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SECURITY AGREEMENT
Dated as of September 30, 1997
between
PHYSICIANS CLINICAL LABORATORY, INC.
and
FIRST TRUST NATIONAL ASSOCIATION
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TABLE OF CONTENTS
Page
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Section 1. Definitions and Interpretation........................... 1
1.01 Certain Defined Terms.................................... 1
Section 2. Collateral............................................... 4
2.01 Grant.................................................... 4
2.02 Intellectual Property.................................... 6
2.03 Perfection............................................... 6
2.04 Preservation and Protection of Security Interests........ 7
2.05 AttorneyinFact........................................... 8
2.06 Use of Intellectual Property............................. 9
2.07 Instruments.............................................. 9
2.08 Use of Collateral....................................... 10
2.09 Rights and Obligations.................................. 10
2.10 Release of Motor Vehicles............................... 10
2.11 Termination............................................. 11
2.11 Subordination and Release Prior to Termination.......... 11
Section 3. Representations and Warranties.......................... 11
3.01 Title................................................... 11
3.02 Intellectual Property................................... 12
3.03 Goods................................................... 12
Section 4. Covenants............................................... 12
4.01 Books and Records....................................... 12
4.02 Removals, Etc........................................... 13
4.03 Sales and Other Liens................................... 13
4.04 Intellectual Property................................... 14
4.05 Further Assurances...................................... 15
Section 5. Remedies................................................ 15
5.01 Events of Default, Etc.................................. 15
5.02 Deficiency.............................................. 17
5.03 Private Sale............................................ 17
5.04 Application of Proceeds................................. 18
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Section 6. Miscellaneous........................................... 18
6.01 Waiver.................................................. 18
6.02 Notices................................................. 19
6.03 Expenses, Etc........................................... 20
6.04 Amendments, Etc......................................... 20
6.05 Successors and Assigns.................................. 20
6.06 Survival................................................ 20
6.07 Agreements Superseded................................... 20
6.08 Severability............................................ 20
6.09 Captions................................................ 21
6.10 Counterparts............................................ 21
6.11 GOVERNING LAW........................................... 21
ANNEX 1 - LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS
AND APPLICATIONS FOR COPYRIGHT REGISTRATION
ANNEX 2 - LIST OF PATENTS AND PATENT APPLICATIONS
ANNEX 3 - LIST OF TRADE NAMES, TRADEMARKS, SERVICE
MARKS, TRADEMARK AND SERVICE XXXX REGISTRATIONS
AND APPLICATIONS FOR TRADEMARK AND SERVICE XXXX
REGISTRATIONS
ANNEX 4 - LIST OF CONTRACTS, LICENSES AND OTHER
AGREEMENTS
ANNEX 5 - LIST OF LOCATIONS
ANNEX 6 - DEPOSIT ACCOUNTS
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SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement") dated as of September 30,
1997 is made between Physicians Clinical Laboratory, Inc. (the "Company") and
First Trust National Association (the "Trustee").
R E C I T A L S
A. Concurrently with the execution hereof, the Company is entering
into that certain Indenture, dated the date hereof (the "Indenture"), with the
Trustee.
B. The Indenture provides for the issuance by the Company of its
Senior Secured Notes Due 2004, in an aggregate principal amount of $55,000,000
on the date hereof. Any Person that holds any of the Senior Notes now or
hereafter shall be referred to herein as a "Noteholder".
C. To induce the Trustee to enter into the Indenture and the other
documents related thereto, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company has agreed
to pledge and grant a security interest in the Collateral (as hereinafter
defined) as security for the Secured Obligations (as hereinafter defined).
A G R E E M E N T
Now therefore, in consideration of the above recitals and other
consideration and the mutual covenants hereinafter set forth, the parties hereto
agree as follows:
Section 1. Definitions and Interpretation.
1.01 Certain Defined Terms. Unless otherwise defined, all
capitalized terms used in this Agreement that are defined in the Indenture
(including those terms incorporated by reference) shall have the respective
meanings assigned to them in the Indenture and shall be interpreted in
accordance with Sections 1.3 and 1.4 of the Indenture. In addition, the
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following terms shall have the following meanings under this Agreement:
"Accounts" shall have the meaning assigned to that term in Section
2.01(a).
