Exhibit T3E.2
Form of Subordinated Security Agreement
SUBORDINATED SECURITY AGREEMENT
This SUBORDINATED SECURITY AGREEMENT (this "Agreement") dated as of
____________, 1998, is made by Inamed Corporation, a Florida corporation (the
"Obligor"), and Santa Xxxxxxx Bank & Trust, as trustee for the benefit of the
holders of the Obligor's 11% Senior Subordinated Secured Notes due March 31,
1999, or at the option of the Obligor exercised as provided therein, September
1, 2000 (in such capacity, the "Trustee").
RECITALS
The Indenture dated as of ___________, 1998 (the "Subordinated
Indenture") between the Obligor and the Trustee provides, subject to its terms
and conditions, for the issuance by the Obligor of its 11% Senior Subordinated
Secured Notes due March 31, 1999, or at the option of the Obligor as provided
therein, September 1, 2000 (the "Exchange Notes") as well as certain warrants to
purchase the Obligor's common stock, $.01 per share, (the "Warrants") to be
issued in exchange for the Obligor's 11% Secured Convertible Notes due 1999 (the
"Old Notes") to the holders thereof (the "Holders") pursuant to the Securities
Exchange Agreement dated as of October 7, 1998 (the "Securities Exchange
Agreement"). It is a condition to the exchange of the Old Notes for the Notes
and Warrants by the Purchasers that the Obligor shall have executed and
delivered, and granted the Liens provided for in, this Agreement.
To induce the Trustee to enter into the Subordinated
Indenture, and to induce the Purchasers to exchange the Old Notes, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Obligor has agreed to pledge and grant a security interest in
the Collateral as security for the Secured Obligations. Accordingly, the Obligor
agrees with the Trustee as follows:
Article I. Definitions and Interpretation.
1.01 CERTAIN DEFINED TERMS. Unless otherwise defined, all capitalized
terms used in this Agreement that are defined in the Subordinated Indenture or
in the Exchange Agreement (including those terms incorporated therein by
reference) shall have the respective meanings assigned to them in the
Subordinated Indenture or the Exchange Agreement, as applicable. In addition,
the following terms shall have the following meanings under this Agreement:
"Accounts" shall have the meaning assigned to that term in Section
2.01(b).
"Breast Implant Litigation" shall mean the litigation in the United
States District Court for the Northern District of Alabama, Southern Division
stylized as "Silicone Gel Breast Implant Products Liability Litigation
(MDL926)."
"Capitalized Lease" shall mean, with respect to any Person, any lease
or any other agreement for the use of property which, in accordance with
generally accepted accounting principles, should be capitalized on the lessee's
or user's balance sheet.
"Capitalized Lease Obligation" of any Person shall mean and include, as
of any date as of which the amount thereof is to be determined, the amount of
the liability capitalized or disclosed (or which should be disclosed) in a
balance sheet of such Person in respect of a Capitalized Lease of such Person.
"Casualty Event" shall mean, with respect to any property of any
Person, any loss of or damage to, or any condemnation or other taking of, such
property for which such Person or any of its Subsidiaries receives insurance
proceeds, or proceeds of a condemnation award or other compensation.
"Collateral" shall have the meaning assigned to that term in Section
2.01.
"Collateral Account" shall have the meaning assigned to that term in
Section 3.01.
"Copyright Collateral" shall mean all Copyrights, whether now owned or
hereafter acquired by the Obligor.
"Copyrights" shall mean, collectively, (a) all copyrights, copyright
registrations and applications for copyright registrations, (b) all renewals and
extensions of all copyrights, copyright registrations and applications for
copyright registration and (c) all rights, now existing or hereafter coming into
existence, (i) to all income, royalties, damages and other payments (including
in respect of all past, present or future infringements) now or hereafter due or
payable under or with respect to any of the foregoing, (ii) to xxx for all past,
present and future infringements with respect to any of the foregoing and (iii)
otherwise accruing under or pertaining to any of the foregoing throughout the
world.
"Documents" shall have the meaning assigned to that term in Section
2.01(f).
"Equipment" shall have the meaning assigned to that term in Section
2.01(e).
"Equity Rights" shall mean, with respect to any Person, any outstanding
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including any stockholders' or voting trust agreements) for the
issuance, sale, registration or voting of, or outstanding securities convertible
into, any additional shares of capital stock of any class, or partnership or
other ownership interests of any type in, such Person.
"Event of Default" shall mean each of the happenings or circumstances
enumerated in Section 4.1 of the Subordinated Indenture.
"Exchange Documents" shall mean the Securities Exchange Agreement dated
as of ___________, 1998 between the Company, the holders listed on Exhibit A
thereto and the Collateral Agent, the Exchange Notes, this Agreement, the
Subordinated Guarantee Agreement, dated as of the date hereof, by and between
certain Subsidiaries of the Company and the Collateral Agent (the "Subordinated
Guarantee Agreement"), the Subordinated Guarantee and
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Security Agreement, dated as of the date hereof, by and between certain
Subsidiaries of the Company and the Collateral Agent (the "Subordinated
Guarantee and Security Agreement"),the Subordinated Indenture, the Exchange
Offer Registration Rights Agreement, dated as of the date hereof, by and between
the Company and the Holders and the Intercreditor Agreement, dated as of the
date hereof, by and between the Collateral Agent and the Trustee.
"Indebtedness" shall mean, with respect to any Person, (i) all
obligations of such Person for borrowed money, or with respect to deposits or
advances of any kind, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (iii) all obligations of such Person
under conditional sale or other title retention agreements relating to property
purchased by such Person, (iv) all obligations of such Person issued or assumed
as the deferred purchase price of property or services (other than accounts
payable to suppliers and similar accrued liabilities incurred in the ordinary
course of business and paid in a manner consistent with industry practice), (v)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any lien or security interest on property owned or acquired by such Person
whether or not the obligations secured thereby have been assumed, (vi) all
Capitalized Lease Obligations of such Person, (vii) all guarantees of such
Person, (viii) all obligations (including but not limited to reimbursement
obligations) relating to the issuance of letters of credit for the account of
such Person, (ix) all obligations arising out of foreign exchange contracts, and
(x) all obligations arising out of interest rate and currency swap agreements,
cap, floor and collar agreements, interest rate insurance, currency spot and
forward contracts and other agreements or arrangements designed to provide
protection against fluctuations in interest or currency exchange rates.
"Instruments" shall have the meaning assigned to that term in Section
2.01(c).
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereon,
and all Patents, patent applications and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions and
reexaminations thereof, (b) all Trademarks, service marks, trade dress, logos,
trade names and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith, and all applications, registrations and renewals in connection
therewith, (c) all copyrightable works, all Copyrights and all applications,
registrations and renewals in connection therewith, (d) all mask works and all
applications, registrations and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, (h) all copies and
tangible embodiments of the foregoing (in whatever form or medium) and (i) all
licenses or agreements in connection with the foregoing.
