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$155,000,000
LOAN AGREEMENT
Dated as of September 1, 1999
Among
INAMED CORPORATION and
INAMED ACQUISITION CORPORATION
as Borrowers,
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders,
and
ABLECO FINANCE LLC
as Administrative Agent
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS......................................................1
SECTION 1.01. Definitions................................................1
SECTION 1.02. Terms Generally...........................................19
SECTION 1.03. Accounting and Other Terms................................19
SECTION 1.04. Time References...........................................19
ARTICLE II AMOUNT AND TERMS OF THE LOAN...................................20
SECTION 2.01. The Loan..................................................20
SECTION 2.02. Making the Loan...........................................20
SECTION 2.03. Repayment.................................................21
SECTION 2.04. Interest and Fees.........................................23
SECTION 2.05. Prepayments of the Notes..................................24
SECTION 2.06. Payments and Computations.................................26
SECTION 2.07. Use of Proceeds...........................................27
SECTION 2.08. Taxes.....................................................27
SECTION 2.09. Increased Costs...........................................29
SECTION 2.10. Sharing of Payments, Etc..................................30
SECTION 2.11 Joint and Several Liability of the Borrowers..............30
SECTION 2.12 Parent as Agent for Borrowers.............................32
ARTICLE III CONDITIONS TO LENDING; RELEASE OF FUNDS IN SECURITIES
ACCOUNT.....................................................................32
SECTION 3.01. Conditions Precedent to the Loan..........................32
SECTION 3.02 Conditions Precedent to Release of Funds in
Securities Account........................................38
ARTICLE IV REPRESENTATIONS AND WARRANTIES.................................40
SECTION 4.01. Representations and Warranties............................40
ARTICLE V COVENANTS.......................................................48
SECTION 5.01. Affirmative Covenants.....................................48
SECTION 5.02. Negative Covenants........................................54
ARTICLE VI EVENTS OF DEFAULT..............................................61
SECTION 6.01. Events of Default.........................................61
ARTICLE VII THE ADMINISTRATIVE AGENT......................................63
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SECTION 7.01. Authorization and Action..................................63
SECTION 7.02. Administrative Agent's Reliance, Etc......................64
SECTION 7.03. Administrative Agent in its Individual Capacity...........64
SECTION 7.04. Lender Credit Decision....................................65
SECTION 7.05. Indemnification...........................................65
SECTION 7.06. Successor Administrative Agents...........................65
ARTICLE VIII MISCELLANEOUS................................................66
SECTION 8.01. Amendments, Etc...........................................66
SECTION 8.02. Notices, Etc..............................................66
SECTION 8.03. No Waiver; Remedies.......................................67
SECTION 8.04. Costs, Expenses...........................................67
SECTION 8.05. Right of Set-off..........................................68
SECTION 8.06. Binding Effect............................................68
SECTION 8.07. Assignments and Participations............................69
SECTION 8.08. Execution in Counterparts.................................71
SECTION 8.09. Jurisdiction, Etc.........................................71
SECTION 8.10. Governing Law.............................................72
SECTION 8.11. Treatment of Certain Information; Confidentiality.........72
SECTION 8.12. Waiver of Jury Trial......................................72
SECTION 8.13. Headings..................................................72
SECTION 8.14. Severability..............................................72
SCHEDULES
Schedule 1.01 Lending Offices
Schedule 2.01 Initial Lenders' Pro Rata Shares of Loan
Schedule 2.07 Use of Proceeds
Schedule 4.01(a) Permitted Liens
Schedule 4.01(b) Subsidiaries
Schedule 4.01(e) Authorizations and Approvals
Schedule 4.01(h) Licenses and Permits
Schedule 4.01(p) Material Contracts
Schedule 4.01(u) Filing Offices
Schedule 5.02(b) Indebtedness
Schedule 5.02(d) Employee Plan, etc.
Schedule 5.02(f) Investments
Schedule 5.02(h) Restrictions on Subsidiaries
Schedule 5.02(i) Affiliate Transactions
EXHIBITS
Exhibit A-1 Form of Bridge Note
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Exhibit A-2 Form of Rollover Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Securities Account Agreement
Exhibit E Form of Securities Account Security Agreement
Exhibit F Form of Borrower Pledge Agreement
Exhibit G Form of Borrower Security Agreement
Exhibit H-1 Form of Collagen Joinder Agreement
Exhibit H-2 Form of Subsidiary Joinder Agreement
Exhibit I Form of Guaranty
Exhibit J Form of Guarantor Pledge Agreement
Exhibit K Form of Guarantor Security Agreement
Exhibit L Certain Terms of Rollover Notes / Exchange Securities
Exhibit M Form of Warrant
Exhibit N Form of Equity Registration Rights Agreement
Exhibit O Form of Contribution Agreement
Exhibit P Form of Solvency Certificate
Exhibit Q Form of Warrant Opinion
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LOAN AGREEMENT
LOAN AGREEMENT dated as of September 1, 1999 among INAMED
Corporation, a Delaware corporation (the "Parent"), Inamed Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary of the Parent
(the "Purchaser", and together with the Parent, the "Borrowers"), the lenders
listed on the signature pages hereof as the Initial Lenders (the "Initial
Lenders") and Ableco Finance LLC, as administrative agent (in such capacity and
together with any successor appointed pursuant to Article VII, the
"Administrative Agent") for the Lenders (as hereinafter defined).
The Borrowers are parties with Collagen Aesthetics, Inc., a Delaware
corporation ("Collagen"), to an Agreement and Plan of Merger dated as of July
31, 1999, pursuant to which the Purchaser has agreed to acquire all of the
outstanding shares of common stock of Collagen (the "Shares") and certain
preferred share purchase rights issued by Collagen (the "Rights"). Such
acquisition (the "Acquisition") is to be accomplished by (i) a tender offer (the
"Tender Offer"), commenced by the Purchaser on August 4, 1999, to purchase all
of the outstanding Shares and the associated Rights pursuant to the Purchaser's
Offer to Purchase dated August 4, 1999 (the "Offer to Purchase") and (ii)
following the purchase of Shares and the associated Rights pursuant to the
Tender Offer and subject to the satisfaction of the applicable conditions
precedent in such Agreement and Plan of Merger, the merger (the "Merger") of the
Purchaser with and into Collagen.
The Borrowers have requested that the Lenders lend to the Borrowers
$155,000,000 to be used to finance the Tender Offer and the Merger, to refinance
certain existing indebtedness of the Parent and to pay certain fees and expenses
relating to the Acquisition and the financing thereof. The Lenders have agreed
to lend such amount to the Borrowers subject to the terms and conditions set
forth in this Agreement.
Accordingly, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. As used in this Agreement, the following
terms shall have the following meanings :
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
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"Acquisition" has the meaning specified in the second paragraph
of this Agreement.
"Administrative Agent" has the meaning specified in the recitals
to this Agreement.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that,
without limiting the foregoing, beneficial ownership of 10% or more of the
voting securities of a Person shall be deemed to be control.
"Agreement" means this Loan Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Approved Fund" means, with respect to any Lender that is a fund or
other Person that invests, in whole or in part, in commercial loans, any other
fund or other Person that invests, in whole or in part, in commercial loans, and
that is managed or advised by the same investment advisor as such Lender or an
Affiliate of such investment advisor.
"Asset Sale" means the sale, lease, conveyance or other disposition
by the Parent or any of its Subsidiaries of (i) any Equity Interests of a
Subsidiary of the Parent or (ii) any Property of the Parent or any of its
Subsidiaries.
"Assignment and Acceptance" means an Assignment and Acceptance,
substantially in the form of Exhibit C hereto or otherwise acceptable to the
Administrative Agent, entered into by a Lender and an assignee of such Lender,
and accepted by the Administrative Agent, in accordance with Section 8.07.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
heretofore and hereafter amended, and codified as 11 U.S.C. Section 101, et seq.
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall be equal to (i) the higher of (A)
the Prime Rate and (B) the Federal Funds Rate plus one-half of one percent, plus
(ii) a margin equal to the rate per annum which is equal to (A) the Applicable
Margin (as defined in the Bridge Notes) less (B) the difference between (1) the
amount determined under clause (i) and (2) the LIBO Rate, provided that a change
in the Base Rate shall take effect simultaneously with the corresponding change
or changes in the Prime Rate or the Federal Funds Rate.
"Base Rate Loan" means, with respect to any Lender, at any time, its
Pro Rata Share of the Loan bearing interest at the Base Rate.
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"Borrower Pledge Agreement" means the Borrower Pledge and Security
Agreement, substantially in the form of Exhibit F hereto, made by each Borrower
in favor of the Administrative Agent and granting a valid and enforceable first
priority Lien in favor of the Administrative Agent on 100% of the Capital Stock
of each of such Borrower's Domestic Subsidiaries and 65% of the Capital Stock of
each of such Borrower's Foreign Subsidiaries that is designated as a pledged
subsidiary in Schedule 4.01(b) hereto or that is a Significant Subsidiary, as
collateral security for the Obligations.
"Borrower Security Agreement" means the Borrower Security Agreement,
substantially in the form of Exhibit G hereto, made by each Borrower in favor of
the Administrative Agent and granting a valid and enforceable and, except to the
extent otherwise provided therein, first priority Lien in favor of the
Administrative Agent on all Collateral of such Borrower, as collateral security
for the Obligations.
"Borrowers" has the meaning specified in the recitals to this
Agreement.
"Bridge Note" means a senior secured promissory note of the
Borrowers payable to the order of a Lender (or its nominee), substantially in
the form of Exhibit A-1 hereto, evidencing the aggregate Indebtedness of the
Borrowers to such Lender resulting from such Lender's Pro Rata Share of the
Loan.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City, and, if the applicable
Business Day relates to any LIBO Rate Loan, a day on which dealings in dollar
deposits are also carried on in the London interbank market.
"Capital Assets" means, with respect to any Person, all equipment,
fixed assets and real property or improvements of such Person, or replacements
or substitutions therefor or additions thereto, that have been or should be, in
accordance with GAAP, reflected as additions to property, plant or equipment on
the balance sheet of such Person or that have a useful life of more than one
year.
"Capital Expenditures" means, with respect to any Person for any
period, (i) all expenditures made directly or indirectly by such Person (whether
paid in Cash Equivalents or other consideration or accrued as a liability and
including, without limitation, all expenditures for maintenance and repairs
which are required, in accordance with GAAP, to be capitalized on the books of
such Person) during such period for Capital Assets and (ii) to the extent not
otherwise included in clause (i) of this definition, the aggregate principal
amount of all Indebtedness (including, without limitation, Capitalized Lease
Obligations) assumed or incurred during such period in connection with any such
expenditures for Capital Assets.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of a partnership or limited liability company,
partnership (whether general or limited) or membership interests, and (iii) in
the case of any other entity, any and all shares, interests, participations,
rights or other equivalents (however designated) that confer on the holder of
such shares, interests, participations, rights or equivalents the right to
receive a share of the profits and losses of, or distributions of assets of,
such entity.
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"Capitalized Lease" means any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on the balance sheet of such Person under GAAP.
"Capitalized Lease Obligations" means, with respect to any Person,
obligations of such Person under Capitalized Leases and, for purposes hereof,
the amount of any such obligation shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (iii) certificates of deposit
and Eurodollar time deposits with maturities of one year or less from the date
of acquisition, bankers' acceptances with maturities not exceeding one year and
overnight bank deposits, in each case with any domestic commercial bank having
capital and surplus in excess of $500,000,000 and rated "P-1" or better by
Moody's and "A-1" or better by S&P, (iv) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clauses (ii) and (iii) above entered into with any financial institution meeting
the qualifications specified in clause (iii) above, (v) commercial paper having
one of the two highest ratings obtainable from Moody's or S&P, and in each case
maturing within nine months after the date of acquisition, and (vi) money market
funds, the portfolios of which are limited to investments described in clauses
(i) through (v) above.
"Change of Control" means the occurrence of any of the following:
(i) any "person" or "group" (as such terms are defined in Section 13(d)(3) of
the Securities Exchange Act), other than Appaloosa Management, L.P. and its
Affiliates, shall become the owner, directly or indirectly, beneficially or of
record, of shares representing more than 35% of the Voting Stock of the Parent,
(ii) a majority of the members of the board of directors of the Parent are not
Continuing Directors, (iii) the Purchaser or, after the consummation of the
Merger, Collagen ceases to be a Wholly-Owned Subsidiary of the Parent or (iv) at
any time following the Closing Date, the number of Shares or the percentage of
the Equity Interests of Collagen owned by the Purchaser shall be less than the
number of Shares or the percentage of the Equity Interests of Collagen owned by
the Purchaser on the Closing Date after giving effect to the consummation of the
Tender Offer.
"Closing Date" means the first Business Day on or before October 29,
1999 on which all of the conditions set forth in Section 3.01 shall have been
satisfied and the Loan shall have been made.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collagen" has the meaning specified in the second paragraph of this
Agreement, and, after the consummation of the Merger, means the surviving
corporation in the Merger.
"Collagen Joinder Agreement" means the Acknowledgment and Joinder
Agreement, substantially in the form of Exhibit H-1 hereto, executed by Collagen
in favor of the Administrative Agent.
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"Collateral" means all Property of any nature whatsoever upon which
a Lien is created or purported to be created by any Loan Document as security
for the Obligations or any portion thereof.
"Confidential Information" means information that the Parent
furnishes to the Administrative Agent or any Lender or any Affiliate of any of
them in a writing designated as confidential, but does not include any such
information that is or becomes generally available to the public or that is or
becomes available to the Administrative Agent or such Lender from a source other
than the Parent or any of its Subsidiaries or Affiliates.
"Consolidated EBITDA" means, for any period, (i) Consolidated Net
Income of the Parent and its Subsidiaries for such period, plus (ii) the sum,
without duplication and only to the extent deducted in determining such
Consolidated Net Income for such period, of (A) Consolidated Interest Expense
for such period, (B) income or franchise tax expense (whether federal, state,
local, foreign or otherwise) of the Parent and its Subsidiaries for such period,
(C) depreciation expense of the Parent and its Subsidiaries for such period and
(D) amortization expense of the Parent and its Subsidiaries for such period,
each determined in accordance with GAAP; provided, however, that Consolidated
EBITDA for any period that includes any period prior to the date on which
Consolidated EBITDA includes the results of operations of Collagen and its
Subsidiaries shall be determined by including the results of operations of
Collagen and its Subsidiaries, determined in accordance with GAAP on a combined
basis with those of the Parent and its Subsidiaries for such period.
"Consolidated Interest Expense" means, for any period, all interest
expense paid or accrued on all Indebtedness of the Parent and its Subsidiaries
for such period, determined on a consolidated basis and in accordance with GAAP,
including, without limitation, (i) interest expense paid or payable in respect
of Indebtedness resulting from the Notes, (ii) the interest component of all
obligations under Capitalized Leases and (iii) the net payment, if any, payable
in connection with Hedging Obligations, less the net credit, if any, received in
connection with Hedging Obligations.
"Consolidated Net Income" means, for any period, the net income (or
net loss) of the Parent and its Subsidiaries for such period, determined on a
consolidated basis and in accordance with GAAP for such period.
"Contingent Obligation" means, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, (i) the direct or indirect guarantee, endorsement (other
than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of a primary obligor, (ii) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement, (iii) any obligation of such Person, whether or not
contingent, (A) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (B) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary
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obligor, (C) to purchase property, assets, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation or (D)
otherwise to assure or hold harmless the holder of such primary obligation
against loss in respect thereof; provided, however, that the term "Contingent
Obligation" shall not include any products warranties extended in the ordinary
course of business. The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made (or, if less,
the maximum amount of such primary obligation for which such Person may be
liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder), as determined by such Person in good faith.
"Continuing Director" means, as of any date of determination, any
member of the board of directors of the Parent who (i) was a member of the board
of directors of the Parent on the Closing Date or (ii) was nominated for
election or elected to the board of directors of the Parent with the approval of
a majority of the directors constituting Continuing Directors who were members
of the board of directors of the Parent at the time of such nomination or
election.
"Contribution Agreement" means the Contribution Agreement,
substantially in the form of Exhibit O hereto, among the Loan Parties.
"Default" means any event or condition that would constitute an
Event of Default but for the requirement that notice be given or time elapse or
both.
"Disqualified Stock" means any Capital Stock that either (i) by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, (A) matures or is
mandatorily redeemable, in whole or in part, pursuant to a sinking fund
obligation or otherwise, (B) is convertible into or exchangeable for
Indebtedness or Disqualified Stock, in whole or in part, or (C) is redeemable,
in whole or in part, at the option of the holder thereof at any time, in any
such case, on or prior to the date that is 123 days after the later of the date
on which the Loan matures or the date on which the Rollover Notes or Exchange
Securities, as the case may be, mature; provided, however, that any Capital
Stock that would constitute Disqualified Stock under this clause (i) solely
because the holders thereof have the right to require the redemption or
repurchase thereof by a Borrower upon the occurrence of a change of control or
an asset sale (as defined in the relevant documentation related thereto) shall
not constitute Disqualified Stock pursuant to this clause (i) if the terms of
such Capital Stock prohibit any such redemption or repurchase prior to the
payment in full of all principal of and interest on the Notes and satisfaction
of all other Obligations, (ii) is a preferred stock of a Subsidiary of the
Parent issued or transferred to, or held by or on behalf of, a Person other than
the Parent or one of its Wholly-Owned Subsidiaries, or (iii) is designated by a
Borrower (in a resolution of the board of directors of such Borrower delivered
to the Administrative Agent) as Disqualified Stock.
"Dollars" and "$" means lawful money of the United States of
America.
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"Domestic Subsidiary" means any Subsidiary of the Parent organized
under the laws of any State of the United States of America.
"Eligible Assignee" means a Lender, an Affiliate of a Lender, an
Approved Fund of a Lender, a commercial bank or any other Person that is an
"accredited investor" (as defined in Regulation D under the Securities Act) or a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act); provided, however, that neither the Parent or any of its Subsidiaries nor
any Affiliate of the Parent or any of its Subsidiaries shall be an Eligible
Assignee.
"Environmental Action" means with respect to the Parent and its
Subsidiaries any action, suit, demand, demand letter, claim, notice of
non-compliance or violation, notice of liability or potential liability,
governmental investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material, or arising from alleged injury or threat to public or
employee health or safety (as it relates to the environment) or the environment,
including, without limitation, (i) by any Governmental Authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
due to the presence of Hazardous Materials or pursuant to any Environmental Law
and (ii) by any Governmental Authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any applicable federal, state, local or
foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree, or other legally binding requirement relating to pollution
or protection of the environment, public or employee health or safety (as it
relates to the environment) or natural resources, including, without limitation,
those relating to the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equity Documents" means the Warrants and the Equity Registration
Rights Agreement.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire such Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, such Capital Stock).
"Equity Registration Rights Agreement" means the Registration Rights
Agreement, substantially in the form of Exhibit N hereto, among the Parent and
the Initial Lenders with respect to the Warrants.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder.
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"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of the Parent or any of its
Subsidiaries, or under common control with the Parent or any of its
Subsidiaries, within the meaning of Section 414 of the Code.
"Event of Default" has the meaning specified in Section 6.01.
"Exchange" has the meaning specified in Section 2.03(b)(i).
"Exchange Date" means June 2, 2000, provided that if a Default has
occurred and is continuing on such date but the applicable grace period (if any)
specified in Section 6.01 has not expired, the Exchange Date shall be the
earliest of (x) the date on which such Default is cured, as determined by the
Administrative Agent, (y) the date on which such grace period expires, and (z)
the date which is 30 days from the date on which such Default first occurs.
"Exchange Documents" means the Rollover Notes, the Exchange
Indenture, the Exchange Securities and the Exchange Registration Rights
Agreement.
"Exchange Indenture" means the indenture, in form and substance
reasonably satisfactory to the Required Lenders, pursuant to which the Exchange
Securities are to be issued.
"Exchange Registration Rights Agreement" means the registration
rights agreement, in form and substance reasonably satisfactory to the Required
Lenders, with respect to the Rollover Notes or the Exchange Securities, as the
case may be, to be executed and delivered by the Parent in connection with the
Exchange.
"Exchange Securities" means the senior notes, in substantially the
form set forth in or as an exhibit to the Exchange Indenture, to be issued, at
the request of the Required Lenders or as otherwise provided in Section 5.01(l),
under the Exchange Indenture pursuant to Section 2.03(b)(iii) in connection with
the consummation of the Exchange.
"fair market value" means, with respect to any Property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between an informed and willing seller and an informed and willing and able
buyer, neither of whom is under undue pressure or compulsion to complete the
transaction.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fiscal Year" means the fiscal year of the Parent and its
Subsidiaries ending on December 31st of any calendar year or such other fiscal
year as the Parent may select from time to time in accordance with the terms
hereof.
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"Foreign Subsidiary" means any Subsidiary of the Parent other
than a Domestic Subsidiary.
"Funding Account" means an account at The Bank of New York into
which the proceeds of the Loan and certain amounts funded by the Parent are to
be deposited and applied to make payments on the Closing Date in accordance with
this Agreement.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect from time to time.
"Governmental Authority" means any government or political
subdivision or any agency, authority, board, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantor" means each Domestic Subsidiary of the Parent (other than
a Borrower) that is or becomes a party to the Guaranty; provided, however, that
notwithstanding anything to the contrary contained herein, neither Collagen nor
any of its Subsidiaries shall be required to become a Guarantor or a party to
any Security Document prior to the consummation of the Merger.
"Guarantor Pledge Agreement" means the Pledge and Security
Agreement, substantially in the form of Exhibit J hereto, made by each Guarantor
in favor of the Administrative Agent and granting a valid and enforceable first
priority Lien in favor of the Administrative Agent on 100% of the Capital Stock
of each of such Guarantor's Domestic Subsidiaries and 65% of the Capital Stock
of each of such Guarantor's Foreign Subsidiaries that is designated as a pledged
subsidiary in Schedule 4.01(b) hereto or that is a Significant Subsidiary, as
collateral security for the Obligations and the obligations of such Guarantor
under the Guaranty.
"Guarantor Security Agreement" means the Security Agreement,
substantially in the form of Exhibit K hereto, made by each Guarantor in favor
of the Administrative Agent and granting a valid and enforceable and, except to
the extent otherwise provided therein, first priority Lien in favor of the
Administrative Agent on all Collateral of such Guarantor, as collateral security
for the Obligations and the obligations of such Guarantor under the Guaranty.
"Guaranty" means the Guaranty, substantially in the form of Exhibit
I hereto, made by each of the Guarantors in favor of the Administrative Agent
and guaranteeing the Obligations.
"Hazardous Materials" means (i) refined petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (ii) any other chemicals,
materials or substances designated,
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Loan Agreement
14
classified or regulated as hazardous or toxic or as a pollutant or contaminant
under any applicable Environmental Law.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate or currency swap agreements,
cap agreements, collar agreements and related agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in value of assets owned, financed or sold, or of liabilities incurred or
assumed or of pre-funding arrangements, in any case, in the ordinary course of
business of such Person and not for speculative purposes.
"Indebtedness" means, with respect to any Person, (i) any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capitalized Lease Obligations or the unpaid deferred
balance of the purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of the
foregoing indebtedness (other than letters of credit or banker's acceptances)
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, (ii) all Hedging Obligations of such Person, (iii) all
indebtedness of others secured by a Lien on any Property of such Person, whether
or not such indebtedness is assumed by such Person (provided, that if such
Person has not assumed or otherwise become liable with respect to such
Indebtedness, such Indebtedness shall be deemed to be in an amount equal to the
lesser of the fair market value of the Property to which such Lien relates, as
determined in good faith by such Person, and the stated amount of such
Indebtedness), (iv) all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock (but
excluding any accrued dividends thereon), and (v) all Contingent Obligations of
such Person. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations as described above at such
date.
"Indemnified Party" has the meaning specified in Section 8.04(b).
"Initial Lenders" has the meaning specified in the recitals to
this Agreement.
"Insignificant Subsidiary" means a Subsidiary of the Parent,
including its Subsidiaries, which meets either of the following conditions: (i)
the Parent's and its other Subsidiaries' proportionate share of the total assets
(after intercompany eliminations) of such Subsidiary is not in excess of five
percent of the total assets of the Parent and its Subsidiaries; or (ii) the
Parent's and its other Subsidiaries' equity in the income from continuing
operations before income taxes and extraordinary items of such Subsidiary is not
in excess of five percent of such income of the Parent and its Subsidiaries for
the most recently completed fiscal quarter.
"Interest Period" has the meaning specified in the Bridge Notes.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Contingent Obligations), advances or capital
contributions (excluding commission, travel and
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Loan Agreement
15
similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness of
another Person, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.
"Lenders" means the Initial Lenders and each Person that shall
become a party hereto pursuant to Section 8.07.
"Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "Lending Office" below its name on Schedule 1.01
hereto or in the Assignment and Acceptance pursuant to which it became a Lender,
or such other office of such Lender as such Lender may from time to time specify
to the Parent and the Administrative Agent.
"LIBO Rate" has the meaning specified in the Bridge Notes.
"LIBO Rate Loan" means, with respect to any Lender, its Pro Rata
Share of the Loan to the extent that it bears interest at rates based upon the
LIBO Rate.
"Lien" means, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or similar encumbrance of any kind in respect
of such Property, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction).
"Loan" means (i) the loans evidenced by the Bridge Notes issued to
the Lenders pursuant to Section 2.01, and (ii) subject to Section 2.03(b), if on
the Exchange Date the Loan Refinancing Securities have not been issued and sold
as contemplated by Section 5.01(k), the Obligations of the Borrowers under the
Rollover Notes or Exchange Securities, as the case may be.
"Loan Documents" means this Agreement, the Bridge Notes, the
Guaranty, the Security Documents, the Collagen Joinder Agreement, each
Subsidiary Joinder Agreement, the Securities Account Agreement, the Equity
Documents and the Exchange Documents.
"Loan Parties" means, collectively, each Borrower and each
Guarantor.
"Loan Refinancing" means the public offering or private placement
and sale by the Parent of the Loan Refinancing Securities contemplated by
Section 5.01(k) in order to refinance all Obligations owing with respect to the
Bridge Notes.
"Loan Refinancing Securities" has the meaning specified in
Section 5.01(k).
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties, assets, liabilities or prospects of a Person.
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Loan Agreement
16
"Material Adverse Effect" means a material adverse effect on (i) the
business, condition (financial or otherwise), operations, performance,
properties, assets, liabilities or prospects of the Parent and its Subsidiaries
(taken as a whole), (ii) the rights and remedies of the Administrative Agent and
the Lenders under any Loan Document or (iii) the ability of any Loan Party to
perform any of its material Obligations under any Loan Document to which it is
or is to be a party.
"Maturity Date" means (i) with respect to any Bridge Note, the
Exchange Date and (ii) with respect to any Rollover Note or Exchange Security,
the date which is seven years from the Exchange Date.
"Merger" has the meaning specified in the second paragraph of
this Agreement.
"Merger Agreement" means the Agreement and Plan of Merger dated as
of July 31, 1999, among the Parent, the Purchaser and Collagen.
"Merger Date" means the date on which the Merger is consummated in
accordance with the Merger Agreement.
"Merger Documents" means the Merger Agreement and all other
agreements, instruments and other documents executed and delivered pursuant to
the terms thereof or otherwise in connection with the Merger (excluding,
however, the Loan Documents and the Tender Offer Documents).
"Minimum Shares" means the greater of (i) the number of Shares which
satisfies the Minimum Condition (as defined in the Merger Agreement) and (ii)
the greater of (A) the number of Shares which are sufficient to approve the
Merger in accordance with applicable law and the Organizational Documents of
Collagen and (B) 51.0% of the Shares on a fully diluted basis.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Parent or any of its Subsidiaries or
any ERISA Affiliate is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an obligation
to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of the Parent
or any of its Subsidiaries or any ERISA Affiliate and at least one Person other
than the Parent, its Subsidiaries and its ERISA Affiliates or (ii) was so
maintained and in respect of which the Borrowers or any ERISA Affiliate could
have liability under Section 4064 or 4069 of ERISA in the event such plan has
been or were to be terminated.
"Net Proceeds" means, with respect to the issuance or incurrence by
any Person of any Indebtedness or the sale or issuance by any Person of any of
its Equity Interests or any Asset Sale (including, without limitation, any Cash
Equivalent received upon the sale or other
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Loan Agreement
17
disposition of or realization on any non-cash consideration received in any
Asset Sale), as the case may be, the aggregate Cash Equivalent proceeds received
by the Parent or any of its Subsidiaries, net of (i) the direct costs relating
thereto (including, without limitation, legal, accounting and investment banking
fees, recording fees, title transfer fees, appraisal fees and sales commissions)
incurred as a result thereof, (ii) taxes paid or payable, in the good faith
estimation of the Parent, as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), and (iii)
in the case of an Asset Sale, amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"Note" means a Bridge Note, a Rollover Note or an Exchange
Security, as the case may be.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Obligations" means all amounts owing to the Administrative Agent or
any Lender pursuant to the terms of this Agreement or any other Loan Document.
"Offer to Purchase" has the meaning specified in the second
paragraph of this Agreement.
"Organizational Documents" means (i) with respect to any Person that
is a corporation, the charter and by-laws of such Person, (ii) with respect to
any Person that is a partnership, the partnership agreement and, if a limited
partnership, certificate of limited partnership of such Person, and (iii) with
respect to any Person that is a limited liability company, the operating
agreement of such Person.
"Other Taxes" has the meaning specified in Section 2.08(b).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Liens" means: (i) Liens granted in favor of the
Administrative Agent or any Lender pursuant to the Security Documents; (ii)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (iii) Liens that are existing on the Closing Date,
after giving effect to the making of the Loan and the use of proceeds thereof,
and that are listed in Schedule 4.01(a) hereto; (iv) Liens for taxes,
assessments or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings, provided that
any reserve or other appropriate provision as shall be required in conformity
with GAAP shall have been made therefor; (v) Liens incurred in the ordinary
course of business of the Parent or any of its Subsidiaries with respect to
obligations not exceeding $500,000 in the aggregate for any or all such Liens at
any one time outstanding and that (A) are not incurred in connection with the
borrowing of money or the obtaining of advances or credit (other than trade
credit in the ordinary course of business) and (B) do not materially detract
from the value of the Property or materially impair the use thereof in the
operation of business by the Parent or such Subsidiary; (vi) Liens imposed by
law, including without limitation carriers',
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18
warehousemen's and mechanics' Liens, in each case for sums not yet due or being
contested in good faith by appropriate proceedings, or other Liens arising out
of judgments or awards that do not constitute an Event of Default under Section
6.01(g) or (h) and in respect of which the Parent or any of its Subsidiaries
subject thereto shall be prosecuting an appeal or proceedings for review in good
faith and, pending such appeal or proceedings, shall have secured within 10 days
after the entry thereof a subsisting stay of execution and shall be maintaining
reserves, in accordance with GAAP, with respect to any such judgment or award;
(vii) survey exceptions, easements and other restrictions on the use of Property
that do not materially detract from the value of such Property or the use
thereof in the operation of business by any of the Parent and its Subsidiaries;
(viii) (A) purchase money Liens on personal Property acquired or held by the
Parent or any of its Subsidiaries in the ordinary course of its business to
secure the purchase price of such Property or Indebtedness incurred solely for
the purpose of financing the acquisition of such Property, (B) Liens existing on
such personal Property at the time of its acquisition and (C) Liens securing or
otherwise arising in connection with Capitalized Lease Obligations permitted to
exist under this Agreement; provided, however, that in the case of Liens
referred to in this clause (viii), (1) no such Lien shall extend to or cover any
other Property of the Parent or any of its Subsidiaries, (2) the principal
amount of the Indebtedness secured by any such Lien shall not exceed the lesser
of the fair market value and the cost of the Property so held or acquired and
(3) the aggregate principal amount of Indebtedness secured by any or all such
Liens shall not exceed at any one time outstanding $500,000; (ix) Liens to
secure any Refinancing (or successive Refinancings), in whole or in part, of any
Indebtedness (or commitment for Indebtedness) existing and secured by a Lien on
the Closing Date; provided, however, that (x) any such new Lien shall be a Lien
on the same Property or interest securing the original Lien, (y) the
Indebtedness secured by such Lien does not exceed the outstanding principal
amount of the Indebtedness existing on the Closing Date secured by such Lien,
and (z) such Indebtedness is not otherwise prohibited hereunder; (x) Liens
arising from precautionary UCC financing statement filings with respect to
operating leases, consignments and similar arrangements entered into in the
ordinary course of business; (xi) pledges or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other social security legislation and deposits securing liability
to insurance carriers under insurance or self-insurance arrangements; provided
that the aggregate amount of obligations secured by such pledges and deposits,
and the value of all Property and cash subject to such pledges and deposits,
shall not exceed at any one time outstanding $500,000; (xii) licenses, leases or
subleases granted to other Persons in the ordinary course of business not
materially interfering with the conduct of the business of the Parent and its
Subsidiaries taken as a whole; (xiii) statutory and common law landlords' Liens
under leases to which the Parent or any of its Subsidiaries is a party; (xiv)
any interest or title of a lessor, sublessor, licensee or licensor under any
lease or license agreement permitted by this Agreement; (xv) Liens securing
reimbursement obligations with respect to trade letters of credit and banker's
acceptances which encumber only documents and other property relating to such
letters of credit and the products and proceeds thereof; (xvi) Liens in favor of
customs and revenue authorities arising by operation of law to secure payment of
customs duties in connection with importation of goods; and (xvii) Liens on the
Property of a Foreign Subsidiary securing Indebtedness incurred by such Foreign
Subsidiary as permitted by Section 5.02(b), provided no such Lien shall extend
to or cover any Property of the Parent or any of its other Subsidiaries.
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19
"Permitted Refinancing Indebtedness" means any Indebtedness or
Disqualified Stock of the Parent or any of its Subsidiaries issued in exchange
for, or the net proceeds of which are used to, Refinance other Indebtedness or
Disqualified Stock of the Parent or any of its Subsidiaries (other than
Indebtedness incurred pursuant to clause (ii), (iii) or (vii) of Section
5.02(b)); provided that: (i) the principal amount (or accreted value, if
applicable) or mandatory redemption amount of such Permitted Refinancing
Indebtedness does not exceed the principal amount of (or accreted value, if
applicable) or mandatory redemption amount, plus accrued and unpaid interest or
dividends on, the Indebtedness or Disqualified Stock so Refinanced (plus the
amount of contractual prepayment charges and reasonable expenses incurred in
connection therewith); (ii) such Permitted Refinancing Indebtedness has a final
maturity or final redemption date later than the final maturity or final
redemption date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness or
Disqualified Stock being Refinanced; (iii) if the Indebtedness or Disqualified
Stock being Refinanced is subordinated in right of payment to the Loan
hereunder, such Permitted Refinancing Indebtedness is subordinated in right of
payment to the Loan hereunder on terms at least as favorable to the Lenders as
those contained in the documentation governing the Indebtedness or Disqualified
Stock being Refinanced; and (iv) such Indebtedness is incurred or such
Disqualified Stock is issued either by the Parent or by a Subsidiary of the
Parent if such Subsidiary was the obligor on the Indebtedness or issuer of the
Disqualified Stock being Refinanced.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by The Chase Manhattan Bank in New York as
its prime rate. Each change in the Prime Rate shall be effective as of the
opening of business on the day such change in the Prime Rate occurs. The parties
hereto acknowledge that the rate announced publicly by The Chase Manhattan Bank
in New York as its Prime Rate is an index or base rate and shall not necessarily
be its lowest or best rate charged to its customers or other banks.
"Projections" means the projections, dated August 11, 1999, prepared
by the Parent in connection with the Transactions and furnished to the Lenders
prior to the Closing Date.
"Pro Rata Share" of any amount means, with respect to any Lender at
any time, the product of such amount times a fraction the numerator of which is
the principal amount of such Lender's portion of the Loan at such time and the
denominator of which is the principal amount of the Loan at such time.
"Property" means any right or interest in or to property or assets
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Purchaser" has the meaning specified in the recitals to this
Agreement.
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20
"Refinance" means, in respect of any Indebtedness, to extend,
refinance, renew, replace, defease, refund, repay, prepay, redeem, repurchase or
retire, or to issue other Indebtedness in exchange or replacement for, such
Indebtedness. "Refinanced" and "Refinancing" shall have correlative meanings.
"Register" has the meaning specified in Section 8.07(d).
"Regulation U" and "Regulation X" mean, respectively, Regulations U
and X of the Board of Governors of the Federal Reserve System as in effect from
time to time.
"Required Lenders" means (i) at any time prior to the Exchange Date,
Lenders owed at least 66 2/3% in interest of the then aggregate unpaid principal
amount of the Loan and (ii) at any time on or after the Exchange Date, Lenders
holding at least 66 2/3% of the aggregate principal amount outstanding under the
Rollover Notes or Exchange Securities, as the case may be.
"Restricted Payment" has the meaning specified in Section 5.02(d).
"Rights" has the meaning specified in the second paragraph of
this Agreement.
"Rollover Note" means a senior secured promissory note of the
Borrowers payable to the order of any Lender (or its nominee), substantially in
the form of Exhibit A-2 hereto, evidencing the aggregate indebtedness of the
Borrowers to such Lender resulting from such Lender's Pro Rata Share of the
Loan.
"S&P" means Standard & Poor's Rating Services, a division of The
McGraw-Hill Companies.
"Securities Account" means the special account designated by that
name established pursuant to the Securities Account Agreement.
"Securities Account Agreement" means the Securities Account
Agreement, substantially in the form of Exhibit D hereto, relating to the escrow
of the Warrants, the Equity Registration Rights Agreement and any portion of the
Loan required to be funded to the Securities Account pursuant to Section
2.02(a).
"Securities Account Security Agreement" means the Securities Account
Security and Control Agreement, substantially in the form of Exhibit E hereto,
made by each Borrower in favor of the Administrative Agent and granting a valid
and enforceable Lien in favor of the Administrative Agent on the Borrowers'
interest in the Securities Account.
"Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations of the Securities and Exchange Commission
thereunder.
"Securities Exchange Act" means the United States Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission thereunder.
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Loan Agreement
21
"Securities Intermediary" has the meaning specified in the
Securities Account Security Agreement.
"Security Documents" means the Borrower Security Agreement, the
Guarantor Security Agreement, the Borrower Pledge Agreement, the Guarantor
Pledge Agreement, the Securities Account Security Agreement and any and all
other agreements, deeds of trust, mortgages, chattel mortgages, security
agreements, pledges, guaranties, assignments of proceeds, assignments of income,
assignments of contract rights, assignments of partnership interests,
assignments of royalty interests, or other collateral assignments, completion or
surety bonds, standby agreements, subordination agreements, undertakings, and
other agreements, instruments, financing statements and other documents now or
hereafter executed and/or delivered by any Loan Party in connection with or as
security or assurance for the payment or performance of the Obligations or any
part thereof.
"Shares" means the issued and outstanding shares of Collagen common
stock.
"Significant Subsidiary" means a Subsidiary of the Parent other than
an Insignificant Subsidiary.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of the Parent
or any of its Subsidiaries or any ERISA Affiliate and no Person other than the
Parent, its Subsidiaries and the ERISA Affiliates or (ii) was so maintained and
with respect to which the Parent or any of its Subsidiaries or any ERISA
Affiliate could have liability under Section 4069 of ERISA in the event such
plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (i) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (ii) the present fair
salable value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts as they
become absolute and matured, (iii) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (iv) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Subsidiary" means, with respect to any Person at any time, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at such time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of such Person (or a
combination thereof) and (ii) any partnership or limited liability company (A)
the sole general partner or the managing general partner or managing member of
which is such Person or a Subsidiary of such Person, (B) the only general
partners or managing members of which are such
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Loan Agreement
22
Person or one or more Subsidiaries of such Person (or any combination thereof)
or (C) of which more than 50% of the interest in the capital or profits of such
Person is at such time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person (or a combination
thereof).
"Subsidiary Joinder Agreement" means an Acknowledgment and Joinder
Agreement, substantially in the form of Exhibit H-2 hereto, executed by a
Guarantor after the Closing Date.
"Taxes" has the meaning specified in Section 2.08(a).
"Tender Offer" has the meaning specified in the second paragraph
of this Agreement.
"Tender Offer Documents" means the documents executed and delivered
in connection with the Tender Offer (excluding, however, the Loan Documents and
the Merger Documents), including, without limitation, the combined Schedule
14D-1 Tender Offer Statement Pursuant to Section 14(d)(1) of the Securities
Exchange Act of 1934 and Schedule 13D Under the Securities Exchange Act of 1934.
"TIA" means the United States Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Securities and Exchange Commission
thereunder.
"Transaction Documents" means, collectively, the Loan Documents,
the Merger Documents and the Tender Offer Documents.
"Transactions" means, collectively, (i) the consummation of the
Tender Offer, (ii) the consummation of the Merger, (iii) the entering into of
the Loan Documents, (iv) the consummation of the Exchange, (v) the issuance of
the Equity Documents, and (vi) the payment of fees, costs and expenses in
connection with the foregoing.
"United States" and "U.S." each means United States of America.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote generally in the election of
the board of directors or equivalent governing body of such Person.
"Warrants" means, with respect to each Lender (or its nominee) which
receives a Rollover Note or an Exchange Security, the warrants issued by the
Parent to such Lender (or its nominee) pursuant to a warrant certificate,
substantially in the form of Exhibit M hereto, entitling the record holder
thereof to acquire the number of shares of common stock of the Parent set forth
therein.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness or Disqualified Stock at any date, the number of years obtained by
dividing (i) the sum of the products obtained by multiplying (A) the amount of
each then remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity (or final redemption,
in the case of Disqualified Stock), in respect thereof, by (B) the number of
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23
years (calculated to the nearest one-twelfth) that will elapse between such date
and the making of such payment, by (ii) the then outstanding principal amount of
such Indebtedness or mandatory redemption amount of Disqualified Stock.
"Wholly-Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other Equity Interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly-Owned Subsidiaries of such Person.
"Year 2000 Compliant" has the meaning specified in Section
4.01(aa)(i).
"Year 2000 Problem" has the meaning specified in Section
4.01(aa)(i).
SECTION 1.02. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise, (i) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (iii) the words "herein," "hereof" and "hereunder," and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (iv) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (v)
the words "asset" and "property" shall be construed to have the same meaning and
effect as the defined term "Property". References in this Agreement to
"determination" by the Administrative Agent or Required Lenders include good
faith estimates by such Person or Persons (in the case of quantitative
determinations) and good faith beliefs by such Person or Persons (in the case of
qualitative determinations).
SECTION 1.03. Accounting and Other Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP applied on a basis consistent with those used in preparing the
financial statements referred to in Section 4.01(f).
SECTION 1.04. Time References. Unless otherwise indicated herein,
all references to time of day refer to Eastern standard time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
ARTICLE II
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AMOUNT AND TERMS OF THE LOAN
SECTION 2.01. The Loan. Each Lender severally agrees, on the terms
and conditions hereinafter set forth, to make to the Borrowers on the Closing
Date, a single loan, in an amount equal to the amount set forth opposite such
Lender's name in Schedule 2.01 hereto or, if such Lender has entered into any
Assignment and Acceptance, set forth for such Lender in the Register maintained
by the Administrative Agent pursuant to Section 8.07(d). Amounts borrowed under
this Section 2.01 and repaid or prepaid may not be reborrowed.
SECTION 2.02. Making the Loan.
(a) The Loan shall be made upon notice from the Borrowers to
the Administrative Agent (which shall give prompt notice thereof to the Lenders)
which notice shall be received by the Administrative Agent not later than 11:00
A.M. (New York City time) one Business Day prior to the date of the proposed
Loan. Such notice (the "Notice of Borrowing") shall be irrevocable and binding
on the Borrowers, and shall be given in writing, in substantially the form of
Exhibit B hereto, specifying therein the requested date and amount of the Loan.
The Notice of Borrowing shall indicate, in detail reasonably satisfactory to the
Administrative Agent, the portion of the proposed Loan to be used for each
purpose identified in Section 2.07. Each Lender shall, before 10:00 A.M. (New
York City time) on the date of the Loan, make available for the account of its
Lending Office to the Administrative Agent at the Funding Account in same day
funds, such Lender's ratable portion of the Loan, net of the fee payable to such
Lender pursuant to Section 2.04(c)(i). After the receipt of such funds and upon
fulfillment of the applicable conditions set forth in Section 3.01, the
Administrative Agent will authorize The Bank of New York, as paying agent, to
distribute such funds for the purposes set forth in the immediately preceding
sentence and in accordance with the Notice of Borrowing.
(b) The Borrowers hereby jointly and severally indemnify each
Lender against any loss, cost or expense incurred by such Lender as a result of
any failure to fulfill on or before the date specified in such Notice of
Borrowing the applicable conditions set forth in Section 3.01, including,
without limitation, any actual loss, cost or expense (as determined by such
Lender absent manifest error) incurred by reason of the liquidation or
reemployment of deposit or other funds acquired by such Lender to fund the Loan.
A certificate as to such amounts, submitted to the Parent by such Lender (with a
copy to the Administrative Agent), shall be conclusive and binding for all
purposes, absent manifest error.
(c) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of the Loan that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of the Loan,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of the Loan in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, the Borrowers
(jointly and severally) and such Lender (severally) agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrowers until the date such amount is repaid to the Administrative
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Agent, at (i) in the case of the Borrowers, the interest rate applicable at the
time to the Loan and (ii) in the case of such Lender, the Federal Funds Rate. If
such Lender shall repay to the Administrative Agent such corresponding amount,
such amount so repaid shall constitute such Lender's portion of the Loan for
purposes of this Agreement.
(d) The failure of any Lender to make its portion of the Loan
to be made by it to the Borrowers shall not relieve any other Lender of its
obligation, if any, hereunder to make its portion of the Loan on the date of the
Loan, but no Lender shall be responsible for the failure of any other Lender to
make the portion of the Loan to be made by such other Lender on the date of the
Loan.
SECTION 2.03. Repayment.
(a) The Borrowers agree, jointly and severally, but subject to
subsection (b) below, to repay to the Administrative Agent for the ratable
account of the Lenders the aggregate outstanding principal amount of the Loan on
the Maturity Date, together with all other amounts in respect of the Loan then
owing to the Lenders (whether for accrued and unpaid interest, fees or other
amounts).
(b) (i) If on the Exchange Date the Loan Refinancing
Securities shall not have been issued and sold as contemplated by Section
5.01(k) and applied to pay in full all of the Obligations, or the Obligations
shall not otherwise have been paid in full, then, subject to the terms contained
herein and the satisfaction of the conditions set forth below, (A) the Borrowers
shall exchange each Bridge Note (the "Exchange") for a Rollover Note or, at the
request of the Required Lenders, or as otherwise provided in Section 5.01(l), an
Exchange Security, in either case, in a principal amount equal to the principal
amount of such Bridge Note outstanding on the Exchange Date, and (B) in the
event that the Borrowers are not obligated to execute and deliver the Exchange
Indenture pursuant to Section 5.01(l), the Borrowers and the Lenders shall enter
into an amendment to this Agreement, or an agreement replacing this Agreement,
modifying the provisions of this Agreement to incorporate the terms and
conditions set forth in Exhibit L hereto pursuant to an amendment reasonably
satisfactory to the Required Lenders. Any accrued and unpaid interest on the
Bridge Notes shall be due and payable on the Exchange Date.
(ii) The obligations of the Lenders to consummate
the Exchange shall be subject to the following conditions precedent:
(A) unless waived in accordance with Section 8.01, no
Default or Event of Default shall have occurred and be continuing;
(B) the Exchange shall not violate the terms of any law,
rule, regulation, order, judgment, ruling, injunction or decree of any
Governmental Authority or arbitrator or any requirement of any
Governmental Authority;
(C) Consolidated EBITDA of the Parent and its
Subsidiaries for the four fiscal quarter period ending on the last day of
the fiscal quarter immediately preceding the Exchange Date shall not be
less than $35,000,000;
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(D) the representations and warranties contained in each
Loan Document shall be correct in all material respects before and after
giving effect to the Exchange;
(E) all fees, expenses and other payments due to the
Administrative Agent or the Lenders in connection with the Exchange or
otherwise owing hereunder, including, without limitation, any breakage
fees payable under Section 2.05(c) because the Exchange Date is not June
2, 2000 (whether due to the deferral of the Exchange Date or otherwise),
shall have been paid in full in cash; and
(F) the Administrative Agent shall have received each of
the documents required to be delivered pursuant to clause (iii) below.
(iii) The Borrowers shall deliver to the
Administrative Agent the following documents, each dated the Exchange Date
(except as otherwise set forth below) and duly executed or authenticated, as the
case may be, by each Person party thereto:
(A) on the Exchange Date, a Rollover Note (or, at the
option of the Required Lenders or as otherwise provided in Section
5.01(l), Exchange Securities) for the account of each Lender (or its
nominee);
(B) on the Exchange Date, (1) the amendment to this
Agreement, or the agreement replacing this Agreement, as contemplated by
Section 2.03(b) or (2) upon request by the Required Lenders for Exchange
Securities pursuant to Section 5.01(l) or as otherwise required by Section
5.01(l), the Exchange Indenture;
(C) if required pursuant to Section 5.01(m), on the
Exchange Date, the Exchange Registration Rights Agreement;
(D) on June 2, 2000, (1) a Warrant for the account of
each Lender (or its nominee), which shall have been delivered to the
Securities Agent on the Closing Date pursuant to Section 3.01(a)(viii),
and (2) an opinion, in the form of Exhibit Q hereto, of counsel reasonably
acceptable to the Lender, subject, in the case of each Lender, to the
receipt by such counsel of a certificate, signed by such Lender, in the
form attached to the form of such opinion attached as Exhibit Q hereto;
(E) on June 2, 2000, the Equity Registration Rights
Agreement (which shall have been delivered to the Securities Intermediary
on the Closing Date pursuant to Section 3.01(a)(viii)); and
(F) certificates, certified copies of resolutions and
favorable opinions of counsel to the Loan Parties, relating to the
Exchange, the Exchange Documents and the Equity Documents comparable to
those provided pursuant to subsections (xiv), (xvi), (xvii), (xix) and
(xxiii) of Section 3.01(a), in each case as may be reasonably requested by
the Administrative Agent and the Required Lenders.
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(c) Each Pro Rata Share of the Loan recorded on the Register
(each, a "Registered Loan") may not be evidenced by a promissory note other than
a Registered Note (as defined below). The Borrowers agree, at the request of any
Lender, to execute and deliver to such Lender a promissory note in registered
form to evidence such Registered Loan (i.e. containing the registered note
language set forth in Exhibit A) and registered as provided in Section 8.07(d)
(a "Registered Note"), dated the date hereof, payable to such Lender (or its
nominee) and otherwise duly completed. Once recorded on the Register, the Pro
Rata Share of the Loan evidenced by such Note may not be removed from the
Register so long as it remains outstanding, and a Registered Note may not be
exchanged for a promissory note that is not a Registered Note.
SECTION 2.04. Interest and Fees.
(a) Interest. The Borrowers agree jointly and severally to pay
to the Lenders interest on the unpaid principal amount of the Loan as set forth
in the Notes.
(b) Default Interest. The Borrowers agree jointly and
severally to pay, on demand (i) interest on the unpaid principal amount of the
Loan during any period from June 2, 2000 to the Maturity Date for the Bridge
Notes at the rate set forth therein plus 2% per annum and (ii) after the
occurrence and during the continuance of an Event of Default, (A) interest on
the unpaid principal amount of the Loan at the rate per annum set forth in the
Notes therefor plus 2.0% per annum and (B) interest on the amount of any
interest, fee or other amount other than principal of the Loan payable hereunder
that is not paid when due, from the date such amount shall be due until such
amount shall be paid in full, at a rate per annum equal to the non-default rate
of interest required to be paid on the unpaid principal amount of the Loan
during such period plus 2.0% per annum.
(c) Lender Fees. The Borrowers agree jointly and severally to
pay to the Administrative Agent for the ratable benefit of the Lenders the
following fees, each of which shall be deemed earned when due and
non-refundable:
(i) on the Closing Date, a fee in an amount equal
to 1.0% of the aggregate principal amount of the Loan made on the Closing
Date;
(ii) on the Exchange Date, a fee in an amount equal
to 1.375% of the aggregate principal amount of the Rollover Notes or the
Exchange Securities, as the case may be, issued on the Exchange Date; and
(iii) on the earlier of the date of the Refinancing
and the Maturity Date of the Bridge Notes, a fee in an amount equal to 1.0% of
the aggregate principal amount of the Loan on the Closing Date.
SECTION 2.05. Prepayments of the Notes.
(a) Voluntary Prepayment.
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(i) The Borrowers may, during the period from the
Closing Date to June 1, 2000 and upon at least five Business Days' prior notice
from the Parent to the Administrative Agent stating the proposed date of payment
and the amount of such prepayment, and if such notice is given the Borrowers
shall prepay the outstanding unpaid principal amount of the Loan, in whole or in
part, together with accrued and unpaid interest thereon to the date of such
prepayment on the principal amount prepaid, provided that each partial
prepayment shall be in an aggregate principal amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof.
(ii) If the Exchange is consummated, (i) the Borrowers
may not prepay or redeem, in whole or in part, any Rollover Note or Exchange
Security held by a Lender that is not an Affiliate of Cerberus Capital
Management, L.P. (a "Non-Affiliate Lender") prior to the fourth anniversary of
the Exchange Date; and (ii) after the fourth anniversary of the Exchange Date,
the Borrowers may, upon at least 30 Business Days' notice to the Administrative
Agent stating the date and amount of such prepayment or redemption, and if such
notice is given, the Borrowers shall prepay or redeem the outstanding principal
amount of the Rollover Notes or Exchange Securities, as the case may be, held by
the Non-Affiliate Lenders, in whole or in part, at the redemption prices
(expressed as percentages of principal amount prepaid or redeemed) set forth
below, together with accrued and unpaid interest thereon to the date of
prepayment or redemption, if redeemed during the twelve-month period beginning
on June 1 of the years indicated below:
Year Percentage
---- ----------
2004 107.500%
2005 105.000%
2006 102.500%
2007 100.000%
(iii) If the Exchange is consummated, the Borrowers
may, upon at least 30 Business Days' notice to the Administrative Agent stating
the date and amount of such prepayment or redemption, and if such notice is
given, the Borrowers shall prepay or redeem the outstanding principal amount of
the Rollover Notes or Exchange Securities, as the case may be, held by a Lender
that is an Affiliate of Cerberus Capital Management, L.P., in whole or in part
at a redemption price equal to 100% of the principal amount prepaid or redeemed,
together with accrued and unpaid interest thereon to the date of prepayment or
redemption.
(b) Mandatory Prepayment.
(i) Upon the consummation of the Loan Refinancing prior
to the Maturity Date for the Bridge Notes, the Borrowers shall prepay the Loan
in an amount equal to the then outstanding principal amount of the Loan together
with accrued interest to the date of such prepayment on the principal amount
prepaid and all fees, expenses and other payments due to the Lenders under the
Loan Documents (the "Refinancing Amount"). If the Loan Refinancing is
consummated prior to the consummation of the Merger, any cash then held in the
Securities
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Account and delivered to the Administrative Agent in accordance with the
Securities Account Agreement shall thereupon be applied toward such prepayment
of the Loan.
(ii) In the event that the Merger shall not have
been consummated in accordance with the terms set forth in Section 3.02(a) on or
prior to the Exchange Date, any cash in the Securities Account which is
delivered to the Administrative Agent in accordance with the Securities Account
Agreement shall thereupon be applied to prepay the Loan, and the Borrowers shall
pay all accrued and unpaid interest on the principal amount of the Loan so
prepaid to the date of such prepayment and all fees, expenses and other payments
due and payable to the holders of the Notes under the Loan Documents on such
date.
(iii) Upon receipt by the Parent or any of its
Subsidiaries prior to the Maturity Date for the Bridge Notes of the Net Proceeds
from the issuance or incurrence by the Parent or any of its Subsidiaries of any
Indebtedness (other than Indebtedness issued or incurred as permitted by Section
5.02(b)) the Borrowers shall prepay outstanding Notes in an amount equal to the
lesser of (A) 100% of the aggregate principal amount of all Notes outstanding on
the date of such prepayment and (B) the amount of such Net Proceeds, in either
case plus all accrued and unpaid interest on the principal amount of the Notes
so prepaid to the date of such prepayment and all fees, expenses and other
payments due and payable to the holders of the Notes under the Loan Documents on
such date.
(iv) Upon receipt by the Parent or any of its
Subsidiaries prior to the Maturity Date for the Bridge Notes of the Net Proceeds
from the issuance or sale by the Parent or any of its Subsidiaries of any Equity
Interests of any such Person or from any capital contribution received by the
Parent from any Person or received by any Subsidiary of the Parent from any
Person other than the Parent in a transaction permitted by Section 5.02(f), the
Borrowers shall prepay outstanding Notes in an amount equal to the lesser of (A)
100% of the aggregate principal amount of all Notes outstanding on the date of
such prepayment and (B) the amount of such Net Proceeds, in either case plus all
accrued and unpaid interest on the principal amount of the Notes so prepaid to
the date of such prepayment and all fees, expenses and other payments due and
payable to the holders of the Notes under the Loan Documents on such date.
(v) Upon receipt by the Parent or any of its
Subsidiaries prior to the Maturity Date for the Bridge Notes of the Net Proceeds
from any Asset Sale (other than Asset Sales permitted under clauses (iii)
through (vi) of Section 5.02(c)), the Borrowers shall prepay outstanding Notes
in an amount equal to the lesser of (A) 100% of the aggregate principal amount
of all Notes outstanding on the date of such prepayment and (B) the amount of
such Net Proceeds.
(vi) Nothing contained in this Section 2.05(b) shall
affect any of the Borrowers' Obligations under Section 5.02 or permit the Parent
or any of its Subsidiaries to issue or incur Indebtedness, issue or sell any
Equity Interests or to sell any Property other than in accordance with Section
5.02. Prepayments described in paragraphs (i) through (v) of this Section
2.05(b) shall be allocated among all the Notes at the time outstanding in
proportion, as nearly as practicable, to the unpaid principal amounts thereof
not theretofore called for prepayment or redemption.
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(c) Breakage Fees. Upon (i) any prepayment of principal of the
Loan under Section 2.05(a) or 2.05(b) on a day other than the last day of an
Interest Period, (ii) the issuance of the Rollover Notes or the Exchange
Securities, as the case may be, on a date which is not the Maturity Date under
the Bridge Notes or (iii) the acceleration of maturity of the Notes pursuant to
Section 6.01, or for any other reason, the Borrowers shall pay upon demand by
any Lender the amount required to compensate such Lender for any losses, costs
or expenses which such Lender may reasonably and actually incur as a result of
such payment or acceleration including, without limitation, any actual loss,
cost or expense (as determined by such Lender, which determination shall be
conclusive and binding absent manifest error) incurred by reason of the
liquidation or reemployment of deposits or other funds actually or notionally
acquired by such Lender to fund or maintain the Loan.
SECTION 2.06. Payments and Computations. (a) The Borrowers shall
make each payment hereunder and under each Note not later than 11:00 a.m. (New
York City time) on the day when due in United States Dollars in immediately
available funds to the applicable Lender for the account of such Lender's
Lending Office or to the Administrative Agent, as the case may be, in each case
to be applied in accordance with the terms of this Agreement. Upon the
acceptance by the Administrative Agent of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 8.07(d), from and after the effective date specified in such Assignment
and Acceptance, the Borrowers shall make all payments hereunder and under the
Notes in respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) All computations of interest and fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent of an interest rate or fee hereunder
and under the Notes shall be conclusive and binding for all purposes, absent
manifest error.
(c) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in each
case be included in the computation of payment of interest or any fee, as the
case may be; provided, however, that if such extension would cause the payment
of interest on or principal of the Loan to be made in the next following
calendar month during such time as the Loan shall be bearing interest based on
the LIBO Rate, such payment shall be made on the next preceding Business Day.
(d) To the fullest extent permitted by law, the Borrowers
shall make all payments hereunder and under the Notes regardless of any defense
or counterclaim, including, without limitation, any defense or counterclaim
based on any law, rule or policy which is now or hereafter promulgated by any
Governmental Authority and which may adversely affect the Borrowers' obligation
to make, or the right of the holder of any Note, as the case may be, to receive,
such payments.
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SECTION 2.07. Use of Proceeds. Subject to the terms of this
Agreement, the proceeds of the Loan shall be used by the Borrowers as set forth
in Schedule 2.07, in the following order of priority, only (i) to pay the
aggregate purchase price of the Shares purchased by the Purchaser in accordance
with the Offer to Purchase, (ii) to fund the Securities Account pursuant to
Section 2.02(a), (iii) to pay the fees, costs and expenses incurred in
connection with the Tender Offer and the financing thereof hereunder and (iv) to
refinance certain existing Indebtedness of the Parent, provided that the
Borrowers hereby authorize the Lenders and the Administrative Agent to apply
directly $1,550,000 of the proceeds of the Loan to pay the fees due pursuant to
Section 2.04(c). Funds on deposit in the Securities Account shall be applied,
upon the satisfaction of the conditions set forth in Section 3.02(a), to pay the
cash consideration in connection with the Merger and to pay costs and expenses
incurred in connection with the Merger.
SECTION 2.08. Taxes. (a) Any and all payments by the Borrowers under
the Loan Documents shall be made, in accordance with Section 2.06, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, (i) in the case of each Lender and the Administrative Agent,
taxes imposed on its overall net income or franchise by the jurisdiction (or any
political subdivision thereof) under the laws of which such Lender or the
Administrative Agent (as the case may be) is organized or engaged in business
(other than as a result of this transaction), (ii) in the case of each Lender,
taxes imposed on its overall net income or franchise by the United States or any
jurisdiction in which such Lender is engaged in business (other than as a result
of this transaction) or any political subdivision thereof, and (iii) in the case
of each Lender, taxes imposed by any jurisdiction solely as a result of such
Lender's activities in or contact with such jurisdiction unrelated to this Loan
Agreement (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities in respect of payments under the Loan Documents
being hereinafter referred to as "Taxes"). If the Borrowers shall be required by
law to deduct any Taxes from or in respect of any sum payable under any Loan
Document to any Lender or the Administrative Agent, (i) the sum payable by the
Borrowers shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.08) such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrowers shall make such deductions and (iii)
the Borrowers shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrowers shall pay any present or future
stamp or documentary taxes or any other excise taxes, charges or similar levies
that arise from any payment made under the Loan Documents or from the execution,
delivery or registration of, performing under, or otherwise with respect to, the
Loan Documents (hereinafter referred to as "Other Taxes").
(c) The Borrowers shall jointly and severally indemnify each
Lender and the Administrative Agent for and hold such Persons harmless against
the full amount of Taxes or Other Taxes imposed on or paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or
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with respect thereto. This indemnification shall be made within 10 days from the
date such Lender or the Administrative Agent (as the case may be) makes written
demand therefor.
(d) Within 45 days after the date of any payment of Taxes
pursuant to clause (iii) of the second sentence of Section 2.08(a), the Parent
shall furnish to the Administrative Agent, at its address referred to in Section
8.02, documentary evidence reasonably satisfactory to the Administrative Agent
of payment thereof, but only to the extent such evidence is furnished to the
Borrowers by the relevant taxation authority or other authority.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender and on the date of
the Assignment and Acceptance pursuant to which it becomes a Lender in the case
of each other Lender, and from time to time thereafter as requested in writing
by the Borrowers (but only so long thereafter as such Lender remains lawfully
able to do so), provide each of the Administrative Agent and the Borrowers with
such properly and duly executed documentation prescribed by applicable law as
will permit payments made under this Agreement to be made without withholding in
respect of U.S. Federal income tax. If the forms provided by a Lender at the
time such Lender first becomes a party to this Agreement indicates a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Lender
provides the appropriate form certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such form; provided, however that, if at the date of the
Assignment and Acceptance pursuant to which a Lender becomes a party to this
Agreement, the Lender assignor was entitled to payments under Section 2.08(a)
with respect to United States withholding tax with respect to interest paid at
such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to the Lender assignee on such date.
(f) For any period with respect to which a Lender has failed
to provide the Borrowers with the appropriate form or document, if any, required
under Section 2.08(e) (other than if such failure is due to a change in law
occurring subsequent to the date on which a form originally was required to be
provided, or if such form otherwise is not required under Section 2.08(e)), such
Lender shall not be entitled to indemnification under Section 2.08(a) or Section
2.08(c) with respect to Taxes imposed by reason of such failure; provided,
however, that should a Lender become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrowers shall take such steps as the
Lender shall reasonably request to assist the Lender to recover such Taxes.
(g) Each Lender agrees that it will (i) take all reasonable
actions requested by the Borrowers to maintain all exemptions, if any, available
to it from withholding taxes (whether available by treaty, statute, or existing
administrative waiver) and (ii) to the extent reasonable and without material
cost or risk to it, otherwise cooperate with the Borrowers to minimize any
amounts payable by the Borrowers under this Section 2.08, including the contest
of any asserted tax liability if and to the extent not contrary to such Lender's
internal policies or procedures.
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SECTION 2.09. Increased Costs. (a) If, due to either (i) the
introduction after the date hereof of or any change after the date hereof in or
in the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
issued after the date hereof (whether or not having the force of law), there
shall be any increase in the cost to any Lender of agreeing to make or making,
funding or maintaining its Pro Rata Share of the Loan (excluding for purposes of
this Section 2.09 any such increased costs resulting from (A) Taxes or Other
Taxes (as to which Section 2.08 shall govern) and (B) changes in the basis of
taxation of overall net income or overall gross income by the United States or
by the foreign jurisdiction or State under the laws of which such Lender is
organized or has its Lending Office or any political subdivision thereof), then
the Borrowers shall from time to time, upon notice thereof and demand by such
Lender therefor, pay to such Lender additional amounts sufficient to compensate
such Lender for such increased cost; provided, however, that prior to any
requirement of the Borrowers to pay such additional amounts, such Lender shall
have expended all reasonably commercial efforts to mitigate any increased costs
relating to the foregoing (including, without limitation, using reasonable
efforts to designate another lending office so long as such designation does not
cause such Lender to suffer any economic, legal or regulatory disadvantage) if
and to the extent not contrary to such Lender's internal policies or procedures.
A certificate as to the amount of such increased cost, submitted to the
Borrowers by such Lender, shall be presumptive evidence of the amount due.
(b) If, due to either (i) the introduction of or any change in
or in the interpretation of any law or regulation or (ii) the compliance with
any guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by any Lender or any
Person controlling any Lender as a result of or based upon the existence of such
Lender's commitment to lend hereunder and other commitments of such type, then,
upon demand by such Lender, the Borrowers shall pay to such Lender, from time to
time as specified by such Lender, additional amounts sufficient to compensate
such Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder. A certificate as to such amounts
submitted to the Borrowers by such Lender shall be presumptive evidence of the
amount due.
(c) If any Lender notifies the Borrowers that the LIBO Rate
for any Interest Period will not adequately reflect the cost to such Lender of
making, funding or maintaining its Pro Rata Share of the Loan bearing interest
based upon the LIBO Rate for such Interest Period, (i) such Lender's Pro Rata
Share of the Loan will automatically, on the last day of the then existing
Interest Period therefor, convert from a LIBO Rate Loan into a Base Rate Loan
and (ii) the obligation of such Lender to make or maintain its Pro Rata Share of
the Loan bearing interest based upon the LIBO Rate shall be suspended until such
Lender shall notify the Borrowers that it has determined that the circumstances
causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other Governmental
Authority shall assert that it is unlawful, for any Lender or its Lending Office
to perform its obligations hereunder to make available its Pro
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Rata Share of the Loan bearing interest based upon the LIBO Rate or to continue
to fund or maintain its Pro Rata Share of the Loan bearing interest based upon
the LIBO Rate hereunder, then, on notice thereof and demand therefor by such
Lender to the Borrowers, such Lender's Pro Rata Share of the Loan will
automatically, upon such demand, convert from a LIBO Rate Loan into a Base Rate
Loan until the Administrative Agent shall notify the Borrowers that such Lender
has determined that the circumstances causing such suspension no longer exist.
SECTION 2.10. Sharing of Payments, Etc. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Note held by it (other than pursuant
to Section 2.05(a), 2.05(c), 2.08 or 2.09) in excess of its ratable share of
payments on account of the Notes obtained by all the Lenders, such Lender shall
forthwith purchase from the other Lenders such participations in the Notes held
by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Borrowers agree that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.10 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrowers in the amount of such participation.
SECTION 2.11 Joint and Several Liability of the Borrowers.
(a) Each of the Borrowers is accepting joint and several
liability hereunder and under the other Loan Documents in consideration of the
financial accommodations to be provided by the Lenders under this Agreement, for
the mutual benefit, directly and indirectly, of each of the Borrowers and in
consideration of the undertakings of the other Borrower to accept joint and
several liability for the Obligations.
(b) Each of the Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrower, with respect to
the payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 2.11), it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each of the Borrowers without preferences or distinction
between them.
(c) If and to the extent that any of the Borrowers shall fail
to make any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event the other Borrower will make such payment with respect to, or
perform, such Obligation.
(d) The Obligations of each of the Borrowers under the
provisions of this Section 2.11 constitute the absolute and unconditional, full
recourse obligations of each of
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the Borrowers enforceable against each such Borrower to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided in this Agreement,
each of the Borrowers hereby waives notice of acceptance of its joint and
several liability, notice of any demand for any payment under this Agreement,
notice of any action at any time taken or omitted by the Administrative Agent
under or in respect of any of the Obligations, any requirement of diligence or
to mitigate damages and, generally, to the extent permitted by applicable law,
all demands, notices and other formalities of every kind in connection with this
Agreement. Each of the Borrowers hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations,
the acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
the Administrative Agent or the Lenders at any time or times with respect to any
Default and the taking, addition, substitution or release, in whole or in part,
at any time or times, of any security for any of the Obligations or the
addition, substitution or release, in whole or in part, of either of the
Borrowers. Without limiting the generality of the foregoing, each of the
Borrowers assents to any other action or delay in acting or failure to act on
the part of the Administrative Agent or the Lenders with respect to the failure
by any of the Borrowers to comply with any of its respective Obligations,
including, without limitation, any failure strictly or diligently to assert any
right or to pursue any remedy or to comply fully with applicable laws or
regulations thereunder, which might, but for the provisions of this Section 2.11
afford grounds for terminating, discharging or relieving either of the
Borrowers, in whole or in part, from any of its Obligations under this Section
2.11, it being the intention of each of the Borrowers that, so long as any of
the Obligations hereunder remain unsatisfied, the Obligations of the Borrowers
under this Section 2.11 shall not be discharged except by performance and then
only to the extent of such performance. The Obligations of each of the Borrowers
under this Section 2.11 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any of the Borrowers, the Lenders or the
Administrative Agent.
(f) The provisions of this Section 2.11 are made for the
benefit of the Administrative Agent, the Lenders, and their respective
successors and assigns, and may be enforced by it or them from time to time
against either or both of the Borrowers as often as occasion therefor may arise
and without requirement on the part of the Administrative Agent, any Lender or
such successor or assign first to marshall any of its or their claims or to
exercise any of its or their rights against the other Borrower or to exhaust any
remedies available to it or them against the other Borrower or to resort to any
other source or means of obtaining payment of any of the Obligations hereunder
or to elect any other remedy. The provisions of this Section 2.11 shall remain
in effect until all of the Obligations shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be restored or
returned by the Lenders upon the insolvency, bankruptcy or reorganization of
either of the Borrowers, or otherwise, the provisions of this Section 2.11 will
forthwith be reinstated in effect, as though such payment had not been made.
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(g) Each of the Borrowers hereby agrees that it will not
enforce any of its rights of contribution or subrogation against the other
Borrower with respect to any liability incurred by it hereunder or under any of
the other Loan Documents, any payments made by it to the Administrative Agent
for the benefit of the Lenders with respect to any of the Obligations or any
collateral security therefor. Any claim which either Borrower may have against
the other Borrower with respect to any payments to the Administrative Agent or
any Lender hereunder or under any other Loan Documents are hereby expressly made
subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to either Borrower, its
debts or its assets, whether voluntary or involuntary, all such Obligations
shall be paid in full in cash before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to the
other Borrower therefor.
(h) Each of the Borrowers hereby agrees that, after the
occurrence and during the continuance of any Default or Event of Default, the
payment of any amounts due with respect to the indebtedness owing by either
Borrower to the other Borrower is hereby subordinated to the prior payment in
full in cash of the Obligations. Each Borrower hereby agrees that after the
occurrence and during the continuance of any Default or Event of Default, such
Borrower will not demand, sue for or otherwise attempt to collect any
indebtedness of the other Borrower owing to such Borrower until the Obligations
shall have been paid in full in cash. If, notwithstanding the foregoing
sentence, such Borrower shall collect, enforce or receive any amounts in respect
of such indebtedness, such amounts shall be collected, enforced and received by
such Borrower as trustee for the Lenders and promptly paid over to the
Administrative Agent for application to the Obligations.
SECTION 2.12 Parent as Agent for Borrowers. Each Borrower hereby (i)
irrevocably appoints the Parent as the borrowing agent and attorney-in-fact for
the Borrowers for all purposes hereunder, (ii) irrevocably authorizes the Parent
(A) to provide the Administrative Agent with all notices and instructions under
this Agreement and the other Loan Documents and (B) to take such action as the
Parent deems appropriate on its behalf to exercise such other powers as are
reasonably incidental thereto to carry out the purposes of this Agreement and
the other Loan Documents and (iii) agrees to be bound by the actions of the
Parent pursuant to this Section 2.12.