"Collateral" shall have the meaning assigned to that term in Section
2.01.
"Copyright Collateral" shall mean all Copyrights, whether now owned
or hereafter acquired by the Company, including each Copyright identified in
Annex 1.
"Copyrights" shall mean, collectively, (a) all copyrights, copyright
registrations and applications for copyright registrations, (b) all renewals and
extensions of all copyrights, copyright registrations and applications for
copyright registration and (c) all rights, now existing or hereafter coming into
existence, (i) to all income, royalties, damages and other payments (including
in respect of all past, present or future infringements) now or hereafter due or
payable under or with respect to any of the foregoing, (ii) to xxx for all past,
present and future infringements with respect to any of the foregoing and (iii)
otherwise accruing under or pertaining to any of the foregoing throughout the
world.
"Documents" shall have the meaning assigned to that term in Section
2.01(e).
"Equipment" shall have the meaning assigned to that term in Section
2.01(d).
"Governmental Approvals" shall mean any authorization, consent,
approval, license, lease, ruling, permits, waiver, exemption, filing,
registration or notice by or with any Governmental Person.
"Governmental Person" shall mean any national (Federal or foreign),
state or local government, any political subdivision or any governmental,
quasi-governmental, judicial, public or statutory instrumentality, authority,
agency, body or corpora-
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tion, the Comptroller of the Currency, the Board of Governors of the Federal
Reserve System, any central bank or any comparable authority.
"Instruments" shall have the meaning assigned to that term in
Section 2.01(b).
"Intellectual Property" shall mean all Copyright Collateral, all
Patent Collateral and all Trademark Collateral, together with (a) all
inventions, processes, production methods, proprietary information, know-how,
trade secrets, computer software, source codes, mask works, and technology; (b)
all licenses or user or other agreements granted to the Company with respect to
any of the foregoing, in each case whether now or hereafter owned or used,
including the licenses or other agreements with respect to the Copyright
Collateral, the Patent Collateral or the Trademark Collateral listed in Annex 4;
(c) all information, customer lists, advertising, identification of suppliers,
data, plans, blueprints, specifications, designs, drawings, recorded knowledge,
surveys, engineering reports, test reports, manuals, materials standards,
processing standards, performance standards, catalogs, computer and automatic
machinery software and programs; (d) all field repair data, sales data and other
information relating to sales or service of products now or hereafter
manufactured; (e) all accounting information and all media in which or on which
any information or knowledge or data or records may be recorded or stored and
all computer programs used for the compilation or printout of such information,
knowledge, records or data; (f) all Governmental Approvals now held or hereafter
obtained by the Company in respect of any of the foregoing; and (g) all causes
of action, claims and warranties now owned or hereafter acquired by the Company
in respect of any of the foregoing. It is understood that Intellectual Property
shall include all of the foregoing owned or acquired by the Company on a
worldwide basis.
"Inventory" shall have the meaning assigned to that term in Section
2.01(c).
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"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.
"Patent Collateral" shall mean all Patents, whether now owned or
hereafter acquired by the Company, including each Patent identified in Annex 2.
"Patents" shall mean, collectively, (a) all patents and patent
applications, (b) all reissues, divisions, continuations, renewals, extensions
and continuations-in-part of all patents or patent applications and (c) all
rights, now existing or hereafter coming into existence, (i) to all income,
royalties, damages, and other payments (including in respect of all past,
present and future infringements) now or hereafter due or payable under or with
respect to any of the foregoing, (ii) to xxx for all past, present and future
infringements with respect to any of the foregoing and (iii) 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.
"Secured Obligations" shall mean (a) any and all Indenture
Obligations and (b) any and all obligations of the Company for the performance
of its agreements, covenants and undertakings under or in respect of the
Documents.
"Signing Date" shall mean the date of this Agreement.
"Trademark Collateral" shall mean all Trademarks, whether now owned
or hereafter acquired by the Company, including each Trademark identified in
Annex 3. 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.
"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
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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.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as
in effect in the State of California from time to time or, by reason of
mandatory application, any other applicable jurisdiction.
Section 2. Collateral.
