<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)
AMERICAN HEALTHCHOICE, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001
(Title of Class of Securities)
02592910
(CUSIP Number)
JERRY D. KENNETT, M.D.
401 KEENE STREET
COLUMBIA, MO 65201
(573) 876-1689
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
MAY 31, 1996
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ ].
Page 1 of 52 Pages
Index to Exhibits on Page 10
<PAGE>
This Amendment No. 3 supplements and amends the Statement on Schedule 13D
filed on March 18, 1996 (the "Schedule 13D") by Michael S. Baskauskas, John A.
Crouch, M.D., Earl L. Jennings, Jr., Jerry D. Kennett, M.D., Merlin Kirby, M.D.,
Charles E. McDowell, H. Jerry Murell, M.D. and Kurt E. Starnes. Capitalized
terms used herein which are not otherwise defined are so used with the
respective meanings ascribed to them in the Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
-------------------------------------------------
Item 3 is hereby amended by adding the following two paragraphs after the
second paragraph thereof.
On May 31, 1996, the Remaining Option Holders exercised an option
granted pursuant to the Stock Option Agreement to purchase 333,333 shares
of Common Stock (the "First Option") and, in connection therewith, paid to
the Company an aggregate exercise price equal to $750,000 (less the
$100,000 nonrefundable option fee previously paid to the Company on March
18, 1996 (the "First Option Fee")) as follows: (i) Jerry D. Kennett, M.D.
paid $328,125 (less $43,750, constituting the portion of the First Option
Fee paid by him) in respect of 145,833 shares of Common Stock issuable upon
exercise of the First Option; (ii) John A. Crouch, M.D. paid $249, 975
(less $33,330, constituting the portion of the First Option Fee paid by
him) in respect of 111,100 shares of Common Stock issuable upon exercise of
the First Option; (iii) Merlin Kirby, M.D. paid $85,950 (less $11,460,
constituting the portion of the First Option Fee paid by him) in respect of
38,200 shares of Common Stock issuable upon exercise of the First Option;
and (iv) H. Jerry Murrell, M.D. paid $85,950 (less $11,460, constituting
the portion of the First Option Fee paid by him) in respect of 38,200
shares of Common Stock issuable upon exercise of the First Option. On May
31, 1996, in accordance with the terms of the Stock Option Agreement the
Remaining Option Holders also paid to the Company a non-refundable option
fee in the amount of $100,000, as follows: (i) Jerry D. Kennett, M.D. paid
$43,750 of such fee; (ii) John A. Crouch M.D. paid $33,330 of such fee;
(iii) Merlin Kirby, M.D. paid $11,460 of such fee; and (iv) H. Jerry
Murrell, M.D. paid $11,460 of such fee.
The foregoing amounts paid by Jerry D. Kennett, M.D. were obtained
from his personal funds and borrowings pursuant to a promissory note, dated
May 31, 1996 (the "Kennett Promissory Note"), with NationsBank, N.A.
("NationsBank"). The foregoing amounts paid by John A. Crouch were obtained
from his personal funds and borrowings pursuant to a promissory note, dated
May 30, 1996 (the "Crouch Promissory Note"), with Boone County National
Bank ("BCNB"). The foregoing amounts paid by Merlin Kirby, M.D. were
obtained from his personal funds. The foregoing amounts paid by H. Jerry
Murrell, M.D. were obtained from
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his personal funds and borrowings pursuant to a promissory note, dated May
28, 1996 (the "Murrell Promissory Note"), with First National Bank & Trust
Co. ("First National"). Copies of the Kennett Promissory Note, the Crouch
Promissory Note and the Murrell Promissory Note are attached as Exhibits 4,
5 and 6, respectively, hereto and incorporated herein by this reference.
ITEM 4. PURPOSE OF TRANSACTION.
----------------------
Item 4 is hereby amended by deleting the last paragraph thereof and
substituting therefor the following two paragraphs:
The principal purpose of each of the Remaining Option Holders in
exercising the First Option was to acquire direct ownership of a
substantial number of shares of Common Stock in accordance with the terms
of the Stock Option Agreement.
The Remaining Option Holders reserve the right at any time and from
time to time to acquire additional shares of Common Stock upon exercise of
the options granted pursuant to the Stock Option Agreement or otherwise, to
dispose of any shares of Common Stock so acquired or to take any other
action with respect to the Company or any of its securities in any manner
permitted by law. There can be no assurance as to whether any such
transaction or action will be consummated or taken or as to the possible
timing or terms thereof.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
------------------------------------
Item 5 is hereby amended by deleting the second, third and fourth
paragraphs thereof and substituting therefor the following three paragraphs:
Immediately following the issuance of the shares of Common Stock
issuable upon exercise of the First Option, and by reason of the remaining
options granted pursuant to the Stock Option Agreement and the provisions
of the Initial Allocation Agreement (as defined below) and the Second
Allocation Agreement (as defined below): (i) Jerry D. Kennett, M.D. will
beneficially own 346,726 shares of Common Stock (including 200,893 shares
purchasable upon the exercise of the remaining options granted pursuant to
the Stock Option Agreement) or 4.6% of the total number of shares of Common
Stock outstanding; (ii) John A. Crouch, M.D. will beneficially own 264,146
shares of Common Stock (including 153,046 shares purchasable upon the
exercise of the remaining options granted pursuant to the Stock Option
Agreement) or 3.5% of the total number of shares of Common Stock
outstanding; (iii) Merlin Kirby, M.D. will beneficially own 90,822 shares
of Common Stock (including 52,622 shares purchasable upon the exercise of
the remaining options granted pursuant to the Stock Option Agreement) or
1.2% of the number of shares of Common Stock outstanding;
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and (iv) H. Jerry Murrell, M.D. will beneficially own 90,822 shares of
Common Stock (including 52,622 shares purchasable upon the exercise of the
remaining options granted pursuant to the Stock Option Agreement) or 1.2%
of the number of shares of Common Stock outstanding. Each of Jerry D.
Kennett, M.D., John A. Crouch, M.D., Merlin Kirby, M.D. and H. Jerry
Murrell, M.D. (collectively, the "Remaining Option Holders") will have sole
power to vote and dispose of the shares of Common Stock acquired by him
upon exercise of the First Option or any of the remaining options granted
pursuant to the Stock Option Agreement and the right to receive any
dividends from, or the proceeds from the sale of, all such shares of Common
Stock.
As a result of the Stock Option Agreement, the Initial Allocation
Agreement and the Second Allocation Agreement, the Remaining Option Holders
may be deemed to constitute a "group" within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, and,
accordingly, each of the Remaining Option Holders may be deemed to be the
beneficial owner of all of the 792,516 shares of Common Stock beneficially
owned by the Remaining Option Holders in the aggregate or 10.6% of the
total number of shares of Common Stock outstanding.
The percentages set forth in the preceding paragraphs are based on
7,482,517 shares of Common Stock outstanding (including (i) 6,690,001
shares of Common Stock actually outstanding prior to the exercise of the
First Option, based on information previously provided by the Company to
the Remaining Option Holders, (ii) 333,333 shares of Common Stock to be
issued in respect of the exercise of the First Option, and (iii) 459,183
shares of Common Stock issuable upon exercise of the remaining options
granted pursuant to the Stock Option Agreement).
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO THE SECURITIES
OF THE ISSUER.
--------------------------------------------
Item 6 is hereby amended by adding the following paragraphs to the end
thereof:
In connection with his borrowings under the Kennett Promissory Note,
pursuant to a pledge agreement, dated May 31, 1996 (the "Kennett Pledge
Agreement"), Jerry D. Kennett, M.D. has pledged to NationsBank, as security
for the repayment of such borrowings, the shares of Common Stock to be
issued to him as a result of the exercise of the First Option. In
connection with his borrowings under the Crouch Promissory Note, pursuant
to a pledge agreement, dated May 30, 1996 (the "Crouch Pledge Agreement),
John A. Crouch M.D. has pledged to BCNB, as security for the repayment of
such borrowings, the shares of Common Stock to be issued to him as a result
of the exercise
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of the First Option. In connection with his borrowings under the Murrell
Promissory Note, pursuant to a pledge agreement, dated May 28, 1996 (the
"Murrell Pledge Agreement), H. Jerry Murrell, M.D. has pledged to First
National, as security for the repayment of such borrowings, the shares of
Common Stock to be issued to him as a result of the exercise of the First
Option. Copies of the Kennett Pledge Agreement, the Crouch Pledge Agreement
and the Murrell Pledge Agreement are attached as Exhibits 7, 8 and 9,
respectively, hereto and incorporated herein by this reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
--------------------------------
Item 7 is hereby amended by adding the following exhibits:
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- --------------------
<S> <C>
4 Kennett Promissory Note
5 Crouch Promissory Note
6 Murrell Promissory Note
7 Kennett Pledge Agreement
8 Crouch Pledge Agreement
9 Murrell Pledge Agreement
</TABLE>
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief, each
of the undersigned certifies that the information set forth in this Statement is
true, complete and correct and agrees that this Statement may be jointly filed
on behalf of him and each of the other persons signing this Statement.
Date: June 7, 1996 /s/ John A. Crouch, M.D.
-----------------------------------
John A. Crouch, M.D.
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief, each
of the undersigned certifies that the information set forth in this Statement is
true, complete and correct and agrees that this Statement may be jointly filed
on behalf of him and each of the other persons signing this Statement.
Date: June 5, 1996 /s/ Jerry D. Kennett, M.D.
-----------------------------------
Jerry D. Kennett, M.D.
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief, each
of the undersigned certifies that the information set forth in this Statement is
true, complete and correct and agrees that this Statement may be jointly filed
on behalf of him and each of the other persons signing this Statement.
Date: June 5, 1996 /s/ Merlin Kirby, M.D.
-----------------------------------
Merlin Kirby, M.D.
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief, each
of the undersigned certifies that the information set forth in this Statement is
true, complete and correct and agrees that this Statement may be jointly filed
on behalf of him and each of the other persons signing this Statement.
Date: June 6, 1996 /s/ H. Jerry Murrell, M.D.
-----------------------------------
H. Jerry Murrell, M.D.
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<PAGE>
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NO. DESCRIPTION PAGE NO.
- ------- -------------------------------- ----------
<S> <C> <C>
4 Kennett Promissory Note 11
5 Crouch Promissory Note 20
6 Murrell Promissory Note 24
7 Kennett Pledge Agreement 27
8 Crouch Pledge Agreement 39
9 Murrell Pledge Agreement 42
</TABLE>
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<PAGE>
EXHIBIT 4
---------
NationsBank, N.A.
Term Note
Date: May 31, 1996 Amount: $600,000.00
Maturity Date: December 31, 1996
in Favor of
Bank:
NationsBank, N.A. (the "Bank" or "Lender")
Banking Center:
Private Banking
Representative Office
767 Fifth Avenue
6th Floor
New York, NY 10153-0083
From
Borrower:
Jerry D. Kennett, M.D.
2801 Peppertree Lane
Columbia, Missouri 65201
Jerry D. Kennett, M.D., P.C.
2801 Peppertree Lane
Columbia, Missouri 65201
collectively (the "Borrower")
NationsBank Promissory Note
New York 3/95
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<PAGE>
NationsBank, N.A.
FOR VALUE RECEIVED, the undersigned Borrower unconditionally, jointly and
severally promises to pay to the order of NationsBank, N.A. (the "Bank" of
"Lender"), its successors and assigns, without setoff, at its offices indicated
at the beginning of this Note, or at such other place as may be designated by
Bank, the principal amount of Six Hundred Thousand and 00/100 Dollars
($600,000.00), or so much thereof as may be advanced from time to time in
immediately available funds, together with interest computed daily on the
outstanding principal balance hereunder, at an annual interest rate, and in
accordance with the payment schedule, indicated below.
1. RATE
The Rate shall be the Prime Rate, plus one-half percent (.5%), per annum. The
"Prime Rate" is the fluctuating rate of interest established by Lender from time
to time, at its discretion, whether or not such rate shall be otherwise
published. The Prime Rate is established by Lender as an index and may or may
not at any time be the best or lowest rate charged by Lender on any loan.