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"Intercreditor Agreement" means the Intercreditor Agreement dated as of
____________, 1998 between the Trustee and Appaloosa Management, L.P. as
Collateral Agent under the Note Purchase Agreement.
"Inventory" shall have the meaning assigned to that term in Section
2.01(d).
"Issuers" shall mean, collectively, each Subsidiary, directly or
indirectly, of the Obligor that is the issuer (as defined in the Uniform
Commercial Code) of any shares of capital stock now owned or hereafter acquired
by the Obligor.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the property, business, prospects (including, without limitation, the prospects
for the settlement of the Breast Implant Litigation), operations, earnings,
assets, liabilities or the condition (financial or otherwise) of the Obligor and
its Subsidiaries taken as a whole, whether or not in the ordinary course of
business, (b) the ability of the Obligor to perform its obligations under any of
the Exchange Documents to which it is a party, (c) the validity or
enforceability of any of the Exchange Documents, (d) the rights, remedies,
powers and privileges of the Holders under any of the Exchange Documents or (e)
the timely payment of the Secured Obligations.
"Motor Vehicles" shall mean motor vehicles, tractors, trailers and
other like property, whether or not the title to any such property is governed
by a certificate of title or ownership.
"Note Purchase Agreement" means the agreement dated as of September 30,
1998 between the Company, the parties listed on Exhibit A thereto and the
Collateral Agent.
"Obligations" shall mean the principal and interest due under the
Exchange Notes and all other obligations and liabilities of the Obligor to the
Holders of every nature whatsoever now existing or hereafter arising, including,
without limitation, all prepayment premiums, indemnities, reimbursement
obligations, fees, costs and expenses, arising under or in connection the
Exchange Documents (including, without limitation, any interest accruing
subsequent to (or that would accrue but for) the commencement of any proceeding
involving the bankruptcy, insolvency, reorganization, liquidation, receivership
or the like of the Obligor), and any and all expenses which may be incurred by
the Holders in collecting any or all of the obligations of the Obligor under
this Agreement and/or enforcing any rights under this Agreement.
"Patent Collateral" shall mean all Patents, whether now owned or
hereafter acquired by the Obligor.
"Patents" shall mean, collectively, (a) all patents and patent
applications, (b) all reissues, divisions, continuations, renewals, extensions
and continuations-in-part of all patents or patent applications and (c) all
rights, now existing or hereafter coming into existence, (i) to all income,
royalties, damages, and other payments (including in respect of all past,
present and future infringements) now or hereafter due or payable under or with
respect to any of the foregoing, (ii) to xxx for all past, present and future
infringements with respect to any of the foregoing and (iii)
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otherwise accruing under or pertaining to any of the foregoing throughout the
world, including all inventions and improvements described or discussed in all
such patents and patent applications.
"Permitted Investments" shall mean (a) direct obligations of the United
States of America, or of any of its agencies, or obligations guaranteed as to
principal and interest by the United States of America, or of any of its
agencies, in either case maturing not more than 90 days from the date of
acquisition of such obligation; (b) deposit accounts in, and certificates of
deposit, repurchase agreements or bankers acceptances of any bank or trust
company organized under the laws of the United States of America or any state or
licensed to conduct a banking or trust business in the United States of America
or any state and having capital, surplus and undivided profits of at least
$35,000,000, maturing not more than 90 days from the date of acquisition; (c)
commercial paper rated A-1 or better or P-1 by Standard & Poor's Corporation or
Xxxxx'x Investors Services, Inc., respectively, maturing not more than 90 days
from the date of acquisition; and (d) money market funds sponsored by commercial
or investment banks unaffiliated with the Obligor.
"Person" shall mean any individual, firm, corporation, limited
liability company, partnership, company or other entity, and shall include any
successor (by merger or otherwise) of such entity.
"Pledged Debt" shall have the meaning assigned to that term in Section
2.01(a).
"Pledged Stock" shall have the meaning assigned to that term in Section
2.01(a).
"SEC" shall mean the United States Securities and Exchange Commission.
"Secured Obligations" shall mean any and all obligations of the Obligor
at any time and from time to time for the performance of its agreements,
covenants and undertakings under or in respect of the Exchange Documents.
"Securities Collateral" means the Stock Collateral and the Pledged
Debt.
"Signing Date" shall mean the date on which the Obligor shall sign and
deliver this Agreement.
"Stock Collateral" shall have the meaning assigned to that term in
Section 2.01(a).
"Subordinated Indenture" means the Indenture dated as of __________,
1998 between the Obligor as issuer of the Exchange Notes, and Santa Xxxxxxx Bank
& Trust, as Trustee.
"Trademark Collateral" shall mean all Trademarks, whether now owned or
hereafter acquired by the Obligor. Notwithstanding the foregoing, the Trademark
Collateral shall not include any Trademark which would be rendered invalid,
abandoned, void or unenforceable by reason of its being included as part of the
Trademark Collateral.
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"Trademarks" shall mean, collectively, (a) all trade names, trademarks
and service marks, logos, trademark and service xxxx registrations and
applications for trademark and service xxxx registrations, (b) all renewals and
extensions of any of the foregoing and (c) all rights, now existing or hereafter
coming into existence, (i) to all income, royalties, damages and other payments
(including in respect of all past, present and future infringements) now or
hereafter due or payable under or with respect to any of the foregoing, (ii) to
xxx for all past, present and future infringements with respect to any of the
foregoing and (iii) otherwise accruing under or pertaining to any of the
foregoing throughout the world, together, in each case, with the product lines
and goodwill of the business connected with the use of, or otherwise symbolized
by, each such trade name, trademark and service xxxx.
"Trustee" shall mean Santa Xxxxxxx Bank & Trust.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect in the State of New York from time to time or, by reason of mandatory
application, any other applicable jurisdiction.
1.02 INTERPRETATION. In this Agreement, unless otherwise indicated, the
singular includes the plural and plural the singular; words importing either
gender include the other gender; references to statutes or regulations are to be
construed as including all statutory or regulatory provisions consolidating,
amending or replacing the statute or regulation referred to; references to
"writing" include printing, typing, lithography and other means of reproducing
words in a tangible visible form; the words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections), exhibits,
annexes or schedules are to this Agreement; references to agreements and other
contractual instruments shall be deemed to include all subsequent amendments,
extensions and other modifications to such instruments (without, however,
limiting any prohibition on any such amendments, extensions and other
modifications by the terms of any Exchange Document); and references to Persons
include their respective permitted successors and assigns and, in the case of
governmental Persons, Persons succeeding to their respective functions and
capacities.
Article II. Collateral.
