SECURITY AGREEMENT
This Security Agreement dated September 1, 1999, by and between KOS
PHARMACEUTICALS, INC., a Florida corporation having a principal place of
business at 0000 Xxxxxxxx Xxx Xxxxx, 00xx Xxxxx, Xxxxx, XX 00000 (hereinafter
called the "Borrower") and XXXXXXX XXXXXXX, an individual residing in South
Norwalk, Connecticut(hereinafter called the "Lender").
W I T N E S S E T H:
WHEREAS, the Lender has agreed to make a loan in the amount of
$50,000,000.00 (the "$50,000,000 Loan") as more fully described and set forth in
a loan agreement of even date herewith between the Lender and the Borrower (the
"Loan Agreement"); and
WHEREAS, the Lender previously entered into a Revolving Credit and Loan
Agreement dated as of July 1, 1998 with Borrower (the "Unsecured Credit
Agreement") whereby Lender agreed to extend an unsecured line of credit to
Borrower in the maximum principal amount of $30,000,000 (the "$30,000,000
Loan"), which amount is fully advanced to Borrower as of the date hereof; and
WHEREAS, the Loan Agreement provides, in part, that the $50,000,000
Loan and the $30,000,000 Loan shall be secured by a blanket lien upon all
personal property owned by Borrower;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and in the Loan Agreement, and One ($1.00) Dollar, the receipt
and sufficiency of which is hereby acknowledged, the Lender and the Borrower
hereby agree as follows:
1. Grant of Security Interest. (a) The Borrower hereby grants to Lender
a security interest (the "Security Interest") in all accounts, accounts
receivable and contract rights, inventory, equipment and machinery, trademarks,
trade names and service marks, patents, licenses, chattel paper, instruments,
documents, letters of credit and general intangibles, and all proceeds of any of
the foregoing, all as more particularly described on Schedule A attached hereto
and made a part hereof (the "Collateral"), to secure the performance of the
following obligations of the Borrower (hereinafter collectively referred to as
the "Indebtedness"):
(i) Borrower's liabilities and obligations under the Loan
Documents as defined in paragraph 5(b) below;
(ii) Borrower's liabilities and obligations under the
$30,000,000 Loan, the Unsecured Credit Agreement and
any and all documents executed in connection
therewith (collectively, the "$30,000,000 Loan
Documentation"); and
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(iii) Any other obligations of the Borrower in favor of
Lender which may now exist or which may hereinafter
arise pursuant to any future loan transaction between
the Borrower and the Lender.
(b) The Borrower is hereby deemed a "debtor" and the Lender is
hereby deemed a "secured party" as those terms are used in the
Connecticut Uniform Commercial Code.
2. Covenants and Warranties of the Borrower. The Borrower hereby
warrants and covenants:
(a) That except for the security interest granted hereby, and the
Security Interests shown on Schedule B attached hereto and made a part hereof,
the Borrower:
(i) is the owner of the Collateral, free and clear of any lien,
security interest, encumbrance or claim of right,
(ii) shall defend the Collateral against any and all claims and
demands of all persons at any time claiming the same or any interest therein,
and
(iii) shall execute and deliver to the Lender such financing
statements, or other documents as the Lender may at any time or from time to
time reasonably require or which may be necessary or appropriate to establish
and maintain a valid and enforceable security interest in the Collateral as
security for the Indebtedness, subject to no prior security interests or
encumbrances.
(b) That the Collateral shall be kept only at the Borrower's
principal place of business at 0000 Xxxxxxxx Xxx Xxxxx, 00xx Xxxxx, Xxxxx, XX
00000 and at the locations, if any, set forth on Schedule C, attached hereto and
made a part hereof (collectively, the "Premises") except as required in the
ordinary course of business; that the Borrower will promptly notify the Lender
of any change in the location of the Collateral, and that the Borrower will not
remove the Collateral from the Premises, except as hereinbefore or hereafter
permitted, without the written consent of the Lender.