ARTICLE III
CONDITIONS TO LENDING; RELEASE OF FUNDS IN SECURITIES ACCOUNT
SECTION 3.01. Conditions Precedent to the Loan. The obligation of
each Lender to make its Pro Rata Share of the Loan to the Borrowers on the
Closing Date is subject to the satisfaction of the following conditions
precedent:
(a) Documents. The Administrative Agent shall have received on
or before the Closing Date the following documents, each dated such date, in
form and substance
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reasonably satisfactory to the Administrative Agent and (except for the Notes)
in sufficient copies for each Lender:
(i) Loan Agreement. This Agreement, together with all
Schedules and Exhibits, duly executed by the Parent, the Purchaser, the
Administrative Agent, and the Lenders;
(ii) Notes. The Bridge Notes, made to the order of the
respective Lenders (or their respective nominees) and executed by the Borrowers;
(iii) Guaranty. The Guaranty, duly executed by each
Guarantor;
(iv) Borrower Security Agreement. The Borrower Security
Agreement, duly executed by each Borrower;
(v) Guarantor Security Agreement. The Guarantor Security
Agreement, duly executed by each Guarantor;
(vi) Borrower Pledge Agreement. The Borrower Pledge
Agreement, duly executed by each Borrower;
(vii) Guarantor Pledge Agreement. The Guarantor Pledge
Agreement, duly executed by each Guarantor;
(viii) Securities Account Agreement; Securities Account
Security Agreement. The Securities Account Agreement and the Securities Account
Security Agreement, duly executed by each of the parties thereto, together with
evidence satisfactory to the Administrative Agent that the Warrants, duly
executed by the Parent, and the Equity Registration Rights Agreement, duly
executed by each of the parties thereto, have been duly delivered thereunder to
the Securities Intermediary;
(ix) Financing Statements; Other Recordings. Each
document (including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded in
order to create in favor of the Administrative Agent for the benefit of the
Lenders, a perfected first priority Lien on the Collateral described therein,
which shall be in proper form for filing, registration or recordation in each
jurisdiction where the filing, registration or recordation thereof is so
required or requested;
(x) Stock Certificates. The stock certificates
representing all of the issued and outstanding Capital Stock referred to in the
Borrower Pledge Agreement and the Guarantor Pledge Agreement, in each case
accompanied by appropriate instruments of transfer or stock powers executed in
blank (as appropriate), and completion of all other action, whether within or
outside the United States, under the Security Documents to create, perfect or
establish the first priority of the Lien in favor of the Administrative Agent
created under such Security Documents;
(xi) Lien Search Reports.
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(A) Uniform Commercial Code, tax, and judgment
Lien search reports, recently conducted by a Person reasonably
satisfactory to the Administrative Agent listing all documentation on file
against each Loan Party in each jurisdiction in which such Loan Party
maintains any Collateral, the results of which shall be reasonably
satisfactory to the Administrative Agent; and
(B) Federal tax lien search reports recently
conducted by a Person reasonably satisfactory to the Administrative Agent
with respect to each Loan Party, the results of which shall be reasonably
satisfactory to the Administrative Agent;
(xii) Satisfaction of Outstanding Indebtedness. A
termination agreement, in form and substance reasonably satisfactory to the
Administrative Agent, duly executed by or on behalf of each of the holders of
the Indebtedness referred to in Section 3.01(g), together with such UCC-3
termination statements and other documents as the Administrative Agent may
reasonably request to terminate or release, or to evidence the termination or
release, by such holders (or the collateral agent for such holders) of any Liens
on Property of the Parent and its Subsidiaries;
(xiii) Form G-3. If requested by any Lender, a Federal
Reserve Form G-3 for such Lender, properly completed and executed by the
Borrowers;
(xiv) Resolutions; Authority. Resolutions of the board
of directors (or similar governing body) of each Loan Party, certified by its
Secretary or an Assistant Secretary and authorizing its execution, delivery, and
performance of the Loan Documents to which it is or is to be a party;
(xv) Organizational Documents. A copy of the
Organizational Documents of each Loan Party, together with each amendment
thereto, certified by its Secretary or Assistant Secretary, and, in the case of
the certificate of incorporation, certified as of a date reasonably close to the
Closing Date by the Secretary of State of the jurisdiction of incorporation as
being a true and correct copy thereof;
(xvi) Incumbency Certificate. A certificate of
incumbency executed by the Secretary or an Assistant Secretary of each Loan
Party and certifying the names of its officers (A) who are authorized to sign
the Loan Documents to which it is or is to be a party (including, without
limitation, the certificates contemplated herein) together with specimen
signatures of each such officer and (B) who will, until replaced by other
officers duly authorized for that purpose, act as its representative for the
purposes of signing documentation and giving notices and other communications in
connection with this Agreement and the Transactions;
(xvii) Good Standing Certificates. A certificate of the
Secretary of State of the jurisdiction of each Loan Party's incorporation or
formation, dated a date reasonably close to the Closing Date, certifying that
(A) such Loan Party has paid all franchise taxes to the date of such certificate
and (B) such Loan Party is duly incorporated or formed and in good standing
under the laws of the state of the jurisdiction of its organization;
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(xviii) Foreign Qualification Certificates. Certificates
of the appropriate Governmental Authorities of each state in which each Loan
Party conducts business, other than the state of incorporation of such Loan
Party, as to such Loan Party's qualification to do business and good standing in
such state, all dated a date reasonably close to the Closing Date;
(xix) Officer's Certificate. A certificate of the
Borrowers, signed on behalf of the Borrowers by a duly authorized senior officer
of the Borrowers, dated the Closing Date (the statements made in which
certificate shall be true on and as of the Closing Date), certifying as to (A)
the truth of the representations and warranties made by the Loan Parties and
contained in the Transaction Documents to which such Loan Party is a party as
though made on and as of the Closing Date (except for such representations and
warranties made as of a specified date, which representations and warranties
shall be true as of such specified date) and (B) the absence of any event
occurring and continuing, or resulting or that will result from, the
consummation of any of the Transactions that constitutes a Default or Event of
Default;
(xx) Financial Statements. Copies of each of the
financial statements described in Section 4.01(f);
(xxi) Consents. Copies of all consents, waivers or
approvals referred to in Section 3.01(i), certified by an authorized officer of
the Parent as true and correct copies of such documents as of the Closing Date;
(xxii) Insurance Policies. Certificates of insurance
summarizing the insurance policies of each Loan Party as required by this
Agreement or the Security Documents and reflecting the Administrative Agent as
loss payee or additional insured, as applicable, under such policies;
(xxiii) Opinions of Counsel. Opinions, in form, scope
and substance reasonably acceptable to the Administrative Agent, of Skadden,
Arps, Slate, Meagher & Flom, LLP and, to the extent reasonably requested by the
Administrative Agent, of other legal counsel, in each case as to such matters as
the Administrative Agent may reasonably request;
(xxiv) Notice of Borrowing. A Notice of Borrowing
complying with the requirements set forth in Section 2.02(a), duly executed by
the Borrowers;
(xxv) Transaction Documents. Copies of the Tender Offer
Documents and the Merger Documents, and all documents required to be delivered
under the terms thereof as of the time of the consummation of the Tender Offer,
each of which shall be reasonably satisfactory to the Administrative Agent, with
all certificates and opinions delivered in connection with such documents to be
addressed to the Administrative Agent and the Lenders or accompanied by a
written authorization from the Person delivering such certificate or opinion
stating that the Administrative Agent and the Lenders may rely on such
certificate or opinion as though it were addressed to the Administrative Agent
and the Lenders, respectively;
(xxvi) Solvency Certificate. A solvency certificate,
substantially in the form of Exhibit P hereto, executed on behalf of the Parent
by its chief financial officer,
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setting forth the conclusion that after giving effect to the Transactions, the
Parent is, and the Parent and its Subsidiaries, taken as a whole, are, Solvent;
(xxvii) Contribution Agreement. The Contribution
Agreement, duly executed by each Guarantor; and
(xxviii) Tax Matters. Such opinions of the Parent's
accountants and such certificates of officers of the Parent and/or Collagen as
the Administrative Agent may request with respect to certain federal and state
tax matters relating to the Parent and the Transactions.
(b) Fees and Expenses. The Loan Parties shall have paid all
accrued fees and expenses of the Administrative Agent and the Lenders which the
Loan Parties are required to pay under the Loan Documents.
(c) No Prohibitions; No Material Litigation. No requirement of
any Governmental Authority shall prohibit the consummation of the Transactions.
No order, judgment, ruling, injunction or decree of any Governmental Authority
or arbitrator shall, and no action, suit, investigation, litigation or other
proceeding shall be pending or, to the knowledge of the Borrowers, threatened
which could or purports to (i) enjoin, prohibit, restrain, or otherwise
adversely affect in any material manner the consummation of any Transaction,
(ii) have a Material Adverse Effect, (iii) adversely affect the legality,
validity or enforceability of any Transaction Document, or (iv) in the
reasonable judgment of the Administrative Agent, impair the ability of the
Parent to issue the securities as contemplated by Section 5.01(k).
(d) Adverse Change. No Material Adverse Change, or any event,
development or occurrence reasonably likely to result in a Material Adverse
Change, shall have occurred with respect to (i) the Parent and its Subsidiaries
(taken as a whole but excluding Collagen and its Subsidiaries), since March 31,
1999 or (ii) Collagen and its Subsidiaries (taken as a whole) since March 31,
1999 other than as described in Section 4.01(f)(iv). No material adverse change
shall have occurred in the United States high-yield debt markets, the financial,
banking or capital markets generally or the market for outstanding Equity
Securities of the Parent, from those in effect on the date hereof which could be
expected in the reasonable opinion of the Administrative Agent to adversely
affect the consummation of any of the Transactions.
(e) Consummation of Tender Offer. The Tender Offer shall have
been consummated on or before the Closing Date pursuant to and in accordance
with the terms the Tender Offer Documents (including at a price per Share of not
more than $16.25), applicable law and regulatory approvals, except for payment
for the tendered Shares. None of the Tender Offer Documents shall have been
amended or otherwise modified or supplemented in any respect or any condition
therein waived without the prior written consent of the Administrative Agent.
(f) Minimum Shares. After giving effect to the transactions
contemplated by the Tender Offer Documents and as of the Closing Date, the
Purchaser shall have acquired Shares constituting at least the Minimum Shares.
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(g) Satisfaction of Outstanding Indebtedness. All Indebtedness
and other amounts owing with respect to the Parent's outstanding 10% Senior
Secured Notes due September 1, 2000 and the Parent's outstanding 11% Junior
Secured Notes due September 1, 2000 shall have been repaid in full and all
indentures, agreements and other documents in respect of such Indebtedness and
all guarantees with respect thereto shall have been terminated and of no further
force and effect, and all Liens on Property owned by the Parent and its
Subsidiaries and securing such Indebtedness shall have been terminated and
released in full.
(h) Recommendation of Board of Directors. The board of
directors of Collagen shall have notified the stockholders of Collagen that such
board of directors has determined that the Tender Offer and the Merger are fair
and in the best interests of Collagen and its stockholders and recommends that
such stockholders accept the Tender Offer in accordance with the Offer to
Purchase, and such recommendation shall not have been withdrawn or otherwise
modified.
(i) Receipt of Consents; Expiration of Waiting Periods. All
governmental and third party consents, waivers and approvals (including without
limitation the approval of the Federal Trade Commission or the U.S. Department
of Justice under the Hart-Scott-Rodino Anti-Trust Improvements Act) necessary or
reasonably requested by the Administrative Agent in connection with any
Transaction, including the execution, delivery and performance by the Loan
Parties of the Transaction Documents, shall have been obtained (without the
imposition of any conditions that are not acceptable to the Administrative
Agent) and shall remain in effect. All applicable waiting periods shall have
expired without any action being taken by any competent authority.
(j) Merger Agreement. The Merger Agreement shall be in full
force and effect and shall not have been amended or otherwise modified or
supplemented in any material respect or any condition therein waived without the
prior written consent of the Administrative Agent, and the representations and
warranties contained in the Merger Agreement shall be true and correct.
(k) Working Capital. After giving effect to the consummation
of the Tender Offer, the repayment in full of the Indebtedness described in
Section 3.01(g) and the making of the Loan and the use of proceeds thereof, and
without giving effect to the Merger or any cash or other Property of Collagen
and its Subsidiaries, (i) on the Closing Date the Borrowers shall have not less
than $5,000,000 in cash or Cash Equivalents, free and clear of any Lien,
available for the working capital needs of the Parent and its Subsidiaries, and
(ii) the Parent and its Subsidiaries shall have sufficient cash flow from
operations, on a historical basis since June 30, 1999 and on a pro forma basis
in accordance with the Projections, to pay its expenses and other obligations
(excluding the Refinancing of the Bridge Notes on the Maturity Date of the
Bridge Notes but including anticipated Capital Expenditures) as and when the
same become due at least during the period from June 1, 1999 through June 30,
2000.
(l) Representations and Warranties. The representations and
warranties of each of the Loan Parties contained in this Agreement and each of
the other Transaction Documents shall be true on the Closing Date, before and
after giving effect to the making of the Loan and to the application of the
proceeds thereof as contemplated by Section
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2.07 (except for such representations and warranties made as of a specified
date, which representations and warranties shall be true as of such specified
date).
(m) No Default. After giving effect to the making of the Loan
and the application of the proceeds thereof as contemplated by Section 2.07, no
Default or Event of Default shall have occurred and be continuing.
SECTION 3.02 Conditions Precedent to Release of Funds in Securities
Account. The obligation of the Administrative Agent to authorize, pursuant to
the terms of the Securities Account Agreement, the release to the Borrowers of
the proceeds of the Loan deposited in the Securities Account to the Borrowers in
connection with the consummation of the Merger shall be subject to the
satisfaction of each of the conditions precedent set forth in this Section 3.02
on or prior to the Exchange Date:
(a) Consummation of Merger. The Merger shall have been, or
shall be, consummated pursuant to and in accordance with the terms of the Merger
Agreement and the other Merger Documents and in accordance with applicable law
and regulatory approvals. None of the Merger Documents shall have been amended,
or otherwise modified or supplemented in any material respect or any material
condition therein waived without the prior written consent of the Administrative
Agent. The Administrative Agent shall have received a copy of the Certificate of
Merger, filed with the Secretary of State of the State of Delaware, evidencing
that the Purchaser has merged with and into Collagen, with Collagen as the
surviving corporation of the Merger.
(b) Merger Documents. The Administrative Agent shall have
received fully executed copies of the Merger Documents, in each case certified
as a true and complete copy by an authorized officer of the Parent, and all
other certificates, filings, approvals, consents, board of directors
resolutions, opinions and other documents required to be delivered under the
terms thereof, each of which shall be reasonably satisfactory to the
Administrative Agent, with all certificates and opinions delivered in connection
with such documents to be addressed to the Administrative Agent and the Lenders
or accompanied by a written authorization from the Person delivering such
certificate or opinion stating that the Administrative Agent and the Lenders may
rely on such certificate or opinion as though it were addressed to the
Administrative Agent and the Lenders, respectively.
(c) Joinder Agreements. (i) Collagen shall have executed and
delivered to the Administrative Agent the Collagen Joinder Agreement and such
other documents as the Administrative Agent may reasonably request in connection
with Collagen's succeeding to all rights, duties, indebtedness, liabilities, and
obligations of the Purchaser under this Agreement and the other Loan Documents,
and (ii) each Domestic Subsidiary of Collagen shall have executed a Subsidiary
Joinder Agreement in favor of the Administrative Agent and such other documents
as the Administrative Agent may reasonably request in connection with such
Domestic Subsidiary being joined as a Guarantor hereunder.
(d) Notes. Collagen and the Parent shall have duly executed
and delivered to the Administrative Agent new Bridge Notes to replace those
Notes delivered pursuant to Section 3.01(a)(ii).
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(e) Guaranties; Security Documents. (A) Collagen shall have
executed and delivered to the Administrative Agent a counterpart of the Borrower
Security Agreement and the Borrower Pledge Agreement, and such other documents
of the type described in Section 3.01 as the Administrative Agent may reasonably
request and as Collagen would have had to deliver if Collagen were a Loan Party
on the Closing Date; and (B) each Domestic Subsidiary of Collagen shall have
executed and delivered to the Administrative Agent a counterpart of the
Guaranty, the Guarantor Security Agreement, the Guarantor Pledge Agreement and
the Contribution Agreement, and such other documents of the type described in
Section 3.01 as the Administrative Agent may reasonably request and as such
Subsidiary would have had to deliver if it were a Loan Party on the Closing
Date.
(f) Officer's Certificate. The Administrative Agent shall have
received a certificate of the Parent, executed by a duly authorized senior
officer of the Parent, dated the Merger Date (the statements made in which
certificate shall be true on and as of the Merger Date), certifying as to (A)
the truth in all material respects of the representations and warranties
contained in the Transaction Documents as though made on and as of the Merger
Date (except for such representations and warranties made as of a specified
date, which representations and warranties shall be true in all material
respects as of such specified date) and (B) the absence of any event occurring
and continuing, or resulting or that will result from, the consummation of any
of the Transactions that constitutes a Default or an Event of Default.
(g) Fees and Expenses. Each of the Loan Parties shall have
paid all accrued fees and expenses of the Administrative Agent and the Lenders
which the Loan Parties are required to pay under the Loan Documents.
(h) No Prohibitions; No Material Litigation. No requirement of
any Governmental Authority shall prohibit the consummation of the Merger or any
other Transaction. No order, judgment, ruling, injunction, or decree of any
Governmental Authority or arbitrator shall, and no action, suit, investigation,
litigation or other proceeding shall be pending or overtly threatened which
purports to, or could reasonably be expected to, (i) enjoin, prohibit, restrain,
or otherwise adversely affect in any material manner the consummation of the
Merger or any other Transaction, (ii) have a Material Adverse Effect, (iii)
adversely affect the legality, validity or enforceability of any Transaction
Document or any document relating thereto, or (iv) in the reasonable judgment of
the Administrative Agent, impair the ability of the Parent to issue the
securities as contemplated by Section 5.01(k).
(i) Adverse Change. No Material Adverse Change, or any event,
development or occurrence reasonably likely to result in a Material Adverse
Change, shall have occurred with respect to the Parent and its Subsidiaries
(taken as a whole but excluding Collagen and its Subsidiaries) since March 31,
1999, or with respect to Collagen and its Subsidiaries (taken as a whole) since
March 31, 1999 except as described in Section 4.01(f)(iv). No material adverse
change shall have occurred in the United States high-yield debt markets, the
financial, banking or capital markets generally or the market for outstanding
Equity Securities of the Parent, from those in effect on the date hereof which
could be expected in the reasonable opinion of the Administrative Agent to
adversely affect the consummation of the Transactions.
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(j) Representations and Warranties. The representations and
warranties of each of the Loan Parties contained in this Agreement and each of
the other Transaction Documents shall be true in all material respects on the
Merger Date, before and after giving effect to the making of the Loan and to the
application of the proceeds thereof as contemplated by Section 2.07 (except for
such representations and warranties made as of a specified date, which
representations and warranties shall be true as of such specified date).
(k) No Default. After giving effect to the Merger and the
application of the proceeds thereof as contemplated by Section 2.07, no Default
or Event of Default shall have occurred and be continuing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties. Each of the Borrowers
hereby represents and warrants as follows:
(a) Organization; Power and Authority. The Parent and each of
its Subsidiaries (i) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) is duly qualified
and in good standing in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed could not
reasonably be expected to have a Material Adverse Effect, and (iii) has all
requisite power and authority to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be conducted.
(b) Subsidiaries; Capitalization.
(i) After giving effect to the consummation of the
Transactions, the Parent has no other Subsidiaries other than those listed in
Schedule 4.01(b). Schedule 4.01(b) sets forth the jurisdiction of incorporation
or organization of the Parent and each of its Subsidiaries, the total authorized
Capital Stock of each such Person, divided by class, and the percentage of the
Parent's or a Subsidiary's (as applicable) ownership of the outstanding Voting
Stock of each Subsidiary of the Parent. None of the Subsidiaries of the Parent
listed in Schedule 4.01(b) and whose names are marked with an asterisk on such
Schedule owns any material assets (other than certain intellectual property
assets) or conducts any material business activities or has any employees, and
the Parent is currently engaged in dissolving each such Person.
(ii) All of the outstanding Capital Stock of the Parent
and its Subsidiaries has been validly issued, is fully paid, is nonassessable,
and has not been issued in violation of any preemptive or similar rights. Except
for the Warrants and the Equity Registration Rights Agreement and except as
disclosed in Schedule 4.01(b), there are (A) no outstanding subscriptions,
options, warrants, calls, or rights (including, without limitation, preemptive
rights) to acquire, and no outstanding securities or instruments convertible
into, Capital Stock of the Parent or any of its Subsidiaries, and (B) no
shareholder agreements, voting
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trusts, or similar agreements in effect and binding on any shareholder of the
Parent or any of its Subsidiaries or the Capital Stock of the Parent or any of
its Subsidiaries. All shares of Capital Stock of the Parent and its Subsidiaries
were issued in compliance with all applicable state and federal securities laws.
(c) Authorization, Enforceability, Etc. The execution and
delivery of the Transaction Documents by each Loan Party which is a party
thereto, the performance by each of the Loan Parties of their respective
obligations thereunder and the consummation by each of the Loan Parties of the
Transactions have been duly authorized by all necessary action (including,
without limitation, all necessary shareholder action). Each of the Transaction
Documents to which a Loan Party is a party has been duly executed and delivered
by such Loan Party and constitutes a legal, valid and binding obligation of such
Loan Party enforceable against such Loan Party in accordance with its terms,
subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and subject to
the effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d) Authorization; Compliance with Law and Other Instruments,
Etc. The execution, delivery and performance by each Loan Party of each
Transaction Document to which it is a party, and the consummation of the
transactions contemplated thereby, are within such Loan Party's powers, and do
not (i) contravene such Loan Party's Organizational Documents, (ii) violate any
law, rule, regulation (including, without limitation, Regulation U or Regulation
X of the Board of Governors of the Federal Reserve System), order, writ,
judgment, injunction, decree, determination or award, (iii) conflict with or
result in the breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting such Loan Party or any of its Property, except for any such
breach or default as to which requisite waivers or consents have been obtained
or (iv) result in or require the creation or imposition of any Lien upon or with
respect to any Property of any Loan Party. Neither the Parent nor any of its
Subsidiaries is in violation of any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which could reasonably be expected to
have a Material Adverse Effect.
(e) Governmental Authorizations, Etc. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority or any other Person is required for (i) the due execution, delivery,
recordation, filing or performance of any Transaction Document or for the
legality, validity, binding effect or enforceability thereof, or for the
consummation of any Transaction, or (ii) the exercise by the Administrative
Agent or any Lender of its rights under the Loan Documents except for the
authorizations, approvals, actions, notices and filings listed on Schedule
4.01(e) hereto all of which have been duly obtained, taken, given or made and
are in full force and effect. All applicable waiting periods in connection with
the transactions contemplated hereby have expired without any action having been
taken by any competent authority restraining, preventing or imposing materially
adverse conditions upon the Loan or the other Transactions.
(f) Financial Statements.
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(i) The consolidated balance sheets of the Parent and
its Subsidiaries as of December 31, 1997 and December 31, 1998, and the related
consolidated statements of income, stockholders' equity and cash flows of the
Parent and its Subsidiaries for the fiscal years ended December 31, 1997 and
December 31, 1998, in each case including the notes and schedules thereto and
accompanied by an opinion of BDO Seidman LLP, independent certified public
accountants of the Parent, and the consolidated balance sheets of the Parent and
its Subsidiaries as of March 31, 1999 and June 30, 1999 and the related
statements of income, stockholders' equity and cash flows of the Parent and its
Subsidiaries for the three-month period and the six-month period, respectively,
ended on such dates, in each case duly certified by the chief financial officer
of the Parent, copies of which have been furnished to the Administrative Agent
and each of the Lenders, present fairly the consolidated financial condition of
the Parent and its Subsidiaries as at such dates and the consolidated results of
operations and cash flows of the Parent and its Subsidiaries for the respective
periods ended on such dates in accordance with GAAP applied consistently
throughout the period involved, subject to year-end audit adjustments and the
absence of footnotes in the case of such unaudited statements.
(ii) The consolidated balance sheets of Collagen and
its Subsidiaries as of June 30, 1998, and the related consolidated statements of
earnings, cash flows and stockholders' equity of Collagen and its Subsidiaries
for the fiscal year ended on such date, including the notes and schedules
thereto and accompanied by an opinion of Ernst & Young LLP, independent
certified public accounts of Collagen, and the unaudited consolidated balance
sheets of Collagen and its Subsidiaries as of June 30, 1999 and the related
unaudited consolidated statements of earnings, cash flows and stockholders'
equity of Collagen and its Subsidiaries for the fiscal year ended on such date,
copies of which have been furnished to the Administrative Agent and each of the
Lenders, present fairly the consolidated financial condition of Collagen and its
Subsidiaries as at such dates and the consolidated results of operations and
cash flows of Collagen and its Subsidiaries for the respective periods ended on
such dates in accordance with GAAP applied consistently throughout the period
involved, subject to year-end audit adjustments and the absence of footnotes in
the case of such unaudited statements.
(iii) There are no liabilities or obligations of the
Parent or any of its Subsidiaries of any nature whatsoever (including
Indebtedness and whether absolute, contingent, accrued or otherwise and whether
or not due), after giving effect to the Transactions that, either individually
or in the aggregate, could reasonably be expected to be material to the Parent
or any of its Subsidiaries, except for those liabilities and obligations that
are fully disclosed in the financial statements referred to in subsection (i)
above.
(iv) Since March 31, 1999, there has been no
Material Adverse Change with respect to the Parent and its Subsidiaries taken as
a whole (excluding Collagen and its Subsidiaries) or with respect to Collagen
and its Subsidiaries taken as a whole, provided that the Lenders acknowledge
notice of, and agree that a Material Adverse Change has not occurred as of the
Closing Date by reason of, the booking of a non-cash adjustment to the provision
for discontinued operations of Lipomatrix Inc. and its breast implant business,
not to exceed $11.5 million, in its financial statements for the fiscal year
ended June 30, 1999.
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(v) The Projections have been prepared in good
faith and are based on reasonable assumptions, and there are no statements or
conclusions in the Projections which are based upon or include information known
to the Parent or any of its Subsidiaries to be misleading in any material
respect or which fail to take into account any material information known to the
Parent or any of its Subsidiaries. On the Closing Date, the Borrowers believe
that the Projections are reasonable and attainable, it being recognized by the
Lenders, however, that projections as to future events are not to be viewed as
facts and that the actual results during the periods covered by the Projections
may differ from the projected results set forth in the Projections.
(g) Litigation.
(i) There is no action, suit, investigation, litigation
or proceeding, including any Environmental Action, pending or, to the Borrowers'
knowledge, threatened, affecting the Parent or any of its Subsidiaries before
any court, Governmental Authority or arbitrator that (i) could reasonably be
expected to have a Material Adverse Effect or (ii) purports to adversely affect
the Transactions or the legality, validity or enforceability of any Transaction
Document or the consummation of the Transactions.
(ii) Schedule 4.01(g) lists and correctly describes all suits,
actions, reissues, reexaminations, public protests, interferences, oppositions,
cancellations or other proceedings currently pending concerning a claim that the
Parent or any of its Subsidiaries has violated any patent, trademark or other
intellectual property or proprietary right or breached any License, as defined
in the Borrower Security Agreement (collectively, "Proceedings"). Other than as
specified in Schedule 4.01(g), no Proceeding is currently pending and no such
claim has been otherwise threatened or asserted against the Parent or any of its
Subsidiaries. The Proceedings listed on Schedule 4.01(g) do not present
liabilities which are material to the business of the Parent or any of its
Subsidiaries. All opinions rendered by any counsel to the Parent or any of its
Subsidiaries in respect of such Proceedings, including without limitation, the
confidential opinion of counsel regarding non-infringement and unenforceability
of U.S. Patent Nos. 4,889,744 and 5,007,929 dated October 28, 1994 prepared by
Finnegan, Henderson, Farabow, Garrett & Dunner (the "Opinion"), are based on a
reasonably diligent review and analysis of the relevant facts and law, are
reasonably stated and are correct in all material respects. The Parent has
provided the Administrative Agent and each Lender with a true, complete and
correct copy of the Opinion. The Parent and its Subsidiaries have reasonably
relied on such opinions in the conduct of their business. For the purposes of
this Section 4.01(g)(ii), the term "License" shall include without limitation
that certain License Agreement dated July 1, 1993 between Lubomyr I. Kuzmak and
Inamed Development Co. (the "Kuzmak License"), and that certain Exclusive
License Agreement dated December 17, 1986 between McGhan Medical Corporation and
Bio-Cell (the "Bio-Cell License"), each as amended or otherwise modified.
Neither the Kuzmak License nor the Bio-Cell License is material to the business
of the Parent or any of its Subsidiaries nor are they required in order to
conduct the business of the Parent and the Subsidiaries as currently conducted
or as contemplated to be conducted.
(h) Licenses, Permits, Etc. Each of the Parent and its
Subsidiaries owns or possesses all of the licenses, permits, franchises,
authorizations, consents and approvals,
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and owns or has the legal right to use all of the patents, copyrights, service
marks, trademarks and trade names (or other rights thereto), that are necessary
to own or lease and operate its Property and to conduct its businesses as
presently conducted, without known conflict with the rights of any other Person,
except where and to the extent that the failure to so own, possess or have the
legal right to use such licenses, permits, franchises, authorizations, consents,
approvals, patents, copyrights, service marks, trademarks, trade names or other
rights, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. Except as described on Schedule
4.01(h), no action, suit, investigation, litigation or proceeding of any Person
is pending or, to the best knowledge of the Borrowers, is threatened challenging
the use of any such license, permit, franchise, authorization, consent,
approval, patent, copyright, service mark, trademark, trade name or other right,
or the validity or effectiveness thereof, except for any such action, suit,
investigation, litigation or proceeding that, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(i) Margin Stock. Neither the Parent nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock, provided that the Purchaser is engaged in
the Acquisition of the Shares pursuant to the Offer to Purchase. No proceeds of
the Loan will be used to purchase or carry any Margin Stock or to extend credit
to others for the purpose of purchasing or carrying any Margin Stock in
violation of Regulation U or Regulation X.
(j) Title to Property; Leases. Each of Parent and its
Subsidiaries has good and sufficient title to, or a valid and enforceable
leasehold interest in, all its Property, in each case free and clear of all
Liens other than Liens permitted under Section 5.02(a). All leases under which
the Parent or any of its Subsidiaries is a lessee are valid and subsisting and
are in full force and effect, except where the failure of such lease to be valid
and subsisting or in full force and effect could not reasonably be expected to
have a Material Adverse Effect.
(k) Taxes. The Parent and each of its Subsidiaries has filed
or caused to be filed all material tax returns and reports that are required to
have been filed in any jurisdiction, and has paid all taxes shown to be due and
payable on such returns and all taxes shown to be due and payable on any
assessments of which such Person has received notice and all other taxes,
assessments, levies, fees and other governmental charges imposed upon it or its
Subsidiaries, or its property, assets, income or franchises, to the extent such
taxes, assessments, levies, fees and other charges have become due and payable
and before they have become delinquent, except for taxes, assessments, levies,
fees or other governmental charges (x) the amount, applicability or validity of
which is being contested in good faith and by appropriate proceedings diligently
conducted and with respect to which such Person has established reserves in
accordance with GAAP or (y) the non-payment of which would not have a Material
Adverse Effect.
(l) Compliance with ERISA. None of the Parent, its
Subsidiaries or their respective ERISA Affiliates maintains or has an obligation
to contribute to any Plan or any Multiemployer Plan. None of the Parent, its
Subsidiaries or their respective ERISA Affiliates nor any fiduciary of any Plan
has (i) engaged in a nonexempt prohibited transaction described in Sections 406
of ERISA or 4975 of the Code which could reasonably be expected to have a
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Material Adverse Effect, (ii) taken or failed to take any action which would
constitute or result in the termination of any Plan which could reasonably be
expected to have a Material Adverse Effect, (iii) adopted any amendment that
would require the granting of a security interest under Section 401(a)(29) of
the Code, (iv) failed to pay any required installment or other payment required
under Section 412 of the Code on or before the due date for such required
installment or payment, (v) engaged in a transaction within the meaning of
Section 4069 of ERISA which can reasonably be expected to have a Material
Adverse Effect, (vi) incurred any liability to the PBGC which remains
outstanding other than the payments of premiums, and there are no premium
payments which have become due which are unpaid, or (vii) made a complete or
partial withdrawal under Section 4203 or 4205 of ERISA from a Multiemployer Plan
in either case which can reasonably be expected to have a Material Adverse
Effect. There are no pending or, to the knowledge of the Borrowers, threatened
claims, actions, proceedings or lawsuits (other than claims for benefits in the
normal course) asserted or instituted against (i) any Plan or its assets, (ii)
any fiduciary with respect to any Plan, or (iii) the Parent, its Subsidiaries or
any ERISA Affiliate with respect to any Plan. No reportable event (as defined in
Section 4043(c) of ERISA), other than a reportable event for which the 30-day
notice provision has been waived, has occurred with respect to any Plan nor does
any event or condition exist that is reasonably likely to result in a reportable
event with respect to any Plan.
(m) Investment Company Act. Neither the Parent nor any of its
Subsidiaries is an "investment company" or a company controlled by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
(n) No Burdensome Agreements. Neither the Parent nor any of
its Subsidiaries is, after giving effect to the Transactions, a party to any
indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction that could
reasonably be expected to have a Material Adverse Effect.
(o) Solvency. The Parent and each of its Subsidiaries is, both
before and after giving effect to the Transactions and the other transactions
contemplated by the Transaction Documents, Solvent.
(p) Existing Indebtedness; Material Contracts; Liens.
(i) Schedule 4.01(p) sets forth a complete and correct
list as of the Closing Date, after giving effect to the Transactions, of all
outstanding Indebtedness of the Parent and its Subsidiaries and each loan
agreement, merger agreement, lease, indenture, mortgage or other agreement or
instrument (other than the Loan Documents) to which the Parent or any of its
Subsidiaries is a party to the extent that (A) the termination of such agreement
or a default thereunder could reasonably be expected to have a Material Adverse
Effect or (B) such agreement provides for Indebtedness or the purchase or other
transfer of Property in excess of $500,000.
(ii) After giving effect to the Transactions, there are
no Liens existing with respect to any Property of the Parent or any of its
Subsidiaries other than Liens permitted under Section 5.02(a).
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(q) Environmental Matters. (i) After giving effect to the
Transactions: (A) the operations and Property of the Parent and its Subsidiaries
comply with all Environmental Laws except for any non-compliance that could not
be reasonably likely individually or in the aggregate to have a Material Adverse
Effect, (B) all necessary Environmental Permits have been obtained and are in
effect for the operations and Property of the Parent and its Subsidiaries,
except for such Environmental Permits where the failure to obtain or maintain
the same, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect; (C) the Parent and each of its Subsidiaries are
in compliance with all such Environmental Permits except for any non-compliance
that could not reasonably be expected individually or in the aggregate to have a
Material Adverse Effect; (D) there are no Environmental Actions pending or, to
the knowledge of the Parent and its Subsidiaries, threatened against the Parent
or any of its Subsidiaries or any of their respective Property that, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect; and (E) to the Borrowers' knowledge, no circumstances
exist that would be reasonably likely to (1) form the basis of an Environmental
Action against the Parent or any of its Subsidiaries or any of their respective
Property that could reasonably be expected to have a Material Adverse Effect or
(2) cause any such property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law that could
reasonably be expected to have a Material Adverse Effect.
(ii) Except in compliance with applicable Environmental
Laws, neither the Parent nor any of its Subsidiaries has generated, used,
treated, handled, stored or disposed of on, or released or transported to or
from, any Property currently or formerly owned or operated by the Parent or any
of its Subsidiaries, any Hazardous Material, and to the Borrower's knowledge no
other Person has released Hazardous Material onto such Property, except for any
such actions that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(r) Compliance with Laws. Except with respect to environmental
matters, which are addressed in Sections 4.01(g) and (q) above, the Parent and
each of its Subsidiaries, both before and after giving effect to the
Transactions, is in compliance with all applicable statutes, laws, ordinances,
rules, orders and regulations of any Governmental Authority in all jurisdictions
in which it is presently doing business, other than those the noncompliance with
which could not (individually or in the aggregate) reasonably be expected to
have a Material Adverse Effect.
(s) Insurance. The Parent and each of its Subsidiaries carries
or is entitled to the benefits of insurance in such amounts and covering such
risks as is reasonably sufficient under the circumstances and is consistent with
comparable businesses, and all such insurance is in full force and effect,
except when the failure of such insurance to be in full force and effect could
not reasonably be expected to have a Material Adverse Effect.
(t) Labor Matters. There are no strikes pending or, to the
Borrowers' knowledge, threatened against the Parent or any of its Subsidiaries
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. The hours worked and payments made to employees of the
Parent and each of its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable legal requirements, except to
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the extent such violations could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect. All material
payments due from the Parent or any of its Subsidiaries, on account of wages and
employee health and welfare insurance and other benefits have been paid or
accrued as a liability on the books of the Parent or such Subsidiary, except
where the failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(u) Security Documents. When executed and delivered, each
Security Document will be effective to create in favor of the Administrative
Agent, for the benefit of the Lenders, a legal, valid and enforceable security
interest in the Collateral described in such Security Document and the proceeds
thereof, and, when the financing statements in appropriate form are filed in the
offices specified on Schedule 4.01(u) and the other perfection actions described
in such Security Documents have been taken, each such Security Document shall
grant a fully perfected first priority Lien on, and security interest in, all
right, title and interest of the relevant Loan Party in such Collateral and the
proceeds thereof as security for the Obligations.
(v) Purposes of Loan. The proceeds of the Loan shall be used
solely for the purposes set forth in Section 2.07 and for no other purpose.
(w) Disclosure. All of the information furnished in writing by
or on behalf of the Parent or any of its Subsidiaries to the Administrative
Agent or any Lender pursuant to or in connection with the Transactions and the
Transaction Documents, taken as a whole, and all of the information contained in
documents filed with the Securities and Exchange Commission by or on behalf of
the Parent and its Subsidiaries or Collagen and its Subsidiaries, are complete
in all material respects as of the date on which such information was so
provided, and all such information, taken as a whole, does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which any
such statements were made, not misleading. All financial projections and
forecasts that have been prepared by or on behalf of the Parent or any of its
Subsidiaries and made available to the Administrative Agent or any Lender have
been prepared in good faith based upon reasonable assumptions and represented,
at the time each such financial projection or forecast was delivered to the
Administrative Agent or any Lender, such Person's best estimate of future
financial performance (it being recognized that such financial projections or
forecasts are not to be viewed as facts and that the actual results during the
period or periods covered by any such financial projections or forecasts may
differ from the projected or forecasted results).
(x) Transaction Documents. As of the Closing Date, the
Borrowers have delivered to the Administrative Agent and the Lenders complete
and correct copies of the Tender Offer Documents and the Merger Documents then
existing. Each such Transaction Document is in full force and effect and no
material term or condition thereof has been amended or otherwise waived except
for such amendments and waivers approved by the Administrative Agent. None of
the parties thereto has failed to perform any material obligation thereunder,
and each of the representations and warranties given therein is true and correct
in all material respects. After giving effect to the Loan hereunder, the Tender
Offer will have been completed in accordance with the Tender Offer Documents.
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(y) Accuracy of Representations and Warranties in Merger
Agreement. Each of the representations and warranties made by Collagen in the
Merger Agreement are true and correct in all material respects.
(z) Broker's Fees. Except for fees described in Sections 5.24
and 6.06 of the Merger Agreement and fees payable to U.S. Bancorp Libra and
disclosed in the letter agreement, dated July 23, 1999, between the Parent and
Cerberus Capital Management, L.P., no broker's or finder's fee, commission, or
similar compensation or commissions have been paid or will be payable by the
Parent or any of its Subsidiaries with respect to the Transactions or for any
other services rendered to the Parent or any of its Subsidiaries ancillary to
the Transactions.
(aa) Year 2000 Compliance.
(i) Each of the Parent and its Subsidiaries have (A)
undertaken a detailed review and assessment of all areas within their respective
business and operations that could be adversely affected by the "Year 2000
Problem" (that is, the risk that computer applications used by the Parent or any
of its Subsidiaries may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (B) developed a detailed plan and timeline for addressing
the Year 2000 Problem on a timely basis, and (C) to date, implemented that plan
in accordance with that timetable in all material respects. All computer
applications of the Parent and its Subsidiaries that are material to their
respective businesses and operations will on a timely basis be able to perform
properly date-sensitive functions for all dates before and after January 1, 2000
(that is, be "Year 2000 Compliant") except where any such non-performance could
not reasonably be expected to have a Material Adverse Effect.
(ii) Each of the Parent and its Subsidiaries has made
inquiry of its key suppliers, vendors, and customers as to whether such Persons
will on a timely basis be Year 2000 Compliant and, on the basis of that inquiry,
believes that all such Persons will be so compliant except where non-compliance
could not reasonably be expected to result in a Material Adverse Effect. For
purposes hereof, "key suppliers, vendors, and customers" refers to those
suppliers, vendors, and customers of the Parent or any of its Subsidiaries the
business failure of which would with reasonable probability be expected to have
a Material Adverse Effect.
ARTICLE V
COVENANTS
SECTION 5.01. Affirmative Covenants. Each of the Borrowers covenants
and agrees that, so long as any Loan or other amount is owing to any Lender or
any Obligation is outstanding under any Note or any of the other Loan Documents,
the Parent shall and shall cause each of its Subsidiaries to:
(a) Compliance with Laws, Etc. Comply with all laws, rules,
regulations and orders (including, without limitation Environmental Laws and
ERISA) to which it or any of its Property is subject, and obtain, comply with
and maintain any and all licenses,
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approvals, notifications, registrations or permits required by such laws, rules,
regulations and orders, except to the extent that such failure to comply, either
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge before the same
shall become delinquent, (i) all material taxes, assessments and governmental
charges or levies imposed upon it or upon its Property and (ii) all material
lawful claims that, if unpaid, might become a Lien upon its Property; provided,
however, that neither the Parent nor any of its Subsidiaries shall be required
to pay or discharge any such tax, assessment, charge or claim (i) that is being
contested in good faith and by proper proceedings and as to which appropriate
reserves are being maintained and (ii) the Borrowers provide the Administrative
Agent with an opinion of counsel to the effect that it is more likely than not
that the Borrowers will prevail with respect to such proceedings.
(c) Maintenance of Insurance. (i) Maintain insurance with
financially sound, responsible and reputable insurance companies or associations
in such amounts and covering such risks (including in any event, business
interruption) as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the Parent or
such Subsidiary operates; and (ii) furnish to each Lender, upon written request,
full information as to the insurance carried.
(d) Preservation of Existence, Etc. Except as permitted by
Section 5.02(c), preserve and maintain its existence, legal structure, legal
name, rights (charter and statutory), permits, licenses, approvals, privileges
and franchises; provided, however, that neither the Parent nor any of its
Subsidiaries shall be required to preserve any right, permit, license, approval,
privilege or franchise if the board of directors of the Parent or such
Subsidiary shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Parent or such Subsidiary, as the case may
be, and that the loss thereof is not disadvantageous in any material respect to
the Parent, such Subsidiary or any of the Lenders. None of the Subsidiaries of
the Parent listed in Schedule 4.01(b) and whose names are marked with an
asterisk on such Schedule shall engage in any material business activities or
shall own any material assets (other than certain intellectual property assets)
or shall have any employees, and each such Person that owns any material
intellectual property assets shall transfer all such assets to one or more
Wholly-Owned Subsidiaries of the Parent within 90 days of the Closing Date.
(e) Visitation Rights. From time to time, upon reasonable
notice and, prior to the occurrence and during the continuance of a Default,
during normal business hours, permit the Administrative Agent or any of the
Lenders (through the Administrative Agent) or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and books
of account of, and visit the offices of, the Parent and any of its Subsidiaries,
and to discuss the affairs, finances and accounts of the Parent and any of its
Subsidiaries with any of their officers or directors and with their independent
certified public accountants.
(f) Keeping of Books. Keep proper books of record and account,
in which full and correct entries shall be made of all financial transactions
and the assets and business of the Parent and each such Subsidiary in accordance
with GAAP.
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(g) Maintenance of Properties, Etc. Maintain and preserve all
of its Properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(h) ERISA.
(i) Furnish to the Administrative Agent forthwith upon
filing or receipt, as the case may be, a copy of (A) any notice by the Parent,
any of its Subsidiaries or any ERISA Affiliate of a Plan termination sent to the
PBGC under Section 4041 of ERISA or (B) any notice sent or received by the
Parent, any of its Subsidiaries or any ERISA Affiliate under Section 4041, 4042,
4043, 4063 or 4068 of ERISA.
(ii) Notify the Administrative Agent within 10 Business
Days after the Parent, any of its Subsidiaries or any ERISA Affiliate knows or
has reason to know that a non-exempt prohibited transaction (as defined in
Section 406 of ERISA and 4975 of the Code) has occurred with respect to a Plan,
such notice to contain a statement of the chief financial officer of the Parent
describing such transaction and the action which the Parent, any of its
Subsidiaries or any ERISA Affiliate has taken or proposes to take with respect
thereto.
(iii) Notify the Administrative Agent within 10 Business
Days after receipt by the Parent, any of its Subsidiaries or any ERISA Affiliate
of a notice from a Multiemployer Plan regarding the imposition of withdrawal
liability, such notice to be accompanied by a copy of such notice from such
Multiemployer Plan.
(iv) Notify the Administrative Agent within 10 Business
Days after the Parent, any of its Subsidiaries or any ERISA Affiliate sends
notice of a plant closing or mass layoff (as defined in the Worker Adjustment
and Retraining Notification Act) to employees.
(v) Furnish to the Administrative Agent as soon as
practicable upon filing a copy of each Annual Report (Form 5500) in respect of
each Plan and notices required under Sections 4065 and 4066 of ERISA.
(i) Reporting Requirements. Furnish to the Administrative
Agent in sufficient copies for each of the Lenders:
(i) as soon as possible and in any event within five
days after a senior officer of the Parent or any of its Subsidiaries obtains
knowledge of the occurrence of any Default, Event of Default or any event,
development or occurrence which could reasonably be expected to have a Material
Adverse Effect continuing on the date of such statement, a statement of a senior
officer of the Parent setting forth details of such Default, event, development
or occurrence and the action that the Parent and each of its Subsidiaries has
taken and proposes to take with respect thereto;
(ii) as soon as available and in any event within 30
days after the end of each month, consolidated and consolidating balance sheets
of the Parent and its Subsidiaries as of the end of such month and consolidated
and consolidating statements of
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income and consolidated and consolidating statements of cash flows of the Parent
and its Subsidiaries for the period commencing at the end of the previous month
and ending with the end of such month and consolidated and consolidating
statements of income and consolidated and consolidating statements of cash flows
of the Parent and its Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such month, setting forth in
each case in comparative form the corresponding figures for the corresponding
month of the preceding Fiscal Year, all in reasonable detail and accompanied by
the signed statement of the chief financial officer of the Parent required
pursuant to subsection (v) below;
(iii) as soon as available and in any event within 45
days after the end of each of the first three quarters of each Fiscal Year,
consolidated and consolidating balance sheets of the Parent and its Subsidiaries
as of the end of such quarter and consolidated and consolidating statements of
income and consolidated and consolidating statements of cash flows of the Parent
and its Subsidiaries for the period commencing at the end of the previous fiscal
quarter and ending with the end of such fiscal quarter and consolidated and
consolidating statements of income and consolidated and consolidating statements
of cash flows of the Parent and its Subsidiaries for the period commencing at
the end of the previous Fiscal Year and ending with the end of such quarter,
setting forth in each case in comparative form the corresponding figures for the
corresponding period of the preceding Fiscal Year for the Parent, all in
reasonable detail and accompanied by the signed statement of the chief financial
officer of the Parent required pursuant to subsection (v) below;
(iv) as soon as available and in any event within 90
days after the end of each Fiscal Year, a copy of the annual audit report for
such year for the Parent and its Subsidiaries, including therein consolidated
and consolidating balance sheets of the Parent and its Subsidiaries as of the
end of such Fiscal Year and consolidated and consolidating statements of income
and consolidated and consolidating statements of cash flows of the Parent and
its Subsidiaries for such Fiscal Year, in each case accompanied by (A) an
unqualified opinion of independent certified public accountants of recognized
standing reasonably acceptable to the Administrative Agent (x) to the effect
that such consolidated and consolidating financial statements have been prepared
in accordance with GAAP in effect for such Fiscal Year and consistently applied
and (y) that is not limited as to the scope of the audit or qualified as to the
status of any of the entities examined as a going concern or otherwise qualified
in any manner not reasonably acceptable to the Administrative Agent, and (B) the
signed statement of the chief financial officer of the Parent required pursuant
to subsection (v) below;
(v) together with the financial statements provided
pursuant to Section 5.01(i)(ii)-(iv), a signed statement of the chief financial
officer of the Parent, to the effect that: (x) all financial statements
delivered or caused to be delivered to the Administrative Agent hereunder have
been prepared in accordance with GAAP (except, in the case of unaudited
financial statements, for the lack of footnotes and being subject to year-end
audit adjustments) and fairly present the consolidated financial condition of
the Parent and its Subsidiaries as at the respective dates thereof and the
consolidated results of operations and cash flows of the Parent and its
Subsidiaries for the respective periods ended on such respective dates; (y) the
representations and warranties of the Parent and its Subsidiaries contained in
this Agreement and the other Loan Documents to which such Person is a party are
true and correct in all material respects on and as of
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the date of such certificate, as though made on and as of such date (except for
such representations and warranties made as of a specified date, which
representations and warranties shall be true as of such specified date), and (z)
on the date of delivery of such certificate to the Lenders there does not exist
any condition or event that constitutes a Default or Event of Default (or, in
the case of clause (w), (x), or (y), to the extent of any non-compliance,
describing such non-compliance as to which he or she may have knowledge and what
action the Parent or any of its Subsidiaries has taken, is taking, or proposes
to take with respect thereto);
(vi) promptly after the commencement thereof, notice
of all actions, suits, investigations, litigation and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Parent or any of its
Subsidiaries and involving an amount in excess of $500,000;
(vii) promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that the Parent
or any of its Subsidiaries sends to its stockholders, and copies of all regular,
periodic and special reports, and all registration statements, that the Parent
or any of its Subsidiaries files with the Securities and Exchange Commission or
any Governmental Authority that may be substituted therefor, or with any
national securities exchange;
(viii) promptly upon receipt thereof, copies of all
notices of default, termination or acceleration prior to the stated maturity
received by the Parent or any of its Subsidiaries under or pursuant to any
indenture, loan or credit or similar agreement relating to obligations of the
Parent or any of its Subsidiaries of $500,000 or more;
(ix) promptly after the assertion or occurrence thereof,
notice of (i) any Environmental Action against the Parent or any of its
Subsidiaries or any noncompliance by the Parent or any of its Subsidiaries with
any Environmental Law or Environmental Permit, and (ii) any release of any
Hazardous Material into the environment, that could in the case of clause (i) or
(ii) reasonably be expected to have a Material Adverse Effect;
(x) as soon as practicable and in any event not later
than 30 days prior to the end of each Fiscal Year, an annual budget of the
Parent and its Subsidiaries consisting of (A) projected financial statements for
the next succeeding Fiscal Year, accompanied by the statement of a chief
financial officer of the Parent to the effect that, to the best of his
knowledge, the budget is a reasonable estimate for the period covered thereby
and (B) such other projections and forecasted information as any Lender through
the Administrative Agent may from time to time reasonably request;
(xi) promptly after the occurrence thereof or the
request therefor, copies of any amendment, waiver or other modification of the
terms of any of the Indebtedness of the Parent and its Subsidiaries, and any
notice of default or other material notices delivered or received thereunder;
(xii) promptly upon entering into any tax sharing,
cost allocation, overhead attribution or any similar contract or arrangement
between the Parent and any of its Subsidiaries, a complete and accurate copy or
detailed description thereof; and
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(xiii) any other information with respect to the
financial condition, business and property of the Parent and its Subsidiaries,
as any Lender through the Administrative Agent may from time to time reasonably
request.
(j) Material Obligations. Perform in a timely manner, all of
its obligations under the terms of each loan or purchase agreement, indenture,
mortgage, deed of trust, lease, instrument, contract or other agreement binding
on or affecting it, except where the failure to so perform, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(k) Loan Refinancing. Prior to the Maturity Date of the Bridge
Notes, use its best efforts to effect an offering and sale of debt or equity
securities ("Loan Refinancing Securities"), in each case reasonably acceptable
in form and substance to the Administrative Agent, for the purpose of
refinancing the aggregate outstanding principal of the Bridge Notes and paying
interest accrued thereon and all fees, expenses, commissions and other amounts
payable by the Borrowers under the Loan Documents and in connection with the
Loan Refinancing.
(l) Exchange Indenture. (i) Upon the consummation of the
Exchange if requested by the Required Lenders no less than 20 days prior to the
Exchange Date, (ii) within 30 days of the request by the Required Lenders after
the Exchange or (iii) as required under the TIA, (y) execute and deliver to the
holders of the Notes an executed counterpart of the Exchange Indenture setting
forth the terms and conditions that will govern the Exchange Securities in lieu
of this Agreement and make all filings required in connection therewith, such
terms and conditions of the Exchange Indenture to incorporate the provisions of
Exhibit L hereto and to be in form and substance customary for indentures
pursuant to which senior debt securities are issued in the United States high
yield debt market and reasonably satisfactory to the Administrative Agent and
the Required Lenders, and (z) appoint under the Exchange Indenture a trustee
(the "Trustee") eligible to act as trustee under Section 310(a)(1) of the TIA.
Upon the execution and delivery of the Exchange Indenture as provided in this
Section 5.01(l), all holders of the Bridge Notes or the Rollover Notes, as the
case may be, shall surrender their Notes to the Borrowers in exchange for
Exchange Securities issued pursuant to the Exchange Indenture.
(m) Registration Rights. Upon request by one or more Persons
holding in the aggregate not less than 25% of the aggregate outstanding
principal amount of the Rollover Notes or the Exchange Securities, as the case
may be, from and after the Exchange Date, use their best efforts, and cause any
other obligor under the Exchange Securities, if any, to use its best efforts, to
file and have declared effective, at the expense of the Borrowers, a
registration statement with respect to sales of the Exchange Securities by the
holders thereof (a "Registration Demand") and make all filings required in
connection therewith. Upon issuance of the Exchange Securities, the Parent shall
deliver to each holder of Exchange Securities an executed counterpart of the
Exchange Registration Rights Agreement providing for the foregoing registration
rights and otherwise in form and substance satisfactory to the holders of a
majority of the Exchange Securities.
(n) Year 2000 Compliance. Promptly notify the Administrative
Agent in the event the Parent or any Subsidiary of the Parent discovers or
determines that any computer application (including those of its suppliers and
vendors) that is material to it or any of its
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business and operations will not be Year 2000 Compliant on a timely basis,
except to the extent that such failure could not reasonably be expected to have
a Material Adverse Effect.
(o) Consummation of Merger. Immediately after the consummation
of the Tender Offer, use its best efforts to consummate the Merger in accordance
with the Merger Documents and all applicable laws.
(p) Additional Security; Further Assurances. (i) Within 30
days after request therefor, grant, and cause each of its Domestic Subsidiaries
to grant, to the Administrative Agent Liens on such Property of the Parent and
its Subsidiaries as are not covered by the original Security Documents, and as
may reasonably be requested from time to time by the Administrative Agent or the
Required Lenders (collectively, the "Additional Security Documents"). All such
Liens shall be granted pursuant to documentation reasonably satisfactory in form
and substance to the Administrative Agent and shall constitute valid,
enforceable, perfected first priority Liens. The Additional Security Documents
or instruments related thereto shall have been duly recorded or filed in such
places as are required by law to establish, perfect and protect the Liens in
favor of the Administrative Agent required to be granted pursuant to the
Additional Security Documents.
(ii) Upon request within 30 days after request therefor,
execute and deliver such further documentation and take such further action as
may be reasonably requested by the Administrative Agent and the Required Lenders
to carry out the provisions and purposes of the Loan Documents.
SECTION 5.02. Negative Covenants. Each of the Borrowers covenants
and agrees that, so long as any amount or Obligation is outstanding under any
Note or any of the other Loan Documents, the Parent shall not, and shall cause
its Subsidiaries not to, directly or indirectly:
(a) Limitations on Liens. Create, incur, assume or suffer to
exist any Lien (other than Permitted Liens) on or with respect to any of its
Property of any character, whether now owned or hereafter acquired, to file or
suffer to exist under the Uniform Commercial Code or any similar law or statute
of any jurisdiction, a financing statement (or the equivalent thereof) that
names the Parent or any of its Subsidiaries as debtor, to sign or suffer to
exist any security agreement authorizing any secured party thereunder to file
such financing statement (or the equivalent thereof), or to assign any accounts
or other right to receive income.
(b) Limitations on Indebtedness. Create, incur, issue, assume,
guarantee or suffer to exist, or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to, any Indebtedness other than:
(i) Indebtedness of the Loan Parties existing on the
Closing Date and set forth on Schedule 5.02(b);
(ii) Indebtedness of the Parent and its Subsidiaries
under the Loan Documents;
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(iii) Indebtedness owing to the Parent or any of its
Wholly-Owned Subsidiaries; provided, however, that (A) any subsequent issuance
or transfer of any Capital Stock which results in any such Indebtedness being
held by a Person other than a Wholly-Owned Subsidiary of the Parent and (B) any
sale or transfer of any such Indebtedness to a Person that is neither the
Parent, or a Wholly-Owned Subsidiary of the Parent, shall be deemed, in each
case, to constitute the incurrence of such Indebtedness by the Parent or such
Subsidiary, as the case may be;
(iv) Permitted Refinancing Indebtedness of the Parent or
any of its Subsidiaries with respect to Indebtedness that is permitted by
another clause of this Section 5.02(b) other than clause (ii), (iii) or (vii);
(v) Indebtedness consisting of Contingent Obligations of
the Borrowers or any of their Subsidiaries of the Indebtedness of the Parent or
any of its Wholly-Owned Subsidiaries that is permitted by another clause of this
Section 5.02(b);
(vi) Indebtedness of the Parent and its Subsidiaries
secured by Liens permitted by clause (viii) of the definition of the term
"Permitted Liens";
(vii) Indebtedness of Foreign Subsidiaries in an
aggregate principal amount not exceeding $2,000,000 at any time outstanding for
all Foreign Subsidiaries; and
(viii) Indebtedness of the Parent and its Subsidiaries
under Hedging Obligations entered into in the ordinary course of business with
respect to obligations and on terms acceptable to the Administrative Agent and
the Required Lenders;
(ix) Indebtedness of the Parent or its Subsidiaries in
respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar
obligations and trade-related letters of credit, in each case provided in the
ordinary course of business and in no event in excess of $500,000 at any one
time outstanding for all such Indebtedness; and
(x) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business; provided that
such Indebtedness is extinguished within five Business Days of its incurrence.
(c) Limitations on Fundamental Changes, Asset Sales,
Acquisitions, Etc. Wind up, liquidate or dissolve itself (or suffer any
liquidation or dissolution), enter into any transaction of merger or
consolidation or consolidate or merge, or sell, assign, transfer, lease, convey
or otherwise dispose of, whether in one transaction or a series of related
transactions, all or any part of its business or Property, whether now owned or
hereafter acquired (or agree to do any of the foregoing), or purchase or
otherwise acquire whether in one transaction or a series of related
transactions, any part of the business or Property of any Person (or agree to do
any of the foregoing), except that:
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(i) any Wholly Owned Subsidiary of the Parent may merge
or consolidate with or into any other Subsidiary of the Parent so long as such
Wholly Owned Subsidiary is the surviving corporation;
(ii) any Subsidiary of the Parent that is no longer
actively engaged in any business or activities and does not have Property with
an aggregate fair market value or book value in excess of $500,000 may be wound
up, liquidated or dissolved by the Parent so long as such winding up,
liquidation or dissolution is determined in good faith to be in the best
interests of the Parent and its Subsidiaries by the board of directors of the
Parent (as evidenced in a resolution set forth in an officer's certificate
delivered to the Administrative Agent);
(iii) the Parent and its Subsidiaries may sell their
respective inventory in the ordinary course of business;
(iv) the Parent and its Subsidiaries may enter into sale
and leaseback transactions otherwise permitted to be entered into under Section
5.02(e), may make Restricted Payments otherwise permitted to be made under
Section 5.02(d), may make Investments otherwise permitted to be made under
Section 5.02(f), may sell shares of its Capital Stock otherwise permitted to be
sold under Section 5.02(g) and may make Capital Expenditures otherwise permitted
to be made under Section 5.02(n);
(v) the Parent and its Subsidiaries may sell, lease,
sublease, transfer or otherwise dispose of any obsolete, worn out or surplus
Property thereof that are no longer useful in the conduct of the Parent's or the
applicable Subsidiary's business so long as the aggregate book value of all of
the Property of the Parent and its Subsidiaries that are sold, leased,
subleased, transferred or otherwise disposed of pursuant to this subsection (vi)
does not exceed $500,000;
(vi) any Subsidiary of the Borrowers may sell, lease,
sublease, transfer or otherwise dispose of all or any portion of its Property to
the Parent or any of its Wholly-Owned Subsidiaries;
(vii) the Parent and its Subsidiaries may sell, lease,
sublease, transfer or otherwise dispose of any of its Property, to the extent
not otherwise permitted under this Section 5.02, at the fair market value
thereof (as determined in good faith by the Parent ) and for cash; provided that
the gross proceeds thereof do not exceed $500,000 in the aggregate in any Fiscal
Year and the Net Proceeds from each such sale, lease, sublease, transfer or
other disposition are applied to the prepayment of the Notes to the extent
required under, and in accordance with the terms of, Section 2.05(b)(v);
(viii) the Parent and its Subsidiaries may purchase or
otherwise acquire inventory, materials, equipment and intangible assets in the
ordinary course of business; and
(ix) the Borrowers may consummate the Merger in
accordance with the Merger Agreement.
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(d) Limitations on Restricted Payments. (i) Declare or pay any
dividend or make any other payment or distribution on account of the Parent's or
any of its Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Parent), or
allow its Subsidiaries so to do, other than (A) dividends or other payments or
distributions payable in Capital Stock (other than Disqualified Stock) of the
Parent, (B) dividends or other payments or distributions payable to the Parent
or any of its Wholly-Owned Subsidiaries, or (C) dividends or other payments or
distributions payable by a Subsidiary of the Parent to (1) a Person that is not
an Affiliate of the Parent or any of its Subsidiaries or (2) a Person that is an
Affiliate of NovaMed Inc. in connection with the strategic alliance between the
Parent and NovaMed Inc. described in Section 5.02(f)(x), provided that each such
dividend or other payment or distribution under this clause (C) is made to such
Person concurrently with a dividend or other payment or distribution, as the
case may be, to the Parent or any of its Wholly-Owned Subsidiaries on a pro rata
basis in accordance with their respective ownership of the applicable Equity
Interests in the Subsidiary making such dividend or other payment or
distribution; (ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, any payment in connection with any merger or
consolidation involving the Parent) any Equity Interests of the Parent or any of
its Subsidiaries (other than (A) any such Equity Interests owned by the Parent
or a Wholly-Owned Subsidiary of the Parent and (B) any such Equity Interests
held by employees or directors of the Parent or any of its Subsidiaries pursuant
to any employee or director equity subscription agreement, stock option
agreement or stock ownership arrangement described in Schedule 5.02(d) and
purchased, redeemed or otherwise acquired or retired for value by the Parent or
a Wholly-Owned Subsidiary of the Parent pursuant to obligations arising under
any arrangement described in Schedule 5.02(d); (iii) make any principal payment
on or with respect to, purchase, redeem, defease or otherwise acquire or retire
for value, any Indebtedness that is subordinated to the Loan; or (iv) make any
Investment (other than an Investment permitted by Section 5.02(f)) (all such
payments and other actions set forth (and not excepted) in clauses (i) through
(iv) above being collectively referred to as "Restricted Payments").
(e) Limitations on Sale-Leaseback Transactions. Become liable
as lessee or as a guarantor or surety with respect to any lease (including,
without limitation, any Capitalized Lease) of any Property, whether now owned or
hereafter acquired, that the Parent or any of its Subsidiaries, as the case may
be, has sold or transferred or is to sell or transfer in a transaction with such
assumption of liability to any other Person other than the Parent or any of its
Wholly-Owned Subsidiaries.
(f) Limitations on Investments, Etc. Make or commit or agree
to make any Investment, except that:
(i) the Parent and its Subsidiaries may acquire and hold
accounts receivable owing to any of them;
(ii) the Parent and its Subsidiaries may acquire and
hold Cash Equivalents;
(iii) the Parent and its Subsidiaries may make
Investments in account debtors received in connection with the bankruptcy or
reorganization, or in settlement of
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delinquent obligations, of customers in the ordinary course of business and in
accordance with applicable collection and credit policies established by the
Parent or its applicable Subsidiary;
(iv) the Parent may make capital contributions and, to
the extent permitted by Section 5.02(c), loans to its Wholly-Owned Subsidiaries
and Subsidiaries of the Parent may make Restricted Payments to the Parent to the
extent permitted by Section 5.02(d);
(v) the Borrowers may consummate the Tender Offer and
the Merger in accordance with the Offer to Purchase and the Merger Agreement;
(vi) the Parent may make loans to officers of the Parent
or any of its Subsidiaries, provided that the aggregate outstanding principal
amount thereof shall not exceed $500,000 at any one time outstanding;
(vii) the Parent or any of its Subsidiaries may incur
Hedging Obligations permitted under Section 5.02(b);
(viii) the Parent and its Subsidiaries may maintain
Investments existing on the Closing Date and described in Schedule 5.02(f);
(ix) the Parent and its Subsidiaries may make
Investments in an aggregate amount not to exceed $5,000,000 pursuant to the
strategic alliance between the Parent and Advanced Tissue Sciences, Inc. set
forth in the heads of agreement dated as of May 10, 1999 between Advanced Tissue
Sciences, Inc. and the Parent;
(x) the Parent and its Subsidiaries may make Investments
in an aggregate amount not to exceed $2,500,000 pursuant to the strategic
alliance between the Parent and NovaMed Inc. set forth in the letter agreement
dated March 25, 1999 between NovaMed Inc. and the Parent; and
(xi) the Parent and its Subsidiaries may make other
Investments in an aggregate amount not to exceed $1,000,000.
(g) Limitations on Issuances and Sales of Equity Interests in
Subsidiaries. (i) Transfer, convey, sell, lease or otherwise dispose of any
Equity Interests in any Subsidiary of the Parent to any Person (other than the
Parent or a Wholly-Owned Subsidiary of the Parent), or (ii) permit any
Subsidiary of the Parent to issue any of its Equity Interests (other than, if
necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person other than to the Parent or a Wholly-Owned Subsidiary of
the Parent.
(h) Limitations on Dividends and other Payment Restrictions
Affecting Subsidiaries. Create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to (i)
pay dividends or make any other distributions to the Parent or any of its
Subsidiaries on its Equity Interests, (ii) pay or prepay any Indebtedness owed
to the Parent or any of its Subsidiaries, (iii) make loans or advances to the
Parent or any of its Subsidiaries, (iv) transfer any of its Property to the
Parent or any of its Subsidiaries, (v) grant Liens on the Property of the Parent
or such Subsidiary as
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collateral security for any Obligations owing to the Administrative Agent or any
Lender under the Loan Documents or (vi) guarantee any of the Obligations owing
to the Administrative Agent or any Lender under the Loan Documents or any
renewals, refundings or refinancings thereof, except for such encumbrances or
restrictions existing under or by reason of (A) agreements (including the
Transaction Documents) in effect as of the Closing Date and set forth in
Schedule 5.02(h), and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, additions, replacements or refinancings
thereof, provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, additions, replacements or refinancings are
no more restrictive with respect to restrictions of the types referred to in
clauses (i) through (vi) above than those contained in the agreements as in
effect on the Closing Date, (B) applicable law, (C) any instrument governing
Acquired Debt or Capital Stock of a Person acquired by the Borrowers or any of
their Subsidiaries as in effect at the time of such acquisition (except to the
extent such Acquired Debt was incurred or such Capital Stock was issued or
incurred or its terms amended in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the Property of any Person, other than the Person or the Property of the
Person, so acquired, (D) customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent with past practices, (E)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the type described in clause (iv) above on
the Property so acquired, (F) Permitted Refinancing Indebtedness, provided that
the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive with respect to restrictions of
the types referred to in clauses (i) to (vi) of this Section 5.02(h) than those
contained in the agreements governing the Indebtedness being refinanced, and (G)
restrictions of the type described in clause (iii) above on Property subject to
Permitted Liens, pursuant to the terms and conditions of such Permitted Liens.
(i) Limitations on Transactions with Affiliates. Sell, lease,
transfer or otherwise dispose of any of its Property, or purchase any Property,
or enter into or make or amend any transaction, contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing actions, considered separately, an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is on terms that are no
less favorable to the Parent or the relevant Subsidiary than those that would
have been obtained in a comparable transaction by the Borrowers or such
Subsidiary with an unrelated Person and (ii) the Parent delivers to the
Administrative Agent (A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$500,000, a resolution of the board of directors of each such Loan Party set
forth in a certificate of a senior officer of the Parent certifying that such
Affiliate Transaction complies with clause (i) above and that such Affiliate
Transaction has been approved by a majority of the disinterested members of the
board of directors of such Loan Party or, if there are no such disinterested
members, unanimously by all members of the board of directors of such Loan
Party, and (B) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$1,000,000, an opinion as to the fairness to the Parent or such Subsidiary of
such Affiliate Transaction from a financial point of view issued by an
unaffiliated nationally recognized accounting, appraisal or investment banking
firm; provided that Affiliate Transactions shall not include (x) transactions
between or among the Borrowers and their Wholly-Owned Subsidiaries not otherwise
prohibited by this Agreement, (y) loans or advances
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to employees in the ordinary course of business of the Borrowers or their
Subsidiaries, but in any event not to exceed $500,000 in aggregate principal
amount outstanding at any one time, and (z) existing agreements with Affiliates
specified on Schedule 5.02(i).
(j) Limitations on Accounting Changes, Etc. Make or permit any
change in accounting policies or reporting practices, except as required or
permitted by GAAP, or change its Fiscal Year.
(k) Limitations on Changes in Nature of Business. Engage, as a
major line of business, in any line or lines of business activity other than the
business activities in which they are engaged (including lines of business in
which Collagen and its Subsidiaries are engaged ) on the date hereof or a
business reasonably related or incidental thereto. From the Closing Date until
the Merger Date, the Purchaser shall not engage in any business activity other
than those activities related to the Transactions.
(l) Investment Company Act of 1940. Become an "investment
company" registered under the Investment Company Act of 1940.
(m) Limitations on Modifications of Indebtedness;
Organizational Document Amendments. (i) Amend or otherwise modify (or permit the
amendment or other modification in any manner of) any of the provisions of any
Indebtedness of the Parent or any of its Subsidiaries or of any instrument or
agreement (including, without limitation, any merger agreement, indenture, loan
agreement or security agreement) relating to any such Indebtedness if such
amendment or other modification would shorten the Weighted Average Life to
Maturity of, or require any payment to be made earlier than the date originally
scheduled on, such Indebtedness, would increase the interest rate applicable to
such Indebtedness, or would change the subordination provision, if any, of such
Indebtedness, or would otherwise be adverse to the issuer of such Indebtedness
in any respect; (ii) except for the Notes and the other Obligations of the
Borrowers and their Subsidiaries under the Loan Documents and except for the
prepayment of Indebtedness existing on the Closing Date made pursuant to Section
2.07 hereof, make any voluntary or optional payment, prepayment, redemption or
other acquisition for value of any Indebtedness of the Parent or any of its
Subsidiaries (including, without limitation, by way of depositing money or
securities with the trustee therefor before the date required for the purpose of
paying any portion of such Indebtedness when due), or refund, refinance, replace
or exchange any other Indebtedness for any such Indebtedness, or make any
prepayment, redemption or repurchase of any outstanding Indebtedness as a result
of any asset sale, change of control, issuance and sale of debt or Equity
Interests or similar event, or give any notice with respect to any of the
foregoing; or (iii) amend any of its Organizational Documents other than such
changes which could not be reasonably likely to have a Material Adverse Effect
or otherwise be adverse or prejudicial to the Lenders.
(n) Limitations on Capital Expenditures. Make any Capital
Expenditures (including, without limitation, installment purchases or
Capitalized Leases) that would cause the aggregate amount of all such Capital
Expenditures made by the Parent and its Subsidiaries during the period
commencing on the date hereof and ending on June 1, 2000, to exceed $10,000,000.
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(o) Creation of Subsidiaries and Entering into Partnerships
and Joint Ventures. (i) Establish, create or acquire any additional Subsidiaries
without the prior written consent of the Required Lenders. In connection with
the establishment, creation or acquisition of any Subsidiary, it is understood
that the Required Lenders shall, unless they otherwise affirmatively indicate,
require that such new Subsidiary (other than a Foreign Subsidiary) (x) execute
and deliver to the Administrative Agent a counterpart of the Guaranty and the
Security Agreement, and (y) execute and deliver or cause to be executed and
delivered to the Administrative Agent all other relevant documentation of the
type described in Section 3.01 as such Subsidiary would have to deliver if such
new Subsidiary were a Loan Party on the Closing Date; or (ii) enter into any
partnerships or joint ventures, except to the extent permitted by Section
5.02(f).