2.01 Grant. As collateral security for the prompt payment in full
when due (whether at stated maturity, by acceleration or otherwise) and
performance of the Secured Obligations, the Company hereby pledges and grants to
the Trustee a security interest in all of the Company's right, title and
interest in and to the following property, whether now owned or hereafter
acquired by the Company and whether now existing or hereafter coming into
existence (collectively, the "Collateral"):
(a) all accounts and general intangibles (each as defined in the
Uniform Commercial Code) of the Company constituting a right to the payment of
money, whether or not earned by performance, including all moneys due and to
become due to the Company in 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");
(b) all instruments, chattel paper or letters of credit (each as
defined in the Uniform Commercial Code) of the
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Company 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");
(c) all inventory (as defined in the Uniform Commercial Code) and
all other goods (including Motor Vehicles) of the Company that are held by the
Company for sale, lease or furnishing under a contract of service (including to
its Subsidiaries or Affiliates), that are so leased or furnished or that
constitute raw materials, work in process or material used or consumed in its
business, including all spare parts and related supplies, all goods obtained by
the Company 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");
(d) all equipment (as defined in the Uniform Commercial Code) and
all other goods (including Motor Vehicles) of the Company that are used or
bought for use primarily in its business, including all spare parts and related
supplies, all goods obtained by the Company 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");
(e) all documents of title (as defined in the Uniform Commercial
Code) or other receipts of the Company covering, evidencing or representing
Inventory or Equipment (collectively, the "Documents");
(f) all contracts and other agreements of the Company relating to
the sale or other disposition of all or any part of the Inventory, Equipment or
Documents and all rights, warranties, claims and benefits of the Company against
any Person arising out of, relating to or in connection with all or any part of
the Inventory, Equipment or Documents of the Company, including any such rights,
warranties, claims or benefits against any Person storing or transporting any
such Inventory or Equipment or issuing any such Documents;
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(g) all other accounts or general intangibles of the Company not
constituting Accounts, including, (i) to the extent related to all or any part
of the other Collateral, all books, correspondence, credit files, records,
invoices, tapes, cards, computer runs and other papers and documents in the
possession or under the control of the Company or any computer bureau or service
company from time to time acting for the Company and (ii) all clinical
laboratory licenses issued to or held by the Company and all other licenses,
permits, approvals or authorizations of any kind or nature relating to the
laboratory testing business or any other business in which the Company may at
any time be engaged; and all contracts, contract rights, undertakings, franchise
agreements, other agreements, whether written or oral in or under which the
Company may now or hereafter have any right, title or interest, including,
without limitation, with respect to an Account, any agreement relating to the
terms of payment or the terms of performance thereof;
(h) all other tangible and intangible property of the Company,
including all Intellectual Property;
(i) all of the Company's rights, title, estate and interest, whether
now existing or hereafter acquired, in and to any and all deposit accounts (as
defined in the Uniform Commercial Code) including, without limitation, those
identified on Annex 6 hereto (collectively, the "Deposit Accounts"); and
(j) all proceeds and products in whatever form of all or any part of
the other Collateral, including all proceeds of insurance and all condemnation
awards and all other compensation for any casualty event with respect to all or
any part of the other Collateral (together with all rights to recover and
proceed with respect to the same), and all accessories to, substitutions for and
replacements of all or any part of the other Collateral.
2.02 Intellectual Property. Solely for the purpose of enabling the
Trustee to exercise its rights, remedies, powers and privileges under Section 5
at such time or times as the Trustee shall be lawfully entitled to exercise such
rights, remedies, powers and privileges, and for no other purpose, the Company
hereby grants to the Trustee, to the extent assignable,
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an irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to the Company) to use, assign, license or sublicense any of
the Intellectual Property of the Company, together with reasonable access to all
media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout of such items.
2.03 Perfection. Concurrently with the execution and delivery of
this Agreement, the Company shall (i) file such financing statements and other
documents in such offices as shall be necessary or as the Trustee may reasonably
request to perfect and establish the priority (subject only to Liens permitted
under Section 4.12 of the Indenture) of the Liens granted by this Agreement,
(ii) deliver and pledge to the Trustee any and all Instruments, endorsed or
accompanied by such instruments of assignment and transfer in such form and
substance as the Trustee may request, (iii) cause the Trustee (to the extent
requested by the Trustee) to be listed as the lienholder on all certificates of
title or ownership relating to Motor Vehicles owned by the Company 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 and (iv) take all such other actions as shall be necessary or as the
Trustee may request to perfect and establish the priority (subject only to such
permitted Liens) of the Liens granted by this Agreement.