Notwithstanding any provision of this Note, Lender does not intend to
charge and Borrower shall not be required to pay any amount of interest or other
charges in excess of the maximum permitted by the applicable law of the State of
New York; if any higher rate ceiling is lawful, then that higher rate ceiling
shall apply. Any payment in excess of such maximum shall be refunded to
Borrower or credited against principal, at the option of Bank.
2. ACCRUAL METHOD
Interest at the Rate set forth above will be calculated by the 365/360 day
method (a daily amount of interest is computed for a hypothetical year of 360
days; that amount is multiplied by the actual number of days for which interest
is charged).
3. DAY AND METHOD OF PAYMENT
The Borrower shall make each payment of principal and interest hereunder not
later than 1:00 P.M. (New York City time) on the day when due in lawful money of
the United States of America to the Lender at its offices set forth below:
NationsBank Promissory Note
New York 3/95
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<PAGE>
NationsBank, N.A.
NationsBank, N.A.
Credit Service Center
NationsBank Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
Attn: Stephanie Davis
or
If by wire transfer: NationsBank, N.A.
Charlotte, North Carolina
ABA#053000196
Jerry D. Kennett, M.D.
Acct. No. 651033607
or at such other place as the Lender may from time to time designate, in
immediately available funds. At any time a payment is due hereunder, or is not
made when due, the Lender may charge the amount thereof to the account of the
Borrower. Whenever any payment to be made hereunder shall become due and
payable on a day which is not a business day, such payment shall be made on the
next succeeding business day and, in the case of any payment of principal, such
extension of time shall in such case be included in computing interest on such
payment.
4. PAYMENT SCHEDULE
All payments received hereunder shall be applied first to the payment of any
expense or charges payable hereunder or under any other loan documents executed
in connection with this Note, then to interest due and payable, with the balance
applied to principal, or in such other order as Lender shall determine at its
option.
Single Principal Payment. Principal shall be paid in full in a single payment
on December 31, 1996. Interest thereon shall be paid monthly, commencing on
July 1, 1996, and continuing on the first day of each successive month
thereafter, with a final payment of all unpaid interest at the stated maturity
of this Note.
5. AUTOMATIC PAYMENT
Borrower has elected to authorize Lender to effect payment of sums due under
this Note by means of debiting Borrower's account number 651033607. This
authorization shall not affect the obligation of Borrower to pay such sums when
due, without notice, if there are insufficient funds in such account to make
such payment in full on the due date thereof, or if Lender fails to debit the
account.
NationsBank Promissory Note
New York 3/95
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<PAGE>
NationsBank, N.A.
6. WAIVERS, CONSENTS AND COVENANTS. Borrower, any endorser, or guarantor
hereof or any other party hereto (individually an "Obligor" and collectively
"Obligors") and each of them jointly and severally: (a) waive presentment,
demand, protest, notice of demand, notice of intent to accelerate, notice of
acceleration of maturity, notice of protest, notice of nonpayment, notice of
dishonor, and any other notice required to be given under the law to any Obligor
in connection with the delivery, acceptance, performance, default or enforcement
of this Note, any endorsement or guaranty of this Note, any other documents
executed in connection with this Note, or any other note or other loan documents
now or hereafter executed in connection with any obligation of Borrower to
Lender (the "Loan Documents"); (b) consent to all delays, extensions, renewals
or other modifications of this Note or the Loan Documents, or waivers of any
term hereof or of the Loan Documents, or release or discharge by Lender of any
of Obligors, or release, substitution or exchange of any security for the
payment hereof, or the failure to act on the part of Lender or any indulgence
shown by Lender (without notice to or further assent from any of Obligors), and
agree that no such action, failure to act or failure to exercise any right or
remedy by Lender shall in any way affect or impair the obligations of any
Obligors or be construed as a waiver by Lender of, or otherwise affect, any of
Bank's rights under this Note, under any endorsement or guaranty of this Note or
under any of the Loan Documents; and (c) agree to pay, on demand, all costs and
expenses of collection of this Note or of any endorsement or guaranty hereof
and/or the enforcement of Bank's rights with respect to, or the administration,
supervision, preservation, protection of, or realization upon, any property
securing payment hereof, including, without limitation, reasonable attorney's
fees, including fees related to any suit, mediation or arbitration proceeding,
out of court payment agreement, trial, appeal, bankruptcy proceedings or other
proceeding, in the amount of 15% of the outstanding balance due under this Note.
7. PREPAYMENTS. Prepayments may be made in whole or in part at any time on
any loan for which the Rate is based on the Prime Rate. All prepayments of
principal shall be applied in the inverse order of maturity, or in such other
order as Bank shall determine in its sole discretion.
8. DELINQUENCY CHARGE. To the extent permitted by law, a delinquency charge
may be imposed in an amount not to exceed four percent (4%) of the unpaid
portion of any payment that is more than fifteen days late. Unless the terms of
this Note call for repayment of the entire balance of this Note (both principal
and interest) in a single payment and not for installments of interest or
principal and interest, the 4% delinquency charge may be imposed not only with
respect to regular installments of
NationsBank Promissory Note
New York 3/95
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<PAGE>
NationsBank, N.A.
principal or interest or principal and interest, but also with respect to any
other payment in default under this Note (other than a previous delinquency
charge), including without limitation a single payment of principal due at the
maturity of this Note. In the event any installment, or portion thereof, is not
paid in a timely manner, subsequent payments will be applied first to the past
due balance (which shall not include any previous delinquency charges),
specifically to the oldest maturing installment, and a separate delinquency
charge will be imposed for each payment that becomes due until the default is
cured.
9. EVENTS OF DEFAULT. The following are events of default hereunder: (a) the
failure to pay or perform any obligation, liability or indebtedness of any
Obligor to Bank, or to any affiliate or subsidiary of NationsBank Corporation,
whether under this Note or any Loan Documents, as and when due (whether upon
demand, at maturity or by acceleration); (b) the failure to pay or perform any
other obligation, liability or indebtedness of any Obligor to any other party;
(c) the death of any Obligor (if an individual), (d) the commencement of a
proceeding against any Obligor for dissolution or liquidation, the voluntary or
involuntary termination or dissolution of any Obligor or the merger or
consolidation of any Obligor with or into another entity; (e) the insolvency of,
the business failure of, the appointment of a custodian, trustee, liquidator or
receiver for or for any of the property of, the assignment for the benefit of
creditors by, or the filing of a petition under bankruptcy, insolvency or
debtor's relief law or the filing of a petition for any adjustment of
indebtedness, composition or extension by or against any Obligor; (f) the
determination by Lender that any representation or warranty made to Lender by
any Obligor in any Loan Documents or otherwise is or was, when it was made,
untrue or materially misleading; (g) the failure of any Obligor to timely
deliver such financial statements, including tax returns, other statements of
condition or other information, as Lender shall request from time to time; (h)
the entry of a judgment against any Obligor which Lender deems to be of a
material nature, in Bank's sole discretion; (i) the seizure or forfeiture of, or
the issuance of any writ of possession, garnishment or attachment, or any
turnover order for any property of any Obligor; (j) the determination by Lender
that it is insecure for any reason; (k) the determination by Lender that a
material adverse change has occurred in the financial condition of any Obligor;
or, (l) the failure of Borrower's business to comply with any law or regulation
controlling its operation.
10. REMEDIES UPON DEFAULT. Whenever there is a default under this Note (a) the
entire balance outstanding hereunder and all other obligations of any Obligor to
Lender (however acquired or evidenced) shall, at the option of Bank, become
immediately due
NationsBank Promissory Note
New York 3/95
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<PAGE>
NationsBank, N.A.
and payable and any obligation of Lender to permit further borrowing under this
Note shall immediately cease and terminate, and/or (b) to the extent permitted
by law, the Rate of interest on the unpaid principal shall be increased at
Bank's discretion up to the maximum rate allowed by law, or if none, 25% per
annum (the "Default Rate"). The provisions herein for a Default Rate shall not
be deemed to extend the time for any payment hereunder or to constitute a "grace
period" giving the Obligors a right to cure any default. At Bank's option, any
accrued and unpaid interest, fees or charges may, for purposes of computing and
accruing interest on a daily basis after the due date of the Note or any
installment thereof, be deemed to be a part of the principal balance, and
interest shall accrue on a daily compounded basis after such date at the Default
Rate provided in this Note until the entire outstanding balance of principal and
interest is paid in full. Lender is hereby authorized at any time to set off and
charge against any deposit accounts of any Obligor, as well as any money,
instruments, securities, documents, chattel paper, credits, claims, demands,
income and any other property, rights and interests of any Obligor which at any
time shall come into the possession or custody or under the control of Lender or
any of its agents, affiliates or correspondents, without notice or demand, any
and all obligations due hereunder. Additionally, Lender shall have all rights
and remedies available under each of the Loan Documents, as well as all rights
and remedies available at law or in equity.
11. NON-WAIVER. The failure at any time of Lender to exercise any of its
options or any other rights hereunder shall not constitute a waiver thereof, nor
shall it be a bar to the exercise of any of its options or rights at a later
date. All rights and remedies of Lender shall be cumulative and may be pursued
singly, successively or together, at the option of Bank. The acceptance by
Lender of any partial payment shall not constitute a waiver of any default or of
any of Bank's rights under this Note. No waiver of any of its rights hereunder,
and no modification or amendment of this Note, shall be deemed to be made by
Lender unless the same shall be in writing, duly signed on behalf of Bank; and
each such waiver shall apply only with respect to the specific instance
involved, and shall in no way impair the rights of Lender or the obligations of
Obligor to Lender in any other respect at any other time.
12. APPLICABLE LAW, VENUE AND JURISDICTION. This Note and the rights and
obligations of Borrower and Lender shall be governed by and interpreted in
accordance with the law of the State of New York. In any litigation in
connection with or to enforce this Note or any endorsement or guaranty of this
Note or any Loan Documents, except as expressly provided in any such Loan
Document, Obligors, and each of them, irrevocably consent to and
NationsBank Promissory Note
New York 3/95
-6-
<PAGE>
NationsBank, N.A.
confer personal jurisdiction on the courts of the State of New York or the
United States located within the State of New York and expressly waive any
objections as to venue in any such courts. Nothing contained herein shall,
however, prevent Lender from bringing any action or exercising any rights within
any other state or jurisdiction or from obtaining personal jurisdiction by any
other means available under applicable law.
13. PARTIAL INVALIDITY. The unenforceability or invalidity of any provision of
this Note shall not affect the enforceability or validity of any other provision
herein and the invalidity or unenforceability of any provision of this Note or
of the Loan Documents to any person or circumstance shall not affect the
enforceability or validity of such provision as it may apply to other persons or
circumstances.
14. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR
ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY
TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING AN ACTION, INCLUDING A
SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR
CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH
ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN NEW YORK COUNTY
AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS
UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE
AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE
COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR
SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF
SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL BE
DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR
DOCUMENT; OR (II) BE A WAIVER BY THE Lender OF THE PROTECTION AFFORDED TO IT BY
12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW;
NationsBank Promissory Note
New York 3/95
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<PAGE>
OR (III) LIMIT THE RIGHT OF THE Lender HERETO (A) TO EXERCISE SELF HELP REMEDIES
SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR
PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR
ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF
POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE Lender MAY EXERCISE SUCH SELF
HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR
ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION
PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER
THIS EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN
ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A
WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
15. BINDING EFFECT. This Note shall be binding upon and inure to the benefit
of Borrower, Obligors and Lender and their respective successors, assigns, heirs
and personal representatives, provided, however, that no obligations of the
Borrower or the Obligors hereunder can be assigned without prior written consent
of Bank.
16. CONTROLLING DOCUMENT. To the extent that this Note conflicts with or is in
any way incompatible with any other Loan Document concerning this obligation,
the Note shall control over any other document, and if the Note does not address
an issue, then the Loan Document shall control to the extent that it deals most
specifically with an issue.
17. FINAL AGREEMENT: THIS WRITTEN TERM NOTE AND ANY OTHER RELATED LOAN
DOCUMENTS CONSTITUTE THE ENTIRE AND FINAL AGREEMENT BETWEEN THE PARTIES, AND
SUPERSEDE ALL PRIOR WRITTEN AGREEMENTS AND ALL PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES REGARDING ALL ISSUES ADDRESSED IN
THOSE LOAN DOCUMENTS.
