acquisition Line of Credit, specifying (i) the aggregate amount
of such requested advance and providing evidence of or the
particulars establishing Borrower's eligibility under the
Borrowing Base, all as more particularly set forth in the
Revolving Line of Credit Note and/or the Acquisition Line of
Credit Note, and (ii) the requested date of such advance, with
such advances to be requested in a written form satisfactory to
Bank.
2. Promissory Notes. The Loan shall be evidenced initially by
three (3) promissory notes (together with any renewals,
extensions, modifications, and/or increases thereof, if any [and
none is committed by Bank], the "Revolving Line of Credit Note,"
the "Term Note" and the "Acquisition Line of Credit Note"
respectively, with each Note providing for joint and several
liability, duly executed by an authorized officer and/or
representative of each entity of Borrower and payable to the
order of Bank), in the stated aggregate principal amount of up to
$7,800,000.00 (the "Commitment Amount"), and otherwise in form
and substance acceptable to Bank. Interest on the three (3)
Notes shall accrue at the various rates set forth in each such
Note. The principal of and interest on the three (3) Notes
comprising the Loan and any subsequent
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refinancing under the Acquisition Line of Credit Note shall be
due and payable in accordance with the terms and conditions set
forth in each of the Notes and in this Loan Agreement.
3. Collateral. As collateral and security for the
indebtedness evidenced by the Notes and any and all other
indebtedness or obligations related to or arising under the Notes
(collectively the "Indebtedness"), Borrower has pledged and
assigned to Bank, its successors and assigns, a first and prior
lien and security interest in the following property or property
interests of Borrower as follows:
a. Revolving Line of Credit Note: (i) all assets
including accounts receivable, inventory, accounts,
securities, fixed assets and general intangibles and
payment intangibles of each of the entities comprising
Borrower and (ii) all accounts receivable, inventory,
cash and all other tangible personal property of
Borrower, including without limitation, insurance
policies thereto and all proceeds therefrom together
with warranties, service contracts and proceeds
therefrom (the "LOC Collateral"), more particularly
described in those six (6) certain Pledge Agreements or
Pledge and Security Agreements dated of even date
herewith, executed as appropriate, by Park, Dougherty,
RX, Ravens, Total and PIS to or for the benefit of Bank
(each hereafter referred to as a "Pledge Agreement").
Park, Dougherty, RX, Ravens, Total and PIS agree to
execute such other agreements and documents as Bank
shall deem appropriate and otherwise require from time
to time to more fully create and perfect Bank's first
and prior liens and security interests in the LOC
Collateral. Borrower confirms that each entity
comprising Borrower owns the LOC Collateral free and
clear of all security interests and liens of any type
after closing and the payoff of any loan balance of
Borrower then outstanding, as applicable.
b. Term Note: All the LOC Collateral shall also be
Collateral for the Term Note (the "Term Note
Collateral").
c. Acquisition Line of Credit Note: (i) All assets
not leased or licensed (but including all contractual
rights thereto) acquired by Borrower in connection with
any acquisition financed by means of advance under the
Acquisition Line of Credit Note and (ii) all the
Collateral securing the Revolving Line of Credit Note
described above.
d. Guaranty Agreements: If Park elects to add
eligible assets of any future subsidiary to secure the
note(s) required to refinance a portion of the
Acquisition Line of Credit Note, then, as part of the
requirements discussed above Borrower further agrees to
provide to Bank a note and pledge and security
agreement, or at Bank's option as additional security
for repayment of the Credit Facility separate
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written guaranty agreements (each hereafter
referred to as a "Guaranty") substantially in form of
the attached Exhibit "B" or as otherwise required by
Bank in its sole discretion by each future subsidiary
of Park. Each Guaranty will remain in effect until the
Notes and all costs and expenses due therein are fully
paid. Each Guaranty shall expressly provide that the
Bank will be entitled to proceed to enforce its rights
in the Additional Collateral against one or more
Guarantors without proceeding against any one or all of
the entities comprising the Borrower, any other
Guarantor, or in any combination thereof, or in respect
of any other collateral which secures the Credit
Facility in such manner, time and sequence as the Bank
shall determine in its sole and absolute discretion.
e. Cross-collateralization and cross-default: The
Notes and any other obligation of Borrower to Bank
shall provide that all collateral for that Note is also
collateral for the other Note, and also state that a
default in the payment of one Note or in the
performance of Borrower's or any other party's
obligations under the Loan Documents associated thereto
shall also be a default under the provisions of the
other Note.
f. Definitions: The following definitions shall apply
to the Loan Documents and the terms and provisions
thereof.
(i) "Accounts Receivable" Any present or
future right to receive payment as shown on the
books and records of Borrower, including without
limitation accounts receivable established in the
ordinary course of business, contract rights
evidencing a debt or obligation of a third party
not an Affiliate (defined herein), a tax refund
due to Borrower based on a filed tax return, or
any other account, chattel paper or document which
evidences a right of Borrower to receive payment
from a third party, not an Affiliate of Borrower.
(ii) "Affiliate" Any partnership, joint venture,
company, association or other entity related to
Borrower by common ownership.
(iii) "Assets of Borrower" Those assets
which are not leased or licensed (but as to any
such lease or licensed assets all contractual
rights of use thereto) which are owned by
Borrower, whether real or personal, or any form
mixed, together with all intangible rights or use
and all intellectual property, goodwill,
trademark, service mark, patent, license or
contractual right in any manner related thereto or
associated therewith.
(iv) "Borrowing Base Amount or "Borrowing Base"
That amount which is equal to two and one-half (2-
1/2) times the total of the trailing
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twelve (12) months proforma EBITDA of Borrower
plus an amount equal to the trailing twelve (12)
months proforma EBITDA of any entity or assets
purchased by Borrower by means of an advance on
the Acquisition Line of Credit Note, or otherwise
acquired by stock purchase, merger transaction,
master lease arrangement or other similar
transaction. Proforma EBITDA to determine the
"Borrowing Base" or "Borrowing Base Amount" may
include, with prior written Bank approval on a
case by case basis, certain add-backs associated
with a particular acquisition or other accounting
adjustments reasonably related thereto.
(v) "Contra Accounts" Any account receivable
where Borrower has a corresponding account
payable. Stated differently, any situation where
there are mutual accounts receivable and accounts
payable existing between Park, Dougherty, RX,
Ravens, Total or PIS or any future subsidiary of
any one or more of Borrower in respect of inter-
company obligations as well as any obligations
with a third party.
(vi) "Government Accounts" Any account
receivable from any governmental agency which is
not a "pre-approved Medicare/Medicaid account."
Included within this definition would be any
Medicare account based upon assignments for
durable goods, "walk-in" accounts or other
accounts subject to governmental audit.
(vii) "Guarantor" Any future subsidiary of
Park which executes and delivers to Bank a written
guaranty of the Credit Facility and a pledge
agreement granting a first and prior security
interest in certain of its personal property which
is eligible LOC Collateral.
(viii) "Ineligible Accounts Receivable" Any
account receivable more than ninety (90) days
outstanding for any account other than a Medicare
account, and for any Medicare account more than
one hundred and fifty (150) days old and any
account receivable required to be subtracted from
total accounts receivable in accordance with the
requirements of Schedule 1 to Exhibit "A" attached
to this Agreement.
(ix) "Eligible Accounts Receivable" Eighty
percent (80%) of any account receivable which is
not an Ineligible Account Receivable as defined
above expressed on the basis of book value of each
account according to the books and records of each
Borrower.
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(x) "Eligible Inventory" Those items held for
sale to third parties not otherwise held for or as
consigned goods as reflected on the books and
records of Borrower at fifty percent (50%) of
FIFO, cost basis accounting method applying
generally accepted accounting principles ("GAAP").
(xi) "Eligible Equipment" All equipment and
other fixed assets actually owned by Borrower
valued as carried on the books and records of that
owning entity at fifty percent (50%) of the
depreciated book value at cost of all such
eligible items.
(xii) "Additional Collateral" Collateral
which is satisfactory to the Bank and of the same
type, character and quality originally pledged to
secure the Credit Facility, but excluding any
Collateral pledged for the Term Note, originally
pledged for the Revolving Line of Credit, any
asserted value for any Guaranty or any Collateral
which Borrower and/or Borrower's future
subsidiaries do not own and cannot provide a first
and prior perfected security interest to Bank.
(xiii) "EBITDA" or "adjusted EBITDA" On a
consolidated basis of all entities comprising
Borrower, the amount of earnings before interest,
taxes, depreciation and amortization determined in
accordance with generally accepted accounting
principles on a consistent basis. "Adjusted
EBITDA" or "adjusted EBITDA" shall mean the EBITDA
with adjustments requested by Borrower and
approved by Bank in accordance with the terms
hereof.
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4. Loan Administration Matters
a. Mandatory Reduction. During the term the Loan is
outstanding at any time the amount advanced and
outstanding on either the Revolving Line of Credit Note
and/or the Acquisition Line of Credit Note is in excess
of any of the conditions stated below, Borrower shall
immediately make a payment on the Loan within five (5)
business days in an amount sufficient to reduce the
outstanding balance of the Revolving Line of Credit
Note and/or the Acquisition Line of Credit Note to an
aggregate amount equal to or less than the Borrowing
Base, or Borrower shall cause to be pledged to the Bank
Additional Collateral in form reasonably satisfactory
to the Bank. Upon either party obtaining knowledge
that Borrower is not in compliance with the Borrowing
Base, Borrower shall not be entitled to any further
advances on the Revolving Line of Credit Note and/or
the Acquisition Line of Credit Note until such time as
Borrower has made the payment provided above or pledged
Additional Collateral in an amount and manner
satisfactory to the Bank to a level of compliance.
Payment of the required amount to bring the outstanding
balance of the Revolving Line of Credit Note into
compliance with the provisions of this Agreement shall
be made on or before five (5) business days after the
date Borrower shall have filed a report with Bank
hereunder reflecting that set of facts. Any action by
Borrower to pledge Additional Collateral to conform
with the provisions hereof shall not increase the
Maximum LOC Commitment Amount and/or Maximum
Acquisition LOC Commitment Amount. The total amount
of the indebtedness owed by Borrower to Bank under the
Notes shall never exceed the Borrowing Base.
b. Advancement on Term Note. Borrower shall be entitled
to one (1) advance on the Term Note in the amount and
based upon the provisions of paragraph 1(b), above.
The amount of advancement to the Term Note shall be
$1,300,000.00.
5. Representations and Warranties. Park, Dougherty, RX,
Ravens, Total and PIS hereby jointly and severally represent and
warrant, and upon each request for an advance under the Credit
Facility further so represent and warrant, to Bank as follows:
a. Binding Obligations. The execution, delivery,
and performance of this Loan Agreement and all of the
other Loan Documents by Borrower, and where applicable
by each Guarantor, constitute legal, valid and binding
obligations of Borrower and where applicable of each
Guarantor, enforceable in accordance with the
respective terms, except as limited by bankruptcy,
insolvency or similar laws of general application
relating to the enforcement of creditors' rights and
except to the extent specific remedies may generally be
limited by equitable principles.
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b. No Consent. The execution, delivery and
performance of this Loan Agreement and the other Loan
Documents, and the consummation of the transactions
contemplated hereby and thereby, do not (i) conflict
with, result in a violation of, or constitute a default
under any law, governmental regulation, court decree or
order applicable to Borrower, or (ii) require the
consent, approval or authorization by any third party,
other than the action to be taken by each Guarantor in
executing and delivering a Guaranty and a Pledge
Agreement as provided above.
c. Financial Condition. Each financial statement of
Borrower and of any future subsidiary of Park agreeing
to be a Guarantor supplied to the Bank fairly discloses
and presents Borrower's and/or each of Park's
subsidiary's respective financial condition as of the
date of each such statement. There has been no
material adverse change in such financial condition or
results of operations of Borrower subsequent to the
date of the most recent financial statements supplied
to the Bank. In the event any obligation of Borrower
hereunder is subsequently additionally secured by a
Guarantor, each Guarantor shall make the foregoing
representations and warranties regarding its financial
statements for the relevant periods addressed thereby.
d. Litigation. There are no actions, suits or
proceedings, pending or, to the knowledge of Borrower,
threatened against or affecting Borrower, or the
property of Borrower and/or of a Guarantor, if
applicable, before any court or governmental
department, commission or board, which, if determined
adversely to Borrower and/or any Guarantor, if
applicable, would have a material adverse effect on the
financial condition, properties, or operations of
Borrower, any subsequent affiliate and/or any
Guarantor.
e. Taxes; Governmental Charges. Borrower and, if
applicable, each Guarantor have filed all federal,
state and local tax reports, applications, and returns
required by any law or regulation to be filed by
Borrower (and if applicable by a Guarantor) and each
filing party has either duly paid all taxes, duties and
charges indicated due on the basis of such returns and
reports, or made adequate provision for the payment
thereof, and the assessment of any material amount of
additional taxes in excess of those paid and reported
is not reasonably expected.
f. UCC Matters. Borrower warrants and represents that
the information detailing Borrower's business location
and the location of all assets pledged to secure the
Credit Facility hereby are as listed on Exhibit "D".
Borrower further commits to immediately apprise Bank no
later than thirty (30) days following any change of the
information set forth below and to execute all
documents and pay all costs and expenses to be incurred
by Bank in connection with any additional steps which
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may be required to perfect and/or continue the
perfection of the security interests and liens granted
hereby.
6. Conditions Precedent to Advances. Bank's obligation to make
any advance under this Loan Agreement relating to any one of the
three (3) Notes, to any term loan required under the Acquisition
Line of Credit or under the other Loan Documents shall be subject
to the conditions precedent that, as of the date of such advance
or loan and after giving effect thereto (i) all representations
and warranties made to Bank in this Loan Agreement and the other
Loan Documents shall be true and correct, as of and as if made on
such date, (ii) no material adverse change in the respective or
consolidated financial condition of Borrower (and a Guarantor, if
applicable) since the effective date of the most recent financial
statements furnished to Bank by Borrower shall have occurred and
be continuing, (iii) no event has occurred and is continuing, or
would result from the requested advance, which with notice or
lapse of time, or both, would constitute an Event of Default (as
hereinafter defined), (iv) Bank has received all Loan Documents
appropriately executed by Borrower and all other proper parties
and Borrower has paid any and all fees and expenses due Bank
hereunder, and (vi) Borrower has submitted all required
certificates and other documentation to request an initial or
subsequent (where, when and to the extent permitted) advance on
the Credit Facility and to meet all reporting obligations
hereunder.
7. Affirmative Covenants. Until (i) the Note and all other
obligations and liabilities of Borrower under this Loan Agreement
and the other Loan Documents are fully paid and satisfied, and
(ii) the Bank has no further commitment to lend hereunder,
Borrower agrees and covenants that Borrower will, unless Bank
shall otherwise consent in writing:
(a) Monthly Financial Statements. As soon as available,
and in any event within thirty (30) days after the end
of each of the months of each fiscal year of Borrower,
Borrower will provide Bank a separate financial report
for the immediate past month ending for Park,
Dougherty, RX, Ravens, Total and PIS and each
Guarantor, if any. Each report will contain a copy of
an unaudited financial report of those five entities
and any subsequently acquired entity as of the end of
such month and for the portion of the fiscal year then
ended, containing balance sheets, statements of income,
statements of retained earnings, statements of changes
in financial position and cash flow statements, in each
case setting forth in comparative form the figures for
the corresponding period of the preceding fiscal year,
all in reasonable detail certified by the respective
chief financial officer of Borrower to have been
prepared in accordance with generally accepted
accounting principles ("GAAP") and to fairly and
accurately present (subject to year-end audit
adjustments) the financial condition and results of
operations of Park, Dougherty, RX, Ravens, Total and
PIS and each Guarantor, if any, at the date and for the
periods indicated therein;
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(b) Quarterly Consolidated Financial Statements. Within
forty-five (45) days of the end of each fiscal quarter,
Borrower shall provide a quarterly consolidated
financial statement for Borrower and any future
subsidiary of Park. Each such quarterly report shall
summarize the prior quarterly end balances and contain
all such detail as is provided in the monthly financial
statements summarized for the quarter and reflected on
a consolidated basis for Borrower and any future
subsidiary of Park, all in reasonable detail prepared
by an outside CPA and certified by the respective chief
financial officer of Borrower. Each such summary shall
be prepared in accordance with generally accepted
accounting principles and fairly and accurately present
the financial condition and results of operations of
the Borrower on a consolidated basis for that quarter
ending;
(c) Annual Financial Statements. As soon as available and
in any event within ninety (90) days after the end of
each fiscal year of the Borrower beginning with the
fiscal year ended June 30, 2001, Borrower will provide
Bank a copy of the annual audited consolidated
financial statements for Park, Dougherty, RX, Ravens,
Total and PIS and any Guarantor for such fiscal year
containing balance sheets, income statements,
statements of retained earnings, statements of changes
in financial position and cash flow statements, as at
the end of each such fiscal year and for the twelve
(12) month period then ended, in each case setting
forth in comparative form the figures for the preceding
fiscal year, all in reasonable detail and audited and
certified by independent certified public accountants
of recognized standing acceptable to the Bank, to the
effect that such report has been prepared in accordance
with GAAP;
(d) Borrowing Base Certificate. Furnish to the Bank,
within thirty (30) days of the end of each month, a
Borrowing Base Certificate (in the form of Exhibit "A"
to this Agreement) for the previous month end, together
with a monthly listing and aging of accounts receivable
which includes a complete and correct list of the
account debtors, their addresses and the amount owing
to Borrower and/or each Guarantor, if applicable, by
each such account debtor;
(e) Compliance Certificate. Furnish to Bank at its
request, but no less frequently than forty-five (45)
days from the end of each fiscal quarter a covenant
Compliance Certificate expressly setting forth the
Borrower's position in respect of all financial
covenants set forth herein, save and except that the
Borrower shall provide a Compliance Certificate setting
forth the Consolidated Debt Service coverage ratio on a
monthly basis.
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(f) Inventory Schedule. Furnish to the Bank, at its
request, but no less frequently than annually,
beginning June 30, 2001, on or before thirty (30) days
from the end of the fiscal year end period, a schedule
of all inventory in a form satisfactory to the Bank;
(g) Listing of Accounts Payable. Furnish to the Bank,
at its request, a listing and aging of accounts payable
of the Borrower and, if applicable, each Guarantor;
(h) Certificate of No Default. Furnish to the Bank,
within thirty (30) days of the end of each month, a
separate Certificate of No Default signed by a
representative of Park, Dougherty, RX, Ravens, Total
and PIS in the form of Exhibit "D" attached hereto and
incorporated by reference to the effect that to the
best of his knowledge and after reasonable
investigation no Event of Default (as hereinafter
defined) has occurred hereunder or under any other
agreement to which the Borrower is a party or by which
it is bound or by which any of its properties or assets
may be affected and the default thereunder is material
to Borrower's financial condition, and no event which,
with the giving of notice or the lapse of time or both,
would constitute an Event of Default has occurred and
is continuing;
(i) Notice of Default. Give notice to the Bank
immediately in writing of the occurrence of any Event
of Default and each event which, with the giving of
notice or lapse of time or both, would constitute an
Event of Default, any change in the name or address of
the Borrower, any change in name, identity or Borrower
structure, and any uninsured or partially uninsured
loss through fire, theft, liability or property damage,
except deductible amounts;
(j) Notice of Litigation. Promptly give notice to the
Bank of all litigation and all proceedings before
governmental or regulatory agencies affecting the
Borrower or any future subsidiary of Park, excepting
only litigation or proceedings not materially
affecting the operations or financial condition of the
Borrower and/or of each Guarantor or Affiliate;
(k) Notice of Material Adverse Effect. As soon as
possible and in any event within five (5) days after
the occurrence thereof, provide written notice of any
matter that could have a material adverse effect on the
business, condition (financial or otherwise),
operations, prospects, or properties of the Borrower
or, if applicable, a Guarantor;
(l) Guarantor Financial Statements. Furnish to the
Bank, within ninety days of the end of the fiscal year
on June 30, corporate financial statements and trial
balances and cash flow statements of each Guarantor, if
any;
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<PAGE>
(m) Further Assurances. From time to time, upon
request by the Bank, execute and deliver to the Bank
any instrument, document, assignment or other writing
which may be necessary or advisable in the Bank's
opinion to carry out the terms of the Agreement and to
perfect the Bank's security interest in and facilitate
the collection of any Collateral securing the Credit
Facility;
(n) Insurance. Maintain insurance with financially
sound and reputable insurance companies at least in
such amounts and against such risks as are usually
insured against by persons engaged in similar
businesses. Each policy covering Collateral shall name
the Bank as loss payee or additional insured, as
appropriate, and provide that such policy will not be
canceled without thirty (30) days prior written notice
to the Bank;
(o) Existence. Maintain its existence as a
corporation duly incorporated and in good standing
under the law of the jurisdiction under which it is
incorporated and continue to be duly licensed or
qualified as a foreign corporation in all jurisdictions
wherein the character of the property owned or leased
by it or the nature of the business transacted by it
makes licensing or qualification necessary by a foreign
corporation. For any member of Borrower or any
subsequent Guarantor which is a limited partnership,
that entity shall maintain its existence in good
standing and conformity to the laws of the state of its
organization and possess all rights to conduct business
in accordance with the laws thereunder, including
without limitation satisfy the obligations of any
corporate general partner to maintain its existence and
good standing under the laws of the state of its
organization and to be qualified to do business in the
State in which the limited partnership has registered;
(p) Inspection. Make available to the Bank's officers
or representatives, at any reasonable time, the books
and records of the Borrower, including, but not limited
to, the accounts receivable files, inventory records,
general ledger, and correspondence files. The Bank has
the right to examine its Collateral at any reasonable
time without prior notice;
(q) Compliance with Laws. Comply in all material
respects with all applicable laws, rules, regulations
and orders of any court, governmental authority or
arbitrator;
(r) Taxes. Pay and discharge all taxes, assessments
and governmental charges ("taxes") imposed upon the
Borrower or its property or property used by Borrower
in the conduct of its business prior to maturity or
before the taxes become delinquent;
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<PAGE>
(s) Opinion of Counsel. Borrower shall provide Bank an
opinion of counsel in the form satisfactory to Bank's
counsel providing opinions by Borrower's counsel as to
the existence of Park, Dougherty, RX, Ravens, Total and
PIS where and when applicable, that the value received
by each Guarantor and the binding effect of each
Guaranty and each Pledge Agreement by a Guarantor, an
opinion on usury, organization and good standing of the
Borrower and each Guarantor as well as the
authorization of Borrower and each Guarantor to conduct
business in the State of Texas, and evidence that all
requisite corporate action, authority of the executing
officer and no third-party consents are required,
together with such other opinions as might be
appropriate under the circumstances to accomplish the
Loan and evidence Borrower's and, when applicable, each
Guarantor's ability to enter into, execute and perform
under the terms of the Loan Documents.
(t) Advice of Principal Place of Business. Each
entity comprising Borrower agrees to immediately Bank
of any change of address relative to the principal
place of business of Borrower. Each entity comprising
Borrower further agrees to notify Bank of any material
change of information set forth in the attached Exhibit
"D" and to cooperate with Bank, execute and deliver
such additional financing statements, documents,
certificates or other instruments as may be reasonably
required to allow Bank to maintain, continue and/or
perfect its security interest now or hereafter granted
or to be granted in connection with providing
Collateral for the Notes. In the event a Guarantor
delivers a Pledge and Security Agreement to secure the
obligations of that Guarantor to Bank, that Guarantor
shall give a written declaration to Bank of the
location of its principal place of business and all
locations at which the assets pledged to secure the
Guaranty are located in the ordinary course of
business.
8. Negative Covenants. Until (i) the Revolving Line of Credit
Note, the Term Note and the Acquisition Line of Credit Note and
all other obligations and liabilities of Borrower under this Loan
Agreement and the other Loan Documents are fully paid and
satisfied, and (ii) the Bank has no further commitment to lend
hereunder, Borrower will not, without the prior written consent
of Bank:
(a) Debt. Directly or contingently create, incur,
assume or suffer to exist any debt for borrowed money,
whether by way of loan, guaranty or the issuance or
sale of bonds, debentures, notes or securities,
including deferred debt for the purchase price, except
(i) the Loan described herein, (ii) current accounts
payable and other current obligations (other than for
borrowed money) arising out of transactions in the
ordinary course of business and (iii) loans by any one
of the five entities
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<PAGE>
comprising the Borrower to any one or more of the
other entities comprising the Borrower;
(b) Mergers; Dispositions. Form any new subsidiary or
merge or invest in or consolidate with any corporation
or other entity, or sell, lease, assign, transfer, or
otherwise dispose of (whether in one transaction or as
a series of related transactions) all or substantially
all of its assets, whether now owned or hereafter
acquired, or acquire by purchase or otherwise, all or
substantially all of the assets of any corporation or
other entity where the total consideration is in excess
of Five Hundred Thousand Dollars ($500,000.00). It is
understood that Borrower may effect a consolidation of
business and/or transfer of assets for infusion
services to patients between Dougherty's and PIS.
Borrower shall give Bank written notice of any such
event, and if necessary, execute and deliver any such
additional documentation as may be reasonably required
to continue the perfection and existence of all
security interests granted by the Borrower as at the
date of the establishment of this Credit Facility;
(c) Change in Form of Business. Borrower shall not,
directly or indirectly, engage in any business
significantly and materially different from those in
which it currently engages in or contemplates engaging
in, or substantially altering its current method of
doing business;
(d) Restricted Payments. During any single fiscal
year, pay any cash dividend or make any other payment
or distribution (in cash, property, or obligations)
other than a stock dividend on account of its
respective capital stock, or redeem, purchase or
retire, or otherwise acquire any of its capital stock,
or set apart any money for a sinking or other analogous
fund for any dividend or other distribution on its
capital stock or for any redemption, purchase,
retirement, or other acquisition of any of its capital
stock, or grant or issue any capital stock, except that
any subsidiary of Park shall be permitted to pay cash
dividends to Park; or
(e) Liens. Create, incur, assume or suffer to exist
any mortgage, deed of trust, pledge, encumbrance, lien
or security interest of any kind, upon any of its
property now owned or hereafter acquired, except (i)
liens, mortgages, encumbrances or security interests to
secure payment of the borrowings authorized hereunder;
(ii) pledges or deposits to secure obligations under
workmen's compensation laws or of similar laws; (iii)
deposits to secure public or statutory obligations;
(iv) statutory mechanics', carriers', workmen's,
repairmen's liens or other like items in the ordinary
course of business with respect to obligations which
are not overdue or are being contested in good faith;
and (v) existing liens not contemplated under
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<PAGE>
this Agreement as reflected by the financial
statements submitted to the Bank dated as of
December 31, 1999;
(f) Affiliated Transactions. Enter into any
transaction, including, without limitation, the
purchase, sale, or exchange of property or the
rendering of any service, with any Affiliate of the
Borrower or a division or future subsidiary of Park,
except in the ordinary course of and pursuant to the
reasonable requirements of the Borrower's (or such
division's or future Parks subsidiary's) business and
upon fair and reasonable terms no less favorable to the
Borrower (or such division or future subsidiary of
Park) than would be obtained in a comparable arms-
length transaction with a person not an affiliate of
the Borrower (or such division or subsidiary of Park);
(g) Disposition of Assets. Sell, lease, assign,
transfer, or otherwise dispose of any of its assets;
and
(h) Capital Expenditures. Permit its aggregate
capital expenditures to exceed $250,000.00 during any
fiscal year.
(i) Change in Management. Permit a change in the
senior management of Borrower's business operations
whereby at the end of that change at least one of
Thomas R. Baker, Joe Moncrief or Joe B. Park is not
holding a senior executive office of the Borrower. In
the event of the retirement, legal incapacity of death
of these three (3) named senior officers, Borrower
shall be able to obtain Bank's approval of another
individual with qualified management experience to have
included in this roster of approval senior management
of the Borrower.
(j) Financial covenants. Borrower shall not allow the
total indebtedness due from Borrower to Bank under this Credit
Facility:
(i) to exceed the Borrowing Base; or
(ii) to exceed an amount equal to the total senior
funded debt to adjusted EBITDA on a consolidated
basis for the prior trailing twelve (12) months as
reported and measured quarterly beginning with the
quarter ending September 30, 2000 and continuing
in a like manner at the end of each fiscal quarter
thereafter times 3.0; or
(iii) to result in a consolidated debt service
coverage for the Loan less than 1.3 to 1.0
calculated on the basis of adjusted EBITDA less
cash taxes paid
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<PAGE>
divided by all principal and interest payments.
This standard shall be calculated and reported by
Borrower on a monthly basis; or
(iv) to result in a consolidated basis the minimum
current ratio of less than 1.50 to 1.0. This
ratio shall be calculated quarterly; or
(v) to result in a ratio of total funded senior debt
to margin collateral of 1.35 to 1.0 on a trailing
twelve (12) months' basis adjusted quarterly
beginning with the quarter ending September 30,
2000 and continuing in a like manner at the end of
each fiscal quarter thereafter. "Margin
collateral" shall include Eligible Accounts
Receivable, Eligible Inventory and Eligible
Equipment.
9. Events of Default. In confirmation and/or in addition to
the express terms of the Loan Documents, each of the following
shall constitute an "Event of Default" under this Loan Agreement:
(a) The failure of Borrower to pay on or before the
date due any installment of principal and/or interest
on any one of the Notes or any other indebtedness or
obligations owing to Bank by Borrower from time to
time, and the continuation of such failure for a period
of ten (10) days after written notice thereof by Bank
to Borrower.
(b) The failure of Borrower or any Obligated Party (as
defined below) to timely and properly observe, keep or
perform any non-monetary covenant, agreement, warranty
or condition required herein or in any of the other
Loan Documents (other than covenants in respect to the
delivery of Additional Collateral, as and when required
by any one of the Pledge Agreements, which covenants
shall be governed by the terms of that Pledge
Agreement), and the continuation of such failure for a
period of thirty (30) days after written notice thereof
by Bank to Borrower and, if applicable, an Obligated
Party.
(c) The occurrence of an event of default under any of
the other Loan Documents or under any other agreement
now existing or hereafter arising between Bank and
Borrower and or any other Obligated Party and such
default shall continue for a period of ten (10) days in
respect of a monetary default and thirty (30) days in
respect of a non-monetary default after written notice
thereof from Bank to Borrower and failure of the
Borrower to cure same within the time period provided.
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<PAGE>
(d) Any representation contained herein or in any of
the other Loan Documents made by Borrower or any
Obligated Party is false or misleading in any material
respect as of the date made.
(e) If Borrower or any Obligated Party: (i) becomes
insolvent, or makes a transfer in fraud of creditors,
or makes an assignment for the benefit of creditors, or
admits in writing its inability to pay its debts as
they become due; (ii) generally is not paying its debts
as such debts become due; (iii) has a receiver, trustee
or custodian appointed for, or take possession of, all
or substantially all of the assets of such party,
either in a proceeding brought by such party or in a
proceeding brought against such party and such
appointment is not discharged or such possession is not
terminated within sixty (60) days after the effective
date thereof or such party consents to or acquiesces in
such appointment or possession; (iv) files a petition
for relief under the United States Bankruptcy Code or
any other present or future federal or state
insolvency, bankruptcy or similar laws (all of the
foregoing hereinafter collectively called "Applicable
Bankruptcy Law") or an involuntary petition for relief
is filed against such party under any Applicable
Bankruptcy Law and such involuntary petition is not
dismissed within sixty (60) days after the filing
thereof, or an order for relief naming such party is
entered under any Applicable Bankruptcy Law, or any
composition, rearrangement, extension, reorganization
or other relief of debtors now or hereafter existing is
requested or consented to by such party; (v) fails to
have discharged within a period of thirty (30) days any
attachment, sequestration or similar writ levied upon
any property of such party; or (vi) fails to pay within
thirty (30) days any final money judgment against such
party.
(f) Borrower shall be required to demonstrate that
either Thomas R. Baker or Jim Moncrief maintain an
executive level office with Joe B. Park. In the event
of death, legal disability or resignation of either
Thomas R. Baker or Jim Moncrief, Borrower shall give
written advice of such event to the Bank and
demonstrate that either Thomas R. Baker or Jim Moncrief
remain in office as an executive officer of each
Borrower. It is the intent of Borrower and Bank that
Borrower is always possessed of qualified senior
executive management and that Borrower can evidence
that its management will not be disrupted by the
absence of both Thomas R. Baker and/or Jim Moncrief who
will work with Joe B. Park. The Bank shall determine
the continuity of management of the Borrower in the
Bank's sole and absolute discretion.
g. If Borrower defaults in any covenant or obligation
in the Pledge Agreement to deliver to Bank Additional
Collateral for the Loan and such failure continues for
a period of ten (10) days after notice thereof from
Bank to Borrower.
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<PAGE>
h. The default by or of Borrower under any one or
more of the Notes now or hereafter outstanding or any
of the Loan Documents related thereto shall also
constitute an event of default under all of the other
Notes not otherwise then in default.
Nothing contained in this Loan Agreement shall be construed
to limit the events of default enumerated in any of the other
Loan Documents and all such events of default shall be
cumulative. The term "Obligated Party", as used herein, shall
mean any party other than Borrower who secures, guarantees, in
whole or in part, and/or is otherwise obligated to pay all or any
portion of the indebtedness evidenced by any one of the Notes.
10. Remedies. Upon the occurrence of any one or more of the
foregoing Events of Default,
(a) the entire unpaid balance of principal of each of
the three Notes, together with all accrued but unpaid
interest thereon, and all other indebtedness owing to
Bank by Borrower at such time shall, at the option of
Bank, become immediately due and payable without
further notice, demand, presentation, notice of
dishonor, notice of intent to accelerate, notice of
acceleration, protest or notice of protest of any kind,
all of which are expressly waived by Borrower, and (b)
Bank may, at its option, make further advances under
the Revolving Line of Credit Note; provided, however
concurrently and automatically with the occurrence of
an Event of Default under subparagraph (e) in the
immediately preceding paragraph (i) further advances
requested by Borrower under the Revolving Line of
Credit Note shall cease, and (ii) the Revolving Line of
Credit Note, the Term Note, the Acquisition Line of
Credit Note and all other indebtedness owing to Bank by
Borrower at such time shall, without any action by
Bank, become due and payable, without further notice,
demand, presentation, notice of dishonor, notice of
acceleration, notice of intent to accelerate, protest
or notice of protest of any kind, all of which are
expressly waived by Borrower. All rights and remedies
of Bank set forth in this Loan Agreement and in any of
the other Loan Documents may also be exercised by Bank,
at its option to be exercised in its sole discretion,
upon the occurrence of an Event of Default.
11. Rights Cumulative. All rights of Bank under the terms of
this Loan Agreement shall be cumulative of, and in addition to,
the rights of Bank under any and all other agreements between
Borrower and Bank (including, but not limited to, the other Loan
Documents), and not in substitution or diminution of any rights
now or hereafter held by Bank under the terms of any other
agreement.