2.01 GRANT. As collateral security for the prompt payment in full when
due (whether at stated maturity, by acceleration or otherwise) and performance
of the Secured Obligations, and subject to the terms and provisions of the
Intercreditor Agreement, the Obligor hereby pledges and grants to the Trustee,
for the ratable benefit of the Holders a security interest in all of the
Obligor's right, title and interest in and to the following property, whether
now owned or hereafter acquired by the Obligor and whether now existing or
hereafter coming into existence including, without limitation, all real and
personal property and interests in real and personal property (collectively, the
"Collateral"):
(a)(i) all of the shares of capital stock of the Issuers now
owned or hereafter acquired by the Obligor as set forth in Schedule 2.01
together with in each case the certificates
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representing the same (collectively, the "Pledged Stock"); (ii) all shares,
securities, moneys or property representing a dividend on, or a distribution or
return of capital in respect of, any of the Pledged Stock, resulting from a
split-up, revision, reclassification or other like change of any of the Pledged
Stock or otherwise received in exchange for any of the Pledged Stock and all
Equity Rights issued to the holders of, or otherwise in respect of, any of the
Pledged Stock; and (iii) without affecting the obligations of the Obligor under
any provision prohibiting such action under any Exchange Document, in the event
of any consolidation or merger in which any Issuer is not the surviving
corporation, all shares of each class of the capital stock of the successor
corporation (unless such successor corporation is the Obligor itself) formed by
or resulting from such consolidation or merger (collectively, and together with
the property described in clauses (i) and (ii) above, the "Stock Collateral");
(iv) the Indebtedness described in Annex I and issued by the obligors named
therein (the "Pledged Debt"); (v) all additional Indebtedness for money borrowed
or for the deferred purchase price of property from time to time owed to the
Obligor by any obligor of the Pledged Debt, and all additional Indebtedness in
excess of $25,000 for money borrowed or for the deferred purchase price of
property from time to time owed to the Obligor by any other Person who, after
the date of this Agreement, becomes, as a result of any occurrence, a Subsidiary
of the Obligor or an Affiliate of the Obligor (any such Indebtedness being
"Additional Debt"); (vi) all notes or other instruments evidencing the
Indebtedness referred to in clauses (iv) and (v) above;
(b) all accounts and general intangibles (each as defined in
the Uniform Commercial Code) of the Obligor constituting a right to the payment
of money, whether or not earned by performance, including all moneys due and to
become due to the Obligor in repayment of any loans or advances (including loans
and advances to Subsidiaries of the Obligor), in payment for goods (including
Inventory and Equipment) sold or leased or for services rendered, in payment of
tax refunds and in payment of any guarantee of any of the foregoing
(collectively, the "Accounts");
(c) all instruments, chattel paper or letters of credit (each
as defined in the Uniform Commercial Code) of the Obligor evidencing,
representing, arising from or existing in respect of, relating to, securing or
otherwise supporting the payment of, any of the Accounts (collectively, the
"Instruments");
(d) all inventory (as defined in the Uniform Commercial Code)
and all other goods (including Motor Vehicles) of the Obligor that are held by
the Obligor for sale, lease or furnishing under a contract of service (including
to its Subsidiaries or Affiliates), that are so leased or furnished or that
constitute raw materials, work in process or material used or consumed in its
business, including all spare parts and related supplies, all goods obtained by
the Obligor in exchange for any such goods, all products made or processed from
any such goods and all substances, if any, commingled with or added to any such
goods (collectively, the "Inventory");
(e) all equipment (as defined in the Uniform Commercial Code)
and all other goods (including Motor Vehicles) of the Obligor that are used or
bought for use primarily in its business, including all spare parts and related
supplies, all goods obtained by the Obligor in
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exchange for any such goods, all substances, if any, commingled with or added to
such goods and all upgrades and other improvements to such goods, in each case
to the extent not constituting Inventory (collectively, the "Equipment");
(f) all documents of title (as defined in the Uniform
Commercial Code) or other receipts of the Obligor covering, evidencing or
representing Inventory or Equipment (collectively, the "Documents");
(g) all contracts and other agreements of the Obligor relating
to the sale or other disposition of all or any part of the Inventory, Equipment
or Documents and all rights, warranties, claims and benefits of the Obligor
against any Person arising out of, relating to or in connection with all or any
part of the Inventory, Equipment or Documents of the Obligor, including any such
rights, warranties, claims or benefits against any Person storing or
transporting any such Inventory or Equipment or issuing any such Documents;
(h) all other accounts or general intangibles of the Obligor
not constituting Accounts, including, to the extent related to all or any part
of the other Collateral, all books, correspondence, credit files, records,
invoices, tapes, cards, computer runs and other papers and documents in the
possession or under the control of the Obligor or any computer bureau or service
company from time to time acting for the Obligor;
(i) the balance from time to time in the Collateral Account;
(j) all other tangible and intangible property of the Obligor,
including all Intellectual Property; and
(k) all proceeds and products in whatever form of all or any
part of the other Collateral, including all proceeds of insurance and all
condemnation awards and all other compensation for any Casualty Event with
respect to all or any part of the other Collateral (together with all rights to
recover and proceed with respect to the same), and all accessories to,
substitutions for and replacements of all or any part of the other Collateral.
2.02 INTELLECTUAL PROPERTY. For the purpose of enabling the Trustee to
exercise its rights, remedies, powers and privileges under Article VI at such
time or times as the Trustee shall be lawfully entitled to exercise such rights,
remedies, powers and privileges, and for no other purpose, the Obligor hereby
grants to the Trustee, to the extent assignable, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to the
Obligor) to use, assign, license or sublicense any of the Intellectual Property
of the Obligor, together with 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 of such items.
2.03 PERFECTION. Concurrently with the execution and delivery of this
Agreement, and subject to the terms and provisions of the Intercreditor
Agreement, the Obligor shall (i) file such financing statements and other
documents in such offices as shall be necessary or as the Trustee
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may request to perfect and establish the security interest (subject only to
Liens permitted under Section 7.8 of the Subordinated Indenture) of the Liens
granted by this Agreement (including promptly filing the Assignment for
Security--Trademarks and Patents, in the form executed on the date hereof by the
Obligor, in the United States Patent and Trademark Office), (ii) deliver and
pledge to the Trustee any and all Instruments, endorsed or accompanied by such
instruments of assignment and transfer in such form and substance as the Trustee
may request, (iii) cause the Trustee (to the extent requested by the Trustee) to
be listed as the lienholder on all certificates of title or ownership relating
to Motor Vehicles owned by the Obligor and deliver to the Trustee originals of
all such certificates of title or ownership for the Motor Vehicles together with
the odometer statements for each respective Motor Vehicle, (iv) deliver and
pledge to the Trustee all certificates for the Pledged Stock and notes,
instruments or other documents evidencing the Pledged Debt, accompanied by
undated stock or bond powers, as the case may be, duly executed in blank and (v)
take all such other actions as shall be necessary or as the Trustee may request
to perfect and establish the security interest (subject only to such Permitted
Liens) of the Liens granted by this Agreement. The Trustee shall have the right,
at any time in its discretion and with notice to the Obligor, to transfer to or
to register in its name or in the name of any of its nominees any or all of the
Pledged Stock or Pledged Debt.