/s/ Jerry D. Kennett, M.D.
-----------------------------------
Jerry D. Kennett, M.D.
Jerry D. Kennett, M.D., P.C.
By: /s/ Jerry D. Kennett, M.D.
-----------------------------------
Jerry D. Kennett, M.D.,
President
NationsBank Promissory Note
New York 3/95
-8-
<PAGE>
NationsBank, N.A.
STATE OF MISSOURI )
) ss.:
COUNTY OF BOONE )
On May 31, 1996 before me personally came Jerry D. Kennett, M.D. to me known,
who, by me duly sworn, did depose and say that he resides at Columbia, Missouri;
that he is the President of Jerry D. Kennett, M.D., P.C., the corporation
described in, and which executed the foregoing instrument; and that he signed
his name thereto by authority of the Board of Directors of said corporation.
/s/ Signature Illegible
-----------------------------------
STATE OF MISSOURI )
) ss.:
COUNTY OF BOONE )
On this 31st day of May, 1996, before me personally came Jerry D. Kennett,
M.D., to me known and known to me to be the individual described in and who
executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Signature Illegible
-----------------------------------
NationsBank Promissory Note
New York 3/95
-9-
<PAGE>
EXHIBIT 5
---------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
JOHN A. CROUCH, M.D. BOONE COUNTY NATIONAL BANK Loan Number _________________________________
806 AUDUBON DRIVE 720 E. BROADWAY - P.O. BOX 678 Date MAY 30, 1996
COLUMBIA, MO 65201 COLUMBIA, MO 65205 ----------------------------------------
Maturity Date JUNE 29, 1996
--------------------------------
Loan Amount $ 250,000.00
----------------------------------
Renewal Of __________________________________
BORROWER'S NAME AND ADDRESS LENDER'S NAME AND ADDRESS SSN/TIN: WMS/TAC
"I" includes each borrower above, joint and "You" means the lender, its
severally. successors and assigns.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of TWO HUNDRED FIFTY
------------------
THOUSAND AND NO/100* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
- --------------------------------------------------------------------------------
* Dollars $ 250,000.00
- -- -----------
[X] Single Advance: I will receive all of this principal sum on MAY 30, 1996.
--------------
No additional advances are contemplated under this note.
[ ] Multiple Advance: The principal sum shown above is the maximum amount of
principal I can borrow under this note. On _______________________________
____________________ I will receive the amount of $_______________________
__________________________ and future principal advances are contemplated.
Conditions: The conditions for future advances are _______________________
__________________________________________________________________________
__________________________________________________________________________
[ ] Open End Credit: You and I agree that I may borrow up to the maximum
amount of principal more than one time. This feature is subject to
all other conditions and expires on ______________________________.
[X] Closed End Credit: You and I agree that I may borrow up to the
maximum only one time (and subject to all other conditions).
INTEREST: I agree to pay interest on the outstanding principal balance from
MAY 30, 1996 at the rate of 10.250 % per year until May 31, 1996 .
---------------- ---------- ----------------
[X] Variable Rate: This rate may then change as stated below.
[X] Index Rate: The future rate will be 2.000% OVER the following
--------------
index rate: CITIBANK OF NEW YORK PRIME LENDING RATE
-----------------------------------------------
__________________________________________________________________________
[ ] No Index: The future rate will not be subject to any internal or
external index. It will be entirely in your control.
[X] Frequency and Timing: The rate on this note may change as often as
DAILY
---------------------------------------------------------------------
A change in the interest rate will take effect ON THE SAME DAY .
--------------------
[ ] Limitations: During the term of this loan, the applicable annual
interest rate will not be more than ___________ % or less than
_______________________%. The rate may not change more than _______
% each ___________________________ .
Effect of Variable Rate: A change in the interest rate will have the
following effect on the payments:
[ ] The amount of each scheduled payment will change. [ ] The amount
of the final payment will change.
[X] THE AMOUNT DUE AT MATURITY WILL CHANGE.
----------------------------------------------------------------------
ACCRUAL METHOD: Interest will be calculated on a ACTUAL/365 basis.
----------------------
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note
owing after maturity, and until paid in full, as stated below:
[ ] on the same fixed or variable rate basis in effect before maturity
(as indicated above).
[ ] at a rate equal to _________________________________________________.
[ ] LATE CHARGE: If a payment is made more than _________ days after it is
due, I agree to pay a late charge of _____________________________________
__________________________________________________________________________
[ ] ADDITIONAL CHARGES: In addition to interest, I agree to pay the following
charges which [ ] are [ ] are not included in the principal amount above:
__________________________________________________________________________
PAYMENTS: I agree to pay this note as follows:
[X] Interest: I agree to pay accrued interest ON DEMAND, BUT IF NO DEMAND IS
------------------------------
MADE AT MATURITY
--------------------------------------------------------------------------
__________________________________________________________________________
[X] Principal: I agree to pay the principal ON DEMAND, BUT IF NO DEMAND IS
----------------------------------
MADE THEN ON JUNE 29, 1996
--------------------------------------------------------------------------
__________________________________________________________________________
[ ] Installments: I agree to pay this note in ________ payments. The first
payment will be in the amount of $ _______________________________________
and will be due _____________________________. A payment of _____________
will be due$ ________________________________________________thereafter.
The final payment of the entire unpaid balance of principal and interest
will be due _____________________________________________________________.
(Page 1 of 4)
<PAGE>
ADDITIONAL TERMS:
SECURITY: THIS PROMISSORY NOTE IS SECURED BY A PLEDGE AGREEMENT DATED MAY
30, 1996 ON 111,100 SHARES OF AMERICAN HEALTHCHOICE, INC. STOCK AND UCC'S
FILED IN BOONE COUNTY AND WITH SECRETARY OF STATE ON THE STOCK.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
<S> <C>
[ ] SECURITY: This note is separately secured by (describe PURPOSE: The purpose of this loan is CONSUMER: PURCHASE STOCK
separate document by type and date): --------------------------
_________________________________________________________________
(This section is for your internal use. Failure to list a SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE
separate security document does not mean the agreement will not ON PAGE 2). I have received a copy on today's date.
secure this note.)
- -----------------------------------------------------------------
</TABLE>
Signature for Lender X /s/ John A. Crouch
------------------------------
JOHN A. CROUCH, M.D.
X /s/ W. Michael Stroupe
- ----------------------------------------------- ______________________________
W. MICHAEL STROUPE, EXECUTIVE VICE PRESIDENT
_______________________________________________ ______________________________
______________________________
(Page 2 of 4)
<PAGE>
DEFINITIONS: As used on page 1, "[X]" means the terms that apply to this loan.
"I," "me" or "my" means each Borrower who signs this note and each other person
or legal entity (including guarantors, endorsers, and sureties) who agrees to
pay this note (together referred to as "us"). "You" or "your" means the Lender
and its successors and assigns.
APPLICABLE LAW: The law of the state in which you are located will govern this
note. Any term of this note which is contrary to applicable law will not be
effective, unless the law permits you and me to agree to such a variation. If
any provision of this agreement cannot be enforced according to its terms, this
fact will not affect the enforceability of the remainder of this agreement. No
modification of this agreement may be made without your express written consent.
Time is of the essence in this agreement.
PAYMENTS: Each payment I make on this note will first reduce the amount I owe
you for charges which are neither interest nor principal. The remainder of each
payment will then reduce accrued unpaid interest, and then unpaid principal. If
you and I agree to a different application of payments, we will describe our
agreement on this note. I may prepay a part of, or the entire balance of this
loan without penalty, unless we specify to the contrary on this note. Any
partial prepayment will not excuse or reduce any later scheduled payment until
this note is paid in full (unless, when I make the prepayment, you and I agree
in writing to the contrary).
INTEREST: Interest accrues on the principal remaining unpaid from time to time,
until paid in full. If I receive the principal in more than one advance, each
advance will start to earn interest only when I receive the advance. The
interest rate in effect on this note at any given time will apply to the entire
principal advanced at that time. Notwithstanding anything to the contrary, I do
not agree to pay and you do not intend to charge any rate of interest that is
higher than the maximum rate of interest you could charge under applicable law
for the extension of credit that is agreed to here (either before or after
maturity). If any notice of interest accrual is sent and is in error, we
mutually agree to correct it, and if you actually collect more interest than
allowed by law and this agreement, you agree to refund it to me.
INDEX RATE: The index will serve only as a device for setting the rate on this
note. You do not guarantee by selecting this index, or the margin, that the
rate on this note will be the same rate you charge on any other loans or class
of loans to me or other borrowers.
ACCRUAL METHOD: The amount of interest that I will pay on this loan will be
calculated using the interest rate and accrual method stated on page 1 of this
note. For the purpose of interest calculation, the accrual method will
determine the number of days in a "year." If no accrual method is stated, then
you may use any reasonable accrual method for calculating interest.
POST MATURITY RATE: For purposes of deciding when the "Post Maturity Rate"
(shown on page 1) applies, the term "maturity" means the date of the last
scheduled payment indicated on page 1 of this note or the date you accelerate
payment on the note, whichever is earlier.
SINGLE ADVANCE LOANS: If this is a single advance loan, you and I expect that
you will make only one advance of principal. However, you may add other amounts
to the principal if you make any payments described in the "PAYMENTS BY LENDER"
paragraph below.
MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I expect
that you will make more than one advance of principal. If this is closed end
credit, repaying a part of the principal will not entitle me to additional
credit.
PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I am
obligated to pay (such as property insurance premiums), then you may treat those
payments made by you as advances and add them to the unpaid principal under this
note, or you may demand immediate payment of the charges.
SET-OFF: I agree that you may set off any amount due and payable under this note
against any right I have to receive money from you.
"Right to receive money from you" means:
(1) any deposit account balance I have with you;
(2) any money owed to me on an item presented to you or in your possession
for collection or exchange; and
(3) any repurchase agreement or other nondeposit obligation.
"Any amount due and payable under this note" means the total amount of
which you are entitled to demand payment under the terms of this note at the
time you set off. This total includes any balance the due date for which you
properly accelerate under this note.
If my right to receive money from you is also owned by someone who has not
agreed to pay this note, your right of set-off will apply to my interest in the
obligation and to any other amounts I could withdraw on my sole request or
endorsement. Your right of set-off does not apply to an account or other
obligation where my rights are only as a representative. It also does not apply
to any Individual Retirement Account or other tax-deferred retirement account.
You will not be liable for the dishonor of any check when the dishonor
occurs because you set off this debt against any of my accounts. I agree to hold
you harmless from any such claims arising as a result of your exercise of your
right of set-off.
REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate or a
residence that is personal property, the existence of a default and your
remedies for such a default will be determined by applicable law, by the terms
of any separate instrument creating the security interest and, to the extent not
prohibited by law and not contrary to the terms of the separate security
instrument, by the "Default" and "Remedies" paragraphs herein.
DEFAULT: I will be in default if any one or more of the following occur: (1) I
fail to make a payment on time or in the amount due; (2) I fail to keep the
property insured, if required; (3) I fail to pay, or keep any promise, on any
debt or agreement I have with you; (4) any other creditor of mine attempts to
collect any debt I owe him through court proceedings; (5) I die, am declared
incompetent, make an assignment for the benefit of creditors, or become
insolvent (either because my liabilities exceed my assets or I am unable to pay
my debts as they become due); (6) I make any written statement or provide any
financial information that is untrue or inaccurate at the time it was provided;
(7) I do or fail to do something which causes you to believe that you will have
difficulty collecting the amount I owe you; (8) any collateral securing this
note is used in a manner or for a purpose which threatens confiscation by a
legal authority; (9) I change my name or assume an additional name without first
notifying you before making such a change; (10) I fail to plant, cultivate and
harvest crops in due season if I am a producer of crops; (11) any loan proceeds
are used for a purpose that will contribute to excessive erosion of highly
erodible land or to the conversion of wetlands to produce an agricultural
commodity, as further explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M.
