<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)
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)
August 28, 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 [_].
Index to Exhibits on Page 10
<PAGE>
This Amendment No. 4 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 Murrell, 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 three paragraphs after the
fourth paragraph thereof.
On August 29 and 30, 1996, pursuant to the Stock Option Agreement, as
amended, the Remaining Option Holders (other than John A. Crouch, M.D.)
paid to the Company an aggregate of $500,000 in respect of the purchase of
shares of Common Stock, as follows: (i) Merlin Kirby, M.D. paid $246,390
(which was applied together with $11,460, constituting the portion of the
$100,000 non-refundable option fee paid by the Remaining Option Holders to
the Company on May 31, 1996 (the "Second Option Fee") paid by him) in
respect of the purchase of 52,622 shares of Common Stock; (ii) H. Jerry
Murrell, M.D. paid $246,390 (which was applied together with $11,460,
constituting the portion of the Second Option Fee paid by him) in respect
of the purchase of 52,622 shares of Common Stock; and (iii) Jerry D.
Kennett, M.D. paid $7,220 in respect of the purchase of 1,473 shares of
Common Stock. 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 his personal funds and borrowings pursuant
to a promissory note, dated August 29, 1996 (the "Second Murrell Promissory
Note"), with First National. The foregoing amounts paid by Jerry D.
Kennett, M.D. were obtained from his personal funds and borrowings pursuant
to the Kennett Promissory Note with NationsBank. A copy of the Second
Murrell Promissory Note is attached as Exhibit 10 hereto and incorporated
herein by this reference.
On September 10 and 11, 1996, John A. Crouch, M.D. paid to the Company
an aggregate of $416,643.50 (which was applied together with $33,330, the
portion of the Second Option Fee paid by him) in respect of the purchase of
91,831 shares of Common Stock. The foregoing amount paid by John A.
Crouch, M.D. was obtained from his personal funds and borrowings pursuant
to a promissory note, dated September 10, 1996 (the "Second Crouch
Promissory Note"), with BCNB and a promissory note, dated September 10,
1996 (the "Third Crouch Promissory Note"), with First National. Copies of
the Second Crouch Promissory Note and Third Crouch Promissory Note are
attached as Exhibits 11 and 12, respectively, hereto and incorporated
herein by this reference. (The transactions effected on August 29 and 30,
-2-
<PAGE>
1996 and September 10 and 11 as described above are hereinafter referred to
collectively as the "August/September Exercise Transactions").
On September 18, 1996, pursuant to the Stock Option Agreement, as
amended, Jerry D. Kennett, M.D. and John A. Crouch, M.D. paid to the
Company an aggregate of $124,813.50, as follows: (1) Jerry D. Kennett,
M.D. paid to the Company (a) a non-refundable option fee in the amount of
$43,750 and (b) a non-refundable extension fee in the amount of $19,942,
constituting $.10 per share in respect of 199,420 shares of Common Stock
purchasable upon exercise of the remaining options granted pursuant to the
Stock Option Agreement, as amended, and (ii) John A. Crouch, M.D. paid to
the Company a non-refundable extension fee in the amount of $6,121.50,
constituting $.10 per share in respect of 61,215 shares of Common Stock
purchasable upon exercise of the remaining options granted pursuant to the
Stock Option Agreement, as amended. The foregoing amounts paid by Jerry D.
Kennett, M.D. were obtained from his personal funds and borrowings pursuant
to the Kennett Promissory Note with Nationsbank. The foregoing amount paid
by John A. Crouch, M.D. was obtained from his personal funds and borrowings
pursuant to the Second Crouch Promissory Note with BCNB and the Third
Crouch Promissory Note with First National. (The payments made on
September 18, 1996 as described above are hereinafter referred to
collectively as the "September Fee Payments").
Item 4. Purpose of Transaction.
----------------------
Item 4 is hereby amended by adding the following paragraph at the end
thereof:
The principal purpose of each of the Remaining Option Holders in
effecting the August/September Exercise Transactions was to acquire direct
ownership of a substantial number of shares of Common Stock in accordance
with the terms of the Stock Option Agreement, as amended. The principal
purpose of each of Jerry D. Kennett, M.D. and John A. Crouch, M.D. in
making the September Fee Payments was to extend the right to acquire the
remaining shares of Common Stock purchasable under the Stock Option
Agreement, as amended, at a purchase price of $4.90 per share.