(c) That the Borrower shall immediately notify the Lender in writing
of any change in or discontinuance of any of the Borrower's places of business
or other facilities listed in this Security Agreement, including any schedules
attached hereto.
(d) That the Borrower will not sell or offer to sell or otherwise
transfer the Collateral or any interest therein without written consent of the
Lender, except that the Borrower may, at the Borrower's own expense, in the
ordinary course of business, sell any of the inventory normally held by the
Borrower for such purpose, and use and consume, in the ordinary course of
business, any raw materials, supplies and materials normally held by the
Borrower for such
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purpose. Unless an Event of Default (as hereinafter defined) has occurred and is
continuing, the Borrower shall have the right, without the consent of the
Lender, to remove and dispose of, free from the Security Interest of this
Agreement, such Collateral as from time to time may become worn or obsolete or
no longer usable in the Borrower's business, provided that if any such
Collateral is replaced with other property, such other property shall be deemed
to be subject to this Security Agreement.
(e) That the Borrower shall have and maintain insurance at all times
with respect to all Collateral against risks of fire (including so-called
extended coverage), theft, and other risks as the Lender may require and, in the
case of motor vehicles, collision, and provide the Lender with a copy of such
policies containing such terms, in such form, for such periods and written by
such companies as may be satisfactory to the Lender, such insurance naming the
Lender as an additional insured or loss payee; that all policies of insurance
shall provide for thirty (30) days' written minimum cancellation notice to the
Lender and at the request of the Lender shall be delivered to and held by the
Lender; and that the Lender may act as attorney-in-fact for the Borrower in
obtaining, adjusting, settling and cancelling such insurance and endorsing any
drafts in accordance with the terms and conditions set forth in the Loan
Agreement.
(f) That the Borrower shall keep the Collateral free and clear of
any lien, security interest or encumbrance other than that granted herein and
those set forth in the attached Schedule B, and in good order and repair and
shall not waste or destroy the Collateral in violation of any statute or
ordinance; and that the Lender may examine and inspect the Collateral during
normal business hours at any time, wherever located, in accordance with Section
6.01(f) of the Loan Agreement.
(g) That the Borrower shall pay promptly when due all taxes and
assessments upon the Collateral or for its use or operation, except as otherwise
provided pursuant to Section 6.02(a)(ii) of the Loan Agreement.
(h) That the Borrower is a corporation duly organized and existing
under the laws of the State of Florida, that the execution, delivery and
performance hereof are within the Borrower's corporate powers, have been duly
authorized, are not in contravention of any law, the Borrower's charter, bylaws,
or any indenture or undertaking to which the Borrower is a party or by which it
is bound.
(i) That at the time any account receivable becomes subject to a
Security Interest in favor of the Lender: said account shall be a good and valid
account representing an undisputed, bona fide indebtedness incurred by the
account debtor named therein (the "Account Debtor") for merchandise held subject
to delivery instructions or theretofore shipped or delivered pursuant to a
contract of sale, or for services theretofore performed by the Borrower with or
for the Account Debtor; no agreement under which any extraordinary deduction or
discount may be claimed shall have been made with the Account Debtor of any such
account except as disclosed in writing to the Lender; and the Borrower shall be
the lawful owner of all such accounts and
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shall have good right to pledge, sell, assign and transfer the same and to
subject the same to a Security Interest in favor of the Lender. No such account
shall have been or shall thereafter be sold, assigned or transferred to any
person other than the Lender or in any way encumbered except to the Lender and
the Borrower shall defend the same against the lawful claims and demands of all
persons.
(j) That the Borrower shall immediately notify the Lender of all
cases involving the return, rejection, repossession, loss or damage of or to
merchandise covered by accounts receivable, except in the ordinary course of the
Borrower's business; of any request for credit or adjustment or replacement
merchandise or other dispute arising with respect to accounts receivable, except
in the ordinary course of the Borrower's business; and generally of all
extraordinary happenings and events affecting accounts receivable or the value
or amount thereof, if, within sixty (60) days after the extraordinary event, the
matter at issue has not been satisfactorily resolved.