REMEDIES: If I am in default on this note you have, but are not limited to, the
following remedies:
(1) You may demand immediate payment of all I owe you under this note
(principal, accrued unpaid interest and other accrued charges).
(2) You may set off this debt against any right I have to the payment of
money from you, subject to the terms of the "Set-Off" paragraph herein.
(3) You may demand security, additional security, or additional parties to
be obligated to pay this note as a condition for not using any other
remedy.
(4) You may refuse to make advances to me or allow purchases on credit by
me.
(5) You may use any remedy you have under state or federal law.
By selecting any one or more of these remedies you do not give up your right to
later use any other remedy. By waiving your right to declare an event to be a
default, you do not waive your right to later consider the event as a default if
it continues or happens again.
COLLECTION COSTS AND ATTORNEY'S FEES: I agree to pay all costs of collection,
replevin or any other or similar type of cost if I am in default. In addition,
if you hire an attorney to collect this note, I also agree to pay any fee you
incur with such attorney plus court costs (except where prohibited by law). To
the extent permitted by the United States Bankruptcy Code, I also agree to pay
the reasonable attorney's fees and costs you incur to collect this debt as
awarded by any court exercising jurisdiction under the Bankruptcy Code.
WAIVER: I give up my rights to require you to do certain things. I will not
require you to:
(1) demand payment of amounts due (presentment);
(2) obtain official certification of nonpayment (protest); or
(3) give notice that amounts due have not been paid (notice of dishonor).
I waive any defenses I have based on suretyship or impairment of
collateral.
OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if someone
else has also agreed to pay it (by, for example, signing this form or a separate
guarantee or endorsement). You may sue me alone, or anyone else who is
obligated on this note, or any number of us together, to collect this note. You
may do so without any notice that it has not been paid (notice of dishonor).
You may without notice release any party to this agreement without releasing any
other party. If you give up any of your rights, with or without notice, it will
not affect my duty to pay this note. Any extension of new credit to any of us,
or renewal of this note by all or less than all of us will not release me from
my duty to pay it. (Of course, you are entitled to only one payment in full.)
I agree that you may at your option extend this note or the debt represented by
this note, or any portion of the note or debt, from time to time without limit
or notice and for any term without affecting my liability for payment of the
note. I will not assign my obligation under this agreement without your prior
written approval.
CREDIT INFORMATION: I agree and authorize you to obtain credit information
about me from time to time (for example, by requesting a credit report) and to
report to others your credit experience with me (such as a credit reporting
agency.) I agree to provide you, upon request, any financial statement or
information you may deem necessary. I warrant that the financial statements and
information I provide to you are or will be accurate, correct and complete.
NOTICE: Unless otherwise required by law, any notice to me shall be given by
delivering it or by mailing it by first class mail addressed to me at my last
known address. My current address is on page 1. I agree to inform you in
writing of any change in my address. I will give any notice to you by mailing
it first class to your address stated on page 1 of this agreement, or to any
other address that you have designated.
Page 3 of 4)
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DATE OF PRINCIPAL BORROWER'S PRINCIPAL PRINCIPAL INTEREST INTEREST INTEREST
TRANSACTION ADVANCE INITIALS PAYMENTS BALANCE RATE PAYMENTS PAID
(not required) THROUGH:
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(Page 4 of 4
<PAGE>
EXHIBIT 6
---------
PROMISSORY NOTE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
$85,000.00 05-28-1996 08-26-1996 604183 CLC
- -------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document
to any particular loan or item.
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BORROWER: H. JERRY MURRELL LENDER: FIRST NATIONAL BANK AND TRUST COMPANY
BEVERLY R. MURRELL P.O. BOX 1867
3600 W. VAUGHTER SCHOOL ROAD COLUMBIA, MO 65205-1867
COLUMBIA, MO 65203
======================================================================================================================
</TABLE>
PRINCIPAL AMOUNT: $85,000.00 INITIAL RATE: 9.250% DATE OF NOTE: MAY 28,
1996
PROMISE TO PAY. H. JERRY MURRELL AND BEVERLY R. MURRELL ("BORROWER") PROMISE TO
PAY TO FIRST NATIONAL BANK AND TRUST COMPANY ("LENDER"), OR ORDER, IN LAWFUL
MONEY OF THE UNITED STATES OF AMERICA, THE PRINCIPAL AMOUNT OF EIGHTY FIVE
THOUSAND & 00/100 DOLLARS ($85,000.00), TOGETHER WITH INTEREST ON THE UNPAID
PRINCIPAL BALANCE FROM MAY 28, 1996, UNTIL PAID IN FULL.
PAYMENT. BORROWER WILL PAY THIS LOAN IN ONE PRINCIPAL PAYMENT OF $85,000.00
PLUS INTEREST ON AUGUST 26, 1996. THIS PAYMENT DUE AUGUST 26, 1996, WILL BE FOR
ALL PRINCIPAL AND ACCRUED INTEREST NOT YET PAID. Interest on this Note is
computed on a 365/360 simple interest basis; that is, by applying the ratio of
the annual interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal balance
is outstanding. Borrower will pay Lender at Lender's address shown above or at
such other place as Lender may designate in writing. Unless otherwise agreed or
required by applicable law, payments will be applied first to accrued unpaid
interest, then to principal, and any remaining amount to any unpaid collection
costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an independent index which is the THE NEW
YORK PRIME RATE AS PUBLISHED IN THE WALL STREET JOURNAL AND DETERMINED BY AT
LEAST 75% OF THE NATION'S 30 LARGEST BANKS (the "Index"). The Index is not
necessarily the lowest rate charged by Lender on its loans. If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute
index after notice to Borrower. Lender will tell Borrower the current Index rate
upon Borrower's request. Borrower understands that Lender may make loans based
on other rates as well. The interest rate change will not occur more often than
each DAY. THE INDEX CURRENTLY IS 8.250% PER ANNUM. THE INTEREST RATE TO BE
APPLIED TO THE UNPAID PRINCIPAL BALANCE OF THIS NOTE WILL BE AT A RATE OF 1.000
PERCENTAGE POINT OVER THE INDEX, RESULTING IN AN INITIAL RATE OF 9.250% PER
ANNUM. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject to
refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law. Except for the foregoing, Borrower may
<PAGE>
pay without penalty all or a portion of the amount owed earlier than it is due.
Early payments will not, unless agreed to by Lender in writing, relieve Borrower
of Borrower's obligation to continue to make payments under the payment
schedule. Rather, they will reduce the principal balance due.
LATE CHARGE. If a payment is 15 DAYS OR MORE LATE, Borrower will be charged
5.000% of the regularly scheduled payment.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Any representation or statement made or furnished to Lender
by Borrower or on Borrower's behalf is false or misleading in any material
respect either now or at the time made or furnished. (d) Borrower dies or
becomes insolvent, a receiver is appointed for any part of Borrower's property,
Borrower makes an assignment for the benefit of creditors, or any proceeding is
commenced either by Borrower or against Borrower under any bankruptcy or
insolvency laws. (e) Any creditor tries to take any of Borrower's property on or
in which Lender has a lien or security interest. This includes a garnishment of
any of Borrower's accounts with Lender. (f) Any of the events described in this
default section occurs with respect to any guarantor of this Note. (g) A
material adverse change occurs in Borrower's financial condition, or Lender
believes the prospect of payment or performance of the Indebtedness is impaired.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Lender may hire or pay someone
else to help collect this Note if Borrower does not pay. Borrower also will pay
Lender that amount. This includes, subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses whether or not there is a
lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law. THIS NOTE HAS BEEN DELIVERED TO
LENDER AND ACCEPTED BY LENDER IN THE STATE OF MISSOURI. IF THERE IS A LAWSUIT,
BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF BOONE COUNTY, THE STATE OF MISSOURI. THIS NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MISSOURI.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Keogh accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts.
-2-
<PAGE>
COLLATERAL. This Note is secured by A COMMERCIAL PLEDGE AND SECURITY AGREEMENT
DATED MAY 28, 1996 ON 38,200 SHARES OF AMERICAN HEALTH CHOICE, INC. STOCK.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan, or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made. The
obligations under this Note are joint and several.
PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER
AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF
THE NOTE.
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER(S)) AND US (CREDITOR) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.
BORROWER:
/s/ H. Jerry Murrell /s/ Beverly R. Murrell
- ------------------------------- -----------------------------------
H. JERRY MURRELL BEVERLY R. MURRELL
-3-
<PAGE>
EXHIBIT 7
---------
STOCK PLEDGE AGREEMENT
----------------------
This Stock Pledge Agreement (the "Agreement") is made and entered into
as of this 31st day of May, 1996 by and between Jerry D. Kennett, M.D. (an
individual) ("Dr. Kennett") and Jerry D. Kennett, M.D., P.C., a Missouri
Professional Corporation (each a "Pledgor" and collectively the "Pledgors") and
NationsBank, N.A., a national banking association (the "Lender" or the "Secured
Party").
W I T N E S S E T H:
-------------------
WHEREAS, the Secured Party has agreed to provide to the Pledgors a
certain term loan in the principal amount of $600,000 ("Term Loan") evidenced by
a promissory note executed by Pledgors in favor of the Lender dated even date
herewith ("Term Note") and
WHEREAS, Pledgor desires to pledge and grant to the Lender to secure
the timely payment of the Term Loan and all other indebtedness due Lender
pursuant to the Term Note and hereunder and performance of the Pledgors'
obligations pursuant to the Term Note a security interest in 145,833 shares of
the issued and outstanding common stock of American HealthChoice, Inc. (the
"Pledged Stock"); and
WHEREAS, Pledgor will materially benefit from the Term Loan and
advances made, pursuant to the Term Note;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows.
1. Pledge of Stock; Other Collateral.
---------------------------------
(a) As collateral security for the payment and performance of all
debts, obligations or liabilities now or hereafter existing, absolute or
contingent, of Pledgors to Lender under the Term Loan and all other indebtedness
payable to this Secured Party pursuant to the Term Note or this Agreement
("Indebtedness") (collectively, the "Secured Obligations"), and subject to
Section 10 hereof, the Pledgors hereby pledge and collaterally assign to the
Secured Party, and grant to the Secured Party pursuant to the New York Uniform
Commercial Code (the "UCC") a first priority security interest in the Pledged
Stock and all of the following:
(i) all cash, securities, dividends, rights, and other property
at any time and from time to time declared or distributed in
respect of or in exchange for any or all of the Pledged
Stock; and
(ii) all other property hereafter delivered to the Secured Party
in substitution for or in addition to any of the foregoing,
all certificates and instruments representing or evidencing
such property and all cash, securities, interest, dividends,
rights, and other property at any
<PAGE>
time and from time to time declared or distributed in
respect of or in exchange for any or all of the Pledged
Stock.
All such Pledged Stock, certificates, instruments, cash, securities, interest,
dividends, rights and other property referred to in this Section 1, are herein
collectively referred to as the "Collateral." All of the Pledged Stock is
currently owned by the Pledgors and represented by the stock certificates listed
on Schedule 1 to be appended hereto, which stock certificates, with stock powers
----------
duly executed in blank by Pledgor, are being delivered to the Secured Party
simultaneously herewith.
(b) The Pledgor agrees to deliver all the Collateral to the Agent at
such location as the Agent shall from time to time designate by written notice
pursuant to Section 19 hereof for its custody at all times until termination of
this Agreement, together with such instruments of assignment and transfer as
requested by the Secured Party.
(c) All advances, charges, costs and expenses, including reasonable
attorneys, fees, incurred or paid by the Secured Party in exercising any right,
power or remedy conferred by this Agreement, or in the enforcement thereof,
shall become a part of the Secured Obligations secured hereunder and shall be
paid to the Secured Party for the benefit of the Secured Party by Pledgor
immediately upon demand therefor, with interest thereon until paid in full at
the Interest Rate set forth in the Term Note.