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
purchased pursuant to the August/September Exercise Transactions, and by
reason of the remaining options granted pursuant to the Stock Option
Agreement, as
-3-
<PAGE>
amended, and the provisions of the Initial Allocation Agreement and the
Second Allocation Agreement: (i) Jerry D. Kennett, M.D. beneficially owned
346,726 shares of Common Stock (including 199,420 shares purchasable upon
exercise of the remaining options granted pursuant to the Stock Option
Agreement, as amended) or 4.6% of the total number of shares of Common
Stock outstanding; (ii) John A. Crouch, M.D. beneficially owned 264,146
shares of Common Stock (including 61,215 shares purchasable upon exercise
of the remaining options granted pursuant to the Stock Option Agreement, as
amended) or 3.5% of the total number of shares of Common Stock outstanding;
(iii) Merlin Kirby, M.D. beneficially owned 90,822 shares of Common Stock
or 1.2% of the number of shares of Common Stock outstanding; and (iv) H.
Jerry Murrell, M.D. beneficially owned 90,822 shares of Common Stock 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") has sole power
to vote and dispose of the shares of Common Stock acquired by him upon
exercise of the options granted pursuant to the Stock Option Agreement, as
amended, 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, as amended, 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. Each of the Remaining
Option Holders disclaims beneficial ownership of the shares of Common Stock
beneficially owned by the other Remaining Option Holders, and the filing of
this Schedule 13D by a Remaining Option Holder shall not be construed as an
admission that such Remaining Option Holder is the beneficial owner of any
such shares for purposes of Section 13 or Section 16 of the Securities
Exchange Act of 1934, as amended.
The percentages set forth in the preceding paragraphs are based on
7,482,517 shares of Common Stock outstanding (including (i) 7,221,882
shares of Common Stock actually outstanding, and (ii) 260,635 shares of
Common Stock issuable upon exercise of the remaining options granted
pursuant to the Stock Option Agreement, as amended).
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to the Securities
of the Issuer.
--------------------------------------------
Item 6 is hereby amended by adding the following paragraph to the end
thereof:
-4-
<PAGE>
On August 28, 1996, the Company and the Remaining Option Holders
entered into a Memorandum of Option Agreement Amendment (the "Option
Agreement Amendment"), which, among other things, extended certain time
periods during which the options to purchase Common Stock granted pursuant
to the Stock Option Agreement could be exercised at $4.90 per share. A
copy of the Option Agreement Amendment is attached as Exhibit 13 hereto
and incorporated herein by this reference.
In connection with his borrowings under the Kennett Promissory Note,
pursuant to 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 issued to him as a result of the
August/September Exercise Transactions. In connection with his borrowings
under the Second Murrell Promissory Note, pursuant to a pledge agreement,
dated August 29, 1996 (the "Second 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 issued to him as a result of
the August/September Exercise Transactions. In connection with his
borrowings under the Second Crouch Promissory Note, pursuant to a pledge
agreement, dated September 10, 1996 (the "Second Crouch Pledge Agreement"),
John A. Crouch, M.D. has pledged to BCNB, as security for the repayment of
such borrowings, 131,508 shares of Common Stock, and, in connection with
his borrowings under the Third Crouch Promissory Note, pursuant to a pledge
agreement, dated September 10, 1996 (the "Third Crouch Pledge Agreement"),
John A. Crouch, M.D. has pledged to First National, as security for the
repayment of such borrowings, 20,408 shares of Common Stock. Copies of the
Second Murrell Pledge Agreement, the Second Crouch Pledge Agreement and the
Third Crouch Pledge Agreement are attached as Exhibits 14, 15 and 16,
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
------- ----------------------------------------
<C> <S>
10 Second Murrell Promissory Note
11 Second Crouch Promissory Note
12 Third Crouch Promissory Note
13 Option Agreement Amendment
14 Second Murrell Pledge Agreement
15 Second Crouch Pledge Agreement
16 Third Crouch Pledge Agreement
</TABLE>
-5-
<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: September 24, 1996 /s/ John A. Crouch, M.D.