Pag 20
<PAGE>
12. Waiver and Agreement. Neither the failure nor any delay
on the part of Bank to exercise any right, power or privilege
herein or under any of the other Loan Documents shall operate as
a waiver thereof, nor shall any single or partial exercise of
such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. No waiver of any provision in this Loan Agreement or
in any of the other Loan Documents and no departure by Borrower
therefrom shall be effective unless the same shall be in writing
and signed by Bank, and then shall be effective only in the
specific instance and for the purpose for which given and to the
extent specified in such writing. No modification or amendment
to this Loan Agreement or to any of the other Loan Documents
shall be valid or effective unless the same is signed by the
party against whom it is sought to be enforced.
13. Benefits. This Loan Agreement shall be binding upon and
inure to the benefit of Bank, Borrower, and any Obligated Party,
and their respective successors and assigns, provided, however,
that Borrower and any Obligated Party may not, without the prior
written consent of Bank, assign any rights, powers, duties or
obligations under this Loan Agreement or any of the other Loan
Documents.
14. Notices. All notices, requests, demands or other
communications required or permitted to be given pursuant to this
Agreement shall be in writing and given by (i) personal delivery,
(ii) expedited delivery service with proof of delivery, or (iii)
United States mail, postage prepaid, registered or certified
mail, return receipt requested, sent to the intended addressee at
the address set forth on the signature page hereof and shall be
deemed to have been received either, in the case of personal
delivery, as of the time of personal delivery, in the case of
expedited delivery service, as of the date of first attempted
delivery at the address and in the manner provided herein, or in
the case of mail, upon deposit in a depository receptacle under
the care and custody of the United States Postal Service. Either
party shall have the right to change its address for notice
hereunder to any other location within the continental United
States by notice to the other party of such new address at least
thirty (30) days prior to the effective date of such new address.
15. Construction. This Loan Agreement and the other Loan
Documents have been executed and delivered in the State of Texas,
shall be governed by and construed in accordance with the laws of
the State of Texas, and shall be performable by the parties
hereto in Dallas County, Texas.
16. Invalid Provisions. If any provision of this Loan Agreement
or any of the other Loan Documents is held to be illegal, invalid
or unenforceable under present or future laws, such provision
shall be fully severable and the remaining provisions of this
Loan Agreement or any of the other Loan Documents shall remain in
full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance.
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<PAGE>
17. Expenses. Borrower shall pay all costs and expenses
(including, without limitation, reasonable attorneys' fees) in
connection with (i) any action required in the course of
administration of the indebtedness and obligations evidenced by
the Loan Documents, and (ii) any action in the enforcement of
Bank's rights upon the occurrence of Event of Default.
18. Participation of the Loan. Borrower agrees that Bank may,
at its option, sell interests in the Loans and its rights under
this Loan Agreement to a financial institution or institutions
and, in connection with each such sale, Bank may disclose any
financial and other information available to Bank concerning
Borrower to each prospective purchaser.
19. Entire Agreement. This Loan Agreement (together with the
other Loan Documents) contains the entire agreement among the
parties regarding the subject matter hereof and supersedes all
prior written and oral agreements and understandings among the
parties hereto regarding same.
20. Conflicts. In the event any term or provision hereof is
inconsistent with or conflicts with any provision of the other
Loan Documents, the terms and provisions contained in this Loan
Agreement shall be controlling.
21. Counterparts. This Loan Agreement may be separately
executed in any number of counterparts, each of which shall be an
original, but all of which, taken together, shall be deemed to
constitute one and the same instrument.
22. Jury Trial Waiver. Each of the Notes and each of the Loan
Documents, and any amendment, modification or extension agreement
thereto, shall contain provisions in a form then promulgated by
the Bank waiving Borrower's and any other Obligated Party's right
to a trial by jury.
23. Origination and Commitment Fees. There shall be no loan
origination fee for the creation of the Credit Facility.
Borrower does agree to pay Bank on a monthly basis a commitment
fee on the average daily unused portion of the Maximum LOC
Commitment Amount, from and including August 10, 2000 to and
including the Maturity Date (as defined in the LOC Note) at the
rate of one quarter of one percent (.25%) per annum based on a
360 day year and the actual number of days elapsed, payable on
the 30th day of each month, commencing September 10, 2000, and
ending on the Maturity Date. Borrower shall also pay an
advancement fee under the Acquisition Line of Credit note equal
to one-half of one percent (.50%) of each amount requested by
Borrower to be advanced under that facility. That advancement
fee shall be payable in cash on the date of funding of each
advance under the Acquisition Line of Credit Note and shall be
paid by Borrower from its own resources, or to the extent
available under the terms of the Acquisition Line of Credit, as a
further amount to be advanced thereunder in conjunction with the
then request for an advance.
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<PAGE>
24. Use of Proceeds to Refinance Existing Obligations.
Borrower confirms that upon Closing of this Loan, all existing
obligations of the Borrower to Bank under the terms of the
March 6, 2000 Credit Facility shall be paid in full and that
facility shall be terminated and of no further force and effect.
Borrower confirms that any of its obligations under the Loan
Documents executed in connection with the previous March 6, 2000
Credit Facility shall, in accordance with their express terms and
provisions, continue beyond the termination date of that
facility. Borrower acknowledges that certain proceeds of this
Loan Agreement will retire the existing obligations of the
borrower under the March 6, 2000 Credit Facility and terminate
all rights of Borrower to request any advances under those
facilities for any reason whatsoever. If requested by Bank,
Borrower shall execute UCC-3s permitting the transfer of security
interests and liens held in favor of the Bank as part of the
security for the Loan.
If the foregoing correctly sets forth our mutual agreement,
please so acknowledge by signing and returning this Loan
Agreement to the undersigned.
BANK OF TEXAS, N.A.
By: /s/ FRANK A. SEWELL, IV
--------------------------------
Frank A. Sewell, IV
Banking Officer
READ, AGREED AND APPROVED:
PARK PHARMACY CORPORATION, RX-PRO.COM, INC.,
a Colorado corporation a Texas corporation
By: /s/ THOMAS R. BAKER By: /s/ JIM MONCRIEF
--------------------------- ----------------------------
Thomas R. Baker, President Jim Moncrief, President
Date: August 10, 2000 Date: August 10, 2000
------------------------- --------------------------
Page 23
<PAGE>
DOUGHERTY'S PHARMACY, INC., TOTAL PHARMACY SUPPLY, INC.
a Texas corporation a Texas corporation
By:/s/THOMAS R. BAKER By: /s/ THOMAS R. BAKER
--------------------------- ------------------------
Thomas R. Baker, President Thomas R. Baker, President
Date: August 10, 2000 Date: August 10, 2000
------------------------- ----------------------
PARK INFUSION SERVICES, LP, RAVENS PHARMACY, INC.,
a Texas limited partnership a Texas corporation
By: Park Operating GP, LLC,
a Texas limited liability company By: /s/ THOMAS R. BAKER
-------------------------
Thomas R. Baker, President
By: /s/ THOMAS R. BAKER
-----------------------------
Name: Thomas R. Baker, President
Page 24
<PAGE>
PROMISSORY NOTE
--------------------
(Term Note)
$1,300,000.00 August 10, 2000
FOR VALUE RECEIVED, on or before August 10, 2004 ("Maturity
Date"), the undersigned and if more than one, each of them,
jointly and severally (hereinafter referred to as "Borrower"),
promises to pay to the order of BANK OF TEXAS, N.A. ("Bank") at
its offices in Dallas County, Texas, at 5956 Sherry Lane, Suite
1100, Dallas, Texas 75225, or elsewhere as Bank may instruct in
writing, the principal amount of ONE MILLION THREE HUNDRED
THOUSAND AND NO/100 DOLLARS ($1,300,000.00) ("Total Principal
Amount"), or such amount less than the Total Principal Amount
which is outstanding from time to time if the total amount
outstanding under this Promissory Note ("Note") is less than the
Total Principal Amount, together with interest on such portion of
the Total Principal Amount which has been advanced to Borrower
from the date advanced until paid at a fluctuating rate of
interest equal to the sum of "Wall Street Journal Prime Rate" as
that rate is from time to time published in the Wall Street
Journal plus one-half of one percent (.5%) per annum. Each
change of rate based upon the publication of a change in the
"Wall Street Journal Prime Rate" shall be effective on the date
of change without requirement to give notice of each such change
to Borrower. All interest due hereon on this Note shall be
calculated on the basis of the actual days elapsed but computed
as if each year consisted of 360 days, as applicable, and no
interest shall be due at a rate in excess of the Maximum Rate.
The term "Maximum Rate" as used herein, shall mean at the
particular time in question the maximum rate of interest which,
under applicable law, may then be charged on this Note. If
applicable law ceases to provide for such a maximum rate of
interest, the Maximum Rate shall be equal to eighteen percent
(18%) per annum.
The principal of and all accrued but unpaid interest on this
Note shall be due and payable as follows:
(a) installment payments of principal and accrued, but
unpaid, interest equal to the amount required to completely
amortize this Note over a four year period shall be due and
payable monthly commencing on September 1, 2000, and continuing
on in a like manner on the first day of each succeeding month
beginning October 1, 2000 through the Maturity Date.
(b) the remaining outstanding principal balance of this
Note, together with all accrued but unpaid interest thereon,
shall be due and payable on the Maturity Date.
If any payment of principal and interest required hereunder
is not paid within ten (10) days after the same became due and
payable, Bank may, at its election, charge Borrower in an amount
equal to 5.0% of the regularly scheduled payment or $25.00,
whichever is greater, up to the maximum amount of $250.00 per
late charge. Upon the occurrence of an Event of Default
Page 1
<PAGE>
hereunder, including a default arising from Borrower's failure to
pay upon final maturity, Bank, at its option, may also, if
permitted under applicable law, do one or both of the following:
(a) increase the applicable interest rate on this Note to a rate
which is the lesser of 5.00 percentage points or the Maximum
Rate, and (b) add any unpaid accrued interest to the principal
balance hereof and all such sums will bear interest therefrom
until paid ,at the lesser of (i) the rate provided in this Note
(including any increased rate), or (ii) the Maximum Rate as Bank
may elect.
This Note is secured by the pledge of all accounts
receivable, inventory, accounts, machinery, furniture, fixtures,
equipment and other tangible and intangible property of Borrower
pursuant to five (5) certain Pledge and Security Agreements dated
of even date herewith, executed for the benefit of Bank (herein,
the "Park Pledge Agreement," "Dougherty Pledge Agreement," "RX
Pledge Agreement," "Ravens Pledge Agreement," "Total Pledge
Agreement," and "PSI Pledge Agreement").
This Note, the Park Pledge Agreement, the Dougherty Pledge
Agreement, the RX Pledge Agreement, the Ravens Pledge Agreement,
the Total Pledge Agreement and the PSI Pledge Agreement and all
other documents evidencing, securing, governing, guaranteeing
and/or pertaining to this Note and one other promissory note of
even date herewith executed by Borrower and payable to the order
of Bank which are cross-collateralized and cross-defaulted with
this Note, including but not limited to those documents described
above, are hereinafter collectively referred to as the "Loan
Documents." The holder of this Note is entitled to the benefits
and security provided in the Loan Documents.
This Note does not evidence a revolving loan. Borrower may
not borrow, repay and reborrow hereunder. Unless otherwise
agreed to in writing or otherwise required by applicable law,
payments received by Bank hereunder will be applied first to
accrued, unpaid interest, then to principal, and any remaining
amount to any unpaid collection costs, late charges and other
charges, provided, however, upon delinquency or other Event of
Default, Bank reserves the right to apply such payments among
principal, interest, late charges, collection costs and other
charges at its discretion. All prepayments shall be applied to
the indebtedness owing hereunder in such order and manner as Bank
may from time to time determine in its sole discretion. All
payments and prepayments of principal of or interest on this Note
shall be made in lawful money of the United States of America in
immediately available funds at the address of Bank indicated
above, or such other place as the holder of this Note shall
designate in writing to Borrower. If any payment of principal of
or interest on this Note shall become due on a day which is not a
Business Day (as hereinafter defined), such payment shall be made
on the next succeeding Business Day and any such extension of
time shall be included in computing interest in connection with
such payment. As used herein, the term "Business Day" shall mean
any day other than any day on which commercial banks in the State
of Texas are authorized to be closed. The books and records of
Bank shall be prima facie evidence of all outstanding principal
of and
Page 2
<PAGE>
accrued and unpaid interest on this Note.
Borrower confirms that this is a business loan, and that no
proceeds of this Note shall be used for personal, family or
household purposes. All advances hereunder shall be used solely
for business, commercial, investment or other similar purposes.
Borrower agrees that upon the occurrence of any one or more
of the following events of default ("Event of Default"):
(a) failure of Borrower to pay any installment of principal
of or interest on this Note or on any other indebtedness of
Borrower to Bank when due and the continued failure to pay same
and all other amounts then due hereunder after ten (10) days
written notice from Bank to Borrower of the initial failure of
Borrower to pay any such installment; or
(b) failure of Borrower to pay any installment of principal
or interest on any other promissory note of Borrower payable to
the order of Bank when due thereby and the continued failure to
pay same and all other amounts then due hereunder after ten (10)
days written notice from Bank to Borrower of the initial failure
of Borrower to pay any such installment; or
(c) the occurrence of any Event of Default specified in any
of the other Loan Documents; or
(d) the bankruptcy or insolvency of, the assignment for the
benefit of creditors by, or the appointment of a receiver for any
of the property of, or the liquidation, termination, or
dissolution of, any party liable for the payment of this Note,
whether as maker, endorser, guarantor, surety or otherwise;
The holder of this Note may, at its option, without further
notice or demand, (i) declare the outstanding principal balance
of and accrued but unpaid interest on this Note at once due and
payable, (ii) foreclose all liens securing payment hereof, (iii)
pursue any and all other rights, remedies and recourses available
to the holder hereof, including but not limited to any such
rights, remedies or recourses under the Loan Documents, at law or
in equity, or (iv) pursue any combination of the foregoing.
The failure to exercise the option to accelerate the
maturity of this Note or any other right, remedy or recourse
available to the holder hereof upon the occurrence of an Event of
Default hereunder shall not constitute a waiver of the right of
the holder of this Note to exercise the same at that time or at
any subsequent time with respect to such Event of Default or any
other Event of Default. The rights, remedies and recourses of
the holder hereof, as provided in this Note and in any of the
other Loan Documents, shall be cumulative and concurrent and may
be pursued separately, successively or together as often as
occasion therefore shall arise, at the sole
Page 3
<PAGE>
discretion of the holder hereof. The acceptance by the holder
hereof of any payment under this Note which is less than the
payment in full of all amounts due and payable at the time of
such payment shall not (i) constitute a waiver of or impair,
reduce, release or extinguish any right, remedy or recourse of
the holder hereof, or nullify any prior exercise of any such
right, remedy or recourse, or (ii) impair, reduce, release or
extinguish the obligations of any party liable under any of the
Loan Documents as originally provided herein or therein.
This Note and all of the other Loan Documents are intended
to be performed in accordance with, and only to the extent
permitted by, all applicable usury laws. If any provision hereof
or of any of the other Loan Documents or the application thereof
to any person or circumstance shall, for any reason and to any
extent, be invalid or unenforceable, neither the application of
such provision to any other person or circumstance nor the
remainder of the instrument in which such provision is contained
shall be affected thereby and shall be enforced to the greatest
extent permitted by law. It is expressly stipulated and agreed
to be the intent of the holder hereof to at all times comply with
the usury and other applicable laws now or hereafter governing
the interest payable on the indebtedness evidenced by this Note.
If the applicable law is ever revised, repealed or judicially
interpreted so as to render usurious any amount called for under
this Note or under any of the other Loan Documents, or contracted
for, charged, taken, reserved or received with respect to the
indebtedness evidenced by this Note, or if Bank's exercise of the
option to accelerate the maturity of this Note, or if any
prepayment by Borrower results in Borrower having paid any
interest in excess of that permitted by law, then it is the
express intent of Borrower and Bank that all excess amounts
theretofore collected by Bank be credited on the principal
balance of this Note (or, if this Note and all other indebtedness
arising under or pursuant to the other Loan Documents have been
paid in full, refunded to Borrower), and the provisions of this
Note and the other Loan Documents immediately be deemed reformed
and the amounts thereafter collectable hereunder and thereunder
reduced, without the necessity of the execution of any new
document, so as to comply with the then applicable law, but so as
to permit the recovery of the fullest amount otherwise called for
hereunder or thereunder. All sums paid, or agreed to be paid, by
Borrower for the use, forbearance, detention, taking, charging,
receiving or reserving of the indebtedness of Borrower to Bank
under this Note or arising under or pursuant to the other Loan
Documents shall, to the maximum extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the
full term of such indebtedness until payment in full so that the
rate or amount of interest on account of such indebtedness does
not exceed the usury ceiling from time to time in effect and
applicable to such indebtedness for so long as such indebtedness
is outstanding. To the extent federal law permits Bank to
contract for, charge or receive a greater amount of interest,
Bank will rely on federal law instead of 306.101 of the Texas
Finance Code, as amended, or 303.009 of the Texas Finance Code,
as amended, relevant for the purpose of determining the Maximum
Rate. Additionally, to the maximum extent permitted by
applicable law now or hereafter in effect, Bank may, at its
option and from time to time, implement any other method of
computing the Maximum Rate under 306.101, or if required, sec.
303.009 of the Texas Finance Code, as amended, or under other
Page 4
<PAGE>
applicable law by giving notice, if required, to Borrower as
provided by applicable law now or hereafter in effect.
Notwithstanding anything to the contrary contained herein or in
any of the other Loan Documents, it is not the intention of Bank
to accelerate the maturity of any interest that has not accrued
at the time of such acceleration or to collect unearned interest
at the time of such acceleration.
In no event shall Chapter 346 of the Texas Finance Code
(which regulates certain revolving loan accounts and revolving
tri-party accounts) apply to this Note. To the extent that
Chapter 303 of the Texas Finance Code, as amended, is applicable
to this Note, the "indicated rate ceiling" specified in such
article is the applicable ceiling; or if 306.107 of the Texas
Finance Code is not applicable, then that provision of the Texas
Finance Code which most nearly affords Bank the benefits of
either of those two sections of the Texas Finance Code, as
amended, shall apply to this Note; provided that, if any
applicable law permits greater interest rate or ceiling, then the
law permitting the greatest interest rate or ceiling shall apply.
If this Note is placed in the hands of an attorney for
collection, or is collected in whole or in part by suit or
through probate, bankruptcy or other legal proceedings of any
kind, Borrower agrees to pay, in addition to all other sums
payable hereunder, all costs and expenses of collection,
including but not limited to reasonable attorneys' fees.
Borrower and any and all endorsers and guarantors of this
Note severally waive presentment for payment, notice of
nonpayment, protest, demand, notice of protest, notice of intent
to accelerate, notice of acceleration and dishonor, diligence in
enforcement and indulgences of every kind and without further
notice hereby agree to renewals, extensions, exchanges or
releases of collateral, taking of additional collateral,
indulgences or partial payments, either before or after maturity.
THIS NOTE HAS BEEN EXECUTED UNDER, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS,
EXCEPT AS SUCH LAWS ARE PREEMPTED BY APPLICABLE FEDERAL LAWS.
BORROWER AND BANK (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG
BORROWER AND BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS
NOTE, ANY OTHER LOAN DOCUMENT, OR ANY RELATIONSHIP BETWEEN
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
Page 5
<PAGE>
BANK AND BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT TO
BANK TO PROVIDE THE FINANCING EVIDENCED HEREIN OR IN THE OTHER
LOAN DOCUMENTS.
BORROWER:
PARK PHARMACY CORPORATION, DOUGHERTY'S PHARMACY, INC,
a Colorado corporation a Texas corporation
By: /s/ THOMAS R. BAKER By: /s/ THOMAS R. BAKER
------------------------- -----------------------------
Thomas R. Baker, President Thomas R. Baker, President
RX-PRO.COM, INC., TOTAL PHARMACY SUPPLY, INC.,
a Texas corporation a Texas corporation
Page 6
<PAGE>
By: /s/ JIM MONCRIEF By: /s/ THOMAS R. BAKER
-------------------------- ---------------------------
Jim Moncrief, President Thomas R. Baker, President
PARK INFUSION SERVICES, LP, RAVENS PHARMACY, INC.,
a Texas limited partnership a Texas corporation
By: Park Operating GP, LLC,
a Texas limited liability company By: /s/ THOMAS R. BAKER
------------------------
Thomas R. Baker, President
By: /s/ THOMAS R BAKER
----------------------------
Name: Thomas R. Baker, President
Page 7
<PAGE>
PROMISSORY NOTE
---------------------
(Revolving Line of Credit Note)
$1,500,000.00 August 10, 2000
FOR VALUE RECEIVED, on or before August 10, 2001 ("Maturity
Date"), the undersigned and if more than one, each of them,
jointly and severally (hereinafter referred to as "Borrower"),
promises to pay to the order of BANK OF TEXAS, N.A. ("Bank") at
its offices in Dallas County, Texas, at 5956 Sherry Lane, Suite
1100, Dallas, Texas 75225, or elsewhere as Bank may instruct in
writing, the principal amount of ONE MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($1,500,000.00) ("Total Principal
Amount"), or such amount less than the Total Principal Amount
which is outstanding from time to time if the total amount
outstanding under this Promissory Note ("Note") is less than the
Total Principal Amount, together with interest on such portion of
the Total Principal Amount which has been advanced to Borrower
from the date advanced until paid at a fluctuating rate of
interest equal to the sum of "Wall Street Journal Prime Rate" as
that rate is from time to time published in the Wall Street
Journal plus one-half of one percent (.5%) per annum. Each
change of rate based upon the publication of a change in the
"Wall Street Journal Prime Rate"shall be effective on the date of
change without requirement to give notice of each such change to
Borrower. All interest due hereon on this Note shall be
calculated on the basis of the actual days elapsed but computed
as if each year consisted of 360 days, as applicable, and no
interest shall be due at a rate in excess of the Maximum Rate.
The term "Maximum Rate" as used herein, shall mean at the
particular time in question the maximum rate of interest which,
under applicable law, may then be charged on this Note. If
applicable law ceases to provide for such a maximum rate of
interest, the Maximum Rate shall be equal to eighteen percent
(18%) per annum.
The principal of and all accrued but unpaid interest on this
Note shall be due and payable as follows:
(a) installment payments of accrued but unpaid interest
shall be due and payable monthly commencing on September 1, 2000,
and continuing on in a like manner on the first day of each
succeeding month beginning October 1, 2000 through the Maturity
Date.
(b) the outstanding principal balance of this Note,
together with all accrued but unpaid interest thereon, shall be
due and payable on the Maturity Date.
If any payment of principal and interest required hereunder
is not paid within ten (10) days after the same became due and
payable, Bank may, at its election, charge Borrower in an amount
equal to 5.0% of the regularly scheduled payment or $25.00,
whichever is greater, up to the maximum amount of $250.00 per
late charge. Upon the occurrence of an Event of Default
hereunder, including a default arising from Borrower's failure to
pay upon final maturity, Bank,
Page 1
<PAGE>
at its option, may also, if permitted under applicable law, do
one or both of the following: (a) increase the applicable
interest rate on this Note to a rate which is the lesser of 5.00
percentage points or to the Maximum Rate, and (b) add any unpaid
accrued interest to the principal balance hereof and such all
sums will bear interest therefrom until paid, at the lesser of
(i) the rate provided in this Note (including any increased
rate), or (ii) the Maximum Rate as Bank may elect.
This Note is secured by the pledge of all accounts
receivable, inventory, accounts, machinery, furniture, fixtures,
equipment and other tangible and intangible property of Borrower
pursuant to five (5) certain Pledge and Security Agreements dated
of even date herewith for the benefit of Bank (herein, the "Park
Pledge Agreement," "Dougherty Pledge Agreement," "RX Pledge
Agreement,""Ravens Pledge Agreement," "Total Pledge Agreement,"
and "PSI Pledge Agreement").
This Note, the Park Pledge Agreement, the Dougherty Pledge
Agreement, the RX Pledge Agreement, the Ravens Pledge Agreement,
the Total Pledge Agreement and the PSI Pledge Agreement and all
other documents evidencing, securing, governing, guaranteeing
and/or pertaining to this Note and one other certain promissory
note of even date herewith, all executed by Borrower and payable
to the order of Bank, are cross-collateralized and cross-
defaulted with this Note, including but not limited to those
documents described above, are hereinafter collectively referred
to as the "Loan Documents." The holder of this Note is entitled
to the benefits and security provided in the Loan Documents.
This Note is a revolving loan. Provided Borrower is not
otherwise in default hereunder or under the terms of any other
Loan Document, Borrower may request advances and make payments
hereunder from time to time, provided that it is understood and
agreed that the aggregate principal amount outstanding from time
to time hereunder shall not exceed the lesser of the Total
Principal Amount or the Allocable Borrowing Base Amount. The
unpaid balance of this Note shall increase and decrease with each
new advance or payment, as the case may be. Borrower may borrow,
repay and, subject to the borrowing base formula reborrow
hereunder. All regularly scheduled payments on this Note and by
any of the other Loan Documents shall be applied first to any
accrued but unpaid interest then due and payable hereunder or
thereunder and then to the principal amount then outstanding.
All non-regularly scheduled payments shall be applied to such
indebtedness in such order and manner as the holder of this Note
may from time to time determine in its sole discretion
exercisable upon each such occasion. Unless otherwise agreed to
in writing, or otherwise required by applicable law, payments
received by Bank hereunder will be applied as so provided and any
remaining amount to any unpaid collection costs, late charges and
other charges; provided, however, upon delinquency or other Event
of Default, Bank reserves the right to apply such payments among
principal, interest, late charges, collection costs and other
charges at its discretion. All payments and prepayments of
principal of or interest on this Note shall be made in lawful
money of the United States of America in
Page 2
<PAGE>
immediately available funds, at the address of Bank indicated
above, or such other place as the holder of this Note shall
designate in writing to Borrower. If any payment of principal of
or interest on this Note shall become due on a day which is not a
Business Day (as hereinafter defined), such payment shall be made
on the next succeeding Business Day and any such extension of
time shall be included in computing interest in connection with
such payment. As used herein, the term "Business Day" shall mean
any day other than any day on which commercial banks in the State
of Texas are authorized to be closed. The books and records of
Bank shall be prima facie evidence of all outstanding principal
of and accrued and unpaid interest on this Note.
In consideration for the creation and maintenance of this
Note, Borrower also agrees to pay monthly to the Bank an "Unused
Facility Commitment Fee" equal to one quarter of one per cent
(.25%) applied to the difference between the then outstanding
principal balance of the Note and the Total Principal Amount.
Borrower acknowledges that Bank has and will incur costs to make
this facility available to Borrower up to the Total Commitment
Amount, and that this fee is a reasonable charge to be paid by
Borrower for the continued availability of the facility for the
term of this Note.
Borrower further confirms that this is a business purpose
loan, and that no proceeds of this Note shall be used for
personal, family or household purposes. All advances hereunder
shall be used solely for business, commercial, investment or
other similar or related purposes.
Borrower agrees that upon the occurrence of any one or more
of the following events of default ("Event of Default"):
(a) failure of Borrower to pay any installment of principal
or interest on this Note or on any other indebtedness of Borrower
to Bank under the Loan Documents when due and the continued
failure to pay same and all other amounts then due hereunder
after ten (10) days written notice from Bank to Borrower of the
initial failure to pay any such installment; or
(b) failure of Borrower to pay any installment of principal
or interest on any other promissory note of Borrower payable to
the order of Bank when due and the continued failure to pay same
and all other amounts then due hereunder after ten (10) days
written notice from Bank to Borrower of the initial failure to
pay any such installment; or
(c) the occurrence of any event of default specified in any
of the other Loan Documents; or
(d) the bankruptcy or insolvency of, the assignment for the
benefit of creditors by, or the appointment of a receiver for any
of the property of, or the liquidation, termination, dissolution
or death or legal incapacity of, any party liable for the payment
of this Note, whether as maker, endorser, guarantor, surety or
otherwise;
Page 3
<PAGE>
The holder of this Note may, at its option, without further
notice or demand, (i) declare the outstanding principal balance
of and accrued but unpaid interest on this Note at once due and
payable, (ii) foreclose all liens securing payment hereof, (iii)
pursue any and all other rights, remedies and recourses available
to the holder hereof, including but not limited to any such
rights, remedies or recourses under the Loan Documents, at law or
in equity, or (iv) pursue any combination of the foregoing.
The failure to exercise the option to accelerate the
maturity of this Note or any other right, remedy or recourse
available to the holder hereof upon the occurrence of an Event of
Default hereunder shall not constitute a waiver of the right of
the holder of this Note to exercise the same at that time or at
any subsequent time with respect to such Event of Default or any
other Event of Default. The rights, remedies and recourses of
the holder hereof, as provided in this Note and in any of the
other Loan Documents, shall be cumulative and concurrent and may
be pursued separately, successively or together as often as
occasion therefore shall arise, at the sole discretion of the
holder hereof. The acceptance by the holder hereof of any
payment under this Note which is less than the payment in full of
all amounts due and payable at the time of such payment shall not
(i) constitute a waiver of or impair, reduce, release or
extinguish any right, remedy or recourse of the holder hereof, or
nullify any prior exercise of any such right, remedy or recourse,
or (ii) impair, reduce, release or extinguish the obligations of
any party liable under any of the Loan Documents as originally
provided herein or therein.
This Note and all of the other Loan Documents are intended
to be performed in accordance with, and only to the extent
permitted by, all applicable usury laws. If any provision hereof
or of any of the other Loan Documents or the application thereof
to any person or circumstance shall, for any reason and to any
extent, be invalid or unenforceable, neither the application of
such provision to any other person or circumstance nor the
remainder of the instrument in which such provision is contained
shall be affected thereby and shall be enforced to the greatest
extent permitted by law. It is expressly stipulated and agreed
to be the intent of the holder hereof to at all times comply with
the usury and other applicable laws now or hereafter governing
the interest payable on the indebtedness evidenced by this Note.
If the applicable law is ever revised, repealed or judicially
interpreted so as to render usurious any amount called for under
this Note or under any of the other Loan Documents, or contracted
for, charged, taken, reserved or received with respect to the
indebtedness evidenced by this Note, or if Bank's exercise of the
option to accelerate the maturity of this Note, or if any
prepayment by Borrower results in Borrower having paid any
interest in excess of that permitted by law, then it is the
express intent of Borrower and Bank that all excess amounts
theretofore collected by Bank be credited on the principal
balance of this Note (or, if this Note and all other indebtedness
arising under or pursuant to the other Loan Documents have been
paid in full, refunded to Borrower), and the provisions of this
Note and the other Loan Documents immediately be deemed reformed
and the amounts thereafter collectable hereunder and thereunder
reduced, without the necessity
Page 4
<PAGE>
of the execution of any new document, so as to comply with the
then applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder or thereunder. All
sums paid, or agreed to be paid, by Borrower for the use,
forbearance, detention, taking, charging, receiving or reserving
of the indebtedness of Borrower to Bank under this Note or
arising under or pursuant to the other Loan Documents shall, to
the maximum extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such
indebtedness until payment in full so that the rate or amount of
interest on account of such indebtedness does not exceed the
usury ceiling from time to time in effect and applicable to such
indebtedness for so long as such indebtedness is outstanding. To
the extent federal law permits Bank to contract for, charge or
receive a greater amount of interest, Bank will rely on federal
law instead of 306.101 of the Texas Finance Code, as amended, or
303.009 of the Texas Finance Code, as amended, relevant for the
purpose of determining the Maximum Rate. Additionally, to the
maximum extent permitted by applicable law now or hereafter in
effect, Bank may, at its option and from time to time, implement
any other method of computing the Maximum Rate under 306.101,
or if required, 303.009 of the Texas Finance Code, as amended,
or under other applicable law by giving notice, if required, to
Borrower as provided by applicable law now or hereafter in
effect. Notwithstanding anything to the contrary contained
herein or in any of the other Loan Documents, it is not the
intention of Bank to accelerate the maturity of any interest that
has not accrued at the time of such acceleration or to collect
unearned interest at the time of such acceleration.
In no event shall Chapter 346 of the Texas Finance Code
(which regulates certain revolving loan accounts and revolving
tri-party accounts) apply to this Note. To the extent that
Chapter 303 of the Texas Finance Code, as amended, is applicable
to this Note, the "indicated rate ceiling" specified in such
article is the applicable ceiling; or if 306.107 of the Texas
Finance Code is not applicable, or if Chapter 303.009 of the
Texas Finance Code if not applicable, then that provision of the
Texas Finance Code which most nearly affords Bank the benefits of
either of those two sections of the Texas Finance Code, as
amended, shall apply to this Note; provided that, if any
applicable law permits greater interest rate or ceiling, then the
law permitting the greatest interest rate or ceiling shall apply.
If this Note is placed in the hands of an attorney for
collection, or is collected in whole or in part by suit or
through probate, bankruptcy or other legal proceedings of any
kind, Borrower agrees to pay, in addition to all other sums
payable hereunder, all costs and expenses of collection,
including but not limited to reasonable attorneys' fees.
Borrower and any and all endorsers and guarantors of this
Note severally waive presentment for payment, notice of
nonpayment, protest, demand, notice of protest, notice of intent
to accelerate, notice of acceleration and dishonor, diligence in
enforcement and indulgences of every kind and without further
notice hereby agree to renewals, extensions,
Page 5
<PAGE>
exchanges or releases of collateral, taking of additional
collateral, indulgences or partial payments, either before or
after maturity.
THIS NOTE HAS BEEN EXECUTED UNDER, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS,
EXCEPT AS SUCH LAWS ARE PREEMPTED BY APPLICABLE FEDERAL LAWS.
BORROWER AND BANK (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG
BORROWER AND BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS
NOTE, ANY OTHER LOAN DOCUMENT, OR ANY RELATIONSHIP BETWEEN BANK
AND BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK TO
PROVIDE THE FINANCING EVIDENCED HEREIN OR IN THE OTHER LOAN
DOCUMENTS.