2.04 PRESERVATION AND PROTECTION OF SECURITY INTERESTS. The Obligor
shall, subject to the terms and provisions of the Intercreditor Agreement:
(a) upon the acquisition after the Signing Date by the Obligor
of any Securities Collateral, promptly either (x) transfer and deliver to the
Trustee all such Securities Collateral (together with the certificates or
instruments representing such Securities Collateral securities duly endorsed in
blank or accompanied by undated powers duly executed in blank) or (y) take such
other action as the Trustee shall deem necessary or appropriate to perfect, and
establish the security interest of, the Liens granted by this Agreement in such
Securities Collateral;
(b) upon the acquisition after the Signing Date by the Obligor
of any Instrument, promptly deliver and pledge to the Trustee all such
Instruments, endorsed or accompanied by such instruments of assignment and
transfer in such form and substance as the Trustee may request;
(c) upon the acquisition after the Signing Date by the Obligor
of any Equipment or Motor Vehicle covered by a certificate of title or
ownership, promptly cause the Trustee to be listed as the lienholder on such
certificate of title and within 45 days of the acquisition of such property
deliver evidence of the same to the Trustee;
(d) upon the Obligor's acquiring, or otherwise becoming
entitled to the benefits of, any Copyright (or copyrightable material), Patent
(or patentable invention), Trademark (or associated goodwill) or other
Intellectual Property or upon or prior to the Obligor's filing, either directly
or through any agent, licensee or other designee, of any application with any
governmental Person for any Copyright, Patent, Trademark, or other Intellectual
Property, in each case after the Signing Date, execute and deliver such
contracts, agreements and other instruments
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as the Trustee may request to evidence, validate, perfect and establish the
security interest (subject only to Liens permitted under Section 7.8 of the
Subordinated Indenture) of the Liens granted by this Agreement in such and any
related Intellectual Property; and
(e) give, execute, deliver, file or record any and all
financing statements, notices, contracts, agreements or other instruments,
obtain any and all governmental approvals and take any and all steps that may be
necessary or as the Trustee may request to create, and establish the security
interest of, or to preserve the validity, perfection or priority (subject only
to such Permitted Liens) of, the Liens granted by this Agreement or to enable
the Trustee to exercise and enforce its rights, remedies, powers and privileges
under this Agreement with respect to such Liens, including causing any or all of
the Securities Collateral to be transferred of record into the name of the
Trustee or its nominee (and the Trustee agrees that if any Securities Collateral
is transferred into its name or the name of its nominee, the Trustee will
thereafter promptly give to the Obligor copies of any notices and communications
received by it with respect to the Stock Collateral pledged by the Obligor),
provided that notices to account debtors in respect of any Accounts or
Instruments shall be subject to the provisions of Section 3.02(b).
2.05 ATTORNEY-IN-FACT. (a) Subject to the rights of the Obligor under
Sections 2.06, 2.07, 2.08 and 2.09, and subject to the terms and provisions of
the Intercreditor Agreement, the Trustee is hereby appointed the
attorney-in-fact of the Obligor for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any instruments which the
Trustee may deem necessary or advisable to accomplish the purposes of this
Agreement, to preserve the validity and security interest of the Liens granted
by this Agreement and, following any Default, to exercise its rights, remedies,
powers and privileges under this Agreement. This appointment as attorney-in-fact
is irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, the Trustee shall be entitled under this Agreement upon the
occurrence and continuation of any Event of Default (or, in respect of Section
3.02(b), any Default) (i) to ask, demand, collect, xxx for, recover, receive and
give receipt and discharge for amounts due and to become due under and in
respect of all or any part of the Collateral; (ii) to receive, endorse and
collect any Instruments or other drafts, instruments, documents and chattel
paper in connection with clause (i) above (including any draft or check
representing the proceeds of insurance or the return of unearned premiums);
(iii) to file any claims or take any action or proceeding that the Trustee may
deem necessary or advisable for the collection of all or any part of the
Collateral, including the collection of any compensation due and to become due
under any contract or agreement with respect to all or any part of the
Collateral; and (iv) to execute, in connection with any sale or disposition of
the Collateral under Article VI, any endorsements, assignments, bills of sale or
other instruments of conveyance or transfer with respect to all or any part of
the Collateral. In any suit, proceeding or action brought by the Trustee
relating to any Account, contract or Instrument for any sum owing thereunder, or
to enforce any provision of any Account, contract or Instrument, the Obligor
will save, indemnify and keep the Trustee harmless from and against all expense,
loss or damage suffered by reason of any defense, set-off, counterclaim,
recoupment or reduction or liability whatsoever of the obligor thereunder,
arising out of a breach by the Obligor of any obligation thereunder or arising
out of any other agreement, Indebtedness or liability at any time owing to, or
in favor of, such obligor or its successors from
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the Obligor, and all such obligations of the Obligor shall be and remain
enforceable against and only against the Obligor and shall not be enforceable
against the Trustee.
(b) Without limiting the rights and powers of the Trustee
under Section 2.05(a), the Obligor hereby appoints the Trustee as its
attorney-in-fact, effective the Signing Date and terminating upon the
termination of this Agreement, for the purpose of (i) executing on behalf of the
Obligor title or ownership applications for filing with appropriate state
agencies to enable Motor Vehicles now owned or hereafter acquired by the Obligor
to be retitled and the Trustee to be listed as lienholder as to such Motor
Vehicles, (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 Obligor as the Trustee may deem necessary or
advisable to accomplish the purposes of this Agreement (including the purpose of
creating in favor of the Trustee a security interest on the Motor Vehicles and
exercising the rights and remedies of the Trustee under Article VI). This
appointment as attorney-in-fact is irrevocable and coupled with an interest.
(c) Without limiting the rights and powers of the Trustee
under Section 2.05(a), the Obligor hereby appoints the Trustee as its
attorney-in-fact, effective the Signing Date and terminating upon the
termination of this Agreement, for the purpose of executing and filing all such
contracts, agreements and other documents as are contemplated by Section
2.04(d). This appointment as attorney-in-fact is irrevocable and coupled with an
interest.