---------------------------------
John A. Crouch, M.D.
-6-
<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: September 24, 1996 /s/ Jerry D. Kennett, M.D.
---------------------------------
Jerry D. Kennett, M.D.
-7-
<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: September 24, 1996 /s/ Merlin Kirby, M.D.
---------------------------------
Merlin Kirby, M.D.
-8-
<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: September 24, 1996 /s/ H. Jerry Murrell, M.D.
---------------------------------
H. Jerry Murrell, M.D.
-9-
<PAGE>
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------------------------------------
<C> <S>
10 Second Murrell Promissory Note
11 Second Crouch Promissory Note
12 Third Crouch Promissory Note
13 Option Agreement Amendment
14 Second Murrell Pledge Agreement
15 Second Crouch Pledge Agreement
16 Third Crouch Pledge Agreement
</TABLE>
-10-
<PAGE>
Exhibit 10
----------
<TABLE>
<CAPTION>
PROMISSORY NOTE
- ------------------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$246,390.00 08-29-1996 08-28-1997 604292 CLC
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
BEVERLY R. MURRELL AND TRUST COMPANY
3600 W. VAUGHTER SCHOOL ROAD P.O. BOX 1867
COLUMBIA, MO 65203 COLUMBIA, MO 65205-1867
================================================================================
Principal Amount: $246,390.00 Date of Note: August 29, 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 Two Hundred Forty
Six Thousand Three Hundred Ninety & 00/100 Dollars ($246,390.00), together with
interest on the unpaid principal balance from August 29, 1996, until paid in
full.
PAYMENT. Subject to any payment changes resulting from changes in the Index,
Borrower will pay this loan in accordance with the following payment schedule:
1 principal and interest payment in the initial amount of $40,000.00 on
October 17, 1996, with interest calculated on the unpaid principal
balances at an interest rate of 1.000 percentage points over the Index
described below; 3 consecutive quarterly interest payments, beginning
November 28, 1996, with interest calculated on the unpaid principal
balances at an interest rate of 1.000 percentage points over the Index
described below; and 1 principal and interest payment in the initial
amount of $214,444.28 on August 28, 1997, with interest calculated on the
unpaid principal balances at an interest rate of 1.000 percentage points
over the Index described below. This estimated final payment is based on
the assumption that all payments will be made exactly as scheduled and
that the Index does not change; the actual final payment will be for all
principal and accrued interest not yet paid, together with any other
unpaid amounts under this Note.
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 or rates to be applied to the unpaid principal balance of this Note will be
the rate or rates set forth in the "Payment" section. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law. Whenever increases occur in the interest rate,
Lender, at its option, may do one or more of the following: (a) increase
Borrower's payments to ensure Borrower's loan will pay off by its original final
maturity date, (b) increase Borrower's payment to cover accruing interest, (c)
increase the number of Borrower's payments, and (d) continue Borrower's payments
at the same amount and increase Borrower's final payment.
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 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 and may result in
Borrower making fewer payments.
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.
COLLATERAL. This Note is secured by A SECURITY AGREEMENT DATED AUGUST 29, 1996
ON 56,622 SHARES OF AMERICAN HEALTH CHOICE, INC.