(p) ERISA. (i) Engage or permit any ERISA Affiliate to engage,
in any transaction described in Section 4069(a) of ERISA; (ii) engage, or permit
any ERISA Affiliate to engage, in any prohibited transaction described in
Section 406 of ERISA or 4975 of the Code for which a statutory or class
exemption is not available or a private exemption has not previously been
obtained from the Department of Labor which can reasonably be expected to have a
Material Adverse Effect; (iii) adopt or permit any ERISA Affiliate to adopt any
employee welfare benefit plan within the meaning of Section 3(1) of ERISA which
provides benefits to employees after termination of employment other than as
required by Section 601 of ERISA or applicable law, except to the extent the
accumulated benefit obligation as determined in accordance with Financial
Accounting Standard Statement No. 106 does not exceed $500,000; (iv) fail to
make any contribution or payment to any Multiemployer Plan which it or any ERISA
Affiliate may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto which can reasonably be
expected to have a Material Adverse Effect; or (v) fail, or permit any ERISA
Affiliate to fail, to pay any required installment or any other payment required
under Section 412 of the Code on or before the due date for such installment or
other payment which can reasonably be expected to have a Material Adverse
Effect.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) (i) the Borrowers shall fail to pay the outstanding
principal of the Loan on the Maturity Date or (ii) the Borrowers shall fail to
pay any other required payment of principal or any payment of interest on the
Loan, or any other payment under any Loan Document, in each case under this
clause (ii), within three Business Days after the same becomes due and payable;
or
(b) any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document shall prove
to have been incorrect in any material respect when made; or
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(c) the Borrowers shall fail to perform or observe any term,
covenant or agreement contained in Section 2.03(b)(iii)(D), 2.03(b)(iii)(E),
5.01(d), 5.01(i), 5.01(k), 5.01(l), 5.01(m), 5.01(o) or Section 5.02; or
(d) the Borrowers shall fail to perform or observe any term,
covenant or agreement contained herein (which is not referred to in subsection
(a) or (c) above), or any of the Borrowers or other Loan Parties shall fail to
perform or observe any other term, covenant or agreement contained in any other
Loan Document, on its part to be performed or observed if such failure shall
remain unremedied for a period of 15 Business Days after the earlier of the date
on which (i) an officer of the Parent becomes aware of such failure or (ii)
written notice thereof shall have been given to the Parent by the Administrative
Agent or any Lender; or
(e) the Parent or any of its Subsidiaries shall fail to pay
any principal of, premium or interest on or any other amount payable in respect
of any Indebtedness that is outstanding in a principal amount of at least
$500,000 either individually or in the aggregate when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Indebtedness; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Indebtedness and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness or otherwise to
cause, or to permit the holder thereof to cause, such Indebtedness to mature, or
any such Indebtedness shall be declared to be due and payable or required to be
redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Indebtedness shall be required to be made, in each case prior to
the stated maturity thereof; or
(f) the Parent or any Significant Subsidiary shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against the
Parent or any Significant Subsidiary seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it that is
being diligently contested by it in good faith, either such proceeding shall
remain undismissed or unstayed for a period of 30 days or any of the actions
sought in such proceeding (including, without limitation, the entry of an order
for relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or any substantial part of its property) shall
occur; or the Parent or any Significant Subsidiary shall take any corporate
action to authorize any of the actions set forth above in this subsection (f);
or
(g) any judgment or order for the payment of money in excess
of $500,000 shall be rendered against the Parent or any of its Subsidiaries and
remains unpaid and
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either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered
against the Parent or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect, and there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof
pursuant to Article III shall for any reason cease to be valid and binding on or
enforceable against the Parent or any of its Subsidiaries or the Parent or any
of its Subsidiaries shall so state in writing; or
(j) any Lien created or purported to be created by any
Security Document shall for any reason cease or fail to be a valid, first
priority perfected Lien upon any of the Collateral purported to be covered
thereby; or
(k) a Change of Control shall occur; or
(l) the Parent or the Purchaser shall take any action to
terminate the Merger Agreement or shall elect for any reason not to consummate
the Merger;
then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrowers,
declare the Notes, all interest thereon and all other amounts payable under this
Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by each Borrower;
provided, however, that in the event of an actual or deemed entry of an order
for relief with respect to any Borrower under the Bankruptcy Code, (x) the
obligation of the Lenders to make the Loan shall automatically be terminated and
(y) the Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by each Borrower.
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement and the
other Loan Documents as are delegated to the Administrative Agent by the terms
hereof and thereof, together with such powers and discretion as are reasonably
incidental thereto. As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or collection of the
Notes), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall
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be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding upon all Lenders and all holders of
Notes; provided, however, that the Administrative Agent shall not be required to
take any action that exposes the Administrative Agent to personal liability or
that is contrary to this Agreement or applicable law. The Administrative Agent
agrees to give to each Lender prompt notice of each notice given to it by the
Borrowers pursuant to the terms of this Agreement.
SECTION 7.02. Administrative Agent's Reliance, Etc.. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct as determined in a non-appealable decision of a
court of competent jurisdiction. Without limitation of the generality of the
foregoing, the Administrative Agent: (a) may treat the payee of any Note or, in
the case of a Registered Note, the Person in whose name such Note is registered
in the Register, as the holder thereof until the Administrative Agent receives
and accepts an Assignment and Acceptance entered into by the Lender that is the
payee of such Note, as assignor, and an assignee of such Lender, as provided in
Section 8.07; (b) may consult with legal counsel (including counsel for the Loan
Parties), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether written
or oral) made in or in connection with the Loan Documents; (d) shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of any Loan Document on the part of the
Borrowers or to inspect the property (including the books and records) of the
Borrowers; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest, if any, created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopy)
believed by it in good faith to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. Administrative Agent in its Individual Capacity. With
respect to its Pro Rata Share of the Loan made by it and the Notes issued to it,
the Administrative Agent shall have the same rights and powers under the Loan
Documents as any other Lender and may exercise the same as though it were not
the Administrative Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include the Administrative Agent in its
individual capacity. The Administrative Agent and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, the Parent or any of its Subsidiaries and any Person who may do business
with or own securities of the Parent or any such Subsidiary, all as if the
Administrative Agent were not the Administrative Agent and without any duty to
account therefor to the Lenders.
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SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Administrative Agent or any
other Lender and based on the financial statements referred to in Section
4.01(f) and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
SECTION 7.05. Indemnification. Each Lender severally agrees to
indemnify the Administrative Agent (to the extent not promptly reimbursed by the
Borrowers) from and against such Lender's ratable share (determined as provided
below) of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of the Loan Documents
or any action taken or omitted by the Administrative Agent under the Loan
Documents; provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrowers under Section
8.04, to the extent that the Administrative Agent is not promptly reimbursed for
such costs and expenses by the Borrowers. The failure of any Lender to reimburse
the Administrative Agent promptly upon demand for its ratable share of any
amount required to be paid by the Lender to the Administrative Agent as provided
herein shall not relieve any other Lender of its obligation hereunder to
reimburse the Administrative Agent for its ratable share of such amount, but no
Lender shall be responsible for the failure of any other Lender to reimburse the
Administrative Agent for such other Lender's ratable share of such amount.
Without prejudice to the survival of any other agreement of any Lender
hereunder, the agreement and obligations of each Lender contained in this
Section 7.05 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the other Loan Documents.
SECTION 7.06. Successor Administrative Agents. The Administrative
Agent may resign at any time by giving written notice thereof to the Lenders and
the Borrowers and may be removed at any time with cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the right
to appoint a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent's giving of notice of resignation or the Required Lenders' removal of the
retiring Administrative Agent, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall be
a commercial bank organized under the laws of the United States or of any State
thereof and having a combined capital and surplus of at least $500,000,000 or
any investment bank or investment fund having a minimum net worth of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent
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shall succeed to and become vested with all the rights, powers, discretion,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article VII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by any Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Lenders, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that (i) no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders do
any of the following at any time: (A) change the number of Lenders or the
percentage of the aggregate unpaid principal amount of the Loan that, in each
case, shall be required for the Lenders or any of them to take any action
hereunder, (B) amend this Section 8.01, or (C) limit the liability of the
Borrowers under any of the Loan Documents and (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Required Lenders and each
Lender affected by such amendment, waiver or consent, (A) subject such Lender to
any additional obligations, (B) reduce the principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender or (C) postpone any date fixed for any payment of principal of, or
interest on, the Notes held by such Lender or any fees or other amounts payable
hereunder to such Lender; and provided further that no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of the Administrative Agent under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopy) and mailed,
telecopied or delivered, if to the Borrowers, to the Parent at its address at
1120 Avenue of the Americas, 4th Floor, New York, NY 10036, Telecopier No. (212)
626-6799, Attention: General Counsel; if to any initial Lender, at its Lending
Office specified below its name on the signature pages hereto; if to any other
Lender, at its Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender; and if to the Administrative Agent, at its
address at 450 Park Avenue, 28th Floor, New York, NY 10022, Telecopier No. (212)
935-2874, Attention: Mark A. Neporent, Esq.; or as to each other party, at such
other address as shall be designated by such party in a written notice to the
Borrowers and the Administrative Agent. All such notices and communications
shall, when mailed or telecopied, be effective when deposited in the mails or
transmitted by telecopier, respectively, except that notices and communications
to the Administrative Agent pursuant to Article II, III or VII shall not be
effective until received by the Administrative Agent. Delivery by telecopier of
an executed counterpart of any amendment or
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waiver of any provision of this Agreement or the Notes or of any Exhibit hereto
to be executed and delivered hereunder shall be effective as delivery of a
manually executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs, Expenses.
(a) The Borrowers jointly and severally agree to pay on demand
(i) all reasonable out-of-pocket costs and expenses of the Administrative Agent
in connection with the preparation, execution, delivery, administration,
amendment and other modification of the Loan Documents (including, without
limitation, (A) all reasonable due diligence, syndication, transportation,
computer, duplication, appraisal, audit, insurance and consultant fees and
expenses and (B) the reasonable fees and expenses of counsel for the
Administrative Agent with respect thereto, with respect to advising the
Administrative Agent as to its rights and responsibilities, or the protection or
preservation of rights or interests, under the Loan Documents, with respect to
negotiations with the Parent or with other creditors of the Parent or any of its
Subsidiaries arising out of any Default with respect to any Loan Party or any
events or circumstances that may give rise to a Default with respect to any Loan
Party and with respect to presenting claims in or otherwise participating in or
monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
costs and expenses of the Administrative Agent and the other Lenders in
connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation, any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally (including, without limitation, the
reasonable fees and expenses of counsel for the Administrative Agent and each
other Lender with respect thereto) whether or not the transactions contemplated
hereby are consummated.
(b) The Borrowers jointly and severally agree to indemnify and
hold harmless the Administrative Agent, each Lender and each of their respective
Affiliates and their officers, directors, employees, agents and advisors (each,
an "Indemnified Party") from and against (and will reimburse each Indemnified
Party as the same is incurred for) any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith)
(i) the Transactions, including the Loan, the actual or proposed use of the
proceeds of the Loan, the Transaction Documents or any of the transactions
contemplated thereby, including, without limitation, any acquisition or proposed
acquisition or (ii) the actual or alleged presence of Hazardous Materials on any
real property or any Environmental Action relating in any way to any real
property, except to the extent such claim, damage, loss, liability or expense is
found in a final, non-appealable judgment by a court of competent jurisdiction
to have resulted from such Indemnified Party's gross negligence or willful
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misconduct. In the case of an investigation, litigation or other proceeding to
which the indemnity in this Section 8.04(b) applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is brought
by the Borrowers, their shareholders, their Affiliates, or creditors or an
Indemnified Party or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. Each
Borrower also agrees not to assert any claim against the Administrative Agent or
any of its Affiliates, or any of their respective officers, directors,
employees, attorneys and agents, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise relating
to the Loan, the actual or proposed use of the proceeds of the Loan, the Loan
Documents or any of the transactions contemplated thereby. The foregoing
Indemnity and Agreement not to assert claims expressly applies, without
limitation, to the negligence (but not gross negligence or willful misconduct)
of the indemnified parties.
(c) If the Borrowers fail to pay when due any costs, expenses
or other amounts payable by them under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of the Borrowers by the Administrative Agent or any Lender, in
its sole discretion, whereupon the amount so paid shall be an Obligation of the
Borrowers hereunder.
(d) Without prejudice to the survival of any other agreement
of the Borrowers hereunder or under any other Loan Document, the agreements and
obligations of the Borrowers contained in this Section 8.04 shall survive the
payment in full of principal, interest and all other amounts payable hereunder
and under any of the other Loan Documents.
SECTION 8.05. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, each Lender and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by the Lender or such Affiliate to
or for the credit or the account of any Borrower against any and all of the
Obligations of the Borrowers now or hereafter existing under this Agreement and
the Notes, irrespective of whether such Lender shall have made any demand under
this Agreement or the Notes and although such obligations may be unmatured. Each
Lender agrees promptly to notify the Parent after any such set-off and
application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
and its respective Affiliates under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that such
Lender and its respective Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrowers and the Administrative Agent
and when the Administrative Agent shall have been notified by each Initial
Lender that such Initial Lender has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrowers, the Administrative Agent and
each Lender and their respective successors and assigns, except that neither
Borrower shall have the right to assign its rights hereunder or any interest
herein without the prior written consent of all of the Lenders.
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SECTION 8.07. Assignments and Participations. (a) Each Lender may
assign to one or more Eligible Assignees, or with the written consent of each of
the Administrative Agent and the Borrowers, which consents shall not be
unreasonably withheld or delayed, any other Person, all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of the Pro Rata Share of the Loan owing to it and the Note held by
it); provided, however, that (i) except in the case of an assignment to a Person
that, immediately prior to such assignment, was a Lender, an Affiliate of a
Lender or an Approved Fund of a Lender or an assignment of all of a Lender's
rights and obligations under this Agreement, the amount of the Pro Rata Share of
the assigning Lender being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $1,000,000 and (ii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,000.
(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (y) the Lender assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any Lien, if any, created or purported to be created under or in
connection with, this Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto; (ii) such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrowers or the performance or
observance by the Borrowers of any of their obligations under any Loan Document
or any other instrument or document furnished pursuant thereto; (iii) such
assignee confirms that it has received from the assigning Lender a copy of this
Agreement, together with copies of the financial statements referred to in
Section 4.01(f), such financial statements theretofore delivered pursuant to
Section 5.01(i) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) unless otherwise agreed to by the
Administrative Agent and the Borrowers in
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74
accordance with Section 8.07(a), such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to the Administrative Agent
by the terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at its address
referred to in Section 8.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the principal amount of the Pro Rata Share of the
Loan owing to each Lender from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers, the Administrative Agent and the Lenders shall treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
any of the Borrowers or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee in accordance with Section 8.07(a),
together with any Note or Notes subject to such assignment, the Administrative
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrowers. No assignment of a Registered
Note shall be effective for any purpose hereunder unless and until such
assignment is recorded in the Register. In the case of any assignment by a
Lender, within five Business Days after its receipt of such notice, the
Borrowers, at their own expense, shall execute and deliver to the Administrative
Agent in exchange for the surrendered Note or Notes a new Note to the order of
such Lender's assignee in an amount equal to the outstanding principal balance
of the Loan, as the case may be, assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a portion of the
outstanding principal balance of the Loan hereunder, a new Note to the order of
the assigning Lender in an amount equal to the portion of the Loan, as the case
may be, retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be substantially in the form of Exhibit A-1
or A-2 hereto, as the case may be.
(f) Each Lender may sell participations to one or more Persons
(other than the Borrowers or any of their Affiliates) in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of the Pro Rata Share of the Loan owing to it and
the Note or Notes (if any) held by it); provided, however, that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
any such Note for all purposes of this Agreement, (iv) the Borrowers, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this
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75
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation or postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers; provided, however, that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender.
(h) In the event that a Lender sells participations in the
Registered Loan held by such lender, such Lender shall maintain a register on
which it enters the name of all participants in the Registered Loan held by it
(the "Participant Register"). A Registered Loan (and the Registered Note, if
any, evidencing the same) may be participated in whole or in part only by
registration of such participation on the Participant Register (and each
Registered Note shall expressly so provide). Any participation of such
Registered Loan (and the Registered Note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register.
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, its
Pro Rata Share of the Loan owing to it and the Note or Notes held by it) in
favor of any Federal Reserve Bank in accordance with Regulation A of the Board
of Governors of the Federal Reserve System.
SECTION 8.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.09. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such
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76
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement or any of the
other Loan Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 8.10. Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 8.11. Treatment of Certain Information; Confidentiality.
Each of the Borrowers acknowledges that from time to time financial advisory,
investment banking and other services may be offered or provided to the Parent
or one or more of its Subsidiaries (in connection with this Agreement or
otherwise) by any Lender or the Administrative Agent or by one or more
Subsidiaries or Affiliates of such Lender or the Administrative Agent and each
Borrower hereby authorizes each Lender and the Administrative Agent to share any
information delivered to such Lender or the Administrative Agent by the Parent
or any of its Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender and the Administrative Agent to enter into this
Agreement, to any such Subsidiary or Affiliate. Such authorization shall survive
the repayment of the Loan and the termination of the Commitments.
SECTION 8.12. Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED
BY LAW, EACH OF THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS, THE LOAN OR THE ACTIONS OF THE
ADMINISTRATIVE AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
SECTION 8.13. Headings. Article, Section and Subsection headings
herein are included for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
SECTION 8.14. Severability. Any provision of this Agreement, or of
any other Loan Document to which any Loan Party is a party, which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
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77
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers or other representatives thereunto duly
authorized, as of the date first above written.
Borrowers:
INAMED CORPORATION
By:
------------------------------------------
Name:
Title:
INAMED ACQUISITION CORPORATION
By:
------------------------------------------
Name:
Title:
Administrative Agent:
ABLECO FINANCE LLC,
as Administrative Agent
By:
------------------------------------------
Name:
Title:
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78
Initial Lenders:
ABLECO FINANCE LLC
By:
------------------------------------------
Name:
Title:
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Loan Agreement
79
U.S. BANCORP INVESTMENTS, INC.
By:
------------------------------------------
Name:
Title:
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Loan Agreement
80
WILLIAM E. SIMON & SONS
SPECIAL SITUATION PARTNERS, L.P.
By: William E. Simon & Sons
Special Situation Partners, LLC,
its General Partner
By:
--------------------------------------
Name: John E. Klinge
Title: Authorized Signatory
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Loan Agreement
81
CONTINENTAL CASUALTY COMPANY
By:
------------------------------------------
Name:
Title:
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Loan Agreement
82
FOOTHILL CAPITAL CORPORATION
By:
------------------------------------------
Name:
Title:
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Loan Agreement
83
THE BROWN & WILLIAMSON MASTER RETIREMENT TRUST
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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Loan Agreement
84
MACKAY-SHIELDS DOMESTIC HEDGE FUND, L.P.
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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Loan Agreement
85
EA CAYMAN UNIT TRUST-EA/MACKAY HIGH YIELD UNIT
TRUST
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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Loan Agreement
86
HIGHBRIDGE CAPITAL CORPORATION
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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Loan Agreement
87
POLICE OFFICERS PENSION SYSTEM OF THE CITY OF
HOUSTON
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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Loan Agreement
88
THE 1199 HEALTH CARE EMPLOYEES PENSION FUND
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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Loan Agreement
89
TEACHERS' RETIREMENT SYSTEM OF LOUISIANA
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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Loan Agreement
90
RETIREMENT SYSTEM OF THE CITY OF MEMPHIS
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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Loan Agreement
91
MEZZACAPPA CAPITAL PARTNERS, L.P.
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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Loan Agreement
92
THE MAINSTAY FUNDS, on behalf of its High Yield
Corporate Bond Fund Series
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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Loan Agreement
93
MACKAY-SHIELD OFFSHORE HEDGE FUND, LTD.
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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Loan Agreement
94
MAINSTAY VP SERIES FUND, INC., on behalf of its
High Yield Corporate Bond Portfolio
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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Loan Agreement
95
EMPLOYEES RETIREMENT FUND OF THE CITY OF FORT
WORTH
By: Mellon Bank, N.A., solely in its capacity
as Trustee for the Employees Retirement
Fund of the City of Fort Worth as
Directed by MacKay- Shields Financial
Corporation, and not in its individual
capacity
By:
-------------------------------------
Name:
Title:
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Loan Agreement
96
ANCHUTZ FOUNDATION
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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Loan Agreement
97
401K SAVINGS PLAN OF THE CHASE MANHATTAN BANK
HIGH YIELD BOND FUND
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
-------------------------------------
Name: Robert A. Nisi
Title: Director
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98
EXHIBIT A-1
BRIDGE NOTE
New York, New York
Dated: September __, 1999
$___________
FOR VALUE RECEIVED, the undersigned, INAMED CORPORATION, a Delaware
corporation (the "Parent"), and INAMED ACQUISITION CORPORATION, a Delaware
corporation (the "Purchaser", and together with the Parent, the "Borrowers"),
HEREBY JOINTLY AND SEVERALLY PROMISE TO PAY _______________ (the "Payee") or
registered assigns on the Maturity Date (this and other capitalized terms that
are not defined herein have the respective meanings specified therefor in the
Loan Agreement referred to below) the principal amount of $______ or, if less,
the aggregate principal amount of the Lender's Pro Rata Share of the Loan made
by the Lenders to the Borrowers pursuant to the Loan Agreement which is
outstanding on the Maturity Date.
The Borrowers, jointly and severally, promise to pay interest on the
unpaid principal amount hereof until such principal amount is paid in full, at
such interest rates, and payable at such times, as are specified below.
Interest on the unpaid balance of the principal amount of this Note
shall accrue at a rate per annum, fluctuating monthly, which is equal to the
LIBO Rate (as defined below) plus a margin (the "Applicable Margin") over the
LIBO Rate, which is equal to 600 basis points per annum, from and including the
date hereof until such unpaid balance shall be paid in full (whether at maturity
or upon acceleration thereof or otherwise), payable in arrears on the first
Business Day of each month and on the Maturity Date and thereafter on demand;
provided, however, that (i) on each of [December __], 1999, and [March __],
2000, the Applicable Margin shall be increased by 100 basis points, (ii) at all
times after June [__], 2000 and upon the occurrence and during the continuance
of any Event of Default, the Borrowers shall pay interest on such unpaid
principal amount at a rate equal at all times to 200 basis points in excess of
the rate of interest otherwise in effect, (iii) the Lender's Pro Rata Share of
the Loan shall convert to, and be maintained as, a Base Rate Loan at such times
as such conversion and maintenance is required under Section 2.09(c) or (d) of
the Loan Agreement, and (iv) in no event shall the rate of interest on this Note
be greater than the maximum rate of interest permitted by law.
"LIBO Rate" means, for any Interest Period (as hereinafter defined),
an interest rate per annum equal at all times during each Interest Period to the
rate per annum obtained by dividing (i) the quotation (expressed as percentage
per annum) appearing on Telerate Page 3750 as of 11:00 a.m., New York time, two
Business Days before the first day of such Interest Period (the "Determination
Date") for U.S. Dollar deposits for periods of one month in the London interbank
market (rounded upward, if necessary, to the nearest 1/100th of a percentage
point) by (ii) a percentage equal to 100% minus the LIBO Rate Reserve Percentage
for such Interest
Loan Agreement
99
Period. Notwithstanding the foregoing, if no such rate appears on Telerate Page
3750, then the LIBO Rate for such Interest Period shall be determined using the
arithmetic mean (rounded upward, if necessary, to the nearest 1/100th of a
percentage point) of the rates quoted at approximately 11:00 a.m., London time,
on such Determination Date, by three banks in the London interbank market,
selected by the Administrative Agent, to prime banks in the London interbank
market for U.S. Dollar deposits for the relevant Interest Period commencing on
the first day of such Interest Period and in a principal amount equal to an
amount of not less than $1,000,000 that is representative for a single
transaction in such market at such time, provided that, if fewer than three such
quotations are provided as requested, the rate of interest that is in effect on
such Determination Date will be the LIBO Rate for the immediately preceding
Interest Period.
The period between the date hereof and the date of payment in full
of the principal amount hereof and all interest and other amounts payable
hereunder shall be divided into successive periods, each such period being an
"Interest Period". The initial Interest Period shall begin on the date hereof
and each subsequent Interest Period shall begin on the last day of the
immediately preceding Interest Period. The duration of each Interest Period
shall be one month or otherwise determined in accordance with the terms of the
Loan Agreement; provided, however, that the initial Interest Period shall end on
October 1, 1999 and provided, further, that (i) no Interest Period shall end
after the Maturity Date, (ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day
(unless such extension would cause the last day of such Interest Period to occur
in the next following calendar month, in which case the last day of such
Interest Period shall occur on the next preceding Business Day), and (iii)
whenever the first day of any Interest Period occurs on a day of an initial
calendar month for which there is no numerically corresponding day in the
calendar month that succeeds such initial calendar month, such Interest Period
shall end on the last Business Day of such succeeding calendar month.
"LIBO Rate Reserve Percentage" for any Interest Period means the
reserve percentage applicable two Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by reference to which the
LIBO Rate is determined) having a term equal to such Interest Period.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from time
to time.
Both principal and interest are payable in lawful money of the
United States of America to the Administrative Agent for the account of the
Lender in immediately available funds. Such payments shall be made by wire
transfer to the Administrative Agent's Account.
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Loan Agreement
100
The Lender is authorized but not required to record the date and amount of each
payment of principal hereof on the schedule annexed hereto and made a part
hereof, or on a continuation thereof which shall be attached hereto and made a
part hereof, and any such recordation shall, in the absence of manifest error,
constitute prima facie evidence of the accuracy of the information so recorded.
Prior to any transfer of this Note, the Lender shall record the foregoing on
such schedule or continuation thereof; provided, however, that the Lender's
failure so to record shall not limit the obligations of the Borrowers hereunder
and under the Loan Agreement to repay the actual outstanding principal of and
interest on the Loan.
This Note is one of the Bridge Notes referred to in, and is entitled
to the benefits of, the Loan Agreement dated as of September 1, 1999 (as
amended, supplemented or otherwise modified from time to time, the "Loan
Agreement") among the Borrowers, the Lenders parties thereto, and Ableco Finance
LLC, as Administrative Agent. The Loan Agreement, among other things, (i)
provides for the making of a single loan by the Lenders to the Borrowers in an
aggregate amount equal to $155,000,000, the indebtedness of the Borrowers
resulting from such Loan being evidenced by this Note and the other Bridge Notes
issued concurrently herewith to the other Lenders, (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions specified therein and (iii) contains
provisions for the making of payments whenever any payment hereunder shall be
stated to be due on a day other than a Business Day.
To the fullest extent permitted by applicable law, the Borrowers,
for themselves and their respective successors and assigns, expressly waive
presentment, demand, protest, notice of dishonor, notice of non-payment, notice
of maturity, notice of protest, presentment for the purpose of accelerating
maturity, diligence in collection, and the benefit of any exemption or
insolvency laws.
If any provision of this Note shall be prohibited or invalid in any
jurisdiction, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or remaining provisions of this Note. No delay or failure on the part of the
Lender or the Administrative Agent in the exercise of any right or remedy
hereunder shall operate as a waiver thereof, nor as an acquiescence in any
Default, nor shall any single or partial exercise by the Lender or the
Administrative Agent of any right or remedy preclude any other right or remedy.
The Lender or the Administrative Agent, at its option, may enforce its rights
against any Collateral securing this Note without enforcing its rights against
either Borrower, any guarantor of the Indebtedness evidenced hereby or any other
Property or Indebtedness due or to become due to either Borrower. The Borrowers
agree that, without releasing or impairing the Borrowers' liability hereunder,
the Lender or the Administrative Agent may at any time release, surrender,
substitute or exchange any Collateral securing this Note and may at any time
release any party primarily or secondarily liable for the Indebtedness evidenced
by this Note.
This Note is a Registered Note and, as provided in and subject to
the terms of the Loan Agreement, this Note may be transferred in whole or in
part only upon surrender of
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101
this Note to the Administrative Agent for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer, duly executed by
the registered holder of this Note. Reference in this Note to a "holder" shall
mean the person or entity in whose name this Note is at the time registered in
the register maintained by the Administrative Agent as provided in Section
8.07(d) of the Loan Agreement.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
INAMED CORPORATION
By
-------------------------------------
Name:
Title:
INAMED ACQUISITION CORPORATION
By
-------------------------------------
Name:
Title:
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102
LOAN AND PAYMENTS OF PRINCIPAL
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AMOUNT OF PRINCIPAL UNPAID PRINCIPAL NOTATION
DATE PAID OR PREPAID BALANCE MADE BY
=====================================================================
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Loan Agreement
103
EXHIBIT A-2
ROLLOVER NOTE
New York, New York
$ _____________ Dated: _______ ___,___
FOR VALUE RECEIVED, the undersigned, INAMED CORPORATION, a Delaware
corporation (the "Parent"), and [INAMED ACQUISITION CORPORATION] [COLLAGEN
AESTHETICS, INC.], a Delaware corporation (together with the Parent, the
"Borrowers"), HEREBY JOINTLY AND SEVERALLY PROMISE TO PAY _______ (the "Payee")
or registered assigns on the Maturity Date (this and other capitalized terms
that are not defined herein have the respective meanings specified therefor in
the Loan Agreement referred to below) the principal amount of $_______ [the
aggregate principal amount of the Lender's Pro Rata Share of the Loan made by
the Lenders to the Borrowers pursuant to the Loan Agreement which is outstanding
on the Maturity Date for the Bridge Note], together with all interest which is
capitalized and added to the principal hereof as provided below.
The Borrowers, jointly and severally, promise to pay interest on the
unpaid principal amount hereof until such principal amount is paid in full, at
such interest rates, and payable at such times, as are specified below.
Interest on the unpaid balance of the principal amount of this
senior secured Note shall accrue at a rate per annum which is equal to the
Applicable Rate (as defined below) from and including the date of this Note,
until such unpaid balance shall be paid in full (whether at maturity or upon
acceleration thereof or otherwise). Interest shall be payable semiannually, in
arrears, on _______________ __ and ____________ __ of each year, commencing
_____________ __, ________, and on the Maturity Date and thereafter on demand;
provided, however, that (i) upon the occurrence and during the continuance of
any Event of Default, the Borrowers shall pay interest on such unpaid principal
at a rate equal at all times to 200 basis points per annum in excess of the rate
of interest otherwise in effect and (ii) in no event shall the rate of interest
on this Note be greater than the maximum rate of interest permitted by law.
The "Applicable Rate" means an interest rate per annum equal to 15%.
Both principal and interest are payable in lawful money of the
United States of America to the Administrative Agent for the account of the
Lender in immediately available funds; provided, however, that (i) 80% of the
amount of interest payable on each interest payment date shall be paid in lawful
money of the United States of America to the Administrative Agent for the
account of the Lender in immediately available funds, and (ii) 20% of the amount
of interest payable on such date shall be capitalized on such date and added to
the outstanding principal amount of this Note. The cash portion of each interest
payment and each principal payment shall be made by wire transfer to the
Administrative Agent's Account. The Lender is authorized but not required to
record the date and amount of each payment of principal hereof and the date and
amount of each portion of interest that is capitalized and added to the
Loan Agreement
104
principal amount evidenced hereby on the schedule annexed hereto and made a part
hereof, or on a continuation thereof which shall be attached hereto and made a
part hereof, and any such recordation shall, in the absence of manifest error,
constitute prima facie evidence of the accuracy of the information so recorded.
Prior to any transfer of this Note, the Lender shall record the foregoing on
such schedule or continuation thereof; provided, however, that the Lender's
failure so to record shall not limit the obligations of the Borrowers hereunder
and under the Loan Agreement to repay the actual outstanding principal of and
interest on the Loan.
This Note is one of the Rollover Notes referred to in, and is
entitled to the benefits of, the Loan Agreement dated as of September 1, 1999
(as amended, supplemented, or otherwise modified from time to time, the "Loan
Agreement"), among the Borrowers, the Lenders parties thereto, and Ableco
Finance LLC, as Administrative Agent. The Loan Agreement, among other things,
(i) provides for the making of a single loan by the Lenders to the Borrowers in
an aggregate amount not to exceed $155,000,000, the indebtedness of the
Borrowers resulting from such Loan being evidenced by this Note and the other
Rollover Notes issued concurrently herewith to the other Lenders, (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions specified therein and (iii)
contains provisions for the making of payments whenever any payment hereunder
shall be stated to be due on a day other than a Business Day.
To the fullest extent permitted by applicable law, the Borrowers,
for themselves and their respective successors and assigns, expressly waive
presentment, demand, protest, notice of dishonor, notice of non-payment, notice
of maturity, notice of protest, presentment for the purpose of accelerating
maturity, diligence in collection, and the benefit of any exemption or
insolvency laws.
If any provision of this Note shall be prohibited or invalid in any
jurisdiction, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or remaining provisions of this Note. No delay or failure on the part of the
Lender or the Administrative Agent in the exercise of any right or remedy
hereunder shall operate as a waiver thereof, nor as an acquiescence in any
Default, nor shall any single or partial exercise by the Lender or the
Administrative Agent of any right or remedy preclude any other right or remedy.
The Lender or the Administrative Agent, at its option, may enforce its rights
against any Collateral securing this Note without enforcing its rights against
either Borrower, any guarantor of the Indebtedness evidenced hereby or any other
Property or Indebtedness due or to become due to either Borrower. The Borrowers
agree that, without releasing or impairing the Borrowers' liability hereunder,
the Lender or the Administrative Agent may at any time release, surrender,
substitute or exchange any Collateral securing this Note and may at any time
release any party primarily or secondarily liable for the Indebtedness evidenced
by this Note.
This Note is a registered Note and, as provided in and subject to
the terms of the Loan Agreement, this Note may be transferred in whole or in
part only upon surrender of this Note to the Administrative Agent for
registration of transfer, duly endorsed or
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Loan Agreement
105
accompanied by a written instrument of transfer, duly executed by the registered
holder of this Note. Reference in this Note to a "holder" shall mean the person
or entity in whose name this Note is at the time registered in the register
maintained by the Administrative Agent as provided in Section 8.07(d) of the
Loan Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
INAMED CORPORATION
By
----------------------------------------
Name:
Title:
[INAMED ACQUISITION CORPORATION]
[COLLAGEN AESTHETICS, INC.]
By
----------------------------------------
Name:
Title:
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106
LOAN AND PAYMENTS OF PRINCIPAL
=====================================================================
AMOUNT OF
PRINCIPAL AMOUNT OF UNPAID
PAID OR INTEREST PRINCIPAL NOTATION
DATE PREPAID CAPITALIZED BALANCE MADE BY
=====================================================================
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
=====================================================================
107
EXHIBIT B
NOTICE OF BORROWING
September __, 1999
Ableco Finance LLC
450 Park Avenue, 28th Floor
New York, New York 10022
Attention: Mark A. Neporent, Esq.
Ladies and Gentlemen:
The undersigned, Inamed Corporation and Inamed Acquisition
Corporation, refer to the Loan Agreement, dated as of September 1, 1999 (as
amended, supplemented, or otherwise modified from time to time, the "Loan
Agreement", the terms defined therein being used herein as therein defined),
among the undersigned (the "Borrowers"), the Lenders party thereto, and Ableco
Finance LLC, as Administrative Agent, and hereby give you notice, irrevocably,
pursuant to Section 2.02 of the Loan Agreement that the Borrowers hereby request
the Loan under the Loan Agreement, and in that connection set forth below the
information relating to the Loan (the "Proposed Loan") as required by Section
2.02 of the Loan Agreement:
(i) The Business Day of the Proposed Loan is _____ __ , 1999,
which date shall be the date on which the Tender Offer is consummated.
(ii) The amount of the Proposed Loan is $155,000,000.
(iii) (A) $______ of the Proposed Loan shall be used to
purchase ______ Shares pursuant to the Tender Offer, at a price of $16.25
per share, representing approximately _____% of the total number of
outstanding Shares, (B) $_____ of the Proposed Loan shall be used to fund
the Securities Account, (C) $_____ of the Proposed Loan shall be used to
pay for expenses incurred in connection with the Tender Offer and the
financing thereof, (D) $_____ of the Proposed Loan shall be used to repay
existing Indebtedness of the Parent, all as set forth on Schedule 2.07,
provided that the Borrowers hereby authorize the Lenders and the
Administrative Agent to apply directly $1,550,000 of the proceeds of the
Loan to pay the fees due pursuant to Section 2.04(c).
The proceeds of the Proposed Loan shall be disbursed in accordance
with the payment instructions set forth on Schedule I hereto.
The undersigned hereby certify that the following statements are
true on the date hereof and will be true on the date of the Proposed Loan:
(A) the representations and warranties contained in each
Loan Document are correct in all material respects, before and after giving
effect to the Proposed Loan
108
and the application of the proceeds therefrom, as though made on and as of such
date (except for such representations and warranties made as of a specified
date, which representations and warranties are correct as of such specified
date); and
(B) no event has occurred and is continuing, or would
result from such Proposed Loan or from the application of proceeds therefrom,
that constitutes a Default or an Event of Default.
Very truly yours,
INAMED CORPORATION
By
----------------------------------------
Name:
Title:
INAMED ACQUISITION CORPORATION
By
----------------------------------------
Name:
Title:
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109
Schedule I
Payment Instructions
[TO COME]
110
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Loan Agreement dated as of September 1,
1999 (as amended, supplemented or otherwise modified from time to time, the
"Loan Agreement") among Inamed Corporation, a Delaware corporation (the
"Parent"), Inamed Acquisition Corporation, a Delaware corporation (the
"Purchaser", and together with the Parent, collectively, the "Borrowers"), the
Lenders party thereto, and Ableco Finance LLC, as Administrative Agent. Terms
defined in the Loan Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I hereto
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in
and to the Assignor's rights and obligations under the Loan Agreement as
of the date hereof equal to the percentage interest specified on Schedule
I hereto of all such rights and obligations of the Assignor under the Loan
Agreement. After giving effect to such sale and assignment, the Assignee's
Pro Rata Share of the Loan and the Assignor's Pro Rata Share of the Loan
will be as set forth on Schedule I hereto.
2. The Assignor: (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection
with the Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be
created in connection with, the Loan Documents or any other instrument or
document furnished pursuant thereto; (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrowers or the performance or observance by the
Borrowers of any of their obligations under any Loan Document or any other
instrument or document furnished pursuant thereto; and (iv) attaches the
[BRIDGE] [ROLLOVER] Note held by the Assignor and requests that the
Administrative Agent exchange such Note for (A) a new [BRIDGE] [ROLLOVER]
Note payable to the order of the Assignee in an amount equal to the amount
of the Assignee's Pro Rata Share of the Loan owing to the Assignee
pursuant hereto and (B) if the Assignor has retained any interest in the
Loan, a new [BRIDGE] [ROLLOVER] Note payable to the order of the Assignor
in an amount equal to the amount of the Assignor's Pro Rata Share of the
Loan owing to the Assignor pursuant hereto, in each case as specified on
Schedule I hereto.
3. The Assignee: (i) confirms that it has received a copy of the
Loan Agreement, together with copies of the financial statements referred
to in Section 4.01(f) thereof, and such other documents and information as
it has deemed appropriate to make
111
its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance
upon the Administrative Agent, the Assignor or any other Lender and based
on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under the Loan Agreement; (iii) unless otherwise agreed to in
writing by the Administrative Agent and the Borrowers, confirms that it is
an Eligible Assignee; (iv) appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such
powers and discretion under the Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the obligations that by the
terms of the Loan Agreement are required to be performed by it as a
Lender; and (vi) attaches any tax forms required under Section 2.08 of the
Loan Agreement.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Administrative Agent for acceptance and recording
by the Administrative Agent. The effective date for this Assignment and
Acceptance (the "Effective Date") shall be the date of acceptance and
recordation hereof by the Administrative Agent, unless otherwise specified
on Schedule I hereto.
5. Upon such acceptance and recording by the Administrative Agent,
as of the Effective Date, (i) the Assignee shall be a party to the Loan
Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Loan
Agreement.
6. Upon such acceptance and recording by the Administrative Agent,
from and after the Effective Date, the Administrative Agent shall make all
payments under the Loan Agreement and the [BRIDGE] [ROLLOVER] Notes in
respect of the interest assigned hereby (including, without limitation,
all payments of principal and interest with respect thereto) to the
Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments under the Loan Agreement and the [BRIDGE] [ROLLOVER] Notes for
periods prior to the Effective Date directly between themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all
of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of Schedule I to this Assignment and
Acceptance by telecopier shall be effective as delivery of a manually
executed counterpart of this Assignment and Acceptance.
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112
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule I to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
-3-
113
Schedule I
to
Assignment and Acceptance
Percentage interest assigned: %
-----
Aggregate outstanding principal amount of Loan assigned: $
-----------
Principal amount of [BRIDGE] [ROLLOVER] Note
payable to Assignee: $
-----------
Pro Rata Share of Assignee: %
-----
Principal amount of [BRIDGE] [ROLLOVER] Note
payable to Assignor: $
-----------
Pro Rata Share of Assignor: %
-----
Effective Date* : ,
------------- -------
[NAME OF ASSIGNOR], as Assignor
By
-----------------------------------
Name:
Title:
Dated: ,
------------------ ----
[NAME OF ASSIGNEE], as Assignee
By
-----------------------------------
Name:
Title:
Lending Office:
[ADDRESS]
- --------
* This date should be no earlier than five Business Days after the delivery of
this Assignment and Acceptance to the Administrative Agent.
114
Accepted this day of , .
---- ---------- ------
ABLECO FINANCE LLC,
as Administrative Agent
By:
------------------------------
Name:
Title:
-2-
115
EXHIBIT D
SECURITIES ACCOUNT AGREEMENT
SECURITIES ACCOUNT AGREEMENT dated as of September 1, 1999 (this
"Agreement") by and among INAMED CORPORATION, a Delaware corporation (the
"Parent"), COLLAGEN AESTHETICS, INC. (successor by merger to INAMED ACQUISITION
CORPORATION), a Delaware corporation (the "Purchaser", and together with the
Parent, the "Borrowers"), ABLECO FINANCE LLC, as administrative agent under the
Loan Agreement (as defined below) for the Lenders (in such capacity, together
with its successors and assigns in such capacity, the "Administrative Agent"),
and THE BANK OF NEW YORK, as securities intermediary (in such capacity, together
with its successors and assigns in such capacity, the "Securities
Intermediary").
W I T N E S S E T H:
WHEREAS, the Borrowers, the Administrative Agent, and the lenders
from time to time party thereto (each a "Lender" and collectively, the
"Lenders") have entered into a Loan Agreement, dated as of September 1, 1999
(such Loan Agreement, as amended, restated, supplemented or otherwise modified
from time to time, the "Loan Agreement"), pursuant to which the Lenders have
agreed to make a loan to the Borrowers in the principal amount of $155,000,000
(the "Loan");
WHEREAS, pursuant to Section 2.02 of the Loan Agreement, any portion
of the Loan which is not used on the Closing Date (as defined in the Loan
Agreement) (i) to pay the aggregate purchase price of the Shares (as defined in
the Loan Agreement) to be acquired by the Purchaser pursuant to the consummation
of the Tender Offer (as defined in the Loan Agreement), (ii) to pay the costs
and expenses incurred in connection with the Tender Offer, or (iii) to refinance
certain existing indebtedness of the Parent, is required to be funded to the
Securities Account (as defined in the Loan Agreement) to be held and distributed
pursuant to the terms of this Agreement;
WHEREAS, pursuant to Section 3.01(a)(viii) of the Loan Agreement,
the Parent is required to deliver to the Securities Intermediary a Warrant (as
defined in the Loan Agreement) and an Equity Registration Rights Agreement (as
defined in the Loan Agreement) for the account of each Lender or its nominee to
be held and distributed pursuant to the terms of this Agreement;
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
1. Definitions. Reference is hereby made to the Loan Agreement for a
statement of the terms thereof. All terms used in this Agreement which are
defined in the Loan
116
Agreement or in Article 8 or Article 9 of the Uniform Commercial Code (the
"Code") currently in effect in the State of New York and which are not otherwise
defined herein shall have the same meanings herein as set forth therein.
2. Appointment of Securities Intermediary; Establishment of
Securities Account. The Borrowers and the Administrative Agent hereby appoint
The Bank of New York as Securities Intermediary for the purposes set forth
herein and the Securities Intermediary accepts such appointment. The Securities
Intermediary shall establish, at its principal corporate trust office located at
101 Barclay Street, New York, New York 10286, the Securities Account for any
amounts received by it hereunder.
3. Deposit of Collateral Amount and Equity Documents. Concurrently
with the execution of this Agreement:
(a) the Administrative Agent is depositing with the Securities
Intermediary, and the Securities Intermediary hereby acknowledges the receipt of
either (i) a wire transfer, or (ii) a bank check of immediately available funds,
in the amount of Ten Million Four Hundred Fifty Eight Thousand Four Hundred
Sixty Eight Dollars ($10,458,468) (the "Collateral Amount"); and
(b) the Parent is depositing with the Securities Intermediary, and
the Securities Intermediary hereby acknowledges the receipt of (i) a Warrant in
favor of each Person named on Schedule I hereto (the "Initial Holders")
representing the right to purchase that percentage of shares of common stock of
the Parent ("Warrant Shares") set forth opposite the name of such Initial Holder
on such Schedule I, and (ii) an Equity Registration Rights Agreement in favor
of each Initial Holder representing the right of such Initial Holder to register
such Warrant Shares. (The Warrants and the Equity Registration Rights Agreement
are hereinafter referred to as the "Equity Documents").
4. Investment of Collateral Amount.
(a) At any time when the Securities Intermediary is holding the
Collateral Amount, it shall invest such Collateral Amount pursuant to the joint
written instructions from the Administrative Agent and the Borrowers, in any one
or more of the following:
(i) certificates of deposit in any national bank or
trust company insured by the Federal Deposit Insurance Corporation
(FDIC), organized under the laws of the United States of America or
any state thereof, which has combined capital and surplus of at
least five hundred million dollars ($500,000,000) (a "Qualifying
Bank"); or
(ii) direct obligations of the United States of America,
provided that as to principal and interest, such obligations
constitute full faith and credit obligations of the United States of
America; or
4
117
(iii) deposits, including time and demand deposits, in a
Qualifying Bank; or
(iv) any open-end or closed end management type
investment company or investment trust registered under the
Investment Company Act of 1940, as amended, which invests primarily
in obligations described in clause (ii) above.
(b) In the event no instructions are received from the
Administrative Agent and the Borrowers as provided in Section 4(a) above, the
Securities Intermediary shall invest the Collateral Amount in the securities set
forth on Schedule III hereto, which constitutes an investment of the type
described in subparagraph (iv) above. Such securities shall in each case have a
maturity not exceeding one (1) year from date of purchase.
(c) The Securities Intermediary shall have the right to liquidate
any investments held, in order to provide funds necessary to make required
payments under this Agreement. The Securities Intermediary in its capacity as
securities intermediary hereunder shall not have any liability for any loss
sustained as a result of any investment or reinvestment made pursuant to the
instructions of the parties hereto or as a result of any liquidation of any
investment prior to its maturity or for the failure of the parties to give the
Securities Intermediary instructions to invest or reinvest the Collateral Amount
or any earnings thereon, except in the case of the gross negligence or willful
misconduct of the Securities Intermediary.
5. Distribution of the Collateral Amount. The Securities
Intermediary shall distribute the Collateral Amount together with any interest
earned thereon (together, the "Collateral Funds") as follows:
(a) upon receipt by the Securities Intermediary of a certificate
from the Borrowers certifying to the Securities Intermediary that (i) the
portion of the Collateral Funds to be used to pay for the Shares tendered for
Guaranteed Delivery (as defined in the Offer to Purchase) is due and payable,
then such portion of the Collateral Funds held in the Securities Account shall
be released by the Securities Intermediary to the Borrowers as specified in such
certificate, to be used as set forth in such certificate, (ii) the portion of
the Collateral Funds required to pay the Merger Consideration for the Shares not
tendered pursuant to the Tender Offer is due and payable, then such portion of
the Collateral Funds held in the Securities Account shall be released by the
Securities Intermediary to the Borrowers as specified in such certificate, to be
used as set forth in such certificate, and (iii) that the portion of the
Collateral Funds to be used to pay appraisal rights in connection with the
Merger is due and payable, then such portion of the Collateral Funds held in the
Securities Account shall be released by the Securities Intermediary to the
Borrowers as specified in such certificate, to use as set forth in such
certificate.
(b) upon receipt by the Securities Intermediary of a certificate
from the Administrative Agent certifying to the Securities Intermediary that an
Event of Default has occurred and is continuing under the Loan Agreement, and
the Administrative Agent has, by notice to the Borrowers, declared the Notes,
all interest thereon and all other amounts payable
5
118
under the Loan Agreement and the other Loan Documents to be forthwith due and
payable, then, all Collateral Funds held in the Securities Account shall be
released by the Securities Intermediary to the Administrative Agent, as
specified in the certificate, for application by the Administrative Agent in
accordance with the terms of the Loan Agreement.
6. Distribution of the Equity Documents. The Securities Intermediary
shall distribute the Equity Documents as follows:
(a) upon receipt by the Securities Intermediary of a certificate
from the Administrative Agent and the Borrowers certifying to the Securities
Intermediary that the Loan Refinancing has occurred as contemplated by Section
5.01(k) of the Loan Agreement on or prior to June 1, 2000, the Securities
Intermediary shall release and deliver the Equity Documents to the Borrowers, as
specified in the certificate, for cancellation.
(b) upon receipt by the Securities Intermediary of a certificate
from the Administrative Agent certifying to the Securities Intermediary that the
Loan Refinancing has not occurred as contemplated by Section 5.01(k) of the Loan
Agreement on or prior to June 1, 2000, the Securities Intermediary shall release
and deliver the Equity Documents to the Administrative Agent, as specified in
the certificate, for distribution to the Holder (as defined in the Equity
Documents);
7. No Rights Under Warrants. Notwithstanding any other provision of
this Agreement, the Loan Agreement, the Warrants, the Equity Registration Rights
Agreement or any other Loan Document, neither the Administrative Agent nor any
Holder shall have any rights under or with respect to the Warrants or the Equity
Registration Rights Agreement unless and until such documents are delivered to
the Administrative Agent for distribution to the Holders in accordance with
Section 6(b) hereof.
8. Warrant Transfers. If any Lender assigns or otherwise transfers
all or any of its Pro Rata Share of the Loan (including by selling
participations therein) to any Person, such Lender shall request that (i) a
number of Warrants held by such Lender or its nominee be canceled on the date of
such assignment and transfer and (ii) a like number of Warrants be issued by the
Parent to the Person to whom such Pro Rata Share of the Loan is being assigned
or otherwise transferred. In such event, the Administrative Agent shall give
notice thereof to the Securities Intermediary and the Parent, together with (i)
a copy of the Assignment and Acceptance pursuant to which such Notes were
transferred and (ii) all documentation required under the terms of the Warrants
in connection with transfer thereof including an assignment in the form attached
as Exhibit B to the Warrants (such notice and the documentation contemplated by
clauses (i) and (ii), collectively, the "Assignment Documentation"). Upon
receipt of Assignment Documentation, the Securities Intermediary shall deliver a
copy thereof to the Borrowers, together with the original Warrants subject to
the proposed transfer, for cancellation of such original Warrants and the
issuance by the Parent of new Warrants in favor of the transferee(s) thereof.
The Parent shall execute and deliver new Warrants in the name(s) of the
transferee(s) thereof and in the denominations specified in the Assignment
Documentation and a new Warrant in the name of the transferor thereof evidencing
the portion of the Warrants, if any,
6
119
not so transferred, all in accordance with the terms of the Warrants. The
Securities Intermediary shall give written notice to the Administrative Agent of
its receipt of the new Warrant(s), with a copy of such notice delivered
simultaneously to the Borrowers (as set forth in Section 10 hereof) and the
transferee(s) (as set forth in the Assignment Documentation).
9.Securities Intermediary.
(a) General. The Securities Intermediary shall act as securities
intermediary and hold and distribute the Collateral Funds and Equity Documents
pursuant to the terms and conditions of this Agreement. Its duties under this
Agreement shall cease upon the distribution of both the Collateral Funds and the
Equity Documents pursuant to Sections 5 and 6.
(b) Limited Duties. The Securities Intermediary undertakes to
perform only such duties as are expressly set forth in this Agreement and no
duties or obligations shall be inferred or implied. Nevertheless, the Securities
Intermediary may consult with counsel of its own choice in connection with
entering into and/or performing under this Agreement. The Securities
Intermediary shall not be subject to, nor required to comply with, any other
agreement between or among any or all of the other parties hereto or to which
any such party is a party, even though reference thereto may be made herein. The
Securities Intermediary shall not be required to, and shall not, expend or risk
any of its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder.
(c) Reliance on Notices. The Securities Intermediary may
conclusively rely and shall be fully protected in acting or refraining from
acting upon any written notice, instruction or request furnished to it hereunder
and believed by it to be genuine and to have been signed or presented by the
proper party or parties.
(d) Limitation of Liability. The Securities Intermediary shall not
be liable for any action or omission in connection with this Agreement in good
faith and may consult with counsel of its own choice and shall have full and
complete authorization and protection for any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel.
(e) Resignation. The Securities Intermediary may resign and be
discharged from its duties or obligations hereunder at any time by giving notice
of such resignation to the Borrowers and the Administrative Agent specifying a
date upon which such resignation shall take effect, whereupon a successor
securities intermediary, which shall be a bank or trust company with a combined
capital and surplus of not less than $500,000,000 (an "Eligible Bank or Trust"),
shall be appointed by the Administrative Agent. If no successor securities
intermediary is appointed pursuant to the immediately preceding sentence on or
before the date on which the Securities Intermediary's resignation is to take
effect, the Securities Intermediary may, at the expense of the Borrowers,
petition a court of competent jurisdiction for the appointment of a successor
securities intermediary. Upon execution by the Securities Intermediary and the
successor securities intermediary of any agreements, documents or instruments
reasonably requested by the Administrative Agent, the Securities Intermediary
shall
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be entitled to deliver the Collateral Funds and the Equity Documents to any
successor securities intermediary so appointed.
(f) Disputes. The parties agree that to the extent the Securities
Intermediary receives conflicting instructions with respect to a matter not
addressed by the provisions of this agreement, the Securities Intermediary,
after 5 Business Days' written notice to the Borrowers, shall be entitled to act
upon the written instructions of the Administrative Agent; provided that as
between the Borrowers and the Administrative Agent the foregoing shall not
constitute a waiver of any right or obligation owing to any party. The Borrowers
and the Administrative Agent hereby agree that the Securities Intermediary shall
be entitled to rely on and shall act on such written instructions without
further question and shall have no liability as a result thereof.
(g) Indemnification. The Borrowers hereby jointly and severally
agree to indemnify the Securities Intermediary for, and to hold it harmless
against, any loss, liability, damage or expense incurred on the part of the
Securities Intermediary arising out of or in connection with its entering into
and/or performing under this Agreement, including the reasonable fees and
expenses of counsel and the cost and expense (including, but not limited to,
reasonable attorneys' fees) of investigating and defending itself against any
claim or liability, but excluding any loss, liability, damage or expense
resulting from the Securities Intermediary's gross negligence or willful
misconduct.
(h) Compensation of Securities Intermediary. The Borrowers jointly
and severally agree to pay to the Securities Intermediary for its services
hereunder the compensation set forth on Schedule II attached hereto.
(i) Certain Rights of the Securities Intermediary.
(i) If at any time the Securities Intermediary is served with
any judicial or administrative order, judgment, decree, writ or
other form of judicial or administrative process which in any way
affects the Collateral Funds or the Equity Documents (including but
not limited to orders of attachment or garnishment or other forms of
levies or injunctions or stays relating to the transfer of the
Collateral Funds or the Equity Documents), the Securities
Intermediary is authorized to comply therewith in any manner as it
or its legal counsel of its own choosing deems appropriate; and if
the Securities Intermediary complies with any such judicial or
administrative order, judgment, decree, writ or other form of
judicial or administrative process, the Securities Intermediary
shall not be liable to any of the parties hereto or to any other
person or entity even though such order, judgment, decree, writ or
process may be subsequently modified or vacated or otherwise
determined to have been without legal force or effect.
(ii) The Securities Intermediary shall not be liable for any
action taken or omitted or for any loss or injury resulting from its
actions or its performance or lack of performance of its duties
hereunder in the absence of gross negligence or willful misconduct
on its part. In no event shall the Securities Intermediary be liable
(x) for acting in accordance with or relying upon any instruction,
notice,
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demand, certificate or document from any party hereto or any entity
acting on behalf of any such party in accordance with the terms of
this Agreement or (y) for any consequential, punitive or special
damages.
(iii) The Securities Intermediary shall not incur any
liability for not performing any act or fulfilling any duty,
obligation or responsibility hereunder by reason of any occurrence
beyond the control of the Securities Intermediary (including but not
limited to any act or provision of any present or future law or
regulation or governmental authority, any act of God or war, or the
unavailability of the Federal Reserve Bank wire or telex or other
wire or communication facility).
10. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing and shall be mailed (by certified mail, postage
prepaid and return receipt requested, or by overnight courier), telecopied or
delivered, if to the Borrowers, to the Parent, at its address at 1120 Avenue of
the Americas, 4th Floor, New York, New York 10036, Attention: General Counsel,
Fax No.: 212-626-6799; if to the Administrative Agent, to it at its address at
450 Park Avenue, 28th Floor, New York, NY 10022, Telecopier No. 212-935-2874,
Attention: Mark A. Neporent, Esq.; or if to the Securities Intermediary, to it
at its address at 101 Barclay Street, Insurance Trust and Escrow, Floor 21W, New
York, New York 10286, Attention: Marie Ladolcetta, Fax No.: 212-815-7181. All
such notices and other communications shall be effective (a) if mailed, when
received or three days after mailing, (b) if telecopied, when transmitted,
provided same is on a Business Day and, if not, on the next Business Day, and
(c) if delivered, upon delivery, provided same is on a Business Day and, if not,
on the next Business Day.
11. Consent to Jurisdiction, Etc.
(a) Each of the Borrowers and the Administrative Agent each
irrevocably and unconditionally submits, for itself and its Property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any document related thereto, or for recognition or enforcement of
any judgment, and each of the parties hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in any such New York State court or, to the extent permitted by
law, in such federal court. Each of the Borrowers and the Administrative Agent
each agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement in the courts of any jurisdiction.
(b) Each of the Borrowers and the Administrative Agent each
irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising
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out of or relating to this Agreement or any documents related thereto in any New
York State or federal court. Each of the Borrowers and the Administrative Agent
each hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
12. Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
13. Miscellaneous.
(a) No amendment or waiver of any provision of this Agreement and no
consent to any departure by any of the parties therefrom shall be effective
unless it is in writing and signed by each of the parties hereto, and in the
case of a waiver or consent, shall be effective only in the specific instance
and for the specific purpose for which given.
(b) No failure on the part of any party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The rights and remedies of
each party provided herein and in the other Loan Documents are cumulative and
are in addition to, and not exclusive of, any rights or remedies provided by
law.
(c) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT APPLYING ANY CONFLICTS OF LAWS
PRINCIPLES EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW), EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW.
(d) The section and subsection headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provisions of this Agreement.
(e) This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be effective as delivery of
a manually executed counterpart of this Agreement.
(f) This Agreement supersedes all prior agreements among the parties
with respect to its subject matter, is intended as a complete and exclusive
statement of the terms of the agreement among the parties with respect thereto
and cannot be changed or terminated orally. No party may assign any rights or
delegate any of its duties under this Agreement, but this
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Agreement shall be binding upon and inure to the benefit of any successor
securities intermediary appointed in accordance with Section 9(e) hereof.
(g) Each of the Borrowers and the Administrative Agent hereby
represents and warrants (i) that this Securities Account Agreement has been duly
authorized, executed and delivered on its behalf and constitutes its legal,
valid and binding obligation and (ii) that the execution, delivery and
performance of this Securities Account Agreement by it do not and will not
violate any applicable law or regulation.
14. Tax Reports. The Securities Intermediary does not have any
interest in the Collateral Amount or the Equity Documents deposited hereunder
but is serving as securities intermediary only and having only possession
thereof. The Borrowers shall pay or reimburse the Securities Intermediary upon
request for any transfer taxes or other taxes relating to the Collateral Amount
and the Equity Documents incurred in connection herewith and shall indemnify and
hold harmless the Securities Intermediary any amounts that it is obligated to
pay in the way of such taxes. Any payments of income from the Securities Account
shall be subject to withholding regulations then in force with respect to United
States taxes. The Borrowers will provide the Securities Intermediary with
appropriate W-9 forms for tax I.D., number certifications, or W-8 forms for
non-resident alien certifications. It is understood that the Securities
Intermediary shall be responsible for income reporting only with respect to
income earned on investment of funds which are a part of the Collateral Amount
and is not responsible for any other reporting. This Section 14 and Section 9(g)
shall survive notwithstanding any termination of this Securities Account
Agreement or the resignation of the Securities Intermediary.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers or other representatives thereunto duly
authorized, as of the date first above written.
INAMED CORPORATION
By
-------------------------------
Name:
Title:
COLLAGEN AESTHETICS, INC.
By
-------------------------------
Name:
Title:
ABLECO FINANCE LLC
as Administrative Agent
By
-------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Securities Intermediary
By
-------------------------------
Name:
Title:
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Schedule I
Schedule of Initial Holders:
126
Schedule II
Securities Intermediary Compensation
127
Schedule III
Investments
128
EXHIBIT E
SECURITY AND CONTROL AGREEMENT
SECURITY AND CONTROL AGREEMENT dated as of September 1, 1999 (this
"Agreement") among INAMED CORPORATION (the "Parent"), COLLAGEN AESTHETICS, INC.
(successor by merger to INAMED ACQUISITION CORPORATION) (the "Purchaser", and
together with the Parent, the "Borrowers"), ABLECO FINANCE LLC, as
administrative agent for the Lenders (as hereinafter defined) under the Loan
Agreement referred to below (in such capacity, together with its successors and
assigns in such capacity the "Administrative Agent") and THE BANK OF NEW YORK,
as securities intermediary (in such capacity, together with its successors and
assigns in such capacity the "Securities Intermediary").
W I T N E S S E T H:
WHEREAS, the Borrowers, the Administrative Agent, and the lenders
from time to time party thereto (each a "Lender" and collectively, the
"Lenders") have entered into a Loan Agreement, dated as of September 1, 1999
(such Loan Agreement, as amended, restated, supplemented or otherwise modified
from time to time, the "Loan Agreement"), pursuant to which the Lenders have
agreed to make a loan to the Borrowers in the principal amount of $155,000,000
(the "Loan");
WHEREAS, pursuant to the Loan Agreement, the Borrowers, the
Administrative Agent and the Securities Intermediary have entered into a
Securities Account Agreement, dated as of the date hereof (the "Securities
Account Agreement") relating to the escrow of the Warrants, the Equity
Registration Rights Agreement and any portion of the Loan required to be funded
to the Securities Account pursuant to Section 2.02 of the Loan Agreement; and
WHEREAS, it is a condition precedent to the making and maintaining
by the Lenders of the Loan pursuant to the Loan Agreement that each of the
parties hereto shall have executed and delivered to the Administrative Agent
this Security and Control Agreement in order to grant and perfect a valid and
enforceable Lien in favor of the Administrative Agent in the Borrowers' interest
in the Securities Account and the Borrowers' rights under the Securities Account
Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, the parties hereto hereby agree as follows:
Section 1. Definitions. Reference is hereby made to the Securities
Account Agreement for a statement of the terms thereof. All terms used in this
Agreement which are defined in the Securities Account Agreement or in Article 8
or Article 9 of the Uniform Commercial Code (the "UCC") currently in effect in
the State of New York and which are not otherwise defined herein shall have the
same meanings herein as set forth therein.
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Section 2. Pledge and Grant of Security Interest. As collateral
security for all of the Obligations, each of the Borrowers hereby pledges and
assigns to the Administrative Agent, and grants to the Administrative Agent a
continuing security interest in, all of such Borrower's right, title and
interest in and to the following (the "Pledged Collateral"):
(a) account number 066715, together with any successor or
replacement accounts (together with such successor and replacement accounts, the
"Securities Account"), maintained by the Borrowers with the Securities
Intermediary pursuant to the Securities Account Agreement, all amounts which may
now or hereafter be on deposit in the Securities Account and all certificates
and instruments, if any, from time to time representing or evidencing the
Securities Account;
(b) all investments now or hereafter held in or credited to the
Securities Account, including, without limitation, cash and cash equivalents,
investment property, financial assets, security entitlements, capital stock,
stock options, other equity interests (excluding the Warrants and all options
and other rights, contractual and otherwise, in respect thereof (including the
Equity Registration Rights Agreement)), commodity contracts, notes, debentures,
bonds, promissory notes and other evidences of indebtedness and all other
securities and other assets now or hereafter deposited in or credited to the
Securities Account, together with all certificates and instruments, if any, from
time to time representing or evidencing such investments;
(c) all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Pledged Collateral;
(d) all security entitlements of the Borrowers in any and all of the
foregoing; and
(e) all proceeds of any and all of the foregoing;
in each case, howsoever its interest therein may arise or appear (whether by
ownership, security interest, claim or otherwise). Notwithstanding anything to
the contrary contained in this Agreement or in any of the other Loan Documents,
any Pledged Collateral which is released from the Securities Account in
accordance with the terms of this Agreement shall be released to the Borrowers
free and clear of any security interest in favor of the Administrative Agent
created pursuant to this Agreement.
Section 3. Establishment of Securities Account. The Securities
Intermediary hereby confirms and agrees that:
(a) The Securities Intermediary has established the Securities
Account as account number 066715 in the name of "Inamed Corporation Escrow", and
the Securities Intermediary shall not change the name or account number of the
Securities Account without the prior written consent of the Administrative
Agent;
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(b) All securities or other property underlying any financial assets
credited to the Securities Account shall be registered in the name of the
Securities Intermediary, indorsed to the Securities Intermediary or in blank or
credited to another securities account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to the Securities
Account be registered in the name of the Borrowers, payable to the order of the
Borrowers or specially indorsed to the Borrowers except to the extent the
foregoing have been specially indorsed to the Securities Intermediary or in
blank;
(c) All property delivered to the Securities Intermediary pursuant
to the Securities Account Agreement will be promptly credited to the Securities
Account; and
(d) The Securities Account is an account to which financial assets
are or may be credited, and the Securities Intermediary shall, subject to the
terms of this Agreement and the Securities Account Agreement, treat the
Borrowers as entitled to exercise the rights that comprise any financial asset
credited to the account, except that the Borrowers shall have no right
whatsoever to remove or withdraw from the Securities Account any financial
asset, cash or other property now or hereafter credited to the Securities
Account without the prior or concurrent written consent of the Administrative
Agent (which consent shall be deemed to have been given with respect to any
certificate delivered pursuant to Section 5(a) of the Securities Account
Agreement).
Section 4. "Financial Assets" Election. The Securities Intermediary
hereby agrees that each item of property (whether investment property, financial
asset, security, instrument or cash) credited to the Securities Account shall be
treated as a "financial asset" within the meaning of Section 8-102(a)(9) of the
UCC.
Section 5. Entitlement Orders. If at any time the Securities
Intermediary shall receive any written order (an "Entitlement Order") from the
Administrative Agent directing transfer or redemption of any financial asset or
other item relating to the Securities Account, the Securities Intermediary shall
comply with such Entitlement Order, without further consent by the Borrowers or
any other person.
Section 6. Subordination of Lien; Waiver of Set-Off. If the
Securities Intermediary has or subsequently obtains by agreement, by operation
of law or otherwise a security interest in the Securities Account or any
security entitlement credited thereto, the Securities Intermediary hereby agrees
that such security interest shall be subordinate to the security interest of the
Administrative Agent. The financial assets and other items deposited in the
Securities Account will not be subject to deduction, set-off, banker's lien, or
any other right in favor of any person other than the Administrative Agent
(except that the Securities Intermediary may set off (i) all amounts due to the
Securities Intermediary in respect of customary fees and expenses for the
routine maintenance and operation of the Securities Account, and (ii) the face
amount of any checks which have been credited to the Securities Account but are
subsequently returned unpaid because of uncollected or insufficient funds).
Section 7. Choice of Law. Both this Agreement and the Securities
Account shall be governed by the laws of the State of New York. Regardless of
any provision in any other
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agreement, for purposes of the UCC, New York shall be deemed to be the
Securities Intermediary's jurisdiction and the Securities Account (as well as
the securities entitlements related thereto) shall be governed by the laws of
the State of New York.
Section 8. Conflict with other Agreements. There are no other
agreements among the Securities Intermediary, the Administrative Agent and the
Borrowers with respect to the Securities Account except for the Securities
Account Agreement. In the event of any conflict between this Agreement (or any
portion thereof) and any other agreement now existing or hereafter entered into,
the terms of this Agreement shall prevail.
Section 9. Amendments. No amendment or modification of this
Agreement or waiver of any right hereunder shall be binding on any party
hereto unless it is in writing and is signed by all of the parties hereto.
Section 10. Assignments. Each party hereto agrees that it shall
not assign its rights hereunder, and any purported or attempted assignment of
rights hereunder shall be null and void and of no effect.
Section 11. Adverse Claims. Except for the claims and interests of
the Administrative Agent (acting on behalf of itself and the other Lenders) and
of the Borrowers in the Securities Account, the Securities Intermediary does not
know of any claim to, or interest in, the Securities Account or in any
"financial asset" (as defined in Section 8-102(a) of the UCC) credited thereto.
If any person asserts any lien, encumbrance or adverse claim (including any
writ, garnishment, judgment, warrant of attachment, execution or similar
process) against the Securities Account or in any financial asset carried
therein, the Securities Intermediary will promptly notify the Administrative
Agent and the Borrowers thereof. The Securities Intermediary has not entered
into, and until the termination of this Agreement will not enter into, any
agreement with any other person relating to the Securities Account and/or any of
the financial assets credited thereto pursuant to which it agrees or has agreed
to comply with entitlement orders (as defined in Section 8-102(a)(8) of the UCC)
of such person.
Section 12. Representations, Warranties and Covenants of the
Securities Intermediary. The Securities Intermediary hereby makes the
following representations, warranties and covenants:
(a) The Securities Account has been established as set forth in
Section 1 above and the Securities Account will be maintained in the manner set
forth herein until termination of this Agreement; and
(b) This Agreement is the valid and legally binding obligation of
the Securities Intermediary.
Section 13. Successors. Subject to the provisions of Section 10, the
terms of this Agreement shall be binding upon, and shall inure to the benefit
of, the parties hereto and their respective corporate successors or heirs and
personal representatives who obtain such rights solely by operation of law.
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Section 14. Notices. All notices and other communications provided
for hereunder shall be in writing and shall be mailed (by certified mail,
postage prepaid and return receipt requested, or by overnight courier),
telecopied or delivered, if to the Borrowers, to the Parent, at its address at
1120 Avenue of the Americas, 4th Floor, New York, New York 10036, Attention:
General Counsel, Fax No.: 212-626-6799; if to the Administrative Agent, to it at
its address at 450 Park Avenue, 28th Floor, New York, NY 10022, Telecopier No.
212-935-2874, Attention: Mark A. Neporent, Esq.; or if to the Securities
Intermediary, to it at its address at 101 Barclay Street, Insurance Trust and
Escrow, Floor 21W, New York, New York 10286, Attention: Marie Ladolcetta, Fax
No.: 212-815-7181. All such notices and other communications shall be effective
(a) if mailed, when received or three days after mailing, (b) if telecopied,
when transmitted, provided same is on a Business Day and, if not, on the next
Business Day, and (c) if delivered, upon delivery, provided same is on a
Business Day and, if not, on the next Business Day.
Section 15. Termination. The rights and powers granted herein to the
Administrative Agent have been granted in order to perfect its security
interests in the Securities Account, are powers coupled with an interest and
will neither be affected by the bankruptcy of the Borrowers nor by the lapse of
time. The obligations of the Securities Intermediary hereunder shall continue in
effect until the termination of the Securities Account Agreement and the
Administrative Agent has notified the Securities Intermediary of such
termination in writing.
Section 16. Counterparts. This Agreement may be executed in any
number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing and
delivering one or more counterparts.
Section 17. Concerning the Securities Intermediary. The Securities
Intermediary shall be entitled hereunder to all of the rights, privileges,
protections and immunities afforded to it under the Securities Account Agreement
(including, without limitation, its rights under Section 9(g) thereof) with the
same force and effect as if the same were set forth in full herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers or other representatives thereunto duly
authorized, as of the date first above written.
INAMED CORPORATION
By:
-------------------------------
Name:
Title:
COLLAGEN AESTHETICS, INC.
By:
-------------------------------
Name:
Title:
ABLECO FINANCE LLC, as
Administrative Agent
By:
-------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Securities Intermediary
By:
-------------------------------
Name:
Title:
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EXHIBIT F
BORROWER PLEDGE AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated September __, 1999 (this
"Agreement"), made by INAMED CORPORATION, a Delaware corporation (the "Parent"),
and COLLAGEN AESTHETICS, INC. (successor by merger to INAMED ACQUISITION
CORPORATION), a Delaware corporation (the "Purchaser", and together with the
Parent, each a "Pledgor" and collectively, the "Pledgors"), in favor of ABLECO
FINANCE LLC, as administrative agent for the Lenders (as hereinafter defined)
under the Loan Agreement referred to below (in such capacity, together with its
successors in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Pledgors, the Administrative Agent, and the lenders
from time to time party thereto (each a "Lender" and collectively, the
"Lenders") have entered into a Loan Agreement, dated as of September 1, 1999
(such Loan Agreement, as amended, restated, supplemented or otherwise modified
from time to time, the "Loan Agreement"), pursuant to which the Lenders have
agreed to make a loan to the Pledgors in the principal amount of $155,000,000
(the "Loan");
WHEREAS, it is a condition precedent to the making and maintaining
by the Lenders of the Loan pursuant to the Loan Agreement that each of the
Pledgors shall have executed and delivered to the Administrative Agent a pledge
and security agreement providing for the pledge to the Administrative Agent of,
and the grant to the Administrative Agent for the benefit of itself and the
Lenders of a security interest in, the outstanding shares of capital stock from
time to time owned by such Pledgor of certain of its subsidiaries now or
hereafter existing; and
WHEREAS, each of the Pledgors has determined that the execution,
delivery and performance by such Pledgor of this Agreement directly benefit, and
are within the corporate purposes and in the best interest of, such Pledgor;
NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Administrative Agent and the Lenders to enter
into the Loan Agreement and the Lenders to make and maintain the Loan pursuant
to the Loan Agreement, the Pledgors hereby agree with the Administrative Agent
as follows:
SECTION 1. Definitions. Reference is hereby made to the Loan
Agreement for a statement of the terms thereof. All terms used in this Agreement
which are defined in the Loan Agreement or in Article 8 or Article 9 of the
Uniform Commercial Code (the "Code") currently in effect in the State of New
York and which are not otherwise defined herein shall have the same meanings
herein as set forth therein.
