Exhibit T3E.3
Form of Subordinated Guarantee and Security Agreement
SUBORDINATED GUARANTEE AND SECURITY AGREEMENT
This GUARANTEE AND SECURITY AGREEMENT (this "Agreement") dated as of
________________, 1998, is made by the certain Subsidiaries of Inamed
Corporation, a Florida corporation (the "Company") that are signatories hereto
and who execute a Joinder hereto in the form of Exhibit A hereto (collectively,
the "Obligors") 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 Company and the Trustee provides, subject to its terms
and conditions, for the issuance by the Company 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 "Notes") as well as certain warrants to purchase
the Company's common stock, $.01 per share, (the "Warrants") to be issued in
exchange for the Company's 11% Secured Convertible Notes due 1999 (the "Old
Notes") to the holders thereof 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 Obligors shall have executed and delivered this Agreement,
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 Obligors have agreed to pledge and grant a security interest
in the Collateral as security for the Secured Obligations. Accordingly, the
Obligors agree 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 Securities Exchange Agreement (including those terms incorporated therein
by reference) shall have the respective meanings assigned to them in the
Subordinated Indenture or the Securities 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
3.01(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
3.01.
"Collateral Account" shall have the meaning assigned to that term in
Section 4.01.
"Copyright Collateral" shall mean all Copyrights, whether now owned or
hereafter acquired by any 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
3.01(f).
"Event of Default" shall mean each of the happenings or circumstances
enumerated in Section 4.1 of the Subordinated Indenture.
"Equipment" shall have the meaning assigned to that term in Section
3.01(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.
"Exchange Documents" shall mean the Securities Exchange Agreement dated
as of October __, 1998 between the Company, the holders listed on Exhibit A
thereto and the Collateral Agent, the Exchange Notes, this Agreement, the
Subordinated Security Agreement, dated as of the date hereof, between the
Company and the Collateral Agent (the "Subordinated
-2-
Security Agreement"), the Subordinated Guarantee and Security 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
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.
"Holder" shall mean, at anytime of reference, a person in whose name a
Note is registered in the Note Register at such time.
"Guaranteed Obligations" means any and all Obligations and any and all
obligations of the Company for the performance by it of its agreements,
covenants and undertakings under or in respect of the Exchange Documents.
"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
3.01(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
-3-
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.
"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
3.01(d).
"Issuers" shall mean, collectively, each Subsidiary, directly or
indirectly, of the Company that is the issuer (as defined in the Uniform
Commercial Code) of any shares of capital stock now owned or hereafter acquired
by any 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 Company and
its Subsidiaries taken as a whole, whether or not in the ordinary course of
business, (b) the ability of any 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.
"Note Register" shall have the meaning ascribed thereto in the
Subordinated Indenture.
"Obligations" shall mean the principal and interest due under the
Exchange Notes and all other obligations and liabilities of the Company 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 Company), and any and all expenses which may be incurred by
the Holders in collecting any or all of the obligations of such 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 any 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,
-4-
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, 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 Company.
"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
3.01(a).
"Pledged Stock" shall have the meaning assigned to that term in Section
3.01(a).
"SEC" shall mean the United States Securities and Exchange Commission.
"Secured Obligations" shall mean (a) any and all Guaranteed Obligations
and (b) any and all obligations of the Obligors at any time and from time to
time for the performance of their 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 a respective Obligor shall
sign and deliver this Agreement, whether directly or through execution and
delivery of a Joinder hereto.
"Stock Collateral" shall have the meaning assigned to that term in
Section 3.01(a).
"Subordinated Indenture" means the indenture dated as of ________,
1998, between the Company, as issuer of the Exchange Notes, and Santa Xxxxxxx
Bank and Trust, as Trustee.
"Trademark Collateral" shall mean all Trademarks, whether now owned or
hereafter acquired by any 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.
-5-
"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. GUARANTEE.