2.04 Preservation and Protection of Security Interests. The Company
shall:
(a) upon the acquisition after the Signing Date by the Company 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;
(b) upon the acquisition after the Signing Date by the Company of
any Motor Vehicle, promptly deliver to the Trustee originals of the certificates
of title or ownership for such Motor Vehicles with the Trustee listed as
lienholder, together
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with the manufacturer's statement of origin and odometer statements;
(c) without limiting the obligations of the Company under Section
2.04(b), upon the acquisition after the Signing Date by the Company of any
Equipment 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
120 days of the acquisition of such Equipment deliver evidence of the same to
the Trustee;
(d) upon the Company's acquiring, or otherwise becoming entitled to
the benefits of, any Copyright (or copyrightable material), Patent (or
patentable invention), Trademark (or associated goodwill) or other Intellectual
Property or upon or prior to the Company'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 priority (subject only to Liens permitted under Section 4.12
of the Indenture) of the Liens granted by this Agreement in such and any related
Intellectual Property and, if requested by the Trustee, amend Annex 1, 2 or 3
(as the case may be) to reflect the inclusion of any such Intellectual Property
as part of the Collateral (it being understood that the failure to amend any
such Annex shall not affect the Liens granted by this Agreement on any such
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, perfect, establish the priority (subject
only to Liens permitted under Section 4.12 of the Indenture) of, or to preserve
the validity, perfection or priority (subject only to such permitted Liens) of,
the Liens granted by this Agreement or to enable the Trustee to exercise and
enforce its rights, rem-
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edies, powers and privileges under this Agreement with respect to such Liens.
2.05 Attorney-in-Fact.
(a) Subject to the rights of the Company under Sections 2.06, 2.07,
2.08 and 2.09, the Trustee is hereby appointed the attorney-in-fact of the
Company 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, perfection and priority (subject only to Liens permitted under
Section 4.12 of the Indenture) 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 (i) to ask, demand, collect, xxx for,
recover, receive and give receipt and discharge for amounts due and to become
due under and in respect of all or any part of the Collateral; (ii) to receive,
endorse and collect any Instruments or other drafts, instruments, documents and
chattel paper in connection with clause (i) above (including any draft or check
representing the proceeds of insurance or the return of unearned premiums);
(iii) to file any claims or take any action or proceeding that the Trustee may
deem necessary or advisable for the collection of all or any part of the
Collateral, including the collection of any compensation due and to become due
under any contract or agreement with respect to all or any part of the
Collateral; and (iv) to execute, in connection with any sale or disposition of
the collateral under Section 5, any endorsements, assignments, bills of sale or
other instruments of conveyance or transfer with respect to all or any part of
the Collateral.
(b) Without limiting the rights and powers of the Trustee under
Section 2.05(a), the Company hereby appoints the Trustee as its
attorney-in-fact, effective the Signing Date and terminating upon the
termination of this Agreement, for the purpose of (i) executing on behalf of the
Company title or
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ownership applications for filing with appropriate state agencies to enable
Motor Vehicles now owned or hereafter acquired by the Company to be retitled and
the Trustee to be listed as lienholder as to such Motor Vehicles, (ii) filing
such applications with such state agencies and (iii) executing such other
documents and instruments on behalf of, and taking such other action in the name
of, the Company as the Trustee may deem necessary or advisable to accomplish the
purposes of this Agreement (including the purpose of creating in favor of the
Trustee a perfected lien on the Motor Vehicles and exercising the rights and
remedies of the Trustee under Section 6). This appointment as attorney-in-fact
is irrevocable and coupled with an interest.
2.06 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 Company 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 Company. 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 Company, execute and deliver any instruments,
certificates or other documents, in the form so requested, which such Company
shall have certified are appropriate (in its judgment) to allow them to take any
action permitted above (including relinquishment of the license provided
pursuant to Section 2.02 as to any specific Intellectual Property). The exercise
of rights, remedies, powers and privileges under Section 5 by the Trustee shall
not terminate the rights of the holders of any licenses or sublicenses
theretofore granted by the Company in accordance with the first sentence of this
Section 2.06.
