SECURITY AGREEMENT
Exhibit
10.3
This
SECURITY
AGREEMENT
(this
“Agreement”)
is
dated as of October 18, 2006 and entered into by and among ASCENDIANT CAPITAL
GROUP, LLC, a Nevada limited liability company (“Secured
Party”)
and
ZYNEX MEDICAL HOLDINGS, INC., a Nevada corporation (“Grantor”).
PRELIMINARY
STATEMENTS
A. Grantor
has issued to Secured Party a promissory note dated as of October 18, 2006
(said
promissory note, as it may hereafter be amended, supplemented or otherwise
modified from time to time, being the “Note”)
Capitalized terms used in this Agreement and not otherwise defined herein shall
have the meanings given to them in the Note.
B. It
is a
condition precedent to the making of the loan by Secured Party the repayment
of
which is evidenced by the Note that Grantor shall have granted the security
interests and undertaken the obligations contemplated by this
Agreement.
NOW,
THEREFORE,
in
consideration of the agreements set forth herein and in order to induce Secured
Party to make the loan the repayment of which is evidenced by the Note, Grantor
hereby agrees with Secured Party as follows:
SECTION
1. Grant
of Security.
Grantor
hereby assigns to Secured Party, and hereby grants to Secured Party a security
interest in, all of Grantor’s right, title and interest in and to all of the
personal property of Grantor including the following, in each case whether
now
or hereafter existing, whether tangible or intangible, whether now owned or
hereafter acquired and wherever the same may be located (the “Collateral”):
(a) all
Accounts;
(b) all
Chattel Paper;
(c) all
Money
and all Deposit Accounts, together with all amounts on deposit from time to
time
in such Deposit Accounts;
(d) all
Documents;
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(e) all
General Intangibles (including patents, trademarks, service marks, copyrights,
and other intellectual property), Payment Intangibles and Software;
(f) all
Goods, including Inventory, Equipment and Fixtures;
(g) all
Instruments;
(h) all
Investment Property;
(i) all
Letter-of-Credit Rights and other Supporting Obligations;
(j) all
Records;
(k) all
Commercial Tort Claims; and
(l) all
Proceeds and Accessions with respect to any of the foregoing
Collateral.
Each
category of Collateral set forth above shall have the meaning set forth in
the
UCC, it being the intention of Grantor that the description of the Collateral
set forth above be construed to include the broadest possible range of
assets.
SECTION
2. Security
for Obligations.
This
Agreement secures, and the Collateral is collateral security for, the prompt
payment in full when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise, of all Secured Obligations
of
Grantor. “Secured
Obligations”
means
all obligations and liabilities of every nature of Grantor now or hereafter
existing under or arising out of or in connection with the Note, together with
all extensions or renewals thereof, whether for principal, interest, fees,
expenses, indemnities or otherwise, whether voluntary or involuntary, direct
or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion
of
such obligations or liabilities that are paid, to the extent all or any part
of
such payment is avoided or recovered directly or indirectly from Secured Party
as a preference, fraudulent transfer or otherwise, and all obligations of every
nature of Grantor now or hereafter existing under this Agreement (including,
without limitation, interest and other amounts that, but for the filing of
a
petition in bankruptcy with respect to Grantor, would accrue on such
obligations, whether or not a claim is allowed against Grantor for such amounts
in the related bankruptcy proceeding).
SECTION
3. Representations
and Warranties.
Grantor
represents and warrants as follows:
(a) Jurisdiction
of Organization.
Grantor’s name as it appears in official filings in the state of its
organization is “Zynex Medical Holdings, Inc.” Grantor is a corporation
organized under the laws of the state of Nevada.
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(b) Names.
Grantor
(and any predecessor by merger or otherwise of Grantor) has not, within the
five
year period preceding the date hereof, had a different name from the name of
Grantor listed on the signature pages hereof, except as set forth on
Schedule
1
hereto.