2.01 GUARANTEE. (a) Subject to the limitation set forth in Section
2.08, each of the Obligors, as a primary obligor and not merely as a surety,
hereby jointly and severally guarantees to the Holders the prompt and complete
payment when due (whether at stated maturity, by acceleration or otherwise) and
performance of the Guaranteed Obligations in each case strictly in accordance
with their terms. The Obligors hereby further jointly and severally agree that
if the Company shall fail to pay in full when due (whether at stated maturity,
by acceleration or otherwise) all or any part of the Guaranteed Obligations, the
Obligors will immediately pay the same, without any demand or notice whatsoever,
and that in the case of any extension of time of payment or renewal of all or
any part of the Guaranteed Obligations, the same will be timely paid in full
when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal. The obligations of the
Obligors under this Article II are irrevocable and unconditional in nature and
are made with respect to any Guaranteed Obligations now existing or in the
future arising. The Obligors' liability under this Agreement shall continue
until full satisfaction of all Guaranteed Obligations. The obligations of the
-6-
Obligors constitute a guarantee of due and punctual payment and performance and
not merely a guarantee of collection, and each of the Obligors specifically
agrees that it shall not be necessary or required that the Holders exercise any
right, assert any claim or demand or enforce any remedy whatsoever against the
Company (or any other Person) before or as a condition to the obligations of
such Obligor hereunder.
(b) No payment or payments made by the Company or any other
Person or received or collected by the Holders from the Company or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Guaranteed Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of the Obligors hereunder which shall,
notwithstanding any such payment or payments, remain liable for the Guaranteed
Obligations until the date upon which the Guaranteed Obligations are fully
performed and paid in full.
2.02 ACKNOWLEDGMENTS, WAIVERS AND CONSENTS. Each Obligor acknowledges
that the obligations undertaken by it under this Agreement involve the guarantee
of obligations of Persons other than such Obligor and that such obligations of
such Obligor are absolute, irrevocable and unconditional under any and all
circumstances. In full recognition and in furtherance of the foregoing, each
Obligor agrees that:
(a) Without affecting the enforceability or effectiveness of
this Agreement in accordance with its terms and without affecting, limiting,
reducing, discharging or terminating the liability of such Obligor, or the
rights, remedies, powers and privileges of the Holders under this Agreement, the
Trustee may, at any time and from time to time and without notice or demand of
any kind or nature whatsoever: (i) amend, supplement, modify, extend, renew,
waive, accelerate or otherwise change the time for payment or performance of, or
the terms of, all or any part of the Guaranteed Obligations (including any
increase or decrease in the rate or rates of interest on all or any part of the
Guaranteed Obligations); (ii) amend, supplement, modify, extend, renew, waive or
otherwise change, or enter into or give, any Exchange Document or any agreement,
security document, guarantee, approval, consent or other instrument with respect
to all or any part of the Guaranteed Obligations, any Exchange Document or any
such other instrument or any term or provision of the foregoing; (iii) accept or
enter into new or additional agreements, security documents, guarantees or other
instruments in addition to, in exchange for or relative to any Exchange
Document, all or any part of the Guaranteed Obligations or any collateral now or
in the future serving as security for the Guaranteed Obligations; (iv) accept or
receive (including from any other Obligor) partial payments or performance on
the Guaranteed Obligations (whether as a result of the exercise of any right,
remedy, power or privilege or otherwise); (v) accept, receive and hold any
additional collateral for all or any part of the Guaranteed Obligations
(including from any other Obligor); (vi) release, reconvey, terminate, waive,
abandon, allow to lapse or expire, fail to perfect, subordinate, exchange,
substitute, transfer, foreclose upon or enforce any collateral, security
documents or guarantees (including the obligations of any other Obligor) for or
relative to all or any part of the Guaranteed Obligations; (vii) apply any
collateral or the proceeds of any collateral or guarantee (including the
obligations of any other Obligor) to all or any part of the Guaranteed
Obligations in such manner and extent as the Trustee may in its discretion
determine; (viii) release any Person (including any other Obligor) from any
personal liability with respect to all or any part of the Guaranteed
Obligations; (ix) settle, compromise, release, liquidate or enforce upon such
terms and in such manner as the
-7-
Trustee may determine or as applicable law may dictate all or any part of the
Guaranteed Obligations or any collateral on or guarantee of all or any part of
the Guaranteed Obligations (including with any other Obligor); (x) consent to
the merger or consolidation of, the sale of substantial assets by, or other
restructuring or termination of the corporate existence of the Company or any
other Person (including any other Obligor); (xi) proceed against the Company,
such or any other Obligor or any other guarantor of all or any part of the
Guaranteed Obligations or any collateral provided by any Person and exercise the
rights, remedies, powers and privileges of the Holders under the Exchange
Documents or otherwise in such order and such manner as the Trustee may, in its
discretion, determine, without any necessity to proceed upon or against or
exhaust any collateral, right, remedy, power or privilege before proceeding to
call upon or otherwise enforce this Agreement as to any Obligor; (xii) foreclose
upon any deed of trust, mortgage or other instrument creating or granting liens
on any interest in real property by judicial or nonjudicial sale or by deed in
lieu of foreclosure, bid any amount or make no bid in any foreclosure sale or
make any other election of remedies with respect to such liens or exercise any
right of set-off; (xiii) obtain the appointment of a receiver with respect to
any collateral for all or any part of the Guaranteed Obligations and apply the
proceeds of such receivership as the Trustee may in its discretion determine (it
being agreed that nothing in this clause (xiii) shall be deemed to make the
Trustee a party in possession in contemplation of law, except at its option);
(xiv) enter into such other transactions or business dealings with any other
Obligor, the Company, any Subsidiary or Affiliate of the Company or any other
guarantor of all or any part of the Guaranteed Obligations as the Trustee may
desire; and (xv) do all or any combination of the actions set forth in this
Section 2.02(a).