(k) That the Borrower shall at all reasonable times and from time to
time allow the Lender, by or through any of its officers, agents or accountants,
to inspect the Collateral and to examine, inspect or make extracts from the
Borrower's books and records in accordance with Section 6.01(f) of the Loan
Agreement and to arrange for verification of accounts receivable, under
reasonable procedures, directly with account debtors or by other methods; shall
furnish to the Lender upon request additional statements of any accounts
receivable, together with all notes or other papers evidencing the same and any
guaranty, securities or other documents or information relating thereto; shall
furnish such reports, in form satisfactory to the Lender, as to its accounts
receivable as may be requested by the Lender under this Security Agreement or
under the Loan Agreement, and shall perform, execute or deliver all such
additional and further acts, deeds, assurances and instruments as may be
required to vest in and assure to the Lender its perfected rights hereunder and
in any Collateral.
3. Lender's Rights to Discharge Encumbrances, Etc. At its option,
either after an Event of Default has occurred and is continuing or after the
Borrower fails to take such action or make such payment or to contest such
action or payment in good faith as hereinafter stated within fifteen (15) days
after notice thereof given by the Lender to the Borrower, Lender may discharge
taxes, liens or security interests or other third party encumbrances at any
times levied or placed on the Collateral, and may pay for insurance and the
maintenance and preservation of the Collateral; provided that, if Borrower
contests such action or payment and Borrower reserves for any such potential
liability in accordance with standard accounting practices the Lender shall not
have the right to discharge such lien. The Lender shall have no obligation to
the Borrower to make any such expenditures nor shall the making thereof relieve
the Borrower of any default provision contained in this Security Agreement, the
Loan Agreement, the note evidencing the $50,000,000 Loan (the "Note"), or any
other Loan Document (as hereinafter defined) or contained in the $30,000,000
Loan Documentation. Any such payments made under this Paragraph 3 and not
reimbursed by the Borrower within ten (10) days of demand therefor shall be
added to the outstanding principal balance of the $50,000,000 Loan, at the
Lender's option. The total amount of additional payments so made by the Lender
and not otherwise reimbursed by
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the Borrower shall be secured by this Security Agreement in the same manner as
this Security Agreement secures the repayment of the Indebtedness.
4. Rights Prior to Default. Until an Event of Default, the Borrower may
have possession of the Collateral and use it in any lawful manner not
inconsistent with this Security Agreement, the Loan Agreement or any other Loan
Documents, and not inconsistent with any policy of insurance thereon.
5. Default. The Borrower shall be in default under this Security
Agreement upon the happening (an "Event of Default") of any of the following
events or conditions:
(a) failure to make any payments within ten (10) days after such
payment is due, or failure to perform any of the obligations required, or comply
with any covenant, under this Security Agreement within thirty (30) days after
notice thereof has been given by Lender to Borrower;
(b) the occurrence of any event of default (and the expiration of
applicable cure periods, if any) by the Borrower under any of the instruments
executed in connection with the $50,000,000 Loan, which instruments include,
without limitation, the Loan Agreement, the Note, the Patent, Trademark and
License Security Agreement of even date herewith (the "Patent Security
Agreement"), the Registration Rights Agreement of even date herewith and such
other documentation as may be executed in connection with the $50,000,000 Loan
together with any subsequent amendments or modifications thereto (collectively,
the "Loan Documents").