(c) Due
Authorization, etc. Grantor
is duly formed, validly existing and in good standing under the law of its
jurisdiction of organization and has full entity power and authority to execute,
deliver and perform this Agreement. The execution, delivery and performance
of
this Agreement has been duly authorized by all necessary entity action. This
Agreement constitutes a legally valid and binding obligation of Grantor,
enforceable against Grantor in accordance with its terms, except as enforcement
hereof may be limited by applicable bankruptcy, insolvency, reorganization
or
other similar laws affecting the enforcement of creditors’ rights generally or
by general equitable principles.
(d) No
Conflict.
The
execution, delivery and performance of this Agreement by Grantor will not
violate the organizational documents of Grantor, any provision of law applicable
to Grantor or any order, judgment or decree of any court or other governmental
agency binding on Grantor.
(e) Security
Interests.
The
security interests in the Collateral granted hereunder constitute valid security
interests in the Collateral, securing payment of the Secured Obligations.
Secured Party understands and agrees that the security interests in the
Collateral granted herein are junior in priority to the security interests
granted by Grantor to Silicon Valley Bank.
SECTION
4. Further
Assurances.
Grantor
agrees that from time to time, at the expense of Grantor, Grantor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that Secured Party may request,
in order to perfect and protect any security interest granted or purported
to be
granted hereby or to enable Secured Party to exercise and enforce its rights
and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Grantor will: (a) (i) execute (if necessary) and
file such financing or continuation statements, or amendments thereto, (ii)
execute and deliver, and cause to be executed and delivered, agreements
establishing that Secured Party has control of Deposit Accounts and Investment
Property of Grantor, (iii) deliver to Secured Party all certificates or
Instruments representing or evidencing Investment Property, accompanied by
duly
executed endorsements or instruments of transfer or assignment in blank, all
in
form and substance satisfactory to Secured Party and (iv) deliver such
other instruments or notices, in each case, as may be necessary or desirable,
or
as Secured Party may request, in order to perfect and preserve the security
interests granted or purported to be granted hereby; (b) furnish to Secured
Party from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Secured Party may reasonably request, all in reasonable detail;
(c) at any reasonable time, upon request by Secured Party, exhibit the
Collateral to and allow inspection of the Collateral by Secured Party, or
persons designated by Secured Party; (d) at Secured Party’s request, appear
in and defend any action or proceeding that may affect Grantor’s title to or
Secured Party’s security interest in all or any part of the Collateral; and
(e) use commercially reasonable efforts to obtain any necessary consents of
third parties to the creation and perfection of a security interest in favor
of
Secured Party with respect
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to
any
Collateral. Grantor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all
or
any part of the Collateral (including any financing statement indicating that
it
covers “all assets” or “all personal property” of Grantor).
SECTION
5. Certain
Covenants of Grantor.
Grantor
shall:
(a) not
use
or permit any Collateral to be used unlawfully or in violation of any provision
of this Agreement or any applicable statute, regulation or ordinance or any
policy of insurance covering the Collateral;
(b) give
Secured Party at least 30 days’ prior written notice of any change in Grantor’s
name, identity or corporate structure or any reincorporation, reorganization
or
other action that results in a change of the jurisdiction of organization of
Grantor;
(c) pay
promptly when due all property and other taxes, assessments and governmental
charges or levies imposed upon, and all claims (including claims for labor,
services, materials and supplies) against, the Collateral except to the extent
the validity thereof is being contested in good faith; provided that Grantor
shall in any event pay such taxes, assessments, charges, levies or claims not
later than five days prior to the date of any proposed sale under any judgment,
writ or warrant of attachment entered or filed against Grantor or any of the
Collateral as a result of the failure to make such payment; and
(d) permit
representatives of Secured Party at any time during normal business hours to
inspect and make abstracts from Records of the Collateral, and Grantor agrees
to
render to Secured Party, at Grantor’s cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto.
SECTION
6. Special
Covenants with respect to Accounts.
Except
as
otherwise provided in this section, Grantor shall continue to collect, at its
own expense, all amounts due or to become due to Grantor under the Accounts.
SECTION
7. Secured
Party Appointed Attorney-in-Fact.