(b) The enforceability and effectiveness of this Agreement and
the liability of the Obligors, and the rights, remedies, powers and privileges
of the Holders and the Trustee, under this Agreement shall not be affected,
limited, reduced, discharged or terminated, and each Obligor hereby expressly
waives to the fullest extent permitted by law any defense now or in the future
arising, by reason of: (i) the illegality, invalidity or unenforceability of all
or any part of the Guaranteed Obligations, any Exchange Document or any
agreement, security document, guarantee or other instrument relative to all or
any part of the Guaranteed Obligations; (ii) any disability or other defense
with respect to all or any part of the Guaranteed Obligations of the Company,
any other Obligor or any other guarantor of all or any part of the Guaranteed
Obligations, including the effect of any statute of limitations that may bar the
enforcement of all or any part of the Guaranteed Obligations or the obligations
of any such other guarantor; (iii) the illegality, invalidity or
unenforceability of any security or guarantee for all or any part of the
Guaranteed Obligations or the lack of perfection or continuing perfection or
failure of the priority of any lien on any collateral for all or any part of the
Guaranteed Obligations; (iv) the cessation, for any cause whatsoever, of the
liability of the Company, any other Obligor or any other guarantor of all or any
part of the Guaranteed Obligations (other than, subject to Section 2.05, by
reason of the full payment and performance of all Guaranteed Obligations); (v)
any failure of the Holders or the Trustee to marshal assets in favor of the
Company or any other Person (including any other Obligor), to exhaust any
collateral for all or any part of the Guaranteed Obligations, to pursue or
exhaust any right, remedy, power or privilege it may have against any other
Obligor, the Company, any other guarantor of all or any part of the Guaranteed
Obligations or any other Person or to take any action whatsoever to mitigate or
reduce such or any other Obligor's liability under this Agreement, the Holders
and the Trustee being under no obligation to take any such action
notwithstanding the fact that all or any part of the Guaranteed Obligations may
be due and
-8-
payable and that the Company may be in default of its obligations under any
Exchange Document; (vi) any failure of the Holders or the Trustee to give notice
of sale or other disposition of any Collateral (including any notice of any
judicial or nonjudicial foreclosure or sale of any interest in real property
serving as collateral for all or any part of the Guaranteed Obligations) for all
or any part of the Guaranteed Obligations to the Company, any Obligor or any
other Person or any defect in, or any failure by any Obligor or any other Person
to receive, any notice that may be given in connection with any sale or
disposition of any Collateral; (vii) any failure of the Holders or the Trustee
to comply with applicable laws in connection with the sale or other disposition
of any Collateral for all or any part of the Guaranteed Obligations; (viii) any
judicial or nonjudicial foreclosure or sale of, or other election of remedies
with respect to, any interest in real property or other Collateral serving as
security for all or any part of the Guaranteed Obligations, even though such
foreclosure, sale or election of remedies may impair the subrogation rights of
any Obligor or may preclude any Obligor from obtaining reimbursement,
contribution, indemnification or other recovery from any other Obligor, the
Company, any other guarantor or any other Person and even though the Company may
not, as a result of such foreclosure, sale or election of remedies, be liable
for any deficiency; (ix) any benefits the Company, any Obligor or any other
guarantor may otherwise derive from the laws of any jurisdiction of the nature
of a "one-form-of-action," "anti-deficiency" or "security-first" rule; (x) any
act or omission of the Holders, the Trustee or any other Person that directly or
indirectly results in or aids the discharge or release of the Company or any
other Obligor of all or any part of the Guaranteed Obligations or any security
or guarantee for all or any part of the Guaranteed Obligations by operation of
law or otherwise; (xi) any law which provides that the obligation of a surety or
guarantor must neither be larger in amount nor in other respects more burdensome
than that of the principal or which reduces a surety's or guarantor's obligation
in proportion to the principal obligation; (xii) the possibility that the
obligations of the Company to the Holders or the Trustee may at any time and
from time to time exceed the aggregate liability of the Obligors under this
