PLEDGE AND SECURITY AGREEMENT
Exhibit 10.3
EXECUTION COPY
THIS PLEDGE AND SECURITY AGREEMENT (as the same may be amended, restated, supplemented or
otherwise modified from time to time, this “Security Agreement”) is entered into as of
April 15, 2011 by and among AMERICAN MEDICAL SYSTEMS HOLDINGS, INC., a Delaware corporation
(“Holdings”), AMERICAN MEDICAL SYSTEMS, INC., a Delaware corporation (the
“Borrower”), the Subsidiaries of the Borrower listed on the signature pages hereto
(together with the Borrower, the “Initial Grantors,” and together with any additional
Subsidiaries, whether now existing or hereafter formed or acquired which become parties to this
Security Agreement from time to time, in accordance with the terms of the Credit Agreement (as
defined below), by executing a Supplement hereto in substantially the form of Annex I, the
“Grantors”), and JPMORGAN CHASE BANK, N.A., a national banking association, in its capacity
as administrative agent (the “Administrative Agent”) for itself and for the Secured Parties
(as defined in the Credit Agreement identified below).
PRELIMINARY STATEMENT
The Borrower, the Administrative Agent and the Lenders are entering into a Credit Agreement
dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”). The Grantors are entering into this
Security Agreement in order to induce the Lenders to enter into and extend credit to the Borrower
under the Credit Agreement.
ACCORDINGLY, the Grantors and the Administrative Agent, on behalf of the Secured Parties,
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. Terms Defined in the Credit Agreement. All capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.
1.2. Terms Defined in UCC. Terms defined in the UCC which are not otherwise defined in
this Security Agreement are used herein as defined in the UCC.
1.3. Definitions of Certain Terms Used Herein. As used in this Security Agreement, in
addition to the terms defined in the Preliminary Statement, the following terms shall have the
following meanings: “Accounts” shall have the meaning set forth in Article 9 of the UCC.
“Article” means a numbered article of this Security Agreement, unless another document
is specifically referenced.
“Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.
“Collateral” means all Accounts, Chattel Paper, Commercial Tort Claims, Deposit
Accounts, Documents, Equipment, Farm Products, Fixtures, General Intangibles, Goods, Instruments,
Inventory, Investment Property, letters of credit, Letter-of-Credit Rights, Pledged Deposits,
Supporting Obligations and Other Collateral, wherever located, in which any Grantor now has or
hereafter acquires any right or interest, and the proceeds (including Stock Rights), insurance
proceeds and products thereof, together with all books and records, customer lists, credit files,
computer files, programs, printouts and other computer materials and records related thereto;
provided that, notwithstanding the foregoing, Collateral shall expressly exclude the
Excluded Property.
“Commercial Tort Claims” means commercial tort claims, as defined in the UCC of any
Grantor, including each commercial tort claim specifically described in Exhibit “F”.
“Control” shall have the meaning set forth in Article 8 or, if applicable, in Section
9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.
“Default” means an event described in Section 5.1 hereof.
“Deposit Account Control Agreement” means an agreement, in form and substance
satisfactory to the Administrative Agent, among any Loan Party, a banking institution holding such
Loan Party’s funds, and the Administrative Agent with respect to collection and Control of all
deposits and balances held in a deposit account maintained by any Loan Party with such banking
institution.
“Deposit Accounts” shall have the meaning set forth in Article 9
of the UCC.
“Documents” shall have the meaning set forth in Article 9 of the UCC.
“Equipment” shall have the meaning set forth
in Article 9 of the UCC.
“Exhibit” refers to a specific exhibit to this Security Agreement, unless another
document is specifically referenced.
“Farm Products” shall have the meaning set forth in Article 9
of the UCC.
“Fixtures” shall have the meaning set forth in
Article 9 of the UCC.
“General Intangibles” shall have the meaning set forth in Article 9 of the UCC and, in
any event, includes payment intangibles, contract rights, rights to payment, rights arising under
common law, statutes, or regulations, choses or things in action, goodwill, programs, programming
materials, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from
pension funds, route lists, rights to payment and other rights under any royalty or licensing
agreements, including infringement claims, computer programs, information contained on computer
disks or tapes, software, literature, reports, catalogs, pension plan refunds, pension plan refund
claims, insurance premium rebates, tax refunds, and tax refund claims, interests in a partnership
or limited liability company which do not constitute a security under Article 8 of the Code, and
any other personal property other than Commercial Tort Claims, money, Accounts, Chattel Paper,
Deposit Accounts, Goods, Investment Property, negotiable Collateral, and oil, gas, or other
minerals before extraction.
“Goods” shall have the meaning set forth in Article 9 of the
UCC.
“Instruments” shall have the meaning set forth in
Article 9 of the UCC.
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“Inventory” shall have the meaning set forth in Article 9 of the UCC.
“Investment Property” shall have the meaning set forth in Article 9 of
the UCC.