2.07 Instruments. So long as no Event of Default shall have occurred
and be continuing, the Company may retain for collection in the ordinary course
of business any Instruments obtained by it in the ordinary course of business,
and the Trustee shall, promptly upon the request, and at the expense of, the
Company, make appropriate arrangements for making any Instruments pledged by the
Company available to the Company for purposes of presentation, collection or
renewal. Any such
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arrangement shall be effected, to the extent deemed appropriate by the Trustee,
against trust receipt or like document.
2.08 Use of Collateral. So long as no Event of Default shall have
occurred and be continuing, the Company shall, in addition to its rights under
Sections 2.06, 2.07 and 2.08 in respect of the Collateral contemplated in those
sections, be entitled to use and possess the other Collateral and to exercise
its rights, title and interest in all contracts, agreements, licenses and
Governmental Approvals, subject to the rights, remedies, powers and privileges
of the Trustee under Section 5.
2.09 Rights and Obligations.
(a) The Company shall remain liable to perform its duties and
obligations under the contracts and agreements included in the Collateral in
accordance with their respective terms to the same extent as if this Agreement
had not been executed and delivered. The exercise by the Trustee of any right,
remedy, power or privilege in respect of this Agreement shall not release the
Company from any of its duties and obligations under such contracts and
agreements. The Trustee shall have no duty, obligation or liability under such
contracts and agreements or in respect to any Governmental Approval included in
the Collateral by reason of this Agreement or any other Document, nor shall the
Trustee be obligated to perform any of the duties or obligations of the Company
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 Company's right, title
and interest in any contract, agreement or Governmental Approval shall be deemed
to be a consent by the Trustee to any such contract, agreement or Governmental
Approval.
(c) No reference in this Agreement to proceeds or to the sale or
other disposition of Collateral shall authorize the Company to sell or otherwise
dispose of any Collateral except to the extent otherwise expressly permitted by
the terms of any Document.
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(d) The Trustee shall not be required to take steps necessary to
preserve any rights against prior parties to any part of the Collateral.
2.10 Release of Motor Vehicles. So long as no Event of Default shall
have occurred and be continuing, upon the request of, and at the expense of, the
Company, the Trustee shall execute and deliver to the Company such instruments
as the Company shall reasonably request to remove the notation of the Trustee as
lienholder on any certificate of title for any Motor Vehicle; provided that any
such instruments shall be delivered, and the release shall be effective, only
upon receipt by the Trustee of a certificate from the Company stating that the
Motor Vehicle the Lien on which is to be released is to be sold in the ordinary
course of business or has suffered a casualty loss (with title passing to the
appropriate casualty insurance company in settlement of the claim for such
loss).
2.11 Termination. When all Secured Obligations shall have been paid
in full, this Agreement shall terminate, and the Trustee shall forthwith cause
to be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any and all remaining
Collateral and money received in respect of the Collateral, to or on the order
of the Company and to be released, canceled and granted back all licenses and
rights referred to in Section 2.02. The Trustee shall also execute and deliver
to the Company upon such termination such Uniform Commercial Code termination
statements, certificates for terminating the Liens on the Motor Vehicles and
such other documentation as shall be reasonably requested by the Company to
effect the termination and release of the Liens granted by this Agreement on the
Collateral.
2.11 Subordination and Release Prior to Termination. The Trustee
hereby acknowledges that pursuant to the Intercreditor and Subordination
Agreement dated as of September 30, 1997, the security interest in Accounts and
Instruments granted pursuant to Sections 2.01(a) and 2.01(b) is expressly
subordinated to the security interest granted by the Company to Daiwa Healthco-2
LLC and the rights of the parties with respect thereto are as set forth in such
intercreditor agreement.
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Section 3. Representations and Warranties. As of the Signing Date,
the Company represents and warrants to the Trustee as follows:
3.01 Title. The Company is the sole beneficial owner of the
Collateral in which it purports to xxxxx x Xxxx pursuant to this Agreement, and
such Collateral is free and clear of all Liens, except for the Liens granted to
the Trustee pursuant to this Agreement and the Liens permitted under Section
4.12 of the Indenture. The Liens granted by this Agreement in favor of the
Trustee have attached and constitute a perfected security interest in all of
such Collateral (other than Intellectual Property registered or otherwise
located outside of the United States of America) prior to all other Liens
(except such permitted Liens).