6. Rights of Lender Upon Default. (a) Without limiting the rights of
the Lender as contained in the Loan Agreement and the Patent Security Agreement,
upon an Event of Default and at any time thereafter (a "Post-Default Period")
the Lender shall have the remedies of a secured party under the Connecticut
Uniform Commercial Code, or the law of another jurisdiction if it shall be
applicable, including, without limitation, the right to take possession of the
Collateral, and for that purpose the Lender may, without legal process, so far
as the Borrower can give authority therefor, enter upon any premises on which
the Collateral or any part thereof may be situated and remove the same
therefrom, provided such entry shall be done lawfully. During a Post-Default
Period, the Borrower shall, at the request of the Lender, notify the Account
Debtors of the Security Interest of the Lender in any account, and will indicate
on all xxxxxxxx to the Account Debtors that the accounts are payable to the
Lender. Notwithstanding the foregoing sentence, the Lender may so notify the
Account Debtors during a Post-Default Period of the Security Interest of the
Lender in any account, and direct the Account Debtors to pay the accounts to the
Lender. Any proceeds of accounts thereafter received by the Borrower shall be
turned over to the Lender daily in the exact form in which they are received.
(b) The Lender may require the Borrower during a Post-Default Period
to assemble the Collateral and make it available to the Lender at a place to be
designated by the Lender which is reasonably convenient to both parties. Unless
the Collateral is perishable or threatens to decline rapidly in value or is of a
type customarily sold on a recognized market, the
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Lender will give the Borrower reasonable notice of the time and place of any
public sale thereof or of the time after which any private sale or any other
intended disposition thereof is to be made. The requirements of reasonable
notice shall be met if such notice is mailed, postage prepaid, to the address of
the Borrower shown in paragraph 2(b) hereof at least five days before the time
of the scheduled sale or disposition. The Borrower shall be and remain liable
for any deficiency remaining after applying the proceeds of disposition first to
the reasonable expenses of repossessing, holding, preparing for and executing
the sale, reasonable attorney's fees and legal expenses incurred by the Lender
in connection therewith, and then to the satisfaction of the indebtedness
secured hereunder.
7. Perfection.
(a) The Security Interest granted herein shall, to the extent
provided by applicable law, be perfected by the filing of a UCC-1 Financing
Statement, duly executed by the Borrower and the Lender, with the Secretary of
the State of Florida, and any other filing office which the Lender in its sole
discretion deems appropriate. The failure of Lender at any time to perfect its
Security Interest in any part of the Collateral shall not constitute a waiver of
its right to perfect such interest at a later date. Borrower shall cooperate in
all respects with Lender in the perfection of Lender's Security Interests
granted herein or in any other Loan Document, including without limitation
executing such other financing statements, notices and documents and furnishing
to Lender such other information as Lender shall request in order to perfect its
Security Interest in any of the Collateral.
(b) At the request of Lender made at any time during the term of the
$50,000,000 Loan or the $30,000,000 Loan for any reason, Borrower shall execute
a mortgage and conveyance of patents, trademarks, licenses and other proprietary
rights in favor of Lender, in form acceptable for filing with the U.S. Patent
and Trademark Office in accordance with 35 U.S.C. ss.261. Such mortgage and
conveyance shall be on substantially the same terms as the Patent Security
Agreement, except that such mortgage and conveyance shall provide for the
absolute mortgaging and conveyancing of such rights, subject to defeasance by
Borrower upon payment of the indebtedness and the satisfaction of the
obligations hereby secured. Lender is hereby authorized to file such mortgage
and conveyance with the U.S. Patent and Trademark Office.
(c) Borrower hereby irrevocably constitutes and appoints the Lender,
with full power of substitution, as its true and lawful attorney-in-fact, with
power, in the name of the attorney-in-fact or in the name of Borrower, to take
action on its behalf in carrying out the terms of this Section 7, including
without limitation to execute and record financing statements and to execute and
record with the U.S. Patent and Trademark Office a mortgage and conveyance of
patents, trademarks, licenses and other proprietary rights in favor of Lender as
provided herein. Lender hereby acknowledges that this grant of a
power-of-attorney is coupled with an interest and ratifies all that such
attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney shall be irrevocable until the Indebtedness secured hereby shall have
been paid in full and all financing arrangements between Borrower and Lender
with respect to the $50,000,000 Loan and the $30,000,000 Loan have been
terminated. Borrower acknowledges and
6
agrees that the grant of this power of attorney is not intended to limit or
restrict in any way the rights and remedies of Lender under the other Loan
Documents, but rather is intended to facilitate the exercise of such rights and
remedies.