2.06 SPECIAL PROVISIONS RELATING TO SECURITIES COLLATERAL. (a) So long
as no Event of Default shall have occurred and be continuing, the Obligor shall
have the right to exercise all voting, consensual and other powers of ownership
pertaining to the Securities Collateral for all purposes not inconsistent with
the terms of any Exchange Document, provided that the Obligor agrees that it
will not vote the Securities Collateral in any manner that is inconsistent with
the terms of any Exchange Document; and the Trustee shall, at the Obligor'
expense, execute and deliver to the Obligor or cause to be executed and
delivered to the Obligor all such proxies, powers of attorney, dividends and
other orders and other instruments, without recourse, as the Obligor may
reasonably request for the purpose of enabling the Obligor to exercise the
rights and powers which it is entitled to exercise pursuant to this Section
2.06(a).
(b) So long as no Event of Default shall have occurred and be
continuing, the Obligor shall be entitled to receive and retain any dividends or
distributions on the Securities Collateral paid in cash.
(c) If any Event of Default shall have occurred and be
continuing, and whether or not the Holders or the Trustee exercise any available
right to declare any Secured Obligation due and payable or seek or pursue any
other right, remedy, power or privilege available to them under applicable law,
this Agreement or any other Exchange Document, all dividends and other
distributions on the Securities Collateral shall be paid directly to the Trustee
and retained by it in the Collateral Account as part of the Securities
Collateral, subject to the terms of this Agreement, and, if the Trustee shall so
request, the Obligor agrees to execute and deliver to the
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Trustee appropriate additional dividend, distribution and other orders and
instruments to that end, provided that if such Event of Default is cured, any
such dividend or distribution paid to the Trustee prior to such cure shall, upon
request of the Obligor (except to the extent applied to the Secured
Obligations), be returned by the Trustee to the Obligor.
2.07 USE OF INTELLECTUAL PROPERTY. Subject to such action not otherwise
constituting a Default and so long as no Event of Default shall have occurred
and be continuing, the Obligor will be permitted to exploit, use, enjoy,
protect, license, sublicense, assign, sell, dispose of or take other actions
with respect to the Intellectual Property in the ordinary course of the business
of the Obligor. In furtherance of the foregoing, so long as no Event of Default
shall have occurred and be continuing, the Trustee shall from time to time, upon
the request of the Obligor, execute and deliver any instruments, certificates or
other documents, in the form so requested, which the Obligor shall have
certified are appropriate (in its reasonable judgment) to allow it to take any
action permitted above (including relinquishment of the license provided
pursuant to Section 2.02 as to any specific Intellectual Property). The exercise
of rights, remedies, powers and privileges under Article VI by the Trustee shall
not terminate the rights of the holders of any licenses or sublicenses
theretofore granted by the Obligor in accordance with the first sentence of this
Section 2.07.
2.08 INSTRUMENTS. So long as no Default or Event of Default shall have
occurred and be continuing, the Obligor may retain for collection in the
ordinary course of business any Instruments obtained by it in the ordinary
course of business, and the Trustee shall, promptly upon the request, and at the
expense of the Obligor, make appropriate arrangements for making any Instruments
pledged by the Obligor available to the Obligor for purposes of presentation,
collection or renewal. Any such arrangement shall be effected, to the extent
deemed appropriate by the Trustee, against trust receipt or like document.
2.09 USE OF COLLATERAL. So long as no Event of Default shall have
occurred and be continuing, the Obligor shall, in addition to its rights under
Sections 2.06, 2.07 and 2.08 in respect of the Collateral contemplated in those
sections, be entitled to (i) use and possess the other Collateral and to
exercise its rights, title and interest in all contracts, agreements, licenses
and governmental approvals, and (ii) sell items of Inventory to customers in the
ordinary course of business, in each case subject to the rights, remedies,
powers and privileges of the Trustee under Articles III and VI and to such use,
possession or exercise not otherwise constituting a Default.
2.10 RIGHTS AND OBLIGATIONS. (a) The Obligor shall remain liable to
perform its duties and obligations under the contracts and agreements included
in the Collateral in accordance with their respective terms to the same extent
as if this Agreement had not been executed and delivered. The exercise by the
Trustee of any right, remedy, power or privilege in respect of this Agreement
shall not release the Obligor from any of its duties and obligations under such
contracts and agreements and the Obligor shall save, indemnify and keep the
Trustee harmless from and against all expense, loss or damage suffered by reason
of such exercise. The Trustee shall have no duty, obligation or liability under
such contracts and agreements or with respect to
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any governmental approval included in the Collateral by reason of this Agreement
or any other Exchange Document, nor shall the Trustee be obligated to perform
any of the duties or obligations of the Obligor under any such contract or
agreement or any such governmental approval or to take any action to collect or
enforce any claim (for payment) under any such contract or agreement or
governmental approval.
(b) No Lien granted by this Agreement in the Obligor's right,
title and interest in any contract, agreement or governmental approval shall be
deemed to be a consent by the Trustee to any such contract, agreement or
governmental approval.
(c) No reference in this Agreement to proceeds or to the sale
or other disposition of Collateral shall authorize the Obligor to sell or
otherwise dispose of any Collateral except to the extent otherwise expressly
permitted by the terms of any Exchange Document.
(d) The Trustee shall not be required to take steps necessary
to preserve any rights against prior parties to any part of the Collateral.
2.11 RELEASE OF MOTOR VEHICLES. So long as no Default shall have
occurred and be continuing, and subject to the terms and provisions of the
Intercreditor Agreement, upon the request of, and at the expense of, the
Obligor, the Trustee shall execute and deliver to the Obligor such instruments
as the Obligor shall reasonably request to remove the notation of the Trustee as
lienholder on any certificate of title for any Motor Vehicle; provided that any
such instruments shall be delivered, and the release shall be effective, only
upon receipt by the Trustee of a certificate from the Obligor 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 passing to the appropriate casualty insurance
company in settlement of the claim for such loss).
2.12 TERMINATION. When all Secured Obligations shall have been
indefeasibly paid in full, this Agreement shall terminate, and the Trustee
shall, at the expense of the Obligor, forthwith cause to be assigned,
transferred and delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Collateral and money received in
respect of the Collateral, to or on the order of the Obligor and to be released,
canceled and granted back all licenses and rights referred to in Section 2.02.
The Trustee shall also, at the expense of the Obligor, execute and deliver to
the Obligor upon such termination such Uniform Commercial Code termination
statements, certificates for terminating the Liens on the Motor Vehicles and
such other documentation as shall be reasonably requested by the Obligor to
effect the termination and release of the Liens granted by this Agreement on the
Collateral.
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Article III. Cash Proceeds of Collateral.