135
SECTION 2. Pledge and Grant of Security Interest. As collateral
security for all of the Obligations (as defined in Section 3 hereof), each
Pledgor hereby pledges and assigns to the Administrative Agent for the benefit
of itself and the Lenders, and grants to the Administrative Agent for the
benefit of itself and the Lenders a continuing security interest in, all of such
Pledgor's right, title and interest in the following property (the "Pledged
Collateral"):
(a) the indebtedness described in Schedule I hereto (the "Initial
Pledged Debt");
(b) the indebtedness (the "Additional Pledged Debt", and together
with the Initial Pledged Debt, the "Pledged Debt") described in a Pledge
Amendment (Debt), duly executed by such Pledgor, in substantially the form of
Schedule II hereto (a "Pledge Amendment (Debt)");
(c) the promissory notes evidencing the Pledged Debt and all
securities, money, instruments, investment property, financial assets and other
Property from time to time received, receivable or otherwise distributed or
distributable in respect of or in exchange for any or all of the Pledged Debt;
(d) the shares of Capital Stock described in Schedule III hereto
(the "Initial Pledged Shares") issued by the Persons described in such Schedule
III (the "Initial Pledged Subsidiaries");
(e) the shares of Capital Stock (the "Additional Pledged Shares")
described in a Pledge Amendment (Stock), duly executed by such Pledgor, in
substantially the form of Schedule IV hereto (a "Pledge Amendment (Stock)", and
together with a Pledge Amendment (Debt), collectively, a "Pledge Amendment") and
issued by the Persons described in such Pledge Amendment (the "Additional
Pledged Subsidiaries", and together with the Initial Pledged Subsidiaries,
collectively the "Pledged Subsidiaries" and individually a "Pledged
Subsidiary");
(f) without affecting the obligations of such Pledgor under any
provision prohibiting such action hereunder or under the Loan Documents, in the
event of any consolidation or merger in which a Pledged Subsidiary is not the
surviving corporation, all shares of each class of the Capital Stock of the
successor entity (unless such successor entity is such Pledgor itself) formed by
or resulting from such consolidation or merger which are then owned by such
Pledgor (the "Successor Shares");
(g) all additional shares of Capital Stock from time to time
acquired by such Pledgor of any Pledged Subsidiary (the "Additional Shares"),
and together with the Initial Pledged Shares, the Additional Pledged Shares and
the Successor Shares, the "Pledged Shares");
(h) all certificates and instruments representing the Pledged
Shares, all warrants, options and other rights, contractual or otherwise, in
respect thereof and all shares, securities, money, instruments, investment
property, financial assets and other Property from time to time received,
receivable or otherwise distributed or distributable in respect of or in
exchange for any or all of the Pledged Shares;
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(i) all security entitlements of such Pledgor in any of the Property
of such Pledgor described in this Section 3; and
(j) all proceeds of and, to the extent related to any Property
described in this Section 3, all books, correspondence, credit files, records,
invoices and other papers;
in each case, whether now owned or hereafter acquired by such Pledgor, whether
now in existence or hereafter coming into existence and howsoever such Pledgor's
interests therein may arise or appear (whether by ownership, security interest,
claim or otherwise); provided, however, that at no time shall the shares of
Capital Stock of any Pledged Subsidiary not organized under the laws of the
United States or any state thereof pledged to the Administrative Agent pursuant
to this Agreement (each, a "Foreign Pledged Subsidiary") exceed 65% of the
issued and outstanding shares of Capital Stock of such Foreign Pledged
Subsidiary.
SECTION 3. Security for Obligations. The security interest created
hereby in the Pledged Collateral constitutes continuing collateral security for
all of the following obligations whether now existing or hereafter incurred (the
"Obligations"):
(a) the prompt payment by each of the Pledgors, as and when due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), of all amounts from time to time owing by such Pledgor
under the Notes, the Loan Agreement and the other Loan Documents to which such
Pledgor is a party, whether for principal, interest, premiums, indemnities,
fees, expenses or otherwise, and whether accruing before or subsequent to the
filing of a petition initiating a bankruptcy, reorganization, liquidation or
similar proceeding affecting such Pledgor (notwithstanding the operation of the
automatic stay under Section 362(a) of the United States Bankruptcy Code); and
(b) the due performance and observance by each of the Pledgors of
all of such Pledgor's other obligations from time to time existing in respect of
this Agreement and the other Loan Documents to which such Pledgor is a party.
SECTION 4. Delivery of the Pledged Collateral.
(a) All promissory notes currently evidencing the Initial Pledged
Debt and all certificates and instruments currently representing the Initial
Pledged Shares shall be delivered to the Administrative Agent on or prior to the
execution and delivery of this Agreement. All other promissory notes evidencing
Pledged Debt and all other certificates and instruments representing Pledged
Shares or other Pledged Collateral from time to time or otherwise required to be
pledged to the Administrative Agent pursuant to the terms of the Loan Agreement
or the terms of this Agreement (the "Additional Collateral") shall be delivered
to the Administrative Agent within 5 days of receipt thereof by or on behalf of
any of the Pledgors. All such promissory notes, certificates and instruments
shall be held by or on behalf of the Administrative Agent pursuant hereto and
shall be delivered in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Administrative Agent. Within 5 days of
the receipt by a Pledgor of the Additional Collateral, a Pledge Amendment
(Debt), in the case of Pledged Debt, or a Pledge
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Amendment (Stock), in the case of Pledged Shares, in each case duly executed by
such Pledgor, shall be delivered to the Administrative Agent in respect of the
Additional Collateral which is to be pledged pursuant to this Agreement and the
Loan Agreement, which Pledge Amendment shall from and after delivery thereof
constitute part of this Agreement. The Pledgors hereby authorize the
Administrative Agent to attach each Pledge Amendment to this Agreement and agree
that all promissory notes, certificates or instruments listed on any Pledge
Amendment delivered to the Administrative Agent shall for all purposes hereunder
constitute Pledged Collateral and the Pledgors shall be deemed upon delivery
thereof to have made the representations and warranties set forth in Section 5
hereof with respect to such Additional Collateral.
(b) If any Pledged Collateral consists of uncertificated securities,
the Pledgors shall (i) cause the Administrative Agent to become the registered
holder thereof, (ii) cause either the Securities Intermediary or another
securities intermediary, acceptable to the Administrative Agent, to become the
registered holder thereof, provided that such securities intermediary has agreed
in writing that it will comply with instructions originated by the
Administrative Agent with respect to such securities without further consent by
the Pledgors, or (iii) cause each issuer of such securities to agree that it
will comply with instructions originated by the Administrative Agent with
respect to such securities without further consent by the Pledgors. If any
Pledged Collateral consists of security entitlements, the Pledgors shall
transfer such security entitlements to the Administrative Agent, or cause the
applicable securities intermediary to agree that it will comply with entitlement
orders by the Administrative Agent without further consent by the Pledgors. The
Pledgors further agree to execute such other documents and to take such other
actions as the Administrative Agent deems reasonably necessary or desirable to
create and perfect the security interests intended to be created hereunder, to
effect the foregoing and to permit the Administrative Agent to exercise any of
its rights and remedies hereunder.
(c) If a Pledgor shall receive, by virtue of its being or having
been an owner of any Pledged Collateral, any (i) stock certificate (including,
without limitation, any certificate representing a stock dividend or
distribution in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of shares,
stock split, spin-off or split-off), promissory note or other instrument, (ii)
option or right, whether as an addition to, substitution for, or in exchange
for, any Pledged Collateral, or otherwise, (iii) dividends or other
distributions payable in cash (except such dividends permitted to be retained by
the Pledgors pursuant to Section 7 hereof) or in securities or other property or
(iv) dividends or other distributions in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in surplus, such Pledgor shall receive such stock certificate,
promissory note, instrument, option, right, payment or distribution in trust for
the benefit of the Administrative Agent, shall segregate it from such Pledgor's
other property and shall deliver it forthwith to the Administrative Agent in the
exact form received, with any necessary indorsement and/or appropriate stock
powers duly executed in blank, to be held by the Administrative Agent as Pledged
Collateral and as further collateral security for the Obligations.
SECTION 5. Representations and Warranties. Each of the Pledgors
represents and warrants to the Lenders and the Administrative Agent as
follows:
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(a) The promissory notes currently evidencing the Pledged Debt have
been, and all other promissory notes from time to time evidencing Pledged Debt,
when executed and delivered, will have been, duly authorized, executed and
delivered by the respective makers thereof, and all such promissory notes are or
will be, as the case may be, legal, valid and binding obligations of such
makers, enforceable against such makers in accordance with their respective
terms.
(b) The Pledged Shares have been duly authorized and validly issued,
are fully paid and nonassessable and constitute 100% of the issued shares of
Capital Stock of the Pledged Subsidiaries, except (i) in the case of each
Foreign Pledged Subsidiary, in which case such Pledged Shares constitute 65% of
the issued shares of Capital Stock of such Foreign Pledged Subsidiary, and (ii)
in the case of Collagen Aesthetics, Inc., a Delaware corporation and a
Subsidiary of the Purchaser ("Collagen"), in which case such Pledged Shares
constitute __% of the issued Shares of Capital Stock of Collagen. All other
shares of Capital Stock constituting Pledged Collateral will be, when issued,
duly authorized and validly issued, and fully paid and nonassessable.
(c) The exercise by the Administrative Agent of any of its rights
and remedies hereunder will not contravene any law or any contractual
restriction binding on or affecting any of the Pledgors or the Pledged
Subsidiaries or any of their respective properties, except where such
contravention would not reasonably be expected to have a Material Adverse
Effect, and will not result in or require the creation of any Lien, security
interest or other charge or encumbrance upon or with respect to any of their
properties.
(d) No authorization or approval or other action by, and no notice
to or filing with, any Governmental Authority, or any other Person, is required
for (i) the due delivery and performance by the Pledgors of this Agreement, (ii)
the grant by the Pledgors, or the perfection, of the security interest purported
to be created hereby in the Pledged Collateral or (iii) the exercise by the
Administrative Agent of any of its rights and remedies hereunder, except as may
be required in connection with any sale of any Pledged Collateral by laws
affecting the offering and sale of securities generally.
(e) This Agreement creates valid security interests in favor of the
Administrative Agent in the Pledged Collateral as security for the Obligations.
The Administrative Agent's having possession of the promissory notes evidencing
the Pledged Debt, the certificates representing the Pledged Shares and all other
certificates, instruments and money constituting Pledged Collateral from time to
time results in the perfection of such security interest in any instruments and
certificated securities constituting Pledged Collateral. If any Pledged
Collateral consists of uncertificated securities, the Administrative Agent's
security interest therein will be perfected upon the transfer of such securities
to the Administrative Agent, or upon the agreement of each issuer that it will
comply with instructions originated by the Administrative Agent with respect to
such securities without further consent by the Pledgor. If any Pledged
Collateral consists of security entitlements, the Administrative Agent's
security interest therein will be perfected upon the filing of appropriate UCC-1
Financing Statements, signed by the applicable Pledgor, or upon the agreement of
the applicable securities intermediary
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to comply with entitlement orders by the Administrative Agent without further
consent by such Pledgor. Such security interest is, or in the case of Pledged
Collateral in which any Pledgor obtains rights after the date hereof, will be, a
perfected, first priority security interest subject only to Permitted Liens. All
action necessary or desirable to perfect and protect such security interest has
been duly taken, except for the Administrative Agent's having possession of
certificates, instruments and cash constituting Pledged Collateral after the
date hereof and obtaining control of uncertificated securities and security
entitlements constituting Pledged Collateral after the date hereof.
SECTION 6. Covenants as to the Pledged Collateral. So long as any
Obligations shall remain outstanding, each of the Pledgors will, unless the
Administrative Agent shall otherwise consent in writing:
(a) keep adequate records concerning the Pledged Collateral pledged
by such Pledgor hereunder and permit the Administrative Agent, or any of its
agents or representatives at any time or from time to time, to examine and make
copies of and abstracts from such records pursuant to the terms of Section
5.01(e) of the Loan Agreement;
(b) at the Pledgors' joint and several expense, promptly deliver to
the Administrative Agent a copy of each material notice or other communication
received by any Pledgor in respect of Pledged Collateral;
(c) at the Pledgors' joint and several expense, defend the
Administrative Agent's right, title and security interest in and to the Pledged
Collateral against the claims of any Person;
(d) at the Pledgors' joint and several expense, at any time and from
time to time, promptly execute and deliver all further instruments and documents
and take all further action that may be necessary or that the Administrative
Agent may reasonably request in order to (i) perfect and protect the security
interest purported to be created hereby, (ii) enable the Administrative Agent to
exercise and enforce its rights and remedies hereunder in respect of the Pledged
Collateral or (iii) otherwise effect the purposes of this Agreement, including,
without limitation, delivering to the Administrative Agent, after the occurrence
and during the continuation of an Event of Default, irrevocable proxies in
respect of the Pledged Collateral;
(e) not sell, assign (by operation of law or otherwise), exchange or
otherwise dispose of any Pledged Collateral or any interest therein, except as
permitted by Section 7(a)(i) hereof and Section 5.02(c) of the Loan Agreement;
(f) not file or suffer to be on file, or authorize or permit to be
filed or to be on file, in any jurisdiction (foreign or domestic), any financing
statement, notice of lien or like instrument with respect to the Pledged
Collateral, except for a financing statement, notice of lien or like instrument
which is filed pursuant hereto or any other Loan Document;
(g) not permit the issuance of (i) any additional shares of any
class of Capital Stock of any Pledged Subsidiary unless such Capital Stock is
pledged to the Administrative
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Agent in accordance with this Agreement, (ii) any securities convertible
voluntarily by the holder thereof or automatically upon the occurrence or
non-occurrence of any event or condition into, or exchangeable for, any such
shares of Capital Stock, (iii) any warrants, options, contracts or other
commitments entitling any Person to purchase or otherwise acquire any such
shares of Capital Stock or (iv) any indebtedness to any Subsidiary, unless such
indebtedness (A) is evidenced by a promissory note which is delivered to the
Administrative Agent in accordance with Section 4(a) hereof and (B) is not
otherwise prohibited by Section 5.02 of the Loan Agreement;
(h) without at least 30 days' prior written notice to the
Administrative Agent, not (i) maintain any of its books and records with respect
to the Pledged Collateral at any office or maintain its principal place of
business at any place other than at the address on Schedule V hereto or (ii)
change its name, or the name under which it does business, from the name shown
on the signature pages hereto; and
(i) not take or fail to take any action which would in any manner
impair the enforceability of the Administrative Agent's security interest in any
Pledged Collateral.
SECTION 7. Voting Rights, Dividends, Etc. in Respect of the Pledged
Collateral.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) each Pledgor may exercise any and all voting and other
consensual rights pertaining to any Pledged Collateral to which such Pledgor is
entitled for any purpose not inconsistent with the terms of this Agreement, the
Loan Agreement or the other Loan Documents; provided, however, that (A) such
Pledgor will not exercise or refrain from exercising any such right, as the case
may be, if the Administrative Agent gives it notice that, in the Administrative
Agent's reasonable judgment, such action would cause a Material Adverse Effect,
and (B) such Pledgor will give the Administrative Agent at least 5 Business
Days' notice of the manner in which it intends to exercise, or the reasons for
refraining from exercising, any such right which could reasonably be expected to
cause a Material Adverse Effect;
(ii) each Pledgor may receive and retain any and all dividends
and interest paid in respect of the Pledged Collateral; provided, however, that
any and all (A) dividends and interest or other distributions paid or payable
other than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of or in exchange for, any
Pledged Collateral, (B) dividends and other distributions paid or payable in
cash in respect of any Pledged Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in surplus, and (C) cash paid, payable or otherwise distributed
in redemption of, in exchange for, or upon the sale of, any Pledged Collateral,
shall be, and shall forthwith be delivered to the Administrative Agent to hold
as, Pledged Collateral and shall, if received by any of the Pledgors, be
received in trust for the benefit of the Administrative Agent, shall be
segregated from the other property or funds of the Pledgors, and shall be
forthwith delivered to the Administrative Agent in the exact form received with
any necessary indorsement and/or appropriate stock powers duly executed in
blank, to be held by the Administrative Agent as Pledged Collateral and as
further collateral security for the Obligations; and
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(iii) the Administrative Agent will execute and deliver (or
cause to be executed and delivered) to each Pledgor all such proxies and other
instruments as any such Pledgor may reasonably request for the purpose of
enabling such Pledgor to exercise the voting and other rights which it is
entitled to exercise pursuant to paragraph (i) of this Section 7(a) and to
receive the dividends which it is authorized to receive and retain pursuant to
paragraph (ii) of this Section 7(a).
(b) Upon the occurrence and during the continuance of an Event of
Default and to the extent not inconsistent with the Loan Agreement:
(i) all rights of any of the Pledgors to exercise the voting
and other consensual rights which such Pledgor would otherwise be entitled to
exercise pursuant to paragraph (i) of subsection (a) of this Section 7, and to
receive the dividends and interest payments which such Pledgor would otherwise
be authorized to receive and retain pursuant to paragraph (ii) of subsection (a)
of this Section 7, shall cease, and all such rights shall thereupon become
vested in the Administrative Agent which shall thereupon have the sole right to
exercise such voting and other consensual rights and to receive and hold as
Pledged Collateral such dividends and interest payments;
(ii) without limiting the generality of the foregoing, the
Administrative Agent may at its option exercise any and all rights of
conversion, exchange, subscription or any other rights, privileges or options
pertaining to any of the Pledged Collateral as if it were the absolute owner
thereof, including, without limitation, the right to exchange, in its
discretion, any and all of the Pledged Collateral upon the merger,
consolidation, reorganization, recapitalization or other adjustment of any
Pledged Subsidiary, or upon the exercise by any Pledged Subsidiary of any right,
privilege or option pertaining to any Pledged Collateral, and, in connection
therewith, to deposit and deliver any and all of the Pledged Collateral with any
committee, depository, transfer agent, registrar or other designated agent upon
such terms and conditions as it may determine; and
(iii) all dividends and interest payments which are received
by the Pledgors contrary to the provisions of paragraph (i) of this Section 7(b)
shall be received in trust for the benefit of the Administrative Agent, shall be
segregated from other funds of the Pledgors, and shall be forthwith paid over to
the Administrative Agent as Pledged Collateral in the exact form received with
any necessary indorsement and/or appropriate stock powers duly executed in
blank, to be held by the Administrative Agent as Pledged Collateral and as
further collateral security for the Obligations.
SECTION 8. Additional Provisions Concerning the Pledged Collateral.
(a) Each of the Pledgors hereby authorizes the Administrative Agent
to file, without the signature of such Pledgor where permitted by law, one or
more financing or continuation statements, and amendments thereto, relating to
the Pledged Collateral.
(b) Each of the Pledgors hereby irrevocably appoints the
Administrative Agent the Pledgors' attorney-in-fact and proxy, with full
authority in the place and stead of such
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Pledgor and in the name of such Pledgor or otherwise, from time to time in the
Administrative Agent's discretion, to take any action and to execute any
instrument which the Administrative Agent may deem necessary or reasonably
advisable to accomplish the purposes of this Agreement (subject to the rights of
such Pledgor under Section 7(a) hereof), including, without limitation, upon the
occurrence of an Event of Default to receive, indorse and collect all
instruments made payable to such Pledgor representing any dividend, or other
distribution in respect of any Pledged Collateral and to give full discharge for
the same.
(c) If any Pledgor fails to perform any agreement or obligation
contained herein, the Administrative Agent itself may perform, or cause
performance of, such agreement or obligation, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by the
Pledgors pursuant to Section 10 hereof.
(d) Other than the exercise of reasonable care to assure the safe
custody of the Pledged Collateral while held hereunder, the Administrative Agent
shall have no duty or liability to preserve rights pertaining thereto and shall
be relieved of all responsibility for the Pledged Collateral upon surrendering
it or tendering surrender of it to any of the Pledgors or to the Parent on
behalf of the Pledgors. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its own
property, it being understood that the Administrative Agent shall not have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not the Administrative Agent has or is deemed to
have knowledge of such matters, or (ii) taking any necessary steps to preserve
rights against any parties with respect to any Pledged Collateral.
(e) The Administrative Agent may at any time in its discretion upon
notice to the Pledgors, (i) transfer or register in the name of the
Administrative Agent or any of its nominees any or all of the Pledged
Collateral, subject only to the revocable rights of the Pledgors under Section
7(a) hereof, and (ii) exchange certificates or instruments constituting Pledged
Collateral for certificates or instruments of smaller or larger denominations.
SECTION 9. Remedies Upon Default. If any Event of Default shall have
occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a secured party
upon default under the Code then in effect in the State of New York (whether or
not the Code is in effect in the jurisdiction where the rights and remedies are
asserted); and without limiting the generality of the foregoing and without
notice except as specified below, sell the Pledged Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange or
broker's board or elsewhere, at such price or prices and on such other terms as
the Administrative Agent may deem commercially reasonable. The Pledgors agree
that, to the extent notice of sale shall be required by law, at least 10 days'
notice to the Parent on behalf of the Pledgors of the time and place of any
public sale or the time
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after which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make any sale
of Pledged Collateral regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) In the event that the Administrative Agent determines to
exercise its right to sell all or any part of the Pledged Collateral pursuant to
subsection (a) of this Section 9, the Pledgors will, at the Pledgors' expense
and upon request by the Administrative Agent: (i) execute and deliver, and cause
each issuer of such Pledged Collateral and the directors and officers thereof to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts and things, as may be necessary or, in the reasonable
opinion of the Administrative Agent, advisable to register such Pledged
Collateral under the provisions of the Securities Act of 1933, as amended (the
"Securities Act"), and to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished, and to make all amendments and supplements
thereto and to the related prospectus which, in the reasonable opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto, (ii) cause each issuer of
such Pledged Collateral to qualify such Pledged Collateral under the state
securities or "Blue Sky" laws of each jurisdiction, and to obtain all necessary
governmental approvals for the sale of the Pledged Collateral, as requested by
the Administrative Agent, (iii) cause each Pledged Subsidiary to make available
to its securityholders, as soon as practicable, an earnings statement which will
satisfy the provisions of Section 11(a) of the Securities Act, and (iv) do or
cause to be done all such other acts and things as may be necessary to make such
sale of such Pledged Collateral valid and binding and in compliance with
applicable law. The Pledgors agree that a breach of any of the covenants
contained in this Section 9(b) will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 9(b) shall
be specifically enforceable against the Pledgors, and the Pledgors hereby waive
and agree not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred and
is continuing under the Loan Agreement.
(c) Notwithstanding the provisions of Section 9(b) hereof, the
Pledgors recognize that the Administrative Agent may deem it impracticable to
effect a public sale of all or any part of the Pledged Shares or any other
securities constituting Pledged Collateral and that the Administrative Agent
may, therefore, determine to make one or more private sales of any such
securities to a restricted group of purchasers who will be obligated to agree,
among other things, to acquire such securities for their own account, for
investment and not with a view to the distribution or resale thereof. The
Pledgors acknowledge that any such private sale may be at prices and on terms
less favorable to the seller than the prices and other terms which might have
been obtained at a public sale and, notwithstanding the foregoing, agree that
such private sales shall be deemed to have been made in a commercially
reasonable manner and that the Administrative Agent shall have no obligation to
delay sale of any such securities for the period
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of time necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act or any other applicable law.
The Pledgors further acknowledge and agree that any offer to sell such
securities which has been (i) publicly advertised on a bona fide basis in a
newspaper or other publication of general circulation in the financial community
of New York, New York (to the extent that such an offer may be so advertised
without prior registration under the Securities Act) or (ii) made privately in
the manner described above to not less than fifteen bona fide offerees shall be
deemed to involve a "public sale" for the purposes of Section 9-504(3) of the
Code (or any successor or similar, applicable statutory provision) as then in
effect in the State of New York, notwithstanding that such sale may not
constitute a "public offering" under the Securities Act, and that the
Administrative Agent may, in such event, bid for the purchase of such
securities.
(d) In addition to the other rights of the Administrative Agent set
forth in this Section 9, (i) the Administrative Agent shall have the right, to
the maximum extent permitted by law, to exercise all voting, consensual and
other powers of ownership pertaining to the Pledged Collateral as if it were the
sole and absolute owner thereof (and each Pledgor agrees to take all such action
as may be appropriate to give effect to such right), (ii) the Administrative
Agent in its discretion may, in its name or in the name of any of the Pledgors
or otherwise, demand, sue for, collect or receive any money or Property at any
time payable or receivable on account of or in exchange for any of the Pledged
Collateral, but shall have no obligation to do so, and (iii) the Administrative
Agent may make any compromise or settlement it deems desirable with respect to
any of the Pledged Collateral and may extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of, any of the Pledged
Collateral.
(e) Any cash held by the Administrative Agent as Pledged Collateral
and all cash proceeds received by the Administrative Agent in respect of any
sale of, collection from, or other realization upon, all or any part of the
Pledged Collateral may, in the discretion of the Administrative Agent, be held
by the Administrative Agent as collateral for, and/or then or at any time
thereafter applied (after payment of any amounts payable to the Administrative
Agent pursuant to Section 10 hereof) in whole or in part by the Administrative
Agent against, all or any part of the Obligations in such order as the
Administrative Agent shall elect. Any surplus of such cash or cash proceeds held
by the Administrative Agent and remaining after payment in full of all of the
Obligations shall be paid over to the Pledgors or to such Person as may be
lawfully entitled to receive such surplus.
(f) In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which the Administrative
Agent or the Lenders are legally entitled, the Pledgors shall be liable for the
deficiency, together with interest thereon at the highest rate specified in the
Loan Documents for interest on overdue principal thereof or such other rate as
shall be fixed by applicable law, together with the costs of collection and the
reasonable fees of any attorneys employed by the Administrative Agent and the
Lenders to collect such deficiency.
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SECTION 10. Indemnity and Expenses.
(a) The Pledgors agree, jointly and severally, to indemnify and hold
the Administrative Agent harmless from and against any and all claims, damages,
losses, liabilities, obligations, penalties, costs or expenses (including,
without limitation, reasonable legal fees, costs and expenses) arising out of or
resulting from this Agreement (including, without limitation, enforcement of
this Agreement), except claims, losses or liabilities resulting solely and
directly from the Administrative Agent's gross negligence or willful misconduct
as determined by the final non-appealable judgment of a court of competent
jurisdiction. The Administrative Agent may employ agents and attorneys-in-fact
in connection herewith and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
(b) The Pledgors agree, jointly and severally, to pay to the
Administrative Agent upon demand the amount of any and all reasonable costs and
expenses, including the reasonable fees and disbursements of the Administrative
Agent's counsel and of any experts and agents, which the Administrative Agent
may incur in connection with (i) the preparation, negotiation, execution,
delivery, recordation, administration, amendment, waiver or other modification
or termination of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any
Pledged Collateral, (iii) the exercise or enforcement of any of the rights of
the Administrative Agent or the Lenders hereunder, or (iv) the failure by any of
the Pledgors to perform or observe any of the provisions hereof, including,
without limitation, all manner of participation in or other involvement with (w)
performance by the Administrative Agent of any obligations of the Pledgors in
respect of the Pledged Collateral that the Pledgors have failed or refused to
perform, (x) bankruptcy, insolvency, receivership, foreclosure, winding up or
liquidation proceedings, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement in respect of any of the
Pledged Collateral, and for the care of the Pledged Collateral and defending or
asserting rights and claims of the Administrative Agent in respect thereof, by
litigation or otherwise, including expenses of insurance, (y) judicial or
regulatory proceedings and (z) workout, restructuring or other negotiations or
proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated).
SECTION 11. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed (by certified
mail, postage prepaid and return receipt requested or by overnight courier),
telecopied or delivered, if to any of the Pledgors, to such Pledgor at its
address specified in Schedule V hereto or to the Parent, on behalf of such
Pledgor, at its address specified in the Loan Agreement, if to the
Administrative Agent, to it at its address specified in the Loan Agreement, or
as to any of the parties, to such Person at such other address as shall be
designated by such Person in a written notice to such other Person complying as
to delivery with the terms of this Section 11. All such notices and other
communications shall be effective (i) if mailed, when received or three days
after mailing, (ii) if telecopied, when transmitted, provided same is on a
Business Day and, if not, on the next Business Day, and (iii) if delivered, when
delivered, provided same is on a business Day and, if not, on the next Business
Day.
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SECTION 12. Parent Appointed Agent. The Purchaser hereby designates
and appoints the Parent as the agent for the Purchaser, and the Purchaser hereby
authorizes the Parent, to execute notices, receive notices, receive summons of
process and take possession of Pledged Collateral on behalf of the Purchaser, in
each case in accordance with the terms hereof.
SECTION 13. Consent to Jurisdiction, Etc.
(a) Each of the Pledgors hereby irrevocably and unconditionally
submits, for itself and its Property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any document related
thereto, or for recognition or enforcement of any judgment, and each of the
Pledgors hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
Each of the Pledgors agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent may otherwise
have to bring any action or proceeding relating to this Agreement or any
document related thereto in the courts of any jurisdiction.
(b) Each of the Pledgors hereby irrevocably and unconditionally
consent to the service of process of any of the aforementioned courts in any
such action or proceeding. Each Pledgor hereby irrevocably consents to the
service of any and all process in any such action or proceeding by the mailing
of copies of such process to such Pledgor, or to the Parent on behalf of such
Pledgor, at its address specified in Section 11 hereof.
(c) Each of the Pledgors irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any documents related
thereto in any New York State or federal court. Each of the Pledgors hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
SECTION 14. Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, EACH OF THE PLEDGORS AND THE ADMINISTRATIVE AGENT (BY ACCEPTING THIS
AGREEMENT) IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE
ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
SECTION 15. Joint and Several. All of the obligations of the
Pledgors hereunder are joint and several. The Administrative Agent may, in its
sole and absolute discretion, enforce the provisions hereof against one or more
of the Pledgors and shall not be required to proceed against all of the Pledgors
jointly or seek payment from the Pledgors ratably. In addition, the
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Administrative Agent may, in its sole and absolute discretion, select the
Pledged Collateral of one or more of the Pledgors for sale or application to the
Obligations, without regard to the ownership of such Pledged Collateral, and
shall not be required to make such selection ratably from the Pledged Collateral
owned by all of the Pledgors. The release or discharge of any Pledgor by the
Administrative Agent shall not release or discharge the other Pledgors from the
obligations of such released or discharged Pledgor hereunder.
SECTION 16. Miscellaneous.
(a) Except as provided in Section 4(a) hereof with respect to a
Pledge Amendment, no amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by each of the Pledgors and the
Administrative Agent, and no waiver of any provision of this Agreement, and no
consent to any departure by any of the Pledgors therefrom, shall be effective
unless it is in writing and signed by the Administrative Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
(b) No failure on the part of the Administrative Agent to exercise,
and no delay in exercising, any right hereunder or under any other Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The rights and remedies of the Administrative Agent provided
herein and in the other Loan Documents are cumulative and are in addition to,
and not exclusive of, any rights or remedies provided by law. The rights of the
Administrative Agent under any Loan Document against any party thereto are not
conditional or contingent on any attempt by the Administrative Agent to exercise
any of its rights under any other Loan Document against such party or against
any other person.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
(d) This Agreement shall create a continuing security interest in
the Pledged Collateral and shall (i) remain in full force and effect until the
payment in full or release of the Obligations and (ii) be binding on the
Pledgors and their respective successors and assigns, and shall inure, together
with all rights and remedies of the Administrative Agent hereunder, to the
benefit of the Administrative Agent and its successors, transferees and assigns.
Without limiting the generality of clause (ii) of the immediately preceding
sentence, the Administrative Agent may assign or otherwise transfer its rights
and obligations under this Agreement to any other Person pursuant to the terms
of the Loan Agreement, and such other Person shall thereupon become vested with
all of the benefits in respect thereof granted to the Administrative Agent
herein or otherwise. Upon any such assignment or transfer, all references in
this Agreement to the Administrative Agent shall mean the assignee of the
Administrative Agent. None of the rights or obligations of any of the Pledgors
hereunder may be assigned or otherwise transferred
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without the prior written consent of the Administrative Agent, and any such
assignment or transfer shall be null and void.
(e) (i) Upon any sale or other disposition of any Pledged
Collateral permitted by the Loan Agreement, (A) the security interest created
hereby in such Pledged Collateral shall terminate and all rights to such Pledged
Collateral shall revert to the Pledgors, and (B) the Administrative Agent will,
upon the Pledgors' request and at the Pledgors' joint and several expense,
promptly (x) return to the Parent on behalf of the Pledgors the Pledgors'
Pledged Collateral to be sold or disposed of and (y) execute and deliver to any
of the Pledgors, without any recourse, representation or warranty whatsoever,
such documents as the Pledgors shall reasonably request to evidence such
termination.
(ii) Upon the satisfaction in full of the Obligations, (i)
this Agreement and the security interest created hereby shall terminate and all
rights to the Pledged Collateral shall revert to the Pledgors, and (ii) the
Administrative Agent will, upon the Pledgors' request and at the Pledgors' joint
and several expense, promptly (A) return to the Parent on behalf of the Pledgors
such of the Pledged Collateral as shall not have been sold or otherwise disposed
of or applied pursuant to the terms hereof and (B) execute and deliver to any of
the Pledgors, without recourse, representation or warranty, such documents as
such Pledgor shall reasonably request to evidence such termination.
(f) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT APPLYING ANY CONFLICTS OF LAWS
PRINCIPLES EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW), EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT
THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION
OR NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE
LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(g) The section headings appearing herein are included solely for
convenience of reference and are not intended to affect the interpretation of
any provision of this Agreement.
(h) This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be effective as delivery of
a manually executed counterpart of this Agreement.
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IN WITNESS WHEREOF, the Pledgors have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized,
as of the date first above written.
PLEDGORS:
INAMED CORPORATION
By:
---------------------------------------
Name:
Title:
COLLAGEN AESTHETICS, INC.
By:
---------------------------------------
Name:
Title:
16
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SCHEDULE I TO PLEDGE AND SECURITY AGREEMENT
Pledged Debt
Principal Amount
Outstanding as of
Name of Payee [Description] Interest Rate
- ------------- ------------- ------------- -----------------
151
SCHEDULE II TO PLEDGE AND SECURITY AGREEMENT
PLEDGE AMENDMENT (DEBT)
This Pledge Amendment, dated ___________________________, is
delivered pursuant to Section 4 of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge and Security Agreement, dated as of September ___, 1999, as it may
heretofore have been or hereafter may be amended, restated or otherwise modified
or supplemented from time to time (the "Pledge Agreement"), and that the
indebtedness listed on this Pledge Amendment shall be and become part of the
Pledged Collateral referred to in said Pledge Agreement and shall secure all of
the Obligations referred to in said Pledge Agreement.
Pledged Debt
Principal Amount
Outstanding as of
Name of Payee [Description] Interest Rate
- ------------- ------------- ------------- -----------------
[PLEDGOR]
By:
------------------------------
Name:
Title:
152
SCHEDULE III TO PLEDGE AND SECURITY AGREEMENT
Pledged Shares
153
SCHEDULE IV TO PLEDGE AND SECURITY AGREEMENT
PLEDGE AMENDMENT
This Pledge Amendment, dated ___________________________, is
delivered pursuant to Section 4 of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge and Security Agreement, dated as of September ___, 1999, as it may
heretofore have been or hereafter may be amended, restated or otherwise modified
or supplemented from time to time (the "Pledge Agreement"), and that the shares
listed on this Pledge Amendment shall be and become part of the Pledged
Collateral referred to in said Pledge Agreement and shall secure all of the
Obligations referred to in said Pledge Agreement.
Pledged Shares
Number Certificate
Name of Issuer Jurisdiction of Shares Class No.(s)
- -------------- ------------ --------- ----- -----------
[PLEDGOR]
By:
------------------------------
Name:
Title:
154
SCHEDULE V TO PLEDGE AND SECURITY AGREEMENT
Executive Office/Location of Books and Records
155
EXHIBIT G
BORROWER SECURITY AGREEMENT
SECURITY AGREEMENT, dated September __, 1999 (this "Agreement"),
made by INAMED CORPORATION, a Delaware corporation (the "Parent"), and COLLAGEN
AESTHETICS, INC., a Delaware corporation (the "Purchaser", and together with the
Parent, each a "Grantor" and collectively, the "Grantors"), in favor of ABLECO
FINANCE LLC, as administrative agent for the Lenders (as hereinafter defined)
party to the Loan Agreement referred to below (in such capacity, together with
its successors in such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Grantors, the Administrative Agent, and the lenders
from time to time party thereto (each a "Lender" and collectively, the
"Lenders") have entered into a Loan Agreement, dated as of September 1, 1999
(such Loan Agreement, as amended, restated, supplemented or otherwise modified
from time to time, the "Loan Agreement"), pursuant to which the Lenders have
agreed to make a loan to the Grantors in the principal amount of $155,000,000
(the "Loan");
WHEREAS, it is a condition precedent to the making and maintaining
of the Loan by the Lenders pursuant to the Loan Agreement that each of the
Grantors shall have executed and delivered to the Administrative Agent a
security agreement providing for the grant to the Administrative Agent, for the
benefit of itself and the Lenders, of a security interest in all personal
property of the Grantors; and
WHEREAS, each of the Grantors has determined that the execution,
delivery and performance by such Grantor of this Agreement directly benefit, and
are within the corporate purposes and in the best interest of, such Grantor.
NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Administrative Agent and the Lenders to enter
into the Loan Agreement and the Lenders to make and maintain the Loan pursuant
to the Loan Agreement, the Grantors hereby agree with the Administrative Agent
as follows:
SECTION 1. Definitions. Reference is hereby made to the Loan
Agreement for a statement of the terms thereof. All terms used in this Agreement
which are defined in the Loan Agreement or in Article 8 or Article 9 of the
Uniform Commercial Code (the "Code") currently in effect in the State of New
York and which are not otherwise defined herein shall have the same meanings
herein as set forth therein.
SECTION 2. Grant of Security Interest. As collateral security for
all of the Obligations (as defined in Section 3 hereof), each Grantor hereby
pledges and assigns to the
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Administrative Agent for the benefit of itself and the Lenders, and grants to
the Administrative Agent for the benefit of itself and the Lenders a continuing
security interest in, all personal property and fixtures of such Grantor,
wherever located and whether now or hereafter existing and whether now owned or
hereafter acquired, of every kind and description, tangible or intangible (the
"Collateral"), including, without limitation, all of such Grantor's right, title
and interest in and to the following:
(a) all equipment of any kind (including, without limitation, all
furniture, fixtures and machinery and all motor vehicles, tractors and other
like property, whether or not the title thereto is governed by a certificate of
title or ownership (such motor vehicles, tractors and other like property
hereinafter collectively referred to as the "Motor Vehicles"), wherever located
and whether now or hereafter existing and whether now owned or hereafter
acquired, together with all substitutes, replacements, accessions and additions
thereto, and all tools, parts, accessories and attachments used in connection
therewith (hereinafter collectively referred to as the "Equipment");
(b) all inventory of any kind wherever located and whether now or
hereafter existing and whether now owned or hereafter acquired (including,
without limitation, all types of inventory, merchandise, goods, tangible
personal property and other assets that are held by such Grantor for sale, lease
or other disposition in the ordinary course of such Grantor's business or to be
furnished under a contract for services, whether such inventory, merchandise,
goods, tangible personal property and other assets are raw, in process and
finished, and materials used or consumed in the business of such Grantor, and
goods returned to or repossessed by such Grantor and goods in which such Grantor
has an interest in mass or in joint or other interest or right of any kind
including consigned goods and goods being processed), and all accessions thereto
and products thereof and all packing and shipping materials (hereinafter
collectively referred to as the "Inventory");
(c) (i) all present and future accounts, contract rights, chattel
paper, documents, general intangibles, instruments and other obligations of any
kind, whether now or hereafter existing and whether now owned or hereafter
acquired, arising out of or in connection with the sale or lease of goods or the
rendering of services or otherwise; (ii) all moneys, securities and other
property and the proceeds thereof, now or hereafter held or received by, or in
transit to, the Administrative Agent or any Lender from or for such Grantor,
whether for safekeeping, pledge, custody, transmission, collection or otherwise,
and all of such Grantor's claims against the Administrative Agent or any Lender
at any time existing; (iii) all rights, remedies, security and liens, in, to and
in respect of any credit insurance, accounts (including, without limitation,
rights of stoppage in transit, replevin, repossession, reclamation and other
rights and remedies of an unpaid vendor, lienor or secured party), guaranties or
other contracts of suretyship with respect to accounts, and deposits or other
security for the obligation of any account debtor; (iv) all rights relating to
the sale or other transfer of property to, or the construction, renovation or
other improvement of property by or for such Grantor; (v) all right, title and
interest in, to and in respect of all goods relating to, or which by sale have
resulted in, accounts, including, without limitation, all goods described in
invoices or other documents or instruments with respect to, or otherwise
representing or evidencing, any accounts, and all
157
returned, reclaimed or repossessed goods; and (vi) all rights now or hereafter
existing in and to all security agreements, leases and other contracts now or
hereafter existing and securing or otherwise relating to any accounts, contract
rights, chattel paper, instruments, documents, or other rights or obligations
(any and all such accounts, contract rights, chattel paper, instruments,
documents, and rights and obligations being hereinafter referred to as the
"Receivables" and any and all such security agreements, leases and other
contracts being hereinafter referred to as the "Related Contracts");
(d) (i) all general intangibles; (ii) all rights, interest, choses
in action, causes of actions, claims and all other intangible property of every
kind and nature, in each instance whether now owned or hereafter acquired by
such Grantor, including, without limitation, all corporate and other business
records, all loans, royalties, and all other forms of obligations receivable
whatsoever (other than Receivables); (iii) all trademarks, patents, trade
secrets, copyrights, goodwill, inventions, designs, registrations, permits; (iv)
all computer programs, software, printouts and other computer materials,
customer lists, credit files, correspondence, and advertising materials; (v) all
customer and supplier contracts, sale orders, rights under license and franchise
agreements, and other contracts and contract rights; (vi) all interests in
partnerships and joint ventures, including all moneys due from time to time in
respect thereof; (vii) all federal, state and local tax refunds and federal,
state and local tax refund claims; (viii) all right, title and interest under
leases, subleases and concessions and other agreements relating to personal
property, including all moneys due from time to time in respect thereof; (ix)
all payments due or made to such Grantor in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of any property by any Person
or Governmental Authority; (x) all deposit accounts (general or special) with
any bank or other financial institution, including, without limitation, any
depository or other accounts maintained by such Grantor with the Administrative
Agent or any Lender and all funds on deposit thereon and the accounts set forth
in Schedule IV hereto; (xi) all credits with and other claims against third
parties (including carriers and shippers) (other than Receivables); (xii) all
rights to indemnification; (xiii) all reversionary interests in pension and
profit sharing plans and reversionary, beneficial and residual interests in
trusts; (xiv) all proceeds of insurance, including credit insurance, of which
such Grantor is the beneficiary; (xv) all letters of credit, guaranties, liens,
security interests and other security held by or granted to such Grantor; and
(xvi) all other intangible property, whether or not similar to the foregoing, in
each instance, however and wherever arising (hereinafter collectively referred
to as "General Intangibles");
(e) (i) all trademarks, service marks, trade names, business names,
trade dress, designs, logos and other source or business identifiers and all
general intangibles of like nature, and all rights concerning the foregoing,
whether now or hereafter owned, adopted, acquired or used by such Grantor
(including, without limitation, all trademarks, service marks, trade names,
business names, trade dress, designs, logos and other source or business
identifiers described in Schedule I or V hereto), all applications,
registrations and recordings thereof (including, without limitation,
applications, registrations and recordings in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state thereof or any other country or any political subdivision thereof), and
all reissues, extensions or renewals thereof, together with all goodwill of the
business symbolized by such marks and all customer lists,
158
formulae and other records of such Grantor relating to the distribution of
products and services in connection with which any of such marks are used, and
all income, royalties, damages and payments now or hereafter due and/or payable
under and with respect thereto, including, without limitation, payments under
all licenses entered into in connection therewith and damages and payments for
past and future infringements or other violations thereof and the right to sue
for past, present and future infringements and other violations thereof
(hereinafter referred to collectively as the "Trademarks"); and (ii) all
licenses, contracts or other agreements, whether written or oral, naming or
otherwise positioning such Grantor as licensor or licensee and providing for the
grant of any right to use any Trademark, including, without limitation, all
agreements described in Schedule I hereto, together with any goodwill connected
with and symbolized by any such trademark licenses or agreements and the right
to prepare for sale and sell any and all Inventory now or hereafter owned by
such Grantor and now or hereafter covered by such licenses (hereinafter referred
to collectively as the "Trademark Licenses");
(f) (i) all letters patent, design patents and utility patents, and
all copyrights, inventions, trade secrets, proprietary information and
technology, know-how, formulae and other general intangibles of like nature, and
all rights concerning the foregoing, whether now existing or hereafter acquired
(including, without limitation, all letters patent, design patents and utility
patents described in Schedule II hereto), all applications, registrations and
recordings thereof (including, without limitation, applications, registrations
and recordings in the United States Patent and Trademark Office or in any
similar office or agency of the United States or any other country or any
political subdivision thereof), and all reissues, divisions, continuations,
continuations in part and extensions or renewals thereof (hereinafter referred
to collectively as the "Patents"); and (ii) all licenses, contracts or other
agreements, whether written or oral, naming or otherwise positioning such
Grantor as licensee or licensor and providing for the grant of any right to
manufacture, use or sell any invention covered by, or of any right to otherwise
exploit, any Patent, including, without limitation, all agreements set forth in
Schedule II hereto (hereinafter referred to collectively as the "Patent
Licenses" and together with the Trademark Licenses, the "Licenses");
(g) (i) all investment property, securities (other than shares of
voting stock of each class of any Foreign Subsidiary in excess of 65% of the
total issued and outstanding shares of the voting stock of such class),
securities accounts, financial assets and all securities entitlements of such
Grantor in any of the foregoing;
(h) all rights of such Grantor in, to and under the Tender Offer
Documents and the Merger Documents;
(i) the books and records of such Grantor relating to any of the
foregoing Collateral, including, without limitation, all customer contracts,
sale orders, minute books, ledgers, records, computer programs, software,
printouts and other computer materials, customer lists, credit files,
correspondence and advertising materials, in each case indicating, summarizing
or evidencing any of the Collateral; and
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(j) all cash and non-cash proceeds of any and all of the foregoing
Collateral (including without limitation, (i) damages for past and future
infringements of the Trademarks or the Patents and (ii) the right to sue for
past, present and future infringements of the Trademarks or the Patents) and, to
the extent not otherwise included, all payments under insurance (whether or not
the Administrative Agent is the loss payee thereof), and any indemnity, warranty
or guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral; in each case, however such Grantor's interest
therein may arise or appear (whether by ownership, security interest, claim or
otherwise).
Notwithstanding anything herein to the contrary, in no event shall
the Collateral include, and no Grantor shall be deemed to have granted a
security interest in, any of such Grantor's rights or interests in any license,
contract or agreement to which such Grantor is a party or any of its rights or
interests thereunder to the extent that such a grant would, under the express
terms of such license, contract or agreement or otherwise, result in a breach of
the terms of, or constitute a default under such license, contract or agreement
(other than to the extent that any such term would be rendered ineffective
pursuant to Section 9-318(4) of the Uniform Commercial Code of any relevant
jurisdiction or any other applicable law (including the Bankruptcy Code) or
principles of equity; and provided that the Collateral shall include (y) any and
all proceeds of such item of Collateral to the extent that the assignment or
encumbering of such proceeds is not so restricted, and (z) upon any such
licensor or other applicable party's consent with respect to any such otherwise
excluded item of Collateral being obtained, thereafter such item of Collateral
as well as any proceeds thereof that might theretofore have been excluded from
such grant, assignment, transfer, and conveyance of a security interest and the
term Collateral.
SECTION 3. Security for Obligations. The security interest created
hereby in the Collateral constitutes continuing collateral security for all of
the following obligations, whether now existing or hereafter incurred (the
"Obligations"):
(a) the prompt payment by each of the Grantors, as and when due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), of all amounts from time to time owing by such Grantor
under the Notes, the Loan Agreement and the other Loan Documents to which such
Grantor is a party, whether for principal, interest, premiums, indemnities,
fees, expenses or otherwise, and whether accruing before or subsequent to the
filing of a petition initiating a bankruptcy, reorganization, liquidation or
similar proceeding affecting such Pledgor (notwithstanding the operation of the
automatic stay under Section 362(a) of the United States Bankruptcy Code); and
(b) the due performance and observance by each of the Grantors of
all of such Grantor's other obligations from time to time existing in respect of
this Agreement and the other Loan Documents to which such Grantor is a party.
SECTION 4. Representations and Warranties. Each of the Grantors
represents and warrants to the Lenders and the Administrative Agent as
follows:
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(a) All Equipment and Inventory now existing is, and except as
otherwise provided in Section 5(b) hereof, all Equipment and Inventory hereafter
existing will be, located at the addresses specified therefor in Schedule III
hereto beneath the name of each Grantor. Each Grantor's chief place of business
and chief executive office, the place where such Grantor keeps its records
concerning Receivables and all originals of all chattel paper which constitute
Receivables are located at the addresses specified therefor in Schedule III
hereto beneath the name of such Grantor. None of the Receivables is evidenced by
a promissory note or other instrument. Set forth in Schedule V hereto is a
complete and correct list of each trade name used by each Grantor. Set forth in
Schedule IV hereto is a complete and correct list of each bank and securities
account of each Grantor, together with the address of such institution, the
account number and the type of account.
(b) Each Grantor has delivered to the Administrative Agent complete
and correct copies of each material Trademark License described in Schedule I
hereto beneath such Grantor's name and each material Patent License described in
Schedule II hereto beneath such Grantor's name, including all schedules and
exhibits thereto. Each Related Contract and License sets forth the entire
agreement and understanding of the parties thereto relating to the subject
matter thereof, and there are no other agreements, arrangements or
understandings, written or oral, relating to the matters covered thereby or the
rights of such Grantor or any of its Affiliates in respect thereof. Each Related
Contract and License now existing is, and each other Related Contract and
License will be, the legal, valid and binding obligation of the parties thereto,
enforceable against such parties in accordance with its terms. No default
thereunder by any such party has occurred, nor does any defense, offset,
deduction or counterclaim exist thereunder in favor of any such party.
(c) Each Grantor owns and controls, or otherwise possesses adequate
rights to use, all Trademarks and Patents which it purports to grant a security
interest in pursuant to Section 2 hereof, which are the only trademarks, patents
or other intellectual property or proprietary rights necessary to conduct its
business in substantially the same manner as conducted as of the date hereof.
Schedule I hereto sets forth a true and complete list of all material,
registered, issued or applied for Trademarks and Trademark Licenses owned or
used by such Grantor as of the date hereof beneath such Grantor's name. Schedule
II hereto sets forth a true and complete list of all material, registered,
issued or applied for Patents and Patent Licenses owned or used by such Grantor
as of the date hereof beneath such Grantor's name. All of such Patents and
Trademarks are subsisting and in full force and effect, have not been adjudged
invalid or unenforceable, are, to such Grantor's knowledge, valid and
enforceable, and have not been abandoned in whole or in part. Except as set
forth in Schedule I or II hereto, none of such Patents or Trademarks is the
subject of any licensing or franchising agreement. None of the Grantors has
knowledge of any conflict with the rights of others to any Trademark or Patent
and, to the best knowledge of each Grantor, none of the Grantors is now
infringing or in conflict with any such rights of others in any material
respect, and to the best knowledge of such Grantor, no other Person is now
infringing or in conflict in any material respect with any such properties,
assets and rights owned or used by any Grantor.
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(d) No effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording or
filing office, except such as may have been filed in favor of the Administrative
Agent relating to this Agreement or any other Security Document and with respect
to Permitted Liens.
(e) The exercise by the Administrative Agent of any of its rights
and remedies hereunder will not contravene law or any contractual restriction
binding on or otherwise affecting any Grantor or any of such Grantor's
properties except where such contravention could not reasonably be expected to
have a Material Adverse Effect and will not result in or require the creation of
any Lien upon or with respect to any of such Grantor's properties.
(f) No authorization or approval or other action by, and no notice
to or filing with, any Governmental Authority, or any other Person, is required
for (i) the grant by any Grantor, or the perfection, of the security interest
purported to be created hereby in any Collateral or (ii) the exercise by the
Administrative Agent of any of its rights and remedies hereunder, except (A)
with respect to the perfection of the security interest created hereby in United
States Trademarks and Patents, for the recording of the Assignment for Security
(Trademarks) and Assignment for Security (Patents) referred to in Section 5(h)
hereof in the United States Patent and Trademark Office, (B) the filing under
the Uniform Commercial Code as in effect in the applicable jurisdiction of the
financing statements in the filing offices described in Schedule VII hereto, all
of which financing statements have been duly filed and are in full force and
effect, (C) with respect to the perfection of the security interest created
hereby in foreign Trademarks and Patents, for registrations and filings in
jurisdictions located outside of the United States and covering rights in such
jurisdictions relating to Patents, Trademarks, Patent Licenses and Trademark
Licenses, or (D) with respect to the perfection of the security interest created
hereby in Motor Vehicles, for the submission of an appropriate application,
together with the certificate of title, with respect to each Motor Vehicle, to
the appropriate state agency.
(g) This Agreement creates valid security interests in favor of the
Administrative Agent in the Collateral which each Grantor purports to grant a
security interest in pursuant to Section 2 hereof, as security for the
Obligations. The Administrative Agent's having possession of all instruments and
cash constituting Collateral from time to time, the recording of the Assignment
for Security (Patents) and the Assignment for Security (Trademarks) executed
pursuant hereto in the United States Patent and Trademark Office, the filing of
the financing statements described in Schedule VII hereto and, with respect to
Patents and Trademarks hereafter existing and not covered by such Assignment for
Security (Patents) or such Assignment for Security (Trademarks), the recording
in the United States Patent and Trademark Office of appropriate instruments of
assignment, result in the perfection of such security interests. Such security
interests are, or in the case of Collateral in which any Grantor obtains rights
after the date hereof, will be, perfected, first priority security interests,
subject only to the security interests and other encumbrances described in
Schedule VI hereto, any other Permitted Liens and the recording of such
instruments of assignment. Such recordings and filings and all other action
necessary or desirable to perfect and protect such security interest have been
duly taken, except
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for the Administrative Agent's having possession of instruments and cash
constituting Collateral after the date hereof and the other filings and
recordations described in Section 4(h) hereof.
SECTION 5. Covenants as to the Collateral. So long as any of the
Obligations shall remain outstanding, unless the Administrative Agent shall
otherwise consent in writing:
(a) Further Assurances. The Grantors will, at their joint and
several expense, at any time and from time to time, promptly execute and deliver
all further instruments and documents and take all further action that may be
necessary or desirable or that the Administrative Agent may reasonably request
in order (i) to perfect and protect the security interest purported to be
created hereby, (ii) to enable the Administrative Agent to exercise and enforce
its rights and remedies hereunder in respect of the Collateral, or (iii)
otherwise to effect the purposes of this Agreement, including, without
limitation: (A) marking conspicuously each chattel paper included in the
Receivables and each License and Related Contract and, at the reasonable request
of the Administrative Agent, each of its records pertaining to the Collateral
with a legend, in form and substance reasonably satisfactory to the
Administrative Agent, indicating that such chattel paper, License, Related
Contract or Collateral is subject to the security interest created hereby, (B)
if any Receivable shall be evidenced by a promissory note or other instrument or
chattel paper, delivering and pledging to the Administrative Agent hereunder
such note, instrument or chattel paper duly endorsed and accompanied by executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to the Administrative Agent, (C) executing and filing such
financing or continuation statements, or amendments thereto, as may be necessary
or desirable or that the Administrative Agent may reasonably request in order to
perfect and preserve the security interest purported to be created hereby, (D)
furnishing to the Administrative Agent from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Administrative Agent may
reasonably request, all in reasonable detail, and (E) upon the acquisition after
the date hereof by any Grantor of any Equipment with a fair market value in
excess of $75,000 covered by a certificate of title or ownership, cause the
Administrative Agent to be listed as the lienholder on such certificate of title
and within 60 days of the acquisition thereof deliver evidence of the same to
the Administrative Agent.
(b) Location of Equipment and Inventory. Each Grantor will keep the
Equipment and Inventory (other than used Equipment and Inventory sold in the
ordinary course of business in accordance with Section 5.02(c) of the Loan
Agreement and Equipment and Inventory in transit) at the locations specified
therefor in Section 4(a) hereof, or, upon not less than 30 Business Days' prior
written notice to the Administrative Agent accompanied by a new Schedule III
hereto indicating each new location of the Equipment and Inventory, at such
other locations in the continental United States as the Grantors may elect,
provided that (i) all action has been taken to grant the Administrative Agent a
perfected, first priority security interest in such Equipment and Inventory,
subject to Permitted Liens and (ii) the Administrative Agent's rights in such
Equipment and Inventory, including, without limitation, the existence,
perfection and priority of the security interest created hereby in such
Equipment and Inventory are not adversely affected.
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(c) Insurance.
(I) EACH GRANTOR WILL, AT ITS OWN EXPENSE, MAINTAIN INSURANCE
(INCLUDING, WITHOUT LIMITATION, COMPREHENSIVE GENERAL LIABILITY AND HAZARD
INSURANCE) WITH RESPECT TO THE EQUIPMENT AND INVENTORY OWNED BY IT IN SUCH
AMOUNTS, AGAINST SUCH RISKS, IN SUCH FORM AND WITH SUCH INSURERS AS IS GENERALLY
CARRIED BY COMPANIES ENGAGED IN SIMILAR BUSINESSES AS THOSE ENGAGED IN BY THE
GRANTORS. EACH POLICY FOR LIABILITY INSURANCE SHALL PROVIDE FOR ALL LOSSES TO BE
PAID ON BEHALF OF THE ADMINISTRATIVE AGENT AND SUCH GRANTOR AS THEIR RESPECTIVE
INTERESTS MAY APPEAR, AND EACH POLICY FOR PROPERTY DAMAGE INSURANCE SHALL
PROVIDE FOR ALL LOSSES (EXCEPT FOR LOSSES OF LESS THAN $100,000 PER OCCURRENCE)
TO BE ADJUSTED WITH, AND PAID DIRECTLY TO, THE ADMINISTRATIVE AGENT. EACH SUCH
POLICY SHALL IN ADDITION (A) NAME SUCH GRANTOR AND THE ADMINISTRATIVE AGENT AS
INSURED PARTIES THEREUNDER (WITHOUT ANY REPRESENTATION OR WARRANTY BY OR
OBLIGATION UPON THE ADMINISTRATIVE AGENT) AS THEIR INTERESTS MAY APPEAR, (B)
CONTAIN THE AGREEMENT BY THE INSURER THAT ANY LOSS THEREUNDER SHALL BE PAYABLE
TO THE ADMINISTRATIVE AGENT ON ITS OWN ACCOUNT NOTWITHSTANDING ANY ACTION,
INACTION OR BREACH OF REPRESENTATION OR WARRANTY BY ANY GRANTOR, (C) PROVIDE
THAT THERE SHALL BE NO RECOURSE AGAINST THE ADMINISTRATIVE AGENT FOR PAYMENT OF
PREMIUMS OR OTHER AMOUNTS WITH RESPECT THERETO, AND (D) PROVIDE THAT AT LEAST 30
DAYS' PRIOR WRITTEN NOTICE OF CANCELLATION OR OF LAPSE SHALL BE GIVEN TO THE
ADMINISTRATIVE AGENT BY THE INSURER. EACH GRANTOR WILL, IF SO REQUESTED BY THE
ADMINISTRATIVE AGENT, DELIVER TO THE ADMINISTRATIVE AGENT ORIGINAL OR DUPLICATE
POLICIES OF SUCH INSURANCE AND, AS OFTEN AS THE ADMINISTRATIVE AGENT MAY
REASONABLY REQUEST, A REPORT OF A REPUTABLE INSURANCE BROKER WITH RESPECT TO
SUCH INSURANCE. EACH GRANTOR WILL ALSO, AT THE REQUEST OF THE ADMINISTRATIVE
AGENT, EXECUTE AND DELIVER INSTRUMENTS OF ASSIGNMENT OF SUCH INSURANCE POLICIES
AND USE REASONABLE EFFORTS TO CAUSE THE RESPECTIVE INSURERS TO ACKNOWLEDGE
NOTICE OF SUCH ASSIGNMENT.
(II) REIMBURSEMENT UNDER ANY LIABILITY INSURANCE MAINTAINED BY
A GRANTOR PURSUANT TO THIS SECTION 5(C) MAY BE PAID DIRECTLY TO THE PERSON WHO
SHALL HAVE INCURRED LIABILITY COVERED BY SUCH INSURANCE. IN THE CASE OF ANY LOSS
INVOLVING DAMAGE TO EQUIPMENT OR INVENTORY AS TO WHICH PARAGRAPH (III) OF THIS
SECTION 5(C) IS NOT APPLICABLE, EACH GRANTOR WILL MAKE OR CAUSE TO BE MADE THE
NECESSARY REPAIRS TO OR REPLACEMENTS OF SUCH EQUIPMENT OR INVENTORY, AND ANY
PROCEEDS OF INSURANCE MAINTAINED BY SUCH GRANTOR PURSUANT TO THIS SECTION 5(C)
SHALL BE PAID BY THE ADMINISTRATIVE AGENT TO SUCH GRANTOR AS REIMBURSEMENT FOR
THE COSTS OF SUCH REPAIRS OR REPLACEMENTS.
(III) UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT OR UPON THE ACTUAL OR CONSTRUCTIVE TOTAL LOSS (IN EXCESS OF
$100,000 PER OCCURRENCE) OF ANY EQUIPMENT OR INVENTORY, ALL INSURANCE PAYMENTS
IN RESPECT OF SUCH EQUIPMENT OR INVENTORY SHALL BE PAID TO THE ADMINISTRATIVE
AGENT AND APPLIED AS SPECIFIED IN SECTION 7(B) HEREOF.
(D) PROVISIONS CONCERNING THE RECEIVABLES, THE RELATED CONTRACTS AND
THE LICENSES.
(I) EACH GRANTOR WILL (A) GIVE THE ADMINISTRATIVE AGENT AT
LEAST 30 DAYS' PRIOR WRITTEN NOTICE OF ANY CHANGE IN SUCH GRANTOR'S NAME,
IDENTITY OR ORGANIZATIONAL STRUCTURE, (B) KEEP ITS CHIEF PLACE OF BUSINESS AND
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CHIEF EXECUTIVE OFFICE AND ALL ORIGINALS OF ALL CHATTEL PAPER WHICH CONSTITUTE
RECEIVABLES AT THE LOCATION(S) SPECIFIED THEREFOR BENEATH SUCH GRANTOR'S NAME IN
SCHEDULE III HEREOF, AND (C) KEEP ADEQUATE RECORDS CONCERNING THE RECEIVABLES
AND SUCH CHATTEL PAPER AND PERMIT REPRESENTATIVES OF THE ADMINISTRATIVE AGENT AT
ANY TIME UPON REASONABLE NOTICE AND, PRIOR TO THE OCCURRENCE AND CONTINUANCE OF
A DEFAULT, DURING NORMAL BUSINESS HOURS TO INSPECT AND MAKE ABSTRACTS FROM SUCH
RECORDS AND CHATTEL PAPER.
(II) EACH GRANTOR WILL DULY PERFORM AND OBSERVE ALL OF ITS
OBLIGATIONS UNDER EACH RELATED CONTRACT AND LICENSE, EXCEPT AS OTHERWISE
PROVIDED IN THIS SUBSECTION (F), CONTINUE TO COLLECT, AT ITS OWN EXPENSE, ALL
AMOUNTS DUE OR TO BECOME DUE UNDER THE RECEIVABLES. IN CONNECTION WITH SUCH
COLLECTIONS, EACH GRANTOR MAY (AND, AT THE ADMINISTRATIVE AGENT'S DIRECTION,
WILL) TAKE SUCH ACTION AS SUCH GRANTOR OR THE ADMINISTRATIVE AGENT MAY DEEM
NECESSARY OR ADVISABLE TO ENFORCE COLLECTION OR PERFORMANCE OF THE RECEIVABLES;
PROVIDED, HOWEVER, THAT, THE ADMINISTRATIVE AGENT SHALL HAVE THE RIGHT AT ANY
TIME, UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, TO
NOTIFY THE ACCOUNT DEBTORS OR OBLIGORS UNDER ANY RECEIVABLES OF THE ASSIGNMENT
OF SUCH RECEIVABLES TO THE ADMINISTRATIVE AGENT AND TO DIRECT SUCH ACCOUNT
DEBTORS OR OBLIGORS TO MAKE PAYMENT OF ALL AMOUNTS DUE OR TO BECOME DUE TO A
GRANTOR THEREUNDER DIRECTLY TO THE ADMINISTRATIVE AGENT OR ITS DESIGNATED AGENT,
UPON SUCH NOTIFICATION AND AT THE EXPENSE OF SUCH GRANTOR AND TO THE EXTENT
PERMITTED BY LAW, TO ENFORCE COLLECTION OF ANY SUCH RECEIVABLES AND TO ADJUST,
SETTLE OR COMPROMISE THE AMOUNT OR PAYMENT THEREOF, IN THE SAME MANNER AND TO
THE SAME EXTENT AS SUCH GRANTOR MIGHT HAVE DONE. AFTER RECEIPT BY A GRANTOR OF A
NOTICE FROM THE ADMINISTRATIVE AGENT THAT THE ADMINISTRATIVE AGENT HAS NOTIFIED
OR INTENDS TO NOTIFY THE ACCOUNT DEBTORS OR OBLIGORS UNDER ANY RECEIVABLES AS
REFERRED TO IN THE PROVISO TO THE IMMEDIATELY PRECEDING SENTENCE, (A) ALL
AMOUNTS AND PROCEEDS (INCLUDING INSTRUMENTS) RECEIVED BY SUCH GRANTOR IN RESPECT
OF THE RECEIVABLES SHALL BE RECEIVED IN TRUST FOR THE BENEFIT OF THE
ADMINISTRATIVE AGENT HEREUNDER, SHALL BE SEGREGATED FROM OTHER FUNDS OF SUCH
GRANTOR AND SHALL BE FORTHWITH PAID OVER TO THE ADMINISTRATIVE AGENT IN THE SAME
FORM AS SO RECEIVED (WITH ANY NECESSARY ENDORSEMENT) TO BE HELD AS CASH
COLLATERAL AND EITHER (1) RELEASED TO SUCH GRANTOR SO LONG AS NO DEFAULT OR
EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING OR (2) IF ANY DEFAULT OR
EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, APPLIED AS SPECIFIED IN
SECTION 7(B) HEREOF, AND (B) SUCH GRANTOR WILL NOT ADJUST, SETTLE OR COMPROMISE
THE AMOUNT OR PAYMENT OF ANY RECEIVABLE OR RELEASE WHOLLY OR PARTLY ANY ACCOUNT
DEBTOR OR OBLIGOR THEREOF OR ALLOW ANY CREDIT OR DISCOUNT THEREON, EXCEPT IN THE
ORDINARY COURSE OF BUSINESS, PROVIDED THAT NO DEFAULT OR EVENT OF DEFAULT SHALL
HAVE OCCURRED AND BE CONTINUING. IN ADDITION, UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, THE ADMINISTRATIVE AGENT SHALL HAVE THE
RIGHT TO NOTIFY THE UNITED STATES POSTAL SERVICE AUTHORITIES TO CHANGE THE
ADDRESS FOR DELIVERY OF MAIL ADDRESSED TO THE GRANTORS AT SUCH ADDRESS AS THE
ADMINISTRATIVE AGENT MAY DESIGNATE AND TO DO ALL OTHER ACTS AND THINGS NECESSARY
TO CARRY OUT THIS AGREEMENT.
(III) UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY
BREACH OR DEFAULT UNDER ANY RELATED CONTRACT OR ANY LICENSE REFERRED TO IN
SCHEDULE I OR II HERETO BY ANY PARTY THERETO OTHER THAN A GRANTOR, (A) EACH
GRANTOR WILL, PROMPTLY AFTER OBTAINING KNOWLEDGE THEREOF, GIVE THE
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ADMINISTRATIVE AGENT WRITTEN NOTICE OF THE NATURE AND DURATION THEREOF,
SPECIFYING WHAT ACTION, IF ANY, IT HAS TAKEN AND PROPOSES TO TAKE WITH RESPECT
THERETO, (B) SUCH GRANTOR WILL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF THE
ADMINISTRATIVE AGENT, DECLARE OR WAIVE ANY SUCH BREACH OR DEFAULT OR
AFFIRMATIVELY CONSENT TO THE CURE THEREOF, AND (C) SUCH GRANTOR WILL, UPON
WRITTEN INSTRUCTIONS FROM THE ADMINISTRATIVE AGENT AND AT SUCH GRANTOR'S
EXPENSE, TAKE SUCH ACTION AS THE ADMINISTRATIVE AGENT MAY DEEM NECESSARY OR
ADVISABLE IN RESPECT THEREOF.
(IV) EACH GRANTOR WILL, AT ITS EXPENSE, PROMPTLY DELIVER TO
THE ADMINISTRATIVE AGENT A COPY OF EACH NOTICE OR OTHER COMMUNICATION RECEIVED
BY IT BY WHICH ANY OTHER PARTY TO ANY RELATED CONTRACT SPECIFIED BY THE
ADMINISTRATIVE AGENT FROM TIME TO TIME OR ANY LICENSE REFERRED TO IN SCHEDULE I
OR II HERETO PURPORTS TO EXERCISE ANY OF ITS MATERIAL RIGHTS OR ADVERSELY AFFECT
ANY OF ITS OBLIGATIONS THEREUNDER, TOGETHER WITH A COPY OF ANY REPLY BY SUCH
GRANTOR THERETO.
(V) EACH GRANTOR WILL EXERCISE PROMPTLY AND DILIGENTLY EACH
AND EVERY RIGHT WHICH IT MAY HAVE UNDER EACH LICENSE (OTHER THAN ANY RIGHT OF
TERMINATION) AND WILL DULY PERFORM AND OBSERVE IN ALL RESPECTS ALL OF ITS
OBLIGATIONS UNDER EACH LICENSE AND WILL TAKE ALL ACTION NECESSARY TO MAINTAIN
ALL LICENSES NECESSARY FOR THE OPERATION OF ITS BUSINESS IN FULL FORCE AND
EFFECT. NO GRANTOR WILL, WITHOUT THE PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE
AGENT, CANCEL, TERMINATE, AMEND OR OTHERWISE MODIFY IN ANY RESPECT, OR WAIVE ANY
PROVISION OF, ANY RELATED CONTRACT OR ANY LICENSE REFERRED TO IN SCHEDULE I OR
II HERETO, EXCEPT WHERE SUCH CANCELLATION, TERMINATION, AMENDMENT, MODIFICATION
OR WAIVER WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;
PROVIDED, HOWEVER, THAT A COPY OF EACH SUCH CANCELLATION, TERMINATION,
AMENDMENT, MODIFICATION OR WAIVER SHALL BE DELIVERED TO THE ADMINISTRATIVE AGENT
PROMPTLY AFTER ITS EXECUTION.
(e) Trademarks and Patents.
(I) EACH GRANTOR WHICH IS THE OWNER OF, OR POSSESSES ANY OTHER
RIGHTS IN OR WITH RESPECT TO, ANY TRADEMARKS OR PATENTS HAS DULY EXECUTED AND
DELIVERED THE ASSIGNMENT FOR SECURITY (TRADEMARKS) AND THE ASSIGNMENT FOR
SECURITY (PATENTS) IN THE FORMS ATTACHED HERETO AS EXHIBITS A AND B,
RESPECTIVELY. EACH SUCH GRANTOR (EITHER ITSELF OR THROUGH LICENSEES) WILL, AND
WILL USE COMMERCIALLY REASONABLE EFFORTS TO CAUSE EACH LICENSEE THEREOF TO, TAKE
ALL ACTION NECESSARY TO MAINTAIN ALL OF THE TRADEMARKS AND PATENTS IN FULL FORCE
AND EFFECT, INCLUDING, WITHOUT LIMITATION, USING THE PROPER TRADEMARK AND PATENT
STATUTORY NOTICES AND MARKINGS, AND USING THE TRADEMARKS ON EACH APPLICABLE
TRADEMARK CLASS OF GOODS IN ORDER TO SO MAINTAIN THE TRADEMARKS IN FULL FORCE
FREE FROM ANY CLAIM OF ABANDONMENT FOR NON-USE, AND NO GRANTOR WILL (NOR WILL IT
PERMIT ANY LICENSEE THEREOF TO) DO ANY ACT OR KNOWINGLY OMIT TO DO ANY ACT
WHEREBY ANY TRADEMARK MAY BECOME INVALIDATED; PROVIDED, HOWEVER, THAT SO LONG AS
NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, THE GRANTORS
SHALL HAVE NO OBLIGATION TO USE OR TO MAINTAIN ANY TRADEMARK, TRADEMARK
APPLICATION OR PATENT APPLICATION (A) THAT RELATES SOLELY TO ANY PRODUCT THAT
HAS BEEN, OR IS IN THE PROCESS OF BEING, DISCONTINUED, ABANDONED OR TERMINATED,
(B) THAT IS BEING REPLACED WITH A TRADEMARK SUBSTANTIALLY SIMILAR TO THE
TRADEMARK THAT MAY BE ABANDONED OR OTHERWISE BECOME INVALID, SO LONG AS SUCH
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REPLACEMENT TRADEMARK IS SUBJECT TO THE SECURITY INTEREST PURPORTED TO BE
CREATED BY THIS AGREEMENT, (C) THAT IS SUBSTANTIALLY THE SAME AS ANOTHER
TRADEMARK THAT IS IN FULL FORCE, SO LONG AS SUCH OTHER TRADEMARK IS SUBJECT TO
THE LIEN AND SECURITY INTEREST CREATED BY THIS AGREEMENT OR (D) THAT SUCH
GRANTOR DETERMINES, IN ITS REASONABLE BUSINESS JUDGMENT, IS NO LONGER MATERIAL
TO THE CONDUCT OF ITS BUSINESS. EACH GRANTOR WILL CAUSE TO BE TAKEN ALL
NECESSARY STEPS IN ANY PROCEEDING BEFORE THE UNITED STATES PATENT AND TRADEMARK
OFFICE TO MAINTAIN EACH REGISTRATION OF THE TRADEMARKS AND THE PATENTS (OTHER
THAN THOSE TRADEMARKS DESCRIBED IN CLAUSES (A), (B), (C) OR (D) OF THE PROVISO
TO THE IMMEDIATELY PRECEDING SENTENCE), INCLUDING, WITHOUT LIMITATION, FILING OF
RENEWALS, AFFIDAVITS OF USE, AFFIDAVITS OF INCONTESTABILITY AND OPPOSITION,
INTERFERENCE AND CANCELLATION PROCEEDINGS AND PAYMENT OF TAXES. IF ANY TRADEMARK
OR PATENT IS INFRINGED, MISAPPROPRIATED OR DILUTED IN ANY MATERIAL RESPECT BY A
THIRD PARTY, EACH GRANTOR SHALL (X) UPON LEARNING OF SUCH INFRINGEMENT,
MISAPPROPRIATION OR DILUTION, PROMPTLY NOTIFY THE ADMINISTRATIVE AGENT AND (Y)
TO THE EXTENT SUCH GRANTOR SHALL DEEM APPROPRIATE UNDER THE CIRCUMSTANCES,
PROMPTLY SUE FOR INFRINGEMENT, MISAPPROPRIATION OR DILUTION, SEEK INJUNCTIVE
RELIEF WHERE APPROPRIATE AND RECOVER ANY AND ALL DAMAGES FOR SUCH INFRINGEMENT,
MISAPPROPRIATION OR DILUTION, OR TAKE SUCH OTHER ACTIONS AS SUCH GRANTOR SHALL
DEEM APPROPRIATE UNDER THE CIRCUMSTANCES TO PROTECT SUCH TRADEMARK OR PATENT.