[Balance of page intentionally left blank]
BORROWER:
---------
PARK PHARMACY CORPORATION, DOUGHERTY'S PHARMACY, INC,
a Colorado corporation a Texas corporation
By: /s/ Thomas R. Baker By: /s/ Thomas R. Baker
----------------------- --------------------------
Thomas R. Baker, President Thomas R. Baker, President
RX-PRO.COM, INC., TOTAL PHARMACY SUPPLY, INC.,
a Texas corporation a Texas corporation
By: /s/ Jim Moncrief By: /s/ Thomas R. Baker
------------------------- --------------------------
Jim Moncrief, President Thomas R. Baker, President
Page 6
<PAGE>
PARK INFUSION SERVICES, LP, RAVENS PHARMACY, INC.,
a Texas limited partnership a Texas corporation
By: Park Operating GP, LLC,
a Texas limited liability company By: /s/ Thomas R. Baker
-----------------------
Thomas R. Baker, President
By: /s/ Thomas R. Baker
-----------------------------
Name: Thomas R. Baker, President
Page 7
<PAGE>
PROMISSORY NOTE
---------------------
(Acquisition Line of Credit Note)
$5,000,000.00 August 10, 2000
FOR VALUE RECEIVED, on or before August 10, 2001 ("Maturity
Date"), the undersigned and if more than one, each of them,
jointly and severally (hereinafter referred to as "Borrower"),
promises to pay to the order of BANK OF TEXAS, N.A. ("Bank") at
its offices in Dallas County, Texas, at 5956 Sherry Lane, Suite
1100, Dallas, Texas 75225, or elsewhere as Bank may instruct in
writing, the principal amount of FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00) ("Total Principal Amount"), or such amount less
than the Total Principal Amount which is outstanding from time to
time if the total amount outstanding under this Promissory Note
("Note") is less than the Total Principal Amount, together with
interest on such portion of the Total Principal Amount which has
been advanced to Borrower from the date advanced until paid at a
fluctuating rate of interest equal to the sum of "Wall Street
Journal Prime Rate" as that rate is from time to time published
in the Wall Street Journal plus one-half of one percent (.5%) per
annum. Each change of rate based upon the publication of a
change in the "Wall Street Journal Prime Rate"shall be effective
on the date of change without requirement to give notice of each
such change to Borrower. All interest due hereon on this Note
shall be calculated on the basis of the actual days elapsed but
computed as if each year consisted of 360 days, as applicable,
and no interest shall be due at a rate in excess of the Maximum
Rate. The term "Maximum Rate" as used herein, shall mean at the
particular time in question the maximum rate of interest which,
under applicable law, may then be charged on this Note. If
applicable law ceases to provide for such a maximum rate of
interest, the Maximum Rate shall be equal to eighteen percent
(18%) per annum.
The principal of and all accrued but unpaid interest on this
Note shall be due and payable as follows:
(a) installment payments of accrued, but unpaid, interest
shall be due and payable monthly commencing on September 1, 2000,
and continuing on in a like manner on the first day of each
succeeding month beginning October 1, 2000 through the Maturity
Date.
(b) the outstanding principal balance of this Note,
together with all accrued but unpaid interest thereon, shall be
due and payable on the Maturity Date.
If any payment of principal and interest required hereunder
is not paid within ten (10) daysafter the same became due and
payable, Bank may, at its election, charge Borrower in an amount
equal to 5.0% of the regularly scheduled payment or $25.00,
whichever is greater, up to the maximum amount of $250.00 per
late charge. Upon the occurrence of an Event of Default
hereunder, including a default arising from Borrower's failure to
pay upon final maturity, Bank,
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at its option, may also, if permitted under applicable law, do
one or both of the following: (a) increase the applicable
interest rate on this Note to a rate which is the lesser of 5.00
percentage points or to the Maximum Rate, and (b) add any unpaid
accrued interest to the principal balance hereof and such all
sums will bear interest therefrom until paid, at the lesser of
(i) the rate provided in this Note (including any increased
rate), or (ii) the Maximum Rate as Bank may elect.
This Note is secured by the pledge of all accounts
receivable, inventory, accounts, machinery, furniture, fixtures,
equipment and other tangible and intangible property of Borrower
pursuant to five (5) certain Pledge and Security Agreements dated
of even date herewith for the benefit of Bank (herein, the "Park
Pledge Agreement," "Dougherty Pledge Agreement," "RX Pledge
Agreement,""Ravens Pledge Agreement," "Total Pledge Agreement,"
and "PSI Pledge Agreement").
This Note, the Park Pledge Agreement, the Dougherty Pledge
Agreement, the RX Pledge Agreement, the Ravens Pledge Agreement,
the Total Pledge Agreement and the PSI Pledge Agreement and all
other documents evidencing, securing, governing, guaranteeing
and/or pertaining to this Note and one other certain promissory
note of even date herewith, all executed by Borrower and payable
to the order of Bank, are cross-collateralized and cross-
defaulted with this Note, including but not limited to those
documents described above, are hereinafter collectively referred
to as the "Loan Documents." The holder of this Note is entitled
to the benefits and security provided in the Loan Documents.
This Note is a revolving loan. Provided Borrower is not
otherwise in default hereunder or under the terms of any other
Loan Document, Borrower may request advances and make payments
hereunder from time to time, provided that it is understood and
agreed that the Acquisition Borrowing Base Amount outstanding
from time to time hereunder shall not exceed the lesser of the
Total Principal Amount or the Allocable Borrowing Base Amount.
The unpaid balance of this Note shall increase and decrease with
each new advance or payment, as the case may be. Borrower may
borrow, repay and, subject to the borrowing base formula reborrow
hereunder. All regularly scheduled payments on this Note and by
any of the other Loan Documents shall be applied first to any
accrued but unpaid interest then due and payable hereunder or
thereunder and then to the principal amount then outstanding.
All non-regularly scheduled payments shall be applied to such
indebtedness in such order and manner as the holder of this Note
may from time to time determine in its sole discretion
exercisable upon each such occasion. Unless otherwise agreed to
in writing or otherwise required by applicable law, payments
received by Bank hereunder will be applied as so provided and any
remaining amount to any unpaid collection costs, late charges and
other charges; provided, however, upon delinquency or other Event
of Default, Bank reserves the right to apply such payments among
principal, interest, late charges, collection costs and other
charges at its discretion. All payments and prepayments of
principal of or interest on this Note shall be made in lawful
money of the
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United States of America in immediately available funds, at the
address of Bank indicated above, or such other place as the
holder of this Note shall designate in writing to Borrower. If
any payment of principal of or interest on this Note shall become
due on a day which is not a Business Day (as hereinafter
defined), such payment shall be made on the next succeeding
Business Day and any such extension of time shall be included in
computing interest in connection with such payment. As used
herein, the term "Business Day" shall mean any day other than any
day on which commercial banks in the State of Texas are
authorized to be closed. The books and records of Bank shall be
prima facie evidence of all outstanding principal of and accrued
and unpaid interest on this Note.
In consideration for the creation and maintenance of this
Note, Borrower also agrees to pay at the same time of each
advancement made on this Loan an additional amount equal to one-
half of one per cent (.5%) of the amount of monies advanced under
this Note for the acquisition of the assets or an entity
(hereinafter referred to as the "Acquisition Advancement Fee").
The Acquisition Advancement Fee shall be payable on the date of
each advancement to be made under this Note, and to the extent of
available limit hereunder, Borrower may request that the amount
of the advance include an additional amount equal to the
Acquisition Advancement Fee payable thereby. To the extent
Borrower has no availability to pay part or all of the
Acquisition Advancement Fee payable, Borrower shall pay that
amount from its other monies as a condition to the advancement of
monies at that time.
Borrower shall be obliged within one hundred and eighty
(180) days of the closing date of each acquisition financed under
this Note to refinance the total acquisition amount (including
all relevant fees and expenses in the acquisition and in the
refinancing), with the proceeds of a separate four (4) year fully
amortizing term loan bearing interest at the non-default of
interest provided for in this Note.
Borrower further confirms that this is a business purpose
loan, and that no proceeds of this Note shall be used for
personal, family or household purposes. All advances hereunder
shall be used solely for business, commercial, investment or
other similar or related purposes.
Borrower agrees that upon the occurrence of any one or more
of the following events of default ("Event of Default"):
(a) failure of Borrower to pay any installment of principal
or interest on this Note or on any other indebtedness of Borrower
to Bank under the Loan Documents when due and the continued
failure of Borrower to pay same and all other amounts then due
hereunder after ten (10) days written notice from Bank to
Borrower of the initial failure to pay any such installment; or
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<PAGE>
(b) failure of Borrower to pay any installment of principal
or interest on any other promissory note of Borrower payable to
the order of Bank when due and then continued failure of Borrower
to pay same and all other amounts then due hereunder after ten
(10) days written notice from Bank to Borrower of the initial
failure to pay any such installment; or
(c) the occurrence of any event of default specified in any
of the other Loan Documents; or
(d) the bankruptcy or insolvency of, the assignment for the
benefit of creditors by, or the appointment of a receiver for any
of the property of, or the liquidation, termination, dissolution
or death or legal incapacity of, any party liable for the payment
of this Note, whether as maker, endorser, guarantor, surety or
otherwise;
The holder of this Note may, at its option, without further
notice or demand, (i) declare the outstanding principal balance
of and accrued but unpaid interest on this Note at once due and
payable, (ii) foreclose all liens securing payment hereof, (iii)
pursue any and all other rights, remedies and recourses available
to the holder hereof, including but not limited to any such
rights, remedies or recourses under the Loan Documents, at law or
in equity, or (iv) pursue any combination of the foregoing.
The failure to exercise the option to accelerate the
maturity of this Note or any other right, remedy or recourse
available to the holder hereof upon the occurrence of an Event of
Default hereunder shall not constitute a waiver of the right of
the holder of this Note to exercise the same at that time or at
any subsequent time with respect to such Event of Default or any
other Event of Default. The rights, remedies and recourses of
the holder hereof, as provided in this Note and in any of the
other Loan Documents, shall be cumulative and concurrent and may
be pursued separately, successively or together as often as
occasion therefore shall arise, at the sole discretion of the
holder hereof. The acceptance by the holder hereof of any
payment under this Note which is less than the payment in full of
all amounts due and payable at the time of such payment shall not
(i) constitute a waiver of or impair, reduce, release or
extinguish any right, remedy or recourse of the holder hereof, or
nullify any prior exercise of any such right, remedy or recourse,
or (ii) impair, reduce, release or extinguish the obligations of
any party liable under any of the Loan Documents as originally
provided herein or therein.
This Note and all of the other Loan Documents are intended
to be performed in accordance with, and only to the extent
permitted by, all applicable usury laws. If any provision hereof
or of any of the other Loan Documents or the application thereof
to any person or circumstance shall, for any reason and to any
extent, be invalid or unenforceable, neither the application of
such provision to any other person or circumstance nor the
remainder of the instrument in which such provision is contained
shall be affected thereby and shall be enforced to the greatest
extent permitted by law. It is expressly stipulated and agreed
to be the intent of the holder hereof to at all times comply with
the usury and other applicable laws now or hereafter
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governing the interest payable on the indebtedness evidenced by
this Note. If the applicable law is ever revised, repealed or
judicially interpreted so as to render usurious any amount called
for under this Note or under any of the other Loan Documents, or
contracted for, charged, taken, reserved or received with respect
to the indebtedness evidenced by this Note, or if Bank's exercise
of the option to accelerate the maturity of this Note, or if any
prepayment by Borrower results in Borrower having paid any
interest in excess of that permitted by law, then it is the
express intent of Borrower and Bank that all excess amounts
theretofore collected by Bank be credited on the principal
balance of this Note (or, if this Note and all other indebtedness
arising under or pursuant to the other Loan Documents have been
paid in full, refunded to Borrower), and the provisions of this
Note and the other Loan Documents immediately be deemed reformed
and the amounts thereafter collectable hereunder and thereunder
reduced, without the necessity of the execution of any new
document, so as to comply with the then applicable law, but so as
to permit the recovery of the fullest amount otherwise called for
hereunder or thereunder. All sums paid, or agreed to be paid, by
Borrower for the use, forbearance, detention, taking, charging,
receiving or reserving of the indebtedness of Borrower to Bank
under this Note or arising under or pursuant to the other Loan
Documents shall, to the maximum extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the
full term of such indebtedness until payment in full so that the
rate or amount of interest on account of such indebtedness does
not exceed the usury ceiling from time to time in effect and
applicable to such indebtedness for so long as such indebtedness
is outstanding. To the extent federal law permits Bank to
contract for, charge or receive a greater amount of interest,
Bank will rely on federal law instead of 306.101 of the Texas
Finance Code, as amended, or 303.009 of the Texas Finance Code,
as amended, relevant for the purpose of determining the Maximum
Rate. Additionally, to the maximum extent permitted by
applicable law now or hereafter in effect, Bank may, at its
option and from time to time, implement any other method of
computing the Maximum Rate under 306.101, or if required,
303.009 of the Texas Finance Code, as amended, or under other
applicable law by giving notice, if required, to Borrower as
provided by applicable law now or hereafter in effect.
Notwithstanding anything to the contrary contained herein or in
any of the other Loan Documents, it is not the intention of Bank
to accelerate the maturity of any interest that has not accrued
at the time of such acceleration or to collect unearned interest
at the time of such acceleration.
In no event shall Chapter 346 of the Texas Finance Code
(which regulates certain revolving loan accounts and revolving
tri-party accounts) apply to this Note. To the extent that
Chapter 303 of the Texas Finance Code, as amended, is applicable
to this Note, the "indicated rate ceiling" specified in such
article is the applicable ceiling; or if 306.107 of the Texas
Finance Code is not applicable, or if Chapter 303.009 of the
Texas Finance Code is not applicable, then that provision of the
Texas Finance Code which most nearly affords Bank the benefits of
either of those two sections of the Texas Finance Code, as
amended, shall apply to this Note; provided that, if any
applicable law permits greater interest rate or ceiling, then the
law permitting the greatest interest rate or ceiling shall apply.
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<PAGE>
If this Note is placed in the hands of an attorney for
collection, or is collected in whole or in part by suit or
through probate, bankruptcy or other legal proceedings of any
kind, Borrower agrees to pay, in addition to all other sums
payable hereunder, all costs and expenses of collection,
including but not limited to reasonable attorneys' fees.
Borrower and any and all endorsers and guarantors of this
Note severally waive presentment for payment, notice of
nonpayment, protest, demand, notice of protest, notice of intent
to accelerate, notice of acceleration and dishonor, diligence in
enforcement and indulgences of every kind and without further
notice hereby agree to renewals, extensions, exchanges or
releases of collateral, taking of additional collateral,
indulgences or partial payments, either before or after maturity.
THIS NOTE HAS BEEN EXECUTED UNDER, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS,
EXCEPT AS SUCH LAWS ARE PREEMPTED BY APPLICABLE FEDERAL LAWS.
BORROWER AND BANK (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG
BORROWER AND BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS
NOTE, ANY OTHER LOAN DOCUMENT, OR ANY RELATIONSHIP BETWEEN BANK
AND BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK TO
PROVIDE THE FINANCING EVIDENCED HEREIN OR IN THE OTHER LOAN
DOCUMENTS.
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BORROWER:
---------
PARK PHARMACY CORPORATION, DOUGHERTY'S PHARMACY, INC,
a Colorado corporation a Texas corporation
By: /s/ Thomas R. Baker By: /s/ Thomas R. Baker
------------------------ --------------------------
Thomas R. Baker, President Thomas R. Baker, President
RX-PRO.COM, INC., TOTAL PHARMACY SUPPLY, INC.
a Texas corporation a Texas corporation
By: /s/ Jim Moncrief By:/s/ Thomas R. Baker
-------------------------- ---------------------------
Jim Moncrief, President Thomas R. Baker, President
PARK INFUSION SERVICES, LP, RAVENS PHARMACY, INC.,
a Texas limited partnership a Texas corporation
By: Park Operating GP, LLC,
a Texas limited liability company By: /s/ Thomas R. Baker
-----------------------
Thomas R. Baker, President
By: /s/ Thomas R. Baker
-----------------------------
Name: Thomas R. Baker, President
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<PAGE>
PLEDGE AND SECURITY AGREEMENT
-----------------------------
PARK PHARMACY CORPORATION
(FACILITY)
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is
made as of the 10th day of August, 2000, by Park Pharmacy
Corporation (hereinafter called "Debtor"), in favor of BANK OF
TEXAS, N.A. ("Bank"). Debtor hereby agrees with Bank as follows:
1. Definitions. As used in this Agreement, the following
terms shall have the meanings indicated below:
(a) The term "Borrower" shall mean Debtor, RX-Pro.Com,
Inc. ("RX"), a Texas corporation, Dougherty's Pharmacy, Inc.
("Dougherty"), a Texas corporation, Ravens Pharmacy, Inc.
("Ravens"), a Texas corporation, Total Pharmacy Supply, Inc.
("Total"), a Texas corporation, Park Infusion Services, LP
("PIS"), a Texas limited partnership, who are jointly and
severally indebted to Bank..
(b) The term "Code" shall mean the Uniform Commercial
Code as in effect in the State of Texas on the date of this
Agreement or as it may hereafter be amended from time to
time.
(c) The term "Collateral" shall mean all common,
preferred or other stock certificates, warrants, options,
subscription agreements and any other right to acquire,
purchase or to have issued any stock in Dougherty's
Pharmacy, Inc., a Texas corporation, and RX-Pro.Com, Inc., a
Texas corporation, Ravens Pharmacy, Inc., a Texas
corporation, Total Pharmacy Supply, Inc., a Texas
corporation, Park LP Holdings, Inc., a Nevada corporation,
the membership or ownership interest of Debtor in Park
Operating GP, LLC, a Texas limited liability company, or any
other subsidiary of Debtor hereafter acquired or existing,
including without limitation all certificates, instruments,
documents evidencing any part of the Collateral together
with all rights to dividends (in cash or in kind), proceeds,
distributions and/or additional stock rights granted by each
issuing corporation or standing in the name of Debtor in
respect of the Collateral, together with all machinery,
equipment, furniture, fixtures, equipment, accounts
receivable, inventory, accounts, instruments, documents,
chattel paper and any other tangible or intangible personal
property of any kind or nature now existing or hereafter
acquired, including without limitation, any payment
intangibles. The term Collateral, as used herein, shall
also include all dividends, splits, increases, mutations,
renewals, replacements, and substitutions of all of the
foregoing, all Additional Property (as hereinafter defined)
and all products and proceeds of all of the foregoing. The
designation of proceeds does not authorize Debtor to sell,
transfer or otherwise convey any of the Collateral other
than in
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<PAGE>
the ordinary course of business. The delivery at any time
by Debtor to Secured Party of any property as a pledge to
secure payment or performance of any indebtedness or
obligation whatsoever shall also constitute a pledge of such
property as Collateral hereunder.
(d) The term "Indebtedness" shall mean all
indebtedness of Borrower now or hereafter owing to Secured
Party pursuant to that certain Loan Agreement dated of even
date herewith, executed by Borrower and Secured Party (the
"Loan Agreement") and evidenced by a Revolving Line of
Credit Note, a Term Equipment Note, and an Acquisition Line
of Credit Note, all dated of even date herewith, executed by
Borrower to and for the benefit of Secured Party, in the
original principal amounts of $1,500,000.00 and
$1,300,000.00 and $5,000,000.00, respectively, together with
any other obligation or indebtedness due from Debtor to
Secured Party in accordance with the terms of the Loan
Documents, including without limitation any additional note
to be executed by Borrower and payable to the order of
Secured Party in accordance with the provisions of the Loan
Agreement in respect of the Acquisition Line of Credit Note
(collectively referred to herein as the "Note" or the
"Notes" as the context requires), (ii) all accrued but
unpaid interest on any of the indebtedness described in (i)
above, (iii) all obligations owing to Secured Party under
any documents evidencing, securing, governing and/or
pertaining to all or any part of the indebtedness described
in (i) and (ii) above, (iv) all costs and expenses incurred
by Secured Party in connection with the collection and
administration of all or any part of the indebtedness and
obligations described in (i), (ii) and (iii) above or the
protection or preservation of, or realization upon, the
collateral securing all or any part of such indebtedness and
obligations, including without limitation all reasonable
attorneys' fees, and (v) all renewals, extensions,
modifications and rearrangements of the indebtedness and
obligations described in (i), (ii), (iii) and (iv) above.
(e) The term "Loan Documents" shall mean all
instruments and documents evidencing, securing, governing,
guaranteeing and/or pertaining to the Indebtedness.
(f) The term "Obligated Party" shall mean any party
other than Borrower who secures, guarantees and/or is
otherwise obligated to pay all or any portion of the
Indebtedness.
(g) The term "Secured Party" shall mean Bank, its
successors and assigns, including without limitation, any
party to whom Bank, or its successors or assigns, may assign
its rights and interests under this Agreement.
(h) Other capitalized terms not defined herein shall
have the meaning ascribed to them in the Loan Agreement of
even date herewith.
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<PAGE>
All words and phrases used herein which are expressly
defined in Section 1.201 of Chapter 9 of the Code shall have the
meaning provided for therein. Other words and phrases defined
elsewhere in the Code shall have the meaning specified therein
except to the extent such meaning is inconsistent with a
definition in Section 1.201 or Chapter 9 of the Code.
2. Security Interest. As security for the Indebtedness,
Debtor, for value received, hereby grants to Secured Party a
continuing security interest in the Collateral.
3. Representations and Warranties. Debtor hereby
represents and warrants the following to Secured Party:
(a) Enforceability. This Agreement and Guaranty
constitute legal, valid and binding obligations of Debtor,
enforceable in accordance with their respective terms,
except as limited by bankruptcy, insolvency or similar laws
of general application relating to the enforcement of
creditors' rights and except to the extent specific remedies
may generally be limited by equitable principles.
(b) Ownership and Liens. Debtor has good and
marketable title to the Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement.
Other than in the ordinary course of business for a non-
material matter, no dispute, right of setoff, counterclaim
or defense exists with respect to all or any part of the
Collateral. Debtor has not executed any other security
agreement currently affecting the Collateral and no
effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file
in any recording office except as may have been executed or
filed in favor of Secured Party.
(c) No Conflicts or Consents. Neither the ownership,
the intended use of the Collateral by Debtor, the grant of
the security interest by Debtor to Secured Party herein nor
the exercise by Secured Party of its rights or remedies
hereunder, will (i) conflict with any provision of (A) any
domestic or foreign law, statute, rule or regulation, or (B)
any agreement, judgment, license, order or permit applicable
to or binding upon Debtor, or (ii) result in or require the
creation of any lien, charge or encumbrance upon any assets
or properties of Debtor or of any person except as may be
expressly contemplated in the Loan Documents. Except as
expressly contemplated in the Loan Documents, no consent,
approval, authorization or order of, and no notice to or
filing with, any court, governmental authority or third
party is required in connection with the grant by Debtor of
the security interest herein or the exercise by Secured
Party of its rights and remedies hereunder.
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<PAGE>
(d) Security Interest. Debtor has and will have at
all times full right, power and authority to grant a
security interest in the Collateral to Secured Party in the
manner provided herein, free and clear of any lien, security
interest or other charge or encumbrance. This Agreement
creates a legal, valid and binding security interest in
favor of Secured Party in the Collateral securing the
Indebtedness. Possession by Secured Party of all
certificates, instruments and cash constituting Collateral
from time to time and/or the filing of the financing
statements delivered prior hereto and/or concurrently
herewith by Debtor to Secured Party will perfect and
establish the first priority of Secured Party's security
interest hereunder in the Collateral.
(e) Location. Debtor's chief executive office and the
office where the records concerning the Collateral are kept
is located at the address set forth on the signature page
hereof.
(f) Solvency of Debtor. As of the date hereof, and
after giving effect to this Agreement and the completion of
all other transactions contemplated by Debtor at the time of
the execution of this Agreement, (i) Debtor is and will be
solvent, (ii) the fair saleable value of Debtor's assets
exceeds and will continue to exceed Debtor's liabilities
(both fixed and contingent), and (iii) Debtor is paying and
will continue to be able to pay his debts as they mature.
Solely for purposes of this warranty by the Debtor, and
without affecting, modifying or otherwise amending any
provision of any Loan Documents, Debtor's assessment of its
solvency includes a claim of subrogation or contribution
against each of the other entities comprising Borrower
and/or a Guarantor (as defined in the Loan Documents) and/or
any other obligated party in the event Debtor should pay
more than its ratable share of the Indebtedness.
(g) Chattel Paper, Documents and Instruments. The
chattel paper, documents and instruments of Debtor pledged
hereunder have only one original counterpart and no party
other than Debtor or Secured Party is in actual or
constructive possession of any such chattel paper, documents
or instruments.
(h) Securities. Any certificates evidencing
securities pledged as Collateral are valid and genuine and
have not been altered. All securities pledged as Collateral
have been duly authorized and validly issued, are fully paid
and non-assessable, and were not issued in violation of the
preemptive rights of any party or of any agreement by which
Debtor or the issuer thereof is bound. No restrictions or
conditions exist with respect to the transfer or voting of
any securities pledged as Collateral, except for the
restrictions of applicable securities laws, rules and
regulations. To the best of Debtor's knowledge, no issuer
of such securities (other than securities of a class which
are publicly traded) has any outstanding stock rights,
rights to subscribe, options, warrants or convertible
securities outstanding or any other rights outstanding
entitling any party to have issued to
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<PAGE>
such party capital stock of such issuer. In addition to
delivering possession of the certificates to any securities
pledged hereby, Debtor agrees to deliver, sign, or otherwise
take any action required to perfect and continue the
perfection of Secured Party in the securities, and any
matters or item in any manner related thereto.
(i) Documents and Instruments. The security
interest in chattel paper, documents and instruments of
Debtor granted hereunder is valid and genuine, and all such
chattel paper, documents and instruments have only one
original counterpart. No party other than Debtor or Secured
Party is in actual or constructive possession of any such
chattel paper, documents or instruments.
4. Affirmative Covenants. Debtor will comply with the
covenants contained in this Section 4 at all times during the
period of time this Agreement is effective unless Secured Party
shall otherwise consent in writing.
(a) Ownership and Liens. Debtor will maintain good
and marketable title to all Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement
and the security interests and other encumbrances expressly
permitted by the other Loan Documents. Other than in the
ordinary course of business for non-material matters, Debtor
will not permit any dispute, right of setoff, counterclaim
or defense to exist with respect to all or any part of the
Collateral. Debtor will not cause any financing statement
or other security instrument with respect to the Collateral
to be terminated, except as may exist or as may have been
filed in favor of Secured Party. Debtor will defend at his
expense Secured Party's right, title and security interest
in and to the Collateral against the claims of any third
party.
(b) Further Assurances. Debtor will from time to time
at his expense promptly execute and deliver all further
instruments and documents and take all further action
necessary or appropriate or that Secured Party may request
in order (i) to perfect and protect the security interest
created or purported to be created hereby and the first
priority of such security interest, (ii) to enable Secured
Party to exercise and enforce its rights and remedies
hereunder in respect of the Collateral, and (iii) to
otherwise effect the purposes of this Agreement, including
without limitation, executing and filing such financing or
continuation statements, or amendments thereto.
(c) Payment of Taxes. Debtor (i) will timely pay all
property and other taxes, assessments and governmental
charges or levies imposed upon the Collateral or any part
thereof, (ii) will timely pay all lawful claims which, if
unpaid, might become a lien or charge upon the Collateral or
any part thereof, and (iii) will maintain appropriate
accruals and reserves for all such liabilities in a timely
fashion in accordance with generally
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<PAGE>
accepted accounting principles. Debtor may, however, delay
paying or discharging any such taxes, assessments, charges,
claims or liabilities so long as the validity thereof is
contested in good faith by proper proceedings and provided
Debtor has set aside adequate reserves therefor.
(d) Chattel Paper, Documents and Instruments. Debtor
will take such action as may be requested by Secured Party
in order to cause any chattel paper, documents or
instruments to be valid and enforceable and will cause all
chattel paper to have only one original counterpart. Upon
request by Secured Party, Debtor will deliver to Secured
Party all originals of chattel paper, documents or
instruments and will mark all chattel paper with a legend
indicating that such chattel paper is subject to the
security interest granted hereunder.
(e) Insurance. Debtor will insure the Collateral
against perils of loss and/or liability and name Secured
Party as an additional insured on all such policies of
insurance in an amount not less than the amount of the
original amount of the Indebtedness. All such insurance
shall be with such carriers as Secured Party may reasonably
approve. Debtor shall provide Secured Party with evidence
of Debtor's compliance with this provision and with evidence
of renewal of all such coverages throughout the term that
any of the Indebtedness remains outstanding and unpaid.
Upon request of Secured Party, Debtor will provide evidence
of payment of renewal premiums and/or with updated policies,
certificates of insurance or other evidence of Debtor's
compliance with this provision at no cost or expense to
Secured Party.
(f) Delivery of Instruments and/or Certificates.
Contemporaneously herewith, Debtor covenants and agrees to
deliver to Secured Party any certificates, documents or
instruments representing or evidencing any part of the
Collateral together with Debtor's endorsement thereon and/or
accompanied by property instruments of transfer and
assignment duly executed in blank with, if requested by
Secured Party, signatures guaranteed by a bank or member
firm of the New York Stock Exchange, all in form and
substance satisfactory to Secured Party. If required by
Secured Party, Debtor also covenants and agrees to cooperate
with Secured Party in registering the pledge of the
securities pledged as Collateral with the issuer of such
securities. Debtor will deliver or cause to be delivered to
Secured Party a Confirmation of Pledge in a form required by
Secured Party in its sole and absolute discretion sufficient
in form and content and executed by the issuer of the
securities pledged a additional collateral hereby.
5. Negative Covenants. Debtor will comply with the
covenants contained in this Section 5 at all times during the
period of time this Agreement is effective, unless Secured Party
shall otherwise consent in writing.
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<PAGE>
(a) Transfer or Encumbrance. Other than in the
ordinary course of business, Debtor will not (i) sell,
assign (by operation of law or otherwise), transfer,
exchange, lease or otherwise dispose of any of the
Collateral, (ii) grant a lien or security interest in or
execute, file or record any financing statement or other
security instrument with respect to the Collateral to any
party other than Secured Party, or (iii) deliver actual or
constructive possession of the Collateral to any party other
than Secured Party.
(b) Impairment of Security Interest. Debtor will not
take or fail to take any action which would in any manner
impair the value or enforceability of Secured Party's
security interest in any Collateral.
(c) Possession of Collateral. Debtor will on or
before the date hereof, deliver possession of any part of
the Collateral to Secured Party where possession by Secured
Party is required for perfection.
(d) Financing Statement Filings. Debtor recognizes
that financing statements pertaining to the Collateral will
be or may be filed where Debtor maintains any Collateral,
has its records concerning any Collateral or has its
principal place of business/ residence. Without limitation
of any other covenant herein, Debtor will not cause or
permit any change in the location of Debtor's office to a
jurisdiction other than as represented in Section 3(e)
unless Debtor shall have notified Secured Party in writing
of such change at least thirty (30) days prior to the
effective date of such change, and shall have first taken
all action required by Secured Party for the purpose of
further perfecting or protecting the security interest in
favor of Secured Party in the Collateral. In any written
notice furnished pursuant to this Section 5(d), Debtor will
expressly state that the notice is required by this
Agreement and contains facts that may require additional
filings of financing statements or other notices for the
purpose of continuing perfection of Secured Party's security
interest in the Collateral.
(e) Dilution of Ownership. As to any securities
pledged as Collateral (other than securities of a class
which are publicly traded, Debtor will not consent to or
approve of the issuance of (i) any additional shares of any
class of securities of such issuer (unless immediately upon
issuance additional securities are pledged and delivered to
Secured Party pursuant to the terms hereof to the extent
necessary to give Secured Party a security interest after
such issuance in at least the same percentage of such
issuer's outstanding securities as Secured Party had before
such issuance0, (ii) any instrument convertible voluntarily
by the holder thereof or automatically upon the occurrence
or non-occurrence of any event or condition into, or
exchangeable for, any such securities, or (iii) any
warrants, options, contracts or other commitments entitling
any third party to purchase or otherwise acquire any such
securities.
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<PAGE>
(f) Restrictions on Securities. Debtor will not
enter into any agreement creating, or otherwise permit to
exist, any restriction or condition upon the transfer,
voting or control of any securities pledged as Collateral,
except as consented to in writing by Secured Party.
6. Rights of Secured Party. Secured Party shall have the
rights contained in this Section 6 at all times during the period
of time this Agreement is effective.
(a) Additional Financing Statements Filings. Debtor
hereby authorizes Secured Party to file, without the
signature of Debtor, one or more financing or continuation
statements, and amendments thereto, relating to the
Collateral. Debtor further agrees that a carbon,
photographic or other reproduction of this Security
Agreement or any financing statement describing any
Collateral is sufficient as a financing statement and may be
filed in any jurisdiction Secured Party may deem
appropriate.
(b) Power of Attorney. Debtor hereby irrevocably
appoints Secured Party as Debtor's attorney-in-fact, such
power of attorney being coupled with an interest, with full
authority in the place and stead of Debtor and in the name
of Debtor or otherwise from and after an Event of Default to
take any action and to execute any instrument which Secured
Party may from time to time in Secured Party's discretion
deem necessary or appropriate to accomplish he purposes of
this Agreement, including without limitation, the following
action: (i) execute and deliver receipts, releases, orders,
bills of lading, acceptances, cancellations or any other
documentary instrument relating in any manner to the
Collateral; (ii) sell for cash or credit, deliver, transfer,
assign, exchange, lease, barter, or otherwise deal with any
part or all of the Collateral; (iii) transfer any
securities, instruments, documents or certificates pledged
as Collateral in the name of Secured Party or its nominee;
(iv) use any interest, premium or principal payments,
conversion or redemption proceeds or other cash proceeds
received in connection with any Collateral to reduce any of
the Indebtedness; (v) exchange any of the securities
pledged as Collateral for any other property upon any
merger, consolidation, reorganization, recapitalization or
other readjustment of the issuer thereof, and, in connection
therewith, to deposit and deliver any and all of such
securities with any committee, depository, transfer agent,
registrar or other designated agent upon such terms and
conditions as Secured Party may deem necessary or
appropriate; (vi) exercise or comply with any conversion,
exchange, redemption, subscription or any other right,
privilege or option pertaining to any securities pledged as
Collateral; provided, however, except as provided herein,
Secured Party shall not have a duty to exercise or comply
with any such right, privilege or option (whether
conversion, redemption or otherwise) and shall not be
responsible for any delay or failure to do so; and (vii)
file any claims or take any action or institute any
proceedings which Secured Party may deem necessary or
appropriate for the collection and/or
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<PAGE>
preservation of the Collateral or otherwise to enforce the
rights of Secured Party with respect to the Collateral.
(c) Performance by Secured Party. If Debtor fails to
perform any agreement or obligation provided herein, Secured
Party may itself perform, or cause performance of, such
agreement or obligation, and the expenses of Secured Party
incurred in connection therewith shall be a part of the
Indebtedness, secured by the Collateral and payable by
Debtor on demand.