Agreement; (xiii) any counterclaim, set-off or other claim which the Company or
any other Obligor has or alleges to have with respect to all or any part of the
Guaranteed Obligations; (xiv) any failure of the Holders or the Trustee to file
or enforce a claim in any bankruptcy or other proceeding with respect to any
Person; (xv) the election by the Holders or the Trustee, in any bankruptcy
proceeding of any Person, of the application or nonapplication of Section
1111(b)(2) of the Bankruptcy Code; (xvi) any extension of credit or the grant of
any Lien under Section 364 of the Bankruptcy Code; (xvii) any use of cash
collateral under Section 363 of the Bankruptcy Code; (xviii) any agreement or
stipulation with respect to the provision of adequate protection in any
bankruptcy proceeding of any Person; (xix) the avoidance of any Lien in favor of
the Holders or the Trustee for any reason; (xx) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, liquidation or dissolution
proceeding commenced by or against any Person, including any discharge of, or
bar or stay against collecting, all or any part of the Guaranteed Obligations
(or any interest on all or any part of the Guaranteed Obligations) in or as a
result of any such proceeding; (xxi) any action taken by the Trustee that is
authorized by this Section 2.02 or otherwise in this Agreement or by any other
provision of any Exchange Document or any omission to take any such action; or
(xxii) any other circumstance whatsoever that might otherwise constitute a legal
or equitable discharge or defense of a surety or guarantor.
(c) Each Obligor expressly waives, for the benefit of the
Trustee and the Holders, all set-offs and counterclaims and all presentments,
demands for payment or performance, notices of nonpayment or nonperformance,
protests, notices of protest, notices of dishonor and all other
-9-
notices or demands of any kind or nature whatsoever with respect to the
Guaranteed Obligations, and all notices of acceptance of this Agreement or of
the existence, creation, incurring or assumption of new or additional Guaranteed
Obligations. Each Obligor further expressly waives the benefit of any and all
statutes of limitation and any and all laws providing for the exemption of
property from execution or for valuation and appraisal upon foreclosure, to the
maximum extent permitted by applicable law.
(d) Each Obligor represents and warrants to the Holders that
it has established adequate means of obtaining financial and other information
pertaining to the business, operations and condition (financial and otherwise)
of the Company and its properties on a continuing basis and that such Obligor is
now and will in the future remain fully familiar with the business, operations
and condition (financial and otherwise) of the Company and its properties. Each
Obligor further represents and warrants that it has reviewed and approved each
of the Exchange Documents and is fully familiar with the transactions
contemplated by the Exchange Documents and that it will in the future remain
fully familiar with such transactions and with any new Exchange Documents and
the transactions contemplated by such Exchange Documents. Each Obligor hereby
expressly waives and relinquishes any duty on the part of the Holders (should
any such duty exist) to disclose to such or any other Obligor any matter of fact
or other information related to the business, operations or condition (financial
or otherwise) of the Company or its properties or to any Exchange Document or
the transactions undertaken pursuant to, or contemplated by, any such Exchange
Document, whether now or in the future known by the Holders.
(e) Each Obligor intends that its rights and obligations shall
be those expressly set forth in this Agreement and that its obligations shall
not be affected, limited, reduced, discharged or terminated by reason of any
principles or provisions of law which conflict with the terms of this Agreement.
2.03 UNDERSTANDING WITH RESPECT TO WAIVERS AND CONSENTS. Each Obligor
warrants and agrees that each of the waivers and consents set forth in this
Agreement are made voluntarily and unconditionally after consultation with
outside legal counsel and with full knowledge of their significance and
consequences, with the understanding that events giving rise to any defense or
right waived may diminish, destroy or otherwise adversely affect rights which
such or any other Obligor otherwise may have against the Company, the Holders,
the Trustee or any other Person or against any Collateral. If, notwithstanding
the intent of the parties that the terms of this Agreement shall control in any
and all circumstances, any such waivers or consents are determined to be
unenforceable under applicable law, such waivers and consents shall be effective
to the maximum extent permitted by law.