8. Forbearance Not a Waiver. No forbearance on the part of the Lender
to take action upon an Event of Default shall operate as a waiver of any other
Event of Default or of the same Event of Default on a future occasion.
9. Modification. This Security Agreement may not be modified or amended
except by a writing signed by both the Borrower and the Lender.
10. Patent Security Agreement. This Agreement is supplemental to the
Patent Security Agreement, and the Lender may exercise its rights under both
agreements collectively or under each agreement independent of the other.
11. Severability. A provision of this Security Agreement deemed invalid
or unenforceable under any applicable law shall not serve to invalidate the
remainder of this Security Agreement.
12. Construction. This Security Agreement and all rights and
obligations hereunder, including matters of construction, validity and
performance, shall be governed by the laws of the State of Connecticut.
13. Binding Effect. All rights of the Lender hereunder shall inure to
the benefit of its successors and assigns, and all obligations of the Borrower
shall bind its heirs, personal representatives, successors and assigns.
14. Headings. Headings are for convenience only and shall not be deemed
part of this Security Agreement.
15. Borrower Waivers. THE BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF
WHICH THIS SECURITY AGREEMENT IS A PART IS A COMMERCIAL TRANSACTION AND MAKES
THE FOLLOWING WAIVERS:
A. THE BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE BENEFITS OF ALL VALUATION, APPRAISEMENT, HOMESTEAD,
EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS, NOW IN FORCE
OR WHICH MAY HEREAFTER BECOME LAWS.
B. THE BORROWER HEREBY WAIVES THE RIGHT TO A JURY TRIAL.
C. THE BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY LOCAL,
STATE, OR FEDERAL COURT LOCATED
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WITHIN THE STATE OF FLORIDA OR CONNECTICUT AND WAIVES ANY OBJECTION
WHICH THE BORROWER MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON
CONVENIENS, TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON BORROWER, AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MAIL OR MESSENGER
DIRECTED TO BORROWER AT THE ADDRESS SET FORTH IN SECTION 9.02 OF THE
LOAN AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
UPON THE EARLIER OF ACTUAL RECEIPT OR THREE (3) DAYS AFTER THE SAME
SHALL HAVE BEEN POSTED TO THE BORROWER'S ADDRESS. THE BORROWER WAIVES
ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH, MIGHT, BUT FOR
THIS WAIVER, BE REQUIRED OF THE LENDER. NOTHING CONTAINED IN THIS
SECTION AFFECTS THE RIGHT OF THE LENDER TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR AFFECTS THE RIGHT OF THE LENDER TO
BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR BORROWER'S
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
D. THE BORROWER HEREBY AGREES NOT TO COMMENCE ANY LEGAL
PROCEEDING AGAINST THE LENDER IN THE JURISDICTION OF ANY
LOCAL, STATE, OR FEDERAL COURT LOCATED WITHIN THE STATE OF
FLORIDA UNLESS THE LENDER EXPRESSLY CONSENTS THERETO IN
WRITING.
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IN WITNESS WHEREOF, the parties have signed and delivered this
agreement on the day and year first above written.
BORROWER:
KOS PHARMACEUTICALS, INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------------------------
Name: Xxxxxx X. Xxxx
Title: President and Chief Executive Officer
LENDER:
/s/ Xxxxxxx Xxxxxxx
---------------------------
XXXXXXX XXXXXXX
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SCHEDULE A
DEBTOR/BORROWER: KOS PHARMACEUTICALS, INC.