EACH GRANTOR SHALL FURNISH TO THE ADMINISTRATIVE AGENT FROM TIME TO TIME (BUT,
UNLESS A DEFAULT OR AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, NO MORE
FREQUENTLY THAN ANNUALLY) STATEMENTS AND SCHEDULES FURTHER IDENTIFYING AND
DESCRIBING THE PATENTS AND THE TRADEMARKS AND SUCH OTHER REPORTS IN CONNECTION
WITH THE PATENTS AND THE TRADEMARKS AS THE ADMINISTRATIVE AGENT MAY REASONABLY
REQUEST, ALL IN REASONABLE DETAIL AND PROMPTLY UPON REQUEST OF THE
ADMINISTRATIVE AGENT, FOLLOWING RECEIPT BY THE ADMINISTRATIVE AGENT OF ANY SUCH
STATEMENTS, SCHEDULES OR REPORTS, EACH GRANTOR SHALL MODIFY THIS AGREEMENT BY
AMENDING SCHEDULES I OR II HERETO, AS THE CASE MAY BE, TO INCLUDE ANY PATENT OR
TRADEMARK WHICH BECOMES PART OF THE COLLATERAL UNDER THIS AGREEMENT.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, UPON THE OCCURRENCE OF A
DEFAULT OR AN EVENT OF DEFAULT NO GRANTOR MAY ABANDON OR OTHERWISE PERMIT A
TRADEMARK OR PATENT TO BECOME INVALID WITHOUT THE PRIOR WRITTEN CONSENT OF THE
ADMINISTRATIVE AGENT, AND IF ANY TRADEMARK OR PATENT IS INFRINGED,
MISAPPROPRIATED OR DILUTED IN ANY MATERIAL RESPECT BY A THIRD PARTY, SUCH
GRANTOR WILL TAKE SUCH ACTION AS THE ADMINISTRATIVE AGENT SHALL DEEM APPROPRIATE
UNDER THE CIRCUMSTANCES TO PROTECT SUCH TRADEMARK OR PATENT.
(II) IN NO EVENT SHALL ANY GRANTOR, EITHER ITSELF OR THROUGH
ANY AGENT, EMPLOYEE, LICENSEE OR DESIGNEE, FILE AN APPLICATION FOR THE
REGISTRATION OF ANY TRADEMARK OR THE ISSUANCE OF ANY PATENT WITH THE UNITED
STATES PATENT AND TRADEMARK OFFICE (OR IN ANY SIMILAR OFFICE OR AGENCY OF THE
UNITED STATES, AND ANY STATE THEREOF OR ANY OTHER COUNTRY OR ANY OTHER POLITICAL
SUBDIVISION THEREOF), UNLESS IT GIVES THE ADMINISTRATIVE AGENT PRIOR WRITTEN
NOTICE THEREOF. UPON REQUEST OF THE ADMINISTRATIVE AGENT, EACH GRANTOR SHALL
EXECUTE AND DELIVER ANY AND ALL ASSIGNMENTS, AGREEMENTS, INSTRUMENTS, DOCUMENTS
AND PAPERS AS THE ADMINISTRATIVE AGENT MAY REASONABLY REQUEST TO EVIDENCE THE
ADMINISTRATIVE AGENT'S SECURITY INTEREST HEREUNDER IN SUCH TRADEMARK OR PATENT
AND THE GENERAL INTANGIBLES OF SUCH GRANTOR RELATING THERETO OR REPRESENTED
THEREBY, AND EACH GRANTOR HEREBY CONSTITUTES THE ADMINISTRATIVE AGENT ITS
ATTORNEY-IN-FACT TO EXECUTE AND FILE ALL SUCH WRITINGS FOR THE FOREGOING
PURPOSES, ALL ACTS OF SUCH ATTORNEY BEING
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HEREBY RATIFIED AND CONFIRMED, AND SUCH POWER (BEING COUPLED WITH AN INTEREST)
SHALL BE IRREVOCABLE UNTIL THE TERMINATION OF THE LOAN AGREEMENT, THE REPAYMENT
OF ALL OF THE OBLIGATIONS IN FULL AND THE TERMINATION OF EACH OF THE LOAN
DOCUMENTS.
(III) IF ANY GRANTOR SHALL AT ANY TIME OWN, USE OR POSSESS THE
RIGHT TO ANY REGISTERED COPYRIGHT, SUCH GRANTOR SHALL PROMPTLY NOTIFY THE
ADMINISTRATIVE AGENT THEREOF AND SHALL EXECUTE SUCH DOCUMENTS (INCLUDING ANY
COPYRIGHT REGISTRATIONS AND ASSIGNMENTS FOR SECURITY OF COPYRIGHTS TO BE FILED
WITH THE UNITED STATES COPYRIGHT OFFICE) AND DO SUCH ACTS AS SHALL BE NECESSARY
OR, IN THE JUDGMENT OF THE ADMINISTRATIVE AGENT, DESIRABLE TO SUBJECT SUCH
COPYRIGHT RIGHTS TO THE LIEN OF THIS AGREEMENT.
(f) Financial Assets. If any financial assets, investment property
or other property pledged by a Grantor under clause (i) of Section 2(g) hereof
are received by such Grantor, forthwith (i) transfer and deliver to the
Administrative Agent such financial assets, investment property or other
property (together with certificates for any securities duly endorsed in blank
or accompanied by undated stock powers duly executed in blank) received by such
Grantor, all of which thereafter shall be held by the Administrative Agent,
pursuant to the terms of this Agreement, as part of the Collateral, (ii)
establish a securities account for such financial assets and execute and deliver
a securities account control agreement among the Grantor, the Administrative
Agent and a securities intermediary, acceptable to the Administrative Agent, for
the purpose of perfecting the security interest granted pursuant hereto in such
Collateral or (iii) take such other action as the Administrative Agent shall
deem necessary or appropriate to duly record the security interest created
hereunder in such Collateral;
(g) Motor Vehicles.
(I) EACH GRANTOR SHALL DELIVER TO THE ADMINISTRATIVE AGENT
WITHIN 60 DAYS AFTER THE CLOSING DATE ORIGINALS OF THE CERTIFICATES OF TITLE OR
OWNERSHIP FOR THE MOTOR VEHICLES OWNED BY IT AND WITH A FAIR MARKET VALUE IN
EXCESS OF $75,000 WITH THE ADMINISTRATIVE AGENT LISTED AS LIENHOLDER.
(II) UPON THE ACQUISITION AFTER THE DATE HEREOF BY ANY GRANTOR
OF ANY MOTOR VEHICLE WITH A FAIR MARKET VALUE IN EXCESS OF $75,000, SUCH GRANTOR
SHALL DELIVER TO THE ADMINISTRATIVE AGENT WITHIN 60 DAYS AFTER SUCH ACQUISITION
ORIGINALS OF THE CERTIFICATES OF TITLE OR OWNERSHIP FOR SUCH MOTOR VEHICLE,
TOGETHER WITH THE MANUFACTURER'S STATEMENT OF ORIGIN, WITH THE ADMINISTRATIVE
AGENT LISTED AS LIENHOLDER; PROVIDED, HOWEVER, THAT IF THE MOTOR VEHICLE TO BE
ACQUIRED IS SUBJECT TO A PURCHASE MONEY SECURITY INTEREST (OTHER THAN A PURCHASE
MONEY SECURITY INTEREST IN FAVOR OF A LOAN PARTY OR AN AFFILIATE OF A LOAN
PARTY) THE ADMINISTRATIVE AGENT SHALL BE LISTED AS A JUNIOR LIENHOLDER TO THE
PERSON HOLDING SUCH PURCHASE MONEY SECURITY INTEREST.
(III) EACH GRANTOR HEREBY APPOINTS THE ADMINISTRATIVE AGENT AS
ITS ATTORNEY-IN-FACT, EFFECTIVE THE DATE HEREOF AND TERMINATING UPON THE
TERMINATION OF THIS AGREEMENT, FOR THE PURPOSE OF (I) EXECUTING ON BEHALF OF
SUCH GRANTOR TITLE OR OWNERSHIP APPLICATIONS FOR FILING WITH APPROPRIATE STATE
AGENCIES TO ENABLE MOTOR VEHICLES NOW OWNED OR HEREAFTER ACQUIRED BY SUCH
GRANTOR TO BE RETITLED AND THE ADMINISTRATIVE AGENT LISTED AS LIENHOLDER
THEREOF, (II) FILING SUCH APPLICATIONS WITH SUCH STATE AGENCIES AND (III)
EXECUTING SUCH OTHER DOCUMENTS AND INSTRUMENTS ON BEHALF OF, AND TAKING
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SUCH OTHER ACTION IN THE NAME OF, THE GRANTOR AS THE ADMINISTRATIVE AGENT MAY
DEEM NECESSARY OR ADVISABLE TO ACCOMPLISH THE PURPOSES HEREOF (INCLUDING,
WITHOUT LIMITATION, FOR THE PURPOSE OF CREATING IN FAVOR OF THE ADMINISTRATIVE
AGENT A PERFECTED LIEN ON THE MOTOR VEHICLES AND EXERCISING THE RIGHTS AND
REMEDIES OF THE ADMINISTRATIVE AGENT HEREUNDER). THIS APPOINTMENT AS
ATTORNEY-IN-FACT IS IRREVOCABLE AND COUPLED WITH AN INTEREST.
(IV) ANY CERTIFICATES OF TITLE OR OWNERSHIP DELIVERED
PURSUANT TO THE TERMS HEREOF SHALL BE ACCOMPANIED BY ODOMETER STATEMENTS FOR
EACH MOTOR VEHICLE COVERED THEREBY.
(V) SO LONG AS NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, UPON THE REQUEST OF A GRANTOR, THE ADMINISTRATIVE
AGENT SHALL EXECUTE AND DELIVER TO SUCH GRANTOR SUCH INSTRUMENTS AS SUCH GRANTOR
SHALL REASONABLY REQUEST TO REMOVE THE NOTATION OF THE ADMINISTRATIVE AGENT AS
LIENHOLDER ON ANY CERTIFICATE OF TITLE FOR ANY MOTOR VEHICLE; PROVIDED THAT ANY
SUCH INSTRUMENTS SHALL BE DELIVERED, AND THE RELEASE EFFECTIVE, ONLY UPON
RECEIPT BY THE ADMINISTRATIVE AGENT OF A CERTIFICATE FROM SUCH GRANTOR, STATING
THAT THE MOTOR VEHICLE THE LIEN ON WHICH IS TO BE RELEASED IS TO BE SOLD OR HAS
SUFFERED A CASUALTY LOSS (WITH TITLE THERETO PASSING TO THE CASUALTY INSURANCE
COMPANY THEREFOR IN SETTLEMENT OF THE CLAIM FOR SUCH LOSS) AND ANY PROCEEDS OF
SUCH SALE OR CASUALTY LOSS IN EXCESS OF $100,000 BEING PAID TO THE
ADMINISTRATIVE AGENT HEREUNDER TO BE APPLIED TO THE OBLIGATIONS THEN OUTSTANDING
IN THE MANNER CONTEMPLATED BY SECTION 7(B) HEREOF.
SECTION 6. Additional Provisions Concerning the Collateral.
(a) Each Grantor hereby authorizes the Administrative Agent to file,
without the signature of such Grantor where permitted by law, one or more
financing or continuation statements, and amendments thereto, relating to the
Collateral.
(b) Each Grantor hereby irrevocably appoints the Administrative
Agent such Grantor's attorney-in-fact and proxy, with full authority in the
place and stead of such Grantor and in the name of such Grantor or otherwise,
from time to time in the Administrative Agent's reasonable discretion, to take
any action and to execute any instrument which the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation, (i) to obtain and adjust insurance required to be paid to
the Administrative Agent pursuant to Section 5(c) hereof, (ii) upon the
occurrence of an Event of Default to ask, demand, collect, sue for, recover,
compound, receive and give acquittance and receipts for moneys due and to become
due under or in respect of any Collateral, (iii) upon the occurrence of an Event
of Default to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper in connection with clause (i) or (ii) above, (iv)
upon the occurrence of an Event of Default to file any claims or take any action
or institute any proceedings which the Administrative Agent may deem necessary
or desirable for the collection of any Collateral or otherwise to enforce the
rights of the Administrative Agent with respect to any Collateral, and (v) upon
the occurrence of an Event of Default to notify the post office authorities to
change the address for delivery of a Grantor's mail to an address designated by
the Administrative Agent, to
169
receive and open all mailed addressed to any Grantor, and to retain all mail
relating to the Collateral and forward all other mail to the appropriate
Grantor.
(c) For the purpose of enabling the Administrative Agent to exercise
rights and remedies hereunder at such time as the Administrative Agent shall be
lawfully entitled to exercise such rights and remedies, and for no other
purpose, each Grantor hereby grants to the Administrative Agent, to the extent
assignable and until this Agreement is terminated, an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation to such
Grantor) to use, assign, license or sublicense any of the Patents or Trademarks
now owned or hereafter acquired by such Grantor, wherever the same may be
located, including in such license reasonable access to all media in which any
of the licensed items may be recorded or stored and to all computer programs
used for the compilation or printout thereof. Notwithstanding anything contained
herein to the contrary, but subject to the provisions of the Loan Agreement that
limits the right of the Grantors to dispose of their property and Section 5(e)
hereof, so long as no Event of Default shall have occurred and be continuing,
each Grantor may exploit, use, enjoy, protect, license, sublicense, assign,
sell, dispose of or take other actions with respect to the Patents or Trademarks
in the ordinary course of the business of such Grantor. In furtherance of the
foregoing, unless an Event of Default shall have occurred and be continuing, the
Administrative Agent shall from time to time, upon the request of a Grantor,
execute and deliver any instruments, certificates or other documents, in the
form so requested, which the such Grantor shall have certified are appropriate
(in its judgment) to allow it to take any action permitted above (including
relinquishment of the license provided pursuant to this clause (c) as to any
Patents or Trademarks). Further, upon the payment in full of all of the
Obligations, the Administrative Agent (subject to Section 10(e) hereof) shall
transfer to the Grantors all of the Administrative Agent's right, title and
interest in and to the Patents, Trademarks and the Licenses, all without
recourse, representation or warranty whatsoever. The exercise of rights and
remedies hereunder by the Administrative Agent shall not terminate the rights of
the holders of any licenses or sublicenses theretofore granted by the Grantor in
accordance with the second sentence of this clause (c). Each Grantor hereby
releases the Administrative Agent from any claims, causes of action and demands
at any time arising out of or with respect to any actions taken or omitted to be
taken by the Administrative Agent under the powers of attorney granted herein
other than actions taken or omitted to be taken through the Administrative
Agent's gross negligence or willful misconduct as determined by the final
non-appealable decision of a court of competent jurisdiction.
(d) If any Grantor fails to perform any agreement contained herein,
the Administrative Agent may itself perform, or cause performance of, such
agreement or obligation, in the name of such Grantor or the Administrative
Agent, and the expenses of the Administrative Agent incurred in connection
therewith shall be payable by the Grantors pursuant to Section 8 hereof.
(e) The powers conferred on the Administrative Agent hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for
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moneys actually received by it hereunder, the Administrative Agent shall have no
duty as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral.
(f) Anything herein to the contrary notwithstanding, (i) each
Grantor shall remain liable under the Related Contracts and Licenses to which it
is a party and otherwise with respect to any of the Collateral to the extent set
forth therein to perform all of its obligations thereunder to the same extent as
if this Agreement had not been executed, (ii) the exercise by the Administrative
Agent of any of its rights hereunder shall not release any Grantor from any of
its obligations under the Related Contracts and Licenses or otherwise in respect
of the Collateral, and (iii) the Administrative Agent shall not have any
obligation or liability by reason of this Agreement under the Related Contracts
and Licenses or with respect to any of the other Collateral, nor shall the
Administrative Agent be obligated to perform any of the obligations or duties of
a Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
SECTION 7. Remedies Upon Default. If any Event of Default shall have
occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a secured party
upon default under the Code then in effect in the State of New York (whether or
not the Code applies to the affected Collateral), and also may (i) require each
Grantor to, and each Grantor hereby agrees that it will at its expense and upon
request of the Administrative Agent forthwith, assemble all or part of the
Collateral as directed by the Administrative Agent and make it available to the
Administrative Agent at a place or places to be designated by the Administrative
Agent which is reasonably convenient to both parties and (ii) without notice
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of the Administrative Agent's
offices or elsewhere, for cash, on credit or for future delivery, and at such
price or prices and upon such other terms as the Administrative Agent may deem
commercially reasonable. Each Grantor agrees that, to the extent notice of sale
shall be required by law, at least 10 days' notice to such Grantor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Administrative Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Administrative Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned. Each Grantor hereby waives any claims against the
Administrative Agent and the Lenders arising by reason of the fact that the
price at which the Collateral may have been sold at a private sale was less than
the price which might have been obtained at a public sale or was less than the
aggregate amount of the Obligations, even if the Administrative Agent accepts
the first offer received and does not offer the Collateral to more than one
offeree and waives all rights which any Grantor may have to require that all or
any part of the Collateral be marshalled upon any sale (public or private)
thereof. In addition to the foregoing, (i) upon written notice from the
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Administrative Agent, each Grantor shall cease any use of the Trademarks or any
mark similar thereto for any purpose described in such notice, (ii) the
Administrative Agent may, at any time and from time to time, upon 10 days' prior
notice to the Grantors, license, whether general, special or otherwise, and
whether on an exclusive or non-exclusive basis, any of the Trademarks and
Patents, throughout the world for such term or terms, on such conditions, and in
such manner, as the Administrative Agent shall in its sole discretion determine,
and (iii) the Administrative Agent may, at any time, pursuant to the authority
granted in Section 6 hereof (such authority being effective upon the occurrence
of an Event of Default), execute and deliver on behalf of the Grantors, one or
more instruments of assignment of the Trademarks and Patents (or any application
or registration thereof), in form suitable for filing, recording or registration
in any country.
(b) Any cash held by the Administrative Agent as Collateral and all
proceeds received by the Administrative Agent in respect of any sale or
collection from, or other realization upon, all or any part the Collateral may,
in the discretion of the Administrative Agent, be held by the Administrative
Agent as collateral for, and/or then or at any time thereafter applied in whole
or in part by the Administrative Agent against, all or any part of the
Obligations as follows:
(I) FIRST, TO THE PAYMENT OF THE COSTS AND EXPENSES OF SUCH
SALE, COLLECTION OR OTHER REALIZATION, INCLUDING THE OUT-OF-POCKET COSTS AND
EXPENSES OF THE ADMINISTRATIVE AGENT AND THE REASONABLE FEES, COSTS AND EXPENSES
OF COUNSEL EMPLOYED IN CONNECTION THEREWITH, TO THE PAYMENT OF ALL ADVANCES MADE
BY THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF ANY GRANTOR HEREUNDER AND TO THE
PAYMENT OF ALL REASONABLE COSTS AND EXPENSES INCURRED BY THE ADMINISTRATIVE
AGENT IN CONNECTION WITH THE ADMINISTRATION AND ENFORCEMENT OF THIS AGREEMENT;
(II) SECOND, AT THE OPTION OF THE ADMINISTRATIVE AGENT, TO
THE PAYMENT OR OTHER SATISFACTION OF ANY LIENS AND OTHER ENCUMBRANCES UPON
ANY OF THE COLLATERAL;
(III) THIRD, TO THE PAYMENT OF ALL OTHER OBLIGATIONS THEN
DUE AND PAYABLE IN ACCORDANCE WITH THE LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS;
(IV) FOURTH, TO THE PAYMENT OF ANY OTHER AMOUNTS REQUIRED BY
APPLICABLE LAW (INCLUDING, WITHOUT LIMITATION, SECTION 9-504(1)(C) OF THE CODE
IN EFFECT IN THE STATE OF NEW YORK OR ANY SUCCESSOR OR SIMILAR, APPLICABLE
STATUTORY PROVISION); AND
(V) FIFTH, TO GRANTORS, OR TO THE PARENT ON BEHALF OF THE
GRANTORS, OR TO WHOMSOEVER SHALL BE LAWFULLY ENTITLED TO RECEIVE THE SAME OR AS
A COURT OF COMPETENT JURISDICTION SHALL DIRECT.
(C) IN THE EVENT THAT THE PROCEEDS OF ANY SUCH SALE, COLLECTION OR
REALIZATION ARE INSUFFICIENT TO PAY ALL AMOUNTS TO WHICH THE ADMINISTRATIVE
AGENT IS LEGALLY ENTITLED, THE GRANTORS SHALL BE JOINTLY AND SEVERALLY LIABLE
FOR THE DEFICIENCY, TOGETHER WITH INTEREST THEREON AT THE
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HIGHEST RATE SPECIFIED IN ANY APPLICABLE LOAN DOCUMENT FOR INTEREST ON OVERDUE
PRINCIPAL THEREOF OR SUCH OTHER RATE AS SHALL BE FIXED BY APPLICABLE LAW,
TOGETHER WITH THE COSTS OF COLLECTION AND THE REASONABLE FEES, COSTS AND
EXPENSES OF ANY ATTORNEYS EMPLOYED BY THE ADMINISTRATIVE AGENT TO COLLECT SUCH
DEFICIENCY.
SECTION 8. INDEMNITY AND EXPENSES.
(A) THE GRANTORS AGREE, JOINTLY AND SEVERALLY, TO INDEMNIFY AND HOLD
THE ADMINISTRATIVE AGENT HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES,
LOSSES, LIABILITIES, OBLIGATIONS, PENALTIES, COSTS OR EXPENSES (INCLUDING,
WITHOUT LIMITATION, LEGAL FEES, COSTS AND EXPENSES) TO THE EXTENT THAT THEY
ARISE OUT OF OR OTHERWISE RESULT FROM THIS AGREEMENT (INCLUDING, WITHOUT
LIMITATION, ENFORCEMENT OF THIS AGREEMENT), EXCEPT CLAIMS, LOSSES OR LIABILITIES
RESULTING SOLELY AND DIRECTLY FROM THE ADMINISTRATIVE AGENT'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT AS DETERMINED BY THE FINAL NON-APPEALABLE JUDGMENT OF A
COURT OF COMPETENT JURISDICTION. THE ADMINISTRATIVE AGENT MAY EMPLOY AGENTS AND
ATTORNEYS-IN-FACT IN CONNECTION HEREWITH AND SHALL NOT BE RESPONSIBLE FOR THE
NEGLIGENCE OR MISCONDUCT OF ANY SUCH AGENTS OR ATTORNEYS-IN-FACT SELECTED BY IT
IN GOOD FAITH.
(B) THE GRANTORS AGREE TO PAY TO THE ADMINISTRATIVE AGENT UPON
DEMAND (I) THE AMOUNT OF ANY AND ALL REASONABLE COSTS AND EXPENSES, INCLUDING
THE REASONABLE FEES, COSTS AND EXPENSES OF COUNSEL FOR THE ADMINISTRATIVE AGENT
AND OF ANY EXPERTS AND AGENTS (INCLUDING, WITHOUT LIMITATION, ANY PERSON WHICH
MAY ACT AS AGENT OF THE ADMINISTRATIVE AGENT), WHICH THE ADMINISTRATIVE AGENT
MAY INCUR IN CONNECTION WITH (A) THE PREPARATION, NEGOTIATION, EXECUTION,
DELIVERY, RECORDATION, ADMINISTRATION, AMENDMENT, WAIVER OR OTHER MODIFICATION
OR TERMINATION OF THIS AGREEMENT, OR (B) THE CUSTODY, PRESERVATION, USE OR
OPERATION OF, COLLECTION FROM, OR OTHER REALIZATION UPON THE COLLATERAL, AND
(II) THE AMOUNT OF ANY AND ALL COSTS AND EXPENSES, INCLUDING THE REASONABLE
FEES, COSTS AND EXPENSES OF COUNSEL FOR THE ADMINISTRATIVE AGENT AND OF ANY
EXPERTS AND AGENTS (INCLUDING, WITHOUT LIMITATION, ANY PERSON WHICH MAY ACT AS
AGENT OF THE ADMINISTRATIVE AGENT), WHICH THE ADMINISTRATIVE AGENT MAY INCUR IN
CONNECTION WITH (A) THE SALE OF, COLLECTION FROM, OR OTHER REALIZATION UPON, ANY
COLLATERAL, (B) THE EXERCISE OR ENFORCEMENT OF ANY OF THE RIGHTS OF THE
ADMINISTRATIVE AGENT HEREUNDER, OR (C) THE FAILURE BY A GRANTOR TO PERFORM OR
OBSERVE ANY OF THE PROVISIONS HEREOF, INCLUDING, WITHOUT LIMITATION, ALL MANNER
OF PARTICIPATION IN OR OTHER INVOLVEMENT WITH (W) PERFORMANCE BY THE
ADMINISTRATIVE AGENT OF ANY OBLIGATIONS OF THE GRANTORS IN RESPECT OF THE
COLLATERAL THAT THE GRANTORS HAVE FAILED OR REFUSED TO PERFORM, (X) BANKRUPTCY,
INSOLVENCY, RECEIVERSHIP, FORECLOSURE, WINDING UP OR LIQUIDATION PROCEEDINGS, OR
ANY ACTUAL OR ATTEMPTED SALE, OR ANY EXCHANGE, ENFORCEMENT, COLLECTION,
COMPROMISE OR SETTLEMENT IN RESPECT OF ANY OF THE COLLATERAL, AND FOR THE CARE
OF THE COLLATERAL AND DEFENDING OR ASSERTING RIGHTS AND CLAIMS OF THE
ADMINISTRATIVE AGENT IN RESPECT THEREOF, BY LITIGATION OR OTHERWISE, INCLUDING
EXPENSES OF INSURANCE, (Y) JUDICIAL OR REGULATORY PROCEEDINGS AND (Z) WORKOUT,
RESTRUCTURING OR OTHER NEGOTIATIONS OR PROCEEDINGS (WHETHER OR NOT THE WORKOUT,
RESTRUCTURING OR TRANSACTION CONTEMPLATED THEREBY IS CONSUMMATED).
SECTION 9. NOTICES, ETC. ALL NOTICES AND OTHER COMMUNICATIONS
PROVIDED FOR HEREUNDER SHALL BE IN WRITING AND SHALL BE MAILED (BY CERTIFIED
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MAIL, POSTAGE PREPAID AND RETURN RECEIPT REQUESTED, OR BY OVERNIGHT COURIER),
TELECOPIED OR DELIVERED, IF TO ANY OF THE GRANTORS, AT THEIR RESPECTIVE
ADDRESSES SET FORTH IN PART II OF SCHEDULE III HERETO OR TO THE PARENT, ON
BEHALF OF SUCH GRANTOR, AT ITS ADDRESS SPECIFIED IN THE LOAN AGREEMENT, IF TO
THE ADMINISTRATIVE AGENT, TO IT AT ITS ADDRESS SPECIFIED IN THE LOAN AGREEMENT,
OR AS TO ANY SUCH PERSON, AT SUCH OTHER ADDRESS AS SHALL BE DESIGNATED BY SUCH
PERSON IN A WRITTEN NOTICE TO SUCH OTHER PERSON COMPLYING AS TO DELIVERY WITH
THE TERMS OF THIS SECTION 9. ALL SUCH NOTICES AND OTHER COMMUNICATIONS SHALL BE
EFFECTIVE (I) IF MAILED, WHEN RECEIVED OR THREE DAYS AFTER MAILING, (II) IF
TELECOPIED, WHEN TRANSMITTED, PROVIDED SAME IS ON A BUSINESS DAY AND, IF NOT, ON
THE NEXT BUSINESS DAY, AND (III) IF DELIVERED, UPON DELIVERY, PROVIDED SAME IS
ON A BUSINESS DAY AND, IF NOT, ON THE NEXT BUSINESS DAY.
SECTION 10. Parent Appointed Agent. Each Grantor hereby designates
and appoints the Parent as an agent for such Grantor, and each Grantor hereby
authorizes the Parent, to execute notices, receive notices, receive summons of
process and take possession of Collateral on behalf of such Grantor, in each
case in accordance with the terms hereof.
SECTION 11. Consent to Jurisdiction, Etc.
(a) Each of the Grantors hereby irrevocably and unconditionally
submits, for itself and its Property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any document related
thereto, or for recognition or enforcement of any judgment, and each of the
Grantors hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
Each of the Grantors agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent may otherwise
have to bring any action or proceeding relating to this Agreement or any
document related thereto in the courts of any jurisdiction.
(b) Each of the Grantors hereby irrevocably and unconditionally
consents to the service of process of any of the aforementioned courts in any
such action or proceeding. Each Grantor hereby irrevocably consents to the
service of any and all process in any such action or proceeding by the mailing
of copies of such process to such Grantor, or to the Parent on behalf of such
Grantor, at its address specified in Section 9 hereof.
(c) Each of the Grantors irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any documents related
thereto in any New York State or federal court. Each of the Grantors hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
SECTION 12. Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, EACH OF THE GRANTORS AND THE ADMINISTRATIVE
174
AGENT (BY ACCEPTING THIS AGREEMENT) IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
SECTION 13. Joint and Several. All of the obligations of the
Grantors hereunder are joint and several. The Administrative Agent may, in its
sole and absolute discretion, enforce the provisions hereof against one or more
of the Grantors and shall not be required to proceed against all of the Grantors
jointly or seek payment from the Grantors ratably. In addition, the
Administrative Agent may, in its sole and absolute discretion, select the
Collateral of one or more of the Grantors for sale or application to the
Obligations, without regard to the ownership of such Collateral, and shall not
be required to make such selection ratably from the Collateral owned by all of
the Grantors. The release or discharge of any Grantor by the Administrative
Agent shall not release or discharge the other Grantors from the obligations of
such released or discharged Grantor hereunder.
SECTION 14. Miscellaneous.
(a) No amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by each Grantor and the
Administrative Agent, and no waiver of any provision of this Agreement, and no
consent to any departure by any Grantor therefrom, shall be effective unless it
is in writing and signed by the Administrative Agent, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
(b) No failure on the part of the Administrative Agent to exercise,
and no delay in exercising, any right hereunder or under any other Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The rights and remedies of the Administrative Agent provided
herein and in the other Loan Documents are cumulative and are in addition to,
and not exclusive of, any rights or remedies provided by law. The rights of the
Administrative Agent under any Loan Document against any party thereto are not
conditional or contingent on any attempt by the Administrative Agent to exercise
any of its rights under any other Loan Document against such party or against
any other Person.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
(d) This Agreement shall create a continuing security interest in
the Collateral and shall (i) remain in full force and effect until the payment
in full or release of the Obligations
175
and (ii) be binding on each Grantor and its successors and assigns and shall
inure, together with all rights and remedies of the Administrative Agent
hereunder, to the benefit of the Administrative Agent and its respective
successors, transferees and assigns. Without limiting the generality of clause
(ii) of the immediately preceding sentence, the Administrative Agent may assign
or otherwise transfer its rights under this Agreement to any other Person
pursuant to the terms of the Loan Agreement and such other Person shall
thereupon become vested with all of the benefits in respect thereof granted to
the Administrative Agent herein or otherwise. Upon any such assignment or
transfer, all references in this Agreement to the Administrative Agent shall
mean the assignee of the Administrative Agent. None of the rights or obligations
of any Grantor hereunder may be assigned or otherwise transferred without the
prior written consent of the Administrative Agent, and any such assignment or
transfer shall be null and void.
(e) (i) Upon any sale or other disposition of any Collateral
permitted by the Loan Agreement, (A) the security interest created hereby in
such Collateral shall terminate and all rights to such Collateral shall revert
to the Grantors, and (B) the Administrative Agent will, upon the Grantors'
request and at the Grantors' joint and several expense, promptly (x) return to
the Parent on behalf of the Grantors the Grantors' Collateral to be sold or
disposed of and (y) execute and deliver to any of the Grantors, without any
recourse, representation or warranty whatsoever, such documents as the Grantors
shall reasonably request to evidence such termination.
(ii) Upon the satisfaction in full of the Obligations, (A)
this Agreement and the security interests created hereby shall terminate and all
rights to the Collateral shall revert to the Grantors and (B) the Administrative
Agent will, upon the Grantors' request and at the Grantors' joint and several
expense, (x) return to the Grantors such of the Collateral as shall not have
been sold or otherwise disposed of or applied pursuant to the terms hereof and
(y) execute and deliver to the Grantors such documents as the Grantors shall
reasonably request to evidence such termination, all without any representation,
warranty or recourse whatsoever.
(f) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT APPLYING ANY CONFLICTS OF LAWS
PRINCIPLES EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW), EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT
THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION
OR NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(g) The section and subsection headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provisions of this Agreement.
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(h) This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be effective as delivery of
a manually executed counterpart of this Agreement.
177
IN WITNESS WHEREOF, the Grantors have caused this Agreement to be
executed and delivered by their respective officer thereunto duly authorized, as
of the date first above written.
PLEDGORS:
INAMED CORPORATION
By:
-------------------------------
Name:
Title:
COLLAGEN AESTHETICS, INC.
By:
-------------------------------
Name:
Title:
178
SCHEDULE I
TRADEMARKS
AND
TRADEMARK LICENSES
179
SCHEDULE II
PATENTS AND PATENT LICENSES
180
SCHEDULE III
ADDRESSES
I. Locations of Equipment and Inventory
II. Chief Place of Business, Chief Executive Office and Location of Records
181
SCHEDULE IV
ACCOUNTS
Bank Name and Address Account Number Type of Account
- --------------------- -------------- ---------------
182
SCHEDULE V
TRADE NAMES
183
SCHEDULE VI
OTHER LIENS
184
SCHEDULE VII
UCC-1 FINANCING STATEMENTS
185
EXHIBIT A
ASSIGNMENT FOR SECURITY
(TRADEMARKS)
WHEREAS, [____________] (the "Assignor") has adopted, used and is
using the trademarks and service marks listed on the annexed Schedule 1A, which
trademarks and service marks are registered or applied for in the United States
Patent and Trademark Office (the "Trademarks");
WHEREAS, the Assignor has entered into a Security Agreement, dated
as of September ___, 1999 (as amended, restated, supplemented or otherwise
modified from time to time, the "Security Agreement"), in favor of ABLECO
FINANCE LLC, as Administrative Agent on behalf of the Lenders (as defined in the
Security Agreement) (the "Assignee");
WHEREAS, pursuant to the Security Agreement, the Assignor has
assigned to the Assignee and granted to the Assignee a security interest in all
right, title and interest of the Assignor in, to and under the Trademarks
together with the good-will of the business symbolized by the Trademarks and the
applications and registrations thereof, and all proceeds thereof, including,
without limitation, any and all causes of action which may exist by reason of
past, present or future infringements and other violations thereof (the
"Collateral"), to secure the payment, performance and observance of the
Obligations (as defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Assignor does hereby convey,
sell, assign, transfer and set over unto the Assignee and grants to the Assignee
a security interest in the Collateral to secure the prompt payment, performance
and observance of the Obligations.
The Assignor does hereby further acknowledge and affirm that the
rights and remedies of the Assignee with respect to the Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are
hereby incorporated herein by reference as if fully set forth herein.
IN WITNESS WHEREOF, the Assignor has caused this Assignment to be
duly executed by its officer thereunto duly authorized as of _____________
__, _____.
[ASSIGNOR]
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
186
STATE OF NEW YORK
ss.:
COUNTY OF NEW YORK
On this ____ day of _______________, ____, before me personally came
________________, to me known to be the person who executed the foregoing
instrument, and who, being duly sworn by me, did depose and say that he is the
________________ of _____________, a ______________ corporation, and that he
executed the foregoing instrument in the firm name of such corporation, and that
he had authority to sign the same, and he acknowledged to me that he executed
the same as the act and deed of said firm for the uses and purposes therein
mentioned.
___________________________
187
SCHEDULE 1A TO ASSIGNMENT FOR SECURITY
(TRADEMARK REGISTRATIONS AND APPLICATIONS)
188
EXHIBIT B
ASSIGNMENT FOR SECURITY
(PATENTS)
WHEREAS, [____________] (the "Assignor") holds all right, title and
interest in, or is otherwise using or has rights to, the patents, industrial
design registrations, and applications for patents and industrial design
registrations listed on the annexed Schedule 1A, which patents are issued or
applied for in the United States Patent and Trademark Office (the "Patents");
WHEREAS, the Assignor, has entered into a Security Agreement, dated
as of September ___, 1999 (as amended, restated, supplemented or otherwise
modified, the "Security Agreement"), in favor of ABLECO FINANCE LLC, as
Administrative Agent on behalf of the Lenders (as defined in the Security
Agreement) (the "Assignee");
WHEREAS, pursuant to the Security Agreement, the Assignor has
assigned to the Assignee and granted to the Assignee a security interest and
mortgage in all right, title and interest of the Assignor in, to and under the
Patents and the applications and registrations thereof, and all proceeds
thereof, including, without limitation, any and all causes of action which may
exist by reason of past, present or future infringement thereof (the
"Collateral"), to secure the payment, performance and observance of the
Obligations (as defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, the Assignor does hereby convey, sell, assign,
transfer and set over unto the Assignee and grants to the Assignee a security
interest and mortgage in the Collateral to secure the prompt payment,
performance and observance of the Obligations.
The Assignor does hereby further acknowledge and affirm that the
rights and remedies of the Assignee with respect to the Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are
hereby incorporated herein by reference as if fully set forth herein.
IN WITNESS WHEREOF, the Assignor has caused this Assignment to be
duly executed by its officer thereunto duly authorized as of __________ __,
____.
[ASSIGNOR]
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
189
STATE OF NEW YORK
ss.:
COUNTY OF NEW YORK
On this ____ day of _______________, _____, before me personally
came ________________, to me known to be the person who executed the foregoing
instrument, and who, being duly sworn by me, did depose and say that he is the
________________ of _____________, a [_________] corporation, and that he
executed the foregoing instrument in the firm name of such corporation, and that
he had authority to sign the same, and he acknowledged to me that he executed
the same as the act and deed of said firm for the uses and purposes therein
mentioned.
___________________________
190
SCHEDULE 1A TO ASSIGNMENT FOR SECURITY
(PATENTS AND PATENT APPLICATIONS)
191
EXHIBIT H-1
COLLAGEN JOINDER AGREEMENT
ACKNOWLEDGMENT AND JOINDER AGREEMENT (this "Agreement"), dated
as of ____________, made between COLLAGEN AESTHETICS, INC., a Delaware
corporation ("Collagen"), and ABLECO FINANCE LLC, a Delaware limited liability
company, as administrative agent for the Lenders (as hereinafter defined) under
the Loan Agreement referred to below (in such capacity, together with its
successors and assigns in such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, INAMED Corporation, a Delaware corporation (the
"Parent"), Inamed Acquisition Corporation, a Delaware corporation (the
"Purchaser", and together with the Parent, the "Borrowers"), the Administrative
Agent, and the lenders from time to time party thereto (each a "Lender" and
collectively, the "Lenders") have entered into a Loan Agreement, dated as of
September 1, 1999 (such Loan Agreement, as amended, restated, supplemented or
otherwise modified from time to time, the "Loan Agreement"), pursuant to which
the Lenders made a loan to the Borrowers in the principal amount of
$155,000,000 (the "Loan");
WHEREAS, on the Merger Date, the Purchaser merged with and
into Collagen with Collagen being the surviving corporation of such merger (the
"Merger"); and
WHEREAS, in order to induce the Administrative Agent and the
Lenders to maintain the Loan, Collagen desires to acknowledge that, upon the
consummation of the Merger, Collagen has by operation of law assumed all
rights, obligations, duties and liabilities of the Purchaser under the Loan
Agreement and the other Loan Documents to which the Purchaser is a party, and
shall comply with and be bound by, all of the terms and provisions of the Loan
Agreement and the other Loan Documents as a Borrower thereunder;
NOW THEREFORE, it is agreed:
1. Reference is hereby made to the Loan Agreement for a
statement of the terms thereof. All terms used in this Agreement which are
defined therein and which are not otherwise defined herein shall have the same
meanings herein as set forth therein.
2. Collagen hereby acknowledges and agrees that it (i)
has assumed all rights, obligations, duties and liabilities of the Purchaser
under the Loan Agreement and the other Loan Documents to which the Purchaser is
a party and (ii) shall be a "Borrower" for all purposes under (and shall be a
party to) the Loan Agreement and the other Loan Documents and all references in
the Loan Agreement and the other Loan Documents to the "Borrowers" shall be
deemed to include references to Collagen.
192
3. Collagen hereby represents, warrants and agrees on
and after the date hereof, that Collagen will fully and faithfully perform all
obligations (including payment obligations and compliance with all covenants)
of a "Borrower" under the Loan Agreement, the Notes delivered pursuant thereto
and the other Loan Documents executed and delivered by the Borrowers.
4. This Agreement shall become effective as of the date
first above written, when each of the parties hereto shall have executed a copy
hereof and shall have delivered the same to the Administrative Agent.
5. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed shall be deemed to be an original, and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed counterpart of this Agreement.
6. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT APPLYING ANY
CONFLICTS OF LAWS PRINCIPLES EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).
2
193
IN WITNESS WHEREOF, each of the parties hereto have caused
this Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
COLLAGEN AESTHETICS, INC.
By:
--------------------------------------------
Name:
Title:
ABLECO FINANCE LLC,
as Administrative Agent
By:
--------------------------------------------
Name:
Title:
Agreed and Accepted
INAMED CORPORATION
By:
-------------------------------
Name:
Title:
194
EXHIBIT H-2
SUBSIDIARY JOINDER AGREEMENT
ACKNOWLEDGMENT AND JOINDER AGREEMENT dated as of
__________________ by [NAME OF GUARANTOR], a ______________________ corporation
(the "Additional Guarantor" and if more than one, collectively the "Additional
Guarantors") in favor of ABLECO FINANCE LLC, as administrative agent for the
Lenders (as hereinafter defined) under the Loan Agreement referred to below (in
such capacity, together with its successors in such capacity, the
"Administrative Agent").
WHEREAS, INAMED Corporation, a Delaware corporation (the
"Parent"), Inamed Acquisition Corporation, a Delaware corporation (the
"Purchaser", and together with the Parent, the "Borrowers"), the Administrative
Agent and the lenders from time to time party thereto (each a "Lender" and
collectively the "Lenders") have entered into a Loan Agreement, dated as of
September 1, 1999 (as amended, supplemented or otherwise modified from time to
time, the "Loan Agreement") pursuant to which the Lenders made a loan to the
Borrowers in the principal amount of $155,000,000 (the "Loan");
WHEREAS, to induce the Lenders to maintain the Loan pursuant
to the Loan Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each Additional
Guarantor has agreed to guarantee the Guaranteed Obligations (as hereinafter
defined), to become a "Guarantor" under the Loan Agreement and the Guaranty (as
defined in the Loan Agreement), to become a "Grantor" under the Guarantor
Security Agreement (as defined in the Loan Agreement), and to become a
"Pledgor" under the Guarantor Pledge Agreement (as defined in the Loan
Agreement) and to become an "Obligor" under the Contribution Agreement (as
defined in the Loan Agreement).
NOW, THEREFORE, in consideration of the premises and the
agreements herein, the parties hereto agree as follows:
Section 1. Definitions. Reference is hereby made to the
Loan Agreement for a statement of terms thereof. All terms used in this
Agreement which are defined in the Loan Agreement and which are not otherwise
defined herein shall have the same meanings herein as set forth therein. In
addition, the terms "Collateral" and "Grantor" shall have the respective
meanings assigned to such terms in the Guarantor Security Agreement.
Section 2. The Guarantee. Each of the Additional
Guarantors hereby agrees to become a "Guarantor" under and for all purposes of
the Loan Agreement and the Guaranty and hereby undertakes all of the
obligations of a Guarantor thereunder as if it had been an original signatory
thereto. In addition, each Additional Guarantor hereby makes the
representations and warranties set forth in Section 6 of the Guaranty and
agrees that Schedule I to the Guaranty shall be deemed to be supplemented in
respect of such Additional Guarantor as specified in Appendix A hereto. .
195
Section 3. Guarantor Security Agreement, Guarantor
Pledge Agreement and Contribution Agreement. Each Additional Guarantor hereby
agrees to become a "Grantor" under and for all purposes of the Guarantor
Security Agreement, a "Pledgor" under and for all purposes of the Guarantor
Pledge Agreement and an "Obligor" under and for all purposes of the
Contribution Agreement, and hereby undertakes all of the obligations of a
Grantor, a Pledgor and an Obligor thereunder as if it had been an original
signatory thereto. Without limiting the generality of the foregoing, (i) each
Additional Guarantor hereby pledges and grants to the Administrative Agent, for
the benefit of the Lenders as provided in the Guarantor Security Agreement, a
security interest in all of such Additional Guarantor's right, title and
interest in all Collateral (as defined therein), whether now owned by such
Additional Guarantor or hereafter acquired and whether now existing or
hereafter coming into existence, and wherever located, and (ii) each Additional
Guarantor hereby pledges and grants to the Administrative Agent (as defined in
the Guarantor Pledge Agreement), for the benefit of the Lenders as provided in
the Guarantor Pledge Agreement, a security interest in all of such Additional
Guarantor's right, title and interest in all Pledged Collateral (as defined
therein), whether now owned by such Additional Guarantor or hereafter acquired
and whether now existing or hereafter coming into existence, and wherever
located. In addition, each Additional Guarantor hereby (i) makes the
representations and warranties set forth in Section 4 of the Guarantor Security
Agreement and agrees that each of the Schedules to the Guarantor Security
Agreement shall be deemed to be supplemented in respect of such Additional
Guarantor as specified in Appendix B hereto, and (ii) makes the representations
and warranties set forth in Section 5 of the Guarantor Pledge Agreement and
agrees that each of the Schedules to the Guarantor Pledge Agreement shall be
deemed to be supplemented in respect of such Additional Guarantor as specified
in Appendix C hereto.
Section 4. Representations and Warranties. Each
Additional Guarantor represents and warrants to the Administrative Agent for
the benefit of the Lenders as follows:
4.01 Corporate Existence. The Additional Guarantor: (a)
is a corporation, partnership or other entity duly organized and validly
existing under the laws of the jurisdiction of its organization; (b) has all
requisite corporate power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (c) is qualified
to do business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure so to
qualify (either individually or in the aggregate) would be reasonably likely to
have a Material Adverse Effect.
4.02 No Breach. None of the execution and delivery of
this Agreement, the consummation of the transactions herein contemplated or
compliance with the terms and provisions hereof will conflict with or result in
a breach of, or require any consent under, the charter or by-laws of the
Additional Guarantor, or any applicable law or regulation, or any order, writ,
injunction or decree of any court or governmental authority or agency, or any
agreement or instrument to which the Additional Guarantor is a party or by
which it is bound or to which it is subject, or constitute a default under any
such agreement or instrument, or (except for the Liens created pursuant to the
Guarantor Security Agreement or the Guarantor Pledge Agreement, each
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196
as supplemented hereby) result in the creation or imposition of any Lien upon
any Property of the Additional Guarantor pursuant to the terms of any such
agreement or instrument.
4.03 Action. The Additional Guarantor has all necessary
corporate or other power and authority to execute, deliver and perform its
obligations under this Agreement and under the Loan Agreement, the Guaranty,
the Guarantor Security Agreement, the Guarantor Pledge Agreement and the
Contribution Agreement, each as supplemented hereby; the execution, delivery
and performance by the Additional Guarantor of this Agreement have been duly
authorized by all necessary corporate or other action on its part (including,
without limitation, any required shareholder approvals); and this Agreement has
been duly and validly executed and delivered by the Additional Guarantor and
(together with the Loan Agreement, the Guaranty, the Guarantor Security
Agreement, the Guarantor Pledge Agreement and the Contribution Agreement, each
as supplemented hereby) constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors generally and (b)
the application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
4.04 Approvals. No authorizations, approvals or consents
of, and no filing or registrations with, any governmental or regulatory
authority or agency, or any securities exchange are necessary for the
execution, delivery or performance by the Additional Guarantor of this
Agreement (or the Loan Agreement, the Guaranty, the Guarantor Security
Agreement, the Guarantor Pledge Agreement or the Contribution Agreement, each
as supplemented hereby) or for the legality, validity or enforceability hereof
or thereof, except for filings and recordings in respect of the Liens created
pursuant to the Guarantor Security Agreement as supplemented hereby.
Section 5. Miscellaneous.
5.01 No Waiver. No failure on the part of the
Administrative Agent or any Lender to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise by
the Administrative Agent or any Lender of any right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
Each Additional Guarantor irrevocably waives, to the fullest
extent permitted by applicable law, any claim that any action or proceeding
commenced by the Administrative Agent or any Lender relating in any way to this
Agreement (or the Loan Agreement, the Guaranty, the Guarantor Security
Agreement, the Guarantor Pledge Agreement or the Contribution Agreement, each
as supplemented hereby) should be dismissed or stayed by reason, or pending the
resolution, of any action or proceeding commenced by any Additional Guarantor
relating in any way to this Agreement (or the Loan Agreement, the Guaranty, the
Guarantor Security Agreement, the Guarantor Pledge Agreement or the
Contribution Agreement, each as so supplemented) whether or not commenced
earlier. To the fullest extent permitted by applicable
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197
law, each Additional Guarantor shall take all measures necessary for any such
action or proceeding commenced by the Administrative Agent or any Lender to
proceed to judgment prior to the entry of judgment in any such action or
proceeding commenced by any Additional Guarantor.
5.02. Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the Additional
Guarantors or the Administrative Agent, as the case may be, at their respective
"Addresses for Notices" specified on the signature pages hereof, at such other
address as shall be designated by such party in a notice to the other party in
accordance with this Section 5.02. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
5.03 Expenses. Each Additional Guarantor agrees to
reimburse each of the Lenders and the Administrative Agent for all reasonable
costs and expenses of the Lenders and the Administrative Agent (including,
without limitation, the reasonable fees and expenses of legal counsel) in
connection with (i) any Default and any enforcement or collection proceeding
resulting therefrom, including, without limitation, all manner of participation
in or other involvement with (x) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, (y) judicial or regulatory
proceedings and (z) workout, restructuring or other negotiations or proceedings
(whether or not the workout, restructuring or transaction contemplated thereby
is consummated), in each case whether relating to the Borrowers or any
Guarantor and (ii) the enforcement of this Section 5.03.
5.04 Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by
the Additional Guarantors and the Administrative Agent (with the consent of the
Lenders as specified in Section 8.01 of the Loan Agreement). Any such
amendment or waiver shall be binding upon the Administrative Agent and each
Lender, each holder of any of the Guaranteed Obligations and the Additional
Guarantors.
5.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Additional Guarantors, the Administrative Agent, the Lenders and each
holder of any of the Guaranteed Obligations (provided, however, that none of
the Additional Guarantors shall assign or transfer its rights hereunder without
the prior written consent of the Administrative Agent).
5.06 Captions. The captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
5.07 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and either of the parties hereto may execute this Agreement
by signing any such counterpart.
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5.08 Governing Law; Submission to Jurisdiction. This
Agreement shall be governed by, and construed in accordance with, the law of
the State of New York. Each Additional Guarantor hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of the Supreme Court of the State of New York sitting
in New York County (including its Appellate Division), and of any other
appellate court in the State of New York, for the purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each Additional Guarantor hereby irrevocably waives, to
the fullest extent permitted by applicable law, any objection that it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such court has
been brought in an inconvenient forum.
5.09 Waiver of Jury Trial. EACH ADDITIONAL GUARANTOR, AND
THE ADMINISTRATIVE AGENT (FOR ITSELF AND ON BEHALF OF THE LENDERS) BY ACCEPTING
THIS AGREEMENT, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
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IN WITNESS WHEREOF, each Additional Guarantor has caused this
Subsidiary Joinder Agreement to be duly executed and delivered as of the day
and year first above written.
[NAME OF SUPPLEMENTAL GUARANTOR]
By:
----------------------------------------------
Name:
Title:
Address for Notices:
-------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
Telecopier No.:
----------------------------------
Telephone No.:
-----------------------------------
Accepted and agreed:
ABLECO FINANCE LLC,
as Administrative Agent
By:
--------------------------------------
Name:
Title:
Address for Notices:
- -------------------
450 Park Avenue
28th Floor
New York, NY 10022
Attn: Mark Neoprent, Esq.
Telecopier No.: (212) 935-2874
Telephone No.: (212) 891-2153
-7-
200
Appendix A
to
Subsidiary Joinder
Agreement
Supplement to Guaranty Schedules
201
Appendix B
to
Subsidiary Joinder
Agreement
Supplement to Guarantor Security Agreement Schedules
202
Appendix C
to
Subsidiary Joinder
Agreement
Supplement to Guarantor Pledge Agreement Schedules
203
EXHIBIT I
GUARANTY
GUARANTY, dated September __, 1999, made by each of the direct
and indirect Domestic Subsidiaries of INAMED CORPORATION, a Delaware
corporation (the "Parent"), party hereto and identified on the signature pages
hereto as a "Guarantor" (each a "Guarantor" and collectively, the
"Guarantors"), in favor of the Lenders (as hereinafter defined) party to the
Loan Agreement referred to below and ABLECO FINANCE LLC, as administrative
agent for the Lenders (in such capacity, together with its successors in such
capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Parent, INAMED Acquisition Corporation, a
Delaware corporation (the "Purchaser", and together with the Parent, each a
"Borrower" and collectively, the "Borrowers"), the Administrative Agent, and
the lenders from time to time party thereto (each a "Lender" and collectively,
the "Lenders") have entered into a Loan Agreement, dated as of September 1,
1999 (such Loan Agreement, as amended, restated, supplemented or otherwise
modified from time to time, the "Loan Agreement"), pursuant to which the
Lenders have agreed to make a loan to the Borrowers in the principal amount of
$155,000,000 (the "Loan");
WHEREAS, it is a condition precedent to the making and
maintaining by the Lenders of the Loan pursuant to the Loan Agreement that each
of the Guarantors shall have executed and delivered to the Lenders and to the
Administrative Agent a guaranty guaranteeing all of the obligations of the
Borrowers under the Loan Documents (as defined in the Loan Agreement); and
WHEREAS, each of the Guarantors has determined that the
execution, delivery and performance by such Guarantor of this Guaranty directly
benefit, and are within the corporate purposes and in the best interests of,
such Guarantor;
NOW, THEREFORE, in consideration of the premises and the
agreements herein and in order to induce the Lenders and the Administrative
Agent to enter into the Loan Agreement and the Lenders to make and maintain the
Loan pursuant to the Loan Agreement, the Guarantors hereby agree with the
Lenders and the Administrative Agent as follows:
SECTION 1. Definitions. Reference is hereby made to the
Loan Agreement for a statement of the terms thereof. All terms used in this
Guaranty which are defined therein and not otherwise defined herein shall have
the same meanings herein as set forth therein.
SECTION 2. Guaranty. Each Guarantor hereby (i) irrevocably,
absolutely and unconditionally guarantees to the Lenders and the Administrative
Agent the prompt payment by the Borrowers, as and when due and payable (whether
by scheduled maturity, required
204
prepayment, acceleration, demand or otherwise), of all amounts now or hereafter
owing in respect of the Notes, the Loan Agreement and the other Loan Documents,
whether for principal, interest, premiums, indemnities, fees, expenses or
otherwise, and whether accruing before or subsequent to the filing of a
petition initiating a bankruptcy, reorganization, liquidation or similar
proceeding affecting the Borrowers (notwithstanding the operation of the
automatic stay under Section 362(a) of the United States Bankruptcy Code), and
the due performance and observance by the Borrowers of their other obligations
now or hereafter existing in respect of the Loan Documents (the "Obligations");
and (ii) agrees to pay any and all expenses (including reasonable counsel fees
and expenses) incurred by the Administrative Agent or any of the Lenders in
enforcing its rights under this Guaranty. Without limiting the generality of
the foregoing, each Guarantor's liability shall extend to all amounts that
constitute part of the Obligations and would be owed by the Borrowers under the
Notes, the Loan Agreement or the other Loan Documents but for the fact that any
such document is unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Borrowers.
Anything herein or in any other Loan Document to the contrary notwithstanding,
the maximum liability of any Guarantor hereunder and under the other Loan
Documents shall in no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws relating to the insolvency of
debtors.
SECTION 3. Guarantors' Obligations Unconditional.
(a) Each Guarantor hereby guarantees that the
Obligations will be paid strictly in accordance with the terms of the Loan
Documents to which the Borrowers are a party, regardless of any law, regulation
or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Administrative Agent or the Lenders with respect
thereto. The obligations of the Guarantors under this Guaranty are independent
of the obligations of the Borrowers under the Loan Agreement and the other Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against the Borrowers or whether the Borrowers are joined in
any such action. The liability of the Guarantors hereunder shall be absolute
and unconditional irrespective of: (i) any lack of validity or enforceability
of any Loan Document or any agreement or instrument relating thereto; (ii) any
change in the time, manner or place of payment of, or in any other term in
respect of, all or any of the Obligations, or any other amendment or waiver of
or consent to any departure from any Loan Document (including, without
limitation, any increase in the obligations of the Borrowers resulting from the
extension of additional credit to the Borrowers or otherwise); (iii) any
exchange or release of, or non-perfection of any lien on or security interest
in, any collateral, or any release or amendment or waiver of or consent to any
departure from any other guaranty, for all or any of the Obligations; (iv) the
existence of any claim, set-off, defense or other right that any Guarantor may
have at any time against any Person, including, without limitation, the
Administrative Agent or any of the Lenders; or (v) any other circumstance
(other than the indefeasible payment or performance in full of the Obligations)
which might otherwise constitute a defense available to, or a discharge of,
either Borrower or any other Guarantor or guarantor in respect of the
Obligations or such Guarantor in respect hereof.
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(b) This Guaranty (i) is a continuing guaranty
and shall remain in full force and effect until the indefeasible satisfaction
in full of the Obligations and the payment of the other expenses to be paid by
the Guarantors pursuant hereto, and (ii) shall continue to be effective or
shall be reinstated, as the case may be, if at any time any payment of any of
the Obligations is rescinded or must otherwise be returned by the
Administrative Agent or any Lender upon the insolvency, bankruptcy or
reorganization of any of the Borrowers or Guarantors or otherwise, all as
though such payment had not been made.
SECTION 4. Waivers. Each Guarantor hereby waives: (i)
promptness and diligence; (ii) notice of acceptance and notice of the
incurrence of any Obligation by the Borrowers; (iii) notice of any actions
taken by the Administrative Agent, any Lender, either Borrower or any other
Loan Party under any Loan Document or any other agreement or instrument
relating thereto; (iv) all other notices, demands and protests, and all other
formalities of every kind in connection with the enforcement of the Obligations
or of the obligations of the Guarantors hereunder, the omission of or delay in
which, but for the provisions of this Section 4, might constitute grounds for
relieving any Guarantor of its obligations hereunder; (v) any right to compel
or direct the Lenders or the Administrative Agent to seek payment or recovery
of any amounts owed under this Guaranty from any one particular fund or source,
including, without limitation, any other Guarantor; and (vi) any requirement
that the Administrative Agent or any Lender protect, secure, perfect or insure
any security interest or lien or any property subject thereto or exhaust any
right or take any action against the Borrowers or any other Person or any
Collateral. Each Guarantor agrees that the Lenders and the Administrative
Agent shall have no obligation to marshall any assets in favor of any Guarantor
or otherwise in connection with obtaining payment of any or all of the
Obligations from any Person or any source.
SECTION 5. Subrogation. To the extent permitted by
applicable law, each Guarantor waives any claim, right or remedy now existing
or hereafter acquired against either Borrower or from the performance by such
Guarantor hereunder, including, without limitation, any claim, right or remedy
of subrogation, reimbursement, exoneration, contribution, indemnification,
claim, right or remedy of such Guarantor against either Borrower, or any
security that such Guarantor now owns or is hereafter granted to such
Guarantor, whether arising in equity, under contract, by statute (including,
without limitation, any such right arising under the United States Bankruptcy
Code), under common law or otherwise, and further agrees with each Borrower for
the benefit of such Borrower's creditors (including, without limitation, the
Administrative Agent and the Lenders), that any such payment by it shall
constitute, to the fullest extent permitted by applicable law, an equity
investment by such Guarantor in such Borrower.
SECTION 6. Representations and Warranties. Each Guarantor
hereby represents and warrants as follows:
(a) Each Guarantor (i) is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation, and (ii) has all requisite power and authority to execute,
deliver and perform this Guaranty and each other Loan Document to which such
Guarantor is a party.
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206
(b) The execution, delivery and performance by
each Guarantor of this Guaranty and each other Loan Document to which such
Guarantor is a party (i) have been duly authorized by all necessary corporate
action, (ii) do not and will not contravene its organizational documents, any
law or any contractual restriction binding on or affecting such Guarantor or
any of its properties, and (iii) do not and will not result in or require the
creation of any lien, security interest or other charge or encumbrance upon or
with respect to any of its properties (other than any lien or security interest
created pursuant to the Loan Documents).
(c) No authorization or approval or other action
by, and no notice to or filing with, any governmental authority or other
regulatory body is required for the due execution, delivery and performance by
any of each the Guarantors of this Guaranty or any of the other Loan Documents
to which any such Guarantor is a party.
(d) Each of this Guaranty and the other Loan
Documents to which any of the Guarantors is a party is a legal, valid and
binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms.
(e) As of the date hereof, there is no action,
suit or proceeding pending or, to the knowledge of the Guarantors, threatened
against or otherwise affecting any of the Guarantors before any court or other
governmental authority or any arbitrator which may materially adversely affect
such Guarantor's ability to perform its obligations hereunder or under the
other Loan Documents to which such Guarantor is a party.
(f) Each of the Guarantors has, independently and
without reliance upon the Lenders or the Administrative Agent and based on
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Guaranty.
SECTION 7. Right of Set-off. Upon the occurrence and during
the continuance of any Event of Default, each of the Lenders may, and is hereby
authorized to, at any time and from time to time, without notice to any
Guarantor (any such notice being expressly waived by each Guarantor) and to the
fullest extent permitted by law, set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender to or for the credit or the
account of a Guarantor against any and all obligations of such Guarantor now or
hereafter existing under this Guaranty, irrespective of whether or not the
Administrative Agent or such Lender shall have made any demand under this
Guaranty and although such obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Guarantors after any such set-off and
application by such Lender, provided that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each
Lender under this Section 7 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the
Administrative Agent and the Lenders may have.
SECTION 8. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing and shall be mailed
(by certified mail, postage prepaid and return receipt requested or by
overnight courier), telecopied or delivered, if to any of the Guarantors, to
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the address of such Guarantor as set forth on Schedule I hereto or to the
Parent, on behalf of such Guarantor, at its address set forth in the Loan
Agreement, and if to the Administrative Agent or the Lenders, to the
Administrative Agent at its address as set forth on Schedule I hereto; or, as
to each such Persons, at such other addresses as shall be designated by such
Person(s) in a written notice to such other Persons complying as to delivery
with the terms of this Section 8. All such notices and other communications
shall be effective (i) if mailed, when received or three days after mailing,
(ii) if telecopied, when transmitted, provided same is on a Business Day and,
if not, on the next Business Day and (iii) if delivered, upon delivery provided
same is on a Business Day and, if not, on the next Business Day.
SECTION 9. Parent Appointed Agent. Each Guarantor hereby
designates and appoints the Parent as an agent for such Guarantor, and each
Guarantor hereby authorizes the Parent, to execute notices, receive notices and
receive summons of process on behalf of such Guarantor, in each case in
accordance with the terms hereof.
SECTION 10. Payments Free and Clear of Taxes, Etc.
(a) All payments by the Guarantors under this
Guaranty shall be made in accordance with the terms of the Loan Agreement and
shall be made free and clear of, and without deduction for, any present or
future income, stamp or other taxes, levies, imposts, deductions, charges,
fees, withholdings, liabilities, restrictions or conditions of any nature
whatsoever now or hereafter imposed, levied, collected, assessed or withheld by
any jurisdiction, by any political subdivision thereof or therein or by any
other government or taxing authority of any kind, and all interest, penalties,
additions to tax or similar liabilities, excluding taxes on any Lender's
overall net income (all such non-excluded taxes, levies, imposts, deductions,
charges, fees, withholdings, liabilities, restrictions and conditions
hereinafter referred to as "Taxes"). In the event that any withholding or
deduction from any payment to be made by the Guarantors hereunder is required
in respect of any Taxes pursuant to any applicable law, rule, or regulation,
then the Guarantors will:
(i) pay to the relevant
authority the full amount required to be so withheld or deducted;
(ii) promptly forward to the
Administrative Agent and each relevant Lender an official receipt or
other documentation satisfactory to it evidencing such payment to such
authority; and
(iii) pay to the Administrative
Agent for the benefit of each relevant Lender such additional amount
as is necessary to ensure that the net amount actually received by
such Lender after such withholding or deduction (including
withholdings or deductions on amounts payable under this Section 10)
will equal the full amount that such Lender would have received had no
such withholding or deduction been required.
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(b) The Guarantors will pay any stamp or other
taxes of any jurisdiction with respect to the execution, delivery,
registration, performance and enforcement of this Guaranty, Taxes specified in
subsection (a) above and taxes of all jurisdictions with respect to any amounts
paid under this subsection (b). If any Taxes specified in subsection (a) above
or any taxes referred to in this subsection (b) are paid by the Administrative
Agent or any Lender, the Guarantors will, upon demand by the Administrative
Agent or such Lender, and whether or not such Taxes or taxes shall be correctly
or legally asserted, indemnify the Administrative Agent or such Lender, as the
case may be, for such payments, together with any interest, penalties and
expenses in connection therewith.
SECTION 11. Submission to Jurisdiction, Etc.
(a) Each of the Guarantors hereby irrevocably and
unconditionally submits, for itself and its Property, to the nonexclusive
jurisdiction of any New York State court or federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Guaranty or any
document related thereto, or for recognition or enforcement of any judgment,
and each of the Guarantors hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each of the Guarantors agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty shall affect any right that the Lenders or the
Administrative Agent may otherwise have to bring any action or proceeding
relating to this Guaranty or any document related thereto in the courts of any
jurisdiction.
(b) Each of the Guarantors hereby irrevocably and
unconditionally consent to the service of process of any of the aforementioned
courts in any such action or proceeding. Each Guarantor hereby irrevocably
consents to the service of any and all process in any such action or proceeding
by the mailing of copies of such process to such Guarantor, or to the Parent on
behalf of such Guarantor, at its address specified in Section 8 hereof.
(c) Each of the Guarantors irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any documents related thereto in any New York State or federal court. Each of
the Guarantors hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 12. Waiver of Jury Trial. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, EACH OF THE GUARANTORS, AND EACH OF THE LENDERS AND THE
ADMINISTRATIVE AGENT (BY ACCEPTING THIS GUARANTY), IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY
OTHER
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LOAN DOCUMENT, OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
SECTION 13. Joint and Several. All of the obligations of the
Guarantors hereunder are joint and several. The Lenders and the Administrative
Agent may, in their sole and absolute discretion, enforce the provisions hereof
against one or more of the Guarantors and shall not be required to proceed
against all of the Guarantors jointly or seek payment from the Guarantors
ratably. The release or discharge of any Guarantor by the Lenders and the
Administrative Agent shall not release or discharge the other Guarantors from
the obligations of such released or discharged Guarantor hereunder.
SECTION 14. Additional Guarantor. Each of the parties hereto
hereby agrees, that at the time any Subsidiary of the Parent first becomes a
Guarantor after the Closing Date, such Subsidiary shall, upon execution of a
Subsidiary Joinder Agreement, become a Guarantor for all purposes under this
Agreement.
SECTION 15. Miscellaneous.
(a) The Guarantors will make each payment
hereunder in lawful money of the United States of America and in same day funds
to the Administrative Agent, for its benefit and the ratable benefit of the
Lenders, at its address specified in Section 8 hereof.
(b) No amendment of any provision of this
Guaranty shall be effective unless it is in writing and signed by the
Guarantors, the Administrative Agent and the Required Lenders, and no waiver of
any provision of this Guaranty, and no consent to any departure by any
Guarantor therefrom, shall be effective unless it is in writing and signed by
the Administrative Agent and the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or
consent shall, unless in writing and signed by all of the Lenders, limit the
liability of any of the Guarantors or postpone any date fixed for payment
hereunder.
(c) No failure on the part of the Administrative
Agent or any of the Lenders to exercise, and no delay in exercising, any right
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any right preclude any other or
further exercise thereof or the exercise of any other right. The rights and
remedies of the Administrative Agent and the Lenders provided herein and in the
other Loan Documents are cumulative and are in addition to, and not exclusive
of, any rights or remedies provided by law. The rights of the Administrative
Agent and the Lenders under any Loan Document against any party thereto are not
conditional or contingent on any attempt by the Administrative Agent and the
Lenders to exercise any of their rights under any other Loan Document against
such party or against any other Person.
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(d) Any provision of this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
(e) This Guaranty shall (i) be binding on the
Guarantors and their respective successors and assigns, and (ii) inure,
together with all rights and remedies of the Administrative Agent and the
Lenders hereunder, to the benefit of the Administrative Agent and the Lenders
and their respective successors, transferees and assigns. Without limiting the
generality of clause (ii) of the immediately preceding sentence, subject to the
terms and conditions of the Loan Agreement, any Lender may assign or otherwise
transfer any Note, and the Administrative Agent and the Lenders may assign or
otherwise transfer their rights under any other Loan Document, to any other
Person, and such other Person shall thereupon become vested with all of the
benefits in respect thereof granted to the Administrative Agent and the Lenders
herein or otherwise. None of the rights or obligations of any Guarantor
hereunder may be assigned or otherwise transferred without the prior written
consent of the Administrative Agent and the Lenders.
(f) THIS GUARANTY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT APPLYING
ANY CONFLICTS OF LAWS PRINCIPLES EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).
(g) The section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Guaranty.
(h) This Guaranty may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Guaranty by telecopier shall
be effective as delivery of a manually executed counterpart of this Guaranty.
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IN WITNESS WHEREOF, the Guarantors have caused this Guaranty
to be executed and delivered by their respective officers thereunto duly
authorized, as of the date first above written.
GUARANTORS:
MCGHAN MEDICAL CORPORATION
By:
--------------------------------------
Name:
Title:
INAMED JAPAN, INC.
By:
--------------------------------------
Name:
Title:
INAMED INTERNATIONAL CORP.
By:
--------------------------------------
Name:
Title:
BIOENTERICS CORPORATION
By:
--------------------------------------
Name:
Title:
BIODERMIS CORPORATION
By:
--------------------------------------
Name:
Title:
BIOPLEXUS CORPORATION
By:
--------------------------------------
Name:
Title:
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INAMED DEVELOPMENT COMPANY
By:
--------------------------------------
Name:
Title:
CUI CORPORATION
By:
--------------------------------------
Name:
Title:
FLOWMATRIX CORPORATION
By:
--------------------------------------
Name:
Title:
MEDISYN TECHNOLOGIES CORPORATION
By:
--------------------------------------
Name:
Title:
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SCHEDULE I TO GUARANTY
Addresses
214
EXHIBIT J
GUARANTOR PLEDGE AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated September __, 1999 (this
"Agreement"), made by each of the direct and indirect domestic subsidiaries of
INAMED CORPORATION, a Delaware corporation (the "Parent"), party hereto and
identified on the signature pages hereto as a "Pledgor" (each a "Pledgor" and
collectively, the "Pledgors"), in favor of ABLECO FINANCE LLC, as
administrative agent for the Lenders (as hereinafter defined) under the Loan
Agreement referred to below (in such capacity, together with its successors in
such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Parent, Collagen Aesthetics, Inc. (successor by
merger to INAMED Acquisition Corporation), a Delaware corporation (the
"Purchaser", and together with the Parent, each a "Borrower" and collectively,
the "Borrowers"), the Administrative Agent, and the lenders from time to time
party thereto (each a "Lender" and collectively, the "Lenders") have entered
into a Loan Agreement, dated as of September 1, 1999 (such Loan Agreement, as
amended, restated, supplemented or otherwise modified from time to time, the
"Loan Agreement"), pursuant to which the Lenders have agreed to make a loan to
the Borrowers in the principal amount of $155,000,000 (the "Loan");
WHEREAS, pursuant to a Guaranty, dated as of the date hereof
(the "Guaranty"), made by each of the Pledgors in favor of the Administrative
Agent for the benefit of itself and the Lenders, the Pledgors have guaranteed
the Loan and all of the other obligations of the Borrowers under the Loan
Agreement and the other Loan Documents (as defined in the Loan Agreement);
WHEREAS, it is a condition precedent to the making and
maintaining by the Lenders of the Loan pursuant to the Loan Agreement that each
of the Pledgors shall have executed and delivered to the Administrative Agent a
pledge and security agreement providing for the pledge to the Administrative
Agent of, and the grant to the Administrative Agent for the benefit of itself
and the Lenders of a security interest in, the outstanding shares of capital
stock from time to time owned by such Pledgor of certain of its subsidiaries
now or hereafter existing; and
WHEREAS, each of the Pledgors has determined that the
execution, delivery and performance by such Pledgor of this Agreement directly
benefit, and are within the corporate purposes and in the best interest of,
such Pledgor;
NOW, THEREFORE, in consideration of the premises and the
agreements herein and in order to induce the Administrative Agent and the
Lenders to enter into the Loan
215
Agreement and the Lenders to make and maintain the Loan pursuant to the Loan
Agreement, the Pledgors hereby agree with the Administrative Agent as follows:
SECTION 1. Definitions. Reference is hereby made to the Loan
Agreement for a statement of the terms thereof. All terms used in this
Agreement which are defined in the Loan Agreement or in Article 8 or Article 9
of the Uniform Commercial Code (the "Code") currently in effect in the State of
New York and which are not otherwise defined herein shall have the same
meanings herein as set forth therein.