Grantor
hereby irrevocably appoints Secured Party as Grantor’s attorney-in-fact, with
full authority in the place and stead of Grantor and in the name of Grantor,
Secured Party or otherwise, from time to time in Secured Party’s discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation:
(a) upon
the
occurrence and during the continuance of an Event of Acceleration, to obtain
and
adjust insurance required to be maintained by Grantor;
(b) upon
the
occurrence and during the continuance of an Event of Acceleration, to ask for,
demand, collect, xxx for, recover, compound, receive and give
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acquittance
and receipts for moneys due and to become due under or in respect of any of
the
Collateral;
(c) upon
the
occurrence and during the continuance of an Event of Acceleration, to receive,
endorse and collect any drafts or other Instruments, Documents, Chattel Paper
and other documents in connection with clauses (a) and (b) above;
(d) upon
the
occurrence and during the continuance of an Event of Acceleration, to file
any
claims or take any action or institute any proceedings that Secured Party may
deem necessary or desirable for the collection of any of the Collateral or
otherwise to enforce or protect the rights of Secured Party with respect to
any
of the Collateral;
(e) to
pay or
discharge liens (other than liens permitted under this Agreement or the Note)
levied or placed upon or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same to be
determined by Secured Party in its sole discretion, any such payments made
by
Secured Party to become obligations of Grantor to Secured Party, due and payable
immediately without demand;
(f) upon
the
occurrence and during the continuance of an Event of Acceleration, to sign
and
endorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications and
notices in connection with Accounts and other documents relating to the
Collateral; and
(g) upon
the
occurrence and during the continuance of an Event of Acceleration, generally
to
sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though Secured Party
were
the absolute owner thereof for all purposes, and to do, at Secured Party’s
option and Grantor’s expense, at any time or from time to time, all acts and
things that Secured Party deems necessary to protect, preserve or realize upon
the Collateral and Secured Party’s security interest therein in order to effect
the intent of this Agreement, all as fully and effectively as Grantor might
do.
SECTION
8. Secured
Party May Perform; Standard of Care.
If
Grantor fails to perform any agreement contained herein, Secured Party may
itself perform, or cause performance of, such agreement, and the expenses of
Secured Party incurred in connection therewith shall be payable by Grantor
under
Section 11(b) hereof. The powers conferred on Secured Party 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 exercise of reasonable
care
in the custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Secured Party 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. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property.
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SECTION
9. Remedies.
If
any
Event of Acceleration shall have occurred and be continuing, Secured Party
may
exercise in respect of the Collateral, in addition to all other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party on default under the UCC (whether or not the UCC
applies to the affected Collateral), and also may (i) require Grantor to,
and Grantor hereby agrees that it will at its expense and upon request of
Secured Party forthwith, assemble all or part of the Collateral as directed
by
Secured Party and make it available to Secured Party at a place to be designated
by Secured Party that is reasonably convenient to both parties, (ii) enter
onto the property where any Collateral is located and take possession thereof
with or without judicial process, (iii) prior to the disposition of the
Collateral, store, process, repair or recondition the Collateral or otherwise
prepare the Collateral for disposition in any manner to the extent Secured
Party
deems appropriate, (iv) take possession of Grantor’s premises or place
custodians in exclusive control thereof, remain on such premises and use the
same and any of Grantor’s equipment for the purpose of completing any work in
process, taking any actions described in the preceding clause (iii) and
collecting any Secured Obligation, (v) sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of Secured
Party’s offices or elsewhere, for cash, on credit or for future delivery, at
such time or times and at such price or prices and upon such other terms as
Secured Party may deem commercially reasonable, (vi) exercise dominion and
control over and refuse to permit further withdrawals from any Deposit Account
and provide instructions directing the disposition of funds in Deposit Accounts
and (vii) provide entitlement orders with respect to Security Entitlements
and
other Investment Property constituting a part of the Collateral and, without
notice to Grantor, transfer to or register in the name of Secured Party or
any
of its nominees any or all of the Collateral constituting Investment Property.