SECURED PARTY/LENDER: XXXXXXX XXXXXXX
For purposes of this Security Agreement, the term "Collateral" shall mean all
right, title and interest in and to any and all tangible property (other than
real property), accounts, accounts receivable and contract rights, inventory,
equipment and machinery, trademarks, trade names and service marks, patents,
licenses, chattel paper, instruments, documents, letters of credit and general
intangibles, and whether now owned or hereafter acquired by the Borrower (to be
used interchangeably with the term "Debtor" as that term is defined or
understood under the Connecticut Uniform Commercial Code) wherever located, and
any additions and accessions thereto and replacements and renewals thereof, and
all proceeds of any of the foregoing, including, without limitation:
8. ACCOUNTS - All presently owned and hereafter acquired accounts,
accounts receivable, contract rights, bills, acceptances, and other
forms of obligations arising out of the sale, lease or consignment of
goods or the rendition of services by the Borrower; together with any
property evidencing or relating to the Accounts (such as guaranties,
credit insurance, Letters of Credit), any security for the Accounts,
all books and records relating thereto, and all Proceeds of any of the
foregoing, including returned or reclaimed inventory.
9. INVENTORY - All presently owned and hereafter acquired inventory of
every nature, kind, and description, wherever located, including,
without limitation, raw materials, goods, work in process, finished
goods, parts or supplies; all goods and property held for sale or lease
or to be furnished under contracts of service; and all goods and
inventory returned, reclaimed or repossessed, together with all
Proceeds of any of the foregoing.
10. EQUIPMENT - All presently owned and hereafter acquired equipment,
whether or not affixed to realty, including, without limitation,
trucks, trailers, motors, tools, dies, parts, jigs, goods, accessories,
handling and delivery equipment, fixtures, improvements, office
machines and furniture, together with all Proceeds of any of the
foregoing, and all accessions, accessories, replacements and the rights
of the Borrower under any manufacturer's warranties relating to the
foregoing.
11. CHATTEL PAPER - All presently owned and hereafter acquired chattel
paper, including, but not limited to, any writing or writings which
evidence both a monetary obligation and a security interest in or a
lease of specific goods, together with all Proceeds of any of the
foregoing.
5. INSTRUMENTS - All presently owned and hereafter acquired instruments,
including, without limitation, bills of exchange, notes, and all
negotiable instruments, all certificated securities, all certificates
of deposit and any other writing which evidences a right to the payment
of money and is not itself a security agreement or lease and is of a
type which is
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in the ordinary course of business transferred by delivery with any
necessary endorsement or assignment, together with all Proceeds of any
of the foregoing.
6. DOCUMENTS - All presently owned and hereafter acquired documents,
including, but not limited to, documents of title (as that term is
defined in the Uniform Commercial Code) and any and all receipts,
including, but not limited to, receipts of the kind described in
Article 7 of the Connecticut Uniform Commercial Code, together with all
Proceeds of any of the foregoing.
7. LETTERS OF CREDIT - All letters of credit under which Borrower is or
hereafter will be the customer or the beneficiary, including, but not
limited to, any written undertaking to pay money conditioned upon
presentation of specified documents, and advices of letters of credit,
together with all Proceeds of any of the foregoing.
8. GENERAL INTANGIBLES - All presently owned and hereafter acquired
general intangibles, including, without limitation, any personal
property, choses in action, causes of action, designs, plans, Goodwill,
tax refunds, Licenses, franchises, Patents, Trademarks, trade secrets,
know-how, rights of Borrower to and interests of Borrower in research
and development of the Borrower, copyrights, and customer lists, and
all rights under license agreements for use of the same, together with
all Proceeds of any of the foregoing.
9. PATENTS - All presently owned and hereafter acquired patents and patent
applications, including, without limitation, the inventions and
improvements described and claimed therein, those patents listed on
Schedule A-1 attached hereto and made a part hereof, and any and all
patents, patent applications and other rights and interests in and to
the Borrower's products Niaspan/registered xxxx/and
Nicostatin/registered xxxx/, and (a) the reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof,
(b) all income, royalties, damages and payments now and hereafter due
and/or payable under and with respect thereto, including, without
limitation, damages and payments for past or future infringements
thereof, (c) the right to xxx for past, present and future
infringements thereof, and (d) all rights corresponding thereto
throughout the world.