7. Events of Default. Each of the following constitutes
an "Event of Default" under this Agreement:
(a) Failure to Pay Indebtedness. The failure, refusal
or neglect of Borrower, or any Obligated Party to make any
payment of principal or interest on the Indebtedness, or any
portion thereof, as the same shall become due and payable
and following ten (10) days written notice to cure the
initial failure to pay an installment; or
(b) Non-Performance of Covenants. The failure of
Debtor or any Obligated Party to timely and properly
observe, keep or perform any non-monetary covenant,
agreement, warranty or condition required herein or in any
of the other Loan Documents following thirty (30) days
written notice to cure; or
(c) Default Under Other Loan Documents. The
occurrence of an event of default under any of the other
Loan Documents; or
(d) False Representation. Any representation
contained herein or in any of the other Loan Documents made
by Borrower, Debtor, or any Obligated Party is false or
misleading in any material respect; or
(e) Bankruptcy or Insolvency. If RX, Dougherty,
Ravens, Total, PIS, Debtor, or any Obligated Party: (i)
becomes insolvent, or makes a transfer in fraud of
creditors, or makes an assignment for the benefit of
creditors, or admits in writing his or its inability to pay
his or its debts as they become due; (ii) generally is not
paying his or its debts as such debts become due; (iii) has
a receiver, trustee or custodian appointed for, or take
possession of, all or substantially all of the assets of
such party or any of the Collateral, either in a proceeding
brought by such party or in a proceeding brought against
such party and such appointment is not discharged or such
possession is not terminated within sixty (60) days after
the effective date thereof or such party consents to or
acquiesces in such appointment or possession; (iv) files a
petition for relief under the United States Bankruptcy Code
or any other present or future federal or state insolvency,
bankruptcy or similar laws (all of the foregoing hereinafter
collectively called "Applicable Bankruptcy
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Law") or an involuntary petition for relief is filed against
such party under any Applicable Bankruptcy Law and such
involuntary petition is not dismissed within sixty (60) days
after the filing thereof, or an order for relief naming such
party is entered under any Applicable Bankruptcy Law, or any
composition, rearrangement, extension, reorganization or
other relief of debtors now or hereafter existing is
requested or consented to by such party; (v) fails to have
discharged within a period of sixty (60) days any
attachment, sequestration or similar writ levied upon any
property of such party; or (vi) fails to pay within thirty
(30) days any final money judgment against such party.
(f) Execution on Collateral. The Collateral or any
portion thereof is taken on execution or other process of
law in any action against Debtor; or
(g) Liquidation or Related Events. The liquidation,
dissolution, merger or consolidation of any one or more of
Borrower or any Obligated Party not otherwise permitted in
advance or approved by Secured Party in writing upon written
request therefor by Debtor.
8. Remedies and Related Rights. If an Event of Default
shall have occurred and for so long as same continues without
cure and any other performance required of the Debtor, and
without limiting any other rights and remedies provided herein,
under any of the other Loan Documents or otherwise available to
Secured Party, Secured Party may exercise one or more of the
rights and remedies provided in this Section.
(a) Remedies. Secured Party may from time to time at
its discretion, without limitation and without notice except
as expressly provided in any of the Loan Documents:
(i) exercise in respect of the Collateral all the
rights and remedies of a secured party under the Code
(whether or not the Code applies to the affected
Collateral);
(ii) require Debtor to, and Debtor hereby
agrees that it will at its expense and upon request of
Secured Party, assemble the Collateral as directed by
Secured Party and make it available to Secured Party at
a place to be designated by Secured Party which is
reasonably convenient to both parties;
(iii) reduce its claim to judgment or
foreclose or otherwise enforce, in whole or in part,
the security interest granted hereunder by any
available judicial procedure;
(iv) sell or otherwise dispose of, at its office,
on the premises of Debtor or elsewhere, the Collateral,
as a unit or in parcels, by public or private
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<PAGE>
proceedings, and by way of one or more contracts (it
being agreed that the sale or other disposition of any
part of the Collateral shall not exhaust Secured
Party's power of sale, but sales or other dispositions
may be made from time to time until all of the
Collateral has been sold or disposed of or until the
Indebtedness has been paid and performed in full), and
at any such sale or other disposition it shall not be
necessary to exhibit any of the Collateral;
(v) buy the Collateral, or any portion thereof,
at any public sale;
(vi) buy the Collateral, or any portion thereof,
at any private sale if the Collateral is of a type
customarily sold in a recognized market or is of a type
which is the subject of widely distributed standard
price quotations;
(vii) apply for the appointment of a receiver
for the Collateral, and Debtor hereby consents to any
such appointment; and
(viii) at its option, withdraw all amounts on
deposit in respect of the Collateral and apply the same
to the payment of the Indebtedness; and
(ix) Debtor agrees that in the event Debtor is
entitled to receive any notice under the Uniform
Commercial Code, as it exists in the state governing
any such notice, of the sale or other disposition of
any Collateral, reasonable notice shall be deemed given
when such notice is deposited in a depository
receptacle under the care and custody of the United
States Postal Service, postage prepaid, at Debtor's
address set forth on the signature page hereof, ten
(10) days prior to the date of any public sale, or
after which a private sale, of any of such Collateral
is to be held. Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of
sale having been given. Secured Party may adjourn any
public or private sale from time to time by
announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the
time and place to which it was so adjourned.
(x) Private Sale of Securities. Debtor
recognizes that Secured Party may be unable to effect a
public sale of all or any part of the securities
pledged as Collateral because of restrictions in
applicable federal and state securities laws. Secured
Party may, therefore, determine to make one or more
private sales of any such securities to a restricted
group of purchasers who will be obligated to agree,
among other things, to acquire such securities for
their own account, for investment and not with a view
to the distribution or resale thereof. Debtor
acknowledges that each any such private sale may be at
prices and other terms less favorable than what might
have been obtained at a public sale and,
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<PAGE>
notwithstanding the foregoing, agrees that each such
private sale shall be deemed to have been made in a
commercially reasonable manner and that Secured Party
shall have no obligation to delay the sale of any such
securities for the period of time necessary to permit
the issuer to register such securities for public sale
under any federal or state securities laws. Debtor
further acknowledges and agrees that any offer to sell
such securities which has been made privately in the
manner described above to not less than five (5) bona
fide offerees shall be deemed to involve a "public
sale" for the purposes of Section 9.504(c) of the Code,
notwithstanding that such sale may not (unless
conducted in compliance with applicable securities
rules and regulations) constitute a "public offering"
under any federal or state securities laws and that
Secured Party may, in such event, bid for the purchase
of such securities.
(xi) Private Sale of the Collateral Other than
Securities. Secured Party is also authorized, and
Debtor confirms Secured Party's right, to give notice
for and to conduct a private sale for any part or all
of the Collateral. Debtor shall assemble, deliver or
otherwise assist Secured Party in making the Collateral
available for inspection, preview or sale in such lots
and at such locations as Secured Party may instruct.
(b) Application of Proceeds. If any Event of Default
shall have occurred, Secured Party may at its discretion
apply or use any cash held by Secured Party as Collateral,
and any cash proceeds received by Secured Party in respect
of any sale or other disposition of, collection from, or
other realization upon, all or any part of the Collateral as
follows in such order and manner as Secured Party may elect:
(i) to the repayment or reimbursement of the
reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses)
incurred by Secured Party in connection with (A) the
administration of the Loan Documents, (B) the custody,
preservation, use or operation of, or the sale of,
collection from, or other realization upon, the
Collateral, and (C) the exercise or enforcement of any
of the rights and remedies of Secured Party hereunder;
(ii) to the payment or other satisfaction of any
liens and other encumbrances upon the Collateral;
(iii) to the satisfaction of the Indebtedness;
(iv) by holding such cash and proceeds as
Collateral;
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<PAGE>
(v) to the payment of any other amounts required
by applicable law (including without limitation,
Section 9.504(a)(3) of the Code or any other applicable
statutory provision); and
(vi) by delivery to Debtor or any other party
lawfully entitled to receive such cash or proceeds
whether by direction of a court of competent
jurisdiction or otherwise.
(c) Deficiency. In the event that the proceeds of any
sale of, collection from, or other realization upon, all or
any part of the Collateral by Secured Party are insufficient
to pay all amounts to which Secured Party is legally
entitled, Debtor and any party who guaranteed or is
otherwise obligated to pay all or any portion of the
Indebtedness shall be liable for the deficiency, together
with interest thereon as provided in the Loan Documents.
(d) Non-Judicial Remedies. In granting to Secured
Party the power to enforce its rights hereunder without
prior judicial process or judicial hearing, Debtor expressly
waives, renounces and knowingly relinquishes any legal right
which might otherwise require Secured Party to enforce its
rights by judicial process. Debtor recognizes and concedes
that non-judicial remedies are consistent with the usage of
trade, are responsive to commercial necessity and are the
result of a bargain at arm's length. Nothing herein is
intended to prevent Secured Party or Debtor from resorting
to judicial process at either party's option.
(e) Other Recourse. Debtor waives any right to
require Secured Party to proceed against any third party,
exhaust any Collateral or other security for the
Indebtedness, or to have any third party joined with Debtor
in any suit arising out of the Indebtedness or any of the
Loan Documents, or pursue any other remedy available to
Secured Party. Debtor further waives any and all notice of
acceptance of this Agreement and of the creation,
modification, rearrangement, renewal or extension of the
Indebtedness. Debtor further waives any defense arising by
reason of any disability or other defense of any third party
or by reason of the cessation from any cause whatsoever of
the liability of any third party. Until all of the
Indebtedness shall have been paid in full, Debtor shall have
no right of subrogation and Debtor waives the right to
enforce any remedy which Secured Party has or may hereafter
have against any third party, and waives any benefit of and
any right to participate in any other security whatsoever
now or hereafter held by Secured Party. Debtor authorizes
Secured Party, and without notice or demand and without any
reservation of rights against Debtor and without affecting
Debtor's liability hereunder or on the Indebtedness to (i)
take or hold any other property of any type from any third
party as security for the Indebtedness, and exchange,
enforce, waive and release any or all of such other
property, (ii) apply such other property and direct the
order or manner of sale thereof as Secured Party may in its
discretion
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<PAGE>
determine, (iii) renew, extend, accelerate, modify,
compromise, settle or release any of the Indebtedness or
other security for the Indebtedness, (iv) waive, enforce or
modify any of the provisions of any of the Loan Documents
executed by any third party, and (v) release or substitute
any third party.
9. Indemnity. Debtor hereby indemnifies and agrees to
hold harmless Secured Party, and its officers, directors,
employees, agents and representatives (each an "Indemnified
Person") from and against any and all liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature
(collectively, the "Claims") which may be imposed on, incurred
by, or asserted against, any Indemnified Person arising in
connection with the Loan Documents, the Indebtedness, or the
Collateral (including without limitation, the enforcement of the
Loan Documents and the defense of any Indemnified Person's
actions and/or inactions in connection with the Loan Documents).
WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH
INDEMNIFIED PERSON WITH RESPECT TO ANY CLAIMS WHICH IN WHOLE OR
IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH
AND/OR ANY OTHER INDEMNIFIED PERSON, except to the limited extent
the Claims against an Indemnified Person are proximately caused
by such Indemnified Person's gross negligence or willful
misconduct. If Debtor or any third party ever alleges such gross
negligence or willful misconduct by any Indemnified Person, the
indemnification provided for in this Section shall nonetheless be
paid upon demand, subject to later adjustment or reimbursement,
until such time as a court of competent jurisdiction enters a
final judgment as to the extent and effect of the alleged gross
negligence or willful misconduct. The indemnification provided
for in this Section shall survive the termination of this
Agreement and shall extend and continue to benefit each
individual or entity who is or has at any time been an
Indemnified Person hereunder.
10. Miscellaneous.
(a) Entire Agreement. This Agreement contains the
entire agreement of Secured Party and Debtor with respect to
the Collateral. If the parties hereto are parties to any
prior agreement, either written or oral, relating to the
Collateral, the terms of this Agreement shall amend and
supersede the terms of such prior agreements as to
transactions on or after the effective date of this
Agreement, but all security agreements, financing
statements, guaranties, other contracts and notices for the
benefit of Secured Party shall continue in full force and
effect to secure the Indebtedness unless Secured Party
specifically releases its rights thereunder by separate
release.
(b) Amendment. No modification, consent or amendment
of any provision of this Agreement or any of the other Loan
Documents shall be valid or effective unless the same is in
writing and signed by the party against whom it is sought to
be enforced.
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<PAGE>
(c) Actions by Secured Party. The lien, security
interest and other security rights of Secured Party
hereunder shall not be impaired by (i) any renewal,
extension, increase or modification with respect to the
Indebtedness, (ii) any surrender, compromise, release,
renewal, extension, exchange or substitution which Secured
Party may grant with respect to the Collateral, (iii) any
release or indulgence granted to any co-maker, endorser,
guarantor or surety of the Indebtedness, or (iv) the
assumption of the obligations of Borrower in respect of the
Indebtedness by any other person or entity affiliated with
the Borrower or any of Borrower's subsidiaries and their
respective successors or assigns. The taking of additional
security by Secured Party shall not release or impair the
lien, security interest or other security rights of Secured
Party hereunder or affect the obligations of Debtor
hereunder.
(d) Waiver by Secured Party. Secured Party may waive
any Event of Default without waiving any other prior or
subsequent Event of Default. Secured Party may remedy any
default without waiving the Event of Default remedied.
Neither the failure by Secured Party to exercise, nor the
delay by Secured Party in exercising, any right or remedy
upon any Event of Default shall be construed as a waiver of
such Event of Default or as a waiver of the right to
exercise any such right or remedy at a later date. No
single or partial exercise by Secured Party of any right or
remedy hereunder shall exhaust the same or shall preclude
any other or further exercise thereof, and every such right
or remedy hereunder may be exercised at any time. No waiver
of any provision hereof or consent to any departure by
Debtor therefrom shall be effective unless the same shall be
in writing and signed by Secured Party and then such waiver
or consent shall be effective only in the specific
instances, for the purpose for which given and to the extent
therein specified. No notice to or demand on Debtor in any
case shall of itself entitle Debtor to any other or further
notice or demand in similar or other circumstances.
(e) Costs and Expenses. Debtor will upon demand pay
to Secured Party the amount of any and all costs and
expenses (including without limitation, attorneys' fees and
expenses), which Secured Party may incur in connection with
(i) the transactions which give rise to the Loan Documents,
(ii) the preparation of this Agreement and the perfection
and preservation of the security interests granted under the
Loan Documents, (iii) the custody, preservation, use or
operation of, or the sale of, collection from, or other
realization upon, the Collateral, (iv) the exercise or
enforcement of any of the rights of Secured Party under the
Loan Documents, or (v) the failure by Debtor to perform or
observe any of the provisions hereof.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND APPLICABLE FEDERAL LAWS.
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<PAGE>
(g) Venue. This Agreement has been entered into in
Dallas County, Texas and it shall be performable for all
purposes in such county. Courts within the State of Texas
shall have jurisdiction over any and all disputes arising
under or pertaining to this Agreement and venue for any such
disputes shall be in Dallas County, Texas.
(h) Severability. If any provision of this Agreement
is held by a court of competent jurisdiction to be illegal,
invalid or unenforceable under present or future laws, such
provision shall be fully severable, shall not impair or
invalidate the remainder of this Agreement and the effect
thereof shall be confined to the provision held to be
illegal, invalid or unenforceable.
(i) No Obligation. Nothing contained herein shall be
construed as an obligation on the part of Secured Party to
extend or continue to extend credit to Borrower.
(j) Notices. All notices, requests, demands or other
communications required or permitted to be given pursuant to
this Agreement shall be in writing and given by (i) personal
delivery, (ii) expedited delivery service with proof of
delivery, or (iii) United States mail, postage prepaid,
registered or certified, return receipt requested, sent to
the intended addressee at the address set forth on the
signature page hereof or to such different address as the
addressee shall have designated by written notice sent
pursuant to the terms hereof and shall be deemed to have
been received either, in the case of personal delivery, at
the time of personal delivery, in the case of expedited
delivery service, as the date of first attempted delivery at
the address and in the manner provided herein, or in the
case of mail, upon deposit in a depository receptacle under
the care and custody of the United States Postal Service.
Either party shall have the right to change his or its
address for notice hereunder to any other location within
the continental United States by notice to the other party
of such new address at least thirty (30) days prior to the
effective date of such new address.
(k) Binding Effect and Assignment. This Agreement (i)
creates a continuing security interest in the Collateral,
(ii) shall be binding on Debtor and the heirs, executors,
administrators and personal representatives of Debtor, and
(iii) shall inure to the benefit of Secured Party and its
successors and assigns. Without limiting the generality of
the foregoing, Secured Party may pledge, assign or otherwise
transfer the Indebtedness and its rights under this
Agreement and any of the other Loan Documents to any other
party. Debtor's rights and obligations hereunder may not be
assigned or otherwise transferred without the prior written
consent of Secured Party.
(l) Termination. Upon the satisfaction in full of the
Indebtedness, or written release or termination delivered by
Secured Party to Debtor, this Agreement and the security
interests created hereby shall terminate. Upon termination
of this Agreement and
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Debtor's written request, Secured Party will, at Debtor's
sole cost and expense, return to Debtor such of the
Collateral as shall not have been sold or otherwise disposed
of or applied pursuant to the terms hereof and execute and
deliver to Debtor such documents as Debtor shall reasonably
request to evidence such termination.
(m) Cumulative Rights. All rights and remedies of
Secured Party hereunder are cumulative of each other and of
every other right or remedy which Secured Party may
otherwise have at law or in equity or under any of the other
Loan Documents, and the exercise of one or more of such
rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of any other rights or
remedies.
(n) Gender and Number. Within this Agreement, words of
any gender shall be held and construed to include the other
gender, and words in the singular number shall be held and
construed to include the plural and words in the plural
number shall be held and construed to include the singular,
unless in each instance the context requires otherwise.
(o) Descriptive Headings. The headings in this
Agreement are for convenience only and shall in no way
enlarge, limit or define the scope or meaning of the various
and several provisions hereof.
EXECUTED as of the date first written above.
Debtor's Address: DEBTOR:
----------------------
10711 Preston Road, Suite 250
Dallas, Texas 75230 PARK PHARMACY CORPORATION,
a Colorado corporation
By: /s/ Thomas R. Baker
--------------------------
Thomas R. Baker, President
Secured Party's Address: BANK:
------------------------------
Bank of Texas, N.A.
5956 Sherry Lane, Suite 1100 BANK OF TEXAS, N.A.
Dallas, Texas 75225
Attention: David J. Broussard, Jr.
Senior Vice President By: /s/ Frank A. Sewell, IV
-------------------------
Frank A. Sewell, IV
Banking Officer
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PLEDGE AND SECURITY AGREEMENT
-----------------------------
PARK INFUSION SERVICES, LP
(AUGUST, 2000 FACILITY)
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is
made as of the10th day of August, 2000, by Park Infusion
Services, LP (hereinafter called "Debtor"), in favor of BANK OF
TEXAS, N.A. ("Bank"). Debtor hereby agrees with Bank as follows:
1. Definitions. As used in this Agreement, the following
terms shall have the meanings indicated below:
(a) The term "Borrower" shall mean Debtor, Park
Pharmacy Corporation ("Park"), a Colorado corporation, RX-
Pro.Com, Inc. ("RX"), a Texas corporation, Dougherty's
Pharmacy, Inc. ("Dougherty"), a Texas corporation, Ravens
Pharmacy, Inc. ("Ravens"), a Texas corporation, Total
Pharmacy Supply, Inc. ("Total"), a Texas limited
partnership, who are jointly and severally indebted to
Bank..
(b) The term "Code" shall mean the Uniform Commercial
Code as in effect in the State of Texas on the date of this
Agreement or as it may hereafter be amended from time to
time.
(c) The term "Collateral" shall mean all machinery,
furniture, fixtures and equipment, and also all accounts
receivable, inventory, accounts, instruments, documents,
chattel paper, commercial tort claims, deposit accounts,
letters of credit rights or letters of credit or rights to
payment for money or sums advanced or sold, securities,
certificates, general intangibles, payment intangibles, and
any other tangible personal property or intangible personal
property of every kind and character now located at Debtor's
places of business or otherwise in Debtor's possession or
control, or in the case of certain items of the Collateral
requiring Bank to have possession to be perfected any of
those items in the possession of, or at any time and from
time to time hereafter delivered to, Secured Party (as
hereinafter defined) or its agents, together with all
certificates, options, rights or other distributions issued
as an addition to, in substitution of, or in exchange for,
or on account of, any of the foregoing, including without
limitation, any property specifically described on Schedule
"A" attached hereto and made a part hereof.
(d) The term "Indebtedness" shall mean all
indebtedness of Borrower now or hereafter owing to Secured
Party pursuant to that certain Loan Agreement dated of even
date herewith, executed by Borrower and Secured Party (the
"Loan Agreement") and evidenced by a Revolving Line of
Credit Note, a Term Equipment Note, and an Acquisition Line
of Credit Note, all dated of even date herewith, executed by
Borrower to
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and for the benefit of Secured Party, in the original
principal amounts of $1,500,000.00 and $1,300,000.00 and
$5,000,000.00, respectively, together with any other
obligation or indebtedness due from Debtor to Secured Party
in accordance with the terms of the Loan Documents,
including without limitation any additional note to be
executed by Borrower and payable to the order of Secured
Party in accordance with the provisions of the Loan
Agreement in respect of the Acquisition Line of Credit Note
(collectively referred to herein as the "Note" or the
"Notes"as the context requires), (ii) all accrued but unpaid
interest on any of the indebtedness described in (i) above,
(iii) all obligations owing to Secured Party under any
documents evidencing, securing, governing and/or pertaining
to all or any part of the indebtedness described in (i) and
(ii) above, (iv) all costs and expenses incurred by Secured
Party in connection with the collection and administration
of all or any part of the indebtedness and obligations
described in (i), (ii) and (iii) above or the protection or
preservation of, or realization upon, the collateral
securing all or any part of such indebtedness and
obligations, including without limitation all reasonable
attorneys' fees, and (v) all renewals, extensions,
modifications and rearrangements of the indebtedness and
obligations described in (i), (ii), (iii) and (iv) above.
(e) The term "Loan Documents" shall mean all
instruments and documents evidencing, securing, governing,
guaranteeing and/or pertaining to the Indebtedness.
(f) The term "Obligated Party" shall mean any party
other than Borrower who secures, guarantees and/or is
otherwise obligated to pay all or any portion of the
Indebtedness.
(g) The term "Secured Party" shall mean Bank, its
successors and assigns, including without limitation, any
party to whom Bank, or its successors or assigns, may assign
its rights and interests under this Agreement.
(h) Other capitalized terms not defined herein shall
have the meaning ascribed to them in the Loan Agreement of
even date herewith.
All words and phrases used herein which are expressly
defined in Section 1.201 of Chapter 9 of the Code shall have the
meaning provided for therein. Other words and phrases defined
elsewhere in the Code shall have the meaning specified therein
except to the extent such meaning is inconsistent with a
definition in Section 1.201 or Chapter 9 of the Code.
2. Security Interest. As security for the Indebtedness,
Debtor, for value received, hereby grants to Secured Party a
continuing security interest in the Collateral.
3. Representations and Warranties. Debtor hereby
represents and warrants the following to Secured Party:
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(a) Enforceability. This Agreement and Guaranty
constitute legal, valid and binding obligations of Debtor,
enforceable in accordance with their respective terms,
except as limited by bankruptcy, insolvency or similar laws
of general application relating to the enforcement of
creditors' rights and except to the extent specific remedies
may generally be limited by equitable principles.
(b) Ownership and Liens. Debtor has good and
marketable title to the Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement.
Other than in the ordinary course of business for a non-
material matter, no dispute, right of setoff, counterclaim
or defense exists with respect to all or any part of the
Collateral. Debtor has not executed any other security
agreement currently affecting the Collateral and no
effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file
in any recording office except as may have been executed or
filed in favor of Secured Party.
(c) No Conflicts or Consents. Neither the ownership,
the intended use of the Collateral by Debtor, the grant of
the security interest by Debtor to Secured Party herein nor
the exercise by Secured Party of its rights or remedies
hereunder, will (i) conflict with any provision of (A) any
domestic or foreign law, statute, rule or regulation, or (B)
any agreement, judgment, license, order or permit applicable
to or binding upon Debtor, or (ii) result in or require the
creation of any lien, charge or encumbrance upon any assets
or properties of Debtor or of any person except as may be
expressly contemplated in the Loan Documents. Except as
expressly contemplated in the Loan Documents, no consent,
approval, authorization or order of, and no notice to or
filing with, any court, governmental authority or third
party is required in connection with the grant by Debtor of
the security interest herein or the exercise by Secured
Party of its rights and remedies hereunder.
(d) Security Interest. Debtor has and will have at
all times full right, power and authority to grant a
security interest in the Collateral to Secured Party in the
manner provided herein, free and clear of any lien, security
interest or other charge or encumbrance. This Agreement
creates a legal, valid and binding security interest in
favor of Secured Party in the Collateral securing the
Indebtedness. Possession by Secured Party of all
certificates, instruments and cash constituting Collateral
from time to time and/or the filing of the financing
statements delivered prior hereto and/or concurrently
herewith by Debtor to Secured Party will perfect and
establish the first priority of Secured Party's security
interest hereunder in the Collateral.
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(e) Location. Debtor's chief executive office and the
office where the records concerning the Collateral are kept
is located at the address set forth on the signature page
hereof.
(f) Solvency of Debtor. As of the date hereof, and
after giving effect to this Agreement and the completion of
all other transactions contemplated by Debtor at the time of
the execution of this Agreement, (i) Debtor is and will be
solvent, (ii) the fair saleable value of Debtor's assets
exceeds and will continue to exceed Debtor's liabilities
(both fixed and contingent), and (iii) Debtor is paying and
will continue to be able to pay his debts as they mature.
Solely for purposes of this warranty by the Debtor, and
without affecting, modifying or otherwise amending any
provision of any Loan Documents, Debtor's assessment of its
solvency includes a claim of subrogation or contribution
against each of the other entities comprising Borrower
and/or a Guarantor (as defined in the Loan Documents) and/or
any other obligated party in the event Debtor should pay
more than its ratable share of the Indebtedness.
(g) Chattel Paper, Documents and Instruments. The
chattel paper, documents and instruments of Debtor pledged
hereunder have only one original counterpart and no party
other than Debtor or Secured Party is in actual or
constructive possession of any such chattel paper, documents
or instruments.
4. Affirmative Covenants. Debtor will comply with the
covenants contained in this Section 4 at all times during the
period of time this Agreement is effective unless Secured Party
shall otherwise consent in writing.
(a) Ownership and Liens. Debtor will maintain good
and marketable title to all Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement
and the security interests and other encumbrances expressly
permitted by the other Loan Documents. Other than in the
ordinary course of business for non-material matters, Debtor
will not permit any dispute, right of setoff, counterclaim
or defense to exist with respect to all or any part of the
Collateral. Debtor will not cause any financing statement
or other security instrument with respect to the Collateral
to be terminated, except as may exist or as may have been
filed in favor of Secured Party. Debtor will defend at his
expense Secured Party's right, title and security interest
in and to the Collateral against the claims of any third
party.
(b) Further Assurances. Debtor will from time to time
at his expense promptly execute and deliver all further
instruments and documents and take all further action
necessary or appropriate or that Secured Party may request
in order (i) to perfect and protect the security interest
created or purported to be created hereby and the first
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priority of such security interest, (ii) to enable Secured
Party to exercise and enforce its rights and remedies
hereunder in respect of the Collateral, and (iii) to
otherwise effect the purposes of this Agreement, including
without limitation, executing and filing such financing or
continuation statements, or amendments thereto.
(c) Payment of Taxes. Debtor (i) will timely pay all
property and other taxes, assessments and governmental
charges or levies imposed upon the Collateral or any part
thereof, (ii) will timely pay all lawful claims which, if
unpaid, might become a lien or charge upon the Collateral or
any part thereof, and (iii) will maintain appropriate
accruals and reserves for all such liabilities in a timely
fashion in accordance with generally accepted accounting
principles. Debtor may, however, delay paying or
discharging any such taxes, assessments, charges, claims or
liabilities so long as the validity thereof is contested in
good faith by proper proceedings and provided Debtor has set
aside adequate reserves therefor.
(d) Chattel Paper, Documents and Instruments. Debtor
will take such action as may be requested by Secured Party
in order to cause any chattel paper, documents or
instruments to be valid and enforceable and will cause all
chattel paper to have only one original counterpart. Upon
request by Secured Party, Debtor will deliver to Secured
Party all originals of chattel paper, documents or
instruments and will mark all chattel paper with a legend
indicating that such chattel paper is subject to the
security interest granted hereunder.
(e) Insurance. Debtor will insure the Collateral
against perils of loss and/or liability and name Secured
Party as an additional insured on all such policies of
insurance in an amount not less than the amount of the
original amount of the Indebtedness. All such insurance
shall be with such carriers as Secured Party may reasonably
approve. Debtor shall provide Secured Party with evidence
of Debtor's compliance with this provision and with evidence
of renewal of all such coverages throughout the term that
any of the Indebtedness remains outstanding and unpaid.
Upon request of Secured Party, Debtor will provide evidence
of payment of renewal premiums and/or with updated policies,
certificates of insurance or other evidence of Debtor's
compliance with this provision at no cost or expense to
Secured Party.
5. Negative Covenants. Debtor will comply with the
covenants contained in this Section 5 at all times during the
period of time this Agreement is effective, unless Secured Party
shall otherwise consent in writing.
(a) Transfer or Encumbrance. Other than in the
ordinary course of business, Debtor will not (i) sell,
assign (by operation of law or otherwise), transfer,
exchange, lease or otherwise dispose of any of the
Collateral, (ii) grant a lien or security interest in or
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execute, file or record any financing statement or other
security instrument with respect to the Collateral to any
party other than Secured Party, or (iii) deliver actual or
constructive possession of the Collateral to any party other
than Secured Party.
(b) Impairment of Security Interest. Debtor will not
take or fail to take any action which would in any manner
impair the value or enforceability of Secured Party's
security interest in any Collateral.
(c) Possession of Collateral. Debtor will on or
before the date hereof, deliver possession of any part of
the Collateral to Secured Party where possession by Secured
Party is required for perfection.
(d) Financing Statement Filings. Debtor recognizes
that financing statements pertaining to the Collateral will
be or may be filed where Debtor maintains any Collateral,
has its records concerning any Collateral or has its
principal place of business/ residence. Without limitation
of any other covenant herein, Debtor will not cause or
permit any change in the location of Debtor's office to a
jurisdiction other than as represented in Section 3(e)
unless Debtor shall have notified Secured Party in writing
of such change at least thirty (30) days prior to the
effective date of such change, and shall have first taken
all action required by Secured Party for the purpose of
further perfecting or protecting the security interest in
favor of Secured Party in the Collateral. In any written
notice furnished pursuant to this Section 5(d), Debtor will
expressly state that the notice is required by this
Agreement and contains facts that may require additional
filings of financing statements or other notices for the
purpose of continuing perfection of Secured Party's security
interest in the Collateral.
6. Rights of Secured Party. Secured Party shall have the
rights contained in this Section 6 at all times during the period
of time this Agreement is effective.
(a) Additional Financing Statements Filings. Debtor
hereby authorizes Secured Party to file, without the
signature of Debtor, one or more financing or continuation
statements, and amendments thereto, relating to the
Collateral. Debtor further agrees that a carbon,
photographic or other reproduction of this Security
Agreement or any financing statement describing any
Collateral is sufficient as a financing statement and may be
filed in any jurisdiction Secured Party may deem
appropriate.
(b) Power of Attorney. Debtor hereby irrevocably
appoints Secured Party as Debtor's attorney-in-fact, such
power of attorney being coupled with an interest, with full
authority in the place and stead of Debtor and in the name
of Debtor or otherwise from and after an Event of Default,
and thereafter until such Event of Default has been cured
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and any other action, performance or assurance required of
the Debtor has been performed or delivered from time to time
and until released by the Secured Party in its sole and
absolute discretion, to take any action and to execute any
instrument which Secured Party may deem necessary or
appropriate to accomplish the purposes of this Agreement,
including without limitation: (i) to demand, collect, sue
for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in
respect of the Collateral; (ii) to receive, endorse and
collect any drafts or other instruments, documents and
chattel paper in connection with clause (i) above; and (iii)
to file any claims or take any action or institute any
proceedings which Secured Party may deem necessary or
appropriate for the collection and/or preservation of the
Collateral or otherwise to enforce the rights of Secured
Party with respect to the Collateral.
(c) Performance by Secured Party. If Debtor fails to
perform any agreement or obligation provided herein, Secured
Party may itself perform, or cause performance of, such
agreement or obligation, and the expenses of Secured Party
incurred in connection therewith shall be a part of the
Indebtedness, secured by the Collateral and payable by
Debtor on demand.
7. Events of Default. Each of the following constitutes
an "Event of Default" under this Agreement:
(a) Failure to Pay Indebtedness. The failure, refusal
or neglect of Borrower, or any Obligated Party to make any
payment of principal or interest on the Indebtedness, or any
portion thereof, as the same shall become due and payable
and following ten (10) days written notice to cure the
initial failure to pay an installment; or
(b) Non-Performance of Covenants. The failure of
Debtor or any Obligated Party to timely and properly
observe, keep or perform any non-monetary covenant,
agreement, warranty or condition required herein or in any
of the other Loan Documents following thirty (30) days
written notice to cure; or
(c) Default Under Other Loan Documents. The
occurrence of an event of default under any of the other
Loan Documents; or
(d) False Representation. Any representation
contained herein or in any of the other Loan Documents made
by Borrower, Debtor, or any Obligated Party is false or
misleading in any material respect; or
(e) Bankruptcy or Insolvency. If Park, Dougherty,
Ravens, Total, Debtor, or any Obligated Party: (i) becomes
insolvent, or makes a transfer in fraud of creditors, or
makes an assignment for the benefit of creditors, or admits
in writing his or its inability to
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pay his or its debts as they become due; (ii) generally is
not paying his or its debts as such debts become due; (iii)
has a receiver, trustee or custodian appointed for, or take
possession of, all or substantially all of the assets of
such party or any of the Collateral, either in a proceeding
brought by such party or in a proceeding brought against
such party and such appointment is not discharged or such
possession is not terminated within sixty (60) days after
the effective date thereof or such party consents to or
acquiesces in such appointment or possession; (iv) files a
petition for relief under the United States Bankruptcy Code
or any other present or future federal or state insolvency,
bankruptcy or similar laws (all of the foregoing hereinafter
collectively called "Applicable Bankruptcy Law") or an
involuntary petition for relief is filed against such party
under any Applicable Bankruptcy Law and such involuntary
petition is not dismissed within sixty (60) days after the
filing thereof, or an order for relief naming such party is
entered under any Applicable Bankruptcy Law, or any
composition, rearrangement, extension, reorganization or
other relief of debtors now or hereafter existing is
requested or consented to by such party; (v) fails to have
discharged within a period of sixty (60) days any
attachment, sequestration or similar writ levied upon any
property of such party; or (vi) fails to pay within thirty
(30) days any final money judgment against such party.
(f) Execution on Collateral. The Collateral or any
portion thereof is taken on execution or other process of
law in any action against Debtor; or
(g) Liquidation or Related Events. The liquidation,
dissolution, merger or consolidation of any one or more of
Borrower or any Obligated Party not otherwise permitted in
advance or approved by Secured Party in writing upon written
request therefor by Debtor..