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
<PAGE>
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
================================================================================
<PAGE>
Exhibit 11
----------
- --------------------------------------------------------------------------------
JOHN A. CROUCH, M.D. BOONE COUNTY NATIONAL BANK Loan Number 306386
806 AUDUBON DRIVE 720 E. BROADWAY Date SEPTEMBER 10, 1996
COLUMBIA, MO 65201 P.O. BOX 678 ----------------------
COLUMBIA, MO 65205 Maturity Date DEC. 9, 1996
--------------
BORROWER'S NAME LENDER'S NAME AND Loan Amount $ 350,000.00
AND ADDRESS ADDRESS ----------------
"I" includes each "You" means the lender, Renewal Of
borrower above, joint its successors and ________________
and severally. assigns. SSN/TIN: WMS/TAC
- --------------------------------------------------------------------------------
For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of THREE HUNDRED FIFTY THOUSAND AND NO/100 *****
-----------------------------------------------
****************************************** Dollars $ 350,000.00
- ------------------------------------------ ---------------------------
[X] Single Advance: I will receive all of this principal sum on SEPTEMBER 10,
--------------
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
SEPTEMBER 10, 1996 at the rate of 10.250% per year until
------------------ -------
SEPTEMBER 11, 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 DECEMBER 9, 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>
ADDITIONAL TERMS:
SECURITY: THIS PROMISSORY NOTE IS SECURED BY A PLEDGE AGREEMENT DATED
SEPTEMBER 10, 1996 ON 131,508 SHARES OF AMERICAN HEALTHCHOICE, INC. STOCK
AND UCC'S FILED IN BOONE COUNTY AND WITH SECRETARY OF STATE ON THE STOCK
CERTIFICATES.
<TABLE>
<S> <C>
- --------------------------------------------
[_] SECURITY: This note is separately PURPOSE: The purpose of this loan is CONSUMER:
secured by (describe separate document ------------
by type and date): REFI #305802 & NEW MONEY FOR ADDL STOCK
- -------------------------------------------- --------------------------------------------------
(This section is for your internal use. SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE
Failure to list a separate security (INCLUDING THOSE ON PAGE 2). I have received a
document does not mean the agreement will copy on today's date.
not secure this note.)
- -------------------------------------------- /s/ John A. Crouch, M.D.
--------------------------------------------------
Signature for Lender JOHN A. CROUCH, M.D.
/s/ W. Michael Stroupe
- -------------------------------------------- __________________________________________________
W. MICHAEL STROUPE, EXECUTIVE VICE PRESIDENT
____________________________________________ __________________________________________________
__________________________________________________
</TABLE>
<PAGE>
Exhibit 12
----------
<TABLE>
<CAPTION>
PROMISSORY NOTE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
$100,000.00 09-10-1996 09-10-1997 604315 BJM
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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: JOHN A. CROUCH Lender: FIRST NATIONAL BANK AND TRUST COMPANY
806 AUDUBON DRIVE P.O. BOX 1867
COLUMBIA, MO 65203 COLUMBIA, MO 65205-1867
================================================================================
<TABLE>
<S> <C> <C>
Principal Amount: $100,000.00 Initial Rate: 9.250% Date of Note: September 10, 1996
</TABLE>
PROMISE TO PAY. JOHN A. CROUCH ("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 One Hundred Thousand & 00/100 Dollars
($100,000.00), together with interest on the unpaid principal balance from
September 10, 1996, until paid in full.
PAYMENT. Borrower will pay this loan in one principal payment of $100,000.00
plus interest on September 10, 1997. This payment due September 10, 1997, 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 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.