2.04 SUBROGATION. Notwithstanding any payment or payments made by the
Obligors hereunder, or any set-off or application of funds of the Obligors by
the Trustee, no Obligors shall exercise any of the rights of the Trustee or any
Holder which any Obligor may acquire by way of subrogation, by any payment made
hereunder, by reason of such set-off or application of funds or otherwise,
against the Company or against any collateral security or guarantee or right of
set-off held by the Trustee or any Holder for the payment of the Guaranteed
Obligations, and no Obligor shall seek or be entitled to seek any contribution
or reimbursement from the Company in respect of payments made by the Obligors
hereunder, until all amounts owing to the Trustee
-10-
and the Holders by the Company on account of the Guaranteed Obligations are paid
in full. If any amount shall be paid to any Obligor on account of such
subrogation rights at any time when all of the Guaranteed Obligations shall not
have been paid in full, such amount shall be held by such Obligor in trust for
the Trustee and the Holders, segregated from other funds of such Obligor, and
shall, forthwith upon receipt by such Obligor, be turned over to the Trustee in
the exact form received by such Obligor (duly indorsed by such Obligor to the
Trustee, if required), to be applied against the Guaranteed Obligations, whether
matured or unmatured, in such order as required by the applicable Exchange
Documents.
2.05 REINSTATEMENT. The obligations of each Obligor under this Article
II shall be automatically reinstated if and to the extent that for any reason
any payment by or on behalf of the Company, any other Obligor or any other
Person or any other application of funds (including the proceeds of any
collateral for all or any part of the Guaranteed Obligations) in respect of all
or any part of the Guaranteed Obligations is rescinded or must be otherwise
restored by any holder of such Guaranteed Obligations, whether as a result of
any proceedings in bankruptcy, reorganization or otherwise and the Obligors
jointly and severally agree that it will indemnify the Holders and the Trustee
on demand for all reasonable costs and expenses (including fees and expenses of
counsel) incurred by the Holders in connection with such rescission or
restoration.
2.06 REMEDIES. The Obligors hereby jointly and severally agree that,
between each of them and the Trustee (for the benefit of the Holders) the
obligations of the Company under the Exchange Documents may be declared to be
forthwith (or may become automatically) due and payable as provided in Section
4.2 of the Subordinated Indenture for purposes of Section 2.01 notwithstanding
any stay, injunction or other prohibition preventing such declaration (or such
obligations becoming due and payable as against the Company) and that, in the
event of such declaration (or such obligation being deemed due and payable),
such obligations (whether or not due and payable by the Company) shall forthwith
become due and payable for purposes of Section 2.01.
2.07 SUBORDINATION OF INDEBTEDNESS OF THE COMPANY; SECURITY INTEREST.
(a) Each Obligor agrees that any indebtedness of the Company now or in the
future owed to such Obligor is hereby subordinated to the Guaranteed
Obligations. If the Trustee so requests, any such indebtedness shall be
collected, enforced and received by such Obligor as trustee for the Trustee and
shall be paid over to the Trustee (for the benefit of the Holders) in kind on
account of the Guaranteed Obligations. If, after the Trustee's request, such
Obligor fails to collect or enforce any such indebtedness or to pay the proceeds
of such indebtedness to the Trustee, the Trustee as such Obligor's
attorney-in-fact may do such acts and sign such documents in such Obligor's name
and on such Obligor's behalf as the Trustee considers necessary or desirable to
effect such collection, enforcement or payment, the Trustee being hereby
appointed such Obligor's attorney-in-fact for such purpose.
(b) Each Obligor hereby grants to the Trustee (for the benefit
of the Holders) a security interest in any indebtedness referred to in Section
2.07(a) and in any personal property of the Company in which such Obligor now
has or in the future acquires any right, title or interest. Each Obligor agrees
that such security interest shall be additional security for the Guaranteed
Obligations and shall be superior to any right of such Obligor in such property
until the Guaranteed Obligations have been fully satisfied and performed.
-11-
2.08 LIMITATION ON GUARANTEE. In any proceeding involving any state
corporate law or any state or federal bankruptcy, insolvency, reorganization or
other law affecting the rights of creditors generally, if the obligations of the
Obligors under Section 2.01 would otherwise be held or determined to be void,
invalid or unenforceable or if the claims of the Holders in respect of such
obligations would be subordinated to the claims of any other creditors on
account of the Obligors' liability under Section 2.01, then, notwithstanding any
other provision of this Agreement to the contrary, the amount of such liability
shall, without any further action by the Obligors, the Holders or any other
Person, be automatically limited and reduced to the highest amount which is
valid and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
ARTICLE III. COLLATERAL.