SECTION 2. Pledge and Grant of Security Interest. As
collateral security for all of the Obligations (as defined in Section 3
hereof), each Pledgor hereby pledges and assigns to the Administrative Agent
for the benefit of itself and the Lenders, and grants to the Administrative
Agent for the benefit of itself and the Lenders a continuing security interest
in, all of such Pledgor's right, title and interest in the following property
(the "Pledged Collateral"):
(a) the indebtedness described in Schedule I hereto (the
"Initial Pledged Debt");
(b) the indebtedness (the "Additional Pledged Debt", and
together with the Initial Pledged Debt, the "Pledged Debt") described in a
Pledge Amendment (Debt), duly executed by such Pledgor, in substantially the
form of Schedule II hereto (a "Pledge Amendment (Debt)");
(c) the promissory notes evidencing the Pledged Debt and
all securities, money, instruments, investment property, financial assets and
other Property from time to time received, receivable or otherwise distributed
or distributable in respect of or in exchange for any or all of the Pledged
Debt;
(d) the shares of Capital Stock described in Schedule III
hereto (the "Initial Pledged Shares") issued by the Persons described in such
Schedule III (the "Initial Pledged Subsidiaries");
(e) the shares of Capital Stock (the "Additional Pledged
Shares") described in a Pledge Amendment (Stock), duly executed by such
Pledgor, in substantially the form of Schedule IV hereto (a "Pledge Amendment
(Stock)", and together with a Pledge Amendment (Debt), collectively, a "Pledge
Amendment") and issued by the Persons described in such Pledge Amendment (the
"Additional Pledged Subsidiaries", and together with the Initial Pledged
Subsidiaries, collectively the "Pledged Subsidiaries" and individually a
"Pledged Subsidiary");
(f) without affecting the obligations of such Pledgor
under any provision prohibiting such action hereunder or under the Loan
Documents, in the event of any consolidation or merger in which a Pledged
Subsidiary is not the surviving corporation, all shares of each class of the
Capital Stock of the successor entity (unless such successor entity is such
Pledgor itself) formed by or resulting from such consolidation or merger which
are then owned by such Pledgor (the "Successor Shares");
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(g) all additional shares of Capital Stock from time to
time acquired by such Pledgor of any Pledged Subsidiary (the "Additional
Shares"), and together with the Initial Pledged Shares, the Additional Pledged
Shares and the Successor Shares, the "Pledged Shares");
(h) all certificates and instruments representing the
Pledged Shares, all warrants, options and other rights, contractual or
otherwise, in respect thereof and all shares, securities, money, instruments,
investment property, financial assets and other Property from time to time
received, receivable or otherwise distributed or distributable in respect of or
in exchange for any or all of the Pledged Shares;
(i) all security entitlements of such Pledgor in any of
the Property of such Pledgor described in this Section 3; and
(j) all proceeds of and, to the extent related to any
Property described in this Section 3, all books, correspondence, credit files,
records, invoices and other papers;
in each case, whether now owned or hereafter acquired by such Pledgor, whether
now in existence or hereafter coming into existence and howsoever such
Pledgor's interests therein may arise or appear (whether by ownership, security
interest, claim or otherwise); provided, however, that at no time shall the
shares of Capital Stock of any Pledged Subsidiary not organized under the laws
of the United States or any state thereof pledged to the Administrative Agent
pursuant to this Agreement (each, a "Foreign Pledged Subsidiary") exceed 65% of
the issued and outstanding shares of Capital Stock of such Foreign Pledged
Subsidiary.
SECTION 3. Security for Obligations. The security interest
created hereby in the Pledged Collateral constitutes continuing collateral
security for all of the following obligations whether now existing or hereafter
incurred (the "Obligations"):
(a) the prompt payment by each of the Pledgors, as and
when due and payable, of all amounts from time to time owing by such Pledgor
under the Guaranty and each of the other Loan Documents to which such Pledgor
is a party; and
(b) the due performance and observance by each of the
Pledgors of all of such Pledgor's other obligations from time to time existing
in respect of the Guaranty, this Agreement and the other Loan Documents to
which such Pledgor is a party.
SECTION 4. Delivery of the Pledged Collateral.
(a) All promissory notes currently evidencing the Initial
Pledged Debt and all certificates and instruments currently representing the
Initial Pledged Shares shall be delivered to the Administrative Agent on or
prior to the execution and delivery of this Agreement. All other promissory
notes evidencing Pledged Debt and all other certificates and instruments
representing Pledged Shares or other Pledged Collateral from time to time or
otherwise required to be pledged to the Administrative Agent pursuant to the
terms of the Loan Agreement or the terms of this Agreement (the "Additional
Collateral") shall be delivered to the Administrative Agent within 5 days of
receipt thereof by or on behalf of any of the Pledgors. All such promissory
notes,
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certificates and instruments shall be held by or on behalf of the
Administrative Agent pursuant hereto and shall be delivered in suitable form
for transfer by delivery or shall be accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance satisfactory to
the Administrative Agent. Within 5 days of the receipt by a Pledgor of the
Additional Collateral, a Pledge Amendment (Debt), in the case of Pledged Debt,
or a Pledge Amendment (Stock), in the case of Pledged Shares, in each case duly
executed by such Pledgor, shall be delivered to the Administrative Agent in
respect of the Additional Collateral which is to be pledged pursuant to this
Agreement and the Loan Agreement, which Pledge Amendment shall from and after
delivery thereof constitute part of this Agreement. The Pledgors hereby
authorize the Administrative Agent to attach each Pledge Amendment to this
Agreement and agree that all promissory notes, certificates or instruments
listed on any Pledge Amendment delivered to the Administrative Agent shall for
all purposes hereunder constitute Pledged Collateral and the Pledgors shall be
deemed upon delivery thereof to have made the representations and warranties
set forth in Section 5 hereof with respect to such Additional Collateral.
(b) If any Pledged Collateral consists of uncertificated
securities, the Pledgors shall (i) cause the Administrative Agent to become the
registered holder thereof, (ii) cause a securities intermediary, acceptable to
the Administrative Agent, to become the registered holder thereof, provided
that such securities intermediary has agreed in writing that it will comply
with instructions originated by the Administrative Agent with respect to such
securities without further consent by the Pledgors, or (iii) cause each issuer
of such securities to agree that it will comply with instructions originated by
the Administrative Agent with respect to such securities without further
consent by the Pledgors. If any Pledged Collateral consists of security
entitlements, the Pledgors shall transfer such security entitlements to the
Administrative Agent, or cause the applicable securities intermediary to agree
that it will comply with entitlement orders by the Administrative Agent without
further consent by the Pledgors. The Pledgors further agree to execute such
other documents and to take such other actions as the Administrative Agent
deems reasonably necessary or desirable to create and perfect the security
interests intended to be created hereunder, to effect the foregoing and to
permit the Administrative Agent to exercise any of its rights and remedies
hereunder.
(c) If a Pledgor shall receive, by virtue of its being or
having been an owner of any Pledged Collateral, any (i) stock certificate
(including, without limitation, any certificate representing a stock dividend
or distribution in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of shares,
stock split, spinoff or split-off), promissory note or other instrument, (ii)
option or right, whether as an addition to, substitution for, or in exchange
for, any Pledged Collateral, or otherwise, (iii) dividends or other
distributions payable in cash (except such dividends permitted to be retained
by the Pledgors pursuant to Section 7 hereof) or in securities or other
property or (iv) dividends or other distributions in connection with a partial
or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in surplus, such Pledgor shall receive such
stock certificate, promissory note, instrument, option, right, payment or
distribution in trust for the benefit of the Administrative Agent, shall
segregate it from such Pledgor's other property and shall deliver it forthwith
to the Administrative Agent in the exact form received, with any necessary
indorsement and/or appropriate stock powers duly executed in blank, to be
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held by the Administrative Agent as Pledged Collateral and as further
collateral security for the Obligations.
SECTION 5. Representations and Warranties. Each of the
Pledgors represents and warrants to the Lenders and the Administrative Agent as
follows:
(a) Each Pledgor (i) is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation, and (ii) has all requisite power and authority to execute,
deliver and perform this Agreement.
(b) The execution, delivery and performance by each
Pledgor of this Agreement (i) have been duly authorized by all necessary
corporate action, (ii) do not and will not contravene its charter or by-laws,
law or any contractual restriction binding on or affecting such Pledgor or any
of its properties, and (iii) do not and will not result in or require the
creation of any Lien, security interest or other charge or encumbrance upon or
with respect to any of its properties, except in favor of the Administrative
Agent.
(c) This Agreement is a legal, valid and binding
obligation of each Pledgor, enforceable against such Pledgor in accordance with
its terms subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights generally
and subject to the effect of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(d) The promissory notes currently evidencing the Pledged
Debt have been, and all other promissory notes from time to time evidencing
Pledged Debt, when executed and delivered, will have been, duly authorized,
executed and delivered by the respective makers thereof, and all such
promissory notes are or will be, as the case may be, legal, valid and binding
obligations of such makers, enforceable against such makers in accordance with
their respective terms.
(e) The Pledged Shares have been duly authorized and
validly issued, are fully paid and nonassessable and constitute 100% of the
issued shares of Capital Stock of the Pledged Subsidiaries, except in the case
of each Foreign Pledged Subsidiary, in which case such Pledged Shares
constitute 65% of the issued shares of Capital Stock of such Foreign Pledged
Subsidiary. All other shares of Capital Stock constituting Pledged Collateral
will be, when issued, duly authorized and validly issued, and fully paid and
nonassessable.
(f) The Pledgors are and will be at all times the legal
and beneficial owners of the Pledged Collateral free and clear of any Lien,
security interest, option or other charge or encumbrance, except for the
security interest created by this Agreement and Liens permitted by the Loan
Agreement.
(g) The exercise by the Administrative Agent of any of
its rights and remedies hereunder will not contravene any law or any
contractual restriction binding on or affecting any of the Pledgors or the
Pledged Subsidiaries or any of their respective properties except where such
contravention would not reasonably be expected to have a Material Adverse
Effect and will
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not result in or require the creation of any Lien, security interest or other
charge or encumbrance upon or with respect to any of their properties.
(h) No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority, or any other Person,
is required for (i) the due delivery and performance by the Pledgors of this
Agreement, (ii) the grant by the Pledgors, or the perfection, of the security
interest purported to be created hereby in the Pledged Collateral or (iii) the
exercise by the Administrative Agent of any of its rights and remedies
hereunder, except as may be required in connection with any sale of any Pledged
Collateral by laws affecting the offering and sale of securities generally.
(i) This Agreement creates valid security interests in
favor of the Administrative Agent in the Pledged Collateral as security for the
Obligations. The Administrative Agent's having possession of the promissory
notes evidencing the Pledged Debt, the certificates representing the Pledged
Shares and all other certificates, instruments and money constituting Pledged
Collateral from time to time results in the perfection of such security
interest in any instruments and certificated securities constituting Pledged
Collateral. If any Pledged Collateral consists of uncertificated securities,
the Administrative Agent's security interest therein will be perfected upon the
transfer of such securities to the Administrative Agent, or upon the agreement
of each issuer that it will comply with instructions originated by the
Administrative Agent with respect to such securities without further consent by
the Pledgor. If any Pledged Collateral consists of security entitlements, the
Administrative Agent's security interest therein will be perfected upon the
filing of appropriate UCC-1 Financing Statements, signed by the applicable
Pledgor, or upon the agreement of the applicable securities intermediary to
comply with entitlement orders by the Administrative Agent without further
consent by such Pledgor. Such security interest is, or in the case of Pledged
Collateral in which any Pledgor obtains rights after the date hereof, will be,
a perfected, first priority security interest subject only to Permitted Liens.
All action necessary or desirable to perfect and protect such security interest
has been duly taken, except for the Administrative Agent's having possession of
certificates, instruments and cash constituting Pledged Collateral after the
date hereof and obtaining control of uncertificated securities and security
entitlements constituting Pledged Collateral after the date hereof.
SECTION 6. Covenants as to the Pledged Collateral. So long
as any Obligations shall remain outstanding, each of the Pledgors will, unless
the Administrative Agent shall otherwise consent in writing:
(a) keep adequate records concerning the Pledged
Collateral pledged by such Pledgor hereunder and permit the Administrative
Agent, or any of its agents or representatives at any time or from time to
time, to examine and make copies of and abstracts from such records pursuant to
the terms of Section 5.01(e) of the Loan Agreement;
(b) at the Pledgors' joint and several expense, promptly
deliver to the Administrative Agent a copy of each material notice or other
communication received by any Pledgor in respect of Pledged Collateral;
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(c) at the Pledgors' joint and several expense, defend
the Administrative Agent's right, title and security interest in and to the
Pledged Collateral against the claims of any Person;
(d) at the Pledgors' joint and several expense, at any
time and from time to time, promptly execute and deliver all further
instruments and documents and take all further action that may be necessary or
that the Administrative Agent may reasonably request in order to (i) perfect
and protect the security interest purported to be created hereby, (ii) enable
the Administrative Agent to exercise and enforce its rights and remedies
hereunder in respect of the Pledged Collateral or (iii) otherwise effect the
purposes of this Agreement, including, without limitation, delivering to the
Administrative Agent, after the occurrence and during the continuation of an
Event of Default, irrevocable proxies in respect of the Pledged Collateral;
(e) not sell, assign (by operation of law or otherwise),
exchange or otherwise dispose of any Pledged Collateral or any interest
therein, except as permitted by Section 7(a)(i) hereof and Section 5.02(c) of
the Loan Agreement;
(f) not create or suffer to exist any Lien, security
interest or other charge or encumbrance upon or with respect to any Pledged
Collateral, except for the security interest created hereby and Liens permitted
by the Loan Agreement;
(g) not file or suffer to be on file, or authorize or
permit to be filed or to be on file, in any jurisdiction (foreign or domestic),
any financing statement, notice of lien or like instrument with respect to the
Pledged Collateral, except for a financing statement, notice of lien or like
instrument which is filed pursuant hereto or any other Loan Document;
(h) not make or consent to any amendment or other
modification or waiver with respect to any Pledged Collateral or enter into any
agreement or permit to exist any restriction with respect to any Pledged
Collateral other than in accordance with and as permitted by the Loan Documents
and applicable laws;
(i) not permit the issuance of (i) any additional shares
of any class of Capital Stock of any Pledged Subsidiary unless such Capital
Stock is pledged to the Administrative Agent in accordance with this Agreement,
(ii) any securities convertible voluntarily by the holder thereof or
automatically upon the occurrence or non-occurrence of any event or condition
into, or exchangeable for, any such shares of Capital Stock, (iii) any
warrants, options, contracts or other commitments entitling any Person to
purchase or otherwise acquire any such shares of Capital Stock or (iv) any
indebtedness to any Subsidiary, unless such indebtedness (A) is evidenced by a
promissory note which is delivered to the Administrative Agent in accordance
with Section 4(a) hereof and (B) is not otherwise prohibited by Section 5.02 of
the Loan Agreement;
(j) without at least 30 days' prior written notice to the
Administrative Agent, not (i) maintain any of its books and records with
respect to the Pledged Collateral at any office or maintain its principal place
of business at any place other than at the address on Schedule V hereto or (ii)
change its name, or the name under which it does business, from the name shown
on the signature pages hereto; and
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(k) not take or fail to take any action which would in
any manner impair the value or enforceability of the Administrative Agent's
security interest in any Pledged Collateral.
SECTION 7. Voting Rights, Dividends, Etc. in Respect of the
Pledged Collateral.
(a) So long as no Event of Default shall have occurred
and be continuing:
(i) each Pledgor may exercise any and all voting
and other consensual rights pertaining to any Pledged Collateral to which such
Pledgor is entitled for any purpose not inconsistent with the terms of this
Agreement, the Loan Agreement or the other Loan Documents; provided, however,
that (A) such Pledgor will not exercise or refrain from exercising any such
right, as the case may be, if the Administrative Agent gives it notice that, in
the Administrative Agent's reasonable judgment, such action would cause a
Material Adverse Effect, and (B) such Pledgor will give the Administrative
Agent at least 5 Business Days' notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right which
could reasonably be expected to cause a Material Adverse Effect;
(ii) each Pledgor may receive and retain any and
all dividends and interest paid in respect of the Pledged Collateral; provided,
however, that any and all (A) dividends and interest or other distributions
paid or payable other than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in respect of or in
exchange for, any Pledged Collateral, (B) dividends and other distributions
paid or payable in cash in respect of any Pledged Collateral in connection with
a partial or total liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in surplus, and (C) cash paid, payable or
otherwise distributed in redemption of, in exchange for, or upon the sale of,
any Pledged Collateral, shall be, and shall forthwith be delivered to the
Administrative Agent to hold as, Pledged Collateral and shall, if received by
any of the Pledgors, be received in trust for the benefit of the Administrative
Agent, shall be segregated from the other property or funds of the Pledgors,
and shall be forthwith delivered to the Administrative Agent in the exact form
received with any necessary indorsement and/or appropriate stock powers duly
executed in blank, to be held by the Administrative Agent as Pledged Collateral
and as further collateral security for the Obligations; and
(iii) the Administrative Agent will
execute and deliver (or cause to be executed and delivered) to each Pledgor all
such proxies and other instruments as any such Pledgor may reasonably request
for the purpose of enabling such Pledgor to exercise the voting and other
rights which it is entitled to exercise pursuant to paragraph (i) of this
Section 7(a) and to receive the dividends which it is authorized to receive and
retain pursuant to paragraph (ii) of this Section 7(a).
(b) Upon the occurrence and during the continuance of an
Event of Default and to the extent not inconsistent with the Loan Agreement:
(i) all rights of any of the Pledgors to
exercise the voting and other consensual rights which such Pledgor would
otherwise be entitled to exercise pursuant to paragraph (i) of subsection (a)
of this Section 7, and to receive the dividends and interest
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payments which such Pledgor would otherwise be authorized to receive and retain
pursuant to paragraph (ii) of subsection (a) of this Section 7, shall cease,
and all such rights shall thereupon become vested in the Administrative Agent
which shall thereupon have the sole right to exercise such voting and other
consensual rights and to receive and hold as Pledged Collateral such dividends
and interest payments;
(ii) without limiting the generality of
the foregoing, the Administrative Agent may at its option exercise any and all
rights of conversion, exchange, subscription or any other rights, privileges or
options pertaining to any of the Pledged Collateral as if it were the absolute
owner thereof, including, without limitation, the right to exchange, in its
discretion, any and all of the Pledged Collateral upon the merger,
consolidation, reorganization, recapitalization or other adjustment of any
Pledged Subsidiary, or upon the exercise by any Pledged Subsidiary of any
right, privilege or option pertaining to any Pledged Collateral, and, in
connection therewith, to deposit and deliver any and all of the Pledged
Collateral with any committee, depository, transfer agent, registrar or other
designated agent upon such terms and conditions as it may determine; and
(iii) all dividends and interest payments
which are received by the Pledgors contrary to the provisions of paragraph (i)
of this Section 7(b) shall be received in trust for the benefit of the
Administrative Agent, shall be segregated from other funds of the Pledgors, and
shall be forthwith paid over to the Administrative Agent as Pledged Collateral
in the exact form received with any necessary indorsement and/or appropriate
stock powers duly executed in blank, to be held by the Administrative Agent as
Pledged Collateral and as further collateral security for the Obligations.
SECTION 8. Additional Provisions Concerning the Pledged
Collateral.
(a) Each of the Pledgors hereby authorizes the
Administrative Agent to file, without the signature of such Pledgor where
permitted by law, one or more financing or continuation statements, and
amendments thereto, relating to the Pledged Collateral.
(b) Each of the Pledgors hereby irrevocably appoints the
Administrative Agent the Pledgors' attorney-in-fact and proxy, with full
authority in the place and stead of such Pledgor and in the name of such
Pledgor or otherwise, from time to time in the Administrative Agent's
discretion, to take any action and to execute any instrument which the
Administrative Agent may deem necessary or reasonably advisable to accomplish
the purposes of this Agreement (subject to the rights of such Pledgor under
Section 7(a) hereof), including, without limitation, upon the occurrence of an
Event of Default to receive, indorse and collect all instruments made payable
to such Pledgor representing any dividend, or other distribution in respect of
any Pledged Collateral and to give full discharge for the same.
(c) If any Pledgor fails to perform any agreement or
obligation contained herein, the Administrative Agent itself may perform, or
cause performance of, such agreement or obligation, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by the
Pledgors pursuant to Section 10 hereof.
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(d) Other than the exercise of reasonable care to assure
the safe custody of the Pledged Collateral while held hereunder, the
Administrative Agent shall have no duty or liability to preserve rights
pertaining thereto and shall be relieved of all responsibility for the Pledged
Collateral upon surrendering it or tendering surrender of it to any of the
Pledgors or to the Parent on behalf of the Pledgors. The Administrative Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially equal to that which the
Administrative Agent accords its own property, it being understood that the
Administrative Agent shall not have responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relating to any Pledged Collateral, whether or not the
Administrative Agent has or is deemed to have knowledge of such matters, or
(ii) taking any necessary steps to preserve rights against any parties with
respect to any Pledged Collateral.
(e) The Administrative Agent may at any time in its
discretion upon notice to the Pledgors, (i) transfer or register in the name of
the Administrative Agent or any of its nominees any or all of the Pledged
Collateral, subject only to the revocable rights of the Pledgors under Section
7(a) hereof, and (ii) exchange certificates or instruments constituting Pledged
Collateral for certificates or instruments of smaller or larger denominations.
SECTION 9. Remedies Upon Default. If any Event of Default
shall have occurred and be continuing:
(a) The Administrative Agent may exercise in respect of
the Pledged Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all of the rights and remedies of a
secured party upon default under the Code then in effect in the State of New
York (whether or not the Code is in effect in the jurisdiction where the rights
and remedies are asserted); and without limiting the generality of the
foregoing and without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange or broker's board or elsewhere, at such price or prices
and on such other terms as the Administrative Agent may deem commercially
reasonable. The Pledgors agree that, to the extent notice of sale shall be
required by law, at least 10 days' notice to the Pledgors, or to the Parent on
behalf of the Pledgors, of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make any sale
of Pledged Collateral regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
(b) In the event that the Administrative Agent determines
to exercise its right to sell all or any part of the Pledged Collateral
pursuant to subsection (a) of this Section 9, the Pledgors will, at the
Pledgors' expense and upon request by the Administrative Agent: (i) execute
and deliver, and cause each issuer of such Pledged Collateral and the directors
and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the reasonable opinion of the
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Administrative Agent, advisable to register such Pledged Collateral under the
provisions of the Securities Act of 1933, as amended (the "Securities Act"),
and to cause the registration statement relating thereto to become effective
and to remain effective for such period as prospectuses are required by law to
be furnished, and to make all amendments and supplements thereto and to the
related prospectus which, in the reasonable opinion of the Administrative
Agent, are necessary or advisable, all in conformity with the requirements of
the Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto, (ii) cause each issuer of such Pledged
Collateral to qualify such Pledged Collateral under the state securities or
"Blue Sky" laws of each jurisdiction, and to obtain all necessary governmental
approvals for the sale of the Pledged Collateral, as requested by the
Administrative Agent, (iii) cause each Pledged Subsidiary to make available to
its securityholders, as soon as practicable, an earnings statement which will
satisfy the provisions of Section 11(a) of the Securities Act, and (iv) do or
cause to be done all such other acts and things as may be necessary to make
such sale of such Pledged Collateral valid and binding and in compliance with
applicable law. The Pledgors agree that a breach of any of the covenants
contained in this Section 9(b) will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 9(b) shall
be specifically enforceable against the Pledgors, and the Pledgors hereby waive
and agree not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred
and is continuing under the Loan Agreement.
(c) Notwithstanding the provisions of Section 9(b)
hereof, the Pledgors recognize that the Administrative Agent may deem it
impracticable to effect a public sale of all or any part of the Pledged Shares
or any other securities constituting Pledged Collateral and that the
Administrative Agent may, therefore, determine to make one or more private
sales of any such securities to a restricted group of purchasers who will be
obligated to agree, among other things, to acquire such securities for their
own account, for investment and not with a view to the distribution or resale
thereof. The Pledgors acknowledge that any such private sale may be at prices
and on terms less favorable to the seller than the prices and other terms which
might have been obtained at a public sale and, notwithstanding the foregoing,
agree that such private sales shall be deemed to have been made in a
commercially reasonable manner and that the Administrative Agent shall have no
obligation to delay sale of any such securities for the period of time
necessary to permit the issuer of such securities to register such securities
for public sale under the Securities Act or any other applicable law. The
Pledgors further acknowledge and agree that any offer to sell such securities
which has been (i) publicly advertised on a bona fide basis in a newspaper or
other publication of general circulation in the financial community of New
York, New York (to the extent that such an offer may be so advertised without
prior registration under the Securities Act) or (ii) made privately in the
manner described above to not less than fifteen bona fide offerees shall be
deemed to involve a "public sale" for the purposes of Section 9-504(3) of the
Code (or any successor or similar, applicable statutory provision) as then in
effect in the State of New York, notwithstanding that such sale may not
constitute a "public offering" under the Securities Act, and that the
Administrative Agent may, in such event, bid for the purchase of such
securities.
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(d) In addition to the other rights of the Administrative
Agent set forth in this Section 9, (i) the Administrative Agent shall have the
right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Pledged Collateral
as if it were the sole and absolute owner thereof (and each Pledgor agrees to
take all such action as may be appropriate to give effect to such right), (ii)
the Administrative Agent in its discretion may, in its name or in the name of
any of the Pledgors or otherwise, demand, sue for, collect or receive any money
or Property at any time payable or receivable on account of or in exchange for
any of the Pledged Collateral, but shall have no obligation to do so, and (iii)
the Administrative Agent may make any compromise or settlement it deems
desirable with respect to any of the Pledged Collateral and may extend the time
of payment, arrange for payment in installments, or otherwise modify the terms
of, any of the Pledged Collateral.
(e) Any cash held by the Administrative Agent as Pledged
Collateral and all cash proceeds received by the Administrative Agent in
respect of any sale of, collection from, or other realization upon, all or any
part of the Pledged Collateral may, in the discretion of the Administrative
Agent, be held by the Administrative Agent as collateral for, and/or then or at
any time thereafter applied (after payment of any amounts payable to the
Administrative Agent pursuant to Section 10 hereof) in whole or in part by the
Administrative Agent against, all or any part of the Obligations in such order
as the Administrative Agent shall elect. Any surplus of such cash or cash
proceeds held by the Administrative Agent and remaining after payment in full
of all of the Obligations shall be paid over to the Pledgors or to such Person
as may be lawfully entitled to receive such surplus.
(f) In the event that the proceeds of any such sale,
collection or realization are insufficient to pay all amounts to which the
Administrative Agent or the Lenders are legally entitled, the Pledgors shall be
liable for the deficiency, together with interest thereon at the highest rate
specified in the Loan Documents for interest on overdue principal thereof or
such other rate as shall be fixed by applicable law, together with the costs of
collection and the reasonable fees of any attorneys employed by the
Administrative Agent and the Lenders to collect such deficiency.
SECTION 10. Indemnity and Expenses.
(a) The Pledgors agree, jointly and severally, to
indemnify and hold the Administrative Agent harmless from and against any and
all claims, damages, losses, liabilities, obligations, penalties, costs or
expenses (including, without limitation, reasonable legal fees, costs and
expenses) arising out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except claims, losses or
liabilities resulting solely and directly from the Administrative Agent's gross
negligence or willful misconduct as determined by the final non-appealable
judgment of a court of competent jurisdiction. The Administrative Agent may
employ agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
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(b) The Pledgors agree, jointly and severally, to pay to
the Administrative Agent upon demand the amount of any and all reasonable costs
and expenses, including the reasonable fees and disbursements of the
Administrative Agent's counsel and of any experts and agents, which the
Administrative Agent may incur in connection with (i) the preparation,
negotiation, execution, delivery, recordation, administration, amendment,
waiver or other modification or termination of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Administrative Agent or the Lenders
hereunder, or (iv) the failure by any of the Pledgors to perform or observe any
of the provisions hereof, including, without limitation, all manner of
participation in or other involvement with (w) performance by the
Administrative Agent of any obligations of the Pledgors in respect of the
Pledged Collateral that the Pledgors have failed or refused to perform, (x)
bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation
proceedings, or any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement in respect of any of the Pledged
Collateral, and for the care of the Pledged Collateral and defending or
asserting rights and claims of the Administrative Agent in respect thereof, by
litigation or otherwise, including expenses of insurance, (y) judicial or
regulatory proceedings and (z) workout, restructuring or other negotiations or
proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated).
SECTION 11. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing and shall be mailed
(by certified mail, postage prepaid and return receipt requested or by
overnight courier), telecopied or delivered, if to any of the Pledgors, to such
Pledgor at its address specified in Schedule V hereto or to the Parent, on
behalf of such Pledgor, at its address specified in the Loan Agreement, if to
the Administrative Agent, to it at its address specified in the Loan Agreement,
or as to any of the parties, to such Person at such other address as shall be
designated by such Person in a written notice to such other Person complying as
to delivery with the terms of this Section 11. All such notices and other
communications shall be effective (i) if mailed, when received or three days
after mailing, (ii) if telecopied, when transmitted, provided same is on a
Business Day and, if not, on the next Business Day, and (iii) if delivered,
when delivered, provided same is on a business Day and, if not, on the next
Business Day.
SECTION 12. Parent Appointed Agent. Each Pledgor hereby
designates and appoints the Parent as the agent for such Pledgor, and each
Pledgor hereby authorizes the Parent, to execute notices, receive notices,
receive summons of process and take possession of Pledged Collateral on behalf
of such Pledgor, in each case in accordance with the terms hereof.
SECTION 13. Consent to Jurisdiction, Etc.
(a) Each of the Pledgors hereby irrevocably and
unconditionally submits, for itself and its Property, to the nonexclusive
jurisdiction of any New York State court or federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or any
document related thereto, or for recognition or enforcement of any judgment,
and each of the Pledgors
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hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York
State court or, to the extent permitted by law, in such federal court. Each of
the Pledgors agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement
shall affect any right that the Administrative Agent may otherwise have to
bring any action or proceeding relating to this Agreement or any document
related thereto in the courts of any jurisdiction.
(b) Each of the Pledgors hereby irrevocably and
unconditionally consent to the service of process of any of the aforementioned
courts in any such action or proceeding. Each Pledgor hereby irrevocably
consents to the service of any and all process in any such action or proceeding
by the mailing of copies of such process to such Pledgor, or to the Parent on
behalf of such Pledgor, at its address specified in Section 11 hereof.
(c) Each of the Pledgors irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any
documents related thereto in any New York State or federal court. Each of the
Pledgors hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 14. Waiver of Jury Trial. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, EACH OF THE PLEDGORS AND THE ADMINISTRATIVE AGENT (BY
ACCEPTING THIS AGREEMENT) IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
SECTION 15. Joint and Several. All of the obligations of the
Pledgors hereunder are joint and several. The Administrative Agent may, in its
sole and absolute discretion, enforce the provisions hereof against one or more
of the Pledgors and shall not be required to proceed against all of the
Pledgors jointly or seek payment from the Pledgors ratably. In addition, the
Administrative Agent may, in its sole and absolute discretion, select the
Pledged Collateral of one or more of the Pledgors for sale or application to
the Obligations, without regard to the ownership of such Pledged Collateral,
and shall not be required to make such selection ratably from the Pledged
Collateral owned by all of the Pledgors. The release or discharge of any
Pledgor by the Administrative Agent shall not release or discharge the other
Pledgors from the obligations of such released or discharged Pledgor hereunder.
SECTION 16. Additional Pledgors. Each of the parties hereto
hereby agrees that, at the time any Subsidiary of the Parent first becomes a
Guarantor after the Closing Date, such Subsidiary shall, upon execution of a
Subsidiary Joinder Agreement, become a Pledgor for all purposes under this
Agreement.
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SECTION 17. Miscellaneous.
(a) Except as provided in Section 4(a) hereof with
respect to a Pledge Amendment, no amendment of any provision of this Agreement
shall be effective unless it is in writing and signed by each of the Pledgors
and the Administrative Agent, and no waiver of any provision of this Agreement,
and no consent to any departure by any of the Pledgors therefrom, shall be
effective unless it is in writing and signed by the Administrative Agent, and
then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
(b) No failure on the part of the Administrative Agent to
exercise, and no delay in exercising, any right hereunder or under any other
Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The rights and remedies of the
Administrative Agent provided herein and in the other Loan Documents are
cumulative and are in addition to, and not exclusive of, any rights or remedies
provided by law. The rights of the Administrative Agent under any Loan
Document against any party thereto are not conditional or contingent on any
attempt by the Administrative Agent to exercise any of its rights under any
other Loan Document against such party or against any other person.
(c) Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
(d) This Agreement shall create a continuing security
interest in the Pledged Collateral and shall (i) remain in full force and
effect until the payment in full or release of the Obligations and (ii) be
binding on the Pledgors and their respective successors and assigns, and shall
inure, together with all rights and remedies of the Administrative Agent
hereunder, to the benefit of the Administrative Agent and its successors,
transferees and assigns. Without limiting the generality of clause (ii) of the
immediately preceding sentence, the Administrative Agent may assign or
otherwise transfer its rights and obligations under this Agreement to any other
Person pursuant to the terms of the Loan Agreement, and such other Person shall
thereupon become vested with all of the benefits in respect thereof granted to
the Administrative Agent herein or otherwise. Upon any such assignment or
transfer, all references in this Agreement to the Administrative Agent shall
mean the assignee of the Administrative Agent. None of the rights or
obligations of any of the Pledgors hereunder may be assigned or otherwise
transferred without the prior written consent of the Administrative Agent, and
any such assignment or transfer shall be null and void.
(e) (i) Upon any sale or other disposition of any
Pledged Collateral permitted by the Loan Agreement, (A) the security interest
created hereby in such Pledged Collateral shall terminate and all rights to
such Pledged Collateral shall revert to the Pledgors, and (B) the
Administrative Agent will, upon the Pledgors' request and at the Pledgors'
joint and several expense, promptly (x) return to the Pledgors the Pledgors'
Pledged Collateral to be sold or
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disposed of and (y) execute and deliver to any of the Pledgors, without any
recourse, representation or warranty whatsoever, such documents as the Pledgors
shall reasonably request to evidence such termination.
(ii) Upon the satisfaction in full of the
Obligations, (i) this Agreement and the security interest created hereby shall
terminate and all rights to the Pledged Collateral shall revert to the
Pledgors, and (ii) the Administrative Agent will, upon the Pledgors' request
and at the Pledgors' joint and several expense, promptly (A) return to the
Parent on behalf of the Pledgors such of the Pledged Collateral as shall not
have been sold or otherwise disposed of or applied pursuant to the terms hereof
and (B) execute and deliver to any of the Pledgors, without recourse,
representation or warranty, such documents as such Pledgor shall reasonably
request to evidence such termination.
(f) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT APPLYING ANY
CONFLICTS OF LAWS PRINCIPLES EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW), EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND
EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE
EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY,
OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE
GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(g) The section headings appearing herein are included
solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
(h) This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this Agreement.
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230
IN WITNESS WHEREOF, the Pledgors have caused this Agreement to
be executed and delivered by their respective officers thereunto duly
authorized, as of the date first above written.
PLEDGORS:
MCGHAN MEDICAL CORPORATION
By:
--------------------------------------
Name:
Title:
INAMED JAPAN, INC.
By:
--------------------------------------
Name:
Title:
INAMED INTERNATIONAL CORP.
By:
--------------------------------------
Name:
Title:
BIOENTERICS CORPORATION
By:
--------------------------------------
Name:
Title:
BIODERMIS CORPORATION
By:
--------------------------------------
Name:
Title:
BIOPLEXUS CORPORATION
By:
--------------------------------------
Name:
Title:
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231
INAMED DEVELOPMENT COMPANY
By:
--------------------------------------
Name:
Title:
CUI CORPORATION
By:
--------------------------------------
Name:
Title:
FLOWMATRIX CORPORATION
By:
--------------------------------------
Name:
Title:
MEDISYN TECHNOLOGIES CORPORATION
By:
--------------------------------------
Name:
Title:
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232
SCHEDULE I TO PLEDGE AND SECURITY AGREEMENT
Pledged Debt
Principal Amount
Outstanding as of
Name of Payee [Description] Interest Rate
------------- ------------- ------------- --------------------------
233
SCHEDULE II TO PLEDGE AND SECURITY AGREEMENT
PLEDGE AMENDMENT (DEBT)
This Pledge Amendment, dated ___________________________, is
delivered pursuant to Section 4 of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge and Security Agreement, dated as of September ___, 1999, as it may
heretofore have been or hereafter may be amended, restated or otherwise
modified or supplemented from time to time (the "Pledge Agreement"), and that
the indebtedness listed on this Pledge Amendment shall be and become part of
the Pledged Collateral referred to in said Pledge Agreement and shall secure
all of the Obligations referred to in said Pledge Agreement.
Pledged Debt
Principal Amount
Outstanding as of
Name of Payee [Description] Interest Rate
------------- ------------- ------------- --------------------------
[PLEDGOR]
By: -----------------------------
Name:
Title:
234
[To be reviewed and corrected by INAMED]
SCHEDULE III TO PLEDGE AND SECURITY AGREEMENT
Pledged Shares
235
SCHEDULE IV TO PLEDGE AND SECURITY AGREEMENT
PLEDGE AMENDMENT (STOCK)
This Pledge Amendment, dated ___________________________, is
delivered pursuant to Section 4 of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge and Security Agreement, dated as of September ___, 1999, as it may
heretofore have been or hereafter may be amended, restated or otherwise
modified or supplemented from time to time (the "Pledge Agreement"), and that
the shares listed on this Pledge Amendment shall be and become part of the
Pledged Collateral referred to in said Pledge Agreement and shall secure all of
the Obligations referred to in said Pledge Agreement.
Pledged Shares
--------------
Number of Certificate
--------- -----------
Name of Issuer Jurisdiction Shares Class No.(s)
-------------- ------------ ------ ----- ------
[PLEDGOR]
By: -----------------------------
Name:
Title:
236
SCHEDULE V TO PLEDGE AND SECURITY AGREEMENT
Executive Office/Location of Books and Records
237
EXHIBIT K
GUARANTOR SECURITY AGREEMENT
SECURITY AGREEMENT, dated September __, 1999, made by each of the
direct and indirect domestic subsidiaries of INAMED CORPORATION, a Delaware
corporation (the "Parent"), party hereto and identified on the signature pages
hereto as a "Grantor" (each a "Grantor" and collectively, the "Grantors"), in
favor of ABLECO FINANCE LLC, as administrative agent for the Lenders (as
hereinafter defined) party to the Loan Agreement referred to below (in such
capacity, together with its successors in such capacity, the "Administrative
Agent").
W I T N E S S E T H :
WHEREAS, the Parent, INAMED Acquisition Corporation, a Delaware
corporation (the "Purchaser", and together with the parent, each a "Borrower"
and collectively, the "Borrowers"), the Administrative Agent, and the lenders
from time to time party thereto (each a "Lender" and collectively, the
"Lenders") have entered into a Loan Agreement, dated as of September 1, 1999
(such Loan Agreement, as amended, restated, supplemented or otherwise modified
from time to time, the "Loan Agreement"), pursuant to which the Lenders have
agreed to make a loan to the Borrowers in the principal amount of $155,000,000
(the "Loan");
WHEREAS, pursuant to a Guaranty, dated as of the date hereof (the
"Guaranty"), made by each of the Grantors in favor of the Administrative Agent
and the Lenders, the Grantors have guaranteed the Loan and all of the other
obligations of the Borrowers under the Loan Agreement and the other Loan
Documents (as defined in the Loan Agreement);
WHEREAS, it is a condition precedent to the making and maintaining
of the Loan by the Lenders pursuant to the Loan Agreement that each of the
Grantors shall have executed and delivered to the Administrative Agent a
security agreement providing for the grant to the Administrative Agent, for the
benefit of itself and the Lenders, of a security interest in all personal
property of the Grantors; and
WHEREAS, each of the Grantors has determined that the execution,
delivery and performance by such Grantor of this Agreement directly benefit,
and are within the corporate purposes and in the best interest of, such
Grantor.
NOW, THEREFORE, in consideration of the premises and the
agreements herein and in order to induce the Administrative Agent and the
Lenders to enter into the Loan Agreement and the Lenders to make and maintain
the Loan pursuant to the Loan Agreement, the Grantors hereby agree with the
Administrative Agent as follows:
SECTION 1. Definitions. Reference is hereby made to the Loan
Agreement for a statement of the terms thereof. All terms used in this
Agreement which are defined in the Loan Agreement or in Article 8 or Article 9
of the Uniform Commercial Code (the "Code") currently
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in effect in the State of New York and which are not otherwise defined herein
shall have the same meanings herein as set forth therein.
SECTION 2. Grant of Security Interest. As collateral security
for all of the Obligations (as defined in Section 3 hereof), each Grantor
hereby pledges and assigns to the Administrative Agent for the benefit of
itself and the Lenders, and grants to the Administrative Agent for the benefit
of itself and the Lenders a continuing security interest in, all personal
property and fixtures of such Grantor, wherever located and whether now or
hereafter existing and whether now owned or hereafter acquired, of every kind
and description, tangible or intangible (the "Collateral"), including, without
limitation, all of such Grantor's right, title and interest in and to the
following:
(a) all equipment of any kind (including, without limitation, all
furniture, fixtures and machinery and all motor vehicles, tractors and other
like property, whether or not the title thereto is governed by a certificate of
title or ownership (such motor vehicles, tractors and other like property
hereinafter collectively referred to as the "Motor Vehicles"), wherever located
and whether now or hereafter existing and whether now owned or hereafter
acquired, together with all substitutes, replacements, accessions and additions
thereto, and all tools, parts, accessories and attachments used in connection
therewith (hereinafter collectively referred to as the "Equipment");
(b) all inventory of any kind wherever located and whether now or
hereafter existing and whether now owned or hereafter acquired (including,
without limitation, all types of inventory, merchandise, goods, tangible
personal property and other assets that are held by such Grantor for sale,
lease or other disposition in the ordinary course of such Grantor's business or
to be furnished under a contract for services, whether such inventory,
merchandise, goods, tangible personal property and other assets are raw, in
process and finished, and materials used or consumed in the business of such
Grantor, and goods returned to or repossessed by such Grantor and goods in
which such Grantor has an interest in mass or in joint or other interest or
right of any kind including consigned goods and goods being processed), and all
accessions thereto and products thereof and all packing and shipping materials
(hereinafter collectively referred to as the "Inventory");
(c) (i) all present and future accounts, contract rights, chattel
paper, documents, general intangibles, instruments and other obligations of any
kind, whether now or hereafter existing and whether now owned or hereafter
acquired, arising out of or in connection with the sale or lease of goods or
the rendering of services or otherwise; (ii) all moneys, securities and other
property and the proceeds thereof, now or hereafter held or received by, or in
transit to, the Administrative Agent or any Lender from or for such Grantor,
whether for safekeeping, pledge, custody, transmission, collection or
otherwise, and all of such Grantor's claims against the Administrative Agent or
any Lender at any time existing; (iii) all rights, remedies, security and
liens, in, to and in respect of any credit insurance, accounts (including,
without limitation, rights of stoppage in transit, replevin, repossession,
reclamation and other rights and remedies of an unpaid vendor, lienor or
secured party), guaranties or other contracts of suretyship with respect to
accounts, and deposits or other security for the obligation of any
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account debtor; (iv) all rights relating to the sale or other transfer of
property to, or the construction, renovation or other improvement of property
by or for such Grantor; (v) all right, title and interest in, to and in respect
of all goods relating to, or which by sale have resulted in, accounts,
including, without limitation, all goods described in invoices or other
documents or instruments with respect to, or otherwise representing or
evidencing, any accounts, and all returned, reclaimed or repossessed goods; and
(vi) all rights now or hereafter existing in and to all security agreements,
leases and other contracts now or hereafter existing and securing or otherwise
relating to any accounts, contract rights, chattel paper, instruments,
documents, or other rights or obligations (any and all such accounts, contract
rights, chattel paper, instruments, documents, and rights and obligations being
hereinafter referred to as the "Receivables" and any and all such security
agreements, leases and other contracts being hereinafter referred to as the
"Related Contracts");
(d) (i) all general intangibles; (ii) all rights, interest, choses
in action, causes of actions, claims and all other intangible property of every
kind and nature, in each instance whether now owned or hereafter acquired by
such Grantor, including, without limitation, all corporate and other business
records, all loans, royalties, and all other forms of obligations receivable
whatsoever (other than Receivables); (iii) all trademarks, patents, trade
secrets, copyrights, goodwill, inventions, designs, registrations, permits;
(iv) all computer programs, software, printouts and other computer materials,
customer lists, credit files, correspondence, and advertising materials; (v)
all customer and supplier contracts, sale orders, rights under license and
franchise agreements, and other contracts and contract rights; (vi) all
interests in partnerships and joint ventures, including all moneys due from
time to time in respect thereof; (vii) all federal, state and local tax refunds
and federal, state and local tax refund claims; (viii) all right, title and
interest under leases, subleases and concessions and other agreements relating
to personal property, including all moneys due from time to time in respect
thereof; (ix) all payments due or made to such Grantor in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of any property
by any Person or Governmental Authority; (x) all deposit accounts (general or
special) with any bank or other financial institution, including, without
limitation, any depository or other accounts maintained by such Grantor with
the Administrative Agent or any Lender and all funds on deposit thereon and the
accounts set forth in Schedule IV hereto; (xi) all credits with and other
claims against third parties (including carriers and shippers) (other than
Receivables); (xii) all rights to indemnification; (xiii) all reversionary
interests in pension and profit sharing plans and reversionary, beneficial and
residual interests in trusts; (xiv) all proceeds of insurance, including credit
insurance, of which such Grantor is the beneficiary; (xv) all letters of
credit, guaranties, liens, security interests and other security held by or
granted to such Grantor; and (xvi) all other intangible property, whether or
not similar to the foregoing, in each instance, however and wherever arising
(hereinafter collectively referred to as "General Intangibles");
(e) (i) all trademarks, service marks, trade names, business
names, trade dress, designs, logos and other source or business identifiers and
all general intangibles of like nature, and all rights concerning the
foregoing, whether now or hereafter owned, adopted, acquired or used by such
Grantor (including, without limitation, all trademarks, service marks, trade
names, business names, trade dress, designs, logos and other source or business
identifiers described in
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240
Schedule I or V hereto), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Patent and Trademark Office or in any similar office or
agency of the United States, any state thereof or any other country or any
political subdivision thereof), and all reissues, extensions or renewals
thereof, together with all goodwill of the business symbolized by such marks
and all customer lists, formulae and other records of such Grantor relating to
the distribution of products and services in connection with which any of such
marks are used, and all income, royalties, damages and payments now or
hereafter due and/or payable under and with respect thereto, including, without
limitation, payments under all licenses entered into in connection therewith
and damages and payments for past and future infringements or other violations
thereof and the right to sue for past, present and future infringements and
other violations thereof (hereinafter referred to collectively as the
"Trademarks"); and (ii) all licenses, contracts or other agreements, whether
written or oral, naming or otherwise positioning such Grantor as licensor or
licensee and providing for the grant of any right to use any Trademark,
including, without limitation, all agreements described in Schedule I hereto,
together with any goodwill connected with and symbolized by any such trademark
licenses or agreements and the right to prepare for sale and sell any and all
Inventory now or hereafter owned by such Grantor and now or hereafter covered
by such licenses (hereinafter referred to collectively as the "Trademark
Licenses");
(f) (i) all letters patent, design patents and utility patents,
and all copyrights, inventions, trade secrets, proprietary information and
technology, know-how, formulae and other general intangibles of like nature,
and all rights concerning the foregoing, whether now existing or hereafter
acquired (including, without limitation, all letters patent, design patents and
utility patents described in Schedule II hereto), all applications,
registrations and recordings thereof (including, without limitation,
applications, registrations and recordings in the United States Patent and
Trademark Office or in any similar office or agency of the United States or any
other country or any political subdivision thereof), and all reissues,
divisions, continuations, continuations in part and extensions or renewals
thereof (hereinafter referred to collectively as the "Patents"); and (ii) all
licenses, contracts or other agreements, whether written or oral, naming or
otherwise positioning such Grantor as licensee or licensor and providing for
the grant of any right to manufacture, use or sell any invention covered by, or
any right to otherwise exploit, any Patent, including, without limitation, all
agreements set forth in Schedule II hereto (hereinafter referred to
collectively as the "Patent Licenses" and together with the Trademark Licenses,
the "Licenses");
(g) (i) all investment property, securities (other than shares of
voting stock of each class of any Foreign Subsidiary in excess of 65% of the
total issued and outstanding shares of the voting stock of such class),
securities accounts, financial assets and all securities entitlements of such
Grantor in any of the foregoing;
(h) all rights of such Grantor in, to and under the Tender Offer
Documents and the Merger Documents;
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241
(i) all rights of any Grantor in, to and under the Contribution
Agreement, dated as of the date hereof, among the Grantors, as the same may be
amended, restated, supplemented or otherwise modified from time to time;
(j) the books and records of such Grantor relating to any of the
foregoing Collateral, including, without limitation, all customer contracts,
sale orders, minute books, ledgers, records, computer programs, software,
printouts and other computer materials, customer lists, credit files,
correspondence and advertising materials, in each case indicating, summarizing
or evidencing any of the Collateral; and
(k) all cash and non-cash proceeds of any and all of the foregoing
Collateral (including without limitation, (i) damages for past and future
infringements of the Trademarks or the Patents and (ii) the right to sue for
past, present and future infringements of the Trademarks or the Patents) and,
to the extent not otherwise included, all payments under insurance (whether or
not the Administrative Agent is the loss payee thereof), and any indemnity,
warranty or guaranty, payable by reason of loss or damage to or otherwise with
respect to any of the foregoing Collateral; in each case, however such
Grantor's interest therein may arise or appear (whether by ownership, security
interest, claim or otherwise).
Notwithstanding anything herein to the contrary, in no event shall
the Collateral include, and no Grantor shall be deemed to have granted a
security interest in, any of such Grantor's rights or interests in any license,
contract or agreement to which such Grantor is a party or any of its rights or
interests thereunder to the extent that such a grant would, under the express
terms of such license, contract or agreement or otherwise, result in a breach
of the terms of, or constitute a default under such license, contract or
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to Section 9-318(4) of the Uniform Commercial Code of any
relevant jurisdiction or any other applicable law (including the Bankruptcy
Code) or principles of equity; provided that the Collateral shall include (y)
any and all proceeds of Collateral to the extent that the assignment or
encumbering of such proceeds is not so restricted, and (z) upon any such
licensor or other applicable party's consent with respect to any such otherwise
excluded item of Collateral being obtained, thereafter such item of Collateral
as well as any proceeds thereof that might theretofore have been excluded from
such grant, assignment, transfer, and conveyance of a security interest and the
term Collateral.
SECTION 3. Security for Obligations. The security interest
created hereby in the Collateral constitutes continuing collateral security for
all of the following obligations, whether now existing or hereafter incurred
(the "Obligations"):
(a) the prompt payment by each of the Grantors, as and when due
and payable, of all amounts from time to time owing by such Grantor under the
Guaranty and each of the other Loan Documents to which such Grantor is a party;
and
(b) the due performance and observance by each of the Grantors of
all of such Grantor's obligations from time to time existing in respect of the
Guaranty, this Agreement and the other Loan Documents to which such Grantor is
a party.
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SECTION 4. Representations and Warranties. Each of the Grantors
represents and warrants to the Lenders and the Administrative Agent as follows:
(a) Each Grantor (i) is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
and (ii) has all requisite power and authority to execute, deliver and perform
this Agreement.
(b) The execution, delivery and performance by each Grantor of
this Agreement (i) have been duly authorized by all necessary corporate action,
(ii) do not and will not contravene its charter or by-laws, law or any
contractual restriction binding on or affecting such Grantor or any of its
properties, and (iii) do not and will not result in or require the creation of
any Lien, security interest or other charge or encumbrance upon or with respect
to any of its properties, except in favor of the Administrative Agent.
(c) This Agreement is a legal, valid and binding obligation of
each Grantor, enforceable against such Grantor in accordance with its terms
subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and subject to
the effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d) All Equipment and Inventory now existing is, and except as
otherwise provided in Section 5(b) hereof, all Equipment and Inventory
hereafter existing will be, located at the addresses specified therefor in
Schedule III hereto beneath the name of each Grantor. Each Grantor's chief
place of business and chief executive office, the place where such Grantor
keeps its records concerning Receivables and all originals of all chattel paper
which constitute Receivables are located at the addresses specified therefor in
Schedule III hereto beneath the name of such Grantor. None of the Receivables
is evidenced by a promissory note or other instrument. Set forth in Schedule V
hereto is a complete and correct list of each trade name used by each Grantor.
Set forth in Schedule IV hereto is a complete and correct list of each bank and
securities account of each Grantor, together with the address of such
institution, the account number and the type of account.
(e) Each Grantor has delivered to the Administrative Agent
complete and correct copies of each material Trademark License described in
Schedule I hereto beneath such Grantor's name and each material Patent License
described in Schedule II hereto beneath such Grantor's name, including all
schedules and exhibits thereto. Each Related Contract and License sets forth
the entire agreement and understanding of the parties thereto relating to the
subject matter thereof, and there are no other agreements, arrangements or
understandings, written or oral, relating to the matters covered thereby or the
rights of such Grantor or any of its Affiliates in respect thereof. Each
Related Contract and License now existing is, and each other Related Contract
and License will be, the legal, valid and binding obligation of the parties
thereto, enforceable against such parties in accordance with its terms. No
default thereunder by any such party has occurred, nor does any defense,
offset, deduction or counterclaim exist thereunder in favor of any such party.
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243
(f) Each Grantor owns and controls, or otherwise possesses
adequate rights to use, all Trademarks and Patents which it purports to grant a
security interest in pursuant to Section 2 hereof, which are the only
trademarks, patents or other intellectual property or proprietary rights
necessary to conduct its business in substantially the same manner as conducted
as of the date hereof. Schedule I hereto sets forth a true and complete list
of all material, registered, issued or applied for Trademarks and Trademark
Licenses owned or used by such Grantor as of the date hereof beneath such
Grantor's name. Schedule II hereto sets forth a true and complete list of all
material, registered, issued or applied for Patents and Patent Licenses owned
or used by such Grantor as of the date hereof beneath such Grantor's name. All
of such Patents and Trademarks are subsisting and in full force and effect,
have not been adjudged invalid or unenforceable, are, to such Grantor's
knowledge, valid and enforceable, and have not been abandoned in whole or in
part. Except as set forth in Schedule I or II hereto, none of such Patents or
Trademarks is the subject of any licensing or franchising agreement. None of
the Grantors has knowledge of any conflict with the rights of others to any
Trademark or Patent and, to the best knowledge of each Grantor, none of the
Grantors is now infringing or in conflict with any such rights of others in any
material respect, and to the best knowledge of such Grantor, no other Person is
now infringing or in conflict in any material respect with any such properties,
assets and rights owned or used by any Grantor.
(g) Each Grantor is and will be at all times the sole and
exclusive owner of the Collateral in which it has an interest free and clear of
any Lien, except for (i) the security interest created by this Agreement and
(ii) the security interests and other encumbrances described in Schedule VI
hereto. No effective financing statement or other instrument similar in effect
covering all or any part of the Collateral is on file in any recording or
filing office, except such as may have been filed in favor of the
Administrative Agent relating to this Agreement or any other Security Document
and with respect to Permitted Liens.
(h) The exercise by the Administrative Agent of any of its rights
and remedies hereunder will not contravene law or any contractual restriction
binding on or otherwise affecting any Grantor or any of such Grantor's
properties except where such contravention could not reasonably be expected to
have a Material Adverse Effect and will not result in or require the creation
of any Lien upon or with respect to any of such Grantor's properties.
(i) No authorization or approval or other action by, and no notice
to or filing with, any Governmental Authority, or any other Person, is required
for (i) the grant by any Grantor, or the perfection, of the security interest
purported to be created hereby in any Collateral or (ii) the exercise by the
Administrative Agent of any of its rights and remedies hereunder, except (A)
with respect to the perfection of the security interest created hereby in
United States Trademarks and Patents, for the recording of the Assignment for
Security (Trademarks) and Assignment for Security (Patents) referred to in
Section 5(h) hereof in the United States Patent and Trademark Office, (B) the
filing under the Uniform Commercial Code as in effect in the applicable
jurisdiction of the financing statements in the filing offices described in
Schedule VII hereto, all of which financing statements have been duly filed and
are in full force and effect, (C) with respect to the perfection of the
security interest created hereby in foreign Trademarks and
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244
Patents, for registrations and filings in jurisdictions located outside of the
United States and covering rights in such jurisdictions relating to Patents,
Trademarks, Patent Licenses and Trademark Licenses, or (D) with respect to the
perfection of the security interest created hereby in Motor Vehicles, for the
submission of an appropriate application, together with the certificate of
title, with respect to each Motor Vehicle, to the appropriate state agency.
(j) This Agreement creates valid security interests in favor of
the Administrative Agent in the Collateral which each Grantor purports to grant
a security interest in pursuant to Section 2 hereof, as security for the
Obligations. The Administrative Agent's having possession of all instruments
and cash constituting Collateral from time to time, the recording of the
Assignment for Security (Patents) and the Assignment for Security (Trademarks)
executed pursuant hereto in the United States Patent and Trademark Office, the
filing of the financing statements described in Schedule VII hereto and, with
respect to Patents and Trademarks hereafter existing and not covered by such
Assignment for Security (Patents) or such Assignment for Security (Trademarks),
the recording in the United States Patent and Trademark Office of appropriate
instruments of assignment, result in the perfection of such security interests.
Such security interests are, or in the case of Collateral in which any Grantor
obtains rights after the date hereof, will be, perfected, first priority
security interests, subject only to the security interests and other
encumbrances described in Schedule VI hereto, any other Permitted Liens and the
recording of such instruments of assignment. Such recordings and filings and
all other action necessary or desirable to perfect and protect such security
interest have been duly taken, except for the Administrative Agent's having
possession of instruments and cash constituting Collateral after the date
hereof and the other filings and recordations described in Section 4(h) hereof.
(k) Any goods now or hereafter produced by such Grantor or any of
its Subsidiaries included in the Collateral have been and will be produced in
compliance with the requirements of the Fair Labor Standards Act, as amended.
SECTION 5. Covenants as to the Collateral. So long as any of the
Obligations shall remain outstanding, unless the Administrative Agent shall
otherwise consent in writing:
(a) Further Assurances. The Grantors will, at their joint and
several expense, at any time and from time to time, promptly execute and
deliver all further instruments and documents and take all further action that
may be necessary or desirable or that the Administrative Agent may reasonably
request in order (i) to perfect and protect the security interest purported to
be created hereby, (ii) to enable the Administrative Agent to exercise and
enforce its rights and remedies hereunder in respect of the Collateral, or
(iii) otherwise to effect the purposes of this Agreement, including, without
limitation: (A) marking conspicuously each chattel paper included in the
Receivables and each License and Related Contract and, at the reasonable
request of the Administrative Agent, each of its records pertaining to the
Collateral with a legend, in form and substance reasonably satisfactory to the
Administrative Agent, indicating that such chattel paper, License, Related
Contract or Collateral is subject to the security interest created hereby, (B)
if any Receivable shall be evidenced by a promissory note or other instrument
or chattel paper, delivering and pledging to the Administrative Agent hereunder
such note, instrument or chattel paper duly endorsed and accompanied by
executed instruments
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245
of transfer or assignment, all in form and substance reasonably satisfactory to
the Administrative Agent, (C) executing and filing such financing or
continuation statements, or amendments thereto, as may be necessary or
desirable or that the Administrative Agent may reasonably request in order to
perfect and preserve the security interest purported to be created hereby, (D)
furnishing to the Administrative Agent from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Administrative Agent may
reasonably request, all in reasonable detail, and (E) upon the acquisition
after the date hereof by any Grantor of any Equipment with a fair market value
in excess of $75,000 covered by a certificate of title or ownership, cause the
Administrative Agent to be listed as the lienholder on such certificate of
title and within 60 days of the acquisition thereof deliver evidence of the
same to the Administrative Agent.
(b) Location of Equipment and Inventory. Each Grantor will keep
the Equipment and Inventory (other than used Equipment and Inventory sold in
the ordinary course of business in accordance with Section 5(g) hereof and
Equipment and Inventory in transit) at the locations specified therefor in
Section 4(d) hereof, or, upon not less than 30 Business Days' prior written
notice to the Administrative Agent accompanied by a new Schedule III hereto
indicating each new location of the Equipment and Inventory, at such other
locations in the continental United States as the Grantors may elect, provided
that (i) all action has been taken to grant the Administrative Agent a
perfected, first priority security interest in such Equipment and Inventory,
subject to Permitted Liens and (ii) the Administrative Agent's rights in such
Equipment and Inventory, including, without limitation, the existence,
perfection and priority of the security interest created hereby in such
Equipment and Inventory are not adversely affected.
(c) Condition of Equipment. Each Grantor will maintain or cause
to be maintained in good repair, working order and condition, excepting
ordinary wear and tear and damage due to casualty, all of the Equipment and
make or cause to be made all of the appropriate repairs, renewals and
replacements thereof which are necessary or desirable and consistent with past
practice of such Grantor, as quickly as practicable after the occurrence of any
loss or damage thereto. Each Grantor shall promptly furnish to the
Administrative Agent a statement describing in reasonable detail any loss or
damage in excess of $100,000 to any Equipment or Inventory due to casualty.
(d) Taxes, Etc. Each Grantor will pay promptly when due all
property and other taxes, assessments and governmental charges or levies
imposed upon, and all claims (including claims for labor, materials and
supplies) against, the Equipment and Inventory, except to the extent the
validity thereof is being contested in good faith by proper proceedings which
stay the imposition of any penalty, fine or lien resulting from the non-payment
thereof and with respect to which adequate reserves in accordance with GAAP
have been set aside for the payment thereof.
(e) Insurance.
(i) Each Grantor will, at its own expense, maintain insurance
(including, without limitation, comprehensive general liability and hazard
insurance) with respect
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to the Equipment and Inventory owned by it in such amounts, against such risks,
in such form and with such insurers as is generally carried by companies
engaged in similar businesses as those engaged in by the Grantors. Each policy
for liability insurance shall provide for all losses to be paid on behalf of
the Administrative Agent and such Grantor as their respective interests may
appear, and each policy for property damage insurance shall provide for all
losses (except for losses of less than $100,000 per occurrence) to be adjusted
with, and paid directly to, the Administrative Agent. Each such policy shall
in addition (A) name such Grantor and the Administrative Agent as insured
parties thereunder (without any representation or warranty by or obligation
upon the Administrative Agent) as their interests may appear, (B) contain the
agreement by the insurer that any loss thereunder shall be payable to the
Administrative Agent on its own account notwithstanding any action, inaction or
breach of representation or warranty by any Grantor, (C) provide that there
shall be no recourse against the Administrative Agent for payment of premiums
or other amounts with respect thereto, and (D) provide that at least 30 days'
prior written notice of cancellation or of lapse shall be given to the
Administrative Agent by the insurer. Each Grantor will, if so requested by the
Administrative Agent, deliver to the Administrative Agent original or duplicate
policies of such insurance and, as often as the Administrative Agent may
reasonably request, a report of a reputable insurance broker with respect to
such insurance. Each Grantor will also, at the request of the Administrative
Agent, execute and deliver instruments of assignment of such insurance policies
and use reasonable efforts to cause the respective insurers to acknowledge
notice of such assignment.
(ii) Reimbursement under any liability insurance
maintained by a Grantor pursuant to this Section 5(e) may be paid directly to
the Person who shall have incurred liability covered by such insurance. In the
case of any loss involving damage to Equipment or Inventory as to which
paragraph (iii) of this Section 5(e) is not applicable, each Grantor will make
or cause to be made the necessary repairs to or replacements of such Equipment
or Inventory, and any proceeds of insurance maintained by such Grantor pursuant
to this Section 5(e) shall be paid by the Administrative Agent to such Grantor
as reimbursement for the costs of such repairs or replacements.
(iii) Upon the occurrence and during the continuance of an
Event of Default or upon the actual or constructive total loss (in excess of
$100,000 per occurrence) of any Equipment or Inventory, all insurance payments
in respect of such Equipment or Inventory shall be paid to the Administrative
Agent and applied as specified in Section 7(b) hereof.
(f) Provisions Concerning the Receivables, the Related Contracts
and the Licenses.
(i) Each Grantor will (A) give the Administrative Agent at
least 30 days' prior written notice of any change in such Grantor's name,
identity or organizational structure, (B) keep its chief place of business and
chief executive office and all originals of all chattel paper which constitute
Receivables at the location(s) specified therefor beneath such Grantor's name
in Schedule III hereof, and (C) keep adequate records concerning the
Receivables and such chattel paper and permit representatives of the
Administrative Agent at any time upon
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reasonable notice and, prior to the occurrence and continuance of a Default,
during normal business hours to inspect and make abstracts from such records
and chattel paper.
(ii) Each Grantor will duly perform and observe all of its
obligations under each Related Contract and License, except as otherwise
provided in this subsection (f), continue to collect, at its own expense, all
amounts due or to become due under the Receivables. In connection with such
collections, each Grantor may (and, at the Administrative Agent's direction,
will) take such action as such Grantor or the Administrative Agent may deem
necessary or advisable to enforce collection or performance of the Receivables;
provided, however, that, the Administrative Agent shall have the right at any
time, upon the occurrence and during the continuance of an Event of Default, to
notify the account debtors or obligors under any Receivables of the assignment
of such Receivables to the Administrative Agent and to direct such account
debtors or obligors to make payment of all amounts due or to become due to a
Grantor thereunder directly to the Administrative Agent or its designated
agent, upon such notification and at the expense of such Grantor and to the
extent permitted by law, to enforce collection of any such Receivables and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done. After receipt by a
Grantor of a notice from the Administrative Agent that the Administrative Agent
has notified or intends to notify the account debtors or obligors under any
Receivables as referred to in the proviso to the immediately preceding
sentence, (A) all amounts and proceeds (including instruments) received by such
Grantor in respect of the Receivables shall be received in trust for the
benefit of the Administrative Agent hereunder, shall be segregated from other
funds of such Grantor and shall be forthwith paid over to the Administrative
Agent in the same form as so received (with any necessary endorsement) to be
held as cash collateral and either (1) released to such Grantor so long as no
Default or Event of Default shall have occurred and be continuing or (2) if any
Default or Event of Default shall have occurred and be continuing, applied as
specified in Section 7(b) hereof, and (B) such Grantor will not adjust, settle
or compromise the amount or payment of any Receivable or release wholly or
partly any account debtor or obligor thereof or allow any credit or discount
thereon, except in the ordinary course of business, provided that no Default or
Event of Default shall have occurred and be continuing. In addition, upon the
occurrence and during the continuance of an Event of Default, the
Administrative Agent shall have the right to notify the United States Postal
Service authorities to change the address for delivery of mail addressed to the
Grantors at such address as the Administrative Agent may designate and to do
all other acts and things necessary to carry out this Agreement.
(iii) Upon the occurrence and during the continuance of any
breach or default under any Related Contract or any License referred to in
Schedule I or II hereto by any party thereto other than a Grantor, (A) each
Grantor will, promptly after obtaining knowledge thereof, give the
Administrative Agent written notice of the nature and duration thereof,
specifying what action, if any, it has taken and proposes to take with respect
thereto, (B) such Grantor will not, without the prior written consent of the
Administrative Agent, declare or waive any such breach or default or
affirmatively consent to the cure thereof, and (C) such Grantor will, upon
written instructions from the Administrative Agent and at such Grantor's
expense, take such action as the Administrative Agent may deem necessary or
advisable in respect thereof.
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(iv) Each Grantor will, at its expense, promptly deliver
to the Administrative Agent a copy of each notice or other communication
received by it by which any other party to any Related Contract or any License
referred to in Schedule I or II hereto purports to exercise any of its material
rights or adversely affect any of its obligations thereunder, together with a
copy of any reply by such Grantor thereto.
(v) Each Grantor will exercise promptly and diligently each
and every right which it may have under each License (other than any right of
termination) and will duly perform and observe in all respects all of its
obligations under each License and will take all action necessary to maintain
all Licenses necessary for the operation of its business in full force and
effect. No Grantor will, without the prior written consent of the
Administrative Agent, cancel, terminate, amend or otherwise modify in any
respect, or waive any provision of, any Related Contract or any License
referred to in Schedule I or II hereto, except where such cancellation,
termination, amendment, modification or waiver would not reasonably be expected
to have a Material Adverse Effect; provided, however, that a copy of each such
cancellation, termination, amendment, modification or waiver shall be delivered
to the Administrative Agent promptly after its execution.
(g) Transfers and Other Liens.
(i) No Grantor will sell, assign (by operation of law or
otherwise), lease, exchange or otherwise transfer or dispose of any of the
Collateral except to the extent permitted under Section 5.02 of the Loan
Agreement.
(ii) No Grantor will create or suffer to exist any Lien
upon or with respect to any Collateral other than Permitted Liens in accordance
with Section 5.02(a) of the Loan Agreement;
(h) Trademarks and Patents.
(i) Each Grantor which is the owner of, or possesses any other
rights in or with respect to, any Trademarks or Patents has duly executed and
delivered the Assignment for Security (Trademarks) and the Assignment for
Security (Patents) in the forms attached hereto as Exhibits A and B,
respectively. Each such Grantor (either itself or through licensees) will, and
will use commercially reasonable efforts to cause each licensee thereof to,
take all action necessary to maintain all of the Trademarks and Patents in full
force and effect, including, without limitation, using the proper trademark and
patent statutory notices and markings, and using the Trademarks on each
applicable trademark class of goods in order to so maintain the Trademarks in
full force free from any claim of abandonment for non-use, and no Grantor will
(nor will it permit any licensee thereof to) do any act or knowingly omit to do
any act whereby any Trademark may become invalidated; provided, however, that
so long as no Default or Event of Default has occurred and is continuing, the
Grantors shall have no obligation to use or to maintain any Trademark,
Trademark application or Patent application (A) that relates solely to any
product that has been, or is in the process of being, discontinued, abandoned
or terminated, (B) that is being replaced with a trademark substantially
similar to the Trademark that may be abandoned or otherwise become invalid, so
long as such replacement Trademark is subject to the
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security interest purported to be created by this Agreement, (C) that is
substantially the same as another Trademark that is in full force, so long as
such other Trademark is subject to the lien and security interest created by
this Agreement or (D) that such Grantor determines, in its reasonable business
judgment, is no longer material to the conduct of its business. Each Grantor
will cause to be taken all necessary steps in any proceeding before the United
States Patent and Trademark Office to maintain each registration of the
Trademarks and the Patents (other than those Trademarks described in clauses
(A), (B), (C) or (D) of the proviso to the immediately preceding sentence),
including, without limitation, filing of renewals, affidavits of use,
affidavits of incontestability and opposition, interference and cancellation
proceedings and payment of taxes. If any Trademark or Patent is infringed,
misappropriated or diluted in any material respect by a third party, each
Grantor shall (x) upon learning of such infringement, misappropriation or
dilution, promptly notify the Administrative Agent and (y) to the extent such
Grantor shall deem appropriate under the circumstances, promptly sue for
infringement, misappropriation or dilution, seek injunctive relief where
appropriate and recover any and all damages for such infringement,
misappropriation or dilution, or take such other actions as such Grantor shall
deem appropriate under the circumstances to protect such Trademark or Patent.
Each Grantor shall furnish to the Administrative Agent from time to time (but,
unless a Default or an Event of Default has occurred and is continuing, no more
frequently than annually) statements and schedules further identifying and
describing the Patents and the Trademarks and such other reports in connection
with the Patents and the Trademarks as the Administrative Agent may reasonably
request, all in reasonable detail and promptly upon request of the
Administrative Agent, following receipt by the Administrative Agent of any such
statements, schedules or reports, each Grantor shall modify this Agreement by
amending Schedules I or II hereto, as the case may be, to include any Patent or
Trademark which becomes part of the Collateral under this Agreement.
Notwithstanding anything herein to the contrary, upon the occurrence of a
Default or an Event of Default no Grantor may abandon or otherwise permit a
Trademark or Patent to become invalid without the prior written consent of the
Administrative Agent, and if any Trademark or Patent is infringed,
misappropriated or diluted in any material respect by a third party, such
Grantor will take such action as the Administrative Agent shall deem
appropriate under the circumstances to protect such Trademark or Patent.
(ii) In no event shall any Grantor, either itself or
through any agent, employee, licensee or designee, file an application for the
registration of any Trademark or the issuance of any Patent with the United
States Patent and Trademark Office (or in any similar office or agency of the
United States, and any state thereof or any other country or any other
political subdivision thereof), unless it gives the Administrative Agent prior
written notice thereof. Upon request of the Administrative Agent, each Grantor
shall execute and deliver any and all assignments, agreements, instruments,
documents and papers as the Administrative Agent may reasonably request to
evidence the Administrative Agent's security interest hereunder in such
Trademark or Patent and the General Intangibles of such Grantor relating
thereto or represented thereby, and each Grantor hereby constitutes the
Administrative Agent its attorney-in-fact to execute and file all such writings
for the foregoing purposes, all acts of such attorney being hereby ratified and
confirmed, and such power (being coupled with an interest) shall be irrevocable
until the termination of the Loan Agreement, the repayment of all of the
Obligations in full and the termination of each of the Loan Documents.
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(iii) If any Grantor shall at any time own, use or possess
the right to any registered copyright, such Grantor shall promptly notify the
Administrative Agent thereof and shall execute such documents (including any
copyright registrations and assignments for security of copyrights to be filed
with the United States Copyright Office) and do such acts as shall be necessary
or, in the judgment of the Administrative Agent, desirable to subject such
copyright rights to the Lien of this Agreement.
(i) Inspection and Reporting. Each Grantor shall permit the
Administrative Agent or any Lender, or any representatives thereof or such
professionals or other Persons as the Administrative Agent may designate (i) to
examine and inspect the books and records of such Grantor and take copies and
extracts therefrom at reasonable times and during normal business hours, (ii)
to verify materials, leases, notes, receivables, deposit accounts and other
assets of such Grantor from time to time, and (iii) to conduct physical
Inventory counts and/or valuations. In addition, each Grantor shall forward to
the Administrative Agent copies of any material notices or communications
received or made by such Grantor with respect to the Collateral, all in such
manner as the Administrative Agent may reasonably require.
(j) Financial Assets. If any financial assets, investment
property or other property pledged by a Grantor under clause (i) of Section
2(g) hereof are received by such Grantor, forthwith (i) transfer and deliver to
the Administrative Agent such financial assets, investment property or other
property (together with certificates for any securities duly endorsed in blank
or accompanied by undated stock powers duly executed in blank) received by such
Grantor, all of which thereafter shall be held by the Administrative Agent,
pursuant to the terms of this Agreement, as part of the Collateral, (ii)
establish a securities account for such financial assets and execute and
deliver a securities account control agreement among the Grantor, the
Administrative Agent and a securities intermediary, acceptable to the
Administrative Agent, for the purpose of perfecting the security interest
granted pursuant hereto in such Collateral or (iii) take such other action as
the Administrative Agent shall deem necessary or appropriate to duly record the
security interest created hereunder in such Collateral;
(k) Motor Vehicles.