2. Status of Pledged Stock. Each Pledgor hereby represents and warrants
-----------------------
to the Secured Party that (i) all of the shares of Pledged Stock are validly
issued and outstanding, fully paid and nonassessable and constitute all the
issued and outstanding shares of common stock of American Health Choice, Inc.
owned by Pledgors (excluding options to purchase additional shares of common
stock of American HealthChoice, Inc. pursuant to that certain Letter Agreement,
dated March 8, 1996, among American HealthChoice, Inc. and the optionees named
therein ("Option Agreement"), (ii) each Pledgor is the registered and record and
beneficial owner of its Pledged Stock, free and clear of all liens, charges,
equities, encumbrances and restrictions on pledge or transfer (other than the
pledge hereunder and applicable restrictions pursuant to federal and state
securities laws, (iii) it has full corporate power, legal right and lawful
authority to execute this Agreement and to pledge, assign and transfer its
Pledged Stock in the manner and form hereof, and (iv) the pledge, assignment and
delivery of its Pledged Stock to the Secured Party pursuant to this Agreement
creates a valid and perfected first priority security interest in such Pledged
Stock, securing the payment of the Secured Obligations, assuming continuous and
uninterrupted possession thereof by the Secured Party. Except as otherwise
expressly provided herein, none of the Pledged Stock (nor any interest therein
or thereto) shall be sold, transferred or assigned without the Secured Party's
prior written consent, which may be withheld for any reason. Each Pledgor
covenants with the Secured Party that it shall at all times cause the Pledged
Stock to be represented by the certificates now and hereafter delivered to the
Secured Party in accordance with Section 1 hereof.
3. Preservation and Protection of Collateral.
-----------------------------------------
-2-
<PAGE>
(a) The Secured Party shall be under no duty or liability with
respect to the collection, protection or preservation of the Collateral, or
otherwise, beyond the use of reasonable care in the custody and preservation
thereof while in its possession.
(b) Each Pledgor agrees to pay when due all taxes, charges, liens and
assessments against the Collateral, unless being contested in good faith by
appropriate proceedings diligently conducted and against which adequate reserves
have been established in accordance with GAAP applied on a consistent basis.
Upon the failure of any Pledgor to so pay or contest such taxes, charges, liens
or assessments, the Secured Party at its option may pay or contest any of them
(the Secured Party having the sole right to determine the legality or validity
and the amount necessary to discharge such taxes, charges liens or assessments).
4. Default. Should Pledgors fail to pay the Lender all Secured
-------
Obligations as of the end of the Business Day on which such Secured Obligations
become due and payable and after the expiration of all grace or cure periods, if
any, and all extensions or waivers, if any, and should such failure continue, or
should any other Event of Default set forth in the Term Note occur and be
continuing, or should such Pledgor fail otherwise to comply with the terms
hereof (any of the foregoing an "Event of Default"), the Secured Party is given
full power and authority, then or at any time thereafter, to sell, assign and
deliver or collect the whole or any part of the Collateral, or any substitute
therefor or any addition thereto, in one or more sales, with or without any
previous demands or demand of performance or, to the extent permitted by law,
notice or advertisement, in such order as the Secured Party may elect; and any
such sale may be made either at public or private sale at the Secured Party's
place of business or elsewhere, either for cash or upon credit or for future
delivery, at such price as the Secured Party may reasonably deem fair; and the
Secured Party may be the purchaser of any or all Collateral so sold and hold the
same thereafter in its own right free from any claim of Pledgors or right of
redemption. Demands of performance, advertisements and presence of property and
sale and notice of sale are hereby waived to the extent permissible by law. Any
sale hereunder may be conducted by an auctioneer or any officer or agent of the
Secured Party. Pledgors recognize that the Secured Party may be unable to effect
a public sale of the Collateral by reason of certain prohibitions contained in
the Securities Act of 1933, as amended (the "Securities Act"), and applicable
state law, and may be otherwise delayed or adversely affected in effecting any
sale by reason of present or future restrictions thereon imposed by governmental
authorities, and that as a consequence of such prohibitions and restrictions the
Secured Party may be compelled (i) to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire the Pledged Stock for their own account, for investment and not with
a view to the distribution or resale thereof, or (ii) to seek regulatory
approval of any proposed sale or sales, or (iii) to limit the amount of
Collateral sold to any Person or group. Each Pledgor agrees and acknowledges
that private sales so made may be at prices and upon terms less favorable to
Pledgors than if such Collateral was sold either at public sales or at private
sales not subject to other regulatory restrictions, and that the Secured Party
has no obligation to delay the sale of any of the Collateral for the period of
time necessary to permit the issuer of such Collateral to register or otherwise
qualify them, even if such issuer would agree to register or otherwise qualify
such Collateral for
-3-
<PAGE>
public sale under the Securities Act or applicable state law. Each Pledgor
further agrees, to the extent permitted by applicable law, that the use of
private sales made under the foregoing circumstances to dispose of the
Collateral shall be deemed to be dispositions in a commercially reasonable
manner. Each Pledgor hereby acknowledges that a ready market may not exist for
the Pledged Stock if it is not then traded on a national securities exchange or
quoted on an automated quotation system and agrees and acknowledges that in such
event the Pledged Stock may be sold for an amount less than a pro rata share of
the fair market value of the issuer's assets minus its liabilities. In addition
to the foregoing, the Secured Party may exercise such other rights and remedies
as may be available under the Term Note, at law (including without limitation
the UCC) or in equity.
5. Proceeds of Sale. The proceeds of the sale of any of the Collateral
----------------
and all sums received or collected from or on account of such Collateral shall
be applied to the payment of expenses incurred or paid by the Secured Party in
connection with any sale, transfer or delivery of the Collateral, to the payment
of any other costs, charges, reasonable attorneys' fees or expenses mentioned
herein, and to the payment of the Secured Obligations or any part thereof, all
in such order and manner as the Secured Party may determine and as permitted by
applicable law and regulation. The Secured Party shall, upon satisfaction in
full of all such Secured Obligations, pay any balance to Pledgors.
6. Presentments, Etc. The Secured Party shall not be under any duty or
------------------
obligation whatsoever to make or give any presentments, demands for
performances, notices of nonperformance, protests, notice of protest or notice
of dishonor in connection with any obligations or evidences of Indebtedness held
thereby as collateral, or in connection with any obligations or evidences of
Indebtedness which constitute in whole or in part the Secured Obligations
secured hereunder
7. Attorney-in-Fact. Each Pledgor hereby appoints the Agent as such
----------------
Pledgor's attorney-in-fact for the purposes of carrying out the provisions of
this Agreement and taking any action and executing any instrument which the
Secured Party may deem necessary or advisable to accomplish the purposes hereof,
which appointment is irrevocable and coupled with an interest; provided, that
--------
the Secured Party shall have and may exercise rights under this power of
attorney only upon the occurrence and during the continuance of a Default or an
Event of Default. Without limiting the generality of the foregoing, upon the
occurrence and during the continuance of a Default or an Event of Default, the
Secured Party shall have the right and power to receive, endorse and collect all
checks and other orders for the payment of money made payable to such Pledgors
representing any dividend, interest payment, principal payment or other
distribution payable or distributable in respect to the Collateral or any part
thereof and to give full discharge for the same.
8. Absolute Rights and Obligations. All rights of the Secured Party, and
-------------------------------
all obligations of the Pledgors hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Term Note, any
other loan document or any other agreement or instrument relating
to any of the Secured Obligations;
-4-
<PAGE>
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any
other amendment or waiver of or any consent to any departure from
the Term Note any other loan document or any other agreement or
instrument relating to any of the Secured Obligations;
(c) any exchange, release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to departure
from any guaranty, for all or any of the Secured Obligations; or
(d) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, any Pledgor in respect
of the Secured Obligations or of this Agreement, other than
payment.
9. Waiver By a Pledgor. Each Pledgor waives (to the extent permitted by
-------------------
applicable law) any right to require any Secured Party or any other obligee of
the Secured Obligations to (a) proceed against any Person or entity, (b) proceed
against or exhaust any Collateral, or (c) pursue any other remedy in its power;
and waives (to the extent permitted by applicable law) any defense arising by
reason of any disability or other defense of any other Person, or by reason of
the cessation from any cause whatsoever of the liability of any other Person or
entity. Until all Secured Obligations shall have been fully satisfied, no
Pledgor shall have the right of subrogation, and each Pledgor waives any right
to enforce any remedy which any Secured Party or any other obligee of the
Secured Obligations now has or may hereafter have against any other Person and
waives (to the extent permitted by applicable law) any benefit of and any right
to participate in any collateral or security whatsoever now or hereafter held by
the Secured Party for the benefit of the Lenders. Each Pledgor authorizes the
Secured Party without notice (except notice required by applicable law) or
demand and without affecting its liability hereunder, the Term Loan or other
loan documents from time to time to: (i) take and hold security, other than the
Collateral herein described, for the payment of such Secured Obligations or any
part thereof, and exchange, enforce, waive and release the Collateral herein
described or any part thereof or any such other security; and (ii) apply such
Collateral or other security and direct the order or manner of sale thereof as
such Secured Party in its discretion may determine.
The Secured Party may at any time deliver (without representation,
recourse or warranty) the Collateral or any part thereof to a Pledgor and the
receipt thereof by such Pledgor shall be a complete and full acquittance for the
Collateral so delivered, and the Secured Party shall thereafter be discharged
from any liability or responsibility therefor.
10. Dividends and Voting Rights.
---------------------------
(a) All dividends and other distributions with respect to any of the
Pledged Stock shall be subject to the pledge hereunder. All dividends or other
distributions with respect to the Pledged Stock shall be promptly delivered to
the Secured Party (together with stock powers or instruments of assignment duly
executed in blank affixed to any capital stock or other negotiable document or
instrument so distributed) to be held, released or
-5-
<PAGE>
disposed of by it hereunder or, at the option of the Secured Party, to be
applied to the Secured Obligations hereby secured as they become due.
(b) So long as no Default or Event of Default shall have occurred and
be continuing, the registration of the Collateral in the name of a Pledgor shall
not be changed and such Pledgor shall be entitled to exercise all voting and
other rights and powers pertaining to the Collateral for all purposes not
inconsistent with the terms hereof.
(c) Upon the occurrence and during the continuance of any Default or
Event of Default, at the option of the Secured Party, all rights of a Pledgor to
exercise the voting or consensual rights and powers which it is authorized to
exercise pursuant to subsection (b) above shall cease and the Secured Party may
thereupon (but shall not be obligated to), at its request, cause such Collateral
to be registered in the name of the Secured Party or its nominee or agent for
the benefit of the Secured Party and/or exercise such voting or consensual
rights and powers as appertain to ownership of such Collateral, and to that end
each Pledgor hereby appoints the Secured Party as its proxy, with full power of
substitution, to vote and exercise all other rights as a shareholder with
respect to such Pledged Stock hereunder upon the occurrence and during the
continuance of any Default or Event of Default, which proxy is coupled with an
interest and is irrevocable prior to termination of this Agreement, and each
Pledgor hereby agrees to provide such further proxies as the Secured Party may
request; provided, however, that the Secured Party in its discretion may from
-------- -------
time to time refrain from exercising, and shall not be obligated to exercise,
any such voting or consensual rights or such proxy.
11. Power of Sale. Until all Secured Obligations shall have been fully
-------------
satisfied, the power of sale and other rights, powers and remedies granted to
the Secured Party shall continue to exist and may be exercised by the Agent at
any time and from time to time irrespective of the fact that any such Secured
Obligations or any part thereof may have become barred by any statute of
limitations or that the liability of a Pledgor may have ceased.
12. Maintenance of Value of Collateral. At all times until the secured
----------------------------------
obligations have been fully satisfied, shall cause to be and remain deposited
with and pledged to the Secured Party hereunder, Collateral having a fair market
value of not less than $700,000.00 ("Minimum Value"), to consist of the Pledged
Stock and such other marketable marginable securities as may be acceptable to
the Secured Party, in its sole discretion. For purposes of this provision,
"fair market value" of marketable securities shall mean the price of such
security last quoted on the New York Stock Exchange, Conversion Stock Exchange
or NASDAQ National Market System, as the case may be, without discount or
deduction for any restrictions thereon. In the event the market value shall
fall below its Minimum Value, the Secured Party shall call the Pledgors to
notify them of such fact. Irrespective of whether the Secured Party was able to
notify the Pledgor or such shortfall, the Secured Party shall have the right but
not the obligation to sell the Collateral at any time that the fair market value
thereof falls below $600,000.00 in such manner as permitted by the terms of this
Agreement.
