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EXHIBIT 10.16
NOTE
200,000.00 Menlo Park, CA
May 7, 1998
Upon the close of business on January 7, 2000, Xxxx Xxxxxxxxx ("Borrower")
promises to pay to the order of UroQuest Medical Corporation, a Delaware
corporation, (the "Company") at 000 Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx
00000, or at such other place as the holder of this note may designate, the
principal sum of Two Hundred Thousand Dollars ($200,000), which sum shall be
free from interest for the term of this Note.
If the principal hereof is not paid when due, such part of the principal
will bear interest from the due date at the maximum rate permitted by law until
the date of payment.
The Borrower may at any time prepay all or any portion of the principal
owing hereunder without penalty.
This Note is secured in by a pledge of the Borrower's Common Stock of
Boston Scientific Corporation, a Delaware corporation, under the terms of a
Security Agreement of even date herewith and is subject to all the provisions
thereof.
The holder of this Note shall no recourse against the Borrower, and may
only proceed against the collateral securing this Note in the event of default.
Notices hereunder shall be deemed to have been received by the Borrower if
delivered or telecopied to the address below on the date thereof, or three (3)
days after having been mailed postpaid in the United States mails, so addressed.
The Borrower may change the address for notices by written notice to the holder
of this note.
If any provision of this note is held invalid or unenforceable, it shall
not affect the validity and enforceability of the other provisions of this note.
If actions are taken to enforce this note, the Borrower agrees to pay all
costs of collection, including, but not limited to, reasonable attorney's fees
incurred by the holder hereof on account of such collection, whether or not suit
is filed hereon.
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This note is executed and delivered in, and shall in all respects be
governed by and construed in accordance with, the laws of the State of
California, including all matters of construction, validity and performance.
/s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
3206 Belvedere Ct.
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Address
Pleasanton, CA 94588
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SECURITY AGREEMENT
This Security Agreement is made as of May 7, 1998 between UroQuest Medical
Corporation, a Delaware corporation ("Pledgee"), and Xxxx Xxxxxxxxx ("Pledgor").
Recitals
Pursuant to Xxxxxxx's Note dated and given to Pledgee on the date hereof
(the "Note"), Pledgor has borrowed $200,000.00 from Pledgee and wishes to secure
repayment of the Note with shares of Pledgee's Common Stock (the "Shares") in
Boston Scientific Corporation, a Delaware corporation, ("BSC").
NOW, THEREFORE, it is agreed as follows:
1. Creation and Description of Security Interest. In consideration of the
loan of $200,000.00 to Pledgor under the Note, Pledgor, pursuant to the
California Commercial Code, hereby pledges 4,000 shares (herein sometimes
referred to as the "Shares" or "Collateral") represented by certificate number
FBU 32774, duly endorsed in blank or with executed stock powers, and herewith
delivers said certificate to the Secretary of Pledgee ("Pledgeholder"), who
shall hold said certificate subject to the terms and conditions of this Security
Agreement.
The pledged stock (together with an executed blank stock assignment for use
in transferring all or a portion of the Shares to Pledgee if, as and when
required pursuant to this Security Agreement) shall be held by the Pledgeholder
as security for the repayment of the Note, and any extensions or renewals
thereof, executed by Pledgor, and the Pledgeholder shall not encumber or dispose
of such Shares except in accordance with the provisions of this Security
Agreement.
2. Xxxxxxx's Representations and Covenants. To induce Pledgee to enter
into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:
(a) Payment of Indebtedness. Pledgor will pay the principal sum of
the Note secured hereby, together with interest thereon if required, at the time
and in the manner provided in the Note.
(b) Encumbrances. The Shares are free of all other encumbrances,
defenses and liens, and Pledgor will not further encumber the Shares without the
prior written consent of Pledgee.
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(c) Margin Regulations. In the event that BSC's Common Stock is now
or later becomes margin-listed by the Federal Reserve Board and BSC is
classified as a "lender" within the meaning of the regulations under Part 207 of
Title 12 of the Code of Federal Regulations ("Regulation G"), Pledgor agrees to
cooperate with Pledgee in making any amendments to the Note or providing any
additional collateral as may be necessary to comply with such regulations.
3. Voting Rights. During the term of this pledge and so long as all
payments of principal and interest, as the case may be, are made as they become
due under the terms of the Note, Pledgor shall have the right to vote all of the
Shares pledged hereunder.