(i) Each Grantor shall deliver to the Administrative Agent
within 60 days after the Closing Date originals of the certificates of title or
ownership for the Motor Vehicles owned by it and with a fair market value in
excess of $75,000 with the Administrative Agent listed as lienholder.
(ii) Upon the acquisition after the date hereof by any
Grantor of any Motor Vehicle with a fair market value in excess of $75,000,
such Grantor shall deliver to the Administrative Agent within 60 days after
such acquisition originals of the certificates of title or ownership for such
Motor Vehicle, together with the manufacturer's statement of origin, with the
Administrative Agent listed as lienholder; provided, however, that if the Motor
Vehicle to be acquired is subject to a purchase money security interest (other
than a purchase money security interest in favor of a Loan Party or an
Affiliate of a Loan Party) the Administrative Agent shall be listed as a junior
lienholder to the Person holding such purchase money security interest.
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(iii) Each Grantor hereby appoints the Administrative Agent
as its attorney-in- fact, effective the date hereof and terminating upon the
termination of this Agreement, for the purpose of (i) executing on behalf of
such Grantor title or ownership applications for filing with appropriate state
agencies to enable Motor Vehicles now owned or hereafter acquired by such
Grantor to be retitled and the Administrative Agent listed as lienholder
thereof, (ii) filing such applications with such state agencies and (iii)
executing such other documents and instruments on behalf of, and taking such
other action in the name of, the Grantor as the Administrative Agent may deem
necessary or advisable to accomplish the purposes hereof (including, without
limitation, for the purpose of creating in favor of the Administrative Agent a
perfected lien on the Motor Vehicles and exercising the rights and remedies of
the Administrative Agent hereunder). This appointment as attorney-in-fact is
irrevocable and coupled with an interest.
(iv) Any certificates of title or ownership delivered
pursuant to the terms hereof shall be accompanied by odometer statements for
each Motor Vehicle covered thereby.
(v) So long as no Default or Event of Default shall have
occurred and be continuing, upon the request of a Grantor, the Administrative
Agent shall execute and deliver to such Grantor such instruments as such
Grantor shall reasonably request to remove the notation of the Administrative
Agent as lienholder on any certificate of title for any Motor Vehicle; provided
that any such instruments shall be delivered, and the release effective, only
upon receipt by the Administrative Agent of a certificate from such Grantor,
stating that the Motor Vehicle the lien on which is to be released is to be
sold or has suffered a casualty loss (with title thereto passing to the
casualty insurance company therefor in settlement of the claim for such loss)
and any proceeds of such sale or casualty loss in excess of $100,000 being paid
to the Administrative Agent hereunder to be applied to the Obligations then
outstanding in the manner contemplated by Section 7(b) hereof.
SECTION 6. Additional Provisions Concerning the Collateral.
(a) Each Grantor hereby authorizes the Administrative Agent to
file, without the signature of such Grantor where permitted by law, one or more
financing or continuation statements, and amendments thereto, relating to the
Collateral.
(b) Each Grantor hereby irrevocably appoints the Administrative
Agent such Grantor's attorney-in-fact and proxy, with full authority in the
place and stead of such Grantor and in the name of such Grantor or otherwise,
from time to time in the Administrative Agent's reasonable discretion, to take
any action and to execute any instrument which the Administrative Agent may
deem necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, (i) to obtain and adjust insurance required to
be paid to the Administrative Agent pursuant to Section 5(e) hereof, (ii) upon
the occurrence of an Event of Default to ask, demand, collect, sue for,
recover, compound, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any Collateral, (iii) upon the occurrence
of an Event of Default to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper in connection with clause (i) or (ii)
above, (iv) upon the occurrence
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of an Event of Default to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or desirable for
the collection of any Collateral or otherwise to enforce the rights of the
Administrative Agent with respect to any Collateral, and (v) upon the
occurrence of an Event of Default to notify the post office authorities to
change the address for delivery of a Grantor's mail to an address designated by
the Administrative Agent, to receive and open all mailed addressed to any
Grantor, and to retain all mail relating to the Collateral and forward all
other mail to the appropriate Grantor.
(c) For the purpose of enabling the Administrative Agent to
exercise rights and remedies hereunder at such time as the Administrative Agent
shall be lawfully entitled to exercise such rights and remedies, and for no
other purpose, each Grantor hereby grants to the Administrative Agent, to the
extent assignable and until this Agreement is terminated, an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to such Grantor) to use, assign, license or sublicense any of the
Patents or Trademarks now owned or hereafter acquired by such Grantor, wherever
the same may be located, including in such license reasonable access to all
media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout thereof.
Notwithstanding anything contained herein to the contrary, but subject to the
provisions of the Loan Agreement that limits the right of the Grantors to
dispose of their property and Section 5(h) hereof, so long as no Event of
Default shall have occurred and be continuing, each Grantor may exploit, use,
enjoy, protect, license, sublicense, assign, sell, dispose of or take other
actions with respect to the Patents or Trademarks in the ordinary course of the
business of such Grantor. In furtherance of the foregoing, unless an Event of
Default shall have occurred and be continuing, the Administrative Agent shall
from time to time, upon the request of a Grantor, execute and deliver any
instruments, certificates or other documents, in the form so requested, which
the such Grantor shall have certified are appropriate (in its judgment) to
allow it to take any action permitted above (including relinquishment of the
license provided pursuant to this clause (c) as to any Patents or Trademarks).
Further, upon the payment in full of all of the Obligations, the Administrative
Agent (subject to Section 10(e) hereof) shall transfer to the Grantors all of
the Administrative Agent's right, title and interest in and to the Patents,
Trademarks and the Licenses, all without recourse, representation or warranty
whatsoever. The exercise of rights and remedies hereunder by the
Administrative Agent shall not terminate the rights of the holders of any
licenses or sublicenses theretofore granted by the Grantor in accordance with
the second sentence of this clause (c). Each Grantor hereby releases the
Administrative Agent from any claims, causes of action and demands at any time
arising out of or with respect to any actions taken or omitted to be taken by
the Administrative Agent under the powers of attorney granted herein other than
actions taken or omitted to be taken through the Administrative Agent's gross
negligence or willful misconduct as determined by the final non-appealable
decision of a court of competent jurisdiction.
(d) If any Grantor fails to perform any agreement contained
herein, the Administrative Agent may itself perform, or cause performance of,
such agreement or obligation, in the name of such Grantor or the Administrative
Agent, and the expenses of the Administrative Agent incurred in connection
therewith shall be payable by the Grantors pursuant to Section 8 hereof.
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(e) The powers conferred on the Administrative Agent hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Administrative Agent shall have no duty as to any Collateral
or as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
(f) Anything herein to the contrary notwithstanding, (i) each
Grantor shall remain liable under the Related Contracts and Licenses to which
it is a party and otherwise with respect to any of the Collateral to the extent
set forth therein to perform all of its obligations thereunder to the same
extent as if this Agreement had not been executed, (ii) the exercise by the
Administrative Agent of any of its rights hereunder shall not release any
Grantor from any of its obligations under the Related Contracts and Licenses or
otherwise in respect of the Collateral, and (iii) the Administrative Agent
shall not have any obligation or liability by reason of this Agreement under
the Related Contracts and Licenses or with respect to any of the other
Collateral, nor shall the Administrative Agent be obligated to perform any of
the obligations or duties of a Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
SECTION 7. Remedies Upon Default. If any Event of Default shall
have occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a secured party
upon default under the Code then in effect in the State of New York (whether or
not the Code applies to the affected Collateral), and also may (i) require each
Grantor to, and each Grantor hereby agrees that it will at its expense and upon
request of the Administrative Agent forthwith, assemble all or part of the
Collateral as directed by the Administrative Agent and make it available to the
Administrative Agent at a place or places to be designated by the
Administrative Agent which is reasonably convenient to both parties and (ii)
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Administrative Agent's offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as the
Administrative Agent may deem commercially reasonable. Each Grantor agrees
that, to the extent notice of sale shall be required by law, at least 10 days'
notice to such Grantor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Each Grantor hereby waives any claims against the Administrative
Agent and the Lenders arising by reason of the fact that the price at which the
Collateral may have been sold at a private sale was less than the price which
might have been obtained at a public sale or was less than the aggregate amount
of the Obligations, even if the Administrative Agent accepts the first
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offer received and does not offer the Collateral to more than one offeree and
waives all rights which any Grantor may have to require that all or any part of
the Collateral be marshalled upon any sale (public or private) thereof. In
addition to the foregoing, (i) upon written notice from the Administrative
Agent, each Grantor shall cease any use of the Trademarks or any mark similar
thereto for any purpose described in such notice, (ii) the Administrative Agent
may, at any time and from time to time, upon 10 days' prior notice to the
Grantors, license, whether general, special or otherwise, and whether on an
exclusive or non-exclusive basis, any of the Trademarks and Patents, throughout
the world for such term or terms, on such conditions, and in such manner, as
the Administrative Agent shall in its sole discretion determine, and (iii) the
Administrative Agent may, at any time, pursuant to the authority granted in
Section 6 hereof (such authority being effective upon the occurrence of an
Event of Default), execute and deliver on behalf of the Grantors, one or more
instruments of assignment of the Trademarks and Patents (or any application or
registration thereof), in form suitable for filing, recording or registration
in any country.
(b) Any cash held by the Administrative Agent as Collateral and
all proceeds received by the Administrative Agent in respect of any sale or
collection from, or other realization upon, all or any part the Collateral may,
in the discretion of the Administrative Agent, be held by the Administrative
Agent as collateral for, and/or then or at any time thereafter applied in whole
or in part by the Administrative Agent against, all or any part of the
Obligations as follows:
(i) first, to the payment of the costs and expenses of
such sale, collection or other realization, including the out-of-pocket costs
and expenses of the Administrative Agent and the reasonable fees, costs and
expenses of counsel employed in connection therewith, to the payment of all
advances made by the Administrative Agent for the account of any Grantor
hereunder and to the payment of all reasonable costs and expenses incurred by
the Administrative Agent in connection with the administration and enforcement
of this Agreement;
(ii) second, at the option of the Administrative Agent, to
the payment or other satisfaction of any Liens and other encumbrances upon any
of the Collateral;
(iii) third, to the payment of all other Obligations then
due and payable in accordance with the Loan Agreement and the other Loan
Documents;
(iv) fourth, to the payment of any other amounts required
by applicable law (including, without limitation, Section 9-504(1)(c) of the
Code in effect in the State of New York or any successor or similar, applicable
statutory provision); and
(v) fifth, to Grantors, or to the Parent on behalf of the
Grantors, or to whomsoever shall be lawfully entitled to receive the same or as
a court of competent jurisdiction shall direct.
(c) In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which the Administrative
Agent is legally entitled, the Grantors
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shall be jointly and severally liable for the deficiency, together with
interest thereon at the highest rate specified in any applicable Loan Document
for interest on overdue principal thereof or such other rate as shall be fixed
by applicable law, together with the costs of collection and the reasonable
fees, costs and expenses of any attorneys employed by the Administrative Agent
to collect such deficiency.
SECTION 8. Indemnity and Expenses.
(a) The Grantors agree, jointly and severally, to indemnify and
hold the Administrative Agent harmless from and against any and all claims,
damages, losses, liabilities, obligations, penalties, costs or expenses
(including, without limitation, legal fees, costs and expenses) to the extent
that they arise out of or otherwise result from this Agreement (including,
without limitation, enforcement of this Agreement), except claims, losses or
liabilities resulting solely and directly from the Administrative Agent's gross
negligence or willful misconduct as determined by the final non-appealable
judgment of a court of competent jurisdiction. The administrative Agent may
employ agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in- fact selected by it in good faith.
(b) The Grantors agree to pay to the Administrative Agent upon
demand (i) the amount of any and all reasonable costs and expenses, including
the reasonable fees, costs and expenses of counsel for the Administrative Agent
and of any experts and agents (including, without limitation, any Person which
may act as agent of the Administrative Agent), which the Administrative Agent
may incur in connection with (A) the preparation, negotiation, execution,
delivery, recordation, administration, amendment, waiver or other modification
or termination of this Agreement, or (B) the custody, preservation, use or
operation of, collection from, or other realization upon the Collateral, and
(ii) the amount of any and all costs and expenses, including the reasonable
fees, costs and expenses of counsel for the Administrative Agent and of any
experts and agents (including, without limitation, any Person which may act as
agent of the Administrative Agent), which the Administrative Agent may incur in
connection with (A) the sale of, collection from, or other realization upon,
any Collateral, (B) the exercise or enforcement of any of the rights of the
Administrative Agent hereunder, or (C) the failure by a Grantor to perform or
observe any of the provisions hereof, including, without limitation, all manner
of participation in or other involvement with (w) performance by the
Administrative Agent of any obligations of the Grantors in respect of the
Collateral that the Grantors have failed or refused to perform, (x) bankruptcy,
insolvency, receivership, foreclosure, winding up or liquidation proceedings,
or any actual or attempted sale, or any exchange, enforcement, collection,
compromise or settlement in respect of any of the Collateral, and for the care
of the Collateral and defending or asserting rights and claims of the
Administrative Agent in respect thereof, by litigation or otherwise, including
expenses of insurance, (y) judicial or regulatory proceedings and (z) workout,
restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated).
SECTION 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed (by certified
mail, postage prepaid and return
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256
receipt requested, or by overnight courier), telecopied or delivered, if to any
of the Grantors, at their respective addresses set forth in Part II of Schedule
III hereto or to the Parent, on behalf of such Grantor, at its address
specified in the Loan Agreement, if to the Administrative Agent, to it at its
address specified in the Loan Agreement, or as to any such Person, at such
other address as shall be designated by such Person in a written notice to such
other Person complying as to delivery with the terms of this Section 9. All
such notices and other communications shall be effective (i) if mailed, when
received or three days after mailing, (ii) if telecopied, when transmitted,
provided same is on a Business Day and, if not, on the next Business Day, and
(iii) if delivered, upon delivery, provided same is on a Business Day and, if
not, on the next Business Day.
SECTION 10. Parent Appointed Agent. Each Grantor hereby
designates and appoints the Parent as an agent for such Grantor, and each
Grantor hereby authorizes the Parent, to execute notices, receive notices,
receive summons of process and take possession of Collateral on behalf of such
Grantor, in each case in accordance with the terms hereof.
SECTION 11. Consent to Jurisdiction, Etc.
(a) Each of the Grantors hereby irrevocably and unconditionally
submits, for itself and its Property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting
in New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any document related
thereto, or for recognition or enforcement of any judgment, and each of the
Grantors hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any
such New York State court or, to the extent permitted by law, in such federal
court. Each of the Grantors agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent may otherwise
have to bring any action or proceeding relating to this Agreement or any
document related thereto in the courts of any jurisdiction.
(b) Each of the Grantors hereby irrevocably and unconditionally
consents to the service of process of any of the aforementioned courts in any
such action or proceeding. Each Grantor hereby irrevocably consents to the
service of any and all process in any such action or proceeding by the mailing
of copies of such process to such Grantor, or to the Parent on behalf of such
Grantor, at its address specified in Section 9 hereof.
(c) Each of the Grantors irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any documents
related thereto in any New York State or federal court. Each of the Grantors
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
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SECTION 12. Waiver of Jury Trial. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, EACH OF THE GRANTORS AND THE ADMINISTRATIVE AGENT (BY
ACCEPTING THIS AGREEMENT) IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
SECTION 13. Joint and Several. All of the obligations of the
Grantors hereunder are joint and several. The Administrative Agent may, in its
sole and absolute discretion, enforce the provisions hereof against one or more
of the Grantors and shall not be required to proceed against all of the
Grantors jointly or seek payment from the Grantors ratably. In addition, the
Administrative Agent may, in its sole and absolute discretion, select the
Collateral of one or more of the Grantors for sale or application to the
Obligations, without regard to the ownership of such Collateral, and shall not
be required to make such selection ratably from the Collateral owned by all of
the Grantors . The release or discharge of any Grantor by the Administrative
Agent shall not release or discharge the other Grantors from the obligations of
such released or discharged Grantor hereunder.
SECTION 14. Additional Grantors. Each of the parties hereto
hereby agrees that, at the time any Subsidiary of the Parent first becomes a
Guarantor after the Closing Date, such Subsidiary shall, upon execution of a
Subsidiary Joinder Agreement, become a Grantor for all purposes under this
Agreement.
SECTION 15. Miscellaneous.
(a) No amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by each Grantor and the
Administrative Agent, and no waiver of any provision of this Agreement, and no
consent to any departure by any Grantor therefrom, shall be effective unless it
is in writing and signed by the Administrative Agent, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
(b) No failure on the part of the Administrative Agent to
exercise, and no delay in exercising, any right hereunder or under any other
Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The rights and remedies of the
Administrative Agent provided herein and in the other Loan Documents are
cumulative and are in addition to, and not exclusive of, any rights or remedies
provided by law. The rights of the Administrative Agent under any Loan
Document against any party thereto are not conditional or contingent on any
attempt by the Administrative Agent to exercise any of its rights under any
other Loan Document against such party or against any other Person.
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258
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
(d) This Agreement shall create a continuing security interest in
the Collateral and shall (i) remain in full force and effect until the payment
in full or release of the Obligations and (ii) be binding on each Grantor and
its successors and assigns and shall inure, together with all rights and
remedies of the Administrative Agent hereunder, to the benefit of the
Administrative Agent and its respective successors, transferees and assigns.
Without limiting the generality of clause (ii) of the immediately preceding
sentence, the Administrative Agent may assign or otherwise transfer its rights
under this Agreement to any other Person pursuant to the terms of the Loan
Agreement and such other Person shall thereupon become vested with all of the
benefits in respect thereof granted to the Administrative Agent herein or
otherwise. Upon any such assignment or transfer, all references in this
Agreement to the Administrative Agent shall mean the assignee of the
Administrative Agent. None of the rights or obligations of any Grantor
hereunder may be assigned or otherwise transferred without the prior written
consent of the Administrative Agent, and any such assignment or transfer shall
be null and void.
(e) (i) Upon any sale or other disposition of any Collateral
permitted by the Loan Agreement, (A) the security interest created hereby in
such Collateral shall terminate and all rights to such Collateral shall revert
to the Grantors, and (B) the Administrative Agent will, upon the Grantors'
request and at the Grantors' joint and several expense, promptly (x) return to
the Parent on behalf of the Grantors the Grantors' Collateral to be sold or
disposed of and (y) execute and deliver to any of the Grantors, without any
recourse, representation or warranty whatsoever, such documents as the Grantors
shall reasonably request to evidence such termination.
(ii) Upon the satisfaction in full of the Obligations, (A)
this Agreement and the security interests created hereby shall terminate and
all rights to the Collateral shall revert to the Grantors and (B) the
Administrative Agent will, upon the Grantors' request and at the Grantors'
joint and several expense, (x) return to the Grantors such of the Collateral as
shall not have been sold or otherwise disposed of or applied pursuant to the
terms hereof and (y) execute and deliver to the Grantors such documents as the
Grantors shall reasonably request to evidence such termination, all without any
representation, warranty or recourse whatsoever.
(f) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT APPLYING ANY
CONFLICTS OF LAWS PRINCIPLES EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW), EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND
EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE
EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY,
OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
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259
COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
(g) The section and subsection headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provisions of this Agreement.
(h) This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this Agreement.
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260
IN WITNESS WHEREOF, the Grantors have caused this Agreement to be
executed and delivered by their respective officer thereunto duly authorized,
as of the date first above written.
GRANTORS:
MCGHAN MEDICAL CORPORATION
By:
--------------------------------------
Name:
Title:
INAMED JAPAN, INC.
By:
--------------------------------------
Name:
Title:
INAMED INTERNATIONAL CORP.
By:
--------------------------------------
Name:
Title:
BIOENTERICS CORPORATION
By:
--------------------------------------
Name:
Title:
BIODERMIS CORPORATION
By:
--------------------------------------
Name:
Title:
BIOPLEXUS CORPORATION
By:
--------------------------------------
Name:
Title:
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261
INAMED DEVELOPMENT COMPANY
By:
--------------------------------------
Name:
Title:
CUI CORPORATION
By:
--------------------------------------
Name:
Title:
FLOWMATRIX CORPORATION
By:
--------------------------------------
Name:
Title:
MEDISYN TECHNOLOGIES CORPORATION
By:
--------------------------------------
Name:
Title:
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262
SCHEDULE I
TRADEMARKS
AND
TRADEMARK LICENSES
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263
SCHEDULE II
PATENTS AND PATENT LICENSES
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264
SCHEDULE III
ADDRESSES
I. Locations of Equipment and Inventory
II. Chief Place of Business, Chief Executive Office and Location of Records
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265
SCHEDULE IV
ACCOUNTS
Bank Name and Address Account Number Type of Account
- --------------------- -------------- ---------------
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266
SCHEDULE V
TRADE NAMES
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267
SCHEDULE VI
OTHER LIENS
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268
SCHEDULE VII
UCC-1 FINANCING STATEMENTS
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269
EXHIBIT A
ASSIGNMENT FOR SECURITY
(TRADEMARKS)
WHEREAS, [____________] (the "Assignor") has adopted, used and is
using the trademarks and service marks listed on the annexed Schedule 1A, which
trademarks and service marks are registered or applied for in the United States
Patent and Trademark Office (the "Trademarks");
WHEREAS, the Assignor has entered into a Security Agreement, dated
as of September ___, 1999 (as amended, restated, supplemented or otherwise
modified from time to time, the "Security Agreement"), in favor of ABLECO
FINANCE LLC, as Administrative Agent on behalf of the Lenders (as defined in
the Security Agreement) (the "Assignee");
WHEREAS, pursuant to the Security Agreement, the Assignor has
assigned to the Assignee and granted to the Assignee a security interest in all
right, title and interest of the Assignor in, to and under the Trademarks
together with the good-will of the business symbolized by the Trademarks and
the applications and registrations thereof, and all proceeds thereof,
including, without limitation, any and all causes of action which may exist by
reason of past, present or future infringements and other violations thereof
(the "Collateral"), to secure the payment, performance and observance of the
Obligations (as defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Assignor does hereby
convey, sell, assign, transfer and set over unto the Assignee and grants to the
Assignee a security interest in the Collateral to secure the prompt payment,
performance and observance of the Obligations.
The Assignor does hereby further acknowledge and affirm that the
rights and remedies of the Assignee with respect to the Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which
are hereby incorporated herein by reference as if fully set forth herein.
IN WITNESS WHEREOF, the Assignor has caused this Assignment to be
duly executed by its officer thereunto duly authorized as of _____________ __,
_____.
[ASSIGNOR]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
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270
STATE OF NEW YORK
ss.:
COUNTY OF NEW YORK
On this ____ day of _______________, ____, before me personally
came ________________, to me known to be the person who executed the foregoing
instrument, and who, being duly sworn by me, did depose and say that he is the
________________ of _____________, a ______________ corporation, and that he
executed the foregoing instrument in the firm name of such corporation, and
that he had authority to sign the same, and he acknowledged to me that he
executed the same as the act and deed of said firm for the uses and purposes
therein mentioned.
--------------------------
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271
SCHEDULE 1A TO ASSIGNMENT FOR SECURITY
(TRADEMARK REGISTRATIONS AND APPLICATIONS)
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272
EXHIBIT B
ASSIGNMENT FOR SECURITY
(PATENTS)
WHEREAS, [____________] (the "Assignor") holds all right, title
and interest in, or is otherwise using or has rights to, the patents,
industrial design registrations, and applications for patents and industrial
design registrations listed on the annexed Schedule 1A, which patents are
issued or applied for in the United States Patent and Trademark Office (the
"Patents");
WHEREAS, the Assignor, has entered into a Security Agreement,
dated as of September ___, 1999 (as amended, restated, supplemented or
otherwise modified, the "Security Agreement"), in favor of ABLECO FINANCE LLC,
as Administrative Agent on behalf of the Lenders (as defined in the Security
Agreement) (the "Assignee");
WHEREAS, pursuant to the Security Agreement, the Assignor has
assigned to the Assignee and granted to the Assignee a security interest and
mortgage in all right, title and interest of the Assignor in, to and under the
Patents and the applications and registrations thereof, and all proceeds
thereof, including, without limitation, any and all causes of action which may
exist by reason of past, present or future infringement thereof (the
"Collateral"), to secure the payment, performance and observance of the
Obligations (as defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, the Assignor does hereby convey, sell, assign,
transfer and set over unto the Assignee and grants to the Assignee a security
interest and mortgage in the Collateral to secure the prompt payment,
performance and observance of the Obligations.
The Assignor does hereby further acknowledge and affirm that the
rights and remedies of the Assignee with respect to the Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which
are hereby incorporated herein by reference as if fully set forth herein.
IN WITNESS WHEREOF, the Assignor has caused this Assignment to be
duly executed by its officer thereunto duly authorized as of __________ __,
____.
[ASSIGNOR]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
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273
STATE OF NEW YORK
ss.:
COUNTY OF NEW YORK
On this ____ day of _______________, _____, before me personally
came ________________, to me known to be the person who executed the foregoing
instrument, and who, being duly sworn by me, did depose and say that he is the
________________ of _____________, a [_________] corporation, and that he
executed the foregoing instrument in the firm name of such corporation, and
that he had authority to sign the same, and he acknowledged to me that he
executed the same as the act and deed of said firm for the uses and purposes
therein mentioned.
---------------------
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274
SCHEDULE 1A TO ASSIGNMENT FOR SECURITY
(PATENTS AND PATENT APPLICATIONS)
275
EXHIBIT L
CERTAIN TERMS AND CONDITIONS OF ROLLOVER NOTES/EXCHANGE SECURITIES
Borrower/Issuer: INAMED Corporation (the "Company").
Amount: Aggregate principal amount of Bridge Notes outstanding on the Exchange Date.
Ranking: Senior secured, pari passu with other senior indebtedness of the Company.
Maturity: Seventh anniversary of the Exchange Date.
Interest: 15% per annum, payable semi-annually, 12% per annum in cash, 3% per annum to be capitalized and added to
principal, as set forth in Exhibit B-2.
Use of Proceeds: Refinancing of aggregate principal amount of Bridge Notes outstanding on the Exchange Date.
Guaranties: Unconditional guaranties on a senior secured basis and in the form of Exhibit I or, in the event of the
execution and delivery of an Exchange Indenture, in customary form consistent in all material respects
with Exhibit I, from all existing and future domestic subsidiaries of the Company and, to the extent that
any such guaranty would not cause adverse tax consequences to the Company, all existing and future foreign
subsidiaries of the Company, including in each case, after the consummation of the Merger, Collagen and
its subsidiaries.
Security: Same as for the Bridge Notes.
Voluntary Redemption: As provided in Section 2.05(a)(ii).
Mandatory Redemption: (i) Change of Control. Upon the occurrence of a Change of Control, each holder of Rollover Notes or
Exchange Securities, as the case may be, will have the right to require the Company to repurchase such
holder's Rollover Notes or Exchange Notes at a purchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest to the date of repurchase.
276
(ii) Excess Proceeds from Asset Sales. Upon the accumulation by the Company of at least $5 million of
excess net proceeds from asset sales (such concepts to be defined in a manner reasonably acceptable to the
Required Lenders and customary for senior notes issued in the United States high-yield debt market), each
holder of Rollover Notes or Exchange Securities, as the case may be, will have the right to require the
Company to apply such excess proceeds to repurchase such holder's Rollover Notes or Exchange Securities,
ratably with such securities of other tendering holders, at a price equal to 100% of the principal amount
thereof plus accrued and unpaid interest to the date of repurchase.
Representations and Representations and warranties comparable to those set forth
Warranties: in Section 4.01.
Financial Covenants: (i) Consolidated EBITDA. So long as any Rollover Note or Exchange Security, as the case may be, is held
by any Affiliate of Cerberus Capital Management, L.P., Consolidated EBITDA of the Parent and its
Subsidiaries for any period of four consecutive fiscal quarters ending on the last day of any fiscal
quarter ending during the period from the Exchange Date through the Maturity Date shall not be less than
$35,000,000.
(ii) Leverage Ratio. So long as any Rollover Note or Exchange Security, as the case may be, is held by an
Affiliate of Cerberus Capital Management, L.P., the ratio of (i) Indebtedness of the Parent and its
Subsidiaries on the last day of any fiscal quarter ending during the period from the Exchange Date through
the Maturity Date to (ii) Consolidated EBITDA for the four consecutive fiscal quarters ending on the last
day of such fiscal quarter shall not be more than 4.6 to 1.
Other Covenants: Covenants customary for senior secured notes issued in the United States high- yield debt market,
including, but not limited to, covenants concerning:
payment of notes
maintenance of office or agency
waiver of stay, extension or usury laws
maintenance of existence
reporting requirements
compliance with law
maintenance of insurance and properties
payment of taxes and claims
limitation on transactions with affiliates
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277
limitations on dividends, repurchases and redemptions of equity securities, prepayments of
subordinated debt and other restricted payments
limitations on indebtedness (provided that any restriction on the
incurrence of indebtedness shall permit, in addition to other customary types of permitted
indebtedness, a secured debt basket of $25 million at any one time outstanding on terms reasonably
acceptable to the holders of at least 66 2/3% in aggregate principal amount of the Rollover Notes
or Exchange Securities, as the case may be)
limitations on issuances of guaranties by subsidiaries
limitations on issuance and sale of capital stock of subsidiaries
limitations on liens (provided that liens in favor of third parties on property consisting of
collateral securing the Rollover Notes or the Exchange Securities, as the case may be, shall be
permitted to the extent such liens secure customary categories of permitted secured debt, are
limited to specific items of property and are subject to customary intercreditor arrangements,
including arrangements pursuant to which such liens are senior to the liens on such collateral
securing the Rollover Notes or Exchange Securities, all on terms reasonably acceptable to holders
of at least 66 2/3% in aggregate principal amount of such securities)
limitations on sale-leaseback transactions
limitations on investments
limitations on assets sales
limitations on mergers and other fundamental changes limitations on conduct of business
limitations on payment restrictions affecting subsidiaries.
Events of Default: As set forth in Section 6.01 of the Loan Agreement as in effect immediately prior to the Exchange, except
that (i) a Change of Control shall not constitute an Event of Default, (ii) an Event of Default shall
occur by reason of the non-compliance by the Company with the Consolidated EBITDA covenant or the Leverage
Ratio covenant described above only if 10 business days shall have elapsed and such Event of Default shall
not have been waived by the holders of at least 66 2/3% in aggregate principal amount of the Rollover
Notes or the Exchange Securities, as the case may be, (iii) defaults under subsections (a) through (d) of
Section 6.01 shall be modified to conform to comparable payment and covenant default provisions customary
for senior notes issued in the Untied States high-yield debt market, (iv) the "cross default" provisions
of Section 6.01(e) shall be changed to provisions, customary for senior notes issued in the United States
high-yield debt market, providing for a "cross default"
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278
to material payment defaults on other material Indebtedness of the Parent or any of its Subsidiaries and a
"cross acceleration" to other defaults on such Indebtedness, and (v) the provisions of Section 6.01 with
respect to acceleration shall be replaced with a provision to the effect that if an Event of Default
(other than an Event of Default specified in Section 6.01(f)) occurs and is continuing, the holders of not
less than 25% in principal amount of the outstanding Rollover Notes or the Exchange Securities, as the
case may be, or the trustee for such holders declare the principal of all the Rollover Notes or the
Exchange Securities, as the case may be, to be due and payable.
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279
EXHIBIT M
WARRANT
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS WARRANT AND SUCH
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS WARRANT.
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A REGISTRATION RIGHTS AGREEMENT DATED AS OF JUNE 1, 2000.
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A SECURITIES ACCOUNT AGREEMENT DATED AS OF SEPTEMBER 1, 1999. IN
NO EVENT SHALL THIS WARRANT BE EXERCISABLE ON OR PRIOR TO JUNE 1, 2000, AS
PROVIDED IN SECTION 2.1 HEREOF.
INAMED CORPORATION
COMMON STOCK PURCHASE WARRANT
No. W-__ September 1, 1999
Void after September 1, 2004 Warrant to Purchase
Shares of Common Stock
INAMED CORPORATION, a Delaware corporation (the "Company"), for
value received, hereby certifies that ____________________ or its registered
assigns (the "Holder"), is entitled to purchase from the Company duly
authorized, validly issued, fully paid and nonassessable shares of Common
Stock, par value $.01 per share, of the Company (the "Common Stock"), at a
purchase price per share equal to the Exercise Price, at any time or from time
to time on or after June 1, 2000 but prior to 5:00 P.M., New York City time, on
September 1, 2004 (the "Expiration Date"), all subject to the terms, conditions
and adjustments set forth below in this Warrant.
280
This Warrant is one of the Common Stock Purchase Warrants (the
"Warrant" and, collectively, the "Warrants," such terms to include any such
warrants issued in substitution therefor) referred to and issued under that
certain Loan Agreement, dated as of September 1, 1999, between the Company,
INAMED Acquisition Corporation, the lenders party thereto and Ableco Finance
LLC, as Administrative Agent (the "Loan Agreement"). The Warrant originally so
issued evidences the right to purchase up to the number of shares of Common
Stock that on and as of June 1, 2000 shall equal ___ percent (__%)(1) of the
issued and outstanding shares of Common Stock on a Fully-Diluted Basis (the
"Initial Number of Shares"), determined as set forth below and subject to
certain adjustments as provided herein. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned such terms in the
Loan Agreement.
1. Definitions. As used herein, unless the context otherwise
requires, the following terms shall have the meanings indicated:
"Additional Shares of Common Stock" shall mean (without
duplication) all shares (including treasury shares) of Common Stock issued or
sold (or, pursuant to Section 3.3 or 3.4, deemed to be issued) by the Company
after the date hereof, whether or not subsequently reacquired or retired by the
Company, other than
(a) (i) shares issued upon the exercise of this Warrant or any
other Warrant issued in connection with the Loan Agreement and (ii)
such number of additional shares as may become issuable upon the
exercise of the Warrants by reason of adjustments required pursuant to
the provisions of such Warrants as in effect on the date hereof;
(b) (i) shares (not to exceed 1,000,000 shares as constituted on
the date hereof) issued upon the exercise of options granted or to be
granted after June 1, 2000 under the Company's stock option plans as
in effect on the date hereof or under any other employee stock option
or purchase plan or plans adopted or assumed after such date by the
Company's Board of Directors; provided in each such case that the
exercise or purchase price for any such share shall not be less than
85% of the then-applicable Market Price (determined in good faith by
the Company's Board of Directors) of the Common Stock on the date of
grant, and (ii) such additional number of shares as may become
issuable pursuant to the terms of any such plans by reason of
adjustments required pursuant to anti-dilution provisions applicable
to such securities in order to reflect any subdivision or combination
of Common Stock, by reclassification or otherwise, or any dividend on
Common Stock payable in Common Stock; and
(c) shares issued or deemed to be issued prior to the Cut-off
Date, provided that the Company has complied with Section 7A in
respect of such issuance.
"Applicable Number of Shares" shall mean at any date of
determination a number of shares of Common Stock equal to the difference
between (a) the Initial Number of Shares, less (b) the number of shares of
Common Stock which were issued pursuant to the exercise of this
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(1) Total percentage issuable under all Warrants will be 10%.
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Warrant, as determined immediately prior to such date (as such numbers shall be
adjusted to give effect to any stock splits or combinations, or any dividends
paid or payable in shares of Common Stock, after the issuance of such shares).
"Business Day" shall mean any day other than a Saturday or a
Sunday or a day on which commercial banking institutions in the City of New
York are authorized by law to be closed. Any reference to "days" (unless
Business Days are specified) shall mean calendar days.
"Commission" shall mean the Securities and Exchange Commission or
any successor agency having jurisdiction to enforce the Securities Act.
"Common Stock" shall have the meaning assigned to it in the
introduction to this Warrant, such term to include any stock into which such
Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock, and all other stock of any class or
classes (however designated) of the Company the holders of which have the
right, without limitation as to amount, either to all or to a share of the
balance of current dividends and liquidating dividends after the payment of
dividends and distributions on any shares entitled to preference.
"Company" shall have the meaning assigned to it in the
introduction to this Warrant, such term to include any corporation or other
entity which shall succeed to or assume the obligations of the Company
hereunder in compliance with Section 4.
"Convertible Securities" shall mean any evidences of indebtedness,
shares of stock (other than Common Stock) or other securities directly or
indirectly convertible into or exchangeable for Additional Shares of Common
Stock.
"Cut-off Date" shall mean May 10, 2000.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Exercise Price" shall mean the average of the daily Market Price
during the 10 consecutive trading days prior to June 1, 2000, as adjusted as
provided herein.
"Expiration Date" shall have the meaning assigned to it in the
introduction to this Warrant.
"Fair Value" shall mean, on any date specified herein (i) in the
case of cash, the dollar amount thereof, (ii) in the case of a security, the
Market Price, and (iii) in all other cases, the fair value thereof (as of a
date which is within 20 days of the date as of which the determination is to be
made) determined in good faith jointly by the Company and the Holder; provided,
however, that if such parties are unable to reach agreement within a reasonable
period of time, the Fair Value shall be determined in good faith, by an
independent investment banking firm selected jointly by the Company and the
Holder or, if that selection cannot be made within ten days, by an independent
investment banking firm selected by the American Arbitration
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Association in accordance with its rules, and provided further, that the
Company shall pay all of the fees and expenses of any third parties incurred in
connection with determining the Fair Value.
"Fully-Diluted Basis" shall mean, without duplication, (a) all
shares of Common Stock issued and outstanding at the date of determination, (b)
all shares of Common Stock issuable, as of the date of determination, upon the
exercise of this Warrant and any other option, Warrant or similar right
outstanding at the time of determination, whether or not presently exercisable,
and (c) all shares of Common Stock issuable, as of the date of determination,
upon the exercise of any conversion or exchange right contained in any security
convertible into or exchangeable for Shares of Common Stock.
"Holder" shall have the meaning assigned to it in the introduction
to this Warrant.
"Initial Number of Shares" shall have the meaning assigned to it
in the introduction to this Warrant.
"Loan Agreement" shall have the meaning assigned to it in the
introduction to this Warrant.
"Market Price" shall mean, on any date specified herein, the
amount per share of the Common Stock, equal to (a) the last reported sale price
of such Common Stock, regular way, on such date or, in case no such sale takes
place on such date, the average of the closing bid and asked prices thereof
regular way on such date, in either case as officially reported on the
principal national securities exchange on which such Common Stock is then
listed or admitted for trading, (b) if such Common Stock is not then listed or
admitted for trading on any national securities exchange but is designated as a
national market system security by the NASD, the last reported trading price of
the Common Stock on such date, (c) if there shall have been no trading on such
date or if the Common Stock is not so designated, the average of the closing
bid and asked prices of the Common Stock on such date as shown by the NASD
automated quotation system, or (d) if such Common Stock is not then listed or
admitted for trading on any national exchange or quoted in the over-the-
counter market, the fair value thereof (as of a date which is within 20 days of
the date as of which the determination is to be made) determined in good faith
jointly by the Company and the Holder; provided, however, that if such parties
are unable to reach agreement within a reasonable period of time, the Market
Price shall be determined in good faith by an independent investment banking
firm selected jointly by the Company and the Holder or, if that selection
cannot be made within ten days, by an independent investment banking firm
selected by the American Arbitration Association in accordance with its rules,
and provided further, that the Company shall pay all of the fees and expenses
of any third parties incurred in connection with determining the Market Price.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"Notice" shall have the meaning assigned to it in Section 2.1(a)
of this Agreement.
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"Options" shall mean any rights, options or warrants to subscribe
for, purchase or otherwise acquire Additional Shares of Common Stock or
Convertible Securities.
"Other Securities" shall mean any stock (other than Common Stock)
and other securities of the Company or any other Person (corporate or
otherwise) which the holders of the Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise of the Warrants, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.
"Person" shall mean any individual, firm, partnership,
corporation, trust, joint venture, association, joint stock company, limited
liability company, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision
thereof, and shall include any successor (by merger or otherwise) of such
entity.
"Purchase Price" shall have the meaning assigned to it in Section
2.1(a) of this Agreement.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of June 1, 2000.
"Restricted Securities" shall mean (a) any Warrants bearing the
applicable legend set forth in Section 9.1, (b) any shares of Common Stock (or
Other Securities) issued or issuable upon the exercise of Warrants which are
(or, upon issuance, will be) evidenced by a certificate or certificates bearing
the applicable legend set forth in such Section, and (c) any shares of Common
Stock (or Other Securities) issued subsequent to the exercise of any of the
Warrants as a dividend or other distribution with respect to, or resulting from
a subdivision of the outstanding shares of Common Stock (or other Securities)
into a greater number of shares by reclassification, stock splits or otherwise,
or in exchange for or in replacement of the Common Stock (or Other Securities)
issued upon such exercise, which are evidenced by a certificate or certificates
bearing the applicable legend set forth in such Section.
"Securities Account Agreement" shall have the meaning assigned to
it in the introduction to this Warrant.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time, and the rules and regulations thereunder, or any successor
statute.
"Warrant or Warrants" shall have the meaning assigned to it in the
introduction to this Warrant.
2. Exercise of Warrant
2.1. Manner of Exercise; Payment of the Purchase Price. (a) This
Warrant may be exercised by the Holder hereof, in whole or in part, (if in
part, then for a minimum aggregate purchase price of $1,000,000, unless
exercised for all shares of Common Stock then issuable
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hereunder) at any time or from time to time on or after June 1, 2000 but prior
to the Expiration Date, for a number of shares of Common Stock not greater than
the then-Applicable Number of Shares determined as of the date of exercise, by
surrendering to the Company at its principal office this Warrant, with the form
of Election to Purchase Shares (the "Notice") attached hereto as Exhibit A (or
a reasonable facsimile thereof) duly executed by the Holder, which Notice shall
specify the number of shares of Common Stock to be issued to such Holder and
accompanied by payment of the applicable purchase price (the "Purchase Price")
in an amount equal to the product of (i) the Exercise Price and (ii) the number
of shares of Common Stock to be issued.
(b) Payment of the Purchase Price may be made in United States
currency by cash or delivery of a certified check or bank draft payable to the
order of the Company or by wire transfer to the Company.
2.2. When Exercise Effective. Each exercise of this
Warrant shall be deemed to have been effected as of the later to occur of (a)
receipt of payment of the Purchase Price and (b) immediately prior to the close
of business on the Business Day on which this Warrant shall have been
surrendered to the Company as provided in Section 2.1, and at such time of
effectiveness the Person or Persons in whose name or names any certificate or
certificates for shares of Common Stock (or Other Securities) shall be issuable
upon such exercise as provided in Section 2.3 shall be deemed to have become
the holder or holders of record thereof for all purposes.
2.3. Delivery of Stock Certificates, etc.; Charges, Taxes
and Expenses. (a) As soon as practicable after each exercise of this Warrant,
in whole or in part, and in any event within five Business Days thereafter, the
Company shall cause to be issued in the name of and delivered to the Holder
hereof or, subject to Section 10, as the Holder may direct, a certificate or
certificates for the number of shares of Common Stock (or Other Securities) to
which the Holder shall be entitled upon such exercise plus, in lieu of issuance
of any fractional share to which the Holder would otherwise be entitled, if
any, a check for the amount of cash equal to the same fraction multiplied by
the Exercise Price per share on the date of Warrant exercise.
In case any such exercise is for less than all of the
then-Applicable Number of Shares as of the date of exercise
purchasable under this Warrant, this Warrant or a new Warrant or
Warrants of like tenor, shall be returned to the Holder, noting the
number of shares of Common Stock issued hereunder to date.
The Company will pay all documentary stamp taxes attributable to
the initial issuance of shares of Common Stock upon the exercise of
Warrants; provided, however, that the Company shall not be required to
pay any tax or taxes which may be payable in respect of any transfer
involved in the issue of any Warrants or any certificates for shares
of Common stock in a name other than that of the Holder, and the
Company shall not be required to issue or deliver such Warrant or
shares of Common Stock unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
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3. Adjustment of Common Stock Issuable Upon Exercise;
Adjustment of Exercise Price.
3.1. Adjustment of Number of Shares. Upon each adjustment of
the Exercise Price as a result of the calculations made in this Section 3, this
Warrant shall thereafter evidence the right to receive, at the adjusted
Exercise Price, that number of shares of Common Stock (calculated to the
nearest one-hundredth) obtained by dividing (i) the product of the aggregate
number of shares covered by this Warrant immediately prior to such adjustment
and the Exercise Price in effect immediately prior to such adjustment of the
Exercise Price by (ii) the Exercise Price in effect immediately after such
adjustment of the Exercise Price.
3.2. Adjustment of Exercise Price.
3.2.1. Issuance of Additional Shares of Common Stock. In case
the Company at any time or from time to time after the date hereof shall issue
or sell Additional Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to Section 3.3 or 3.4) without
consideration or for a consideration per share less than the Market Price in
effect immediately prior to such issue or sale, then, and in each such case
(other than issuances pursuant to this Section 3.2.1 consented to in advance by
a majority of the Holders), subject to Section 3.8, the Exercise Price shall be
reduced, concurrently with such issue or sale, to a price (calculated to the
nearest .001 of a cent) determined by multiplying such Exercise Price by a
fraction
(a) the numerator of which shall be the sum of (i) the number
of shares of Common Stock outstanding immediately prior to such issue
or sale and (ii) the number of shares of Common Stock which the
aggregate consideration received by the Company for the total number
of such Additional Shares of Common Stock so issued or sold would
purchase at such Market Price, and
(b) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issue or sale,
provided, however, that, for the purposes of this Section 3.2.1, (x)
immediately after any Additional Shares of Common Stock are deemed to
have been issued pursuant to Section 3.3 or 3.4, such Additional
Shares shall be deemed to be outstanding, and (y) treasury shares
shall not be deemed to be outstanding.
3.2.2. Extraordinary Dividends and Distributions. In case the
Company at any time or from time to time after June 1, 2000 shall declare,
order, pay or make a dividend (excluding dividends consented to in advance by
the majority of the Holders) or other distribution (including, without
limitation, any distribution of other or additional stock or other securities
or property or Options by way of dividend or spin-off, reclassification,
recapitalization or similar corporate rearrangement) on the Common Stock,
subject to Section 3.8, the Exercise Price in effect immediately prior to the
close of business on the record date fixed for the determination of holders of
any class of securities entitled to receive such dividend or distribution shall
be reduced, effective as of the close of business on such record date, to a
price determined by multiplying such Exercise Price by a fraction
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(x) the numerator of which shall be the Market Price in effect
on such record date or, if the Common Stock trades on an ex-dividend
basis, on the date prior to the commencement of ex- dividend trading,
less the Fair Value of such dividend or distribution applicable to one
share of Common Stock, and
(y) the denominator of which shall be such Market Price.
3.3. Treatment of Options and Convertible Securities. In case
the Company at any time or from time to time after the date hereof shall issue,
sell, grant or assume, or shall fix a record date for the determination of
holders of any class of securities of the Company entitled to receive, any
Options or Convertible Securities (whether or not the rights thereunder are
immediately exercisable), then, and in each such case, the maximum number of
Additional Shares of Common Stock (as set forth in the instrument relating
thereto, without regard to any provisions contained therein for a subsequent
adjustment of such number) issuable upon the exercise of such Options or, in
the case of Convertible Securities and Options therefor, or the conversion or
exchange of such Convertible Securities, shall be deemed to be Additional
Shares of Common Stock issued as of the time of such issue, sale, grant or
assumption or, in case such a record date shall have been fixed, as of the
close of business on such record date (or, if the Common Stock trades on an ex-
dividend basis, on the date prior to the commencement of ex-dividend trading),
provided, however, that such Additional Shares of Common Stock shall not be
deemed to have been issued unless the consideration per share (determined
pursuant to Section 3.5) of such shares would be less than the Market Price in
effect on the date of and immediately prior to such issue, sale, grant or
assumption or immediately prior to the close of business on such record date
(or, if the Common Stock trades on an ex-dividend basis, on the date prior to
the commencement of ex-dividend trading), as the case may be and provided,
further, that in any such case in which Additional Shares of Common Stock are
deemed to be issued:
(a) whether or not the Additional Shares of Common Stock
underlying such Options or Convertible Securities are deemed to be
issued, no further adjustment of the Exercise Price shall be made upon
the subsequent issue or sale of Convertible Securities or shares of
Common Stock upon the exercise of such Options or the conversion or
exchange of such Convertible Securities, except in the case of any
such Options or Convertible Securities which contain provisions
requiring an adjustment, subsequent to the date of the issue or sale
thereof, of the number of Additional Shares of Common Stock issuable
upon the exercise of such Options or the conversion or exchange of
such Convertible Securities by reason of (x) a change of control of
the Company, (y) the acquisition by any Person or group of Persons of
any specified number or percentage of the voting securities of the
Company or (z) any similar event or occurrence, each such case to be
deemed hereunder to involve a separate issuance of Additional Shares
of Common Stock, Options or Convertible Securities, as the case may
be;
(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Company, or decrease in the number of
Additional Shares of Common Stock issuable,
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upon the exercise, conversion or exchange thereof (by change of rate
or otherwise), the Exercise Price computed upon the original issue,
sale, grant or assumption thereof (or upon the occurrence of the
record date, or date prior to the commencement of ex-dividend trading,
as the case may be, with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease
becoming effective, be recomputed to reflect such increase or decrease
insofar as it affects such Options, or the rights of conversion or
exchange under such Convertible Securities, which are outstanding at
such time;
(c) upon the expiration (or purchase by the Company and
cancellation or retirement) of any such Options which shall not have
been exercised or the expiration of any rights of conversion or
exchange under any such Convertible Securities which (or purchase by
the Company and cancellation or retirement of any such Convertible
Securities the rights of conversion or exchange under which) shall not
have been exercised, the Exercise Price computed upon the original
issue, sale, grant or assumption thereof (or upon the occurrence of
the record date, or date prior to the commencement of ex-dividend
trading, as the case may be, with respect thereto), and any subsequent
adjustments based thereon, shall, upon such expiration (or such
cancellation or retirement, as the case may be), be recomputed as if:
(i) in the case of Options for Common Stock or
Convertible Securities, the only Additional Shares of Common Stock
issued or sold were the Additional Shares of Common Stock, if any,
actually issued or sold upon the exercise of such Options or the
conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually
received by the Company for the issue, sale, grant or assumption
of all such Options, whether or not exercised, plus the
consideration actually received by the Company upon such exercise,
or for the issue or sale of all such Convertible Securities which
were actually converted or exchanged, plus the additional
consideration, if any, actually received by the Company upon such
conversion or exchange, and
(ii) in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually
issued or sold upon the exercise of such Options were issued at
the time of the issue or sale, grant or assumption of such
Options, and the consideration received by the Company for the
Additional Shares of Common Stock deemed to have then been issued
was the consideration actually received by the Company for the
issue, sale, grant or assumption of all such Options, whether or
not exercised, plus the consideration deemed to have been received
by the Company (pursuant to Section 3.5) upon the issue or sale of
such Convertible Securities with respect to which such Options
were actually exercised;
(d) no readjustment pursuant to subdivision (b) or (c) above
shall have the effect of increasing the Exercise Price by an amount in
excess of the amount of the
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adjustment thereof originally made in respect of the issue, sale,
grant or assumption of such Options or Convertible Securities; and
(e) in the case of any such Options which expire by their
terms not more than 30 days after the date of issue, sale, grant or
assumption thereof, no adjustment of the Exercise Price shall be made
until the expiration or exercise of all such Options, whereupon such
adjustment shall be made in the manner provided in subdivision (c)
above.
3.4. Treatment of Stock Dividends, Stock Splits, etc. In case
the Company at any time or from time to time after June 1, 2000 shall declare
or pay any dividend on the Common Stock payable in Common Stock, or shall
effect a subdivision of the outstanding shares of Common Stock into a greater
number of shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in Common Stock), then, and in each such case, Additional
Shares of Common Stock shall be deemed to have been issued (a) in the case of
any such dividend, immediately after the close of business on the record date
for the determination of holders of any class of securities entitled to receive
such dividend, or (b) in the case of any such subdivision, at the close of
business on the day immediately prior to the day upon which such corporate
action becomes effective.
3.5. Computation of Consideration. For the purposes of this
Section 3,
(a) the consideration for the issue or sale of any Additional
Shares of Common Stock shall, irrespective of the accounting treatment
of such consideration,
(i) insofar as it consists of cash, be computed at the
net amount of cash received by the Company, without deducting any
expenses paid or incurred by the Company or any commissions or
compensations paid or concessions or discounts allowed to
underwriters, dealers or others performing similar services in
connection with such issue or sale,
(ii) insofar as it consists of property (including
securities) other than cash, be computed at the Fair Value thereof
at the time of such issue or sale, and
(iii) in case Additional Shares of Common Stock are
issued or sold together with other stock or securities or other
assets of the Company for a consideration which covers both, be
the portion of such consideration so received, computed as
provided in clauses (i) and (ii) above, allocable to such
Additional Shares of Common Stock, such allocation to be
determined in the same manner that the Fair Value of property not
consisting of cash or securities is to be determined as provided
in the definition of "Fair Value" herein;
(b) Additional Shares of Common Stock deemed to have been
issued pursuant to Section 3.3, relating to Options and Convertible
Securities, shall be deemed to have been issued for a consideration
per share determined by dividing
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(i) the total amount, if any, received and receivable by
the Company as consideration for the issue, sale, grant or
assumption of the Options or Convertible Securities in question,
plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to
any provision contained therein for a subsequent adjustment of
such consideration to protect against dilution) payable to the
Company upon the exercise in full of such Options or the
conversion or exchange of such Convertible Securities or, in the
case of Options for Convertible Securities, the exercise of such
Options for Convertible Securities and the conversion or exchange
of such Convertible Securities, in each case computing such
consideration as provided in the foregoing subdivision (a),
by
(ii) the maximum number of shares of Common Stock (as
set forth in the instruments relating thereto, without regard to
any provision contained therein for a subsequent adjustment of
such number to protect against dilution) issuable upon the
exercise of such Options or the conversion or exchange of such
Convertible Securities; and
(c) Additional Shares of Common Stock deemed to have been
issued pursuant to Section 3.4, relating to stock dividends, stock
splits and similar corporate events shall be deemed to have been
issued for no consideration.
3.6. Adjustments for Combinations, etc. If, at any time after
June 1, 2000, the outstanding shares of Common Stock shall be combined or
consolidated, by reclassification or otherwise, into a lesser number of shares
of Common Stock, the Exercise Price in effect immediately prior to such
combination or consolidation shall, concurrently with the effectiveness of such
combination or consolidation, be proportionately increased.
3.7. Dilution in Case of Other Securities. If, at any time
after June 1, 2000, any Other Securities shall be issued or sold or shall
become subject to issue or sale upon the conversion or exchange of any stock
(or Other Securities) of the Company (or any issuer of Other Securities or any
other Person referred to in Section 4) or to subscription, purchase or other
acquisition pursuant to any Options issued or granted by the Company (or any
such other issuer or Person) for a consideration such as to dilute, on a basis
consistent with the standards established in the other provisions of this
Section 3, the purchase rights granted by this Warrant, then, and in each such
case, the computations, adjustments and readjustments provided for in this
Section 3 with respect to the Exercise Price shall be made as nearly as
possible in the manner so provided and applied to determine the amount of Other
Securities from time to time receivable upon the exercise of the Warrants, so
as to protect the holders of the Warrants against the effect of such dilution.
3.8. De Minimis Adjustments. If the amount of any adjustment
of the Exercise Price per share required pursuant to this Section 3 would be
less than one tenth (1/10) of one percent (1%) of the Exercise Price, such
amount shall be carried forward and adjustment with
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respect thereto made at the time of and together with any subsequent adjustment
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate a change in the Exercise Price of at least one tenth
(1/10) of one percent (1%) of such Exercise Price. All calculations under this
Warrant shall be made to the nearest .001 of a cent or to the nearest
one-hundredth of a share, as the case may be.
3.9. Abandoned Dividend or Distribution. If the Company shall
take a record of the holders of its Common Stock for the purpose of entitling
them to receive a dividend or other distribution (which results in an
adjustment to the Exercise Price under the terms of this Warrant) and shall,
thereafter, and before such dividend or distribution is paid or delivered to
shareholders entitled thereto, legally abandon its plan to pay or deliver such
dividend or distribution, then any adjustment made to the Exercise Price by
reason of the taking of such record shall be reversed, and any subsequent
adjustments, based thereon, shall be recomputed.
4. Consolidation, Merger, Etc.
4.1. Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. In case the Company after the Cut-off Date (a) shall
consolidate with or merge into any other Person and shall not be the continuing
or surviving corporation of such consolidation or merger, or (b) shall permit
any other Person to consolidate with or merge into the Company and the Company
shall be the continuing or surviving Person but, in connection with such
consolidation or merger, the Common Stock or Other Securities shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (c) shall transfer all or substantially all of its
properties or assets to any other Person and shall thereafter distribute any
material portion of the proceeds of such transaction to its shareholders
generally, or (d) shall effect a capital reorganization or reclassification of
the Common Stock or Other Securities (other than a capital reorganization or
reclassification of the Common Stock resulting in the issuance of Additional
Shares of Common Stock for which adjustment in the Purchase Price is provided
in Section 3.2.1 or 3.2.2), then, and in the case of each such transaction,
proper provision shall be made so that, upon the basis and the terms and in the
manner provided in this Warrant, the Holder of this Warrant, upon the exercise
hereof at any time after the consummation of such transaction, shall be
entitled to receive (at the aggregate Purchase Price in effect immediately
prior to the time of such consummation for all Common Stock or Other Securities
issuable upon such exercise immediately prior to such consummation), in lieu of
the Common Stock or Other Securities issuable upon such exercise prior to such
consummation, the highest amount of securities, cash or other property to which
such Holder would actually have been entitled as a shareholder upon such
consummation if such Holder had exercised this Warrant for all of the
then-Applicable Number of Shares immediately prior thereto, subject to
adjustments (subsequent to such consummation) as nearly equivalent as possible
to the adjustments provided for in Sections 3 through 5.
4.2. Assumption of Obligations. Notwithstanding anything
contained in the Warrants or in the Loan Agreement to the contrary, the Company
shall not effect any of the transactions described in clauses (a) through (d)
of Section 4.1 unless, prior to the consummation thereof, each Person (other
than the Company) which may be required to deliver any stock,
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securities, cash or property upon the exercise of this Warrant as provided
herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (a) the obligations of the Company
under this Warrant (and if the Company shall survive the consummation of such
transaction, such assumption shall be in addition to, and shall not release the
Company from, any continuing obligations of the Company under this Warrant),
(b) the obligations of the Company under the Registration Rights Agreement and
(c) the obligation to deliver to the Holder such shares of stock, securities,
cash or property as, in accordance with the foregoing provisions of this
Section 4, the Holder may be entitled to receive and such Person shall have
similarly delivered to the Holder an opinion of counsel for such person, which
counsel shall be reasonably satisfactory to the Holder, stating that this
Warrant shall thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of this Section 4) shall
be applicable to the stock, securities, cash or property which such person may
be required to deliver upon any exercise of this Warrant or the exercise of any
rights pursuant thereto. Nothing in this Section 4 shall be deemed to
authorize the Company to enter into any transaction not otherwise permitted by
the Loan Agreement.
5. Other Dilutive Events. In case any event shall occur as
to which the provisions of Section 3 or Section 4 are not strictly applicable
or if strictly applicable would not, in the reasonable judgment of the Board of
Directors, fairly protect the purchase rights represented by this Warrant in
accordance with the essential intent and principles of such Sections, then, in
each such case, the Board of Directors of the Company shall, in good faith,
make an adjustment in the application of such provisions, in accordance with
the essential intent and principles hereof, so as to preserve, without
dilution, the purchase rights represented by this Warrant.
6. No Dilution or Impairment The Company shall not, by
amendment of its certificate of incorporation or through any consolidation,
merger, reorganization, transfer of assets, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of
all such action as may be necessary or appropriate in order to protect the
rights of the Holder of this Warrant against dilution or other impairment.
Without limiting the generality of the foregoing, the Company (a) shall not
permit the par value of any shares of stock receivable upon the exercise of
this Warrant to exceed the amount payable therefor upon such exercise, (b)
shall take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
stock, free from all taxes, liens, security interests, encumbrances, preemptive
rights and charges on the exercise of the Warrants from time to time
outstanding, and (c) shall not amend or modify any provision of the Certificate
of Incorporation or by-laws of the Company in any manner that would adversely
affect in any way the rights or powers of the Holder of this Warrant in its
capacity as such.
7. Notices of Corporate Action. In the event of:
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders
thereof who are entitled to receive
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any dividend or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company, any consolidation or merger involving the Company and any
other Person, any transaction or series of transactions in which more
than 50% of the voting securities of the Company are transferred to
another Person, or any transfer, sale or other disposition of all or
substantially all the assets of the Company to any other Person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
the Company shall mail to each holder of a Warrant a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, and (ii) the date or expected date on which
any such reorganization, reclassification, recapitalization, consolidation,
merger, transfer, sale, disposition, dissolution, liquidation or winding-up is
to take place and the time, if any such time is to be fixed, as of which the
holders of record of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for the securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up. In the case of any action covered by clause (a) above, such notice
shall be mailed by the Company at least 10 days prior to the date on which such
record is to be taken, and, in the case of any action covered by clause (b) or
(c) above, such notice shall be mailed by the Company at least 20 days prior to
the date or expected date on which such action is to take place.
7A. Public Disclosure. On or prior to the Cut-off Date, the
existence of the Warrants and the material economic terms thereof shall be
publicly disclosed by the Company. In addition, the material economic terms of
any issuances of Common Stock (including deemed issuances pursuant to Section
3.3 or 3.4) between the date hereof and the Cut-off Date, either without
consideration or for a consideration per share less than the Market Price in
effect immediately prior to such issuance, shall be publicly disclosed not
later than the Cut-off Date. The Company shall not issue any Common Stock
(including deemed issuances pursuant to Section 3.3 or 3.4) at a price below
the then-applicable Market Price between the Cut-off Date and June 1, 2000,
other than pursuant to (i) the exercise of rights, options or warrants to
subscribe for, purchase or otherwise acquire shares of Common Stock, (ii) the
conversion of any evidences of indebtedness, shares of stock (other than Common
Stock) or other securities directly or indirectly convertible into shares of
Common Stock, or (iii) other transactions requiring the issuance of Common
Stock by the Company, in each case where such issuance of Common Stock is not
initiated by the Company.
8. Listing of Common Stock. At any such time as Common Stock
is listed on any national securities exchange, the Company shall, at its
expense, obtain promptly and
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maintain the approval for listing on the principal such exchange, upon official
notice of issuance, the shares of Common Stock issuable upon exercise of the
then outstanding Warrants and maintain the listing of such shares after their
issuance; and the Company shall also list on such national securities exchange
and shall maintain such listing of, any Other Securities that at any time are
issuable upon exercise of the Warrants, if and at the time that any securities
of the same class shall be listed on such national securities exchange by the
Company.
9. Restrictions on Transfer.
9.1. Restrictive Legends. Except as otherwise permitted by this
Section 9, each Warrant (including each Warrant issued upon the transfer of any
Warrant) shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS WARRANT AND
SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS WARRANT."
"THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO
THE TERMS AND CONDITIONS OF A REGISTRATION RIGHTS AGREEMENT DATED AS
OF JUNE 1, 2000."
Except as otherwise permitted by this Section 9, during the term of the
Securities Account Agreement, each Warrant (including each Warrant issued upon
the transfer of any Warrant) shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO
THE TERMS AND CONDITIONS OF AN SECURITIES ACCOUNT AGREEMENT DATED AS OF
SEPTEMBER 1, 1999. IN NO EVENT SHALL THIS WARRANT BE EXERCISABLE ON OR PRIOR
TO JUNE 1, 2000."
Except as otherwise permitted by this Section 9, each certificate for Common
Stock (or Other Securities) issued upon the exercise of any Warrant, and each
certificate issued upon the transfer of any such Common Stock (or Other
Securities), shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE, AND MAY NOT
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BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. SUCH SECURITIES
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE CONDITIONS SPECIFIED IN COMMON STOCK PURCHASE
WARRANT ISSUED BY INAMED CORPORATION. A COMPLETE AND CORRECT COPY OF
THE FORM OF SUCH WARRANT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL
OFFICE OF INAMED CORPORATION OR AT THE OFFICE OR AGENCY MAINTAINED BY
INAMED CORPORATION AS PROVIDED IN SUCH WARRANT AND WILL BE FURNISHED
TO THE HOLDER OF SUCH SECURITIES UPON WRITTEN REQUEST AND WITHOUT
CHARGE."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A REGISTRATION RIGHTS AGREEMENT, DATED AS OF
JUNE 1, 2000."
9.2. Transfer to Comply With the Securities Act. Restricted
Securities may not be sold, assigned, pledged, hypothecated, encumbered or in
any manner transferred or disposed of, in whole or in part, except in
compliance with the provisions of the Securities Act and state securities or
Blue Sky laws and the terms and conditions hereof. Prior to effecting any such
sale, assignment, pledge, hypothecation, encumbrance, transfer or disposition,
the Holder shall deliver to the Company an opinion of counsel, reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration under the Securities Act and is otherwise in compliance with the
Securities Act and any applicable state securities or Blue Sky laws.
9.3. Termination of Restrictions. The restrictions imposed by
this Section 9 on the transferability of Restricted Securities shall cease and
terminate as to any particular Restricted Securities (a) when a registration
statement with respect to the sale of such securities shall have been declared
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (b) when such securities are
sold pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act, or (c) when, in the opinion of both counsel for the Holder and
counsel for the Company, such restrictions are no longer required or necessary
in order to protect the Company against a violation of the Securities Act upon
any sale or other disposition of such securities without registration
thereunder. Whenever such restrictions shall cease and terminate as to any
Restricted Securities, the Holder shall be entitled to receive from the
Company, without expense (other than applicable transfer taxes, if any), new
securities of like tenor not bearing the applicable legends required by Section
9.1.
10. Reservation of Stock, Etc.. The Company shall at all
times from and after June 1, 2000, reserve and keep available, solely for
issuance and delivery upon exercise of this Warrant, the number of shares of
Common Stock (or Other Securities) from time to time issuable
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295
upon exercise of this Warrant. All shares of Common Stock (or Other Securities)
issuable upon exercise of this Warrant shall be duly authorized and, when
issued upon such exercise, shall be validly issued and, in the case of shares,
fully paid and nonassessable with no liability on the part of the holders
thereof, and, in the case of all securities, shall be free from all taxes,
liens, security interests, encumbrances, preemptive rights and charges. The
transfer agent for the Common Stock, which may be the Company ("Transfer
Agent"), and every subsequent Transfer Agent for any shares of the Company's
capital stock issuable upon the exercise of any of the purchase rights
represented by this Warrant, are hereby irrevocably authorized and directed at
all times until the Expiration Date to reserve such number of authorized and
unissued shares as shall be requisite for such purpose. The Company shall keep
copies of this Warrant on file with the Transfer Agent for the Common Stock and
with every subsequent Transfer Agent for any shares of the Company's capital
stock issuable upon the exercise of the rights of purchase represented by this
Warrant. The Company shall supply such Transfer Agent with duly executed stock
certificates for such purpose. All Warrant Certificates surrendered upon the
exercise of the rights thereby evidenced and not required to be returned to the
Holder pursuant hereto shall be canceled. Subsequent to the Expiration Date,
no shares of Common Stock need be reserved in respect of any unexercised
Warrant.
11. Registration and Transfer of Warrant, Etc.
11.1. Warrant Register; Ownership of Warrant. Each Warrant
issued by the Company shall be numbered and shall be registered in a warrant
register (the "Warrant Register") as it is issued and transferred, which
Warrant Register shall be maintained by the Company at its principal office or,
at the Company's election and expense, by a Warrant Agent or the Company's
transfer agent. The Company shall be entitled to treat the registered Holder
of any Warrant on the Warrant Register as the owner in fact thereof for all
purposes and shall not be bound to recognize any equitable or other claim to or
interest in such Warrant on the part of any other Person, and shall not be
affected by any notice to the contrary, except that, if and when any Warrant is
properly assigned in blank, the Company may (but shall not be obligated to)
treat the bearer thereof as the owner of such Warrant for all purposes.
Subject to Section 9, a Warrant, if properly assigned, may be exercised by a
new holder without a new Warrant first having been issued.
11.2. Transfer of Warrant. Subject to compliance with Section
9, if applicable, this Warrant and all rights hereunder are transferable in
whole or in part, without charge to the Holder hereof, upon surrender of this
Warrant with a properly executed Form of Assignment attached hereto as Exhibit
B at the principal office of the Company. Upon any partial transfer, the
Company shall at its expense issue and deliver to the Holder a new Warrant of
like tenor, in the name of the Holder, which shall be exercisable for a number
of shares of Common Stock with respect to which rights under this Warrant were
not so transferred.
11.3. Replacement of Warrant. On receipt by the Company of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity bond in such
reasonable amount as the Company may determine, or, in the case of any
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such mutilation, on surrender of such Warrant to the Company at its principal
office and cancellation thereof, the Company at its expense shall execute and
deliver, in lieu thereof, a new Warrant of like tenor. Applicants for such
substitute Warrants shall also comply with such other reasonable regulations
and pay such other reasonable charges as the Company may from time to time
prescribe by giving notice thereof to the Holder.
11.4. Fractional Shares. Notwithstanding any provision of this
Warrant, the Company shall not be required to issue fractions of shares upon
exercise of this Warrant or to distribute certificates which evidence
fractional shares. In lieu of fractional shares, the Company shall make
payment to the Holder, at the time of exercise of this Warrant as herein
provided, in an amount in cash equal to such fraction multiplied by the
Exercise Price of a share of Common Stock on the date of Warrant exercise.
12. Remedies; Specific Performancee. The Company stipulates
that there would be no adequate remedy at law to the Holder of this Warrant in
the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Warrant and
accordingly, the Company agrees that, in addition to any other remedy to which
the Holder may be entitled at law or in equity, the Holder shall be entitled to
seek to compel specific performance of the obligations of the Company under
this Warrant, without the posting of any bond, in accordance with the terms and
conditions of this Warrant in any court of the United States or any State
thereof having jurisdiction, and if any action should be brought in equity to
enforce any of the provisions of this Warrant, the Company shall not raise the
defense that there is an adequate remedy at law. Except as otherwise provided
by law, a delay or omission by the Holder hereto in exercising any right or
remedy accruing upon any such breach shall not impair the right or remedy or
constitute a waiver of or acquiescence in any such breach. No remedy shall be
exclusive of any other remedy. All available remedies shall be cumulative.
13. No Rights or Liabilities as Shareholder. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof any rights as a shareholder of the Company or as imposing any obligation
on the Holder to purchase any securities or as imposing any liabilities on the
Holder as a shareholder of the Company, whether such obligation or liabilities
are asserted by the Company or by creditors of the Company.
14. Notices. All notices and other communications (and
deliveries) provided for or permitted hereunder shall be made in writing by
hand delivery, telecopier, any courier guaranteeing overnight delivery or first
class registered or certified mail, return receipt requested, postage prepaid,
addressed (a) if to the Company, to the attention of its President at its
principal office located at 1120 Avenue of the Americas, 4th Floor, New York,
NY 10036, or such other address as may hereafter be designated in writing by
the Company to the Holder in accordance with the provisions of this Section, or
(b) if to the Holder, at its address as it appears in the Warrant Register.
All such notices and communications (and deliveries) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; when receipt is acknowledged, if telecopied; on the next Business
Day, if timely delivered to a courier
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guaranteeing overnight delivery; and five days after being deposited in the
mail, if sent first class or certified mail, return receipt requested, postage
prepaid; provided, that the exercise of any Warrant shall be effective in the
manner provided in Section 2.
15. Amendments. This Warrant and any term hereof may not be
amended, modified, supplemented or terminated, and waivers or consents to
departures from the provisions hereof may not be given, except by written
instrument duly executed by the party against which enforcement of such
amendment, modification, supplement, termination or consent to departure is
sought.
16. Descriptive Headings, Etc. The headings in this Warrant
are for convenience of reference only and shall not limit or otherwise affect
the meaning of terms contained herein. Unless the context of this Warrant
otherwise requires: (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Warrant shall
refer to this Warrant as a whole and not to any particular provision of this
Warrant, and Section and paragraph references are to the Sections and
paragraphs of this Warrant unless otherwise specified; (4) the word "including"
and words of similar import when used in this Warrant shall mean "including,
without limitation," unless otherwise specified; (5) "or" is not exclusive; and
(6) provisions apply to successive events and transactions.
17. Governing Law. This Warrant shall be governed by, and
construed in accordance with, the laws of the State of New York (without giving
effect to the conflict of laws principles thereof, except Sections 5-1401 and
5-1402 of the New York General Obligations Law).
18. Judicial Proceedings. Any legal action, suit or
proceeding brought against either the Company or the Holder with respect to
this Warrant may be brought in any federal court of the Southern District of
New York or any state court located in New York County, State of New York, and
by execution and delivery of this Warrant, the Company and the Holder hereby
irrevocably and unconditionally waive any claim (by way of motion, as a defense
or otherwise) of improper venue, that it is not subject personally to the
jurisdiction of such court, that such courts are an inconvenient forum or that
this Warrant or the subject matter may not be enforced in or by such court.
The Company and Holder hereby irrevocably and unconditionally consent to the
service of process of any of the aforementioned courts in any such action, suit
or proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, at its address set forth or provided for in Section 14, such
service to become effective 5 days after such mailing. Nothing herein contained
shall be deemed to affect the right of any party to serve process in any manner
permitted by law or commence legal proceedings or otherwise proceed against any
other party in any other jurisdiction to enforce judgments obtained in any
action, suit or proceeding brought pursuant to this Section.