3.01 COLLATERAL ACCOUNT. There is hereby established with the Trustee a
cash collateral account (the "Collateral Account") in the name and under the
exclusive domain and control of the Trustee into which there shall be deposited
from time to time the cash proceeds of any of the Collateral (including proceeds
resulting from insurance or condemnation) required to be delivered to the
Trustee pursuant to this Agreement and into which the Obligor may from time to
time deposit any additional amounts which it wishes to pledge to the Trustee as
additional collateral security under this Agreement. The balance from time to
time in the Collateral Account shall constitute part of the Collateral and shall
not constitute payment of the Secured Obligations until applied as provided in
this Agreement. If any Event of Default shall have occurred and be continuing,
the Trustee may in its discretion apply (subject to collection) the balance from
time to time outstanding to the credit of the Collateral Account to the payment
of the Secured Obligations in the manner specified in Article VI. The balance
from time to time in the Collateral Account shall be subject to withdrawal only
as provided in this Agreement.
3.02 CERTAIN PROCEEDS. (a) If any Default or Event of Default shall
have occurred and be continuing, the Obligor shall, subject to the terms and
provisions of the Intercreditor Agreement, upon request of the Trustee, promptly
notify (and the Obligor hereby authorizes the Trustee so to notify) each account
debtor in respect of any Accounts or Instruments that such Collateral has been
assigned to the Trustee under this Agreement and that any payments due or to
become due in respect of such Collateral are to be made directly to the Trustee.
All such payments made to the Trustee shall be immediately deposited in the
Collateral Account.
(b) The Obligor agrees that if the proceeds of any Collateral
(including payments made in respect of Accounts and Instruments) shall be
received by it following the occurrence and during the continuation of a
Default, the Obligor shall as promptly as possible deposit such proceeds into
the Collateral Account. Until so deposited, all such proceeds shall be held in
trust by the Obligor for and as the property of the Trustee and shall not be
commingled with any other funds or property of the Obligor.
3.03 INVESTMENT OF BALANCE IN COLLATERAL ACCOUNT. Amounts on deposit in
the Collateral Account shall be invested from time to time in such Permitted
Investments as the Obligor (or, if any Default or Event of Default shall have
occurred and be continuing, the Trustee) shall determine. All such investments
shall be held in the name and be under the control of the Trustee. At any time
after the occurrence and during the continuance of an Event of Default, the
Trustee may in its discretion at any time and from time to time elect to
liquidate any such investments and to apply or cause to be applied the proceeds
of such action to the payment of the Secured Obligations in the manner specified
in Article VI.
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Article IV. Representations and Warranties.
The Obligor hereby represents and warrants to the Trustee for the
benefit of the Holders as follows:
4.01 TITLE. The Obligor is the sole beneficial owner of the Collateral
in which it purports to xxxxx x Xxxx pursuant to this Agreement, and, except as
set forth in Schedule 4.01, such Collateral is free and clear of all Liens. The
security interest granted by this Agreement in favor of the Trustee for the
benefit of the Trustee and the Holders have attached and, upon filing of the
respective financing statements in the jurisdictions listed on Annex II, this
Agreement is effective to create a security interest in all of such Collateral.
4.02 SECURITIES COLLATERAL. (a) The Pledged Stock presently owned by
the Obligor is duly authorized, validly existing, fully paid and nonassessable,
and none of such Pledged Stock is subject to any contractual restriction, or any
restriction under the charter or by-laws of the respective Issuer of such
Pledged Stock, upon the transfer of such Pledged Stock (except for any such
restriction contained in any Exchange Document). The Pledged Debt pledged by the
Obligor has been duly authorized, authenticated or issued and delivered, and is
the legal, valid and binding obligation of the issuers thereof, and is not in
default. The Pledged Debt constitutes all of the outstanding Indebtedness for
money borrowed or for the deferred purchase price of property owed to the
Obligor by any of its Subsidiaries or Affiliates.
(b) The Pledged Stock pledged by the Obligor constitutes all
of the issued and outstanding shares of capital stock of any class of the
Issuers beneficially owned by the Obligor on the Signing Date (whether or not
registered in the name of the Obligor).
4.03 INTELLECTUAL PROPERTY. (a) Except pursuant to licenses and other
user agreements entered into by the Obligor in the ordinary course of business,
the Obligor owns and possesses the right to use, and has done nothing to
authorize or enable any other Person to use, any Copyright, Patent or Trademark
constituting Intellectual Property.
(b) The Obligor owns any Trademarks registered in the United
States of America to which the last sentence of the definition of Trademark
Collateral applies.
4.04 GOODS. Any goods now or hereafter manufactured or otherwise
produced by the Obligor 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.
Article V. Covenants.
5.01 BOOKS AND RECORDS. The Obligor shall: (a) keep full and accurate
books and records relating to the Collateral and stamp or otherwise xxxx such
books and records in such manner as the Trustee may reasonably require in order
to reflect the Liens granted by this Agreement; (b) furnish to the Trustee from
time to time (but, unless a Default shall have occurred
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and be continuing, no more frequently than quarterly) statements and schedules
further identifying and describing the Copyright Collateral, the Patent
Collateral and the Trademark Collateral and such other reports in connection
with the Copyright Collateral, the Patent Collateral and the Trademark
Collateral, as the Trustee may reasonably request, all in reasonable detail; (c)
prior to filing, either directly or through an agent, licensee or other
designee, any application for any Copyright, Patent or Trademark, furnish to the
Trustee prompt notice of such proposed filing; and (d) permit representatives of
the Trustee, upon reasonable notice, at any time during normal business hours to
inspect and make abstracts from its books and records pertaining to the
Collateral, permit representatives of the Trustee to be present at the Obligor's
place of business to receive copies of all communications and remittances
relating to the Collateral and forward copies of any notices or communications
received by the Obligor with respect to the Collateral, all in such manner as
the Trustee may reasonably request.
5.02 REMOVALS, ETC. Without at least 30 days' prior written notice to
the Trustee, the Obligor shall (i) not maintain any of its books and records
with respect to the Collateral at any office or maintain its principal place of
business at any place, or permit any Inventory or Equipment to be located
anywhere, other than (a) at the address initially indicated for notices to it
under Article VII, (b) at one of the other business locations presently owned or
operated by the Obligor or any of its Affiliates and identified in Annex III or
IV or (c) in transit from one of such locations to another, or (ii) change its
corporate name, or the name under which it does business, from the name shown on
the signature pages to this Agreement, provided that the Obligor shall be
permitted to consummate the reincorporation merger whereby the Obligor would
merge with a Delaware Subsidiary of the Obligor to change the Obligor's state of
incorporation from Florida to Delaware (as described in the Notice of Special
Meeting of Stockholders and Proxy Statement filed by the Obligor with the SEC on
September 18, 1998).