<PAGE>
COLLATERAL. This Note is secured by A SECURITY AGREEMENT DATED SEPTEMBER 10,
1996 ON 20,408 SHARES OF AMERICAN HEALTH CHOICE, INC.
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.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. 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/ John A. Crouch
- ----------------------------------------------
JOHN A. CROUCH
================================================================================
<PAGE>
Exhibit 13
----------
MEMORANDUM OF OPTION AGREEMENT AMENDMENT
----------------------------------------
Date: August 28, 1996
To: Dr. J. W. Stucki, Chairman & CEO
American HealthChoice, Inc. ("AHIC")
1500 W. Walnut Hill Lane, Suite 275
Irving, TX 75038
From: The Optionees, as defined under March 8, 1996 Agreement ("Option
Agreement")
Subject: Option Agreement Amendment
- --------------------------------------------------------------------------------
This Memorandum of Option Agreement Amendment sets forth terms and conditions
amending and modifying the Option Agreement between AHIC and the Optionees (such
Optionees hereinafter referred to as "Optionee(s)"):
A. If the Optionee(s) make payment to AHIC on or before August 31, 1996 for
the purchase by the Optionee(s) of such number of shares of common stock of AHIC
optioned under the Option Agreement, such optioned shares being described under
Paragraphs 2, 3 and 4 thereof (i.e., the Second Stock Option, the Third Stock
Option and the Fourth Stock Option respectively) at a price of Four and 90/100
Dollars ($4.90) per share, which aggregate purchase price, to be paid by the
Optionee(s) on or before August 31, 1996 ($250,000 to be wired by 12:00 CST
8/29/96; $250,000 to be wired by 12:00 CST 8/30/96), totals Five Hundred
Thousand Dollars ($500,000.00) or more, (with the method and manner in which the
shares so purchased to be shared between the Optionee(s) as shall be determined
in their sole discretion), then in such event, (i) all such shares so purchased
by the Optionee(s) shall be added to the shares owned by the respective
Optionee(s), for which shares the registration thereof is being sought, in the
registration statement filed by AHIC with the SEC on or about July 31, 1996 (the
"Registration") as part of the amendment to the registration statement AHIC is
otherwise required to file by reason of the recently filed quarterly statement
for the period ending June 30, 1996 and such other events as may require said
amendment, and (ii) all such shares so purchased by the Optionee(s) shall not be
subject to any lock-up provisions, consistent with the treatment of the shares
owned by the respective Optionee(s) as set forth in the Registration;
B. If (i) the Optionee(s) on or before August 31, 1996, pay to AHIC Five
Hundred Thousand Dollars ($500,000.00) or more, as set forth in "A" above and
(ii) the Optionee(s) make payment to AHIC on or before September 11, 1996 for
the purchase by the Optionee(s) of any such additional number of shares of
common stock of AHIC optioned under the Option Agreement, such optioned shares
being described under Paragraphs 2, 3 and 4 thereof (i.e., the Second Stock
Option, the Third Stock Option and the Fourth Stock Option respectively) at a
price of Four and 90/100 Dollars ($4.90) per share, (with the method and manner
in which the shares so purchased to be shared between the Optionee(s) as shall
be determined in their sole discretion) then in such event, (i) all such shares
so purchased by the Optionee(s) shall be added to the shares owned by the
respective Optionee(s) for which shares the registration thereof is being
sought, in the registration statement filed by
<PAGE>
MEMORANDUM OF OPTION AGREEMENT AMENDMENT
August 28, 1996
Page 2
AHIC with the SEC on or about July 31, 1996 (the "Registration") as part of the
amendment to the registration statement AHIC is otherwise required to file by
reason of the recently filed quarterly statement for the period ending June 30,
1996 and such other events as may require said amendment, and (ii) all such
shares so purchased by the Optionee(s) shall not be subject to any lock-up
provisions, consistent with the treatment of the shares owned by the respective
Optionee(s) as set forth in the Registration;
C. If the Optionee(s) make payment to AHIC on or before September 18, 1996 of
a non-refundable extension fee of Ten Cents ($.10) per share for all shares of
common stock of AHIC optioned under the Option Agreement, such shares being
described under Paragraphs 2, 3 and 4 thereof (i.e., the Second Stock Option,
the Third Stock Option and the Fourth Stock Option respectively) not so
purchased as described in "A" and "B" above (hereinafter collectively referred
to as the "Remaining Option Shares" and with the method and manner in which the
Remaining Option Shares to be shared between the Optionee(s) as shall also be
determined in their sole discretion); and
D. If the Optionee(s) make payment to AHIC on or before September 18, 1996 of
the Third Option Fee (i.e., One Hundred Thousand Dollars [$100,000.00]), or such
portion thereof as shall be ratably due AHIC after consideration of the number
of total shares purchased as described in "A" and "B" above; then
E. Conditioned only upon the performance by Optionee(s) of the conditions set
forth in "A", "C" and "D" above, AHIC hereby confirms and agrees to an extension
of the time period for the Optionee(s) purchase of all or part of the Remaining
Option Shares at a price of Four and 90/100 Dollars ($4.90) per share until on
or before December 18, 1996.
F. All other terms and conditions of the Option Agreement not modified or
amended herein shall remain in full force and effect.