13. Other Rights. The rights, powers and remedies given to the Secured
------------
Party by this Agreement shall be in addition to all rights, powers and remedies
given to any Secured Party by virtue of any statute or rule of law.
-6-
<PAGE>
Any forbearance or failure or delay by the Secured Party in exercising any
right, power or remedy hereunder shall not be deemed to be a waiver of such
right, power or remedy, and any single or partial exercise of any right, power
or remedy hereunder shall not preclude the further exercise thereof; and every
right, power and remedy of the Secured Party shall continue in full force and
effect unless such right, power or remedy is specifically waived by the Lender
by an instrument in writing.
14. Further Assurances. Each Pledgor agrees at its own expense to do such
------------------
further acts and things, and to execute and deliver such additional conveyances,
assignments, financing statements, agreements and instruments, as the Secured
Party may at any time reasonably request in connection with the administration
or enforcement of this Agreement or related to the Collateral or any part
thereof or in order better to assure and confirm unto the Secured Party its
rights, powers and remedies. Each Pledgor hereby consents and agrees that the
issuers of or obligors in respect of the Collateral shall be entitled to accept
the provisions hereof as conclusive evidence of the right of the Secured Party
to exercise its rights hereunder with respect to the Collateral, notwithstanding
any other notice or direction to the contrary heretofore or hereafter given by
such Pledgor or any other Person to any of such issuers or obligors.
15. Binding Agreement; Assignment. This Agreement, and the terms,
-----------------------------
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto, and to their respective successors and assigns, except
that no Pledgor shall be permitted to assign this Agreement or any interest
herein or in the Collateral, or any part thereof, or otherwise pledge, encumber
or grant any option with respect to the Collateral, or any part thereof, or any
cash or property held by the Security Party as Collateral under this Agreement.
All references herein to the Secured Party shall include any successor thereof.
16. Severability. In case any lien, security interest or other right of
------------
any Secured Party or any provision hereof shall be held to be invalid, illegal
or unenforceable, such invalidity, illegality or unenforceability shall not
affect any other lien, security interest or other right granted hereby or
provision hereof.
17. Counterparts. This Agreement may be executed in any number of
------------
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
18. Termination. This Agreement and all obligations of the Pledgors
-----------
hereunder shall terminate without delivery of any instrument or performance of
any act by any party on the date when all of the Secured Obligations have been
fully satisfied. Upon such termination of this Agreement, the Secured Party
shall, at the sole expense of the Pledgors, deliver to each Pledgor the
certificates evidencing their Pledged Stock (and any other property received as
a dividend or distribution or otherwise in respect of such Pledged Stock),
together with any cash then constituting the Collateral, not then sold or
otherwise disposed of in accordance with the provisions hereof and take such
further actions as may be necessary to effect the same.
19. Indemnification. Each Pledgor hereby covenants and agrees to pay,
---------------
indemnify, and hold the Secured Party harmless from and against any and all
-7-
<PAGE>
other out-of-pocket liabilities, costs, expenses or disbursements of any kind or
nature whatsoever arising in connection with any claim or litigation by any
person resulting from the execution, delivery, enforcement, performance and
administration of this Agreement, the Term Note or the transactions contemplated
hereby or thereby, or in any respect relating to the Collateral or any
transaction pursuant to which such Pledgor has incurred any Secured Obligation
(all the foregoing, collectively, the "indemnified liabilities"); provided,
--------
however, that the Pledgors shall have no obligation hereunder with respect to
- -------
indemnified liabilities arising from the willful misconduct or gross negligence
of the Secured Party. The agreements in this subsection shall survive repayment
of all Secured Obligations and termination or expiration of this Agreement.
20. Notices. Any notice shall be conclusively deemed to have been
-------
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telecopy (where the receipt of
such message is verified by return) expressly provided for hereunder, when
received at such telephone or telecopy number as may from time to time be
specified in written notice to the other parties hereto or otherwise received),
or if sent prepaid by certified or registered mail return receipt requested on
the third Business Day after the day on which mailed, or if sent prepaid by a
national overnight courier service, on the first Business Day after the day on
which delivered to such service against receipt therefor, addressed to such
party at said address:
(a) if to the Pledgors:
Jerry D. Kennett, M.D.
2801 Peppertree Lane
Columbia, Missouri 65201
Telephone:
Telecopy:
with a copy to:
Craig A. Van Matre, Esq.
1103 East Broadway, Suite 101
P.O. Box 1017
Columbia, Missouri 65205
Telephone: (573) 874-7777
Telecopy: (573) 875-0017
(b) if to the Secured Party:
NationsBank, N.A.
Private Banking
767 Fifth Avenue, 5th Floor
New York, New York 10153-0083
Attention: Ms. Rosemary Vrablic
Senior Vice President
Telephone: (212) 407-5467
Telecopy: (212) 407-5461
-8-
<PAGE>
with a copy to:
Kane Kessler, P.C.
1350 Avenue of the Americas
New York, New York 10019
Attention: Jeffrey S. Tullman, Esq.
Telephone: (212) 541-6222
Telecopy: (212) 245-3009
21. Governing Law: Waivers.
----------------------
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO
BE FULLY PERFORMED, IN SUCH STATE.
(b) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS
THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR
FEDERAL COURT SITTING IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, UNITED
STATES OF AMERICA AND, BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT,
EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING
OF THE VENUE OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE BY PERSONAL
SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL PROCESS IN ANY
SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE
PREPAID) TO THE ADDRESS OF SUCH PARTY PROVIDED IN SECTION 20 OF THIS AGREEMENT
----------
OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN
EFFECT IN THE STATE OF NEW YORK.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF SHALL
---------------- ----
PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY
PLACE WHERE ANY OTHER PARTY OR ANY OF SUCH PARTY'S PROPERTY OR ASSETS MAY BE
FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH
JURISDICTION, EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE, MAY BE
AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION WITH THE FOREGOING, EACH PARTY HEREBY AGREES, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY AND EACH PARTY HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
IN WITNESS WHEREOF, the parties have duly executed this Pledge Agreement on
the day and year first written above.
-9-
<PAGE>
PLEDGORS:
/s/ Jerry D. Kennett
--------------------------------------
Jerry D. Kennett, M.D.
JERRY D. KENNETT, M.D., P.C.
By: /s/ Jerry D. Kennett, M.D., P.C.
---------------------------------
President
-10-
<PAGE>
SECURED PARTY:
NATIONSBANK, N.A.
By: /s/ Rosemary T. Vrablic
-----------------------------
Rosemary T. Vrablic
Senior Vice President
-11-
<PAGE>
SCHEDULE I
----------
NO. OF NO. OF CERTIFICATE NOS.
CLASS OF STOCK SHARES ISSUED SHARES PLEDGED FOR PLEDGED SHARES
- -------------- ------------- -------------- ------------------
<PAGE>
EXHIBIT 8
---------
GENERAL PLEDGE AGREEMENT
IN CONSIDERATION of any financial accommodation given, to be given or continued
to John A. Crouch, M.D. by BOONE COUNTY NATIONAL BANK (hereinafter called
"Bank"), and as collateral security for the payment of all debts, obligations or
liabilities now or hereafter existing, absolute or contingent, of John A.
Crouch. M.D. to Bank (hereinafter called "indebtedness"), the undersigned does
hereby assign, transfer, and grant a security interest in or pledge (as the case
may be) with Bank the following property:
111,100 Shares of American Healthchoice, Inc. Stock
(1) Bank may accelerate payment of any indebtedness or require additional
collateral whenever it deems itself insecure and the undersigned will at
all times maintain with Bank collateral of a character and value
satisfactory to Bank.
At any time, without notice, and at the expense of the undersigned, Bank in its
name or in the name of its nominee or of the undersigned may, but shall not be
obligated to: (1) notify any person obligated on any security, instrument, or
other paper subject to this agreement of its rights hereunder; (2) collect by
legal proceedings or otherwise all dividends, interest, principal payments and
other sums now or hereafter payable upon or on account of said collateral; (3)
enter into any extension, reorganization, deposit, merger, or consolidation
agreement, or any agreement in anywise relating to or affecting the collateral,
and in connection therewith may deposit or surrender control of such collateral
thereunder, accept other property in exchange for such collateral and do and
perform such acts and things as it may deem proper, and any money or property
received in exchange for such collateral shall be applied to the indebtedness or
thereafter held by it pursuant to the provisions hereof; (4) make any compromise
or settlement it deems desirable or proper with reference to the collateral; (5)
insure, process and preserve the collateral; (6) cause the collateral to be
transferred to its name or to the name of its nominee; (7) exercise as to such
collateral all the rights, powers and remedies of an owner; and (8) perform any
obligation of the undersigned hereunder.
Bank shall be under no duty or obligation whatsoever to make or give any
presentments, demands for performance, notices of nonperformance, protests,
notices of protest or notices of dishonor in connection with any obligations or
evidences of indebtedness held by Bank as collateral, or in connection with any
obligations Or evidences of indebtedness which constitute in whole or in part
the indebtedness secured hereunder.
Each of the undersigned waives any right to require Bank to (a) proceed against
any person, (b) proceed against or exhaust any collateral, or (c) pursue any
other remedy in Bank's power; and waives any defense arising by reason of any
disability or other defense of any other of the undersigned or any other person,
or by reason of the cessation from any cause whatsoever of the liability of any
other of the undersigned or any other person. Until all indebtedness shall have
been paid in full: None of the undersigned shall have any right of subrogation,
and each of the undersigned waives any right to enforce any remedy which Bank
now has or may hereafter have against any other of the undersigned or against
any other person and waives any benefit of and any right to participate in any
collateral or security whatsoever now or hereafter held by Bank. Each of the
undersigned authorizes Bank, without notice or demand and without affecting his
liability hereunder or on the indebtedness, from time to time to (a) renew,
accelerate or otherwise change the time for payment of, or otherwise change the
terms of the indebtedness or any part thereof, including increase or decrease of
the rate of interest thereon; (b) take and hold security, other than the
collateral herein described, for the payment of the indebtedness of any part
thereof, and exchange, enforce, waive and release the collateral herein
described or any part thereof or any such other security; (c) apply such
collateral or other security and direct the order of manner of sale thereof as
bank in its discretion may determine; and (d) release or substitute any other of
the undersigned, or any of the endorsers or guarantor of the indebtedness or any
part thereof, or any other parties thereto.
Bank may at any time deliver the collateral or any part thereof to any of the
undersigned and the receipt of any of the undersigned shall be a complete and
full acquittance for the collateral so delivered, and Bank shall thereafter be
discharged from any liability or responsibility therefor.
<PAGE>
The undersigned agrees to pay prior to delinquency all taxes, charges, liens and
assessments against the collateral, and upon the failure of the undersigned to
do so Bank at its option may pay any of them and shall be the sole judge of the
legality or validity thereof and the amount necessary to discharge the same.
All advances, charges, costs and expenses, including reasonable attorney's fees,
incurred or paid by Bank in exercising any right, power or remedy conferred by
this agreement, or in the enforcement thereof, shall become a part of the
indebtedness secured hereunder and shall be 'paid to Bank by the undersigned
immediately and without demand, with interest thereon at ten per cent (10%) per
annum.
The occurrence of any of the following shall be a default under this agreement:
(a) failure to pay up any debt secured hereby when due; (b) failure to perform
any other obligation secured hereby when the same should be performed; (c)
breach of any warranty contained herein; (d) filing of a petition by or against
the undersigned under the bankruptcy or like law, receivership, or assignment
for the benefit of creditors; (e) attachment or like levy on any property of the
undersigned; (f) the occurrence of an adverse change in the financial condition
of the undersigned deemed material to Bank; (g) any financial statement made by
the undersigned to Bank proves false; or (h) the collateral becomes, in the
judgement of Bank, unsatisfactory in character or value; (i) the occurrence of
any sale of all or a substantial part of the assets of the undersigned, other
than in the ordinary course of business, or (j) the death, insolvency or
cessation of business of the undersigned, or any surety or guarantor of any
obligation of the undersigned to Bank.