5.03 STOCK COLLATERAL. The Obligor will cause the Stock Collateral to
constitute at all times 100% of the total number of shares of each class of
capital stock of each Issuer then outstanding. The Obligor shall cause all such
shares to be duly authorized, validly issued, fully paid and nonassessable and
to be free of any contractual restriction or any restriction under the charter
or bylaws of the respective Issuer of such Stock Collateral, upon the transfer
of such Stock Collateral (except for any such restriction contained in any
Exchange Document). The Obligor, subject to the terms and provisions of the
Intercreditor Agreement, agrees that it will (i) cause each issuer of the
Pledged Stock not to issue any shares of stock or other securities in addition
to or in substitution for the Pledged Stock, (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all additional
shares of capital stock issued to the Obligor (the "Additional Stock") and any
and all Additional Debt, and (iii) promptly (and in any event within three
business days) deliver to the Trustee an amendment to this Agreement, duly
executed by the Obligor, in respect of the Additional Shares or Additional Debt,
together with all certificates, notes or other instruments representing or
evidencing the same. The Obligor agrees that all Additional Shares and
Additional Debt listed on any such amendment delivered to the Trustee shall for
all purposes hereunder constitute Pledged Stock and Pledged Debt, respectively,
and (iii) is deemed to have made, upon such delivery, the representations and
warranties contained in Article IV hereof with respect to such Collateral.
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5.04 INTELLECTUAL PROPERTY. (a) The Obligor (either itself or through
licensees) will, for each Trademark, (i) to the extent consistent with past
practice and good business judgment, continue to use such Trademark on each and
every trademark class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists in order to maintain such
Trademark in full force and effect free from any claim of abandonment for
nonuse, (ii) maintain as in the past the quality of products and services
offered under such Trademark, (iii) employ such Trademark with the appropriate
notice of registration and (iv) not (and not permit any licensee or sublicensee
to) do any act or knowingly omit to do any act whereby any Trademark material to
the conduct of its business may become invalidated.
(b) The Obligor (either itself or through licensees) will not
do any act or knowingly omit to do any act whereby any Patent material to the
conduct of its business may become abandoned or dedicated.
(c) The Obligor shall notify the Trustee immediately if it
knows or has reason to know that any Intellectual Property material to the
conduct of its business may become abandoned or dedicated, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding before any governmental Person)
regarding the Obligor's ownership of any Intellectual Property material to its
business, its right to copyright, patent or register the same (as the case may
be), or its right to keep, use and maintain the same.
(d) The Obligor will take all necessary steps that are
consistent with good business practices in any proceeding before any appropriate
governmental Person to maintain and pursue each application relating to any
Intellectual Property (and to obtain the relevant registrations) and to maintain
each registration material to the conduct of its business, including payment of
maintenance fees, filing of applications for renewal, affidavits of use,
affidavits of incontestability and opposition, interference and cancellation
proceedings.
(e) In the event that any Intellectual Property material to
the conduct of its business is infringed, misappropriated or diluted by a third
party, the Obligor shall notify the Trustee within ten days after it learns of
such event and shall, if consistent with good business practice, promptly xxx
for infringement, misappropriation or dilution, seek temporary restraints and
preliminary injunctive relief to the extent practicable, seek to recover any and
all damages for such infringement, misappropriation or dilution and take such
other actions as are appropriate under the circumstances to protect such
Collateral.
(f) The Obligor shall prosecute diligently any application for
any Intellectual Property pending as of the date of this Agreement or thereafter
made until the termination of this Agreement, make application on uncopyrighted
but copyrightable material, unpatented but patentable inventions and
unregistered but registerable Trademarks and preserve and maintain all rights in
applications for any Intellectual Property; provided, however, that the Obligor
shall have no obligation to make any such application if making such application
would be unnecessary or
-17-
imprudent in the good faith business judgment of the Obligor. Any expenses
incurred in connection with such an application shall be borne by the Obligor.
(g) The Trustee shall have the right but shall in no way be
obligated to bring suit in its own name to enforce the Copyrights, Patents and
Trademarks and any license under such Intellectual Property, in which event the
Obligor shall, at the request of the Trustee, do any and all lawful acts and
execute and deliver any and all proper documents required by the Trustee in aid
of such enforcement action.
Article VI. Remedies.
6.01 EVENTS OF DEFAULT, ETC. If any Event of Default shall have
occurred and be continuing and subject to the terms and provisions of the
Intercreditor Agreement:
(a) the Trustee in its discretion may require the Obligor to,
and the Obligor shall, assemble the Collateral owned by it at such place or
places, reasonably convenient to both the Trustee and the Obligor, designated in
the Trustee's request;
(b) the Trustee in its discretion may make any reasonable
compromise or settlement it deems desirable with respect to any of the
Collateral and may extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, all or any part of the
Collateral;
(c) the Trustee in its discretion may, in its name or in the
name of the Obligor or otherwise, demand, xxx for, collect or receive any money
or property at any time payable or receivable on account of or in exchange for
all or any part of the Collateral, but shall be under no obligation to do so;
(d) the Trustee in its discretion may, upon five business
days' prior written notice to the Obligor of the time and place, with respect to
all or any part of the Collateral which shall then be or shall thereafter come
into the possession, custody or control of the Trustee, or its agents, sell,
lease or otherwise dispose of all or any part of such Collateral, at such place
or places as the Trustee deems best, for cash, for credit or for future delivery
(without thereby assuming any credit risk) and at public or private sale,
without demand of performance or notice of intention to effect any such
disposition or of time or place of any such sale (except such notice as is
required above or by applicable statute and cannot be waived), and the Trustee
or any other Person may be the purchaser, lessee or recipient of any or all of
the Collateral so disposed of at any public sale (or, to the extent permitted by
law, at any private sale) and thereafter hold the same absolutely, free from any
claim or right of whatsoever kind, including any right or equity of redemption
(statutory or otherwise), of the Obligor, any such demand, notice and right or
equity being hereby expressly waived and released. In the event of any sale,
license or other disposition of any of the Trademark Collateral, the goodwill
connected with and symbolized by the Trademark Collateral subject to such
disposition shall be included, and the Obligor shall supply to the Trustee or
its designee, for inclusion in such sale, assignment or other disposition,
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all Intellectual Property relating to such Trademark Collateral. The Trustee
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
sale may be so adjourned; and
(e) the Trustee shall have, and in its discretion may
exercise, all of the rights, remedies, powers and privileges with respect to the
Collateral of a secured party under the Uniform Commercial Code (whether or not
the Uniform Commercial Code is in effect in the jurisdiction where such rights,
remedies, powers and privileges are asserted) and such additional rights,
remedies, powers and privileges to which a secured party is entitled under the
laws in effect in any jurisdiction where any rights, remedies, powers and
privileges in respect of this Agreement or the Collateral may be asserted,
including the right, to the maximum extent permitted by law, to exercise all
voting, consensual and other powers of ownership pertaining to the Collateral as
if the Trustee were the sole and absolute owner of the Collateral (and the
Obligor agrees to take all such action as may be appropriate to give effect to
such right).