4. Collateral Adjustments.
(a) In the event that during the term of the pledge any stock
dividend, reclassification, readjustment or other changes are declared or made
in the capital structure of BSC, all new, substituted and additional shares or
other securities issued by reason of any such change shall be delivered to and
held by the Pledgee under the terms of this Security Agreement in the same
manner as the Shares originally pledged hereunder. In the event of substitution
of such securities, Pledgor, Pledgee and Pledgeholder shall cooperate and
execute such documents as are reasonable so as to provide for the substitution
of such Collateral and, upon such substitution, references to "Shares" in this
Security Agreement shall include the substituted shares of capital stock of
Pledgor as a result thereof.
(b) In the event that during the term of the pledge the average of the
Share's daily closing prices, as quoted in the Western Edition of the Wall
Street Journal, over a fifteen (15) day period ("Average Period") is less than
or equal to fifty (50) dollars per Share; provided, however, that any Average
Period shall not overlap with any other Average Period, Pledgor shall execute
such documents as are reasonable so as to deliver additional Shares to the
Pledgee The Pledgor shall deliver such number of additional Shares such that
after delivery the quotient obtained by dividing: (i) the product of (a) the
number of pledged Shares and (b) the Shares' closing price on the date of
transfer, by (ii) the outstanding balance of the Note, shall be equal to or
greater than one point two (1.2). The Pledgor's delivery of such additional
Shares shall occur no later than three (3) days following the Pledgor's receipt
of notice of the Pledgee's request for additional Shares ("Request Notice").
Such Request Notice shall contain the fifteen day period used, the Shares' daily
closing price, and the average closing price over such period. Such additional
Shares shall be held by the Pledgee under the terms of this Security Agreement
in the same manner as the Shares originally pledged hereunder. Upon such
additional delivery, references to "Shares" in this Security Agreement shall
include such additional Shares.
5. Options and Rights. In the event that, during the term of this pledge,
subscription Options or other rights or options shall be issued in connection
with the pledged Shares, such rights, Options and options shall be the property
of Pledgor and, if exercised by Pledgor, all new stock or other securities so
acquired by Pledgor as it relates to the pledged Shares then held by
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Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.
6. Default. Pledgor shall be deemed to be in default of the Note and of
this Security Agreement in the event:
(a) Payment of principal or interest on the Note shall be delinquent
for a period of 10 days or more; or
(b) Pledgor fails to perform any of the covenants contained in this
Security Agreement for a period of 10 days after written notice thereof from
Pledgee.
In the case of an event of Default, as set forth above, Pledgee shall have
the right to accelerate payment of the Note upon notice to Pledgor, and Pledgee
shall thereafter be entitled to pursue its remedies under the California
Commercial Code.
7. Release of Collateral. Subject to any applicable contrary rules under
Regulation G, there shall be released from this pledge a portion of the pledged
Shares held by Pledgeholder hereunder upon payments of the principal of the
Note. The number of the pledged Shares which shall be released shall be that
number of full Shares which bears the same proportion to the initial number of
Shares pledged hereunder as the payment of principal bears to the initial full
principal amount of the Note.
8. Withdrawal or Substitution of Collateral. Pledgor shall not sell,
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.
9. Term. The within pledge of Shares shall continue until the payment of
all indebtedness secured hereby, at which time the remaining pledged stock shall
be promptly delivered to Pledgor, subject to the provisions for prior release of
a portion of the Collateral as provided in paragraph 7 above.
10. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Xxxxxxx makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.
11. Pledgeholder Liability. In the absence of willful or gross negligence,
Pledgeholder shall not be liable to any party for any of his acts, or omissions
to act, as Pledgeholder.
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12. Invalidity of Particular Provisions. Pledgor and Pledgee agree that
the enforceability or invalidity of any provision or provisions of this Security
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
13. Successors or Assigns. Pledgor and Pledgee agree that all of the terms
of this Security Agreement shall be binding on their respective successors and
assigns, and that the term "Pledgor" and the term "Pledgee" as used herein shall
be deemed to include, for all purposes, the respective designees, successors,
assigns, heirs, executors and administrators.
14. Governing Law. This Security Agreement shall be interpreted and
governed under the laws of the State of California.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"PLEDGOR" By: /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
Address: 0000 Xxxxxxxxx Xx.
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Pleasanton, CA 94588
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"PLEDGEE" UROQUEST MEDICAL CORP.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Chief Financial Officer
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"PLEDGEHOLDER" /s/Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Secretary of
UroQuest Medical Corp.
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