3.01 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
Exchange Offer Intercreditor Agreement, each Obligor hereby pledges and grants
to the Trustee, for the ratable benefit of the Holders a security interest in
all of such Obligor's right, title and interest in and to the following
property, whether now owned or hereafter acquired by such 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 such Obligor as set forth in Schedule 3.01
together with in each case the certificates 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 any 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 Company 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 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 such 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 such Obligor by any other Person who, after the date of
this Agreement, becomes, as a result of any occurrence, a Subsidiary of such
Obligor or an Affiliate of such 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 such Obligor constituting a right to the payment
of money, whether or not earned by performance, including all moneys due and to
become due to such Obligor in
-12-
repayment of any loans or advances, 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 such 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 such Obligor that are held by
such 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 such 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 such Obligor that are used or
bought for use primarily in its business, including all spare parts and related
supplies, all goods obtained by such Obligor in 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 such Obligor covering, evidencing or
representing Inventory or Equipment (collectively, the "Documents");
(g) all contracts and other agreements of such 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 such
Obligor against any Person arising out of, relating to or in connection with all
or any part of the Inventory, Equipment or Documents of such 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 such 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 such Obligor or any computer bureau or
service company from time to time acting for such Obligor;
(i) the balance from time to time in the Collateral Account;
(j) all other tangible and intangible property of such
Obligor, including all Intellectual Property; and
-13-
(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.
3.02 INTELLECTUAL PROPERTY. For the purpose of enabling the Trustee to
exercise its rights, remedies, powers and privileges under Article VII 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, each Obligor hereby
grants to the Trustee, to the extent assignable, and subject to the terms and
provisions of the Exchange Offer Intercreditor Agreement, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to such Obligor) to use, assign, license or sublicense any of the
Intellectual Property of such 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.
3.03 PERFECTION. Concurrently with the execution and delivery of this
Agreement, and subject to the terms and provisions of the Exchange Offer
Intercreditor Agreement, each Obligor shall (i) file such financing statements
and other documents in such offices as shall be necessary or as the Trustee may
request to establish a security interest 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 Obligors, 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
such 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 of the Liens granted by this Agreement. The Trustee shall have the
right, at any time in its discretion and with notice to the Company, 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.
3.04 PRESERVATION AND PROTECTION OF SECURITY INTERESTS. Each Obligor
shall, subject to the terms and provisions of the Exchange Offer Intercreditor
Agreement:
(a) upon the acquisition after the Signing Date by such
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 establish a
security interest in the Liens granted by this Agreement in such Securities
Collateral;
-14-
(b) upon the acquisition after the Signing Date by such
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 such
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 such 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 such 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 as the Trustee may request to
evidence, validate, perfect and establish the Liens (subject only to Liens
permitted under Section 7.8 of the Subordinated Indenture) 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 a security
interest of, or to preserve the validity, perfection or priority 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 such
Obligor copies of any notices and communications received by it with respect to
the Stock Collateral pledged by such Obligor), provided that notices to account
debtors in respect of any Accounts or Instruments shall be subject to the
provisions of Section 4.02(b).
3.05 ATTORNEY-IN-FACT. (a) Subject to the rights of such Obligor under
Sections 3.06, 3.07, 3.08 and 3.09, and subject to the terms and provisions of
the Exchange Offer Intercreditor Agreement, the Trustee is hereby appointed the
attorney-in-fact of each 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
4.02(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
-15-
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 VII, 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 Obligors,
jointly and severally, 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 any 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 the
Obligors, and all such obligations of the Obligors shall be and remain
enforceable against and only against the Obligors and shall not be enforceable
against the Trustee.
(b) Without limiting the rights and powers of the Trustee
under Section 3.05(a), and subject to the terms and provisions of the Exchange
Offer Intercreditor Agreement, each 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
such Obligor title or ownership applications for filing with appropriate state
agencies to enable Motor Vehicles now owned or hereafter acquired by such
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, such 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 security interest in the Motor Vehicles and
exercising the rights and remedies of the Trustee under Article VII). 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 3.05(a), and subject to the terms and provisions of the Exchange
Offer Intercreditor Agreement,each 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
3.04(d). This appointment as attorney-in-fact is irrevocable and coupled with an
interest.
3.06 SPECIAL PROVISIONS RELATING TO SECURITIES COLLATERAL. (a) So long
as no Event of Default shall have occurred and be continuing, the Obligors 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 Obligors jointly and
severally agree that they 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 Obligors' expense, execute and deliver to the Obligors or cause to
be executed and delivered to the Obligors all such proxies, powers of attorney,
dividends and other orders and other instruments, without recourse, as the
Obligors may reasonably request for the purpose of enabling the Obligors
-16-
to exercise the rights and powers which they are entitled to exercise pursuant
to this Section 3.06(a).