Secured Party may be the purchaser of any or all of the Collateral at any such
sale and Secured Party, shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Grantor hereby waives any claims against
Secured Party arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Collateral to more than one
offeree. If the proceeds of any sale or other disposition of the Collateral
are
insufficient to pay all the Secured Obligations, Grantor shall be liable for
the
deficiency and the fees of any attorneys employed by Secured Party to collect
such deficiency. Grantor further agrees that a breach of any of the covenants
contained in this Section 9 will cause irreparable injury to Secured Party,
that Secured Party has no adequate remedy at law in respect of such breach
and,
as a consequence, that each and every covenant contained in this Section shall
be specifically enforceable against Grantor, and Grantor hereby waives and
agrees not to assert any defenses against an action for specific performance
of
such covenants except for a defense that no default has occurred giving rise
to
the Secured Obligations becoming due and payable prior to their stated
maturities.
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SECTION
10. Application
of Proceeds.
Except
as
expressly provided elsewhere in this Agreement, all proceeds received by Secured
Party in respect of any sale of, collection from, or other realization upon
all
or any part of the Collateral shall be applied in the following order of
priority:
FIRST:
To
the payment of all costs and expenses of such sale, collection or other
realization, including reasonable compensation to Secured Party and its agents
and counsel, and all other expenses, liabilities and advances made or incurred
by Secured Party in connection therewith, and all amounts for which Secured
Party is entitled to indemnification hereunder and all advances made by Secured
Party hereunder for the account of Grantor, and to the payment of all costs
and
expenses paid or incurred by Secured Party in connection with the exercise
of
any right or remedy hereunder;
SECOND:
To the payment of all other Secured Obligations; and
THIRD:
To
the payment to or upon the order of Grantor, or to whosoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct,
of any surplus then remaining from such proceeds.
SECTION
11. Indemnity
and Expenses.
(a) Grantor
agrees to indemnify Secured Party from and against any and all claims, losses
and liabilities in any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party’s gross negligence or
willful misconduct as finally determined by a court of competent
jurisdiction.
(b) Grantor
agrees to pay to Secured Party upon demand the amount of any and all reasonably
incurred costs and expenses, including the reasonable fees and expenses of
counsel and of any experts and agents, that Secured Party may incur in
connection with the custody or preservation of the Collateral, the exercise
of
rights or remedies hereunder or the failure by Grantor to perform or observe
any
of the provisions hereof.
(c) The
obligations of Grantor in this Section 11 shall survive the termination of
this Agreement and the discharge of Grantor’s other obligations under this
Agreement and the Note.
SECTION
12. Amendments;
Etc.
No
amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by Grantor therefrom, shall in any
event be effective unless the same shall be in writing and signed by Secured
Party and, in the case of any such amendment or modification, by Grantor. Any
such waiver or consent shall be effective only in the specific instance and
for
the specific purpose for which it was given.
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SECTION
13. Notices.
Any
notice or other communication herein required or permitted to be given shall
be
in writing (including facsimile communication) and mailed, faxed or delivered
to
Grantor or to Secured Party, as applicable, at the address of such party set
forth under such party’s name on the signature pages hereof, or to such other
address as shall be designated by such party in a written notice delivered
to
the other party hereto. All such notices and communications shall, when mailed,
faxed or sent by overnight courier, be effective when deposited in the mails,
delivered to the overnight courier, as the case may be, or sent by fax.
Electronic mail may be used to distribute routine communications; provided
that
no signature with respect to any notice, request, agreement, waiver amendment,
or other documents may be sent by electronic mail.
SECTION
14. Failure
or Indulgence Not Waiver; Remedies Cumulative; Severability.
(a) No
failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or
be
construed to be a waiver of any default or acquiescence therein, nor shall
any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege.
All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
(b) In
case
any provision in or obligation under this Agreement shall be invalid, illegal
or
unenforceable in any jurisdiction, the validity, legality and enforceability
of
the remaining provisions or obligations, or of such provision or obligation
in
any other jurisdiction, shall not in any way be affected or impaired
thereby.
SECTION
15. Continuing
Security Interest; Transfer of Loans; Termination and Release.
(a) 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 of the
Secured Obligations, (ii) be binding upon Grantor and its successors and
assigns, and (iii) inure, together with the rights and remedies of Secured
Party hereunder, to the benefit of Secured Party and its successors, transferees
and assigns. Without limiting the generality of the foregoing clause (iii),
if
Secured Party assigns or otherwise transfers the Note (but only to the extent
permitted under the Note) held by it to any other Person, such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to Secured Party herein or otherwise.