* * *
<PAGE>
MEMORANDUM OF OPTION AGREEMENT AMENDMENT
August 28, 1996
Page 3
AGREED & ACCEPTED BY OPTIONOR:
AMERICAN HEALTHCHOICE, INC.,
a New York Corporation
By: /s/ J.W. Stucki
----------------------------------
Its: Chief Executive Officer
----------------------------------
Date: 8/29/96
------------------------
AGREED & ACCEPTED BY OPTIONEES:
/s/ John A. Crouch, M.D. /s/ Jerry D. Kennett, M.D.
- ------------------------------ --------------------------------------
John A. Crouch, M.D. Jerry D. Kennett, M.D.
Date: 8/29/96 Date: 8/29/96
------------------------ -------------------------------
/s/ H. Jerry Murrell, M.D. /s/ Merlin Kirby, M.D.
- ------------------------------ --------------------------------------
H. Jerry Murrell, M.D. Merlin Kirby, M.D.
Date: 8/29/96 Date: 8/29/96
------------------------ -------------------------------
<PAGE>
Exhibit 14
----------
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
$246,390.00 08-29-1996 08-28-1997 604292 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.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Borrower: H. JERRY MURRELL Lender: FIRST NATIONAL BANK AND
BEVERLY R. MURRELL TRUST COMPANY
3600 W. VAUGHTER SCHOOL ROAD P.O. BOX 1867
COLUMBIA, MO 65203 COLUMBIA, MO 65205-1867
- --------------------------------------------------------------------------------
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:
56622.000 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.
(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.
<PAGE>
(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 August
29, 1996, in the principal amount of $246,390.00 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.
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.
<PAGE>
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.
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
<PAGE>
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
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.
<PAGE>
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
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,
<PAGE>
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.
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.
<PAGE>
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:
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
<PAGE>
(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.
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
<PAGE>
jurisdiction of the courts of BOONE County, the State of Missouri.
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.
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.
<PAGE>
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 AUGUST 29, 1996.
GRANTOR:
/s/ H. Jerry Murrell /s/ Beverly R. Murrell
-------------------- ----------------------
H. JERRY MURRELL BEVERLY R. MURRELL
<PAGE>
Exhibit 15
----------
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:
131,508 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
<PAGE>
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.
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
<PAGE>
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.
IN WITNESS WHEREOF, the undersigned have executed this agreement this 10th day
of September, 1996.
BOONE COUNTY NATIONAL BANK
By: /s/ W. Michael Stroupe /s/John A. Crouch, M.D.
-------------------------------- --------------------------------
W. MICHAEL STROUPE JOHN A. CROUCH, M.D.
Title: Executive Vice President
------------------------
<PAGE>
Exhibit 16
----------
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
$100,000.00 09-10-1996 09-10-1997 604315 BJM
- ------------------------------------------------------------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Borrower: JOHN A. CROUCH Lender: FIRST NATIONAL BANK AND TRUST COMPANY
806 AUDUBON DRIVE P.O. BOX 1867
COLUMBIA, MO 65203 COLUMBIA, MO 65205-1867
================================================================================
THIS COMMERCIAL PLEDGE AND SECURITY AGREEMENT is entered into between JOHN A.
CROUCH (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:
20408.000 shares of AMERICAN HEALTH CHOICE, INC. WITH CERTIFICATE
# , WITH CUSIP # , WITH A VALUE OF $ .
---------- ----------- -------------
In addition, the word "Collateral" includes all property of Grantor, 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.
(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.
<PAGE>
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 JOHN A. CROUCH.
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 September
10, 1996, in the principal amount of $100,000.00 from JOHN A. CROUCH to
Lender, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of and substitutions for the note or credit
agreement.
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.
<PAGE>
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.
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
<PAGE>
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 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 and preserving the
Collateral. All such expenditures incurred or paid
<PAGE>
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.
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
<PAGE>
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:
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.
<PAGE>
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.
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:
<PAGE>
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. 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.
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>
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 SEPTEMBER 10, 1996.
GRANTOR:
/s/ John A. Crouch
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JOHN A. CROUCH