The proceeds of, and other realization upon, the Collateral by
virtue of the exercise of remedies under this Section 6.01 and of the exercise
of the license granted to the Trustee in Section 2.02 shall be applied in
accordance with Section 6.04.
6.02 DEFICIENCY. If the proceeds of, or other realization upon, the
Collateral by virtue of the exercise of remedies under Section 6.01 and of the
exercise of the license granted to the Trustee in Section 2.02 are insufficient
to cover the costs and expenses (including attorneys fees) of such exercise and
the payment in full of the other Secured Obligations, the Obligor shall remain
liable for any deficiency.
6.03 PRIVATE SALE. (a) The Trustee shall incur no liability as a result
of the sale, lease or other disposition of all or any part of the Collateral at
any private sale pursuant to Section 6.01 conducted in a commercially reasonable
manner. The Obligor hereby waives any claims against the Trustee arising by
reason of the fact that the price at which the Collateral may have been sold at
such 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 Secured Obligations,
even if the Trustee accepts the first offer received and does not offer the
Collateral to more than one offeree.
(b) The Obligor recognizes that, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws, the Trustee may be compelled, with respect to any sale of all or any part
of the Collateral, to limit purchasers to those who will agree, among other
things, to acquire the Collateral for their own account, for investment and not
with a view to distribution or resale. The Obligor acknowledges that any such
private sales may be at prices and on terms less favorable to the Trustee than
those obtainable through a public sale without such restrictions, and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that the
Trustee shall have no obligation to engage in public sales and no obligation to
delay the sale of any Collateral
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for the period of time necessary to permit the respective Issuer of such
Collateral to register it for public sale.
6.04 APPLICATION OF PROCEEDS. Except as otherwise expressly provided in
this Agreement, except as provided below in this Section 6.04 and except as
provided for by the terms and provisions of the Intercreditor Agreement, the
proceeds of, or other realization upon, all or any part of the Collateral by
virtue of the exercise of remedies under Section 6.01 or of the exercise of the
license granted in Section 2.02, and any other cash at the time held by the
Trustee under Article III or this Article VI, shall be applied by the Trustee:
First, to the payment of the costs and expenses of such exercise of
remedies, including reasonable out-of-pocket costs and expenses of the Trustee,
the fees and expenses of its agents and counsel and all other expenses incurred
and advances made by the Trustee in that connection;
Second, to the Trustee for amounts due and unpaid on the Exchange Notes
for principal and interest and all other amounts due and unpaid under the
Exchange Documents; and
Third, to the Obligor or any other obligor on the Exchange Notes, as
their interests may appear, or as a court of competent jurisdiction may direct.
As used in this Article VI, "proceeds" of Collateral shall mean cash,
securities and other property realized in respect of, and distributions in kind
of, Collateral, including any property received under any bankruptcy,
reorganization or other similar proceeding as to the Obligor or any issuer of,
or account debtor or other obligor on, any of the Collateral.
Article VII. Miscellaneous.
7.01 WAIVER. No failure on the part of the Trustee or any Holder to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, remedy, power or privilege under this Agreement shall operate as a
waiver of such right, remedy, power or privilege, nor shall any single or
partial exercise of any right, remedy, power or privilege under this Agreement
preclude any other or further exercise of any such right, remedy, power or
privilege or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges provided in this Agreement are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
7.02 NOTICES. All notices and communications to be given under this
Agreement shall be deemed given, if in writing and delivered personally, by
telecopy or sent by registered mail, postage prepaid to:
if to the Obligor: Inamed Corporation
0000 Xxxxxx Xxxxxx Xxxxxxx, #000
Xxx Xxxxx, Xxxxxx
Attention: Xxxx Xxxxx
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if to the Trustee: Santa Xxxxxxx Bank & Trust
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Administrator
7.03 EXPENSES, ETC. The Obligor agrees to pay or to reimburse the
Trustee for all costs and expenses (including reasonable attorney's fees and
expenses) that may be incurred by the Trustee in any effort to enforce any of
the provisions of Article VI, or any of the obligations of the Obligor in
respect of the Collateral or in connection with (a) the preservation of the Lien
of, or the rights of the Trustee under this Agreement or (b) any actual or
attempted sale, lease, disposition, exchange, collection, compromise, settlement
or other realization in respect of, or care of, the Collateral, including all
such costs and expenses (and reasonable attorney's fees and expenses) incurred
in any bankruptcy, reorganization, workout or other similar proceeding.
7.04 AMENDMENTS. This Agreement may be amended as to the Trustee and
its respective successors and assigns, and the Obligor may take any action
herein prohibited, or omit to perform any act required to be performed by it, if
the Obligor shall obtain the written consent of the Trustee. This Agreement may
not be waived, changed, modified, or discharged orally, but only by an agreement
in writing signed by the party or parties against whom enforcement of any
waiver, change, modification or discharge is sought or by parties with the right
to consent to such waiver, change, modification or discharge on behalf of such
party.
7.05 SUCCESSORS AND ASSIGNS. All covenants and agreements contained
herein shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.
7.06 SURVIVAL. All covenants, agreements, representations and
warranties contained herein and in any certificates delivered pursuant hereto in
connection with the transactions contemplated hereby shall survive the Closing
and the delivery of the Exchange Documents, regardless of any investigation made
by or on behalf of any party.
7.07 AGREEMENTS SUPERSEDED. Except with respect to express references
to other Exchange Documents, this Agreement supersedes all prior agreements and
understandings, written or oral, among the parties with respect to the subject
matter of this Agreement.
7.08 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement or any exhibit hereto is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement and such exhibits shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such which may be hereafter declared
invalid, void or unenforceable.
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7.09 CAPTIONS. The table of contents and captions and section headings
appearing in this Agreement are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
7.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more of the counterparts have been signed by
each party and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
7.11 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH
STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER
THAN
SUCH STATE.
7.12 SUBMISSION TO JURISDICTION. If any action, proceeding or
litigation shall be brought by the Trustee in order to enforce any right or
remedy under this Agreement, the Obligor hereby consents and will submit, and
will cause each of its Subsidiaries to submit, to the jurisdiction of any state
or federal court of competent jurisdiction sitting within the area comprising
the Southern District of New York on the date of this Agreement. The Obligor
hereby irrevocably waives any objection, including, but not limited to, any
objection to the laying of venue or based on the grounds of FORUM NON
CONVENIENS, which it may now or hereafter have to the bringing of any such
action, proceeding or litigation in such jurisdiction.
7.13. SERVICE OF PROCESS. Nothing herein shall affect the right of the
Trustee to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Obligor in any other
jurisdiction.
7.14. WAIVER OF JURY TRIAL. THE OBLIGOR HEREBY WAIVES ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS
AGREEMENT.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
INAMED CORPORATION
By:________________________
Name:
Title:
SANTA XXXXXXX BANK & TRUST
By:________________________
Name:
Title:
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