8. Remedies and Related Rights. If an Event of Default
shall have occurred and for so long as same continues without
cure and any other performance required of the Debtor, and
without limiting any other rights and remedies provided herein,
under any of the other Loan Documents or otherwise available to
Secured Party, Secured Party may exercise one or more of the
rights and remedies provided in this Section.
(a) Remedies. Secured Party may from time to time at
its discretion, without limitation and without notice except
as expressly provided in any of the Loan Documents:
(i) exercise in respect of the Collateral all the
rights and remedies of a secured party under the Code
(whether or not the Code applies to the affected
Collateral);
(ii) require Debtor to, and Debtor hereby
agrees that it will at its expense and upon request of
Secured Party, assemble the Collateral as directed by
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Secured Party and make it available to Secured Party at
a place to be designated by Secured Party which is
reasonably convenient to both parties;
(iii) reduce its claim to judgment or
foreclose or otherwise enforce, in whole or in part,
the security interest granted hereunder by any
available judicial procedure;
(iv) sell or otherwise dispose of, at its office,
on the premises of Debtor or elsewhere, the Collateral,
as a unit or in parcels, by public or private
proceedings, and by way of one or more contracts (it
being agreed that the sale or other disposition of any
part of the Collateral shall not exhaust Secured
Party's power of sale, but sales or other dispositions
may be made from time to time until all of the
Collateral has been sold or disposed of or until the
Indebtedness has been paid and performed in full), and
at any such sale or other disposition it shall not be
necessary to exhibit any of the Collateral;
(v) buy the Collateral, or any portion thereof,
at any public sale;
(vi) buy the Collateral, or any portion thereof,
at any private sale if the Collateral is of a type
customarily sold in a recognized market or is of a type
which is the subject of widely distributed standard
price quotations;
(vii) apply for the appointment of a receiver
for the Collateral, and Debtor hereby consents to any
such appointment; and
(viii) at its option, withdraw all amounts on
deposit in respect of the Collateral and apply the same
to the payment of the Indebtedness; and
(ix) Debtor agrees that in the event Debtor is
entitled to receive any notice under the Uniform
Commercial Code, as it exists in the state governing
any such notice, of the sale or other disposition of
any Collateral, reasonable notice shall be deemed given
when such notice is deposited in a depository
receptacle under the care and custody of the United
States Postal Service, postage prepaid, at Debtor's
address set forth on the signature page hereof, ten
(10) days prior to the date of any public sale, or
after which a private sale, of any of such Collateral
is to be held. Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of
sale having been given. Secured Party may adjourn any
public or private sale from time to time by
announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the
time and place to which it was so adjourned.
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(b) Application of Proceeds. If any Event of Default
shall have occurred, Secured Party may at its discretion
apply or use any cash held by Secured Party as Collateral,
and any cash proceeds received by Secured Party in respect
of any sale or other disposition of, collection from, or
other realization upon, all or any part of the Collateral as
follows in such order and manner as Secured Party may elect:
(i) to the repayment or reimbursement of the
reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses)
incurred by Secured Party in connection with (A) the
administration of the Loan Documents, (B) the custody,
preservation, use or operation of, or the sale of,
collection from, or other realization upon, the
Collateral, and (C) the exercise or enforcement of any
of the rights and remedies of Secured Party hereunder;
(ii) to the payment or other satisfaction of any
liens and other encumbrances upon the Collateral;
(iii) to the satisfaction of the Indebtedness;
(iv) by holding such cash and proceeds as
Collateral;
(v) to the payment of any other amounts required
by applicable law (including without limitation,
Section 9.504(a)(3) of the Code or any other applicable
statutory provision); and
(vi) by delivery to Debtor or any other party
lawfully entitled to receive such cash or proceeds
whether by direction of a court of competent
jurisdiction or otherwise.
(c) Deficiency. In the event that the proceeds of any
sale of, collection from, or other realization upon, all or
any part of the Collateral by Secured Party are insufficient
to pay all amounts to which Secured Party is legally
entitled, Debtor and any party who guaranteed or is
otherwise obligated to pay all or any portion of the
Indebtedness shall be liable for the deficiency, together
with interest thereon as provided in the Loan Documents.
(d) Non-Judicial Remedies. In granting to Secured
Party the power to enforce its rights hereunder without
prior judicial process or judicial hearing, Debtor expressly
waives, renounces and knowingly relinquishes any legal right
which might otherwise require Secured Party to enforce its
rights by judicial process. Debtor recognizes and concedes
that non-judicial remedies are consistent with the usage of
trade, are responsive to commercial necessity and are the
result of a bargain at arm's length. Nothing herein
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is intended to prevent Secured Party or Debtor from
resorting to judicial process at either party's option.
(e) Other Recourse. Debtor waives any right to
require Secured Party to proceed against any third party,
exhaust any Collateral or other security for the
Indebtedness, or to have any third party joined with Debtor
in any suit arising out of the Indebtedness or any of the
Loan Documents, or pursue any other remedy available to
Secured Party. Debtor further waives any and all notice of
acceptance of this Agreement and of the creation,
modification, rearrangement, renewal or extension of the
Indebtedness. Debtor further waives any defense arising by
reason of any disability or other defense of any third party
or by reason of the cessation from any cause whatsoever of
the liability of any third party. Until all of the
Indebtedness shall have been paid in full, Debtor shall have
no right of subrogation and Debtor waives the right to
enforce any remedy which Secured Party has or may hereafter
have against any third party, and waives any benefit of and
any right to participate in any other security whatsoever
now or hereafter held by Secured Party. Debtor authorizes
Secured Party, and without notice or demand and without any
reservation of rights against Debtor and without affecting
Debtor's liability hereunder or on the Indebtedness to (i)
take or hold any other property of any type from any third
party as security for the Indebtedness, and exchange,
enforce, waive and release any or all of such other
property, (ii) apply such other property and direct the
order or manner of sale thereof as Secured Party may in its
discretion determine, (iii) renew, extend, accelerate,
modify, compromise, settle or release any of the
Indebtedness or other security for the Indebtedness, (iv)
waive, enforce or modify any of the provisions of any of the
Loan Documents executed by any third party, and (v) release
or substitute any third party.
9. Indemnity. Debtor hereby indemnifies and agrees to
hold harmless Secured Party, and its officers, directors,
employees, agents and representatives (each an "Indemnified
Person") from and against any and all liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature
(collectively, the "Claims") which may be imposed on, incurred
by, or asserted against, any Indemnified Person arising in
connection with the Loan Documents, the Indebtedness, or the
Collateral (including without limitation, the enforcement of the
Loan Documents and the defense of any Indemnified Person's
actions and/or inactions in connection with the Loan Documents).
WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH
INDEMNIFIED PERSON WITH RESPECT TO ANY CLAIMS WHICH IN WHOLE OR
IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH
AND/OR ANY OTHER INDEMNIFIED PERSON, except to the limited extent
the Claims against an Indemnified Person are proximately caused
by such Indemnified Person's gross negligence or willful
misconduct. If Debtor or any third party ever alleges such gross
negligence or willful misconduct by any Indemnified Person, the
indemnification provided for in this Section shall
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nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent
jurisdiction enters a final judgment as to the extent and effect
of the alleged gross negligence or willful misconduct. The
indemnification provided for in this Section shall survive the
termination of this Agreement and shall extend and continue to
benefit each individual or entity who is or has at any time been
an Indemnified Person hereunder.
10. Miscellaneous.
(a) Entire Agreement. This Agreement contains the
entire agreement of Secured Party and Debtor with respect to
the Collateral. If the parties hereto are parties to any
prior agreement, either written or oral, relating to the
Collateral, the terms of this Agreement shall amend and
supersede the terms of such prior agreements as to
transactions on or after the effective date of this
Agreement, but all security agreements, financing
statements, guaranties, other contracts and notices for the
benefit of Secured Party shall continue in full force and
effect to secure the Indebtedness unless Secured Party
specifically releases its rights thereunder by separate
release.
(b) Amendment. No modification, consent or amendment
of any provision of this Agreement or any of the other Loan
Documents shall be valid or effective unless the same is in
writing and signed by the party against whom it is sought to
be enforced.
(c) Actions by Secured Party. The lien, security
interest and other security rights of Secured Party
hereunder shall not be impaired by (i) any renewal,
extension, increase or modification with respect to the
Indebtedness, (ii) any surrender, compromise, release,
renewal, extension, exchange or substitution which Secured
Party may grant with respect to the Collateral, (iii) any
release or indulgence granted to any co-maker, endorser,
guarantor or surety of the Indebtedness, or (iv) the
assumption of the obligations of Borrower in respect of the
Indebtedness by any other person or entity affiliated with
the Borrower or any of Borrower's subsidiaries and their
respective successors or assigns. The taking of additional
security by Secured Party shall not release or impair the
lien, security interest or other security rights of Secured
Party hereunder or affect the obligations of Debtor
hereunder.
(d) Waiver by Secured Party. Secured Party may waive
any Event of Default without waiving any other prior or
subsequent Event of Default. Secured Party may remedy any
default without waiving the Event of Default remedied.
Neither the failure by Secured Party to exercise, nor the
delay by Secured Party in exercising, any right or remedy
upon any Event of Default shall be construed as a waiver of
such Event of Default or as a waiver of the right to
exercise any such right or remedy at a later date. No
single or partial exercise by Secured Party of any right or
remedy hereunder shall exhaust the same or shall preclude
any other or further exercise thereof, and every such right
or
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remedy hereunder may be exercised at any time. No waiver of
any provision hereof or consent to any departure by Debtor
therefrom shall be effective unless the same shall be in
writing and signed by Secured Party and then such waiver or
consent shall be effective only in the specific instances,
for the purpose for which given and to the extent therein
specified. No notice to or demand on Debtor in any case
shall of itself entitle Debtor to any other or further
notice or demand in similar or other circumstances.
(e) Costs and Expenses. Debtor will upon demand pay
to Secured Party the amount of any and all costs and
expenses (including without limitation, attorneys' fees and
expenses), which Secured Party may incur in connection with
(i) the transactions which give rise to the Loan Documents,
(ii) the preparation of this Agreement and the perfection
and preservation of the security interests granted under the
Loan Documents, (iii) the custody, preservation, use or
operation of, or the sale of, collection from, or other
realization upon, the Collateral, (iv) the exercise or
enforcement of any of the rights of Secured Party under the
Loan Documents, or (v) the failure by Debtor to perform or
observe any of the provisions hereof.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND APPLICABLE FEDERAL LAWS.
(g) Venue. This Agreement has been entered into in
Dallas County, Texas and it shall be performable for all
purposes in such county. Courts within the State of Texas
shall have jurisdiction over any and all disputes arising
under or pertaining to this Agreement and venue for any such
disputes shall be in Dallas County, Texas.
(h) Severability. If any provision of this Agreement
is held by a court of competent jurisdiction to be illegal,
invalid or unenforceable under present or future laws, such
provision shall be fully severable, shall not impair or
invalidate the remainder of this Agreement and the effect
thereof shall be confined to the provision held to be
illegal, invalid or unenforceable.
(i) No Obligation. Nothing contained herein shall be
construed as an obligation on the part of Secured Party to
extend or continue to extend credit to Borrower.
(j) Notices. All notices, requests, demands or other
communications required or permitted to be given pursuant to
this Agreement shall be in writing and given by (i) personal
delivery, (ii) expedited delivery service with proof of
delivery, or (iii) United States mail, postage prepaid,
registered or certified, return receipt requested, sent to
the intended addressee at the address set forth on the
signature page hereof or to such different address as the
addressee shall have designated by written notice sent
pursuant to
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the terms hereof and shall be deemed to have been received
either, in the case of personal delivery, at the time of
personal delivery, in the case of expedited delivery
service, as the date of first attempted delivery at the
address and in the manner provided herein, or in the case of
mail, upon deposit in a depository receptacle under the care
and custody of the United States Postal Service. Either
party shall have the right to change his or its address for
notice hereunder to any other location within the
continental United States by notice to the other party of
such new address at least thirty (30) days prior to the
effective date of such new address.
(k) Binding Effect and Assignment. This Agreement (i)
creates a continuing security interest in the Collateral,
(ii) shall be binding on Debtor and the heirs, executors,
administrators and personal representatives of Debtor, and
(iii) shall inure to the benefit of Secured Party and its
successors and assigns. Without limiting the generality of
the foregoing, Secured Party may pledge, assign or otherwise
transfer the Indebtedness and its rights under this
Agreement and any of the other loan Documents to nay other
party. Debtor's rights and obligations hereunder may not be
assigned or otherwise transferred without the prior written
consent of Secured Party.
(l) Termination. Upon the satisfaction in full of the
Indebtedness, or written release or termination delivered by
Secured Party to Debtor, this Agreement and the security
interests created hereby shall terminate. Upon termination
of this Agreement and Debtor's written request, Secured
Party will, at Debtor's sole cost and expense, return to
Debtor such of the Collateral as shall not have been sold or
otherwise disposed of or applied pursuant to the terms
hereof and execute and deliver to Debtor such documents as
Debtor shall reasonably request to evidence such
termination.
(m) Cumulative Rights. All rights and remedies of
Secured Party hereunder are cumulative of each other and of
every other right or remedy which Secured Party may
otherwise have at law or in equity or under any of the other
Loan Documents, and the exercise of one or more of such
rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of any other rights or
remedies.
(n) Gender and Number. Within this Agreement, words of
any gender shall be held and construed to include the other
gender, and words in the singular number shall be held and
construed to include the plural and words in the plural
number shall be held and construed to include the singular,
unless in each instance the context requires otherwise.
(o) Descriptive Headings. The headings in this
Agreement are for convenience only and shall in no way
enlarge, limit or define the scope or meaning of the various
and several provisions hereof.
EXECUTED as of the date first written above.
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Debtor's Address: DEBTOR:
----------------------
10711 Preston Road, Suite 250
Dallas, Texas 75230 PARK INFUSION SERVICES, LP,
a Texas limited partnership
By: Park Operating GP, LLC,
a Texas limited liability
company
By:/s/ Thomas R. Baker
---------------------------
Thomas R. Baker, President
Secured Party's Address: BANK:
----------------------------------------
Bank of Texas, N.A.
5956 Sherry Lane, Suite 1100 BANK OF TEXAS, N.A.
Dallas, Texas 75225
Attention: David J. Broussard, Jr.
Senior Vice President By: /s/ Frank A. Sewell, IV
-------------------------
Frank A. Sewell, IV
Banking Officer
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PLEDGE AND SECURITY AGREEMENT
------------------------------
DOUGHERTY'S PHARMACY, INC.
(AUGUST, 2000 FACILITY)
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is
made as of the10th day of August, 2000, by Dougherty's Pharmacy,
Inc. (hereinafter called "Debtor"), in favor of BANK OF TEXAS,
N.A. ("Bank"). Debtor hereby agrees with Bank as follows:
1. Definitions. As used in this Agreement, the following
terms shall have the meanings indicated below:
(a) The term "Borrower" shall mean Debtor, Park
Pharmacy Corporation ("Park"), a Colorado corporation, RX-
Pro.Com, Inc. ("RX"), a Texas corporation, Ravens Pharmacy,
Inc. ("Ravens"), a Texas corporation, Total Pharmacy Supply,
Inc. ("Total"), a Texas corporation, Park Infusion Services,
LP ("PIS"), a Texas limited partnership, who are jointly and
severally indebted to Bank..
(b) The term "Code" shall mean the Uniform Commercial
Code as in effect in the State of Texas on the date of this
Agreement or as it may hereafter be amended from time to
time.
(c) The term "Collateral" shall mean all machinery,
furniture, fixtures and equipment, and also all accounts
receivable, inventory, accounts, instruments, documents,
chattel paper, commercial tort claims, deposit accounts,
letters of credit rights or letters of credit or rights to
payment for money or sums advanced or sold, securities,
certificates, general intangibles, payment intangibles, and
any other tangible personal property or intangible personal
property of every kind and character now located at Debtor's
places of business or otherwise in Debtor's possession or
control, or in the case of certain items of the Collateral
requiring Bank to have possession to be perfected any of
those items in the possession of, or at any time and from
time to time hereafter delivered to, Secured Party (as
hereinafter defined) or its agents, together with all
certificates, options, rights or other distributions issued
as an addition to, in substitution of, or in exchange for,
or on account of, any of the foregoing, including without
limitation, any property specifically described on Schedule
"A" attached hereto and made a part hereof.
(d) The term "Indebtedness" shall mean all
indebtedness of Borrower now or hereafter owing to Secured
Party pursuant to that certain Loan Agreement dated of even
date herewith, executed by Borrower and Secured Party (the
"Loan Agreement") and evidenced by a Revolving Line of
Credit Note, a Term Equipment Note, and an Acquisition Line
of Credit Note, all dated of even date herewith, executed by
Borrower to
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and for the benefit of Secured Party, in the original
principal amounts of $1,500,000.00 and $1,300,000.00 and
$5,000,000.00, respectively, together with any other
obligation or indebtedness due from Debtor to Secured Party
in accordance with the terms of the Loan Documents,
including without limitation any additional note to be
executed by Borrower and payable to the order of Secured
Party in accordance with the provisions of the Loan
Agreement in respect of the Acquisition Line of Credit Note
(collectively referred to herein as the "Note" or the
"Notes"as the context requires), (ii) all accrued but unpaid
interest on any of the indebtedness described in (i) above,
(iii) all obligations owing to Secured Party under any
documents evidencing, securing, governing and/or pertaining
to all or any part of the indebtedness described in (i) and
(ii) above, (iv) all costs and expenses incurred by Secured
Party in connection with the collection and administration
of all or any part of the indebtedness and obligations
described in (i), (ii) and (iii) above or the protection or
preservation of, or realization upon, the collateral
securing all or any part of such indebtedness and
obligations, including without limitation all reasonable
attorneys' fees, and (v) all renewals, extensions,
modifications and rearrangements of the indebtedness and
obligations described in (i), (ii), (iii) and (iv) above.
(e) The term "Loan Documents" shall mean all
instruments and documents evidencing, securing, governing,
guaranteeing and/or pertaining to the Indebtedness.
(f) The term "Obligated Party" shall mean any party
other than Borrower who secures, guarantees and/or is
otherwise obligated to pay all or any portion of the
Indebtedness.
(g) The term "Secured Party" shall mean Bank, its
successors and assigns, including without limitation, any
party to whom Bank, or its successors or assigns, may assign
its rights and interests under this Agreement.
(h) Other capitalized terms not defined herein shall
have the meaning ascribed to them in the Loan Agreement of
even date herewith.
All words and phrases used herein which are expressly
defined in Section 1.201 of Chapter 9 of the Code shall have the
meaning provided for therein. Other words and phrases defined
elsewhere in the Code shall have the meaning specified therein
except to the extent such meaning is inconsistent with a
definition in Section 1.201 or Chapter 9 of the Code.
2. Security Interest. As security for the Indebtedness,
Debtor, for value received, hereby grants to Secured Party a
continuing security interest in the Collateral.
3. Representations and Warranties. Debtor hereby
represents and warrants the following to Secured Party:
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(a) Enforceability. This Agreement and Guaranty
constitute legal, valid and binding obligations of Debtor,
enforceable in accordance with their respective terms,
except as limited by bankruptcy, insolvency or similar laws
of general application relating to the enforcement of
creditors' rights and except to the extent specific remedies
may generally be limited by equitable principles.
(b) Ownership and Liens. Debtor has good and
marketable title to the Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement.
Other than in the ordinary course of business for a non-
material matter, no dispute, right of setoff, counterclaim
or defense exists with respect to all or any part of the
Collateral. Debtor has not executed any other security
agreement currently affecting the Collateral and no
effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file
in any recording office except as may have been executed or
filed in favor of Secured Party.
(c) No Conflicts or Consents. Neither the ownership,
the intended use of the Collateral by Debtor, the grant of
the security interest by Debtor to Secured Party herein nor
the exercise by Secured Party of its rights or remedies
hereunder, will (i) conflict with any provision of (A) any
domestic or foreign law, statute, rule or regulation, or (B)
any agreement, judgment, license, order or permit applicable
to or binding upon Debtor, or (ii) result in or require the
creation of any lien, charge or encumbrance upon any assets
or properties of Debtor or of any person except as may be
expressly contemplated in the Loan Documents. Except as
expressly contemplated in the Loan Documents, no consent,
approval, authorization or order of, and no notice to or
filing with, any court, governmental authority or third
party is required in connection with the grant by Debtor of
the security interest herein or the exercise by Secured
Party of its rights and remedies hereunder.
(d) Security Interest. Debtor has and will have at
all times full right, power and authority to grant a
security interest in the Collateral to Secured Party in the
manner provided herein, free and clear of any lien, security
interest or other charge or encumbrance. This Agreement
creates a legal, valid and binding security interest in
favor of Secured Party in the Collateral securing the
Indebtedness. Possession by Secured Party of all
certificates, instruments and cash constituting Collateral
from time to time and/or the filing of the financing
statements delivered prior hereto and/or concurrently
herewith by Debtor to Secured Party will perfect and
establish the first priority of Secured Party's security
interest hereunder in the Collateral.
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<PAGE>
(e) Location. Debtor's chief executive office and the
office where the records concerning the Collateral are kept
is located at the address set forth on the signature page
hereof.
(f) Solvency of Debtor. As of the date hereof, and
after giving effect to this Agreement and the completion of
all other transactions contemplated by Debtor at the time of
the execution of this Agreement, (i) Debtor is and will be
solvent, (ii) the fair saleable value of Debtor's assets
exceeds and will continue to exceed Debtor's liabilities
(both fixed and contingent), and (iii) Debtor is paying and
will continue to be able to pay his debts as they mature.
Solely for purposes of this warranty by the Debtor, and
without affecting, modifying or otherwise amending any
provision of any Loan Documents, Debtor's assessment of its
solvency includes a claim of subrogation or contribution
against each of the other entities comprising Borrower
and/or a Guarantor (as defined in the Loan Documents) and/or
any other obligated party in the event Debtor should pay
more than its ratable share of the Indebtedness.
(g) Chattel Paper, Documents and Instruments. The
chattel paper, documents and instruments of Debtor pledged
hereunder have only one original counterpart and no party
other than Debtor or Secured Party is in actual or
constructive possession of any such chattel paper, documents
or instruments.
4. Affirmative Covenants. Debtor will comply with the
covenants contained in this Section 4 at all times during the
period of time this Agreement is effective unless Secured Party
shall otherwise consent in writing.
(a) Ownership and Liens. Debtor will maintain good
and marketable title to all Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement
and the security interests and other encumbrances expressly
permitted by the other Loan Documents. Other than in the
ordinary course of business for non-material matters, Debtor
will not permit any dispute, right of setoff, counterclaim
or defense to exist with respect to all or any part of the
Collateral. Debtor will not cause any financing statement
or other security instrument with respect to the Collateral
to be terminated, except as may exist or as may have been
filed in favor of Secured Party. Debtor will defend at his
expense Secured Party's right, title and security interest
in and to the Collateral against the claims of any third
party.
(b) Further Assurances. Debtor will from time to time
at his expense promptly execute and deliver all further
instruments and documents and take all further action
necessary or appropriate or that Secured Party may request
in order (i) to perfect and protect the security interest
created or purported to be created hereby and the first
Page 4
<PAGE>
priority of such security interest, (ii) to enable Secured
Party to exercise and enforce its rights and remedies
hereunder in respect of the Collateral, and (iii) to
otherwise effect the purposes of this Agreement, including
without limitation, executing and filing such financing or
continuation statements, or amendments thereto.
(c) Payment of Taxes. Debtor (i) will timely pay all
property and other taxes, assessments and governmental
charges or levies imposed upon the Collateral or any part
thereof, (ii) will timely pay all lawful claims which, if
unpaid, might become a lien or charge upon the Collateral or
any part thereof, and (iii) will maintain appropriate
accruals and reserves for all such liabilities in a timely
fashion in accordance with generally accepted accounting
principles. Debtor may, however, delay paying or
discharging any such taxes, assessments, charges, claims or
liabilities so long as the validity thereof is contested in
good faith by proper proceedings and provided Debtor has set
aside adequate reserves therefor.
(d) Chattel Paper, Documents and Instruments. Debtor
will take such action as may be requested by Secured Party
in order to cause any chattel paper, documents or
instruments to be valid and enforceable and will cause all
chattel paper to have only one original counterpart. Upon
request by Secured Party, Debtor will deliver to Secured
Party all originals of chattel paper, documents or
instruments and will mark all chattel paper with a legend
indicating that such chattel paper is subject to the
security interest granted hereunder.
(e) Insurance. Debtor will insure the Collateral
against perils of loss and/or liability and name Secured
Party as an additional insured on all such policies of
insurance in an amount not less than the amount of the
original amount of the Indebtedness. All such insurance
shall be with such carriers as Secured Party may reasonably
approve. Debtor shall provide Secured Party with evidence
of Debtor's compliance with this provision and with evidence
of renewal of all such coverages throughout the term that
any of the Indebtedness remains outstanding and unpaid.
Upon request of Secured Party, Debtor will provide evidence
of payment of renewal premiums and/or with updated policies,
certificates of insurance or other evidence of Debtor's
compliance with this provision at no cost or expense to
Secured Party.
5. Negative Covenants. Debtor will comply with the
covenants contained in this Section 5 at all times during the
period of time this Agreement is effective, unless Secured Party
shall otherwise consent in writing.
(a) Transfer or Encumbrance. Other than in the
ordinary course of business, Debtor will not (i) sell,
assign (by operation of law or otherwise), transfer,
exchange, lease or otherwise dispose of any of the
Collateral, (ii) grant a lien or security interest in
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<PAGE>
or execute, file or record any financing statement or other
security instrument with respect to the Collateral to any
party other than Secured Party, or (iii) deliver actual or
constructive possession of the Collateral to any party other
than Secured Party.
(b) Impairment of Security Interest. Debtor will not
take or fail to take any action which would in any manner
impair the value or enforceability of Secured Party's
security interest in any Collateral.
(c) Possession of Collateral. Debtor will on or
before the date hereof, deliver possession of any part of
the Collateral to Secured Party where possession by Secured
Party is required for perfection.
(d) Financing Statement Filings. Debtor recognizes
that financing statements pertaining to the Collateral will
be or may be filed where Debtor maintains any Collateral,
has its records concerning any Collateral or has its
principal place of business/ residence. Without limitation
of any other covenant herein, Debtor will not cause or
permit any change in the location of Debtor's office to a
jurisdiction other than as represented in Section 3(e)
unless Debtor shall have notified Secured Party in writing
of such change at least thirty (30) days prior to the
effective date of such change, and shall have first taken
all action required by Secured Party for the purpose of
further perfecting or protecting the security interest in
favor of Secured Party in the Collateral. In any written
notice furnished pursuant to this Section 5(d), Debtor will
expressly state that the notice is required by this
Agreement and contains facts that may require additional
filings of financing statements or other notices for the
purpose of continuing perfection of Secured Party's security
interest in the Collateral.
6. Rights of Secured Party. Secured Party shall have the
rights contained in this Section 6 at all times during the period
of time this Agreement is effective.
(a) Additional Financing Statements Filings. Debtor
hereby authorizes Secured Party to file, without the
signature of Debtor, one or more financing or continuation
statements, and amendments thereto, relating to the
Collateral. Debtor further agrees that a carbon,
photographic or other reproduction of this Security
Agreement or any financing statement describing any
Collateral is sufficient as a financing statement and may be
filed in any jurisdiction Secured Party may deem
appropriate.
(b) Power of Attorney. Debtor hereby irrevocably
appoints Secured Party as Debtor's attorney-in-fact, such
power of attorney being coupled with an interest, with full
authority in the place and stead of Debtor and in the name
of Debtor or otherwise from and after an Event of Default,
and thereafter until such Event of Default has been cured
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<PAGE>
and any other action, performance or assurance required of
the Debtor has been performed or delivered from time to time
and until released by the Secured Party in its sole and
absolute discretion, to take any action and to execute any
instrument which Secured Party may deem necessary or
appropriate to accomplish the purposes of this Agreement,
including without limitation: (i) to demand, collect, sue
for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in
respect of the Collateral; (ii) to receive, endorse and
collect any drafts or other instruments, documents and
chattel paper in connection with clause (i) above; and (iii)
to file any claims or take any action or institute any
proceedings which Secured Party may deem necessary or
appropriate for the collection and/or preservation of the
Collateral or otherwise to enforce the rights of Secured
Party with respect to the Collateral.
(c) Performance by Secured Party. If Debtor fails to
perform any agreement or obligation provided herein, Secured
Party may itself perform, or cause performance of, such
agreement or obligation, and the expenses of Secured Party
incurred in connection therewith shall be a part of the
Indebtedness, secured by the Collateral and payable by
Debtor on demand.
7. Events of Default. Each of the following constitutes
an "Event of Default" under this Agreement:
(a) Failure to Pay Indebtedness. The failure, refusal
or neglect of Borrower, or any Obligated Party to make any
payment of principal or interest on the Indebtedness, or any
portion thereof, as the same shall become due and payable
and following ten (10) days written notice to cure the
initial failure to pay an installment; or
(b) Non-Performance of Covenants. The failure of
Debtor or any Obligated Party to timely and properly
observe, keep or perform any non-monetary covenant,
agreement, warranty or condition required herein or in any
of the other Loan Documents following thirty (30) days
written notice to cure; or
(c) Default Under Other Loan Documents. The
occurrence of an event of default under any of the other
Loan Documents; or
(d) False Representation. Any representation
contained herein or in any of the other Loan Documents made
by Borrower, Debtor, or any Obligated Party is false or
misleading in any material respect; or
(e) Bankruptcy or Insolvency. If Park, RX, Ravens,
Total, PIS, Debtor, or any Obligated Party: (i) becomes
insolvent, or makes a transfer in fraud of creditors, or
makes an assignment for the benefit of creditors, or admits
in writing his or its inability to
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pay his or its debts as they become due; (ii) generally is
not paying his or its debts as such debts become due; (iii)
has a receiver, trustee or custodian appointed for, or take
possession of, all or substantially all of the assets of
such party or any of the Collateral, either in a proceeding
brought by such party or in a proceeding brought against
such party and such appointment is not discharged or such
possession is not terminated within sixty (60) days after
the effective date thereof or such party consents to or
acquiesces in such appointment or possession; (iv) files a
petition for relief under the United States Bankruptcy Code
or any other present or future federal or state insolvency,
bankruptcy or similar laws (all of the foregoing hereinafter
collectively called "Applicable Bankruptcy Law") or an
involuntary petition for relief is filed against such party
under any Applicable Bankruptcy Law and such involuntary
petition is not dismissed within sixty (60) days after the
filing thereof, or an order for relief naming such party is
entered under any Applicable Bankruptcy Law, or any
composition, rearrangement, extension, reorganization or
other relief of debtors now or hereafter existing is
requested or consented to by such party; (v) fails to have
discharged within a period of sixty (60) days any
attachment, sequestration or similar writ levied upon any
property of such party; or (vi) fails to pay within thirty
(30) days any final money judgment against such party.
(f) Execution on Collateral. The Collateral or any
portion thereof is taken on execution or other process of
law in any action against Debtor; or
(g) Liquidation or Related Events. The liquidation,
dissolution, merger or consolidation of any one or more of
Borrower or any Obligated Party not otherwise permitted in
advance or approved by Secured Party in writing upon written
request therefor by Debtor..
8. Remedies and Related Rights. If an Event of Default
shall have occurred and for so long as same continues without
cure and any other performance required of the Debtor, and
without limiting any other rights and remedies provided herein,
under any of the other Loan Documents or otherwise available to
Secured Party, Secured Party may exercise one or more of the
rights and remedies provided in this Section.
(a) Remedies. Secured Party may from time to time at
its discretion, without limitation and without notice except
as expressly provided in any of the Loan Documents:
(i) exercise in respect of the Collateral all the
rights and remedies of a secured party under the Code
(whether or not the Code applies to the affected
Collateral);
(ii) require Debtor to, and Debtor hereby
agrees that it will at its expense and upon request of
Secured Party, assemble the Collateral as directed by
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Secured Party and make it available to Secured Party at
a place to be designated by Secured Party which is
reasonably convenient to both parties;
(iii) reduce its claim to judgment or
foreclose or otherwise enforce, in whole or in part,
the security interest granted hereunder by any
available judicial procedure;
(iv) sell or otherwise dispose of, at its office,
on the premises of Debtor or elsewhere, the Collateral,
as a unit or in parcels, by public or private
proceedings, and by way of one or more contracts (it
being agreed that the sale or other disposition of any
part of the Collateral shall not exhaust Secured
Party's power of sale, but sales or other dispositions
may be made from time to time until all of the
Collateral has been sold or disposed of or until the
Indebtedness has been paid and performed in full), and
at any such sale or other disposition it shall not be
necessary to exhibit any of the Collateral;
(v) buy the Collateral, or any portion thereof,
at any public sale;
(vi) buy the Collateral, or any portion thereof,
at any private sale if the Collateral is of a type
customarily sold in a recognized market or is of a type
which is the subject of widely distributed standard
price quotations;
(vii) apply for the appointment of a receiver
for the Collateral, and Debtor hereby consents to any
such appointment; and
(viii) at its option, withdraw all amounts on
deposit in respect of the Collateral and apply the same
to the payment of the Indebtedness; and
(ix) Debtor agrees that in the event Debtor is
entitled to receive any notice under the Uniform
Commercial Code, as it exists in the state governing
any such notice, of the sale or other disposition of
any Collateral, reasonable notice shall be deemed given
when such notice is deposited in a depository
receptacle under the care and custody of the United
States Postal Service, postage prepaid, at Debtor's
address set forth on the signature page hereof, ten
(10) days prior to the date of any public sale, or
after which a private sale, of any of such Collateral
is to be held. Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of
sale having been given. Secured Party may adjourn any
public or private sale from time to time by
announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the
time and place to which it was so adjourned.
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(b) Application of Proceeds. If any Event of Default
shall have occurred, Secured Party may at its discretion
apply or use any cash held by Secured Party as Collateral,
and any cash proceeds received by Secured Party in respect
of any sale or other disposition of, collection from, or
other realization upon, all or any part of the Collateral as
follows in such order and manner as Secured Party may elect:
(i) to the repayment or reimbursement of the
reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses)
incurred by Secured Party in connection with (A) the
administration of the Loan Documents, (B) the custody,
preservation, use or operation of, or the sale of,
collection from, or other realization upon, the
Collateral, and (C) the exercise or enforcement of any
of the rights and remedies of Secured Party hereunder;
(ii) to the payment or other satisfaction of any
liens and other encumbrances upon the Collateral;
(iii) to the satisfaction of the Indebtedness;
(iv) by holding such cash and proceeds as
Collateral;
(v) to the payment of any other amounts required
by applicable law (including without limitation,
Section 9.504(a)(3) of the Code or any other applicable
statutory provision); and
(vi) by delivery to Debtor or any other party
lawfully entitled to receive such cash or proceeds
whether by direction of a court of competent
jurisdiction or otherwise.