19. Waiver of Jury Trial. THE COMPANY AND THE HOLDER HEREBY
IRREVOCABLY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING,
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WHETHER AT LAW OR EQUITY, BROUGHT BY IT OR THE HOLDER IN CONNECTION WITH THIS
WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
20. Registration Rights Agreement The shares of Common Stock
(and Other Securities) issuable upon exercise of this Warrant (or upon
conversion of any shares of Common Stock issued upon such exercise) shall
constitute Registrable Securities (as such term is defined in the Registration
Rights Agreement). Each Holder of this Warrant shall be entitled to all of the
benefits afforded to a holder of any such Registrable Securities under the
Registration Rights Agreement and such Holder, by its acceptance of this
Warrant, agrees to be bound by and to comply with the terms and conditions of
the Registration Rights Agreement applicable to such Holder as a holder of such
Registrable Securities.
21. Expiration. The right to exercise this Warrant shall
expire at 5:00 p.m., New York City time, September 1, 2004.
INAMED CORPORATION
By:
--------------------------------
Name:
Title:
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EXHIBIT A to
Common Stock Purchase Warrant
FORM OF
ELECTION TO PURCHASE SHARES
The undersigned hereby irrevocably elects to exercise the Warrant
to purchase ________ shares of Common Stock, par value $______ per share
("Common Stock"), of INAMED CORPORATION and hereby makes payment of $_________
therefor in accordance with the terms of the Common Stock Purchase Warrant
against delivery of stock certificates representing such shares. The
undersigned hereby requests that certificates for such shares be issued and
delivered as follows:
ISSUE TO:
-----------------------------------------------------------------------
(NAME)
- --------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
- --------------------------------------------------------------------------------
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO:
---------------------------------------------------------------------
(NAME)
- --------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
If the number of shares of Common Stock purchased (and/or reduced)
hereby is less than the total number of Shares then covered by the Warrant, the
undersigned requests that this Warrant, which shall note the number of shares of
Common Stock issued to date, be delivered to the holder as follows:
ISSUE TO:
-----------------------------------------------------------------------
(NAME OF HOLDER)
- --------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
DELIVER TO:
---------------------------------------------------------------------
(NAME OF HOLDER)
- --------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
Dated: , 19
------------- --
NAME OF HOLDER(2)
By
---------------------------
Name:
Title:
- --------------------
(2) Name of Holder must conform in all respects to name of holder as
specified on the face of the Warrant.
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EXHIBIT B to
Common Stock Purchase Warrant
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the Assignee named below all of the rights of the undersigned to
purchase Common Stock, par value $_____ per share ("Common Stock"), of INAMED
CORPORATION represented by the Warrant, with respect to the number of shares of
Common Stock set forth below:
Name of Assignee Address
Number of Shares
and does hereby irrevocably constitute and appoint ________ Attorney to make
such transfer on the books of INAMED CORPORATION maintained for that purpose,
with full power of substitution in the premises.
Dated: , 19 NAME OF HOLDER(3)
--------------- --
By
------------------------
Name:
Title:
- --------------------
(3) Name of Holder must conform in all respects to name of holder as
specified on the face of the Warrant
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EXHIBIT N
EQUITY REGISTRATION RIGHTS AGREEMENT
302
EQUITY REGISTRATION RIGHTS AGREEMENT
by and among
INAMED CORPORATION
and
THE INITIAL HOLDERS SPECIFIED ON
THE SIGNATURE PAGES HEREOF
Dated as of June 1, 2000
303
TABLE OF CONTENTS
Page
----
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Registration Under the Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Demand Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Incidental Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Shelf Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.5 Underwritten Offerings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6 Exercises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.7 Postponements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3. Holdback Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.1 Restrictions on Sale by Holders of Registrable Securities . . . . . . . . . . . . . . . . . . . . 12
3.2 Restrictions on Sale by Company and Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4. Registration Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.1 Obligations of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.2 Seller Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.3 Notice to Discontinue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5. Indemnification; Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1 Indemnification by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Indemnification by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.3 Conduct of Indemnification Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.4 Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.1 Adjustments Affecting Registrable Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.2 Registration Rights to Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.3 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.5 Successors and Assign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.7 Descriptive Headings, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.10 Remedies; Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.11 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
304
6.12 Nominees for Beneficial Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.13 Consent to Jurisdiction; Waiver of Jury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.14 No Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.15 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
-26-
305
EQUITY REGISTRATION RIGHTS AGREEMENT (this or the "Agreement") dated
as of June 1, 2000, by and among Inamed Corporation, a Delaware corporation
(the "Company"), and the Initial Holders specified on the signature pages to
this Agreement.
W I T N E S S E T H :
WHEREAS, the Company and INAMED Acquisition Corporation, a Delaware
corporation, (the "Inamed Acquisition," and together with the Company each a
"Borrower" and collectively, the "Borrowers"), the lenders (the "Lenders")
specified on the signature pages to the Loan Agreement (as defined below) and
Ableco Finance LLC, as administrative agent for such Lenders (in such capacity,
together with its successors in such capacity (the "Administrative Agent"),
have entered into a Loan Agreement, dated as of September 1, 1999 (such Loan
Agreement, as amended or otherwise modified from time to time, the "Loan
Agreement"), pursuant to which the Lenders have agreed to make a loan to the
Borrowers in the principal amount of $155 million (the "Loan").
WHEREAS, in order to induce the Lenders to enter into the Loan
Agreement, the Company is issuing and delivering to the Lenders or their
nominees or assigns (the "Initial Holders") warrants (the "Warrants") to
purchase Common Shares (the Common Shares issued or issuable upon exercise of
the Warrants are hereinafter referred to as the "Warrant Shares"), and the
Company has further agreed to provide certain registration rights in respect of
the Registrable Securities (as defined below) on the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein and in order to induce the Lenders and the
Administrative Agent to enter into the Loan Agreement and the Lenders to make
and maintain the Loan pursuant to the Loan Agreement, the Company hereby agrees
with the Initial Holders as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
"Administrative Agent" shall have the meaning set forth in the
recitals hereto.
"Affiliate" shall mean (i) with respect to any Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person, and (ii) with respect to any
individual, shall also mean the spouse, sibling, child, step-child, grandchild,
niece, nephew or parent of such Person, or the spouse thereof.
"Blackout Period" shall have the meaning set forth in Section 2.7.
"Borrowers" shall have the meaning set forth in the recitals hereto.
"Common Shares" shall mean shares of common stock, par value $.01 per
share, of the Company.
"Company" shall have the meaning set forth in the recitals hereto.
-1- EQUITY REGISTRATION RIGHTS AGREEMENT
306
"Demand Registration" shall mean a registration required to be
effected by the Company pursuant to Section 2.1.
"Demand Registration Statement" shall mean a registration statement of
the Company which covers the Registrable Securities requested to be included
therein pursuant to the provisions of Section 2.1 and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Holders" shall mean each of the Initial Holders for so long as it
owns any Warrants or Registrable Securities and such of its respective heirs,
successors and permitted assigns (including any permitted transferees of
Warrants or Registrable Securities) who acquire or are otherwise the transferee
of Warrants or Registrable Securities, directly or indirectly, from such
Initial Holder (or any subsequent Holder), for so long as such heirs,
successors and permitted assigns own any Warrants or Registrable Securities.
"Holders' Counsel" shall mean one firm of counsel (per registration)
to the Holders of Registrable Securities participating in such registration,
which counsel shall be selected (i) in the case of a Demand Registration, by
the Initiating Holders holding a majority of the Registrable Securities for
which registration was requested in the Request, and (ii) in all other cases,
by the Majority Holders of the Registration.
"Incidental Registration" shall mean a registration required to be
effected by the Company pursuant to Section 2.2.
"Incidental Registration Statement" shall mean a registration
statement of the Company which covers the Registrable Securities requested to
be included therein pursuant to the provisions of Section 2.2 and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference (or
deemed to be incorporated by reference) therein.
"Initial Holders" shall have the meaning set forth in the recitals
hereto.
"Initiating Holders" shall mean, with respect to a particular
registration, the Holders who initiated the Request for such registration.
"Inspectors" shall have the meaning set forth in Section 4.1(g).
"Lenders" shall have the meaning set forth in the recitals hereto.
"Loan" shall have the meaning set forth in the recitals hereto.
-2- EQUITY REGISTRATION RIGHTS AGREEMENT
307
"Loan Agreement" shall have the meaning set forth in the recitals
hereto.
"Majority Holders" shall mean one or more Holders of Registrable
Securities who would hold a majority of the Registrable Securities then issued
and outstanding or issuable upon exercise of Warrants.
"Majority Holders of the Registration" shall mean, with respect to a
particular registration, one or more Holders of Registrable Securities who hold
(or will hold upon exercise of Warrants) a majority of the Registrable
Securities to be included in such registration.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Person" shall mean any individual, firm, partnership, corporation,
trust, joint venture, association, joint stock company, limited liability
company, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof, and shall
include any successor (by merger or otherwise) of such entity.
"Prospectus" shall mean the prospectus included in a Registration
Statement (including, without limitation, any preliminary prospectus and any
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), and any such Prospectus as amended or
supplemented by any prospectus supplement, and all other amendments and
supplements to such Prospectus, including post-effective amendments, and in
each case including all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Registrable Securities" shall mean (i) any Warrant Shares issued or
issuable upon exercise of the Warrants, and (ii) any other securities of the
Company (or any successor or assign of the Company, whether by merger,
consolidation, sale of assets or otherwise) which may be issued or issuable
with respect to, in exchange for, or in substitution of, Registrable Securities
referenced in clause (i) above by reason of any dividend or stock split,
combination of shares, merger, consolidation, recapitalization,
reclassification, reorganization, sale of assets or similar transaction. As to
any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (A) a registration statement with respect to the
sale of such securities shall have been declared effective under the Securities
Act and such securities shall have been disposed of in accordance with such
registration statement, (B) such securities are saleable pursuant to Rule 144
(or any similar provisions then in force) under the Securities Act, (C) such
securities have been otherwise transferred, a new certificate or other evidence
of ownership for them not bearing the legend restricting further transfer shall
have been delivered by the Company and subsequent public distribution of them
shall not require registration under the Securities Act, or (D) such securities
shall have ceased to be outstanding.
"Registration Expenses" shall mean any and all reasonable out of
pocket expenses incident to performance of or compliance with this Agreement by
the Company and its subsidiaries, including, without limitation (i) all SEC,
stock exchange, NASD and other registration, listing and filing fees, (ii) all
fees and expenses incurred in connection with
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308
compliance with state securities or blue sky laws and compliance with the rules
of any stock exchange (including fees and disbursements of counsel in
connection with such compliance and the preparation of a blue sky memorandum
and legal investment survey), (iii) all printers' fees and costs incurred in
printing, distributing, mailing and delivering any Registration Statement, any
Prospectus and any other document relating to the performance of or compliance
with this Agreement, (iv) the fees and disbursements of counsel for the
Company, (v) the reasonable fees and disbursements of Holders' Counsel, (vi)
the fees and disbursements of all independent public accountants (including the
expenses of any audit and/or "cold comfort" letters) and the fees and expenses
of other Persons, including experts, retained by the Company, (vii) the
expenses incurred in connection with making road show presentations and holding
meetings with potential investors to facilitate the distribution and sale of
Registrable Securities which are customarily borne by the issuer, and (viii)
any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities, provided, however, Registration Expenses shall not
include discounts and commissions payable to underwriters, selling brokers,
dealer managers or other similar Persons engaged in the distribution of any of
the Registrable Securities; and provided further, that in any case where
Registration Expenses are not to be borne by the Company, such expenses shall
not include salaries of Company personnel or general overhead expenses of the
Company, auditing fees, premiums or other expenses relating to liability
insurance required by underwriters of the Company or other expenses for the
preparation of financial statements or other data normally prepared by the
Company in the ordinary course of its business or which the Company would have
incurred in any event; and provided, further, that in the event the Company
shall, in accordance with Section 2.2 or Section 2.7 hereof, not register any
securities with respect to which it had given written notice of its intention
to register to Holders, notwithstanding anything to the contrary in the
foregoing, all of the costs incurred by the Holders in connection with such
registration shall be deemed to be Registration Expenses.
"Registration Statement" shall mean any registration statement of the
Company which covers any Registrable Securities and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Request" shall have the meaning set forth in Section 2.1(a).
"SEC" shall mean the Securities and Exchange Commission, or any
successor agency having jurisdiction to enforce the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time, and the rules and regulations thereunder, or any successor
statute.
"Shelf Registration" shall have the meaning set forth in Section
2.1(a).
"Underwriters" shall mean the underwriters, if any, of the offering
being registered under the Securities Act.
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309
"Underwritten Offering" shall mean a sale of securities of the Company
to an Underwriter or Underwriters for reoffering to the public.
"Warrant Shares" shall mean the Common Shares or other securities
issued or issuable upon the exercise of the Warrants.
"Withdrawn Demand Registration" shall have the meaning set forth in
Section 2.1(a).
"Withdrawn Request" shall have the meaning set forth in Section
2.1(a).
2. Registration Under the Securities Act.
2.1 Demand Registration.
(a) Right to Demand Registration. Subject to Section 2.1(c), at any
time or from time to time after release of this Agreement from the Escrow
Account (as defined in the Loan Agreement) the Majority Holders shall have the
right to request in writing that the Company register all or part of such
Holders' Registrable Securities (a "Request") (which Request shall specify the
amount of Registrable Securities intended to be disposed of by such Holders and
the intended method of disposition thereof) by filing with the SEC a Demand
Registration Statement. As promptly as practicable, but no later than 10 days
after receipt of a Request, the Company shall give written notice of such
requested registration to all Holders of Warrants and Registrable Securities.
Subject to Section 2.1(b), the Company shall include in a Demand Registration
(i) the Registrable Securities intended to be disposed of by the Initiating
Holders and (ii) the Registrable Securities intended to be disposed of by any
other Holder which shall have made a written request (which request shall
specify the amount of Registrable Securities to be registered and the intended
method of disposition thereof) to the Company for inclusion thereof in such
registration within 20 days after the receipt of such written notice from the
Company. The Company shall, as expeditiously as possible following a Request,
use commercially reasonable efforts to cause to be filed with the SEC a Demand
Registration Statement providing for the registration under the Securities Act
of the Registrable Securities which the Company has been so requested to
register by all such Holders, to the extent necessary to permit the disposition
of such Registrable Securities so to be registered in accordance with the
intended methods of disposition thereof specified in such Request or further
requests (including, without limitation, by means of a shelf registration
pursuant to Rule 415 under the Securities Act (a "Shelf Registration") if so
requested and if the Company is then eligible to use such a registration). The
Company shall use commercially reasonable efforts to have such Demand
Registration Statement declared effective by the SEC as soon as practicable
thereafter and to keep such Demand Registration Statement continuously
effective for the period specified in Section 4.1(b).
A Request may be withdrawn prior to the filing of the Demand
Registration Statement by the Majority Holders of the Registration (a
"Withdrawn Request") and a Demand Registration Statement may be withdrawn prior
to the effectiveness thereof by the Majority Holders of the Registration (a
"Withdrawn Demand Registration"), and such
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310
withdrawals shall be treated as a Demand Registration which shall have been
effected pursuant to this Section 2.1, unless the Holders of Registrable
Securities to be included in such Registration Statement reimburse the Company
for its Registration Expenses relating to the preparation and filing of such
Demand Registration Statement (to the extent actually incurred); provided;
however, that if a Withdrawn Request or Withdrawn Registration Statement is
made (A) because of a material adverse change in the business, financial
condition or prospects of the Company, or (B) because the sole or lead managing
Underwriter advises that the amount of Registrable Securities to be sold in
such offering be reduced pursuant to Section 2.1(b) by more than 40% of the
Registrable Securities to be included in such Registration Statement, or (C)
because of a postponement of such registration pursuant to Section 2.7, then
such withdrawal shall not be treated as a Demand Registration effected pursuant
to this Section 2.1 (and shall not be counted toward the permitted number of
Demand Registrations), and the Company shall pay all Registration Expenses in
connection therewith; provided, further, that the Majority Holders of the
Registration shall be entitled to only one Withdrawn Request or Withdrawn
Registration pursuant to clause (B) above. Any Holder requesting inclusion in
a Demand Registration may, at any time prior to the effective date of the
Demand Registration Statement (and for any reason) revoke such request by
delivering written notice to the Company revoking such requested inclusion.
The registration rights granted pursuant to the provisions of this
Section 2.1 shall be in addition to the registration rights granted pursuant to
the other provisions of Section 2 hereof.
(b) Priority in Demand Registrations. If a Demand Registration
involves an Underwritten Offering, and the sole or lead managing Underwriter,
as the case may be, of such Underwritten Offering shall advise the Company in
writing (with a copy to each Holder requesting registration) on or before the
date five days prior to the date then scheduled for such offering that, in its
opinion, the amount of Registrable Securities requested to be included in such
Demand Registration exceeds the number which can be sold in such offering
within a price range acceptable to the Majority Holders of the Registration
(such writing to state the basis of such opinion and the approximate number of
Registrable Securities which may be included in such offering), and the Request
is not thereafter withdrawn, the Company shall include in such Demand
Registration, to the extent of the number which the Company is so advised may
be included in such offering, the Registrable Securities requested to be
included in the Demand Registration by the Holders allocated pro rata in
proportion to the number of Registrable Securities requested to be included in
such Demand Registration by each of them. In the event the Company shall not,
by virtue of this Section 2.1(b), include in any Demand Registration all of the
Registrable Securities of any Holder requested to be included in such Demand
Registration, such Holder may, upon written notice to the Company given within
five days of the time such Holder first is notified of such matter, further
reduce the amount of Registrable Securities it desires to have included in such
Demand Registration, whereupon only the Registrable Securities, if any, that it
desires to have included will be so included and the Holders not so reducing
shall be entitled to a corresponding increase in the amount of Registrable
Securities to be included in such Demand Registration.
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311
(c) Limitations on Registrations. The rights of Holders of
Registrable Securities to request Demand Registrations pursuant to Section
2.1(a) are subject to the limitation that in no event shall the Company be
required to effect more than one Demand Registration; provided, however, that
such number of Demand Registrations shall be increased, on one occasion only,
by one Demand Registration to the extent that the sole or lead managing
underwriter advises that the amount of Registrable Securities to be sold in
such offering be reduced pursuant to Section 2.1(b) by more than 40% of the
Registrable Securities to be included in such Demand Registration, and such
Demand Registration is not thereafter withdrawn pursuant to Section 2.1(a).
(d) Underwriting; Selection of Underwriters. Notwithstanding anything
to the contrary contained in Section 2.1(a), if the Initiating Holders holding
a majority of the Registrable Securities for which registration was requested
in the Request so elect, the offering of such Registrable Securities pursuant
to such Demand Registration shall be in the form of a firm commitment
Underwritten Offering; and such Initiating Holders may require that all Persons
(including other Holders) participating in such registration sell their
Registrable Securities to the Underwriters at the same price and on the same
terms of underwriting applicable to the Initiating Holders. If any Demand
Registration involves an Underwritten Offering, the sole or managing
Underwriters and any additional investment bankers and managers to be used in
connection with such registration shall be selected by the Initiating Holders
holding a majority of the Registrable Securities for which registration was
requested in the Request, subject to the approval of the Company (such approval
not to be unreasonably withheld).
(e) Registration of Other Securities. Whenever the Company shall
effect a Demand Registration, no securities other than the Registrable
Securities shall be covered by such registration unless the Majority Holders of
the Registration shall have consented in writing to the inclusion of such other
securities.
(f) Effective Registration Statement; Suspension. A Demand
Registration Statement shall not be deemed to have become effective (and the
related registration will not be deemed to have been effected) (i) unless it
has been declared effective by the SEC and remains effective in compliance with
the provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Demand Registration Statement for the
time period specified in Section 4.1(b), (ii) if the offering of any
Registrable Securities pursuant to such Demand Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, or (iii) if, in the case of
an Underwritten Offering, the conditions to closing specified in an
underwriting agreement to which the Company is a party are not satisfied (other
than by the sole reason of any breach or failure by the Holders of Registrable
Securities) and are not otherwise waived.
(g) Other Registrations. During the period (i) beginning on the date
of a Request and (ii) ending on the date that is 90 days after the date that a
Demand Registration Statement filed pursuant to such Request has been declared
effective by the SEC or, if the Holders shall withdraw such Request or such
Demand Registration Statement, on the date of such Withdrawn Request or such
Withdrawn Registration Statement, the Company shall not,
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312
without the consent of the Majority Holders of the Registration, file a
registration statement pertaining to any other equity securities of the
Company.
(h) Registration Statement Form. Registrations under this Section 2.1
shall be on such appropriate registration form of the SEC (i) as shall be
reasonably selected by the Company and (ii) which shall be available for the
sale of Registrable Securities in accordance with the intended method or
methods of disposition specified in the requests for registration. With the
approval of the Company (not to be unreasonably withheld), the Company shall
include in any such Registration Statement all information which any selling
Holder, upon advice of counsel, shall reasonably request.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If the Company
at any time or from time to time proposes to register any of its equity
securities under the Securities Act (other than in a registration on Form S-4
or S-8 or any successor form to such forms and other than pursuant to Section
2.1 or 2.3) whether or not pursuant to registration rights granted to other
holders of its securities and whether or not for sale for its own account, the
Company shall deliver prompt written notice (which notice shall be given at
least 30 days prior to such proposed registration) to all Holders of
Registrable Securities of its intention to undertake such registration,
describing in reasonable detail the proposed registration and distribution
(including the anticipated range of the proposed offering price, the class and
number of securities proposed to be registered and the distribution
arrangements) and of such Holders' right to participate in such registration
under this Section 2.2 as hereinafter provided. Subject to the other
provisions of this paragraph (a) and Section 2.2(b), upon the written request
of any Holder made within 20 days after the receipt of such written notice
(which request shall specify the amount of Registrable Securities to be
registered and the intended method of disposition thereof), the Company shall
effect the registration under the Securities Act of all Registrable Securities
requested by Holders to be so registered (an "Incidental Registration"), to the
extent requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be
registered, by inclusion of such Registrable Securities in the Registration
Statement which covers the securities which the Company proposes to register
and shall cause such Registration Statement to become and remain effective with
respect to such Registrable Securities in accordance with the registration
procedures set forth in Section 4. If an Incidental Registration involves an
Underwritten Offering, immediately upon notification to the Company from the
Underwriter of the price at which such securities are to be sold, the Company
shall so advise each participating Holder. The Holders requesting inclusion in
an Incidental Registration may, at any time prior to the effective date of the
Incidental Registration Statement (and for any reason), revoke such request by
delivering written notice to the Company revoking such requested inclusion.
If at any time after giving written notice of its intention to
register any securities and prior to the effective date of the Incidental
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
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313
determination to each Holder of Registrable Securities and, thereupon, (A) in
the case of a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses
incurred in connection therewith), without prejudice, however, to the rights of
Holders to cause such registration to be effected as a registration under
Section 2.1 and (B) in the case of a determination to delay such registration,
the Company shall be permitted to delay the registration of such Registrable
Securities for the same period as the delay in registering such other
securities; provided, however, that if such delay shall extend beyond 120 days
from the date the Company received a request to include Registrable Securities
in such Incidental Registration, then the Company shall again give all Holders
the opportunity to participate therein and shall follow the notification
procedures set forth in the preceding paragraph. There is no limitation on the
number of such Incidental Registrations pursuant to this Section 2.2 which the
Company is obligated to effect.
The registration rights granted pursuant to the provisions of this
Section 2.2 shall be in addition to the registration rights granted pursuant to
the other provisions of Section 2 hereof.
(b) Priority in Incidental Registration. If an Incidental
Registration involves an Underwritten Offering (on a firm commitment basis),
and the sole or the lead managing Underwriter, as the case may be, of such
Underwritten Offering shall advise the Company in writing (with a copy to each
Holder requesting registration) on or before the date five days prior to the
date then scheduled for such offering that, in its opinion, the amount of
securities (including Registrable Securities) requested to be included in such
registration exceeds the amount which can be sold in such offering without
materially interfering with the successful marketing of the securities being
offered (such writing to state the basis of such opinion and the approximate
number of such securities which may be included in such offering without such
effect), the Company shall include in such registration, to the extent of the
number which the Company is so advised may be included in such offering without
such effect, (i) in the case of a registration initiated by the Company, (A)
first, the securities that the Company proposes to register for its own
account, (B) second, the Registrable Securities requested to be included in
such registration by the Holders, allocated pro rata in proportion to the
number of Registrable Securities requested to be included in such registration
by each of them, and (C) third, other securities of the Company to be
registered on behalf of any other Person, and (ii) in the case of a
registration initiated by a Person other than the Company, (A) first, the
securities requested to be included in such registration by any Persons
initiating such registration (other than an Affiliate of the Company), (B)
second, the Registrable Securities requested to be included in such
registration by the Holders and any other Persons (not including Affiliates of
the Company), allocated pro rata in proportion to the number of securities
requested to be included in such registration by each of them, and (C) third,
the securities that the Company proposes to register for the account of it and
its Affiliates, provided, however, that in the event the Company will not, by
virtue of this Section 2.2(b), include in any such registration all of the
Registrable Securities of any Holder requested to be included in such
registration, such Holder may, upon written notice to the Company given within
three days of the time such Holder first is notified of such matter, reduce the
amount of Registrable Securities it desires to have included in such
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314
registration, whereupon only the Registrable Securities, if any, it desires to
have included will be so included and the Holders not so reducing shall be
entitled to a corresponding increase in the amount of Registrable Securities to
be included in such registration.
2.3 Shelf Registration.
(a) Shelf Registration. If a request made pursuant to Section
2.1 is for a Shelf Registration, the Company shall use commercially reasonable
efforts to keep the Shelf Registration continuously effective through the
earlier of (a) the date on which all of the Registrable Securities covered by
such Shelf Registration may be sold pursuant to Rule 144(k) under the
Securities Act (or any successor provision having similar effect) and (b) two
years from the effective date of the Registration Statement in connection with
such Shelf Registration; provided, however, that prior to the termination of
such Shelf Registration, the Company shall first furnish to each Holder of
Registrable Securities participating in such Shelf Registration (i) an opinion,
in form and substance satisfactory to the Majority Holders of the Registration,
of counsel for the Company satisfactory to the Majority Holders of the
Registration stating that such Registrable Securities are freely saleable
pursuant to Rule 144(k) under the Securities Act (or any successor provision
having similar effect) or (ii) a "No-Action Letter" from the staff of the SEC
stating that the SEC would not recommend enforcement action if the Registrable
Securities included in such Shelf Registration were sold in a public sale other
than pursuant to an effective registration statement.
2.4 Expenses. Except as provided herein, the Company shall pay all
Registration Expenses in connection with any Demand Registration or Incidental
Registration, whether or not such registration shall become effective and
whether or not all Registrable Securities originally requested to be included
in such registration are withdrawn or otherwise ultimately not included in such
registration, except as otherwise provided with respect to a Withdrawn Request
and a Withdrawn Demand Registration in Section 2.1(a). Each Holder shall pay
all discounts and commissions payable to underwriters, selling brokers,
managers or other similar Persons engaged in the distribution of such Holder's
Registrable Securities pursuant to any registration pursuant to this Section 2.
Each Holder shall pay all stock transfer taxes applicable to the shares
registered by the Holders and all fees and disbursements of counsel for the
Holders retained by them.
2.5 Underwritten Offerings.
(a) Demand Underwritten Offerings. If requested by the sole
or lead managing Underwriter for any Underwritten Offering effected pursuant to
a Demand Registration, the Company shall enter into a customary underwriting
agreement with the Underwriters for such offering, such agreement to be
reasonably satisfactory in substance and form to the Company and each Holder of
Registrable Securities participating in such offering and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnification and contribution to the effect and to the extent provided in
Section 5.
(b) Holders of Registrable Securities to be Parties to
Underwriting Agreement. The Holders of Registrable Securities to be
distributed by Underwriters in an
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315
Underwritten Offering contemplated by Section 2 shall be parties to the
underwriting agreement between the Company and such Underwriters; provided,
however, that the Company shall not be required to make any representations or
warranties with respect to written information specifically provided by a
selling Holder for inclusion in the Registration Statement. No Holder shall be
required to make any representations or warranties to, or agreements with, the
Company or (in the case of an Incidental Registration) the Underwriters other
than representations, warranties or agreements regarding such Holder, such
Holder's Registrable Securities and such Holder's intended method of
disposition.
(c) Participation in Underwritten Registration.
Notwithstanding anything herein to the contrary, no Person may participate in
any underwritten registration hereunder unless such Person (i) agrees to sell
its securities on the same terms and conditions provided in any underwritten
arrangements approved by the Persons entitled hereunder to approve such
arrangement and (ii) accurately completes and executes in a timely manner all
questionnaires, powers of attorney, indemnities, custody agreements,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
2.6 Exercises. Notwithstanding anything to the contrary
herein, in order for any Registrable Securities that are issuable upon the
exercise of Warrants to be included in any registration pursuant to Section 2
hereof, the exercise of such Warrants must be effected no later than
immediately prior to the closing of any sales under the Registration Statement
pursuant to which such Registrable Securities are to be sold.
2.7 Postponements.
(a) The Company shall be entitled to postpone a Demand
Registration and to require the Holders of Registrable Securities to
discontinue the disposition of their securities covered by a Shelf Registration
during any Blackout Period (as defined below) (i) if the Board of Directors of
the Company determines in good faith that effecting such a registration or
continuing such disposition at such time would have an adverse effect upon a
proposed sale of all (or substantially all) of the assets of the Company or a
merger, reorganization, recapitalization or similar current transaction
materially affecting the capital structure or equity ownership of the Company,
or (ii) if the Company is in possession of material information which the Board
of Directors of the Company determines in good faith is not in the best
interests of the Company to disclose in a registration statement at such time
provided, however, that the Company may delay a Demand Registration and require
the Holders of Registrable Securities to discontinue the disposition of their
securities covered by a Shelf Registration only for a reasonable period of time
not to exceed 120 days (or such earlier time as such transaction is consummated
or no longer proposed or the material information has been made public) (the
"Blackout Period"). There shall not be more than one Blackout Period in any 12
month period. The Company shall promptly notify the Holders in writing (a
"Blackout Notice") of any decision to postpone a Demand Registration or to
discontinue sales of Registrable Securities covered by a Shelf Registration
pursuant to this Section 2.7(a) and shall include an undertaking by the Company
to promptly notify the Holders as soon as a Demand Registration may be effected
or sales of Registrable Securities covered by a Shelf Registration may resume.
In making any such determination to
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initiate or terminate a Blackout Period, the Company shall not be required to
consult with or obtain the consent of any Holder, and any such determination
shall be the Company's sole responsibility. Each Holder shall treat all
notices received from the Company pursuant to this Section 2.7(a) in the
strictest confidence and shall not disseminate such information. If the
Company shall postpone the filing of a Demand Registration Statement pursuant
to this Section 2.7(a), the Majority Holders of Registrable Securities who were
to participate therein shall have the right to withdraw the request for
registration. Any such withdrawal shall be made by giving written notice to
the Company within 30 days after receipt of the Blackout Notice. Such
withdrawn registration request shall not be treated as a Demand Registration
effected pursuant to Section 2.1 (and shall not be counted towards the number
of Demand Registrations effected), and the Company shall pay all Registration
Expenses in connection therewith.
(b) Notwithstanding any provision of this Agreement to the
contrary, the Company shall not be required to effect a Demand Registration
during the period commencing with the date of the filing by the Company of, and
ending on a date one hundred twenty (120) days following the effective date of,
a registration statement pertaining to a public offering of securities for the
account of the Company.
3. Holdback Arrangements.
3.1 Restrictions on Sale by Holders of Registrable Securities. Each
Holder of Registrable Securities hereby agrees, by acquisition of such
Registrable Securities, if timely requested in writing by the sole or lead
managing Underwriter in an Underwritten Offering of any Registrable Securities,
not to make any short sale of, loan, grant any option for the purchase of or
effect any public sale or distribution of, including sales pursuant to Rule 144
(other than Rule 144(k)), any Registrable Securities or any other equity
security of the Company, or any securities convertible into or exchangeable or
exercisable for any equity security of the Company, during the seven days prior
to and the 90-day period beginning on the effective date of the applicable
Registration Statement, unless the sole or lead Managing Underwriter in such
Underwritten Offering otherwise agree.
3.2 Restrictions on Sale by the Company and Others. The Company
agrees that (i) if timely requested in writing by the sole or lead managing
Underwriter in an Underwritten Offering of any Registrable Securities, not to
make any short sale of, loan, grant any option for the purchase of or effect
any public sale or distribution of any of the Company's equity securities, or
any security convertible into or exchangeable or exercisable for any equity
security of the Company, during the seven days prior to and the 90-day period
beginning on the effective date of any applicable Registration Statement
(except as part of such underwritten registration or pursuant to registrations
on Forms S-4 or S-8 or any successor form to such forms), unless the sole or
lead Managing Underwriter in such Underwritten Offering otherwise agree, and
(ii) it will use commercially reasonable efforts to cause each Affiliate that
holds 5% or more of the Company's equity securities, or any securities
convertible into or exchangeable or exercisable for any equity security of the
Company purchased from the Company at any time after the date of this Agreement
(other than in a registered public offering) to so agree.
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4. Registration Procedures.
4.1 Obligations of the Company. Whenever the Company is required to
effect the registration of Registrable Securities under the Securities Act
pursuant to Section 2 of this Agreement, the Company shall, use commercially
reasonable efforts to:
(a) prepare and file with the SEC (promptly, and in any event
within 60 days after receipt of a request to register Registrable Securities)
the requisite Registration Statement to effect such registration, which
Registration Statement shall comply as to form in all material respects with
the requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith, and the Company shall use
commercially reasonable efforts to cause such Registration Statement to become
effective (provided, that the Company may discontinue any registration of its
securities that are not Registrable Securities, and, under the circumstances
specified in Section 2.2, its securities that are Registrable Securities);
provided, however, that before filing a Registration Statement or Prospectus or
any amendments or supplements thereto, or comparable statements under
securities or blue sky laws of any jurisdiction, the Company shall (i) provide
Holders' Counsel and any other Inspector with an adequate and appropriate
opportunity to participate in the preparation of such Registration Statement
and each Prospectus included therein (and each amendment or supplement thereto
or comparable statement, other than a Registration Statement or Prospectus with
such changes or insertions as are required by Rule 430A under the Securities
Act or permitted by Rule 424(b) under the Securities Act ) to be filed with the
SEC which documents shall be subject to the review and comment of Holders'
Counsel, and (ii) not file any such Registration Statement or Prospectus (or
amendment or supplement thereto or comparable statement) with the SEC to which
Holder's Counsel, any selling Holder or any other Inspector shall have
reasonably objected on the grounds that such filing does not comply in all
material respects with the requirements of the Securities Act or of the rules
or regulations thereunder;
(b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary (i) to keep such Registration
Statement effective, and (ii) to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by
such Registration Statement, in each case until such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the seller(s) thereof set forth in such Registration
Statement; provided, however, that except with respect to any Shelf
Registration, such period need not extend beyond 90 calendar days after the
effective date of the Registration Statement; and provided further, that with
respect to any Shelf Registration, such period need not extend beyond the time
period provided in Section 2.3, and which periods, in any event, shall
terminate when all Registrable Securities covered by such Registration
Statement have been sold (but not before the expiration of the 90 day period
referred to in Section 4(3) of the Securities Act and Rule 174 thereunder, if
applicable);
(c) furnish, without charge, to each selling Holder of such
Registrable Securities and each Underwriter, if any, of the securities covered
by such Registration Statement, such reasonable number of copies of such
Registration Statement, each amendment and
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supplement thereto (in each case including all exhibits), and the Prospectus
included in such Registration Statement (including each preliminary Prospectus)
in conformity with the requirements of the Securities Act, and other documents,
as such selling Holder and Underwriter may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities
owned by such selling Holder (the Company hereby consenting to the use in
accordance with applicable law of each such Registration Statement (or
amendment or post-effective amendment thereto) and each such Prospectus (or
preliminary prospectus or supplement thereto) by each such selling Holder of
Registrable Securities and the Underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by such Registration
Statement or Prospectus);
(d) prior to any public offering of Registrable Securities,
use commercially reasonable efforts to register or qualify all Registrable
Securities and other securities covered by such Registration Statement under
such other securities or blue sky laws of such jurisdictions as any selling
Holder of Registrable Securities covered by such Registration Statement or the
sole or lead managing Underwriter, if any, may reasonably request to enable
such selling Holder to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such selling Holder and to continue such
registration or qualification in effect in each such jurisdiction for as long
as such Registration Statement remains in effect (including through new filings
or amendments or renewals), and do any and all other acts and things which may
be necessary or advisable to enable any such selling Holder to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
selling Holder; provided, however, that the Company shall not be required to
(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 4.1(d), (ii) subject
itself to taxation in any such jurisdiction, or (iii) consent to general
service of process in any such jurisdiction;
(e) use commercially reasonable efforts to obtain all other
approvals, consents, exemptions or authorizations from such governmental
agencies or authorities as may be necessary to enable the selling Holders of
such Registrable Securities to consummate the disposition of such Registrable
Securities;
(f) notify Holders' Counsel, each Holder of Registrable
Securities covered by such Registration Statement and the sole or lead managing
Underwriter, if any: (i) when the Registration Statement, any pre-effective
amendment, the Prospectus or any prospectus supplement related thereto or post-
effective amendment to the Registration Statement has been filed and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the SEC or any state
securities or blue sky authority for amendments or supplements to the
Registration Statement or the Prospectus related thereto or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threat of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
existence of any fact of which the Company becomes aware or the happening of
any event of
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which the Company becomes aware, which results in (A) the Registration
Statement containing an untrue statement of a material fact or omitting to
state a material fact required to be stated therein or necessary to make any
statements therein not misleading, or (B) the Prospectus included in such
Registration Statement containing an untrue statement of a material fact or
omitting to state a material fact required to be stated therein or necessary to
make any statements therein, in the light of the circumstances under which they
were made, not misleading, (vi) if at any time the representations and
warranties contemplated by Section 2.5(b) cease to be true and correct in all
material respects, and (vii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate or
that there exists circumstances not yet disclosed to the public which make
further sales under such Registration Statement inadvisable pending such
disclosure and post-effective amendment; and, if the notification relates to an
event described in any of the clauses (ii) through (vii) of this Section
4.1(f), the Company shall promptly prepare a supplement or post-effective
amendment to such Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that
(1) such Registration Statement shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (2) as thereafter
delivered to the purchasers of the Registrable Securities being sold
thereunder, such Prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading (and shall furnish to each such
Holder and each Underwriter, if any, a reasonable number of copies of such
Prospectus so supplemented or amended); and if the notification relates to an
event described in clause (iii) of this Section 4.1(f), the Company shall take
all reasonable action required to prevent the entry of such stop order or to
remove it if entered;
(g) make available for inspection by any selling Holder of
Registrable Securities, any sole or lead managing Underwriter participating in
any disposition pursuant to such Registration Statement, Holders' Counsel and
any attorney, accountant or other agent retained by any such seller or any
Underwriter (each, an "Inspector" and, collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of
the Company and any subsidiaries thereof as may be in existence at such time
(collectively, the "Records") as shall be necessary, in the reasonable opinion
of such Holders' and such Underwriters' respective counsel, to enable them to
exercise their due diligence responsibility and to conduct a reasonable
investigation within the meaning of the Securities Act, and cause the Company's
and any subsidiaries' officers, directors and employees, and the independent
public accountants of the Company, to supply all information reasonably
requested by any such Inspectors in connection with such Registration
Statement;
(h) use commercially reasonable efforts to obtain an opinion
from the Company's counsel and a "cold comfort" letter from the Company's
independent public accountants who have certified the Company's financial
statements included or incorporated by reference in such Registration
Statement, in each case dated the effective date of such Registration Statement
(and if such registration involves an Underwritten Offering, dated the date of
the closing under the underwriting agreement), in customary form and covering
such
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matters as are customarily covered by such opinions and "cold comfort" letters
delivered to underwriters in underwritten public offerings, and furnish to each
Holder participating in the offering and to each Underwriter, if any, a copy of
such opinion and letter addressed to such Holder (in the case of the opinion)
and Underwriter (in the case of the opinion and the "cold comfort" letter);
(i) provide or maintain a CUSIP number for all Registrable
Securities and provide and cause to be maintained a transfer agent and
registrar for all such Registrable Securities covered by such Registration
Statement not later than the effectiveness of such Registration Statement;
(j) otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the SEC and any other governmental
agency or authority having jurisdiction over the offering, and make available
to its security holders, as soon as reasonably practicable but no later than 90
days after the end of any 12-month period, an earnings statement (i) commencing
at the end of any month in which Registrable Securities are sold to
Underwriters in an Underwritten Offering and (ii) commencing with the first day
of the Company's calendar month next succeeding each sale of Registrable
Securities after the effective date of a Registration Statement, which
statement shall cover such 12-month periods, in a manner which satisfies the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) if so requested by the Majority Holders of the
Registration, use commercially reasonable efforts to cause all such Registrable
Securities to be (i) duly included for quotation on the Nasdaq Stock Market's
National Market (the "Nasdaq National Market") or listed on the principal
national securities exchange on which the Company's similar securities are then
listed, if applicable, or (ii) if securities of the Company are not at the time
included on the Nasdaq National Market or listed on any national securities
exchange (or if the listing of Registrable Securities is not permitted under
the rules of each national securities exchange on which the Company's
securities are then listed), on the National Nasdaq Market or a national
securities exchange designated by the Majority Holders of the Registration;
(l) enter into and perform customary agreements (including, if
applicable, an underwriting agreement in customary form) and provide officers'
certificates and other customary closing documents;
(m) cooperate with each selling Holder of Registrable
Securities and each Underwriter participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the NASD and make reasonably available its
employees and personnel and otherwise provide reasonable assistance to the
Underwriters (taking into account the needs of the Company's businesses and the
requirements of the marketing process) in the marketing of Registrable
Securities in any Underwritten Offering;
(n) cooperate with the selling Holders of Registrable
Securities and the sole or lead managing Underwriter, if any, to facilitate the
timely preparation and delivery of certificates not bearing any restrictive
legends representing the Registrable Securities to be sold, and cause
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such Registrable Securities to be issued in such denominations and registered
in such names in accordance with the underwriting agreement prior to any sale
of Registrable Securities to the Underwriters or, if not an Underwritten
Offering, in accordance with the instructions of the selling Holders of
Registrable Securities at least three business days prior to any sale of
Registrable Securities; and
(o) if requested by the sole or lead managing Underwriter or
any selling Holder of Registrable Securities, promptly incorporate in a
prospectus supplement or post-effective amendment such information concerning
such Holder of Registrable Securities, the Underwriters or the intended method
of distribution as the sole or lead managing Underwriter or the selling Holder
of Registrable Securities reasonably requests to be included therein and as is
appropriate in the reasonable judgment of the Company, including, without
limitation, information with respect to the number of shares of the Registrable
Securities being sold to the Underwriters, the purchase price being paid
therefor by such Underwriters and with respect to any other terms of the
Underwritten Offering of the Registrable Securities to be sold in such
offering; make all required filings of such Prospectus supplement or
post-effective amendment as soon as notified of the matters to be incorporated
in such Prospectus supplement or post-effective amendment; and supplement or
make amendments to any Registration Statement if requested by the sole or lead
managing Underwriter of such Registrable Securities.
4.2 Seller Information. The Company may require each selling Holder
of Registrable Securities as to which any registration is being effected to
furnish to the Company such information regarding such Holder, such Holder's
Registrable Securities and such Holder's intended method of disposition as the
Company may from time to time reasonably request in writing; provided, however,
that such information shall be used only in connection with such registration.
4.3 Notice to Discontinue. Each Holder of Registrable Securities
agrees by acquisition of such Registrable Securities that, upon receipt of a
Blackout Notice or any notice from the Company of the happening of any event of
the kind described in Section 4.1(f)(ii) through (vii), such Holder shall
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 4.1(f) and, if so directed by the Company, such Holder shall deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies, then in such Holder's possession of the Prospectus covering such
Registrable Securities which is current at the time of receipt of such notice.
5. Indemnification; Contribution.
5.1 Indemnification by the Company. The Company agrees to indemnify
and hold harmless, to the fullest extent permitted by law, each Holder of
Registrable Securities, its officers, directors, partners, members,
shareholders, employees, Affiliates, advisers and agents (collectively,
"Agents") and each Person who controls such Holder (within the meaning of the
Securities Act) and its Agents with respect to each registration which has been
effected pursuant
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to this Agreement, against any and all losses, claims, damages or liabilities,
joint or several, actions or proceedings (whether commenced or threatened) in
respect thereof, and expenses (as incurred or suffered and including, but not
limited to, any and all expenses incurred in investigating, preparing or
defending any litigation or proceeding, whether commenced or threatened, and
the reasonable fees, disbursements and other charges of legal counsel) in
respect thereof (collectively, "Claims"), insofar as such Claims arise out of
or are based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus (including any
preliminary, final or summary prospectus and any amendment or supplement
thereto) related to any such registration or any omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of the
Securities Act or any rule or regulation thereunder applicable to the Company
and relating to action or inaction required of the Company in connection with
any such registration, or any qualification or compliance incident thereto;
provided, however, that the Company will not be liable in any such case to the
extent that any such Claims arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact or omission or alleged omission
of a material fact so made in reliance upon and in conformity with written
information furnished to the Company by a Holder, Underwriter or other
indemnified person hereunder expressly for use therein. The Company shall also
indemnify any Underwriters of the Registrable Securities, their Agents and each
Person who controls any such Underwriter (within the meaning of the Securities
Act) to the same extent as provided above with respect to the indemnification
of the Holders of Registrable Securities. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of any
Person who may be entitled to indemnification pursuant to this Section 5 and
shall survive the transfer of securities by such Holder or Underwriter.
5.2 Indemnification by Holders. Each Holder, if Registrable
Securities held by it are included in the securities as to which a registration
is being effected, agrees to, severally and not jointly, indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its directors
and officers, each other selling Holder, each other Person who participates as
an Underwriter in the offering or sale of such securities and its Agents and
each Person who controls the Company or any such selling Holder or Underwriter
(within the meaning of the Securities Act) and its Agents against any and all
Claims, insofar as such Claims arise out of or are based upon any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus (including any preliminary, final or summary prospectus
and any amendment or supplement thereto) related to such registration, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by a Holder,
Underwriter or other indemnified person hereunder expressly for use therein;
provided, however, that the aggregate amount which any such Holder shall be
required to pay pursuant to this Section 5.2 shall in no event be greater than
the amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities pursuant to the Registration Statement giving rise to
such Claims less all amounts previously paid by such Holder with respect to any
such Claims. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on
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behalf of such indemnified party and shall survive the transfer of such
securities by such Holder or Underwriter.
5.3 Conduct of Indemnification Proceedings. Promptly after receipt by
an indemnified party of notice of any Claim or the commencement of any action
or proceeding involving a Claim under this Section 5, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party pursuant to Section 5, (i) notify the indemnifying party in writing of
the Claim or the commencement of such action or proceeding; provided, however,
that the failure of any indemnified party to provide such notice shall not
relieve the indemnifying party of its obligations under this Section 5, except
to the extent the indemnifying party is materially and actually prejudiced
thereby and shall not relieve the indemnifying party from any liability which
it may have to any indemnified party otherwise than under this Section 5, and
(ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided, however,
that any indemnified party shall have the right to employ separate counsel and
to participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (A) the
indemnifying party has agreed in writing to pay such fees and expenses, (B) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such indemnified party promptly, (C)
in the reasonable judgment of any such indemnified party, based upon advice of
counsel, a conflict of interest may exist between such indemnified party and
the indemnifying party with respect to such claims (in which case, if the
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such indemnified party) or (D) such indemnified party is a
defendant in an action or proceeding which is also brought against the
indemnifying party and, in opinion of counsel, there may be one or more legal
defenses available to such indemnified party which are not available to the
indemnifying party. It is understood that in connection with the foregoing,
the indemnifying party shall not be liable for the expenses of more than one
separate counsel. No indemnifying party shall be liable for any settlement of
any such claim or action effected without its written consent, which consent
shall not be unreasonably withheld. In addition, without the consent of the
indemnified party (which consent shall not be unreasonably withheld), no
indemnifying party shall be permitted to consent to entry of any judgment with
respect to, or to effect the settlement or compromise of any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim), unless such settlement, compromise or
judgment (1) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim, (2) does not include a
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party, and (3) does not provide for any action
on the part of any party other than the payment of money damages which is to be
paid in full by the indemnifying party. If an indemnifying party is entitled
to assume, and assumes, the defense of such action or proceeding in accordance
with this paragraph, such indemnifying party of parties shall not be liable for
any fees and expenses of counsel of the indemnified parties incurred thereafter
in connection with such action or proceeding, except as otherwise expressly
provided herein.
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5.4 Contribution. If the indemnification provided for in Section 5.1
or 5.2 from the indemnifying party for any reason is unavailable to (other than
by reason of exceptions provided therein), or is insufficient to hold harmless,
an indemnified party hereunder in respect of any Claim, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such Claim in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and the indemnified party, on the other
hand, in connection with the actions which resulted in such Claim, as well as
any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. If, however, the foregoing allocation is not permitted by applicable
law, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative faults but also the relative benefits of each
such indemnifying party as well as any other relevant equitable considerations.
The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 5.4 were determined by pro rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by a party as a result of any Claim
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth in Section 5.3, any legal or other fees,
costs or expenses reasonably incurred by such party in connection with any
investigation or proceeding. Notwithstanding anything in this Section 5.4 to
the contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 5.4 to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of the Registrable
Securities pursuant to the Registration Statement giving rise to such Claims,
less all amounts previously paid by such indemnifying party with respect to
such Claims. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 5.4, each director of the Company,
each officer of the Company who signed the Registration Statement, and each
Person, if any, who controls the Company within the meaning of Section 15 of
the Securities Act, shall have the same rights to contribution as the Company.
6. General.
6.1 Adjustments Affecting Registrable Securities. The Company agrees
that it shall not effect or permit to occur any combination or subdivision of
shares which would adversely affect the ability of the Holder of any
Registrable Securities to include such Registrable Securities in any
registration contemplated by this Agreement or the marketability of such
Registrable Securities in any such registration.
-20- EQUITY REGISTRATION RIGHTS AGREEMENT
325
6.2 Registration Rights to Others. Other than (i) as set forth on
Schedule A attached hereto and (ii) registration rights granted to present and
former directors and officers that are not in conflict with the provisions
hereof, the Company is not currently a party to any agreement with respect to
its securities granting registration rights to Persons. If the Company shall
at any time hereafter provide to any holder of any securities of the Company
rights with respect to the registration of such securities under the Securities
Act (not including any such rights which have been previously granted), (i)
such rights shall not be in conflict with or adversely affect any of the rights
provided in this Agreement to the Holders and (ii) if such rights are provided
on terms or conditions more favorable to such holder than the terms and
conditions provided in this Agreement, the Company shall provide (by way of
amendment to this Agreement or otherwise) such more favorable terms or
conditions to the Holders.
6.3 Amendments and Waivers. The provisions of this Agreement may not
be amended, modified, supplemented or terminated, and waivers or consents to
departures from the provisions hereof may not be given, without the written
consent of the Company and the Holders holding more than 50% of the Warrants
and Registrable Securities then outstanding; provided, however, that no such
amendment, modification, supplement, waiver or consent to departure shall
reduce the aforesaid percentage of Registrable Securities without the written
consent of all of the Holders of Registrable Securities; and provided further,
that nothing herein shall prohibit any amendment, modification, supplement,
termination, waiver or consent to departure the effect of which is limited only
to those Holders who have agreed to such amendment, modification, supplement,
termination, waiver or consent to departure.
6.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, telecopier, any
courier guaranteeing overnight delivery or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to the applicable
party at the address set forth below or such other address as may hereafter be
designated in writing by such party to the other parties in accordance with the
provisions of this Section:
(i) If to the Company, to:
Inamed Corporation
1120 Avenue of the Americas
New York, New York 10036
Attn: General Counsel
Telecopy: (212) 626-6799
Telephone: (212) 626-6800
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Los Angeles, California 90071
Attn: Michael A. Woronoff
Telecopy: (213) 687-5600
-21- EQUITY REGISTRATION RIGHTS AGREEMENT
326
Telephone:(213) 687-5000
(ii) If to the Initial Holders, to:
Ableco Holding LLC
450 Park Avenue - 28th Floor
New York, New York 10022
Telecopy: (212) 750-5212
Telephone: (212) 891-2100
With a copy to:
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
Attn: Paul E. Weber
Telecopy: (212) 593-5955
Telephone: (212) 756-2000
(iii) If to any subsequent Holder, to the address
of such Person set forth in the records of the
Company.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; when
receipt is acknowledged, if telecopied; on the next business day, if timely
delivered to a courier guaranteeing overnight delivery; and five days after
being deposited in the mail, if sent first class or certified mail, return
receipt requested, postage prepaid.
6.5 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs,
successors and permitted assigns (including any permitted transferee of
Warrants or Registrable Securities). Any Holder may assign to any permitted
(as determined under the Warrant) transferee of its Warrants or Registrable
Securities (other than a transferee that acquires such Registrable Securities
in a registered public offering or pursuant to a sale under Rule 144 of the
Securities Act (or any successor rule)), its rights and obligations under this
Agreement; provided, however, if any permitted transferee shall take and hold
Warrants or Registrable Securities, such transferee shall promptly notify the
Company and by taking and holding such Registrable Securities such permitted
transferee shall automatically be entitled to receive the benefits of and be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement as if it were a party hereto (and shall,
for all purposes, be deemed a Holder under this Agreement). If the Company
shall so request any heir, successor or permitted assign (including any
permitted transferee) wishing to avail itself of the benefits of this Agreement
shall agree in writing to acquire and hold the Registerable Securities subject
to all of the terms hereof. For purposes of this Agreement, "successor" for
any entity other than a natural person shall mean a successor to such entity as
a result of such entity's merger, consolidation, sale of substantially all
-22- EQUITY REGISTRATION RIGHTS AGREEMENT
327
of its assets, or similar transaction. Except as provided above or otherwise
permitted by this Agreement, neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by any Holder or by the Company without the consent of the other
parties hereto.
6.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original, but all of which counterparts, taken together, shall constitute
one and the same instrument.
6.7 Descriptive Headings, Etc The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and paragraph references are to the Sections and
paragraphs of this Agreement unless otherwise specified; (4) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified; (5) "or" is not
exclusive; and (6) provisions apply to successive events and transactions.
6.8 Severability. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
6.9 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York (without giving effect to
the conflict of laws principles thereof, except Sections 5-1401 and 5-1402 of
the New York General Obligations Law).
6.10 Remedies; Specific Performance. The parties hereto
acknowledge that money damages would not be an adequate remedy at law if any
party fails to perform in any material respect any of its obligations
hereunder, and accordingly agree that each party, in addition to any other
remedy to which it may be entitled at law or in equity, shall be entitled to
seek to compel specific performance of the obligations of any other party under
this Agreement, without the posting of any bond, in accordance with the terms
and conditions of this Agreement in any court of the United States or any State
thereof having jurisdiction, and if any action should be brought in equity to
enforce any of the provisions of this Agreement, none of the parties hereto
shall raise the defense that there is an adequate remedy at law. Except as
otherwise provided by law, a delay or omission by a party hereto in exercising
any right or remedy accruing upon any such breach shall not impair the right or
remedy or constitute a waiver of or acquiescence in any such
-23- EQUITY REGISTRATION RIGHTS AGREEMENT
328
breach. No remedy shall be exclusive of any other remedy. All available
remedies shall be cumulative.
6.11 Entire Agreement. This Agreement, the Escrow Agreement and the
Warrants (collectively, the "Other Agreements") are intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, representations, warranties, covenants or undertakings relating to
such subject matter, other than those set forth or referred to herein or in the
Other Agreements. This Agreement and the Other Agreements supersede all prior
agreements and understandings between the Company and the other parties to this
Agreement with respect to such subject matter.
6.12 Nominees for Beneficial Owners. In the event that any Warrants
or Registrable Securities are held by a nominee for the beneficial owner
thereof, the beneficial owner thereof may, at its election in writing delivered
to the Company, be treated as the holder of such Warrants or Registrable
Securities for purposes of any request or other action by any holder or holders
of Warrants or Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Warrants or Registrable
Securities held by any holder or holders of Warrants or Registrable Securities
contemplated by this Agreement. If the beneficial owner of any Warrants or
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Warrants or
Registrable Securities.
6.13 Consent to Jurisdiction; Waiver of Jury. Each party to this
Agreement hereby irrevocably and unconditionally agrees that any legal action,
suit or proceeding arising out of or relating to this Agreement or any
agreements or transactions contemplated hereby may be brought in any federal
court of the Southern District of New York or any state court located in New
York County, State of New York, and hereby irrevocably and unconditionally
expressly submits to the personal jurisdiction and venue of such courts for the
purposes thereof and hereby irrevocably and unconditionally waives any claim
(by way of motion, as a defense or otherwise) of improper venue, that it is not
subject personally to the jurisdiction of such court, that such courts are an
inconvenient forum or that this Agreement or the subject matter may not be
enforced in or by such court. Each party hereby irrevocably and
unconditionally consents to the service of process of any of the aforementioned
courts in any such action, suit or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, to the address set forth or
provided for in Section 6.5 of this Agreement, such service to become effective
10 days after such mailing. Nothing herein contained shall be deemed to affect
the right of any party to serve process in any manner permitted by law or
commence legal proceedings or otherwise proceed against any other party in any
other jurisdiction to enforce judgments obtained in any action, suit or
proceeding brought pursuant to this Section. Each of the parties hereby
irrevocably waives trial by jury in any action, suit or proceeding, whether at
law or equity, brought by any of them in connection with this Agreement or the
transactions contemplated hereby.
-24- EQUITY REGISTRATION RIGHTS AGREEMENT
329
6.14 Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
6.15 No Inconsistent Agreements. The Company will not hereafter enter
into any agreement which is inconsistent with the rights granted to the Holders
in this Agreement.
6.16 Construction. The Company and the Initial Holders acknowledge
that each of them has had the benefit of legal counsel of its own choice and
has been afforded an opportunity to review this Agreement with its legal
counsel and that this Agreement shall be construed as if jointly drafted by the
Company and the Holders.
-25- EQUITY REGISTRATION RIGHTS AGREEMENT
330
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
INAMED CORPORATION
By:
-------------------
Name:
Title:
INITIAL HOLDERS:
ABLECO HOLDING LLC
By:
------------------------------------------
Name:
Title:
STYX PARTNERS, L.P.
By: Styx Associates, L.L.C.
its General Partner
By:
------------------------------------------
Name:
Title:
U.S. BANCORP INVESTMENTS, INC.
By:
----------------------------------------
Name:
Title:
WILLIAM E. SIMON & SONS
SPECIAL SITUATION PARTNERS, L.P.
-26- Equity Registration Rights Agreement
331
By: William E. Simon & Sons
Special Situation Partners, LLC,
its General Partner
By:
------------------------------------
Name: John E. Klinge
Title: Authorized Signatory
CONTINENTAL CASUALTY COMPANY
By:
------------------------------------
Name:
Title:
FOOTHILL PARTNERS III, L.P.
By: The Foothill Group, Inc.,
its General Partner
By:
------------------------------------
Name:
Title:
THE BROWN & WILLIAMSON MASTER
RETIREMENT TRUST
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
-27- Equity Registration Rights Agreement
332
MACKAY-SHIELDS DOMESTIC HEDGE FUND, L.P.
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
EA CAYMAN UNIT TRUST-EA/MACKAY HIGH
YIELD UNIT TRUST
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
HIGHBRIDGE CAPITAL CORPORATION
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
POLICE OFFICERS PENSION SYSTEM OF THE CITY
OF HOUSTON
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
-28- Equity Registration Rights Agreement
333
THE 1199 HEALTH CARE EMPLOYEES PENSION FUND
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
TEACHERS' RETIREMENT SYSTEM OF LOUISIANA
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
RETIREMENT SYSTEM OF THE CITY OF MEMPHIS
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
MEZZACAPPA CAPITAL PARTNERS, L.P.
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
THE MAINSTAY FUNDS, on behalf of its High Yield
Corporate Bond Fund Series
-29- Equity Registration Rights Agreement
334
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
MACKAY-SHIELD OFFSHORE HEDGE FUND, LTD.
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
MAINSTAY VP SERIES FUND, INC., on behalf of its
High Yield Corporate Bond Portfolio
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
EMPLOYEES RETIREMENT FUND OF THE CITY OF
FORT WORTH
By: Mellon Bank, N.A., solely in its capacity
as Trustee for the Employees Retirement
Fund of the City of Fort Worth as Directed
by MacKay- Shields Financial Corporation,
and not in its individual capacity
By:
-------------------------------------
Name:
Title:
ANCHUTZ FOUNDATION
-30- Equity Registration Rights Agreement
335
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
401K SAVINGS PLAN OF THE CHASE MANHATTAN
BANK HIGH YIELD BOND FUND
By: MacKay-Shields Financial Corporation,
its Investment Adviser
By:
------------------------------------
Name: Robert A. Nisi
Title: Director
-31- Equity Registration Rights Agreement
336
SCHEDULE A
RECORD NAME OF WARRANTHOLDER $6.50 LOAN WARRANTS $7.50 ADDITIONAL WARRANTS
---------------------------- ------------------- -------------------------
-32- Equity Registration Rights Agreement
337
EXHIBIT O
CONTRIBUTION AGREEMENT
CONTRIBUTION AGREEMENT, dated as of September __, 1999 (this
"Agreement"), among each of the direct and indirect Subsidiaries of INAMED
CORPORATION, a Delaware corporation (the "Parent"), identified on the signature
pages hereto as a "Guarantor" (each a "Guarantor" and together with any other
entity that becomes a party hereto pursuant to Section 9 hereof, the
"Obligors"). As used herein, the term "Contributor" shall mean each of the
Guarantors required to make any payment to any other Guarantor pursuant to
Section 2 hereof.
W I T N E S S E T H :
WHEREAS, the Parent, Inamed Acquisition Corporation., a Delaware
corporation (the "Purchaser", and together with the Parent, each a "Borrower"
and collectively, the "Borrowers"), the lenders from time to time party thereto
(each a "Lender" and collectively, the "Lenders") and Ableco Finance LLC, as
administrative agent for the Lenders (the "Administrative Agent") have entered
into a Loan Agreement, dated as of September 1, 1999 (such Loan Agreement, as
amended or otherwise modified from time to time, the "Loan Agreement"),
pursuant to which the Lenders have agreed to make a loan to the Borrowers in
the principal amount of $155,000,000 (the "Loan");
WHEREAS, the Borrowers are liable for the repayment of the Loan
incurred by them under the Loan Agreement and for the payment of all of their
other obligations under the Loan Documents to which they are parties (all of
such obligations, the "Obligations");
WHEREAS, pursuant to the Guaranty, each of the Guarantors has
unconditionally and irrevocably agreed to guarantee the Obligations;
WHEREAS, each of the Guarantors shall obtain benefits from the
incurrence of the Obligations;
WHEREAS, the Obligors wish to enter into this Agreement to effect
an equitable sharing of the Obligations; and
WHEREAS, each Obligor shall be entitled to contributions from the
Contributors in the event such Obligor pays more than its Contribution
Percentage (as hereinafter defined) of the Obligations;
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
338
SECTION 1. Definitions. Reference is hereby made to the Loan
Agreement for a statement of the terms thereof. All terms used in this
Agreement which are defined therein and not otherwise defined herein shall have
the same meanings herein as set forth therein.
SECTION 2. Right of Contribution. On any date a payment in
respect of the Obligations is made, the right of contribution, if any, of each
Obligor against each Contributor shall be determined as provided in the
immediately succeeding sentence, with the right of contribution of each Obligor
to be revised and restated as of each such date. At any time that a payment (a
"Relevant Payment") is made by an Obligor in respect of the Obligations and
results in the aggregate payments made by such Obligor in respect of the
Obligations to and including the date of such Relevant Payment exceeding such
Obligor's Contribution Percentage of the aggregate payments made by all
Obligors in respect of the Obligations to and including such date (such excess,
the "Aggregate Excess Amount"), each such Obligor shall have a right of
contribution against each Contributor who has made payments in respect of the
Obligations to and including such date in an aggregate amount less than such
Contributor's Contribution Percentage of the aggregate payments made to and
including such date by all Obligors in respect of the Obligations (the
aggregate amount of such deficit, the "Aggregate Deficit Amount") in an amount
equal to (x) a fraction the numerator of which is the Aggregate Excess Amount
of such Obligor and the denominator of which is the sum of the Aggregate Excess
Amounts of all Obligors multiplied by (y) the Aggregate Deficit Amount of such
Contributor. An Obligor's right of contribution, if any, pursuant to this
Section 1 shall arise at the time of each computation, subject to adjustment at
the time of subsequent computations, provided that (i) such Obligor may not
take any action to enforce such right until the Obligations have been paid in
full, it being expressly recognized and agreed by all Obligors that any
Obligor's right of contribution arising pursuant hereto against any Contributor
shall be expressly junior and subordinate to such Contributor's obligations and
liabilities in respect of the Obligations and (ii) each Obligor's right of
contribution shall be secured on the same basis as the Obligations are secured.
As used in this Agreement, (i) the "Contribution Percentage" of each Obligor
shall mean the percentage obtained by dividing (x) the Benefit Amount of such
Obligor by (y) the aggregate Benefit Amount of all Obligors and (ii) the
"Benefit Amount" of each Obligor shall mean the net value of the benefits to
such Obligor and all of its Subsidiaries from the Loan made under the Loan
Agreement.
SECTION 3. Waiver of Right of Subrogation. Each of the Obligors
recognizes and agrees that, except for any right of contribution arising
pursuant to Section 2 hereof, each Obligor which makes any payment in respect
of the Obligations shall have no right of contribution or subrogation against
any other Obligor in respect of such payment, any such right of contribution or
subrogation arising under law or otherwise being expressly waived by all
Obligors.
SECTION 4. Right to Waive Contribution Right. Each of the
Obligors recognizes and acknowledges that the rights to contribution arising
hereunder shall constitute an asset in favor of the party entitled to such
contribution. In this connection each Obligor has the right to waive its
contribution right against any Contributor to the extent that after giving
effect to such waiver such Obligor would remain solvent, in the reasonable
determination of the Administrative Agent and the Lenders.
-2-
339
SECTION 5. Waiver and Amendment. Any provision of this
Agreement may be amended or waived only by an amendment or waiver in writing
signed by the parties hereto and consented to by the Administrative Agent and
the Lenders.
SECTION 6. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, any such successor to constitute
an Obligor hereunder. To the extent any successor shall be a successor to all
or part of the assets of a Contributor, such successor shall also constitute a
Contributor, with a Contribution Percentage equal to the Contribution
Percentage of the predecessor corporation or as otherwise consented to by the
Administrative Agent and the Lenders.
SECTION 7. Termination. This Agreement, as it may be amended,
supplemented or otherwise modified from time to time, shall remain in effect
and shall not be terminated as to any Obligation until such Obligation has been
paid in full.
SECTION 8. Execution in Counterparts. This Agreement may be
executed in counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same instrument.
SECTION 9. Additional Guarantors. The parties hereto hereby
agree that, at the time any entity first becomes a Guarantor after the Closing
Date, such entity shall upon execution of the Subsidiary Joinder Agreement
become an Obligor for all purposes of this Agreement.
SECTION 10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
-3-
340
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective duly authorized officers as of the
day first above written.
GUARANTORS:
MCGHAN MEDICAL CORPORATION
By:
--------------------------------------
Name:
Title:
INAMED JAPAN, INC.
By:
--------------------------------------
Name:
Title:
INAMED INTERNATIONAL CORP.
By:
--------------------------------------
Name:
Title:
BIOENTERICS CORPORATION
By:
--------------------------------------
Name:
Title:
BIODERMIS CORPORATION
By:
--------------------------------------
Name:
Title:
BIOPLEXUS CORPORATION
By:
--------------------------------------
Name:
Title:
-4-
341
INAMED DEVELOPMENT COMPANY
By:
--------------------------------------
Name:
Title:
CUI CORPORATION
By:
--------------------------------------
Name:
Title:
FLOWMATRIX CORPORATION
By:
--------------------------------------
Name:
Title:
MEDISYN TECHNOLOGIES CORPORATION
By:
--------------------------------------
Name:
Title:
-5-
342
EXHIBIT P
OFFICER'S SOLVENCY CERTIFICATE
I, the undersigned, the ________________ of INAMED Corporation, a
Delaware corporation (the "Parent"), do hereby certify that:
1. This Certificate is furnished pursuant to Section
3.01(a)(xxvi) of the Loan Agreement, dated as of September 1, 1999 (the "Loan
Agreement"), among the Parent, Inamed Acquisition Corporation, a Delaware
corporation, as borrowers, the lenders from time to time party thereto (the
"Lenders") and Ableco Finance LLC, as administrative agent for the Lenders (in
such capacity, together with its successors in such capacity, the
"Administrative Agent"). Unless otherwise defined herein, capitalized terms
used in this Certificate shall have the meanings set forth in the Loan
Agreement.
2. For purposes of this Certificate, the terms below shall
have the following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of
(i) the Parent or (ii) the Parent and its
Subsidiaries, taken as a whole, as the case may be,
would change hands between a willing buyer and a
willing seller, within a commercially reasonable
period of time, each having reasonable knowledge of
the relevant facts, with neither being under any
compulsion to act.
(b) "Present Fair Saleable Value"
The amount that could be obtained by an independent
willing seller from an independent willing buyer if
the assets of (i) the Parent or (ii) the Parent and
its Subsidiaries, taken as a whole, as the case may
be, were sold with reasonable promptness under normal
selling conditions in a current market.
(c) "Stated Liabilities"
The recorded liabilities (including contingent
liabilities that would be recorded in accordance with
generally accepted accounting principles,
consistently applied ("GAAP")) of (i) the Parent or
(ii) the Parent and its Subsidiaries, taken as a
whole, as the case may be, at the date hereof,
together with the amount of all indebtedness to be
incurred in connection with the Transactions.
(d) "Contingent Liabilities"
343
The maximum estimated amount, as of the date hereof,
of liability reasonably likely to result from pending
litigation, asserted claims and assessments,
guaranties, uninsured risks and other contingent
liabilities of (i) the Parent or (ii) the Parent and
its Subsidiaries, taken as a whole, as the case may
be, as of the date hereof after giving effect to the
consummation of the Transactions (including all fees
and expenses related thereto but exclusive of such
Contingent Liabilities to the extent reflected in
Stated Liabilities).
(e) "Will be able to pay its Stated Liabilities,
including Contingent Liabilities, as they mature"
For the period from the date hereof through the date
of payment in full of all the Obligations under the
Loan Agreement, each of (i) the Parent or (ii) the
Parent and its Subsidiaries, taken as a whole, as the
case may be, will have sufficient assets and cash
flow to pay its Stated Liabilities and Contingent
Liabilities as those liabilities mature or otherwise
become payable.
(f) "Will not have Unreasonably Small Capital"
For the period from the date hereof through the date
of payment in full of all the Obligations under the
Loan Agreement each of (i) the Parent or (ii) the
Parent and its Subsidiaries, taken as a whole, as the
case may be, after the consummation of the
Transactions and all Indebtedness being incurred or
assumed and Liens created in connection therewith, is
a going concern and has sufficient capital to ensure
that it will continue to be a going concern for such
period and to remain a going concern for such period.
3. For purposes of this Certificate, I, or other officers of
the Parent under my direction and supervision, have performed the following
procedures as of and for the period set forth below:
(a) I have reviewed the financial statements of the
Parent and its Subsidiaries dated December 31, 1997
and December 31, 1998, March 31, 1999 and June 30,
1999.
(b) I have made inquiries of certain other officials of
the Parent and its Subsidiaries who have
responsibility for financial and accounting matters
regarding the existence and amount of Contingent
Liabilities associated with the business of the
Parent and its Subsidiaries.
(c) I have knowledge of and have reviewed to my
satisfaction the Loan Documents, the documents to be
executed in connection
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therewith, the Transaction Documents and the
respective Schedules and Exhibits thereto.
(d) With respect to Contingent Liabilities, I:
1. have inquired of certain officials of the Parent
and its Subsidiaries who have responsibility for
legal, financial and accounting matters as to the
existence and estimated liability with respect to
all Contingent Liabilities known to them;
2. have confirmed with senior officers of the Parent
and its Subsidiaries that (i) all appropriate
items were included in Stated Liabilities or
Contingent Liabilities and (ii) the amounts
relating thereto were the maximum estimated
amount of liability reasonably likely to result
therefrom as of the date hereof; and
3. hereby certify that all material Contingent
Liabilities that may reasonably be expected to
arise from any pending litigation, asserted
claims and assessments, guaranties, uninsured
risks and other Contingent Liabilities of (i) the
Parent and (ii) the Parent and its Subsidiaries,
taken as a whole (exclusive of such Contingent
Liabilities to the extent reflected in Stated
Liabilities), have been considered in making the
certification set forth in paragraph 4 below, and
with respect to each such Contingent Liability
the maximum estimated amount of liability with
respect thereto was used in making such
certification.
(e) I have made inquiries of certain officers of the
Parent and its Subsidiaries who have responsibility
for financial reporting and accounting matters
regarding whether they were aware of any events or
conditions that, as of the date hereof, would cause
(x) the Parent or (y) the Parent and its
Subsidiaries, taken as a whole, after giving effect
to the consummation of the Transactions, to (i) have
assets with a Fair Value less than the sum of Stated
Liabilities and Contingent Liabilities; (ii) have
assets with a Present Fair Saleable Value less than
the amount that will be required to pay the probable
liability on its Stated Liabilities and Contingent
Liabilities as they become absolute and matured;
(iii) have Unreasonably Small Capital; or (iv) not be
able to pay its Stated Liabilities and Contingent
Liabilities as they mature or otherwise become
payable.
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4. Based on and subject to the foregoing, I hereby certify
that after giving effect to the consummation of the Transactions, it is my
informed opinion that as of the date hereof (i) the Fair Value of the assets of
each of (A) the Parent and (B) the Parent and its Subsidiaries, taken as a
whole, will exceed its Stated Liabilities and Contingent Liabilities; (ii) the
Present Fair Saleable Value of the assets of each of (A) the Parent and (B) the
Parent and its Subsidiaries, taken as a whole, will exceed the amount required
to pay its probable liability on its existing debts as they become absolute and
matured; (iii) each of (A) the Parent and (B) the Parent and its Subsidiaries,
taken as a whole, will not have Unreasonably Small Capital; and (iv) each of
(A) the Parent and (B) the Parent and its Subsidiaries, taken as a whole, will
be able to pay its Stated Liabilities and Contingent Liabilities as they mature
or otherwise become payable.
IN WITNESS WHEREOF, I have hereto set my hand this ____ day of
September, 1999.
`
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Name:
Title:
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