“Letter of Credit Rights” shall have the meaning set forth in
Article 9 of the UCC.
“Other Collateral” means any property of the Grantors, not included within the defined
terms Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Equipment,
Fixtures, Farm Products, General Intangibles, Goods, Instruments, Inventory, Investment Property,
Letter-of-Credit Rights, Pledged Deposits and Supporting Obligations, including, without
limitation, all cash on hand, letters of credit, Stock Rights or any other deposits (general or
special, time or demand, provisional or final) with any bank or other financial institution, it
being intended that the Collateral include all real and personal property of the Grantors, subject
to the limitations contained in Article II of this Security Agreement.
“Pledged Collateral” means all Instruments, Securities and other Investment Property
of the Grantors, whether or not physically delivered to the Administrative Agent pursuant to this
Security Agreement.
“Pledged Deposits” means all time deposits of money (other than Deposit Accounts and
Instruments), whether or not evidenced by certificates, which a Grantor may from time to time
designate as pledged to the Administrative Agent or to any Secured Party as security for any
Secured Obligations, and all rights to receive interest on said deposits.
“Receivables” means the Accounts, Chattel Paper, Documents, Investment Property,
Instruments or Pledged Deposits, and any other rights or claims to receive money which are General
Intangibles or which are otherwise included as Collateral.
“Section” means a numbered section of this Security Agreement, unless another document
is specifically referenced.
“Security” shall have the meaning set forth in Article 8 of
the UCC.
“Securities Account” has the meaning set forth in
Article 8 of the UCC.
“Stock Rights” means any securities, dividends, instruments or other distributions and
any other right or property which any Grantor shall receive or shall become entitled to receive for
any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interest
constituting Collateral, any right to receive an Equity Interest and any right to receive earnings,
in which any Grantor now has or hereafter acquires any right, issued by an issuer of such
securities.
| “Supporting Obligation” shall have the meaning set forth in Article 9 of the UCC. |
“Voting Power” means with respect to any share of Voting Stock, the number of votes
that the holder of such share may cast in an election of members of the Board of Directors (or
analogous governing body) of the issuer of such share.
The foregoing definitions shall be equally applicable to both the singular and plural forms of
the defined terms.
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ARTICLE II
GRANT OF SECURITY INTEREST
Each of the Grantors hereby pledges, assigns and grants to the Administrative Agent, on behalf
of and for the benefit of the Secured Parties, a security interest in all of such Grantor’s right,
title and interest, whether now owned or hereafter acquired, in and to the Collateral to secure the
prompt and complete payment and performance of the Secured Obligations; provided that,
notwithstanding anything to the contrary contained in this Article II, the amount of Equity
Interests in any First-Tier Foreign Subsidiary that is an Affected Foreign Subsidiary pledged or
required to be pledged to the Administrative Agent hereunder or under any other Collateral Document
shall be automatically limited to the Voting Stock of such First-Tier Foreign Subsidiary
representing not more than 65% of the total Voting Power of all outstanding Voting Stock of such
First-Tier Foreign Subsidiary (and the term “Collateral” shall not include any other Equity
Interests of such First-Tier Foreign Subsidiary).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of the Initial Grantors represents and warrants to the Administrative Agent and the
Secured Parties, and each Grantor that becomes a party to this Security Agreement pursuant to the
execution of a Security Agreement Supplement in substantially the form of Annex I
represents and warrants (after giving effect to supplements to each of the Exhibits hereto with
respect to such subsequent Grantor as attached to such Security Agreement Supplement), that:
3.1. Title, Authorization, Validity and Enforceability. Such Grantor has good and
valid rights in or the power to transfer the Collateral owned by it and title to the Collateral
with respect to which it has purported to grant a security interest hereunder, free and clear of
all Liens except for Liens permitted under Section 4.1.6 hereof, and has full corporate,
limited liability company or partnership, as applicable, power and authority to grant to the
Administrative Agent the security interest in such Collateral pursuant hereto. The execution and
delivery by such Grantor of this Security Agreement have been duly authorized by proper corporate,
limited liability company, limited partnership or partnership, as applicable, proceedings, and this
Security Agreement constitutes a legal, valid and binding obligation of such Grantor and creates a
security interest which is enforceable against such Grantor in all Collateral it now owns or
hereafter acquires, except as enforceability may be limited by (i) bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws relating to or affecting the enforcement of
creditors’ rights generally, (ii) general equitable principles (whether considered in a proceeding
in equity or at law), and (iii) requirements of reasonableness, good faith and fair dealing. When
financing statements have been filed in the appropriate offices against such Grantor in the
locations listed in Exhibit “E”, the Administrative Agent will have a fully perfected first
priority security interest in the Collateral owned by such Grantor in which a security interest may
be perfected by filing of a financing statement under the UCC, subject only to Liens permitted
under Section 4.1.6 hereof.