(c) Deficiency. In the event that the proceeds of any
sale of, collection from, or other realization upon, all or
any part of the Collateral by Secured Party are insufficient
to pay all amounts to which Secured Party is legally
entitled, Debtor and any party who guaranteed or is
otherwise obligated to pay all or any portion of the
Indebtedness shall be liable for the deficiency, together
with interest thereon as provided in the Loan Documents.
(d) Non-Judicial Remedies. In granting to Secured
Party the power to enforce its rights hereunder without
prior judicial process or judicial hearing, Debtor expressly
waives, renounces and knowingly relinquishes any legal right
which might otherwise require Secured Party to enforce its
rights by judicial process. Debtor recognizes and concedes
that non-judicial remedies are consistent with the usage of
trade, are responsive to commercial necessity and are the
result of a bargain at arm's length. Nothing herein is
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intended to prevent Secured Party or Debtor from resorting
to judicial process at either party's option.
(e) Other Recourse. Debtor waives any right to
require Secured Party to proceed against any third party,
exhaust any Collateral or other security for the
Indebtedness, or to have any third party joined with Debtor
in any suit arising out of the Indebtedness or any of the
Loan Documents, or pursue any other remedy available to
Secured Party. Debtor further waives any and all notice of
acceptance of this Agreement and of the creation,
modification, rearrangement, renewal or extension of the
Indebtedness. Debtor further waives any defense arising by
reason of any disability or other defense of any third party
or by reason of the cessation from any cause whatsoever of
the liability of any third party. Until all of the
Indebtedness shall have been paid in full, Debtor shall have
no right of subrogation and Debtor waives the right to
enforce any remedy which Secured Party has or may hereafter
have against any third party, and waives any benefit of and
any right to participate in any other security whatsoever
now or hereafter held by Secured Party. Debtor authorizes
Secured Party, and without notice or demand and without any
reservation of rights against Debtor and without affecting
Debtor's liability hereunder or on the Indebtedness to (i)
take or hold any other property of any type from any third
party as security for the Indebtedness, and exchange,
enforce, waive and release any or all of such other
property, (ii) apply such other property and direct the
order or manner of sale thereof as Secured Party may in its
discretion determine, (iii) renew, extend, accelerate,
modify, compromise, settle or release any of the
Indebtedness or other security for the Indebtedness, (iv)
waive, enforce or modify any of the provisions of any of the
Loan Documents executed by any third party, and (v) release
or substitute any third party.
9. Indemnity. Debtor hereby indemnifies and agrees to
hold harmless Secured Party, and its officers, directors,
employees, agents and representatives (each an "Indemnified
Person") from and against any and all liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature
(collectively, the "Claims") which may be imposed on, incurred
by, or asserted against, any Indemnified Person arising in
connection with the Loan Documents, the Indebtedness, or the
Collateral (including without limitation, the enforcement of the
Loan Documents and the defense of any Indemnified Person's
actions and/or inactions in connection with the Loan Documents).
WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH
INDEMNIFIED PERSON WITH RESPECT TO ANY CLAIMS WHICH IN WHOLE OR
IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH
AND/OR ANY OTHER INDEMNIFIED PERSON, except to the limited extent
the Claims against an Indemnified Person are proximately caused
by such Indemnified Person's gross negligence or willful
misconduct. If Debtor or any third party ever alleges such gross
negligence or willful misconduct by any Indemnified Person, the
indemnification provided for in this Section shall
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nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent
jurisdiction enters a final judgment as to the extent and effect
of the alleged gross negligence or willful misconduct. The
indemnification provided for in this Section shall survive the
termination of this Agreement and shall extend and continue to
benefit each individual or entity who is or has at any time been
an Indemnified Person hereunder.
10. Miscellaneous.
(a) Entire Agreement. This Agreement contains the
entire agreement of Secured Party and Debtor with respect to
the Collateral. If the parties hereto are parties to any
prior agreement, either written or oral, relating to the
Collateral, the terms of this Agreement shall amend and
supersede the terms of such prior agreements as to
transactions on or after the effective date of this
Agreement, but all security agreements, financing
statements, guaranties, other contracts and notices for the
benefit of Secured Party shall continue in full force and
effect to secure the Indebtedness unless Secured Party
specifically releases its rights thereunder by separate
release.
(b) Amendment. No modification, consent or amendment
of any provision of this Agreement or any of the other Loan
Documents shall be valid or effective unless the same is in
writing and signed by the party against whom it is sought to
be enforced.
(c) Actions by Secured Party. The lien, security
interest and other security rights of Secured Party
hereunder shall not be impaired by (i) any renewal,
extension, increase or modification with respect to the
Indebtedness, (ii) any surrender, compromise, release,
renewal, extension, exchange or substitution which Secured
Party may grant with respect to the Collateral, (iii) any
release or indulgence granted to any co-maker, endorser,
guarantor or surety of the Indebtedness, or (iv) the
assumption of the obligations of Borrower in respect of the
Indebtedness by any other person or entity affiliated with
the Borrower or any of Borrower's subsidiaries and their
respective successors or assigns. The taking of additional
security by Secured Party shall not release or impair the
lien, security interest or other security rights of Secured
Party hereunder or affect the obligations of Debtor
hereunder.
(d) Waiver by Secured Party. Secured Party may waive
any Event of Default without waiving any other prior or
subsequent Event of Default. Secured Party may remedy any
default without waiving the Event of Default remedied.
Neither the failure by Secured Party to exercise, nor the
delay by Secured Party in exercising, any right or remedy
upon any Event of Default shall be construed as a waiver of
such Event of Default or as a waiver of the right to
exercise any such right or remedy at a later date. No
single or partial exercise by Secured Party of any right or
remedy hereunder shall exhaust the same or shall preclude
any other or further exercise thereof, and every such right
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or remedy hereunder may be exercised at any time. No waiver
of any provision hereof or consent to any departure by
Debtor therefrom shall be effective unless the same shall be
in writing and signed by Secured Party and then such waiver
or consent shall be effective only in the specific
instances, for the purpose for which given and to the extent
therein specified. No notice to or demand on Debtor in any
case shall of itself entitle Debtor to any other or further
notice or demand in similar or other circumstances.
(e) Costs and Expenses. Debtor will upon demand pay
to Secured Party the amount of any and all costs and
expenses (including without limitation, attorneys' fees and
expenses), which Secured Party may incur in connection with
(i) the transactions which give rise to the Loan Documents,
(ii) the preparation of this Agreement and the perfection
and preservation of the security interests granted under the
Loan Documents, (iii) the custody, preservation, use or
operation of, or the sale of, collection from, or other
realization upon, the Collateral, (iv) the exercise or
enforcement of any of the rights of Secured Party under the
Loan Documents, or (v) the failure by Debtor to perform or
observe any of the provisions hereof.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND APPLICABLE FEDERAL LAWS.
(g) Venue. This Agreement has been entered into in
Dallas County, Texas and it shall be performable for all
purposes in such county. Courts within the State of Texas
shall have jurisdiction over any and all disputes arising
under or pertaining to this Agreement and venue for any such
disputes shall be in Dallas County, Texas.
(h) Severability. If any provision of this Agreement
is held by a court of competent jurisdiction to be illegal,
invalid or unenforceable under present or future laws, such
provision shall be fully severable, shall not impair or
invalidate the remainder of this Agreement and the effect
thereof shall be confined to the provision held to be
illegal, invalid or unenforceable.
(i) No Obligation. Nothing contained herein shall be
construed as an obligation on the part of Secured Party to
extend or continue to extend credit to Borrower.
(j) Notices. All notices, requests, demands or other
communications required or permitted to be given pursuant to
this Agreement shall be in writing and given by (i) personal
delivery, (ii) expedited delivery service with proof of
delivery, or (iii) United States mail, postage prepaid,
registered or certified, return receipt requested, sent to
the intended addressee at the address set forth on the
signature page hereof or to such different address as the
addressee shall have designated by written notice sent
pursuant to
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the terms hereof and shall be deemed to have been received
either, in the case of personal delivery, at the time of
personal delivery, in the case of expedited delivery
service, as the date of first attempted delivery at the
address and in the manner provided herein, or in the case of
mail, upon deposit in a depository receptacle under the care
and custody of the United States Postal Service. Either
party shall have the right to change his or its address for
notice hereunder to any other location within the
continental United States by notice to the other party of
such new address at least thirty (30) days prior to the
effective date of such new address.
(k) Binding Effect and Assignment. This Agreement (i)
creates a continuing security interest in the Collateral,
(ii) shall be binding on Debtor and the heirs, executors,
administrators and personal representatives of Debtor, and
(iii) shall inure to the benefit of Secured Party and its
successors and assigns. Without limiting the generality of
the foregoing, Secured Party may pledge, assign or otherwise
transfer the Indebtedness and its rights under this
Agreement and any of the other loan Documents to nay other
party. Debtor's rights and obligations hereunder may not be
assigned or otherwise transferred without the prior written
consent of Secured Party.
(l) Termination. Upon the satisfaction in full of the
Indebtedness, or written release or termination delivered by
Secured Party to Debtor, this Agreement and the security
interests created hereby shall terminate. Upon termination
of this Agreement and Debtor's written request, Secured
Party will, at Debtor's sole cost and expense, return to
Debtor such of the Collateral as shall not have been sold or
otherwise disposed of or applied pursuant to the terms
hereof and execute and deliver to Debtor such documents as
Debtor shall reasonably request to evidence such
termination.
(m) Cumulative Rights. All rights and remedies of
Secured Party hereunder are cumulative of each other and of
every other right or remedy which Secured Party may
otherwise have at law or in equity or under any of the other
Loan Documents, and the exercise of one or more of such
rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of any other rights or
remedies.
(n) Gender and Number. Within this Agreement, words of
any gender shall be held and construed to include the other
gender, and words in the singular number shall be held and
construed to include the plural and words in the plural
number shall be held and construed to include the singular,
unless in each instance the context requires otherwise.
(o) Descriptive Headings. The headings in this
Agreement are for convenience only and shall in no way
enlarge, limit or define the scope or meaning of the various
and several provisions hereof.
EXECUTED as of the date first written above.
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Debtor's Address: DEBTOR:
----------------------
10711 Preston Road, Suite 250
Dallas, Texas 75230 DOUGHERTY'S PHARMACY, INC.,
a Texas corporation
By:/s/ Thomas R. Baker
---------------------------
Thomas R. Baker, President
Secured Party's Address: BANK:
---------------------------------------------
Bank of Texas, N.A.
5956 Sherry Lane, Suite 1100 BANK OF TEXAS, N.A.
Dallas, Texas 75225
Attention: David J. Broussard, Jr.
Senior Vice President By:/s/ Frank A. Sewell, IV
-----------------------
Frank A. Sewell, IV
Banking Officer
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PLEDGE AND SECURITY AGREEMENT
----------------------------
RAVENS PHARMACY, INC.
(AUGUST, 2000 FACILITY)
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is
made as of the10th day of August, 2000, by Ravens Pharmacy, Inc.
(hereinafter called "Debtor"), in favor of BANK OF TEXAS, N.A.
("Bank"). Debtor hereby agrees with Bank as follows:
1. Definitions. As used in this Agreement, the following
terms shall have the meanings indicated below:
(a) The term "Borrower" shall mean Debtor, Park
Pharmacy Corporation ("Park"), a Colorado corporation, RX-
Pro.Com, Inc. ("RX"), a Texas corporation, Dougherty's
Pharmacy, Inc. ("Dougherty"), a Texas corporation, Total
Pharmacy Supply, Inc. ("Total"), a Texas corporation, Park
Infusion Services, LP ("PIS"), a Texas limited partnership,
who are jointly and severally indebted to Bank..
(b) The term "Code" shall mean the Uniform Commercial
Code as in effect in the State of Texas on the date of this
Agreement or as it may hereafter be amended from time to
time.
(c) The term "Collateral" shall mean all machinery,
furniture, fixtures and equipment, and also all accounts
receivable, inventory, accounts, instruments, documents,
chattel paper, commercial tort claims, deposit accounts,
letters of credit rights or letters of credit or rights to
payment for money or sums advanced or sold, securities,
certificates, general intangibles, payment intangibles, and
any other tangible personal property or intangible personal
property of every kind and character now located at Debtor's
places of business or otherwise in Debtor's possession or
control, or in the case of certain items of the Collateral
requiring Bank to have possession to be perfected any of
those items in the possession of, or at any time and from
time to time hereafter delivered to, Secured Party (as
hereinafter defined) or its agents, together with all
certificates, options, rights or other distributions issued
as an addition to, in substitution of, or in exchange for,
or on account of, any of the foregoing, including without
limitation, any property specifically described on Schedule
"A" attached hereto and made a part hereof.
(d) The term "Indebtedness" shall mean all
indebtedness of Borrower now or hereafter owing to Secured
Party pursuant to that certain Loan Agreement dated of even
date herewith, executed by Borrower and Secured Party (the
"Loan Agreement") and evidenced by a Revolving Line of
Credit Note, a Term Equipment Note, and an Acquisition Line
of Credit Note, all dated of even date herewith, executed by
Borrower to
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and for the benefit of Secured Party, in the original
principal amounts of $1,500,000.00 and $1,300,000.00 and
$5,000,000.00, respectively, together with any other
obligation or indebtedness due from Debtor to Secured Party
in accordance with the terms of the Loan Documents,
including without limitation any additional note to be
executed by Borrower and payable to the order of Secured
Party in accordance with the provisions of the Loan
Agreement in respect of the Acquisition Line of Credit Note
(collectively referred to herein as the "Note" or the
"Notes"as the context requires), (ii) all accrued but unpaid
interest on any of the indebtedness described in (i) above,
(iii) all obligations owing to Secured Party under any
documents evidencing, securing, governing and/or pertaining
to all or any part of the indebtedness described in (i) and
(ii) above, (iv) all costs and expenses incurred by Secured
Party in connection with the collection and administration
of all or any part of the indebtedness and obligations
described in (i), (ii) and (iii) above or the protection or
preservation of, or realization upon, the collateral
securing all or any part of such indebtedness and
obligations, including without limitation all reasonable
attorneys' fees, and (v) all renewals, extensions,
modifications and rearrangements of the indebtedness and
obligations described in (i), (ii), (iii) and (iv) above.
(e) The term "Loan Documents" shall mean all
instruments and documents evidencing, securing, governing,
guaranteeing and/or pertaining to the Indebtedness.
(f) The term "Obligated Party" shall mean any party
other than Borrower who secures, guarantees and/or is
otherwise obligated to pay all or any portion of the
Indebtedness.
(g) The term "Secured Party" shall mean Bank, its
successors and assigns, including without limitation, any
party to whom Bank, or its successors or assigns, may assign
its rights and interests under this Agreement.
(h) Other capitalized terms not defined herein shall
have the meaning ascribed to them in the Loan Agreement of
even date herewith.
All words and phrases used herein which are expressly
defined in Section 1.201 of Chapter 9 of the Code shall have the
meaning provided for therein. Other words and phrases defined
elsewhere in the Code shall have the meaning specified therein
except to the extent such meaning is inconsistent with a
definition in Section 1.201 or Chapter 9 of the Code.
2. Security Interest. As security for the Indebtedness,
Debtor, for value received, hereby grants to Secured Party a
continuing security interest in the Collateral.
3. Representations and Warranties. Debtor hereby
represents and warrants the following to Secured Party:
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<PAGE>
(a) Enforceability. This Agreement and Guaranty
constitute legal, valid and binding obligations of Debtor,
enforceable in accordance with their respective terms,
except as limited by bankruptcy, insolvency or similar laws
of general application relating to the enforcement of
creditors' rights and except to the extent specific remedies
may generally be limited by equitable principles.
(b) Ownership and Liens. Debtor has good and
marketable title to the Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement.
Other than in the ordinary course of business for a non-
material matter, no dispute, right of setoff, counterclaim
or defense exists with respect to all or any part of the
Collateral. Debtor has not executed any other security
agreement currently affecting the Collateral and no
effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file
in any recording office except as may have been executed or
filed in favor of Secured Party.
(c) No Conflicts or Consents. Neither the ownership,
the intended use of the Collateral by Debtor, the grant of
the security interest by Debtor to Secured Party herein nor
the exercise by Secured Party of its rights or remedies
hereunder, will (i) conflict with any provision of (A) any
domestic or foreign law, statute, rule or regulation, or (B)
any agreement, judgment, license, order or permit applicable
to or binding upon Debtor, or (ii) result in or require the
creation of any lien, charge or encumbrance upon any assets
or properties of Debtor or of any person except as may be
expressly contemplated in the Loan Documents. Except as
expressly contemplated in the Loan Documents, no consent,
approval, authorization or order of, and no notice to or
filing with, any court, governmental authority or third
party is required in connection with the grant by Debtor of
the security interest herein or the exercise by Secured
Party of its rights and remedies hereunder.
(d) Security Interest. Debtor has and will have at
all times full right, power and authority to grant a
security interest in the Collateral to Secured Party in the
manner provided herein, free and clear of any lien, security
interest or other charge or encumbrance. This Agreement
creates a legal, valid and binding security interest in
favor of Secured Party in the Collateral securing the
Indebtedness. Possession by Secured Party of all
certificates, instruments and cash constituting Collateral
from time to time and/or the filing of the financing
statements delivered prior hereto and/or concurrently
herewith by Debtor to Secured Party will perfect and
establish the first priority of Secured Party's security
interest hereunder in the Collateral.
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<PAGE>
(e) Location. Debtor's chief executive office and the
office where the records concerning the Collateral are kept
is located at the address set forth on the signature page
hereof.
(f) Solvency of Debtor. As of the date hereof, and
after giving effect to this Agreement and the completion of
all other transactions contemplated by Debtor at the time of
the execution of this Agreement, (i) Debtor is and will be
solvent, (ii) the fair saleable value of Debtor's assets
exceeds and will continue to exceed Debtor's liabilities
(both fixed and contingent), and (iii) Debtor is paying and
will continue to be able to pay his debts as they mature.
Solely for purposes of this warranty by the Debtor, and
without affecting, modifying or otherwise amending any
provision of any Loan Documents, Debtor's assessment of its
solvency includes a claim of subrogation or contribution
against each of the other entities comprising Borrower
and/or a Guarantor (as defined in the Loan Documents) and/or
any other obligated party in the event Debtor should pay
more than its ratable share of the Indebtedness.
(g) Chattel Paper, Documents and Instruments. The
chattel paper, documents and instruments of Debtor pledged
hereunder have only one original counterpart and no party
other than Debtor or Secured Party is in actual or
constructive possession of any such chattel paper, documents
or instruments.
4. Affirmative Covenants. Debtor will comply with the
covenants contained in this Section 4 at all times during the
period of time this Agreement is effective unless Secured Party
shall otherwise consent in writing.
(a) Ownership and Liens. Debtor will maintain good
and marketable title to all Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement
and the security interests and other encumbrances expressly
permitted by the other Loan Documents. Other than in the
ordinary course of business for non-material matters, Debtor
will not permit any dispute, right of setoff, counterclaim
or defense to exist with respect to all or any part of the
Collateral. Debtor will not cause any financing statement
or other security instrument with respect to the Collateral
to be terminated, except as may exist or as may have been
filed in favor of Secured Party. Debtor will defend at his
expense Secured Party's right, title and security interest
in and to the Collateral against the claims of any third
party.
(b) Further Assurances. Debtor will from time to time
at his expense promptly execute and deliver all further
instruments and documents and take all further action
necessary or appropriate or that Secured Party may request
in order (i) to perfect and protect the security interest
created or purported to be created hereby and the first
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<PAGE>
priority of such security interest, (ii) to enable Secured
Party to exercise and enforce its rights and remedies
hereunder in respect of the Collateral, and (iii) to
otherwise effect the purposes of this Agreement, including
without limitation, executing and filing such financing or
continuation statements, or amendments thereto.
(c) Payment of Taxes. Debtor (i) will timely pay all
property and other taxes, assessments and governmental
charges or levies imposed upon the Collateral or any part
thereof, (ii) will timely pay all lawful claims which, if
unpaid, might become a lien or charge upon the Collateral or
any part thereof, and (iii) will maintain appropriate
accruals and reserves for all such liabilities in a timely
fashion in accordance with generally accepted accounting
principles. Debtor may, however, delay paying or
discharging any such taxes, assessments, charges, claims or
liabilities so long as the validity thereof is contested in
good faith by proper proceedings and provided Debtor has set
aside adequate reserves therefor.
(d) Chattel Paper, Documents and Instruments. Debtor
will take such action as may be requested by Secured Party
in order to cause any chattel paper, documents or
instruments to be valid and enforceable and will cause all
chattel paper to have only one original counterpart. Upon
request by Secured Party, Debtor will deliver to Secured
Party all originals of chattel paper, documents or
instruments and will mark all chattel paper with a legend
indicating that such chattel paper is subject to the
security interest granted hereunder.
(e) Insurance. Debtor will insure the Collateral
against perils of loss and/or liability and name Secured
Party as an additional insured on all such policies of
insurance in an amount not less than the amount of the
original amount of the Indebtedness. All such insurance
shall be with such carriers as Secured Party may reasonably
approve. Debtor shall provide Secured Party with evidence
of Debtor's compliance with this provision and with evidence
of renewal of all such coverages throughout the term that
any of the Indebtedness remains outstanding and unpaid.
Upon request of Secured Party, Debtor will provide evidence
of payment of renewal premiums and/or with updated policies,
certificates of insurance or other evidence of Debtor's
compliance with this provision at no cost or expense to
Secured Party.
5. Negative Covenants. Debtor will comply with the
covenants contained in this Section 5 at all times during the
period of time this Agreement is effective, unless Secured Party
shall otherwise consent in writing.
(a) Transfer or Encumbrance. Other than in the
ordinary course of business, Debtor will not (i) sell,
assign (by operation of law or otherwise), transfer,
exchange, lease or otherwise dispose of any of the
Collateral, (ii) grant a lien or security interest in
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<PAGE>
or execute, file or record any financing statement or other
security instrument with respect to the Collateral to any
party other than Secured Party, or (iii) deliver actual or
constructive possession of the Collateral to any party other
than Secured Party.
(b) Impairment of Security Interest. Debtor will not
take or fail to take any action which would in any manner
impair the value or enforceability of Secured Party's
security interest in any Collateral.
(c) Possession of Collateral. Debtor will on or
before the date hereof, deliver possession of any part of
the Collateral to Secured Party where possession by Secured
Party is required for perfection.
(d) Financing Statement Filings. Debtor recognizes
that financing statements pertaining to the Collateral will
be or may be filed where Debtor maintains any Collateral,
has its records concerning any Collateral or has its
principal place of business/ residence. Without limitation
of any other covenant herein, Debtor will not cause or
permit any change in the location of Debtor's office to a
jurisdiction other than as represented in Section 3(e)
unless Debtor shall have notified Secured Party in writing
of such change at least thirty (30) days prior to the
effective date of such change, and shall have first taken
all action required by Secured Party for the purpose of
further perfecting or protecting the security interest in
favor of Secured Party in the Collateral. In any written
notice furnished pursuant to this Section 5(d), Debtor will
expressly state that the notice is required by this
Agreement and contains facts that may require additional
filings of financing statements or other notices for the
purpose of continuing perfection of Secured Party's security
interest in the Collateral.
6. Rights of Secured Party. Secured Party shall have the
rights contained in this Section 6 at all times during the period
of time this Agreement is effective.
(a) Additional Financing Statements Filings. Debtor
hereby authorizes Secured Party to file, without the
signature of Debtor, one or more financing or continuation
statements, and amendments thereto, relating to the
Collateral. Debtor further agrees that a carbon,
photographic or other reproduction of this Security
Agreement or any financing statement describing any
Collateral is sufficient as a financing statement and may be
filed in any jurisdiction Secured Party may deem
appropriate.
(b) Power of Attorney. Debtor hereby irrevocably
appoints Secured Party as Debtor's attorney-in-fact, such
power of attorney being coupled with an interest, with full
authority in the place and stead of Debtor and in the name
of Debtor or otherwise from and after an Event of Default,
and thereafter until such Event of Default has been cured
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<PAGE>
and any other action, performance or assurance required of
the Debtor has been performed or delivered from time to time
and until released by the Secured Party in its sole and
absolute discretion, to take any action and to execute any
instrument which Secured Party may deem necessary or
appropriate to accomplish the purposes of this Agreement,
including without limitation: (i) to demand, collect, sue
for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in
respect of the Collateral; (ii) to receive, endorse and
collect any drafts or other instruments, documents and
chattel paper in connection with clause (i) above; and (iii)
to file any claims or take any action or institute any
proceedings which Secured Party may deem necessary or
appropriate for the collection and/or preservation of the
Collateral or otherwise to enforce the rights of Secured
Party with respect to the Collateral.
(c) Performance by Secured Party. If Debtor fails to
perform any agreement or obligation provided herein, Secured
Party may itself perform, or cause performance of, such
agreement or obligation, and the expenses of Secured Party
incurred in connection therewith shall be a part of the
Indebtedness, secured by the Collateral and payable by
Debtor on demand.
7. Events of Default. Each of the following constitutes
an "Event of Default" under this Agreement:
(a) Failure to Pay Indebtedness. The failure, refusal
or neglect of Borrower, or any Obligated Party to make any
payment of principal or interest on the Indebtedness, or any
portion thereof, as the same shall become due and payable
and following ten (10) days written notice to cure the
initial failure to pay an installment; or
(b) Non-Performance of Covenants. The failure of
Debtor or any Obligated Party to timely and properly
observe, keep or perform any non-monetary covenant,
agreement, warranty or condition required herein or in any
of the other Loan Documents following thirty (30) days
written notice to cure; or
(c) Default Under Other Loan Documents. The
occurrence of an event of default under any of the other
Loan Documents; or
(d) False Representation. Any representation
contained herein or in any of the other Loan Documents made
by Borrower, Debtor, or any Obligated Party is false or
misleading in any material respect; or
(e) Bankruptcy or Insolvency. If Park, RX, Dougherty,
Total, PIS, Debtor, or any Obligated Party: (i) becomes
insolvent, or makes a transfer in fraud of creditors, or
makes an assignment for the benefit of creditors, or admits
in writing his or its inability to
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pay his or its debts as they become due; (ii) generally is
not paying his or its debts as such debts become due; (iii)
has a receiver, trustee or custodian appointed for, or take
possession of, all or substantially all of the assets of
such party or any of the Collateral, either in a proceeding
brought by such party or in a proceeding brought against
such party and such appointment is not discharged or such
possession is not terminated within sixty (60) days after
the effective date thereof or such party consents to or
acquiesces in such appointment or possession; (iv) files a
petition for relief under the United States Bankruptcy Code
or any other present or future federal or state insolvency,
bankruptcy or similar laws (all of the foregoing hereinafter
collectively called "Applicable Bankruptcy Law") or an
involuntary petition for relief is filed against such party
under any Applicable Bankruptcy Law and such involuntary
petition is not dismissed within sixty (60) days after the
filing thereof, or an order for relief naming such party is
entered under any Applicable Bankruptcy Law, or any
composition, rearrangement, extension, reorganization or
other relief of debtors now or hereafter existing is
requested or consented to by such party; (v) fails to have
discharged within a period of sixty (60) days any
attachment, sequestration or similar writ levied upon any
property of such party; or (vi) fails to pay within thirty
(30) days any final money judgment against such party.
(f) Execution on Collateral. The Collateral or any
portion thereof is taken on execution or other process of
law in any action against Debtor; or
(g) Liquidation or Related Events. The liquidation,
dissolution, merger or consolidation of any one or more of
Borrower or any Obligated Party not otherwise permitted in
advance or approved by Secured Party in writing upon written
request therefor by Debtor..
8. Remedies and Related Rights. If an Event of Default
shall have occurred and for so long as same continues without
cure and any other performance required of the Debtor, and
without limiting any other rights and remedies provided herein,
under any of the other Loan Documents or otherwise available to
Secured Party, Secured Party may exercise one or more of the
rights and remedies provided in this Section.
(a) Remedies. Secured Party may from time to time at
its discretion, without limitation and without notice except
as expressly provided in any of the Loan Documents:
(i) exercise in respect of the Collateral all the
rights and remedies of a secured party under the Code
(whether or not the Code applies to the affected
Collateral);
(ii) require Debtor to, and Debtor hereby
agrees that it will at its expense and upon request of
Secured Party, assemble the Collateral as directed by
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Secured Party and make it available to Secured Party at
a place to be designated by Secured Party which is
reasonably convenient to both parties;
(iii) reduce its claim to judgment or
foreclose or otherwise enforce, in whole or in part,
the security interest granted hereunder by any
available judicial procedure;
(iv) sell or otherwise dispose of, at its office,
on the premises of Debtor or elsewhere, the Collateral,
as a unit or in parcels, by public or private
proceedings, and by way of one or more contracts (it
being agreed that the sale or other disposition of any
part of the Collateral shall not exhaust Secured
Party's power of sale, but sales or other dispositions
may be made from time to time until all of the
Collateral has been sold or disposed of or until the
Indebtedness has been paid and performed in full), and
at any such sale or other disposition it shall not be
necessary to exhibit any of the Collateral;
(v) buy the Collateral, or any portion thereof,
at any public sale;
(vi) buy the Collateral, or any portion thereof,
at any private sale if the Collateral is of a type
customarily sold in a recognized market or is of a type
which is the subject of widely distributed standard
price quotations;
(vii) apply for the appointment of a receiver
for the Collateral, and Debtor hereby consents to any
such appointment; and
(viii) at its option, withdraw all amounts on
deposit in respect of the Collateral and apply the same
to the payment of the Indebtedness; and
(ix) Debtor agrees that in the event Debtor is
entitled to receive any notice under the Uniform
Commercial Code, as it exists in the state governing
any such notice, of the sale or other disposition of
any Collateral, reasonable notice shall be deemed given
when such notice is deposited in a depository
receptacle under the care and custody of the United
States Postal Service, postage prepaid, at Debtor's
address set forth on the signature page hereof, ten
(10) days prior to the date of any public sale, or
after which a private sale, of any of such Collateral
is to be held. Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of
sale having been given. Secured Party may adjourn any
public or private sale from time to time by
announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the
time and place to which it was so adjourned.
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(b) Application of Proceeds. If any Event of Default
shall have occurred, Secured Party may at its discretion
apply or use any cash held by Secured Party as Collateral,
and any cash proceeds received by Secured Party in respect
of any sale or other disposition of, collection from, or
other realization upon, all or any part of the Collateral as
follows in such order and manner as Secured Party may elect:
(i) to the repayment or reimbursement of the
reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses)
incurred by Secured Party in connection with (A) the
administration of the Loan Documents, (B) the custody,
preservation, use or operation of, or the sale of,
collection from, or other realization upon, the
Collateral, and (C) the exercise or enforcement of any
of the rights and remedies of Secured Party hereunder;
(ii) to the payment or other satisfaction of any
liens and other encumbrances upon the Collateral;
(iii) to the satisfaction of the Indebtedness;
(iv) by holding such cash and proceeds as
Collateral;
(v) to the payment of any other amounts required
by applicable law (including without limitation,
Section 9.504(a)(3) of the Code or any other applicable
statutory provision); and
(vi) by delivery to Debtor or any other party
lawfully entitled to receive such cash or proceeds
whether by direction of a court of competent
jurisdiction or otherwise.
(c) Deficiency. In the event that the proceeds of any
sale of, collection from, or other realization upon, all or
any part of the Collateral by Secured Party are insufficient
to pay all amounts to which Secured Party is legally
entitled, Debtor and any party who guaranteed or is
otherwise obligated to pay all or any portion of the
Indebtedness shall be liable for the deficiency, together
with interest thereon as provided in the Loan Documents.
(d) Non-Judicial Remedies. In granting to Secured
Party the power to enforce its rights hereunder without
prior judicial process or judicial hearing, Debtor expressly
waives, renounces and knowingly relinquishes any legal right
which might otherwise require Secured Party to enforce its
rights by judicial process. Debtor recognizes and concedes
that non-judicial remedies are consistent with the usage of
trade, are responsive to commercial necessity and are the
result of a bargain at arm's length. Nothing herein is
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intended to prevent Secured Party or Debtor from resorting
to judicial process at either party's option.
(e) Other Recourse. Debtor waives any right to
require Secured Party to proceed against any third party,
exhaust any Collateral or other security for the
Indebtedness, or to have any third party joined with Debtor
in any suit arising out of the Indebtedness or any of the
Loan Documents, or pursue any other remedy available to
Secured Party. Debtor further waives any and all notice of
acceptance of this Agreement and of the creation,
modification, rearrangement, renewal or extension of the
Indebtedness. Debtor further waives any defense arising by
reason of any disability or other defense of any third party
or by reason of the cessation from any cause whatsoever of
the liability of any third party. Until all of the
Indebtedness shall have been paid in full, Debtor shall have
no right of subrogation and Debtor waives the right to
enforce any remedy which Secured Party has or may hereafter
have against any third party, and waives any benefit of and
any right to participate in any other security whatsoever
now or hereafter held by Secured Party. Debtor authorizes
Secured Party, and without notice or demand and without any
reservation of rights against Debtor and without affecting
Debtor's liability hereunder or on the Indebtedness to (i)
take or hold any other property of any type from any third
party as security for the Indebtedness, and exchange,
enforce, waive and release any or all of such other
property, (ii) apply such other property and direct the
order or manner of sale thereof as Secured Party may in its
discretion determine, (iii) renew, extend, accelerate,
modify, compromise, settle or release any of the
Indebtedness or other security for the Indebtedness, (iv)
waive, enforce or modify any of the provisions of any of the
Loan Documents executed by any third party, and (v) release
or substitute any third party.
9. Indemnity. Debtor hereby indemnifies and agrees to
hold harmless Secured Party, and its officers, directors,
employees, agents and representatives (each an "Indemnified
Person") from and against any and all liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature
(collectively, the "Claims") which may be imposed on, incurred
by, or asserted against, any Indemnified Person arising in
connection with the Loan Documents, the Indebtedness, or the
Collateral (including without limitation, the enforcement of the
Loan Documents and the defense of any Indemnified Person's
actions and/or inactions in connection with the Loan Documents).
WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH
INDEMNIFIED PERSON WITH RESPECT TO ANY CLAIMS WHICH IN WHOLE OR
IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH
AND/OR ANY OTHER INDEMNIFIED PERSON, except to the limited extent
the Claims against an Indemnified Person are proximately caused
by such Indemnified Person's gross negligence or willful
misconduct. If Debtor or any third party ever alleges such gross
negligence or willful misconduct by any Indemnified Person, the
indemnification provided for in this Section shall
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nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent
jurisdiction enters a final judgment as to the extent and effect
of the alleged gross negligence or willful misconduct. The
indemnification provided for in this Section shall survive the
termination of this Agreement and shall extend and continue to
benefit each individual or entity who is or has at any time been
an Indemnified Person hereunder.