3.02 Intellectual Property.
(a) Annexes 1, 2 and 3 set forth completely and correctly all
Copyrights, Patents and Trademarks owned by the Company on the Signing Date;
except pursuant to licenses and other user agreements entered into by the
Company in the ordinary course of business and listed in Annex 4, the Company
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 listed in Annex 1, 2
or 3; all registrations listed in Annexes 1, 2 and 3 are valid and in full force
and effect; and, except as may be set forth in Annex 4 the Company owns and
possesses the right to use all Copyrights, Patents and Trademarks listed in
Annexes 1, 2 and 3.
(b) Annex 4 sets forth completely and correctly all licenses and
other user agreements included in the Intellectual Property on the Signing Date.
(c) To the Company's knowledge, (i) except as set forth in Annex 4,
there is no violation by others of any right of the Company with respect to any
Copyright, Patent or Trademark listed in Annex 1, 2 or 3 and (ii) the Company is
not infringing in any respect upon any Copyright, Patent or Trademark of any
other Person; and no proceedings have been instituted, are
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pending against the Company or, to the Company's knowledge, have been threatened
against, and no claim has been received by, the Company, alleging any such
violation, except as may be set forth in Annex 4.
(d) The Company does not own any Trademarks registered in the United
States of America to which the last sentence of the definition of Trademark
Collateral applies.
3.03 Goods. Any goods now or hereafter manufactured or otherwise
produced by the Company 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.
Section 4. Covenants.
4.01 Books and Records. The Company 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 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
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to the Collateral, permit representatives of the Trustee to be present at the
Company's place of business to receive copies of all communications and
remittances relating to the Collateral and forward copies of any notices or
communications received by the Company with respect to the Collateral, all in
such manner as the Trustee may request.
4.02 Removals, Etc. Without at least 30 days' prior written notice
to the Trustee, the Company shall not (i) 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 at the address initially indicated for notices to it under
Section 6 or at one of the locations identified in Annex 5 or in transit from
one of such locations to another or (ii) except with respect to the change of
the Company's name to Bio-Cypher Laboratories Ltd., change its corporate name,
or the name under which it does business, from the name shown on the signature
pages to this Agreement.
4.03 Sales and Other Liens. Without the prior written consent of the
Trustee, the Company shall not dispose of any Collateral, create, incur, assume
or suffer to exist any Lien (other than Liens permitted under Section 4.12 of
the Indenture) upon any Collateral or file or suffer to be on file or authorize
to be filed, in any jurisdiction, any financing statement or like instrument
with respect to all or any part of the Collateral in which the Trustee is not
named as the sole secured party for its own benefit; provided, however, that the
Company shall, without the consent of the Trustee, be allowed, (i) to dispose of
obsolete Collateral in the ordinary course of business, and (ii) provided that
no Event of Default shall have occurred and be continuing, to dispose of
Collateral in the ordinary course of business.
4.04 Intellectual Property.
(a) The Company (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
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current line as reflected in its current catalogs, brochures and price lists in
order to maintain such Trademark in full force and effect free from any claim of
abandonment for nonuse, (ii) maintain as in the past the quality of products and
services offered under such Trademark, (iii) employ such Trademark with the
appropriate notice of registration and (iv) not (and not permit any licensee or
sublicensee to) do any act or knowingly omit to do any act whereby any Trademark
material to the conduct of its business may become invalidated.
(b) The Company (either itself or through licensees) will not do any
act or knowingly omit to do any act whereby any Patent material to the conduct
of its business may become abandoned or dedicated.
(c) The Company shall notify the Trustee immediately if it knows or
has reason to know that any Intellectual Property material to the conduct of its
business may become abandoned or dedicated, or of any adverse determination or
development (including the institution of, or any such determination or
development in, any proceeding before any Governmental Person) regarding the
Company's ownership of any Intellectual Property material to its business, its
right to copyright, patent or register the same (as the case may be), or its
right to keep, use and maintain the same.