10. TRADEMARKS - trademarks, service marks, trademark registrations,
service xxxx registrations, trade names and trademark registrations,
including, without limitation, the trademarks/service marks
Niaspan/registered xxxx/ and Nicostatin/registered xxxx/, and (a)
renewals or extensions, thereof, (b) all income, royalties, damages and
payments now and hereafter due and/or payable with respect thereto,
including, without limitation, damages and payments for past or future
infringements thereof, (c) the right to xxx for past, present and
future infringements thereof, and (d) all rights corresponding thereto
throughout the world.
11. LICENSES - license agreements with any other party, whether Borrower is
a licensor or licensee under any such license agreement, and the right
to prepare for sale, sell and advertise for sale, all Inventory now or
hereafter owned by Borrower and now or hereafter covered by such
licenses.
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12. GOODWILL - the goodwill of Borrower's business connected with and
symbolized by the Trademarks.
13. PROCEEDS - All presently owned and hereafter acquired proceeds, as that
term is defined in the Connecticut Uniform Commercial Code, including,
without limitation, whatever is received upon the use, lease, sale,
exchange, collection, any other utilization or any disposition of any
of the Collateral described on this Schedule A, whether cash or
non-cash, all rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles,
equipment, inventory, substitutions, additions, accessions,
replacements, products, and renewals of, for, or to such property and
all insurance therefor.
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SCHEDULE B
Exceptions to Title
1. Debt under Master Equipment Lease No. E119 dated April 15, 1998 with
Essex Capital, Inc. (assigned to Gramercy Leasing Services, Inc.)
2. Debt under Equipment Lease Agreement with Vendor Lease Management Group
for lease of 238 Mobile Pro 750C H/PC, S1424-04A03
3. $3,000,000 Letter of Credit Agreement dated July 17, 1999 with First
Union National Bank.
4. $30,000,000 Revolving Credit and Loan Agreement dated as of July 1,
1998 payable to Lender.
5. Leases with Copyco dated June 26, 1997, July 31, 1997, August 13, 1997,
September 30, 1997, December 10, 1997 and one undated lease for Toshiba
office equipment and LAN software equipment subsequently assigned to
AT&T Capital Leasing.
6. Leases with Copyco dated March 17, 1998, March 23, 1998 and March 24,
1998 for Toshiba office equipment subsequently assigned to AT&T Capital
Leasing.
7. Lease with Danka dated June 10, 1996 for Canon office equipment.
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SCHEDULE C
Additional Locations of Collateral
I. Facilities Leased by KOS Pharmaceuticals, Inc.
Location Facility Use
-------- ------------
1. 00000 X.X. 00 Xxxxxx Xxxxxxx for Research and
Xxxxx Xxxxx, XX 00000 Development Admin.
2. 00 Xxxxxxxx Xxxxxx Aerosol Research and
Xxxxxx Xxxxx 0 Xxxxxxxxxxx, Xxxxxxxxxx,
Xxxxxxx Center and Admin. Offices
Xxxxxx, XX 00000
3. 0 Xxxxxxx Xxxx. Research and Development
Suites 140 and 150 Production, and Admin.
Xxxxxxxxx, XX 00000 Offices
4. 000 Xxxxxxx Xxxx Research and Development
Suite 100 Production, and Admin.
Xxxxxxxxx, XX 00000 Offices
II. Other Facilities Where Company Assets Are Held
1. DDN/Obergfel, LLC Storage, Distribution of
0000 Xxxxxxxxxx Xxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
2. International Laboratories, Inc. Bulk Niaspan Tablets,
0000 00xx Xxxxxx Xxxxx Finished Niaspan Bottles
St. Petersburg, FL 33712
3. X. Xxxxxxx and Company, Inc. Niaspan samples
000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
4. Packaging Coordinators, Inc. Raw materials, Packaging
0000 Xxx Xxxx Xxxx Xxxxxxxxxx, Xxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000 Tablets
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