Upon the happening of any default Bank may declare immediately due and payable
all indebtedness secured hereby and shall have all rights and remedies provided
by law. Any public sale may be held at any branch office of Bank.
Upon transfer of all or any part of the indebtedness Bank may transfer all or
any part of the collateral and shall be fully discharged thereafter from all
liability and responsibility with respect to such collateral so transferred, and
the transferee shall be vested with all the rights and powers of Bank hereunder
with respect to such collateral so transferred; but with respect to any
collateral not so transferred Bank shall retain all rights and powers hereby
given.
This is a continuing agreement and all the rights, powers and remedies hereunder
shall apply to all past, present and future indebtedness of the undersigned to
Bank, including that arising under successive transactions which shall either
continue the indebtedness, increase or decrease it, or from time to time create
new indebtedness after all or any prior indebtedness has been satisfied, and
notwithstanding the death, incapacity or bankruptcy of the undersigned or any
other event or proceeding affecting the undersigned.
Until all indebtedness shall have been paid in full the power of sale and all
other rights, powers and remedies granted to Bank hereunder shall continue to
exist and may be exercised by Bank at any time and from time to time
irrespective of the fact that the indebtedness or any part thereof may have
become barred by any statute of limitations, or that the personal liability of
the undersigned may have ceased.
The rights, powers and remedies given to Bank by this agreement shall be in
addition to all rights, powers and remedies given to Bank by virtue of any
statute or rule of law, Bank may exercise it's banker's lien or right of setoff
with respect to the indebtedness in the same manner as if the indebtedness were
unsecured. Any forbearance or failure or delay by Bank in exercising any right,
power or remedy hereunder shall not be deemed to be a waiver of such right,
power or remedy, and any single or partial exercise of any right, power or
remedy hereunder shall not preclude the further exercise thereof; and every
right, power and remedy of Bank shall continue in full force and effect until
such right, power or remedy is specifically waived by an instrument in writing
executed by Bank.
In all cases where but one party executes this agreement all words used herein
in the plural shall be deemed to have been used in the singular where the
context and construction so require; when this agreement is executed by more
than one party all references to the undersigned shall mean any or any one or
more of them. The obligations and agreements of the undersigned hereunder are
joint and several.
-2-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this agreement this 30th day
of May, 1996.
BOONE COUNTY NATIONAL BANK
By: /s/ W. Michael Stroupe /s/ John A. Crouch
--------------------------------- -----------------------------------
W. Michael Stroupe John A. Crouch, M.D.
Title: Executive Vice President
------------------------------- ___________________________________
___________________________________
-3-
<PAGE>
EXHIBIT 9
---------
COMMERCIAL PLEDGE AND SECURITY AGREEMENT
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
$85,000.00 05-28-1996 08-26-1996 604183 CLC
- ----------------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan
or item.
- -----------------------------------------------------------------------------------------------------------------------------------
BORROWER: H. JERRY MURRELL LENDER: FIRST NATIONAL BANK AND TRUST COMPANY
BEVERLY R. MURRELL P.O. BOX 1867
3600 W. VAUGHTER SCHOOL ROAD COLUMBIA, MO 65205-1867
COLUMBIA, MO 65203
===================================================================================================================================
</TABLE>
THIS COMMERCIAL PLEDGE AND SECURITY AGREEMENT IS ENTERED INTO BETWEEN H. JERRY
MURRELL AND BEVERLY R. MURRELL (REFERRED TO BELOW AS "GRANTOR"); AND FIRST
NATIONAL BANK AND TRUST COMPANY (REFERRED TO BELOW AS "LENDER").
GRANT OF SECURITY INTEREST. FOR VALUABLE CONSIDERATION, GRANTOR GRANTS TO
LENDER A SECURITY INTEREST IN THE COLLATERAL TO SECURE THE INDEBTEDNESS AND
AGREES THAT LENDER SHALL HAVE THE RIGHTS STATED IN THIS AGREEMENT WITH RESPECT
TO THE COLLATERAL, IN ADDITION TO ALL OTHER RIGHTS WHICH LENDER MAY HAVE BY LAW.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement:
AGREEMENT. The word "Agreement" means this Commercial Pledge and Security
Agreement, as this Commercial Pledge and Security Agreement may be amended
or modified from time to time, together with all exhibits and schedules
attached to this Commercial Pledge and Security Agreement from time to
time.
COLLATERAL. The word "Collateral" means the following specifically
described property, which Grantor has delivered or agrees to deliver (or
cause to be delivered or appropriate book-entries made) immediately to
Lender, together with all Income and Proceeds as described below:
38200.000 SHARES OF AMERICAN HEALTH CHOICE, INC.______________________
______________________________________________________________________
In addition, the word "Collateral" includes all property of Grantor
(however owned), in the possession of Lender (or in the possession of a
third party subject to the control of Lender), whether now or hereafter
existing and whether tangible or intangible in character, including without
limitation each of the following:
(A) ALL PROPERTY TO WHICH LENDER ACQUIRES TITLE OR DOCUMENTS OF TITLE.
(B) ALL PROPERTY ASSIGNED TO LENDER.
<PAGE>
COMMERCIAL PLEDGE AND SECURITY AGREEMENT PAGE 2
(CONTINUED)
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(C) ALL PROMISSORY NOTES, BILLS OF EXCHANGE, STOCK CERTIFICATES,
BONDS, SAVINGS PASSBOOKS, TIME CERTIFICATES OF DEPOSIT, INSURANCE
POLICIES, AND ALL OTHER INSTRUMENTS AND EVIDENCES OF AN OBLIGATION.
(D) ALL RECORDS RELATING TO ANY OF THE PROPERTY DESCRIBED IN THIS
COLLATERAL SECTION, WHETHER IN THE FORM OF A WRITING, MICROFILM,
MICROFICHE, OR ELECTRONIC MEDIA.
EVENT OF DEFAULT. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section
titled "Events of Default."
GRANTOR. The word "Grantor" means H. JERRY MURRELL and BEVERLY R. MURRELL.
GUARANTOR. The word "Guarantor" means and includes without limitation each
and all of the guarantors, sureties, and accommodation parties in
connection with the Indebtedness.
INCOME AND PROCEEDS. The words "Income and Proceeds" mean all present and
future income, proceeds, earnings, increases, and substitutions from or for
the Collateral of every kind and nature, including without limitation all
payments, interest, profits, distributions, benefits, rights, options,
warrants, dividends, stock dividends, stock splits, stock rights,
regulatory dividends, distributions, subscriptions, monies, claims for
money due and to become due, proceeds of any insurance on the Collateral,
shares of stock of different par value or no par value issued in
substitution or exchange for shares included in the Collateral, and all
other property Grantor is entitled to receive on account of such
Collateral, including accounts, documents, instruments, chattel paper, and
general intangibles.
INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced by
the Note, including all principal and interest, together with all other
indebtedness and costs and expenses for which Grantor is responsible under
this Agreement or under any of the Related Documents.
LENDER. The word "Lender" means FIRST NATIONAL BANK AND TRUST COMPANY, its
successors and assigns.
NOTE. The word "Note" means the note or credit agreement dated May 28,
1996, in the principal amount of $85,000.00 from H. JERRY MURRELL and
BEVERLY R. MURRELL to Lender, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of and substitutions for
the note or credit agreement.
<PAGE>
COMMERCIAL PLEDGE AND SECURITY AGREEMENT PAGE 3
(CONTINUED)
===========================================================================
OBLIGOR. The word "Obligor" means and includes without limitation any and
all persons or entities obligated to pay money or to perform some other act
under the Collateral.
RELATED DOCUMENTS. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Indebtedness.
RIGHT OF SETOFF. Grantor hereby grants Lender a contractual possessory security
interest in and hereby assigns, conveys, delivers, pledges, and transfers all of
Grantor's right, title and interest in and to Grantor's accounts with Lender
(whether checking, savings, or some other account), including all accounts held
jointly with someone else and all accounts Grantor may open in the future,
excluding, however, all IRA and Keogh accounts, and all trust accounts for which
the grant of a security interest would be prohibited by law. Grantor authorizes
Lender, to the extent permitted by applicable law, to charge or setoff all
Indebtedness against any and all such accounts.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL.
Grantor represents and warrants to Lender that:
OWNERSHIP. Grantor is the lawful owner of the Collateral free and clear of
all security interests, liens, encumbrances and claims of others except as
disclosed to and accepted by Lender in writing prior to execution of this
Agreement.
RIGHT TO PLEDGE. Grantor has the full right, power and authority to enter
into this Agreement and to pledge the Collateral.
BINDING EFFECT. This Agreement is binding upon Grantor, as well as
Grantor's heirs, successors, representatives and assigns, and is legally
enforceable in accordance with its terms.
NO FURTHER ASSIGNMENT. Grantor has not, and will not, sell, assign,
transfer, encumber or otherwise dispose of any of Grantor's rights in the
Collateral except as provided in this Agreement.
NO DEFAULTS. There are no defaults existing under the Collateral, and
there are no offsets or counterclaims to the same. Grantor will strictly
and promptly perform each of the terms, conditions, covenants and
agreements contained in the Collateral which are to be performed by
Grantor, if any.
<PAGE>
COMMERCIAL PLEDGE AND SECURITY AGREEMENT PAGE 4
(CONTINUED)
===========================================================================
NO VIOLATION. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor is a
party.
LENDER'S RIGHTS AND OBLIGATIONS WITH RESPECT TO COLLATERAL. Lender may hold the
Collateral until all the Indebtedness has been paid and satisfied and thereafter
may deliver the Collateral to any Grantor. Lender shall have the following
rights in addition to all other rights it may have by law:
MAINTENANCE AND PROTECTION OF COLLATERAL. Lender may, but shall not be
obligated to, take such steps as it deems necessary or desirable to
protect, maintain, insure, store, or care for the Collateral, including
payment of any liens or claims against the Collateral. Lender may charge
any cost incurred in so doing to Grantor.
INCOME AND PROCEEDS FROM THE COLLATERAL. Lender may receive all Income and
Proceeds and add it to the Collateral. Grantor agrees to deliver to Lender
immediately upon receipt, in the exact form received and without
commingling with other property, all Income and Proceeds from the
Collateral which may be received by, paid, or delivered to Grantor or for
Grantor's account, whether as an addition to, in discharge of, in
substitution of, or in exchange for any of the Collateral.
APPLICATION OF CASH. At Lender's option, Lender may apply any cash,
whether included in the Collateral or received as Income and Proceeds or
through liquidation, sale, or retirement, of the Collateral, to the
satisfaction of the Indebtedness or such portion thereof as Lender shall
choose, whether or not matured.
TRANSACTIONS WITH OTHERS. Lender may (a) extend time for payment or other
performance, (b) grant a renewal or change in terms or conditions, or (c)
compromise, compound or release any obligation, with any one or more
Obligors, endorsers, or Guarantors of the Indebtedness as Lender deems
advisable, without obtaining the prior written consent of Grantor, and no
such act or failure to act shall affect Lender's rights against Grantor or
the Collateral.
ALL COLLATERAL SECURES INDEBTEDNESS. All Collateral shall be security for
the Indebtedness, whether the Collateral is located at one or more offices
or branches of Lender and whether or not the office or branch where the
Indebtedness is created is aware of or relies upon the Collateral.
COLLECTION OF COLLATERAL. Lender, at Lender's option may, but need not,
collect directly from the Obligors on any of the Collateral all Income and
Proceeds or other sums of money and other property
<PAGE>
COMMERCIAL PLEDGE AND SECURITY AGREEMENT PAGE 5
(CONTINUED)
===========================================================================
due and to become due under the Collateral, and Grantor authorizes and
directs the Obligors, if Lender exercises such option, to pay and deliver
to Lender all income and Proceeds and other sums of money and other
property payable by the terms of the Collateral and to accept Lender's
receipt for the payments.