(d) The Company will take all necessary steps that are consistent
with good business practices in any proceeding before any appropriate
Governmental Person to maintain and pursue each application relating to any
Intellectual Property (and to obtain the relevant registrations) and to maintain
each registration material to the conduct of its business, including payment of
maintenance fees, filing of applications for renewal, affidavits of use,
affidavits of incontestability and opposition, interference and cancellation
proceedings.
(e) In the event that any Intellectual Property material to the
conduct of its business is infringed, misappropriated or diluted by a third
party, the Company shall notify the Trustee within (10) days after it learns of
such event and shall, if consistent with good business practice, promptly xxx
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for infringement, misappropriation or dilution, seek temporary restraints and
preliminary injunctive relief to the extent practicable, seek to recover any and
all damages for such infringement, misappropriation or dilution and take such
other actions as are appropriate under the circumstances to protect such
Collateral.
(f) The Company shall, through counsel acceptable to the Trustee,
prosecute diligently any application for any Intellectual Property pending as of
the Signing Date 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 Company 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 Company. Any expenses incurred in connection with such
an application shall be borne by the Company. The Company shall not abandon any
right to file an application for any Intellectual Property or any pending such
application in the United States without the consent of the Trustee, which
consent shall not be unreasonably withheld.
(g) The Trustee shall have the right but shall in no way be
obligated to bring suit in its own name to enforce the Copyrights, Patents and
Trademarks and any license under such Intellectual Property, in which event the
Company shall, at the request of the Trustee, do any and all lawful acts and
execute and deliver any and all proper documents reasonably required by the
Trustee in aid of such enforcement action.
4.05 Further Assurances. The Company agrees that, from time to time
upon the written request of the Trustee, the Company will execute and deliver
such further documents and do such other acts and things as the Trustee may
reasonably request in order fully to effect the purposes of this Agreement.
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Section 5. Remedies.
5.01 Events of Default, Etc. If any Event of Default shall have
occurred and be continuing:
(a) The Trustee in its discretion may require the Company to, and
the Company shall, assemble the Collateral owned by it at such place or places,
reasonably convenient to both the Trustee and the Company, designated in the
Trustee's request;
(b) the Trustee in its discretion may make any reasonable compromise
or settlement it deems desirable with respect to any of the Collateral and may
extend the time of payment, arrange for payment in installments, or otherwise
modify the terms of, all or any part of the Collateral;
(c) the Trustee in its discretion may, in its name or in the name of
the Company 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 ten business days' prior
written notice to the Company 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 any of 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 Company, any such demand, notice and right or
equity being hereby
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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 Company 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 Agreement or the Collateral may be asserted, including the right, to the
maximum extent permitted by law, to exercise all voting, consensual and other
powers of ownership pertaining to the Collateral as if the Trustee were the sole
and absolute owner of the Collateral (and the Company 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 5.01 and of the exercise of the license
granted to the Trustee in Section 2.02 shall be applied in accordance with
Section 5.04.
5.02 Deficiency. If the proceeds of, or other realization upon, the
Collateral by virtue of the exercise of remedies under Section 5.01 and of the
exercise of the license granted by the Trustee in Section 2.02 are insufficient
to cover the costs and expenses of such exercise and the payment in full of the
other Secured Obligations, the Company shall remain liable for any deficiency.
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5.03 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 5.01 conducted in a commercially reasonable manner. The
Company 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 Company recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933 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 Company acknowledges that any such private sales
may be at prices and on terms less favorable to the Trustee than those
obtainable through a public sale without such restrictions, and, notwithstanding
such circumstances, 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.
5.04 Application of Proceeds. Except as otherwise expressly provided
in this Agreement and except as provided below in this Section 5.04, the
proceeds of, or other realization upon, all or any part of the Collateral by
virtue of the exercise of remedies under Section 5.01 or of the exercise of the
license granted in Section 2.02, and any other cash at the time held by the
Trustee under this Section 5, shall be applied by the Trustee:
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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 reasonable fees and expenses of its agents and counsel and all other
expenses incurred and advances made by the Trustee in that connection;
Next, to the payment in full of the remaining Secured Obligations in
such manner as the Trustee may determine in accordance with the provisions of
the Indenture; and
Finally, to the payment to the Company, or its respective successors
or assigns, or as a court of competent jurisdiction may direct, of any surplus
then remaining.