(b) So long as no Event of Default shall have occurred and be
continuing, the Obligors 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 Obligors jointly and severally agree to execute and deliver to the
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 Obligors (except to the extent applied to the Secured
Obligations), be returned by the Trustee to the Obligors.
3.07 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 Obligors 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 Obligors. 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 Obligors through the Company, execute and deliver any
instruments, certificates or other documents, in the form so requested, which
such Obligors through the Company shall have certified are appropriate (in their
reasonable judgment) to allow them to take any action permitted above (including
relinquishment of the license provided pursuant to Section 3.02 as to any
specific Intellectual Property). The exercise of rights, remedies, powers and
privileges under Article VII by the Trustee shall not terminate the rights of
the holders of any licenses or sublicenses theretofore granted by the Obligors
in accordance with the first sentence of this Section 3.07.
3.08 INSTRUMENTS. So long as no Default or Event of Default shall have
occurred and be continuing, each 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, such Obligor through the Company, make appropriate arrangements for
making any Instruments pledged by the Obligors available to the respective
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.
3.09 USE OF COLLATERAL. So long as no Event of Default shall have
occurred and be continuing, each Obligor shall, in addition to its rights under
Sections 3.06, 3.07 and 3.08 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
-17-
under Articles IV and VII and to such use, possession or exercise not otherwise
constituting a Default.
3.10 RIGHTS AND OBLIGATIONS. (a) Each 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 any Obligor from any of its duties and obligations under such
contracts and agreements and the Obligors 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 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 any 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 Obligors' 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 any 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.
3.11 RELEASE OF MOTOR VEHICLES. So long as no Default shall have
occurred and be continuing and subject to the Exchange Offer Intercreditor
Agreement, upon the request of, and at the expense of, any Obligor, the Trustee
shall execute and deliver to such Obligor such instruments as such 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 such 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).
3.12 TERMINATION. When all Secured Obligations shall have been
indefeasibly paid in full, this Agreement shall (subject, however, to Section
2.05) terminate, and the Trustee shall, at the expense of the respective
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 respective Obligors and to be released, canceled and granted
back all licenses and rights referred to in Section 3.02. The Trustee shall
also, at the expense of the respective Obligor, execute and deliver to the
respective Obligors upon such termination such Uniform Commercial Code
termination statements, certificates for terminating the Liens on the Motor
Vehicles and such
-18-
other documentation as shall be reasonably requested by the respective Obligors
to effect the termination and release of the Liens granted by this Agreement on
the Collateral.
ARTICLE IV. CASH PROCEEDS OF COLLATERAL.
4.01 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 any 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 VII. The balance
from time to time in the Collateral Account shall be subject to withdrawal only
as provided in this Agreement.
4.02 CERTAIN PROCEEDS. (a) If any Default or Event of Default shall
have occurred and be continuing, each Obligor shall, subject to the terms and
provisions of the Exchange Offer Intercreditor Agreement, upon request of the
Trustee, promptly notify (and such 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) Each 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, such 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 each Obligor for and as the property of the Trustee and shall not be
commingled with any other funds or property of such Obligor.
4.03 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 Obligors through the Company (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 VII.
ARTICLE V. REPRESENTATIONS AND WARRANTIES.
-19-
Each Obligor hereby represents and warrants to the Trustee for the
benefit of the Holders as follows:
5.01 TITLE. Such 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, and subject to any and all Liens created under the
Note Purchase Agreement, 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.
5.02 SECURITIES COLLATERAL. (a) The Pledged Stock presently owned by
such 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
such 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 such
Obligor by any of its Subsidiaries or Affiliates.
(b) The Pledged Stock pledged by such Obligor constitutes all
of the issued and outstanding shares of capital stock of any class of the
Issuers beneficially owned by such Obligor on the Signing Date (whether or not
registered in the name of such Obligor).
5.03 INTELLECTUAL PROPERTY. (a) Except pursuant to licenses and other
user agreements entered into by such Obligor in the ordinary course of business,
such 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) No Obligor owns any Trademarks registered in the United
States of America to which the last sentence of the definition of Trademark
Collateral applies.
5.04 GOODS. Any goods now or hereafter manufactured or otherwise
produced by any 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 VI. COVENANTS.
6.01 BOOKS AND RECORDS. Each 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 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
-20-
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 such
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 such Obligor with respect to the Collateral, all in
such manner as the Trustee may reasonably request.