10. Miscellaneous.
(a) Entire Agreement. This Agreement contains the
entire agreement of Secured Party and Debtor with respect to
the Collateral. If the parties hereto are parties to any
prior agreement, either written or oral, relating to the
Collateral, the terms of this Agreement shall amend and
supersede the terms of such prior agreements as to
transactions on or after the effective date of this
Agreement, but all security agreements, financing
statements, guaranties, other contracts and notices for the
benefit of Secured Party shall continue in full force and
effect to secure the Indebtedness unless Secured Party
specifically releases its rights thereunder by separate
release.
(b) Amendment. No modification, consent or amendment
of any provision of this Agreement or any of the other Loan
Documents shall be valid or effective unless the same is in
writing and signed by the party against whom it is sought to
be enforced.
(c) Actions by Secured Party. The lien, security
interest and other security rights of Secured Party
hereunder shall not be impaired by (i) any renewal,
extension, increase or modification with respect to the
Indebtedness, (ii) any surrender, compromise, release,
renewal, extension, exchange or substitution which Secured
Party may grant with respect to the Collateral, (iii) any
release or indulgence granted to any co-maker, endorser,
guarantor or surety of the Indebtedness, or (iv) the
assumption of the obligations of Borrower in respect of the
Indebtedness by any other person or entity affiliated with
the Borrower or any of Borrower's subsidiaries and their
respective successors or assigns. The taking of additional
security by Secured Party shall not release or impair the
lien, security interest or other security rights of Secured
Party hereunder or affect the obligations of Debtor
hereunder.
(d) Waiver by Secured Party. Secured Party may waive
any Event of Default without waiving any other prior or
subsequent Event of Default. Secured Party may remedy any
default without waiving the Event of Default remedied.
Neither the failure by Secured Party to exercise, nor the
delay by Secured Party in exercising, any right or remedy
upon any Event of Default shall be construed as a waiver of
such Event of Default or as a waiver of the right to
exercise any such right or remedy at a later date. No
single or partial exercise by Secured Party of any right or
remedy hereunder shall exhaust the same or shall preclude
any other or further exercise thereof, and every such right
or
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remedy hereunder may be exercised at any time. No waiver of
any provision hereof or consent to any departure by Debtor
therefrom shall be effective unless the same shall be in
writing and signed by Secured Party and then such waiver or
consent shall be effective only in the specific instances,
for the purpose for which given and to the extent therein
specified. No notice to or demand on Debtor in any case
shall of itself entitle Debtor to any other or further
notice or demand in similar or other circumstances.
(e) Costs and Expenses. Debtor will upon demand pay
to Secured Party the amount of any and all costs and
expenses (including without limitation, attorneys' fees and
expenses), which Secured Party may incur in connection with
(i) the transactions which give rise to the Loan Documents,
(ii) the preparation of this Agreement and the perfection
and preservation of the security interests granted under the
Loan Documents, (iii) the custody, preservation, use or
operation of, or the sale of, collection from, or other
realization upon, the Collateral, (iv) the exercise or
enforcement of any of the rights of Secured Party under the
Loan Documents, or (v) the failure by Debtor to perform or
observe any of the provisions hereof.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND APPLICABLE FEDERAL LAWS.
(g) Venue. This Agreement has been entered into in
Dallas County, Texas and it shall be performable for all
purposes in such county. Courts within the State of Texas
shall have jurisdiction over any and all disputes arising
under or pertaining to this Agreement and venue for any such
disputes shall be in Dallas County, Texas.
(h) Severability. If any provision of this Agreement
is held by a court of competent jurisdiction to be illegal,
invalid or unenforceable under present or future laws, such
provision shall be fully severable, shall not impair or
invalidate the remainder of this Agreement and the effect
thereof shall be confined to the provision held to be
illegal, invalid or unenforceable.
(i) No Obligation. Nothing contained herein shall be
construed as an obligation on the part of Secured Party to
extend or continue to extend credit to Borrower.
(j) Notices. All notices, requests, demands or other
communications required or permitted to be given pursuant to
this Agreement shall be in writing and given by (i) personal
delivery, (ii) expedited delivery service with proof of
delivery, or (iii) United States mail, postage prepaid,
registered or certified, return receipt requested, sent to
the intended addressee at the address set forth on the
signature page hereof or to such different address as the
addressee shall have designated by written notice sent
pursuant to
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the terms hereof and shall be deemed to have been received
either, in the case of personal delivery, at the time of
personal delivery, in the case of expedited delivery
service, as the date of first attempted delivery at the
address and in the manner provided herein, or in the case of
mail, upon deposit in a depository receptacle under the care
and custody of the United States Postal Service. Either
party shall have the right to change his or its address for
notice hereunder to any other location within the
continental United States by notice to the other party of
such new address at least thirty (30) days prior to the
effective date of such new address.
(k) Binding Effect and Assignment. This Agreement (i)
creates a continuing security interest in the Collateral,
(ii) shall be binding on Debtor and the heirs, executors,
administrators and personal representatives of Debtor, and
(iii) shall inure to the benefit of Secured Party and its
successors and assigns. Without limiting the generality of
the foregoing, Secured Party may pledge, assign or otherwise
transfer the Indebtedness and its rights under this
Agreement and any of the other loan Documents to nay other
party. Debtor's rights and obligations hereunder may not be
assigned or otherwise transferred without the prior written
consent of Secured Party.
(l) Termination. Upon the satisfaction in full of the
Indebtedness, or written release or termination delivered by
Secured Party to Debtor, this Agreement and the security
interests created hereby shall terminate. Upon termination
of this Agreement and Debtor's written request, Secured
Party will, at Debtor's sole cost and expense, return to
Debtor such of the Collateral as shall not have been sold or
otherwise disposed of or applied pursuant to the terms
hereof and execute and deliver to Debtor such documents as
Debtor shall reasonably request to evidence such
termination.
(m) Cumulative Rights. All rights and remedies of
Secured Party hereunder are cumulative of each other and of
every other right or remedy which Secured Party may
otherwise have at law or in equity or under any of the other
Loan Documents, and the exercise of one or more of such
rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of any other rights or
remedies.
(n) Gender and Number. Within this Agreement, words of
any gender shall be held and construed to include the other
gender, and words in the singular number shall be held and
construed to include the plural and words in the plural
number shall be held and construed to include the singular,
unless in each instance the context requires otherwise.
(o) Descriptive Headings. The headings in this
Agreement are for convenience only and shall in no way
enlarge, limit or define the scope or meaning of the various
and several provisions hereof.
EXECUTED as of the date first written above.
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Debtor's Address: DEBTOR:
----------------------
10711 Preston Road, Suite 250
Dallas, Texas 75230 RAVENS PHARMACY, INC.,
a Texas corporation
By: /s/ Thomas R. Baker
---------------------------
Thomas R. Baker, President
Secured Party's Address: BANK:
---------------------------------------------
Bank of Texas, N.A.
5956 Sherry Lane, Suite 1100 BANK OF TEXAS, N.A.
Dallas, Texas 75225
Attention: David J. Broussard, Jr.
Senior Vice President By: /s/ Frank A. Sewell, IV
------------------------
Frank A. Sewell, IV
Banking Officer
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PLEDGE AND SECURITY AGREEMENT
-----------------------------
TOTAL PHARMACY SUPPLY, INC.
(AUGUST, 2000 FACILITY)
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is
made as of the10th day of August, 2000, by Total Pharmacy Supply,
Inc. (hereinafter called "Debtor"), in favor of BANK OF TEXAS,
N.A. ("Bank"). Debtor hereby agrees with Bank as follows:
1. Definitions. As used in this Agreement, the following
terms shall have the meanings indicated below:
(a) The term "Borrower" shall mean Debtor, Park
Pharmacy Corporation ("Park"), a Colorado corporation, RX-
Pro.Com, Inc. ("RX"), a Texas corporation, Dougherty's
Pharmacy, Inc. ("Dougherty"), a Texas corporation, Ravens
Pharmacy, Inc. ("Ravens"), a Texas corporation, Park
Infusion Services, LP ("PIS"), a Texas limited partnership,
who are jointly and severally indebted to Bank..
(b) The term "Code" shall mean the Uniform Commercial
Code as in effect in the State of Texas on the date of this
Agreement or as it may hereafter be amended from time to
time.
(c) The term "Collateral" shall mean all machinery,
furniture, fixtures and equipment, and also all accounts
receivable, inventory, accounts, instruments, documents,
chattel paper, commercial tort claims, deposit accounts,
letters of credit rights or letters of credit or rights to
payment for money or sums advanced or sold, securities,
certificates, general intangibles, payment intangibles, and
any other tangible personal property or intangible personal
property of every kind and character now located at Debtor's
places of business or otherwise in Debtor's possession or
control, or in the case of certain items of the Collateral
requiring Bank to have possession to be perfected any of
those items in the possession of, or at any time and from
time to time hereafter delivered to, Secured Party (as
hereinafter defined) or its agents, together with all
certificates, options, rights or other distributions issued
as an addition to, in substitution of, or in exchange for,
or on account of, any of the foregoing, including without
limitation, any property specifically described on Schedule
"A" attached hereto and made a part hereof.
(d) The term "Indebtedness" shall mean all
indebtedness of Borrower now or hereafter owing to Secured
Party pursuant to that certain Loan Agreement dated of even
date herewith, executed by Borrower and Secured Party (the
"Loan Agreement") and evidenced by a Revolving Line of
Credit Note, a Term Equipment Note, and an Acquisition Line
of Credit Note, all dated of even date herewith, executed by
Borrower to
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and for the benefit of Secured Party, in the original
principal amounts of $1,500,000.00 and $1,300,000.00 and
$5,000,000.00, respectively, together with any other
obligation or indebtedness due from Debtor to Secured Party
in accordance with the terms of the Loan Documents,
including without limitation any additional note to be
executed by Borrower and payable to the order of Secured
Party in accordance with the provisions of the Loan
Agreement in respect of the Acquisition Line of Credit Note
(collectively referred to herein as the "Note" or the
"Notes"as the context requires), (ii) all accrued but unpaid
interest on any of the indebtedness described in (i) above,
(iii) all obligations owing to Secured Party under any
documents evidencing, securing, governing and/or pertaining
to all or any part of the indebtedness described in (i) and
(ii) above, (iv) all costs and expenses incurred by Secured
Party in connection with the collection and administration
of all or any part of the indebtedness and obligations
described in (i), (ii) and (iii) above or the protection or
preservation of, or realization upon, the collateral
securing all or any part of such indebtedness and
obligations, including without limitation all reasonable
attorneys' fees, and (v) all renewals, extensions,
modifications and rearrangements of the indebtedness and
obligations described in (i), (ii), (iii) and (iv) above.
(e) The term "Loan Documents" shall mean all
instruments and documents evidencing, securing, governing,
guaranteeing and/or pertaining to the Indebtedness.
(f) The term "Obligated Party" shall mean any party
other than Borrower who secures, guarantees and/or is
otherwise obligated to pay all or any portion of the
Indebtedness.
(g) The term "Secured Party" shall mean Bank, its
successors and assigns, including without limitation, any
party to whom Bank, or its successors or assigns, may assign
its rights and interests under this Agreement.
(h) Other capitalized terms not defined herein shall
have the meaning ascribed to them in the Loan Agreement of
even date herewith.
All words and phrases used herein which are expressly
defined in Section 1.201 of Chapter 9 of the Code shall have the
meaning provided for therein. Other words and phrases defined
elsewhere in the Code shall have the meaning specified therein
except to the extent such meaning is inconsistent with a
definition in Section 1.201 or Chapter 9 of the Code.
2. Security Interest. As security for the Indebtedness,
Debtor, for value received, hereby grants to Secured Party a
continuing security interest in the Collateral.
3. Representations and Warranties. Debtor hereby
represents and warrants the following to Secured Party:
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<PAGE>
(a) Enforceability. This Agreement and Guaranty
constitute legal, valid and binding obligations of Debtor,
enforceable in accordance with their respective terms,
except as limited by bankruptcy, insolvency or similar laws
of general application relating to the enforcement of
creditors' rights and except to the extent specific remedies
may generally be limited by equitable principles.
(b) Ownership and Liens. Debtor has good and
marketable title to the Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement.
Other than in the ordinary course of business for a non-
material matter, no dispute, right of setoff, counterclaim
or defense exists with respect to all or any part of the
Collateral. Debtor has not executed any other security
agreement currently affecting the Collateral and no
effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file
in any recording office except as may have been executed or
filed in favor of Secured Party.
(c) No Conflicts or Consents. Neither the ownership,
the intended use of the Collateral by Debtor, the grant of
the security interest by Debtor to Secured Party herein nor
the exercise by Secured Party of its rights or remedies
hereunder, will (i) conflict with any provision of (A) any
domestic or foreign law, statute, rule or regulation, or (B)
any agreement, judgment, license, order or permit applicable
to or binding upon Debtor, or (ii) result in or require the
creation of any lien, charge or encumbrance upon any assets
or properties of Debtor or of any person except as may be
expressly contemplated in the Loan Documents. Except as
expressly contemplated in the Loan Documents, no consent,
approval, authorization or order of, and no notice to or
filing with, any court, governmental authority or third
party is required in connection with the grant by Debtor of
the security interest herein or the exercise by Secured
Party of its rights and remedies hereunder.
(d) Security Interest. Debtor has and will have at
all times full right, power and authority to grant a
security interest in the Collateral to Secured Party in the
manner provided herein, free and clear of any lien, security
interest or other charge or encumbrance. This Agreement
creates a legal, valid and binding security interest in
favor of Secured Party in the Collateral securing the
Indebtedness. Possession by Secured Party of all
certificates, instruments and cash constituting Collateral
from time to time and/or the filing of the financing
statements delivered prior hereto and/or concurrently
herewith by Debtor to Secured Party will perfect and
establish the first priority of Secured Party's security
interest hereunder in the Collateral.
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<PAGE>
(e) Location. Debtor's chief executive office and the
office where the records concerning the Collateral are kept
is located at the address set forth on the signature page
hereof.
(f) Solvency of Debtor. As of the date hereof, and
after giving effect to this Agreement and the completion of
all other transactions contemplated by Debtor at the time of
the execution of this Agreement, (i) Debtor is and will be
solvent, (ii) the fair saleable value of Debtor's assets
exceeds and will continue to exceed Debtor's liabilities
(both fixed and contingent), and (iii) Debtor is paying and
will continue to be able to pay his debts as they mature.
Solely for purposes of this warranty by the Debtor, and
without affecting, modifying or otherwise amending any
provision of any Loan Documents, Debtor's assessment of its
solvency includes a claim of subrogation or contribution
against each of the other entities comprising Borrower
and/or a Guarantor (as defined in the Loan Documents) and/or
any other obligated party in the event Debtor should pay
more than its ratable share of the Indebtedness.
(g) Chattel Paper, Documents and Instruments. The
chattel paper, documents and instruments of Debtor pledged
hereunder have only one original counterpart and no party
other than Debtor or Secured Party is in actual or
constructive possession of any such chattel paper, documents
or instruments.
4. Affirmative Covenants. Debtor will comply with the
covenants contained in this Section 4 at all times during the
period of time this Agreement is effective unless Secured Party
shall otherwise consent in writing.
(a) Ownership and Liens. Debtor will maintain good
and marketable title to all Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement
and the security interests and other encumbrances expressly
permitted by the other Loan Documents. Other than in the
ordinary course of business for non-material matters, Debtor
will not permit any dispute, right of setoff, counterclaim
or defense to exist with respect to all or any part of the
Collateral. Debtor will not cause any financing statement
or other security instrument with respect to the Collateral
to be terminated, except as may exist or as may have been
filed in favor of Secured Party. Debtor will defend at his
expense Secured Party's right, title and security interest
in and to the Collateral against the claims of any third
party.
(b) Further Assurances. Debtor will from time to time
at his expense promptly execute and deliver all further
instruments and documents and take all further action
necessary or appropriate or that Secured Party may request
in order (i) to perfect and protect the security interest
created or purported to be created hereby and the first
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<PAGE>
priority of such security interest, (ii) to enable Secured
Party to exercise and enforce its rights and remedies
hereunder in respect of the Collateral, and (iii) to
otherwise effect the purposes of this Agreement, including
without limitation, executing and filing such financing or
continuation statements, or amendments thereto.
(c) Payment of Taxes. Debtor (i) will timely pay all
property and other taxes, assessments and governmental
charges or levies imposed upon the Collateral or any part
thereof, (ii) will timely pay all lawful claims which, if
unpaid, might become a lien or charge upon the Collateral or
any part thereof, and (iii) will maintain appropriate
accruals and reserves for all such liabilities in a timely
fashion in accordance with generally accepted accounting
principles. Debtor may, however, delay paying or
discharging any such taxes, assessments, charges, claims or
liabilities so long as the validity thereof is contested in
good faith by proper proceedings and provided Debtor has set
aside adequate reserves therefor.
(d) Chattel Paper, Documents and Instruments. Debtor
will take such action as may be requested by Secured Party
in order to cause any chattel paper, documents or
instruments to be valid and enforceable and will cause all
chattel paper to have only one original counterpart. Upon
request by Secured Party, Debtor will deliver to Secured
Party all originals of chattel paper, documents or
instruments and will mark all chattel paper with a legend
indicating that such chattel paper is subject to the
security interest granted hereunder.
(e) Insurance. Debtor will insure the Collateral
against perils of loss and/or liability and name Secured
Party as an additional insured on all such policies of
insurance in an amount not less than the amount of the
original amount of the Indebtedness. All such insurance
shall be with such carriers as Secured Party may reasonably
approve. Debtor shall provide Secured Party with evidence
of Debtor's compliance with this provision and with evidence
of renewal of all such coverages throughout the term that
any of the Indebtedness remains outstanding and unpaid.
Upon request of Secured Party, Debtor will provide evidence
of payment of renewal premiums and/or with updated policies,
certificates of insurance or other evidence of Debtor's
compliance with this provision at no cost or expense to
Secured Party.
5. Negative Covenants. Debtor will comply with the
covenants contained in this Section 5 at all times during the
period of time this Agreement is effective, unless Secured Party
shall otherwise consent in writing.
(a) Transfer or Encumbrance. Other than in the
ordinary course of business, Debtor will not (i) sell,
assign (by operation of law or otherwise), transfer,
exchange, lease or otherwise dispose of any of the
Collateral, (ii) grant a lien or security interest in
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<PAGE>
or execute, file or record any financing statement or other
security instrument with respect to the Collateral to any
party other than Secured Party, or (iii) deliver actual or
constructive possession of the Collateral to any party other
than Secured Party.
(b) Impairment of Security Interest. Debtor will not
take or fail to take any action which would in any manner
impair the value or enforceability of Secured Party's
security interest in any Collateral.
(c) Possession of Collateral. Debtor will on or
before the date hereof, deliver possession of any part of
the Collateral to Secured Party where possession by Secured
Party is required for perfection.
(d) Financing Statement Filings. Debtor recognizes
that financing statements pertaining to the Collateral will
be or may be filed where Debtor maintains any Collateral,
has its records concerning any Collateral or has its
principal place of business/ residence. Without limitation
of any other covenant herein, Debtor will not cause or
permit any change in the location of Debtor's office to a
jurisdiction other than as represented in Section 3(e)
unless Debtor shall have notified Secured Party in writing
of such change at least thirty (30) days prior to the
effective date of such change, and shall have first taken
all action required by Secured Party for the purpose of
further perfecting or protecting the security interest in
favor of Secured Party in the Collateral. In any written
notice furnished pursuant to this Section 5(d), Debtor will
expressly state that the notice is required by this
Agreement and contains facts that may require additional
filings of financing statements or other notices for the
purpose of continuing perfection of Secured Party's security
interest in the Collateral.
6. Rights of Secured Party. Secured Party shall have the
rights contained in this Section 6 at all times during the period
of time this Agreement is effective.
(a) Additional Financing Statements Filings. Debtor
hereby authorizes Secured Party to file, without the
signature of Debtor, one or more financing or continuation
statements, and amendments thereto, relating to the
Collateral. Debtor further agrees that a carbon,
photographic or other reproduction of this Security
Agreement or any financing statement describing any
Collateral is sufficient as a financing statement and may be
filed in any jurisdiction Secured Party may deem
appropriate.
(b) Power of Attorney. Debtor hereby irrevocably
appoints Secured Party as Debtor's attorney-in-fact, such
power of attorney being coupled with an interest, with full
authority in the place and stead of Debtor and in the name
of Debtor or otherwise from and after an Event of Default,
and thereafter until such Event of Default has been cured
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and any other action, performance or assurance required of
the Debtor has been performed or delivered from time to time
and until released by the Secured Party in its sole and
absolute discretion, to take any action and to execute any
instrument which Secured Party may deem necessary or
appropriate to accomplish the purposes of this Agreement,
including without limitation: (i) to demand, collect, sue
for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in
respect of the Collateral; (ii) to receive, endorse and
collect any drafts or other instruments, documents and
chattel paper in connection with clause (i) above; and (iii)
to file any claims or take any action or institute any
proceedings which Secured Party may deem necessary or
appropriate for the collection and/or preservation of the
Collateral or otherwise to enforce the rights of Secured
Party with respect to the Collateral.
(c) Performance by Secured Party. If Debtor fails to
perform any agreement or obligation provided herein, Secured
Party may itself perform, or cause performance of, such
agreement or obligation, and the expenses of Secured Party
incurred in connection therewith shall be a part of the
Indebtedness, secured by the Collateral and payable by
Debtor on demand.
7. Events of Default. Each of the following constitutes
an "Event of Default" under this Agreement:
(a) Failure to Pay Indebtedness. The failure, refusal
or neglect of Borrower, or any Obligated Party to make any
payment of principal or interest on the Indebtedness, or any
portion thereof, as the same shall become due and payable
and following ten (10) days written notice to cure the
initial failure to pay an installment; or
(b) Non-Performance of Covenants. The failure of
Debtor or any Obligated Party to timely and properly
observe, keep or perform any non-monetary covenant,
agreement, warranty or condition required herein or in any
of the other Loan Documents following thirty (30) days
written notice to cure; or
(c) Default Under Other Loan Documents. The
occurrence of an event of default under any of the other
Loan Documents; or
(d) False Representation. Any representation
contained herein or in any of the other Loan Documents made
by Borrower, Debtor, or any Obligated Party is false or
misleading in any material respect; or
(e) Bankruptcy or Insolvency. If Park, RX, Dougherty,
Ravens, PIS, Debtor, or any Obligated Party: (i) becomes
insolvent, or makes a transfer in fraud of creditors, or
makes an assignment for the benefit of creditors, or admits
in writing his or its inability to
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pay his or its debts as they become due; (ii) generally is
not paying his or its debts as such debts become due; (iii)
has a receiver, trustee or custodian appointed for, or take
possession of, all or substantially all of the assets of
such party or any of the Collateral, either in a proceeding
brought by such party or in a proceeding brought against
such party and such appointment is not discharged or such
possession is not terminated within sixty (60) days after
the effective date thereof or such party consents to or
acquiesces in such appointment or possession; (iv) files a
petition for relief under the United States Bankruptcy Code
or any other present or future federal or state insolvency,
bankruptcy or similar laws (all of the foregoing hereinafter
collectively called "Applicable Bankruptcy Law") or an
involuntary petition for relief is filed against such party
under any Applicable Bankruptcy Law and such involuntary
petition is not dismissed within sixty (60) days after the
filing thereof, or an order for relief naming such party is
entered under any Applicable Bankruptcy Law, or any
composition, rearrangement, extension, reorganization or
other relief of debtors now or hereafter existing is
requested or consented to by such party; (v) fails to have
discharged within a period of sixty (60) days any
attachment, sequestration or similar writ levied upon any
property of such party; or (vi) fails to pay within thirty
(30) days any final money judgment against such party.
(f) Execution on Collateral. The Collateral or any
portion thereof is taken on execution or other process of
law in any action against Debtor; or
(g) Liquidation or Related Events. The liquidation,
dissolution, merger or consolidation of any one or more of
Borrower or any Obligated Party not otherwise permitted in
advance or approved by Secured Party in writing upon written
request therefor by Debtor..
8. Remedies and Related Rights. If an Event of Default
shall have occurred and for so long as same continues without
cure and any other performance required of the Debtor, and
without limiting any other rights and remedies provided herein,
under any of the other Loan Documents or otherwise available to
Secured Party, Secured Party may exercise one or more of the
rights and remedies provided in this Section.
(a) Remedies. Secured Party may from time to time at
its discretion, without limitation and without notice except
as expressly provided in any of the Loan Documents:
(i) exercise in respect of the Collateral all the
rights and remedies of a secured party under the Code
(whether or not the Code applies to the affected
Collateral);
(ii) require Debtor to, and Debtor hereby
agrees that it will at its expense and upon request of
Secured Party, assemble the Collateral as directed by
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<PAGE>
Secured Party and make it available to Secured Party at
a place to be designated by Secured Party which is
reasonably convenient to both parties;
(iii) reduce its claim to judgment or
foreclose or otherwise enforce, in whole or in part,
the security interest granted hereunder by any
available judicial procedure;
(iv) sell or otherwise dispose of, at its office,
on the premises of Debtor or elsewhere, the Collateral,
as a unit or in parcels, by public or private
proceedings, and by way of one or more contracts (it
being agreed that the sale or other disposition of any
part of the Collateral shall not exhaust Secured
Party's power of sale, but sales or other dispositions
may be made from time to time until all of the
Collateral has been sold or disposed of or until the
Indebtedness has been paid and performed in full), and
at any such sale or other disposition it shall not be
necessary to exhibit any of the Collateral;
(v) buy the Collateral, or any portion thereof,
at any public sale;
(vi) buy the Collateral, or any portion thereof,
at any private sale if the Collateral is of a type
customarily sold in a recognized market or is of a type
which is the subject of widely distributed standard
price quotations;
(vii) apply for the appointment of a receiver
for the Collateral, and Debtor hereby consents to any
such appointment; and
(viii) at its option, withdraw all amounts on
deposit in respect of the Collateral and apply the same
to the payment of the Indebtedness; and
(ix) Debtor agrees that in the event Debtor is
entitled to receive any notice under the Uniform
Commercial Code, as it exists in the state governing
any such notice, of the sale or other disposition of
any Collateral, reasonable notice shall be deemed given
when such notice is deposited in a depository
receptacle under the care and custody of the United
States Postal Service, postage prepaid, at Debtor's
address set forth on the signature page hereof, ten
(10) days prior to the date of any public sale, or
after which a private sale, of any of such Collateral
is to be held. Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of
sale having been given. Secured Party may adjourn any
public or private sale from time to time by
announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the
time and place to which it was so adjourned.
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<PAGE>
(b) Application of Proceeds. If any Event of Default
shall have occurred, Secured Party may at its discretion
apply or use any cash held by Secured Party as Collateral,
and any cash proceeds received by Secured Party in respect
of any sale or other disposition of, collection from, or
other realization upon, all or any part of the Collateral as
follows in such order and manner as Secured Party may elect:
(i) to the repayment or reimbursement of the
reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses)
incurred by Secured Party in connection with (A) the
administration of the Loan Documents, (B) the custody,
preservation, use or operation of, or the sale of,
collection from, or other realization upon, the
Collateral, and (C) the exercise or enforcement of any
of the rights and remedies of Secured Party hereunder;
(ii) to the payment or other satisfaction of any
liens and other encumbrances upon the Collateral;
(iii) to the satisfaction of the Indebtedness;
(iv) by holding such cash and proceeds as
Collateral;
(v) to the payment of any other amounts required
by applicable law (including without limitation,
Section 9.504(a)(3) of the Code or any other applicable
statutory provision); and
(vi) by delivery to Debtor or any other party
lawfully entitled to receive such cash or proceeds
whether by direction of a court of competent
jurisdiction or otherwise.
(c) Deficiency. In the event that the proceeds of any
sale of, collection from, or other realization upon, all or
any part of the Collateral by Secured Party are insufficient
to pay all amounts to which Secured Party is legally
entitled, Debtor and any party who guaranteed or is
otherwise obligated to pay all or any portion of the
Indebtedness shall be liable for the deficiency, together
with interest thereon as provided in the Loan Documents.
(d) Non-Judicial Remedies. In granting to Secured
Party the power to enforce its rights hereunder without
prior judicial process or judicial hearing, Debtor expressly
waives, renounces and knowingly relinquishes any legal right
which might otherwise require Secured Party to enforce its
rights by judicial process. Debtor recognizes and concedes
that non-judicial remedies are consistent with the usage of
trade, are responsive to commercial necessity and are the
result of a bargain at arm's length. Nothing herein is
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<PAGE>
intended to prevent Secured Party or Debtor from resorting
to judicial process at either party's option.
(e) Other Recourse. Debtor waives any right to
require Secured Party to proceed against any third party,
exhaust any Collateral or other security for the
Indebtedness, or to have any third party joined with Debtor
in any suit arising out of the Indebtedness or any of the
Loan Documents, or pursue any other remedy available to
Secured Party. Debtor further waives any and all notice of
acceptance of this Agreement and of the creation,
modification, rearrangement, renewal or extension of the
Indebtedness. Debtor further waives any defense arising by
reason of any disability or other defense of any third party
or by reason of the cessation from any cause whatsoever of
the liability of any third party. Until all of the
Indebtedness shall have been paid in full, Debtor shall have
no right of subrogation and Debtor waives the right to
enforce any remedy which Secured Party has or may hereafter
have against any third party, and waives any benefit of and
any right to participate in any other security whatsoever
now or hereafter held by Secured Party. Debtor authorizes
Secured Party, and without notice or demand and without any
reservation of rights against Debtor and without affecting
Debtor's liability hereunder or on the Indebtedness to (i)
take or hold any other property of any type from any third
party as security for the Indebtedness, and exchange,
enforce, waive and release any or all of such other
property, (ii) apply such other property and direct the
order or manner of sale thereof as Secured Party may in its
discretion determine, (iii) renew, extend, accelerate,
modify, compromise, settle or release any of the
Indebtedness or other security for the Indebtedness, (iv)
waive, enforce or modify any of the provisions of any of the
Loan Documents executed by any third party, and (v) release
or substitute any third party.
9. Indemnity. Debtor hereby indemnifies and agrees to
hold harmless Secured Party, and its officers, directors,
employees, agents and representatives (each an "Indemnified
Person") from and against any and all liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature
(collectively, the "Claims") which may be imposed on, incurred
by, or asserted against, any Indemnified Person arising in
connection with the Loan Documents, the Indebtedness, or the
Collateral (including without limitation, the enforcement of the
Loan Documents and the defense of any Indemnified Person's
actions and/or inactions in connection with the Loan Documents).
WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH
INDEMNIFIED PERSON WITH RESPECT TO ANY CLAIMS WHICH IN WHOLE OR
IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH
AND/OR ANY OTHER INDEMNIFIED PERSON, except to the limited extent
the Claims against an Indemnified Person are proximately caused
by such Indemnified Person's gross negligence or willful
misconduct. If Debtor or any third party ever alleges such gross
negligence or willful misconduct by any Indemnified Person, the
indemnification provided for in this Section shall
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nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction
enters a final judgment as to the extent and effect of the alleged
gross negligence or willful misconduct. The indemnification provided
for in this Section shall survive the termination of this
Agreement and shall extend and continue to benefit each
individual or entity who is or has at any time been an
Indemnified Person hereunder.
10. Miscellaneous.
(a) Entire Agreement. This Agreement contains the
entire agreement of Secured Party and Debtor with respect to
the Collateral. If the parties hereto are parties to any
prior agreement, either written or oral, relating to the
Collateral, the terms of this Agreement shall amend and
supersede the terms of such prior agreements as to
transactions on or after the effective date of this
Agreement, but all security agreements, financing
statements, guaranties, other contracts and notices for the
benefit of Secured Party shall continue in full force and
effect to secure the Indebtedness unless Secured Party
specifically releases its rights thereunder by separate
release.
(b) Amendment. No modification, consent or amendment
of any provision of this Agreement or any of the other Loan
Documents shall be valid or effective unless the same is in
writing and signed by the party against whom it is sought to
be enforced.
(c) Actions by Secured Party. The lien, security
interest and other security rights of Secured Party
hereunder shall not be impaired by (i) any renewal,
extension, increase or modification with respect to the
Indebtedness, (ii) any surrender, compromise, release,
renewal, extension, exchange or substitution which Secured
Party may grant with respect to the Collateral, (iii) any
release or indulgence granted to any co-maker, endorser,
guarantor or surety of the Indebtedness, or (iv) the
assumption of the obligations of Borrower in respect of the
Indebtedness by any other person or entity affiliated with
the Borrower or any of Borrower's subsidiaries and their
respective successors or assigns. The taking of additional
security by Secured Party shall not release or impair the
lien, security interest or other security rights of Secured
Party hereunder or affect the obligations of Debtor
hereunder.
(d) Waiver by Secured Party. Secured Party may waive
any Event of Default without waiving any other prior or
subsequent Event of Default. Secured Party may remedy any
default without waiving the Event of Default remedied.
Neither the failure by Secured Party to exercise, nor the
delay by Secured Party in exercising, any right or remedy
upon any Event of Default shall be construed as a waiver of
such Event of Default or as a waiver of the right to
exercise any such right or remedy at a later date. No
single or partial exercise by Secured Party of any right or
remedy hereunder shall exhaust the same or shall preclude
any other or further exercise thereof, and every such right
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or remedy hereunder may be exercised at any time. No waiver
of any provision hereof or consent to any departure by
Debtor therefrom shall be effective unless the same shall be
in writing and signed by Secured Party and then such waiver
or consent shall be effective only in the specific
instances, for the purpose for which given and to the extent
therein specified. No notice to or demand on Debtor in any
case shall of itself entitle Debtor to any other or further
notice or demand in similar or other circumstances.
(e) Costs and Expenses. Debtor will upon demand pay
to Secured Party the amount of any and all costs and
expenses (including without limitation, attorneys' fees and
expenses), which Secured Party may incur in connection with
(i) the transactions which give rise to the Loan Documents,
(ii) the preparation of this Agreement and the perfection
and preservation of the security interests granted under the
Loan Documents, (iii) the custody, preservation, use or
operation of, or the sale of, collection from, or other
realization upon, the Collateral, (iv) the exercise or
enforcement of any of the rights of Secured Party under the
Loan Documents, or (v) the failure by Debtor to perform or
observe any of the provisions hereof.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND APPLICABLE FEDERAL LAWS.
(g) Venue. This Agreement has been entered into in
Dallas County, Texas and it shall be performable for all
purposes in such county. Courts within the State of Texas
shall have jurisdiction over any and all disputes arising
under or pertaining to this Agreement and venue for any such
disputes shall be in Dallas County, Texas.