As used in this Section 5, "proceeds" of Collateral shall mean cash,
securities and other property realized in respect of, and distributions in kind
of, Collateral, including any property received under any bankruptcy,
reorganization or other similar proceeding as to the Company or any issuer of,
or account debtor or other obligor on, any of the Collateral.
Section 6. Miscellaneous.
6.01 Waiver. No failure on the part of the Trustee 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.
6.02 Notices. All notices and communications to be given under this
Agreement shall be given or made in writing to the intended recipient at the
address specified below or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as otherwise
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provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telex or telecopier, delivered to the telegraph
or cable office or personally delivered or, in the case of a mailed notice, upon
receipt, in each case, given or addressed as provided in this Section 6.02:
To the Company : Physicians Clinical Laboratory, Inc.
0000 "X" Xxxxxx, Xxxxx 000X
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: J. Xxxxxx Xxxxxxxxxx
To the Trustee : First Trust National Association
First Trust Center
000 Xxxx 0xx Xxxxxx, Xxxxx 000
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
6.03 Expenses, Etc. The Company agrees to pay or to reimburse the
Trustee for all costs and expenses (including reasonable attorney's fees and
expenses) that may be incurred by the Trustee in any effort to enforce any of
the provisions of Section 5 or any of the obligations of the Company 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.
6.04 Amendments, Etc. Any provision of this Agreement may be
modified, supplemented or waived only by an instrument in writing duly executed
by the Company and the Trustee. Any such modification, supplement or waiver
shall be for such period and subject to such conditions as shall be specified in
the instrument effecting the same and shall be binding upon the Trustee, each
holder of any of the Secured Obligations and the Company, and any such waiver
shall be
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effective only in the specific instance and for the purposes for which given.
6.05 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Company, the Trustee and each holder of any of
the Secured Obligations and their respective successors and permitted assigns.
The Company shall not assign or transfer its rights under this Agreement without
the prior written consent of the Trustee.
6.06 Survival. All representations and warranties made in this
Agreement or in any certificate or other document delivered pursuant to or in
connection with this Agreement shall survive the execution and delivery of this
Agreement or such certificate or other document (as the case may be) or any
deemed repetition of any such representation or warranty.
6.07 Agreements Superseded. This Agreement supersedes all prior
agreements and understandings, written or oral, among the parties with respect
to the subject matter of this Agreement.
6.08 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
6.09 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.
6.10 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties to this Agreement may execute this Agreement
by signing any such counterpart.
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6.11 GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
PHYSICIANS CLINICAL
LABORATORY, INC.
By:_________________________
Name:
Title:
FIRST TRUST NATIONAL ASSOCIATION
By:_________________________
Name:
Title:
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ANNEX 1
LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
APPLICATIONS FOR COPYRIGHT REGISTRATIONS
PHYSICIANS CLINICAL LABORATORY, INC.
Title Date Filed Registration No. Effective Date
---------------------------------------------------------------
None.
Annex 1 to Security Agreement
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31
ANNEX 2
LIST OF PATENTS AND PATENT APPLICATIONS
PHYSICIANS CLINICAL LABORATORIES, INC.
File Patent Country Registration No. Date
-------------------------------------------------------------
None
Annex 2 to Security Agreement
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32
ANNEX 3
LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
TRADEMARK AND SERVICE XXXX REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE XXXX REGISTRATIONS
U.S. Trademarks
PHYSICIANS CLINICAL LABORATORIES, INC.
Application (A)
Registration (R) Registration
Xxxx or Series No. (S) or Filing Date
------------------------------------------------------------
See Attached.
Annex 3 to Security Agreement
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33
Foreign Trademarks
PHYSICIANS CLINICAL LABORATORIES, INC.
Application (A) Registration or
Xxxx Registration (R) Country Filing Date (F)
---------------------------------------------------------------
None.
Annex 3 to Security Agreement
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34
ANNEX 4
LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS
PHYSICIANS CLINICAL LABORATORIES, INC.
[None]
Annex 4 to Security Agreement
- 1 -
35
ANNEX 5
LIST OF LOCATIONS
PHYSICIANS CLINICAL LABORATORIES, INC.
See attached.
Annex 5 to Security Agreement
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36
ANNEX 6
DEPOSIT ACCOUNTS
See Attached.
Annex 6 to Security Agreement
- 1 -