POWER OF ATTORNEY. Grantor irrevocably appoints Lender as Grantor's
attorney-in-fact, with full power of substitution, (a) to demand, collect,
receive, receipt for, sue and recover all Income and Proceeds and other
sums of money and other property which may now or hereafter become due,
owing or payable from the Obligors in accordance with the terms of the
Collateral; (b) to execute, sign and endorse any and all instruments,
receipts, checks, drafts and warrants issued in payment for the Collateral;
(c) to settle or compromise any and all claims arising under the
Collateral, and in the place and stead of Grantor, execute and deliver
Grantor's release and acquittance for Grantor; (d) to file any claim or
claims or to take any action or institute or take part in any proceedings,
either in Lender's own name or in the name of Grantor, or otherwise, which
in the discretion of Lender may seem to be necessary or advisable; and (e)
to execute in Grantor's name and to deliver to the Obligors on Grantor's
behalf, at the time and in the manner specified by the Collateral, any
necessary instruments or documents.
PERFECTION OF SECURITY INTEREST. Upon request of Lender, Grantor will
deliver to Lender any and all of the documents evidencing or constituting
the Collateral. When applicable law provides more than one method of
perfection of Lender's security interest, Lender may chose the method(s) to
be used. Upon request of Lender, Grantor will sign and deliver any writings
necessary to perfect Lender's security interest. If the Collateral consists
of securities for which no certificate has been issued, Grantor agrees, at
Lender's option, either to request issuance of an appropriate certificate
or to execute appropriate instructions on Lender's forms instructing the
issuer, transfer agent, mutual fund company, or broker, as the case may be,
to record on its books or records, by book-entry or otherwise, Lender's
security interest in the Collateral. Grantor hereby appoints Lender as
Grantor's irrevocable attorney-in-fact for the purpose of executing any
documents necessary to perfect or to continue the security interest granted
in this Agreement.
EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without limitation
all taxes, liens, security interests, encumbrances, and other claims, at any
time levied or placed on the Collateral. Lender also may (but shall not be
obligated to) pay all costs for insuring, maintaining
<PAGE>
COMMERCIAL PLEDGE AND SECURITY AGREEMENT PAGE 6
(CONTINUED)
===========================================================================
and preserving the Collateral. All such expenditures incurred or paid by Lender
for such purposes will then bear interest at the rate charged under the Note
from the date incurred or paid by Lender to the date of repayment by Grantor.
All such expenses shall become a part of the Indebtedness and, at Lender's
option, will (a) be payable on demand, (b) be added to the balance of the Note
and be apportioned among and be payable with any installment payments to become
due during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will be
due and payable at the Note's maturity. This Agreement also will secure payment
of these amounts. Such right shall be in addition to all other rights and
remedies to which lender may be entitled upon the occurrence of an Event of
Default.
LIMITATIONS ON OBLIGATIONS OF LENDER. Lender shall use ordinary reasonable care
in the physical preservation and custody of the Collateral in Lender's
possession, but shall have no other obligation to protect the Collateral or its
value. In particular, but without limitation, Lender shall have no
responsibility for (a) any depreciation in value of the Collateral or for the
collection or protection of any Income and Proceeds from the Collateral, (b)
preservation of rights against parties to the Collateral or against third
persons, (c) ascertaining any maturities, calls, conversions, exchanges, offers,
tenders, or similar matters relating to any of the Collateral, or (d) informing
Grantor about any of the above, whether or not Lender has or is deemed to have
knowledge of such matters. Except as provided above, Lender shall have no
liability for depreciation or deterioration of the Collateral.
REINSTATEMENT OF SECURITY INTEREST. If payment is made by Grantor, whether
voluntarily or otherwise, or by guarantor or by any third party, on the
Indebtedness and thereafter Lender is forced to remit the amount of that payment
(a) to Grantor's trustee in bankruptcy or to any similar person under any
federal or state bankruptcy law or law for the relief of debtors, (b) by reason
of any judgment, decree or order of any court or administrative body having
jurisdiction over Lender or any of Lender's property, or (c) by reason of any
settlement or comprise of any claim made by Lender with any claimant (including
without limitation Grantor), the Indebtedness shall be considered unpaid for the
purpose of enforcement of this Agreement and this Agreement shall continue to be
effective or shall be reinstated, as the case may be, notwithstanding any
cancellation of this Agreement or of any note or other instrument or agreement
evidencing the Indebtedness and the Collateral will continue to secure the
amount repaid or recovered to the same extent as if that amount never had been
originally received by Lender, and Grantor shall be bound by any judgment,
decree, order, settlement or compromise relating to the Indebtedness or to this
Agreement.
<PAGE>
COMMERCIAL PLEDGE AND SECURITY AGREEMENT PAGE 7
(CONTINUED)
===========================================================================
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when due
on the Indebtedness.
OTHER DEFAULTS. Failure of Grantor to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement or in
any of the Related Documents or in any other agreement between Lender and
Grantor.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Grantor under this Agreement, the
Note or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral documents to create a valid and perfected security interest or
lien) at any time and for any reason.
DEATH OR INSOLVENCY. The death of Grantor or the dissolution or
termination of Grantor's existence as a going business, the insolvency of
Grantor, the appointment of a receiver for any part of Grantor's property,
any assignment for the benefit of creditors, any type of creditor workout,
or the commencement of any proceeding under any bankruptcy or insolvency
laws by or against Grantor.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against the Collateral or any other collateral securing
the Indebtedness. This includes a garnishment of any of Grantor's deposit
accounts with Lender.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or such Guarantor dies
or becomes incompetent.
ADVERSE CHANGE. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender may exercise any one or more of the
following rights and remedies:
<PAGE>
COMMERCIAL PLEDGE AND SECURITY AGREEMENT PAGE 8
(CONTINUED)
===========================================================================
ACCELERATE INDEBTEDNESS. Declare all Indebtedness, including any
prepayment penalty which Grantor would be required to pay, immediately due
and payable, without notice of any kind to Grantor.
COLLECT THE COLLATERAL. Collect any of the Collateral and, at Lender's
option and to the extent permitted by applicable law, retain possession of
the Collateral while suing on the Indebtedness.
SELL THE COLLATERAL. Sell the Collateral, at Lender's discretion, as a
unit or in parcels, at one or more public or private sales. Unless the
Collateral is perishable or threatens to decline speedily in value or is of
a type customarily sold on a recognized market, Lender shall give or mail
to Grantor, or any of them, notice at least ten (10) days in advance of the
time and place of any public sale, or of the date after which any private
sale may be made. Grantor agrees that any requirement of reasonable notice
is satisfied if Lender mails notice by ordinary mail addressed to Grantor,
or any of them, at the last address Grantor has given Lender in writing. If
a public sale is held, there shall be sufficient compliance with all
requirements of notice to the public by a single publication in any
newspaper of general circulation in the county where the Collateral is
located, setting forth the time and place of sale and a brief description
of the property to be sold. Lender may be a purchaser at any public sale.
REGISTER SECURITIES. Register any securities included in the Collateral in
Lender's name and exercise any rights normally incident to the ownership of
securities.
SELL SECURITIES. Sell any securities included in the Collateral in a
manner consistent with applicable federal and state securities laws,
notwithstanding any other provision of this or any other agreement. If,
because of restrictions under such laws, Lender is or believes it is unable
to sell the securities in an open market transaction, Grantor agrees that
Lender shall have no obligation to delay sale until the securities can be
registered, and may make a private sale to one or more persons or to a
restricted group of persons, even though such sale may result in a price
that is less favorable than might be obtained in an open market
transaction, and such a sale shall be considered commercially reasonable.
If any securities held as Collateral are "restricted securities" as defined
in the Rules of the Securities and Exchange Commission (such as Regulation
D or Rule 144) or state securities departments under state "Blue Sky" laws,
or if Grantor is an affiliate of the issuer of the securities, Grantor
agrees that neither Borrower nor any member of Borrower's family and
neither Grantor nor any member of Grantor's family will sell or dispose of
any securities of such issuer without obtaining Lender's prior written
consent.
<PAGE>
COMMERCIAL PLEDGE AND SECURITY AGREEMENT PAGE 9
(CONTINUED)
===========================================================================
FORECLOSURE. Maintain a judicial suit for foreclosure and sale of the
Collateral.
TRANSFER TITLE. Effect transfer of title upon sale of all or part of the
Collateral. For this purpose, Grantor irrevocably appoints Lender as its
attorney-in-fact to execute endorsements, assignments and instruments in
the name of Grantor and each of them (if more than one) as shall be
necessary or reasonable.
OTHER RIGHTS AND REMEDIES. Have and exercise any or all of the rights and
remedies of a secured creditor under the provisions of the Uniform
Commercial Code, at law, in equity, or otherwise.
APPLICATION OF PROCEEDS. Apply any cash which is part of the Collateral,
or which is received from the collection or sale of the Collateral, to
reimbursement of any expenses, including any costs for registration of
securities, commissions incurred in connection with a sale, attorney fees
as provided below, and court costs, whether or not there is a lawsuit and
including any fees on appeal, incurred by Lender in connection with the
collection and sale of such Collateral and to the payment of the
Indebtedness of Grantor to Lender, with any excess funds to be paid to
Grantor as the interests of Grantor may appear. Grantor agrees, to the
extent permitted by law, to pay any deficiency after application of the
proceeds of the Collateral to the Indebtedness.
CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether
evidenced by this Agreement or by any other writing, shall be cumulative
and may be exercised singularly or concurrently. Election by Lender to
pursue any remedy shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an obligation of
Grantor under this Agreement, after Grantor's failure to perform, shall not
affect Lender's right to declare a default and to exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
APPLICABLE LAW. THIS AGREEMENT HAS BEEN DELIVERED TO LENDER AND ACCEPTED
BY LENDER IN THE STATE OF MISSOURI. IF THERE IS A LAWSUIT, GRANTOR AGREES
UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS OF BOONE
COUNTY, THE STATE OF MISSOURI.
<PAGE>
COMMERCIAL PLEDGE AND SECURITY AGREEMENT PAGE 10
(CONTINUED)
===========================================================================
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF MISSOURI.
ATTORNEYS' FEES; EXPENSES. Grantor agrees to pay upon demand all of
Lender's costs and expenses, including attorneys' fees and Lender's legal
expenses, incurred in connection with the enforcement of this Agreement.
Lender may pay someone else to help enforce this Agreement, and Grantor
shall pay the costs and expenses of such enforcement. Costs and expenses
include Lender's attorneys' fees and legal expenses whether or not there is
a lawsuit, including attorneys' fees and legal expenses for bankruptcy
proceedings (and including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated post-judgment collection
services. Grantor also shall pay all court costs and such additional fees
as may be directed by the court.
CAPTION HEADINGS. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Agreement.
MULTIPLE PARTIES. All obligations of Grantor under this Agreement shall be
joint and several, and all references to Grantor shall mean each and every
Grantor. This means that each of the Borrowers signing below is responsible
for ALL obligations in this Agreement.
NOTICES. All notices required to be given under this Agreement shall be
given in writing, may be sent by telefacsimile, and shall be effective when
actually delivered or when deposited with a nationally recognized overnight
courier or deposited in the United States mail, first class, postage
prepaid, addressed to the party to whom the notice is to be given at the
address shown above. Any party may change its address for notices under
this Agreement by giving formal written notice to the other parties,
specifying that the purpose of the notice is to change the party's address.
To the extent permitted by applicable law, if there is more than one
Grantor, notice to any Grantor will constitute notice to all Grantors. For
notice purposes, Grantor will keep Lender informed at all times of
Grantor's current address(es).
SEVERABILITY. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Agreement in all other respects shall remain valid and enforceable.
<PAGE>
COMMERCIAL PLEDGE AND SECURITY AGREEMENT PAGE 11
(CONTINUED)
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SUCCESSOR INTERESTS. Subject to the limitations set forth above on
transfer of the Collateral, this Agreement shall be binding upon and inure
to the benefit of the parties, their successors and assigns.
WAIVER. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by Lender of
a provision of this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Grantor, shall constitute a waiver of
any of Lender's rights or of any of Grantor's obligations as to any future
transactions. Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the
sole discretion of Lender.
EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS PLEDGE AND
SECURITY AGREEMENT, AND EACH GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS
DATED MAY 28, 1996.
GRANTOR:
/s/ H. Jerry Murrell /s/ Beverly R. Murrell
- ----------------------------------- -----------------------------------
H. JERRY MURRELL BEVERLY R. MURRELL