6.02 REMOVALS, ETC. Without at least 30 days' prior written notice to
the Trustee, each 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 VIII, (b) at one of the other business locations presently owned
or operated by such Obligor or any of its Affiliates and identified in Annex II
or III 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 Company shall
be permitted to consummate the reincorporation merger whereby the Company would
merge with a Delaware Subsidiary of the Company to change the Company's state of
incorporation from Florida to Delaware (as described in the Notice of Special
Meeting of Stockholders and Proxy Statement filed by the Company with the SEC on
September 18, 1998).
6.03 STOCK COLLATERAL. The Obligors 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 Obligors 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). Such Obligor, subject to the terms and provisions of the
Exchange Offer 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 such 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 such Obligor, in respect of the Additional Shares or
Additional Debt, together with all certificates, notes or other instruments
representing or evidencing the same. Such 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.
6.04 INTELLECTUAL PROPERTY. (a) Each 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
-21-
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) Each 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) Each 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 each 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) Each 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, each 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) Each 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 Obligors shall have no obligation to make any such application if making
such application would be unnecessary or imprudent in the good faith business
judgment of the respective Obligor. Any expenses incurred in connection with
such an application shall be borne by the Obligors.
(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 each
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.
-22-
ARTICLE VII. REMEDIES.
7.01 EVENTS OF DEFAULT, ETC. Without limitation on the rights,
remedies, powers and privileges of the Trustee under Article II, if any Event of
Default shall have occurred and be continuing and subject to the Exchange Offer
Intercreditor Agreement:
(a) the Trustee in its discretion may require each Obligor to,
and each Obligor shall, assemble the Collateral owned by it at such place or
places, reasonably convenient to both the Trustee and such 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
names of the Obligors 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 Obligors 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 Obligors, 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 Obligors shall supply to the Trustee or
its designee, for inclusion in such sale, assignment or other disposition, 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
-23-
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 each 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 7.01 and of the exercise of the
license granted to the Trustee in Section 3.02 shall be applied in accordance
with Section 7.04.
7.02 DEFICIENCY. If the proceeds of, or other realization upon, the
Collateral by virtue of the exercise of remedies under Section 7.01 and of the
exercise of the license granted to the Trustee in Section 3.02 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 Obligors shall remain
liable for any deficiency.
7.03 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 7.01 conducted in a commercially reasonable
manner. Each 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 Obligors recognize 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 Obligors acknowledge 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, agree 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 for the period of time necessary to permit the
respective Issuer of such Collateral to register it for public sale.
7.04 APPLICATION OF PROCEEDS. Except as otherwise expressly provided in
this Agreement, except as provided below in this Section 7.04 and except as
provided under the terms and provisions of the Exchange Offer 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 7.01 or of the
exercise of the license granted in Section 3.02, and any other cash at the time
held by the Trustee under Article IV or this Article VII, 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;
-24-
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 Company, the Obligors or any other obligors on the
Exchange Notes, as their interests may appear, or as a court of competent
jurisdiction may direct.
As used in this Article VII, "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 any Obligor or any issuer of,
or account debtor or other obligor on, any of the Collateral.
ARTICLE VIII. MISCELLANEOUS.
8.01 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.
8.02 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 Obligors: Inamed Corporation
0000 Xxxxxx Xxxxxx Xxxxxxx, #000
Xxx Xxxxx, Xxxxxx
Attention: Xxxx Xxxxx
if to the Trustee: Santa Xxxxxxx Bank & Trust
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Administrator
8.03 EXPENSES, ETC. The Obligors jointly and severally agree 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 II or Article VII, or any of the
obligations of the Obligors 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.
-25-
8.04 AMENDMENTS. This Agreement may be amended as to the Trustee and
its respective successors and assigns, and the Obligors may take any action
herein prohibited, or omit to perform any act required to be performed by it, if
the Obligors 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.
8.05 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.
8.06 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.
8.07 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.
8.08 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.
8.09 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.
8.10 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.
8.11 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.
8.12 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, each Obligor hereby consents and will submit, and
will cause each of its Subsidiaries to submit, to the jurisdiction of
-26-
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. Each
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.
8.13. 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 any Obligor in any other
jurisdiction.
8.14. WAIVER OF JURY TRIAL. EACH 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.
-27-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
SANTA XXXXXXX BANK & TRUST
By:_____________________
Name:
Title:
------------------------,
a ____________corporation
By:_____________________
Name:
Title:
------------------------,
a ____________corporation
By:_____________________
Name:
Title:
-------------------------,
a _____________corporation
By:______________________
Name:
Title:
-28-