(b) Upon
the
payment in full of all Secured Obligations, the security interest granted hereby
shall terminate and all rights to the Collateral shall revert to Grantor. Upon
any such termination Secured Party will, at Grantor’s expense, execute and
deliver to Grantor such documents as Grantor shall reasonably request to
evidence such termination.
SECTION
16. Headings.
Section
and subsection headings in this Agreement are included herein for convenience
of
reference only and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.
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SECTION
17. Governing
Law; Rules of Construction.
THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF CALIFORNIA, IN WHICH CASE THE LAWS OF
SUCH
JURISDICTION SHALL GOVERN WITH RESPECT TO THE PERFECTION OF THE SECURITY
INTEREST IN, OR THE REMEDIES WITH RESPECT TO, SUCH PARTICULAR
COLLATERAL.
SECTION
18. Consent
to Jurisdiction and Service of Process.
ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO
THIS
AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA.
SECTION
19. Waiver
of Jury Trial.
GRANTOR
AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT.
THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
SECTION
20. Counterparts.
This
Agreement may be executed in one or more counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all signature
pages are physically attached to the same document.
SECTION
21. Definitions.
(a) Each
capitalized term utilized in this Agreement that is not defined in this
Agreement, but that is defined in the UCC, including the categories of
Collateral listed in Section 1 hereof, shall have the meaning set forth in
Articles 1, 8 or 9 of the UCC.
(b) In
addition, the following terms used in this Agreement shall have the following
meanings:
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“Collateral”
has the
meaning set forth in Section 1 hereof.
“Event
of Acceleration”
means
any Event of Acceleration as defined in the Note.
“Secured
Obligations”
has the
meaning set forth in Section 2 hereof.
“UCC”
means
the
Uniform Commercial Code, as it exists on the date of this Agreement or as it
may
hereafter be amended, in the State of California.
SECTION
22. Subordination
Agreement.
Notwithstanding
any other provision of this Agreement, the rights of the Secured party hereunder
are subject to the provisions of that certain Subordination Agreement dated
October 17, 2006 by and between Silicon Valley Bank and Secured
Party.
[Remainder
of page intentionally left blank]
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IN
WITNESS WHEREOF,
Grantor
and Secured Party have caused this Agreement to be duly executed and delivered
by their respective officers thereunto duly authorized as of the date first
written above.
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ZYNEX
MEDICAL HOLDINGS, INC.,
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as Grantor | |||
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By:
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/s/
Xxxxxx Xxxxxxxxx
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Name:
Xxxxxx Xxxxxxxxx
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Title:
President and CEO
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| Notice Address: | ||||
| _________________________________________ | ||||
| _________________________________________ | ||||
| _________________________________________ | ||||
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| ASCENDIANT CAPITAL GROUP, LLC, | ||||
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| as Secured Party | ||||
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By:
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/s/
Xxxxxxx X. Xxxxxxx
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Name:
Xxxxxxx X. Xxxxxxx
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Title:
Managing Director
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| Notice Address: | ||||
| _________________________________________ | ||||
| _________________________________________ | ||||
| _________________________________________ | ||||
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SCHEDULE
1
LIST
OF OTHER NAMES
Zynex
Medical Holdings, Inc. (for purposes of this Schedule, “Holdings”)
Zynex
Medical, Inc. (for purposes of this Schedule, “Sub”), is a wholly owned
subsidiary of Holdings. Sub was incorporated in 1998 as Stroke Recovery Systems,
Inc. ("SRSI"). On October 1, 2003, SRSI acquired by merger the assets and
liabilities of Xxx Med, Inc. ("DMI").
Holdings
was initially organized on December 26, 1991 as a Delaware
corporation
under the name of Life Medical Technologies, Inc., and, between 1995 and 2003,
changed its corporate name (and business) to xXxxxxx.xxx, Inc,, to China Global
Development, Inc., to Arizona Ventures, Inc., and to Fox River Holdings,
Inc.
On
February 11, 2004, Holdings acquired 100% of the common stock of
Sub.
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