(h) Severability. If any provision of this Agreement
is held by a court of competent jurisdiction to be illegal,
invalid or unenforceable under present or future laws, such
provision shall be fully severable, shall not impair or
invalidate the remainder of this Agreement and the effect
thereof shall be confined to the provision held to be
illegal, invalid or unenforceable.
(i) No Obligation. Nothing contained herein shall be
construed as an obligation on the part of Secured Party to
extend or continue to extend credit to Borrower.
(j) Notices. All notices, requests, demands or other
communications required or permitted to be given pursuant to
this Agreement shall be in writing and given by (i) personal
delivery, (ii) expedited delivery service with proof of
delivery, or (iii) United States mail, postage prepaid,
registered or certified, return receipt requested, sent to
the intended addressee at the address set forth on the
signature page hereof or to such different address as the
addressee shall have designated by written notice sent
pursuant to
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the terms hereof and shall be deemed to have been received
either, in the case of personal delivery, at the time of
personal delivery, in the case of expedited delivery
service, as the date of first attempted delivery at the
address and in the manner provided herein, or in the case of
mail, upon deposit in a depository receptacle under the care
and custody of the United States Postal Service. Either
party shall have the right to change his or its address for
notice hereunder to any other location within the
continental United States by notice to the other party of
such new address at least thirty (30) days prior to the
effective date of such new address.
(k) Binding Effect and Assignment. This Agreement (i)
creates a continuing security interest in the Collateral,
(ii) shall be binding on Debtor and the heirs, executors,
administrators and personal representatives of Debtor, and
(iii) shall inure to the benefit of Secured Party and its
successors and assigns. Without limiting the generality of
the foregoing, Secured Party may pledge, assign or otherwise
transfer the Indebtedness and its rights under this
Agreement and any of the other loan Documents to nay other
party. Debtor's rights and obligations hereunder may not be
assigned or otherwise transferred without the prior written
consent of Secured Party.
(l) Termination. Upon the satisfaction in full of the
Indebtedness, or written release or termination delivered by
Secured Party to Debtor, this Agreement and the security
interests created hereby shall terminate. Upon termination
of this Agreement and Debtor's written request, Secured
Party will, at Debtor's sole cost and expense, return to
Debtor such of the Collateral as shall not have been sold or
otherwise disposed of or applied pursuant to the terms
hereof and execute and deliver to Debtor such documents as
Debtor shall reasonably request to evidence such
termination.
(m) Cumulative Rights. All rights and remedies of
Secured Party hereunder are cumulative of each other and of
every other right or remedy which Secured Party may
otherwise have at law or in equity or under any of the other
Loan Documents, and the exercise of one or more of such
rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of any other rights or
remedies.
(n) Gender and Number. Within this Agreement, words of
any gender shall be held and construed to include the other
gender, and words in the singular number shall be held and
construed to include the plural and words in the plural
number shall be held and construed to include the singular,
unless in each instance the context requires otherwise.
(o) Descriptive Headings. The headings in this
Agreement are for convenience only and shall in no way
enlarge, limit or define the scope or meaning of the various
and several provisions hereof.
EXECUTED as of the date first written above.
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Debtor's Address: DEBTOR:
----------------------
10711 Preston Road, Suite 250
Dallas, Texas 75230 TOTAL PHARMACY SUPPLY, INC.,
a Texas corporation
By:/s/ Thomas R. Baker
--------------------------
Thomas R. Baker, President
Secured Party's Address: BANK:
----------------------------------------
Bank of Texas, N.A.
5956 Sherry Lane, Suite 1100 BANK OF TEXAS, N.A.
Dallas, Texas 75225
Attention: David J. Broussard, Jr.
Senior Vice President By:/s/ Frank A. Sewell,IV
----------------------
Frank A. Sewell, IV
Banking Officer
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PLEDGE AND SECURITY AGREEMENT
-----------------------------
RX-PRO.COM, INC.
(AUGUST, 2000 FACILITY)
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is
made as of the10th day of August, 2000, by Rx-Pro.Com, Inc.
(hereinafter called "Debtor"), in favor of BANK OF TEXAS, N.A.
("Bank"). Debtor hereby agrees with Bank as follows:
1. Definitions. As used in this Agreement, the following
terms shall have the meanings indicated below:
(a) The term "Borrower" shall mean Debtor, Park
Pharmacy Corporation ("Park"), a Colorado corporation,
Dougherty's Pharmacy, Inc. ("Dougherty"), a Texas
corporation, Ravens Pharmacy, Inc. ("Ravens"), a Texas
corporation, Total Pharmacy Supply, Inc. ("Total"), a Texas
corporation, Park Infusion Services, LP ("PIS"), a Texas
limited partnership, who are jointly and severally indebted
to Bank..
(b) The term "Code" shall mean the Uniform Commercial
Code as in effect in the State of Texas on the date of this
Agreement or as it may hereafter be amended from time to
time.
(c) The term "Collateral" shall mean all machinery,
furniture, fixtures and equipment, and also all accounts
receivable, inventory, accounts, instruments, documents,
chattel paper, commercial tort claims, deposit accounts,
letters of credit rights or letters of credit or rights to
payment for money or sums advanced or sold, securities,
certificates, general intangibles, payment intangibles, and
any other tangible personal property or intangible personal
property of every kind and character now located at Debtor's
places of business or otherwise in Debtor's possession or
control, or in the case of certain items of the Collateral
requiring Bank to have possession to be perfected any of
those items in the possession of, or at any time and from
time to time hereafter delivered to, Secured Party (as
hereinafter defined) or its agents, together with all
certificates, options, rights or other distributions issued
as an addition to, in substitution of, or in exchange for,
or on account of, any of the foregoing, including without
limitation, any property specifically described on Schedule
"A" attached hereto and made a part hereof.
(d) The term "Indebtedness" shall mean all
indebtedness of Borrower now or hereafter owing to Secured
Party pursuant to that certain Loan Agreement dated of even
date herewith, executed by Borrower and Secured Party (the
"Loan Agreement") and evidenced by a Revolving Line of
Credit Note, a Term Equipment Note, and an Acquisition Line
of Credit Note, all dated of even date herewith, executed by
Borrower to
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and for the benefit of Secured Party, in the original
principal amounts of $1,500,000.00 and $1,300,000.00 and
$5,000,000.00, respectively, together with any other
obligation or indebtedness due from Debtor to Secured Party
in accordance with the terms of the Loan Documents,
including without limitation any additional note to be
executed by Borrower and payable to the order of Secured
Party in accordance with the provisions of the Loan
Agreement in respect of the Acquisition Line of Credit Note
(collectively referred to herein as the "Note" or the
"Notes"as the context requires), (ii) all accrued but unpaid
interest on any of the indebtedness described in (i) above,
(iii) all obligations owing to Secured Party under any
documents evidencing, securing, governing and/or pertaining
to all or any part of the indebtedness described in (i) and
(ii) above, (iv) all costs and expenses incurred by Secured
Party in connection with the collection and administration
of all or any part of the indebtedness and obligations
described in (i), (ii) and (iii) above or the protection or
preservation of, or realization upon, the collateral
securing all or any part of such indebtedness and
obligations, including without limitation all reasonable
attorneys' fees, and (v) all renewals, extensions,
modifications and rearrangements of the indebtedness and
obligations described in (i), (ii), (iii) and (iv) above.
(e) The term "Loan Documents" shall mean all
instruments and documents evidencing, securing, governing,
guaranteeing and/or pertaining to the Indebtedness.
(f) The term "Obligated Party" shall mean any party
other than Borrower who secures, guarantees and/or is
otherwise obligated to pay all or any portion of the
Indebtedness.
(g) The term "Secured Party" shall mean Bank, its
successors and assigns, including without limitation, any
party to whom Bank, or its successors or assigns, may assign
its rights and interests under this Agreement.
(h) Other capitalized terms not defined herein shall
have the meaning ascribed to them in the Loan Agreement of
even date herewith.
All words and phrases used herein which are expressly
defined in Section 1.201 of Chapter 9 of the Code shall have the
meaning provided for therein. Other words and phrases defined
elsewhere in the Code shall have the meaning specified therein
except to the extent such meaning is inconsistent with a
definition in Section 1.201 or Chapter 9 of the Code.
2. Security Interest. As security for the Indebtedness,
Debtor, for value received, hereby grants to Secured Party a
continuing security interest in the Collateral.
3. Representations and Warranties. Debtor hereby
represents and warrants the following to Secured Party:
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<PAGE>
(a) Enforceability. This Agreement and Guaranty
constitute legal, valid and binding obligations of Debtor,
enforceable in accordance with their respective terms,
except as limited by bankruptcy, insolvency or similar laws
of general application relating to the enforcement of
creditors' rights and except to the extent specific remedies
may generally be limited by equitable principles.
(b) Ownership and Liens. Debtor has good and
marketable title to the Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement.
Other than in the ordinary course of business for a non-
material matter, no dispute, right of setoff, counterclaim
or defense exists with respect to all or any part of the
Collateral. Debtor has not executed any other security
agreement currently affecting the Collateral and no
effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file
in any recording office except as may have been executed or
filed in favor of Secured Party.
(c) No Conflicts or Consents. Neither the ownership,
the intended use of the Collateral by Debtor, the grant of
the security interest by Debtor to Secured Party herein nor
the exercise by Secured Party of its rights or remedies
hereunder, will (i) conflict with any provision of (A) any
domestic or foreign law, statute, rule or regulation, or (B)
any agreement, judgment, license, order or permit applicable
to or binding upon Debtor, or (ii) result in or require the
creation of any lien, charge or encumbrance upon any assets
or properties of Debtor or of any person except as may be
expressly contemplated in the Loan Documents. Except as
expressly contemplated in the Loan Documents, no consent,
approval, authorization or order of, and no notice to or
filing with, any court, governmental authority or third
party is required in connection with the grant by Debtor of
the security interest herein or the exercise by Secured
Party of its rights and remedies hereunder.
(d) Security Interest. Debtor has and will have at
all times full right, power and authority to grant a
security interest in the Collateral to Secured Party in the
manner provided herein, free and clear of any lien, security
interest or other charge or encumbrance. This Agreement
creates a legal, valid and binding security interest in
favor of Secured Party in the Collateral securing the
Indebtedness. Possession by Secured Party of all
certificates, instruments and cash constituting Collateral
from time to time and/or the filing of the financing
statements delivered prior hereto and/or concurrently
herewith by Debtor to Secured Party will perfect and
establish the first priority of Secured Party's security
interest hereunder in the Collateral.
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(e) Location. Debtor's chief executive office and the
office where the records concerning the Collateral are kept
is located at the address set forth on the signature page
hereof.
(f) Solvency of Debtor. As of the date hereof, and
after giving effect to this Agreement and the completion of
all other transactions contemplated by Debtor at the time of
the execution of this Agreement, (i) Debtor is and will be
solvent, (ii) the fair saleable value of Debtor's assets
exceeds and will continue to exceed Debtor's liabilities
(both fixed and contingent), and (iii) Debtor is paying and
will continue to be able to pay his debts as they mature.
Solely for purposes of this warranty by the Debtor, and
without affecting, modifying or otherwise amending any
provision of any Loan Documents, Debtor's assessment of its
solvency includes a claim of subrogation or contribution
against each of the other entities comprising Borrower
and/or a Guarantor (as defined in the Loan Documents) and/or
any other obligated party in the event Debtor should pay
more than its ratable share of the Indebtedness.
(g) Chattel Paper, Documents and Instruments. The
chattel paper, documents and instruments of Debtor pledged
hereunder have only one original counterpart and no party
other than Debtor or Secured Party is in actual or
constructive possession of any such chattel paper, documents
or instruments.
4. Affirmative Covenants. Debtor will comply with the
covenants contained in this Section 4 at all times during the
period of time this Agreement is effective unless Secured Party
shall otherwise consent in writing.
(a) Ownership and Liens. Debtor will maintain good
and marketable title to all Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement
and the security interests and other encumbrances expressly
permitted by the other Loan Documents. Other than in the
ordinary course of business for non-material matters, Debtor
will not permit any dispute, right of setoff, counterclaim
or defense to exist with respect to all or any part of the
Collateral. Debtor will not cause any financing statement
or other security instrument with respect to the Collateral
to be terminated, except as may exist or as may have been
filed in favor of Secured Party. Debtor will defend at his
expense Secured Party's right, title and security interest
in and to the Collateral against the claims of any third
party.
(b) Further Assurances. Debtor will from time to time
at his expense promptly execute and deliver all further
instruments and documents and take all further action
necessary or appropriate or that Secured Party may request
in order (i) to perfect and protect the security interest
created or purported to be created hereby and the first
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priority of such security interest, (ii) to enable Secured
Party to exercise and enforce its rights and remedies
hereunder in respect of the Collateral, and (iii) to
otherwise effect the purposes of this Agreement, including
without limitation, executing and filing such financing or
continuation statements, or amendments thereto.
(c) Payment of Taxes. Debtor (i) will timely pay all
property and other taxes, assessments and governmental
charges or levies imposed upon the Collateral or any part
thereof, (ii) will timely pay all lawful claims which, if
unpaid, might become a lien or charge upon the Collateral or
any part thereof, and (iii) will maintain appropriate
accruals and reserves for all such liabilities in a timely
fashion in accordance with generally accepted accounting
principles. Debtor may, however, delay paying or
discharging any such taxes, assessments, charges, claims or
liabilities so long as the validity thereof is contested in
good faith by proper proceedings and provided Debtor has set
aside adequate reserves therefor.
(d) Chattel Paper, Documents and Instruments. Debtor
will take such action as may be requested by Secured Party
in order to cause any chattel paper, documents or
instruments to be valid and enforceable and will cause all
chattel paper to have only one original counterpart. Upon
request by Secured Party, Debtor will deliver to Secured
Party all originals of chattel paper, documents or
instruments and will mark all chattel paper with a legend
indicating that such chattel paper is subject to the
security interest granted hereunder.
(e) Insurance. Debtor will insure the Collateral
against perils of loss and/or liability and name Secured
Party as an additional insured on all such policies of
insurance in an amount not less than the amount of the
original amount of the Indebtedness. All such insurance
shall be with such carriers as Secured Party may reasonably
approve. Debtor shall provide Secured Party with evidence
of Debtor's compliance with this provision and with evidence
of renewal of all such coverages throughout the term that
any of the Indebtedness remains outstanding and unpaid.
Upon request of Secured Party, Debtor will provide evidence
of payment of renewal premiums and/or with updated policies,
certificates of insurance or other evidence of Debtor's
compliance with this provision at no cost or expense to
Secured Party.
5. Negative Covenants. Debtor will comply with the
covenants contained in this Section 5 at all times during the
period of time this Agreement is effective, unless Secured Party
shall otherwise consent in writing.
(a) Transfer or Encumbrance. Other than in the
ordinary course of business, Debtor will not (i) sell,
assign (by operation of law or otherwise), transfer,
exchange, lease or otherwise dispose of any of the
Collateral, (ii) grant a lien or security interest in or
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<PAGE>
execute, file or record any financing statement or other
security instrument with respect to the Collateral to any
party other than Secured Party, or (iii) deliver actual or
constructive possession of the Collateral to any party other
than Secured Party.
(b) Impairment of Security Interest. Debtor will not
take or fail to take any action which would in any manner
impair the value or enforceability of Secured Party's
security interest in any Collateral.
(c) Possession of Collateral. Debtor will on or
before the date hereof, deliver possession of any part of
the Collateral to Secured Party where possession by Secured
Party is required for perfection.
(d) Financing Statement Filings. Debtor recognizes
that financing statements pertaining to the Collateral will
be or may be filed where Debtor maintains any Collateral,
has its records concerning any Collateral or has its
principal place of business/ residence. Without limitation
of any other covenant herein, Debtor will not cause or
permit any change in the location of Debtor's office to a
jurisdiction other than as represented in Section 3(e)
unless Debtor shall have notified Secured Party in writing
of such change at least thirty (30) days prior to the
effective date of such change, and shall have first taken
all action required by Secured Party for the purpose of
further perfecting or protecting the security interest in
favor of Secured Party in the Collateral. In any written
notice furnished pursuant to this Section 5(d), Debtor will
expressly state that the notice is required by this
Agreement and contains facts that may require additional
filings of financing statements or other notices for the
purpose of continuing perfection of Secured Party's security
interest in the Collateral.
6. Rights of Secured Party. Secured Party shall have the
rights contained in this Section 6 at all times during the period
of time this Agreement is effective.
(a) Additional Financing Statements Filings. Debtor
hereby authorizes Secured Party to file, without the
signature of Debtor, one or more financing or continuation
statements, and amendments thereto, relating to the
Collateral. Debtor further agrees that a carbon,
photographic or other reproduction of this Security
Agreement or any financing statement describing any
Collateral is sufficient as a financing statement and may be
filed in any jurisdiction Secured Party may deem
appropriate.
(b) Power of Attorney. Debtor hereby irrevocably
appoints Secured Party as Debtor's attorney-in-fact, such
power of attorney being coupled with an interest, with full
authority in the place and stead of Debtor and in the name
of Debtor or otherwise from and after an Event of Default,
and thereafter until such Event of Default has been cured
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<PAGE>
and any other action, performance or assurance required of
the Debtor has been performed or delivered from time to time
and until released by the Secured Party in its sole and
absolute discretion, to take any action and to execute any
instrument which Secured Party may deem necessary or
appropriate to accomplish the purposes of this Agreement,
including without limitation: (i) to demand, collect, sue
for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in
respect of the Collateral; (ii) to receive, endorse and
collect any drafts or other instruments, documents and
chattel paper in connection with clause (i) above; and (iii)
to file any claims or take any action or institute any
proceedings which Secured Party may deem necessary or
appropriate for the collection and/or preservation of the
Collateral or otherwise to enforce the rights of Secured
Party with respect to the Collateral.
(c) Performance by Secured Party. If Debtor fails to
perform any agreement or obligation provided herein, Secured
Party may itself perform, or cause performance of, such
agreement or obligation, and the expenses of Secured Party
incurred in connection therewith shall be a part of the
Indebtedness, secured by the Collateral and payable by
Debtor on demand.
7. Events of Default. Each of the following constitutes
an "Event of Default" under this Agreement:
(a) Failure to Pay Indebtedness. The failure, refusal
or neglect of Borrower, or any Obligated Party to make any
payment of principal or interest on the Indebtedness, or any
portion thereof, as the same shall become due and payable
and following ten (10) days written notice to cure the
initial failure to pay an installment; or
(b) Non-Performance of Covenants. The failure of
Debtor or any Obligated Party to timely and properly
observe, keep or perform any non-monetary covenant,
agreement, warranty or condition required herein or in any
of the other Loan Documents following thirty (30) days
written notice to cure; or
(c) Default Under Other Loan Documents. The
occurrence of an event of default under any of the other
Loan Documents; or
(d) False Representation. Any representation
contained herein or in any of the other Loan Documents made
by Borrower, Debtor, or any Obligated Party is false or
misleading in any material respect; or
(e) Bankruptcy or Insolvency. If Park, Dougherty,
Ravens, Total, PIS, Debtor, or any Obligated Party: (i)
becomes insolvent, or makes a transfer in fraud of
creditors, or makes an assignment for the benefit of
creditors, or admits in writing his or
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<PAGE>
its inability to pay his or its debts as they become due;
(ii) generally is not paying his or its debts as such debts
become due; (iii) has a receiver, trustee or custodian
appointed for, or take possession of, all or substantially
all of the assets of such party or any of the Collateral,
either in a proceeding brought by such party or in a
proceeding brought against such party and such appointment
is not discharged or such possession is not terminated
within sixty (60) days after the effective date thereof or
such party consents to or acquiesces in such appointment or
possession; (iv) files a petition for relief under the
United States Bankruptcy Code or any other present or future
federal or state insolvency, bankruptcy or similar laws (all
of the foregoing hereinafter collectively called "Applicable
Bankruptcy Law") or an involuntary petition for relief is
filed against such party under any Applicable Bankruptcy Law
and such involuntary petition is not dismissed within sixty
(60) days after the filing thereof, or an order for relief
naming such party is entered under any Applicable Bankruptcy
Law, or any composition, rearrangement, extension,
reorganization or other relief of debtors now or hereafter
existing is requested or consented to by such party; (v)
fails to have discharged within a period of sixty (60) days
any attachment, sequestration or similar writ levied upon
any property of such party; or (vi) fails to pay within
thirty (30) days any final money judgment against such
party.
(f) Execution on Collateral. The Collateral or any
portion thereof is taken on execution or other process of
law in any action against Debtor; or
(g) Liquidation or Related Events. The liquidation,
dissolution, merger or consolidation of any one or more of
Borrower or any Obligated Party not otherwise permitted in
advance or approved by Secured Party in writing upon written
request therefor by Debtor..
8. Remedies and Related Rights. If an Event of Default
shall have occurred and for so long as same continues without
cure and any other performance required of the Debtor, and
without limiting any other rights and remedies provided herein,
under any of the other Loan Documents or otherwise available to
Secured Party, Secured Party may exercise one or more of the
rights and remedies provided in this Section.
(a) Remedies. Secured Party may from time to time at
its discretion, without limitation and without notice except
as expressly provided in any of the Loan Documents:
(i) exercise in respect of the Collateral all the
rights and remedies of a secured party under the Code
(whether or not the Code applies to the affected
Collateral);
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<PAGE>
(ii) require Debtor to, and Debtor hereby
agrees that it will at its expense and upon request of
Secured Party, assemble the Collateral as directed by
Secured Party and make it available to Secured Party at
a place to be designated by Secured Party which is
reasonably convenient to both parties;
(iii) reduce its claim to judgment or
foreclose or otherwise enforce, in whole or in part,
the security interest granted hereunder by any
available judicial procedure;
(iv) sell or otherwise dispose of, at its office,
on the premises of Debtor or elsewhere, the Collateral,
as a unit or in parcels, by public or private
proceedings, and by way of one or more contracts (it
being agreed that the sale or other disposition of any
part of the Collateral shall not exhaust Secured
Party's power of sale, but sales or other dispositions
may be made from time to time until all of the
Collateral has been sold or disposed of or until the
Indebtedness has been paid and performed in full), and
at any such sale or other disposition it shall not be
necessary to exhibit any of the Collateral;
(v) buy the Collateral, or any portion thereof,
at any public sale;
(vi) buy the Collateral, or any portion thereof,
at any private sale if the Collateral is of a type
customarily sold in a recognized market or is of a type
which is the subject of widely distributed standard
price quotations;
(vii) apply for the appointment of a receiver
for the Collateral, and Debtor hereby consents to any
such appointment; and
(viii) at its option, withdraw all amounts on
deposit in respect of the Collateral and apply the same
to the payment of the Indebtedness; and
(ix) Debtor agrees that in the event Debtor is
entitled to receive any notice under the Uniform
Commercial Code, as it exists in the state governing
any such notice, of the sale or other disposition of
any Collateral, reasonable notice shall be deemed given
when such notice is deposited in a depository
receptacle under the care and custody of the United
States Postal Service, postage prepaid, at Debtor's
address set forth on the signature page hereof, ten
(10) days prior to the date of any public sale, or
after which a private sale, of any of such Collateral
is to be held. Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of
sale having been given. Secured Party may adjourn any
public or private sale from time to time by
announcement at the time
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<PAGE>
and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which
it was so adjourned.
(b) Application of Proceeds. If any Event of Default
shall have occurred, Secured Party may at its discretion
apply or use any cash held by Secured Party as Collateral,
and any cash proceeds received by Secured Party in respect
of any sale or other disposition of, collection from, or
other realization upon, all or any part of the Collateral as
follows in such order and manner as Secured Party may elect:
(i) to the repayment or reimbursement of the
reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses)
incurred by Secured Party in connection with (A) the
administration of the Loan Documents, (B) the custody,
preservation, use or operation of, or the sale of,
collection from, or other realization upon, the
Collateral, and (C) the exercise or enforcement of any
of the rights and remedies of Secured Party hereunder;
(ii) to the payment or other satisfaction of any
liens and other encumbrances upon the Collateral;
(iii) to the satisfaction of the Indebtedness;
(iv) by holding such cash and proceeds as
Collateral;
(v) to the payment of any other amounts required
by applicable law (including without limitation,
Section 9.504(a)(3) of the Code or any other applicable
statutory provision); and
(vi) by delivery to Debtor or any other party
lawfully entitled to receive such cash or proceeds
whether by direction of a court of competent
jurisdiction or otherwise.
(c) Deficiency. In the event that the proceeds of any
sale of, collection from, or other realization upon, all or
any part of the Collateral by Secured Party are insufficient
to pay all amounts to which Secured Party is legally
entitled, Debtor and any party who guaranteed or is
otherwise obligated to pay all or any portion of the
Indebtedness shall be liable for the deficiency, together
with interest thereon as provided in the Loan Documents.
(d) Non-Judicial Remedies. In granting to Secured
Party the power to enforce its rights hereunder without
prior judicial process or judicial hearing, Debtor expressly
waives, renounces and knowingly relinquishes any legal right
which might otherwise
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<PAGE>
require Secured Party to enforce its rights by judicial
process. Debtor recognizes and concedes that non-judicial
remedies are consistent with the usage of trade, are
responsive to commercial necessity and are the result of a
bargain at arm's length. Nothing herein is intended to
prevent Secured Party or Debtor from resorting to judicial
process at either party's option.
(e) Other Recourse. Debtor waives any right to
require Secured Party to proceed against any third party,
exhaust any Collateral or other security for the
Indebtedness, or to have any third party joined with Debtor
in any suit arising out of the Indebtedness or any of the
Loan Documents, or pursue any other remedy available to
Secured Party. Debtor further waives any and all notice of
acceptance of this Agreement and of the creation,
modification, rearrangement, renewal or extension of the
Indebtedness. Debtor further waives any defense arising by
reason of any disability or other defense of any third party
or by reason of the cessation from any cause whatsoever of
the liability of any third party. Until all of the
Indebtedness shall have been paid in full, Debtor shall have
no right of subrogation and Debtor waives the right to
enforce any remedy which Secured Party has or may hereafter
have against any third party, and waives any benefit of and
any right to participate in any other security whatsoever
now or hereafter held by Secured Party. Debtor authorizes
Secured Party, and without notice or demand and without any
reservation of rights against Debtor and without affecting
Debtor's liability hereunder or on the Indebtedness to (i)
take or hold any other property of any type from any third
party as security for the Indebtedness, and exchange,
enforce, waive and release any or all of such other
property, (ii) apply such other property and direct the
order or manner of sale thereof as Secured Party may in its
discretion determine, (iii) renew, extend, accelerate,
modify, compromise, settle or release any of the
Indebtedness or other security for the Indebtedness, (iv)
waive, enforce or modify any of the provisions of any of the
Loan Documents executed by any third party, and (v) release
or substitute any third party.
9. Indemnity. Debtor hereby indemnifies and agrees to
hold harmless Secured Party, and its officers, directors,
employees, agents and representatives (each an "Indemnified
Person") from and against any and all liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature
(collectively, the "Claims") which may be imposed on, incurred
by, or asserted against, any Indemnified Person arising in
connection with the Loan Documents, the Indebtedness, or the
Collateral (including without limitation, the enforcement of the
Loan Documents and the defense of any Indemnified Person's
actions and/or inactions in connection with the Loan Documents).
WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH
INDEMNIFIED PERSON WITH RESPECT TO ANY CLAIMS WHICH IN WHOLE OR
IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH
AND/OR ANY OTHER INDEMNIFIED PERSON, except to the limited extent
the Claims against an
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Indemnified Person are proximately caused by such Indemnified
Person's gross negligence or willful misconduct. If Debtor or
any third party ever alleges such gross negligence or willful
misconduct by any Indemnified Person, the indemnification
provided for in this Section shall nonetheless be paid upon
demand, subject to later adjustment or reimbursement, until such
time as a court of competent jurisdiction enters a final judgment
as to the extent and effect of the alleged gross negligence or
willful misconduct. The indemnification provided for in this
Section shall survive the termination of this Agreement and shall
extend and continue to benefit each individual or entity who is
or has at any time been an Indemnified Person hereunder.
10. Miscellaneous.
(a) Entire Agreement. This Agreement contains the
entire agreement of Secured Party and Debtor with respect to
the Collateral. If the parties hereto are parties to any
prior agreement, either written or oral, relating to the
Collateral, the terms of this Agreement shall amend and
supersede the terms of such prior agreements as to
transactions on or after the effective date of this
Agreement, but all security agreements, financing
statements, guaranties, other contracts and notices for the
benefit of Secured Party shall continue in full force and
effect to secure the Indebtedness unless Secured Party
specifically releases its rights thereunder by separate
release.
(b) Amendment. No modification, consent or amendment
of any provision of this Agreement or any of the other Loan
Documents shall be valid or effective unless the same is in
writing and signed by the party against whom it is sought to
be enforced.
(c) Actions by Secured Party. The lien, security
interest and other security rights of Secured Party
hereunder shall not be impaired by (i) any renewal,
extension, increase or modification with respect to the
Indebtedness, (ii) any surrender, compromise, release,
renewal, extension, exchange or substitution which Secured
Party may grant with respect to the Collateral, (iii) any
release or indulgence granted to any co-maker, endorser,
guarantor or surety of the Indebtedness, or (iv) the
assumption of the obligations of Borrower in respect of the
Indebtedness by any other person or entity affiliated with
the Borrower or any of Borrower's subsidiaries and their
respective successors or assigns. The taking of additional
security by Secured Party shall not release or impair the
lien, security interest or other security rights of Secured
Party hereunder or affect the obligations of Debtor
hereunder.
(d) Waiver by Secured Party. Secured Party may waive
any Event of Default without waiving any other prior or
subsequent Event of Default. Secured Party may remedy any
default without waiving the Event of Default remedied.
Neither the failure by Secured Party to exercise, nor the
delay by Secured Party in exercising, any right or remedy
upon any Event of Default shall be construed as a waiver of
such Event of
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Default or as a waiver of the right to exercise any such
right or remedy at a later date. No single or partial
exercise by Secured Party of any right or remedy hereunder
shall exhaust the same or shall preclude any other or
further exercise thereof, and every such right or remedy
hereunder may be exercised at any time. No waiver of any
provision hereof or consent to any departure by Debtor
therefrom shall be effective unless the same shall be in
writing and signed by Secured Party and then such waiver or
consent shall be effective only in the specific instances,
for the purpose for which given and to the extent therein
specified. No notice to or demand on Debtor in any case
shall of itself entitle Debtor to any other or further
notice or demand in similar or other circumstances.
(e) Costs and Expenses. Debtor will upon demand pay
to Secured Party the amount of any and all costs and
expenses (including without limitation, attorneys' fees and
expenses), which Secured Party may incur in connection with
(i) the transactions which give rise to the Loan Documents,
(ii) the preparation of this Agreement and the perfection
and preservation of the security interests granted under the
Loan Documents, (iii) the custody, preservation, use or
operation of, or the sale of, collection from, or other
realization upon, the Collateral, (iv) the exercise or
enforcement of any of the rights of Secured Party under the
Loan Documents, or (v) the failure by Debtor to perform or
observe any of the provisions hereof.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND APPLICABLE FEDERAL LAWS.
(g) Venue. This Agreement has been entered into in
Dallas County, Texas and it shall be performable for all
purposes in such county. Courts within the State of Texas
shall have jurisdiction over any and all disputes arising
under or pertaining to this Agreement and venue for any such
disputes shall be in Dallas County, Texas.
(h) Severability. If any provision of this Agreement
is held by a court of competent jurisdiction to be illegal,
invalid or unenforceable under present or future laws, such
provision shall be fully severable, shall not impair or
invalidate the remainder of this Agreement and the effect
thereof shall be confined to the provision held to be
illegal, invalid or unenforceable.
(i) No Obligation. Nothing contained herein shall be
construed as an obligation on the part of Secured Party to
extend or continue to extend credit to Borrower.
(j) Notices. All notices, requests, demands or other
communications required or permitted to be given pursuant to
this Agreement shall be in writing and given by (i) personal
delivery, (ii) expedited delivery service with proof of
delivery, or (iii) United
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States mail, postage prepaid, registered or certified,
return receipt requested, sent to the intended addressee at
the address set forth on the signature page hereof or to
such different address as the addressee shall have
designated by written notice sent pursuant to the terms
hereof and shall be deemed to have been received either, in
the case of personal delivery, at the time of personal
delivery, in the case of expedited delivery service, as the
date of first attempted delivery at the address and in the
manner provided herein, or in the case of mail, upon deposit
in a depository receptacle under the care and custody of the
United States Postal Service. Either party shall have the
right to change his or its address for notice hereunder to
any other location within the continental United States by
notice to the other party of such new address at least
thirty (30) days prior to the effective date of such new
address.
(k) Binding Effect and Assignment. This Agreement (i)
creates a continuing security interest in the Collateral,
(ii) shall be binding on Debtor and the heirs, executors,
administrators and personal representatives of Debtor, and
(iii) shall inure to the benefit of Secured Party and its
successors and assigns. Without limiting the generality of
the foregoing, Secured Party may pledge, assign or otherwise
transfer the Indebtedness and its rights under this
Agreement and any of the other loan Documents to nay other
party. Debtor's rights and obligations hereunder may not be
assigned or otherwise transferred without the prior written
consent of Secured Party.
(l) Termination. Upon the satisfaction in full of the
Indebtedness, or written release or termination delivered by
Secured Party to Debtor, this Agreement and the security
interests created hereby shall terminate. Upon termination
of this Agreement and Debtor's written request, Secured
Party will, at Debtor's sole cost and expense, return to
Debtor such of the Collateral as shall not have been sold or
otherwise disposed of or applied pursuant to the terms
hereof and execute and deliver to Debtor such documents as
Debtor shall reasonably request to evidence such
termination.
(m) Cumulative Rights. All rights and remedies of
Secured Party hereunder are cumulative of each other and of
every other right or remedy which Secured Party may
otherwise have at law or in equity or under any of the other
Loan Documents, and the exercise of one or more of such
rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of any other rights or
remedies.
(n) Gender and Number. Within this Agreement, words of
any gender shall be held and construed to include the other
gender, and words in the singular number shall be held and
construed to include the plural and words in the plural
number shall be held and construed to include the singular,
unless in each instance the context requires otherwise.
Page 14
<PAGE>
(o) Descriptive Headings. The headings in this
Agreement are for convenience only and shall in no way
enlarge, limit or define the scope or meaning of the various
and several provisions hereof.
EXECUTED as of the date first written above.
Debtor's Address: DEBTOR:
------------------
10711 Preston Road, Suite 250
Dallas, Texas 75230 RX-PRO.COM, INC.,
a Texas corporation
By:/s/ Jim Moncrief
-----------------------
Jim Moncrief, President
Secured Party's Address: BANK:
---------------------------------------------
Bank of Texas, N.A.
5956 Sherry Lane, Suite 1100 BANK OF TEXAS, N.A.
Dallas, Texas 75225
Attention: David J. Broussard, Jr.
Senior Vice President By:/s/ Frank A. Sewell, IV
------------------------
Frank A. Sewell, IV
Banking Officer
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