3.2. Conflicting Laws and Contracts. Neither the execution and delivery by such
Grantor of this Security Agreement, the creation and perfection of the security interest in the
Collateral granted hereunder, nor compliance with the terms and provisions hereof will violate (i)
any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on such
Grantor, or (ii) such Grantor’s charter, articles or certificate of incorporation, partnership
agreement or by-laws (or similar constitutive documents), or (iii) the provisions of any indenture,
instrument or agreement to which
such Grantor is a party or is subject, or by which it, or its property may be bound or
affected, or conflict with or constitute a default thereunder, or result in or require the creation
or imposition of any Lien in, of or on the property
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of such Grantor pursuant to the terms of any such indenture, instrument or agreement (other than
any Lien of the Administrative Agent on behalf of the Secured Parties).
3.3. Principal Location. Such Grantor’s mailing address and the location of its place
of business (if it has only one) or its chief executive office (if it has more than one place of
business), are disclosed in Exhibit “A”; such Grantor has no other places of business
except those set forth in Exhibit “A”.
3.4. Property Locations. The Inventory, Equipment and Fixtures of each Grantor are
located solely at the locations of such Grantor described in Exhibit “A”. All of said
locations are owned by such Grantor except for locations (i) which are leased by such Grantor as
lessee and designated in Part B of Exhibit “A” and (ii) at which Inventory is held in a
public warehouse or is otherwise held by a bailee or on consignment by such Grantor as designated
in Part C of Exhibit “A”.
3.5. No Other Names; Etc.. Within the five-year period ending as of the date such
Person becomes a Grantor hereunder, such Grantor has not conducted business under any name, changed
its jurisdiction of formation, merged with or into or consolidated with any other Person, except as
disclosed in Exhibit “A”. The name in which such Grantor has executed this Security
Agreement is the exact name as it appears in such Grantor’s organizational documents, as amended,
as filed with such Grantor’s jurisdiction of organization as of the date such Person becomes a
Grantor hereunder.
3.6. No Default. No Default or Event of Default exists.
3.7. Accounts and Chattel Paper. The names of the obligors, amounts owing, due dates
and other information with respect to the Accounts and Chattel Paper owned by such Grantor are and
will be correctly stated in all records of such Grantor relating thereto and in all invoices and
reports with respect thereto furnished to the Administrative Agent by such Grantor from time to
time. As of the time when each Account or each item of Chattel Paper arises, such Grantor shall be
deemed to have represented and warranted that such Account or Chattel Paper, as the case may be,
and all records relating thereto, are genuine and in all respects what they purport to be.
3.8. Filing Requirements. None of the Equipment owned by such Grantor is covered by
any certificate of title, except for motor vehicles. None of the Collateral owned by such Grantor
is of a type for which security interests or liens may be perfected by filing under any federal
statute except for motor vehicles. The legal description, county and street address of the property
on which any Fixtures owned by such Grantor are located is set forth in Exhibit “C”
together with the name and address of the record owner of each such property.
3.9. No Financing Statements, Security Agreements. No financing statement or security
agreement describing all or any portion of the Collateral which has not lapsed or been terminated
naming such Grantor as debtor has been filed or is of record in any jurisdiction except financing
statements (i) naming the Administrative Agent on behalf of the Secured Parties as the secured
party and (ii) in respect of Liens permitted by Section 6.02 of the Credit Agreement;
provided, that nothing herein shall be deemed to constitute an agreement to subordinate any
of the Liens of the Administrative Agent under the Loan Documents to any Liens otherwise permitted
under Section 6.02 of the Credit Agreement.
3.10. Federal Employer Identification Number; State Organization Number; Jurisdiction of
Organization. Such Grantor’s federal employer identification number is, and if such Grantor is
a
registered organization, such Grantor’s State of organization, type of organization and State
of organization identification number are, listed in Exhibit “G”.
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3.11. Pledged Securities and Other Investment Property. Exhibit “D” sets forth
a complete and accurate list of the Instruments, Securities and other Investment Property
constituting Collateral and delivered to the Administrative Agent. Each Grantor is the direct and
beneficial owner of each Instrument, Security and other type of Investment Property listed in
Exhibit “D” as being owned by it, free and clear of any Liens, except for the security
interest granted to the Administrative Agent for the benefit of the Secured Parties hereunder or as
permitted by Section 6.02 of the Credit Agreement. Each Grantor further represents and warrants
that (i) all Pledged Collateral owned by it constituting an Equity Interest has been (to the extent
such concepts are relevant with respect to such Pledged Collateral) duly authorized and validly
issued, are fully paid and non-assessable and constitute the percentage of the issued and
outstanding shares of stock (or other Equity Interests) of the respective issuers thereof indicated
in Exhibit “D” hereto, (ii) with respect to any certificates delivered to the
Administrative Agent representing an Equity Interest, either such certificates are Securities as
defined in Article 8 of the UCC of the applicable jurisdiction as a result of actions by the issuer
or otherwise, or, if such certificates are not Securities, such Grantor has so informed the
Administrative Agent so that the Administrative Agent may take steps to perfect its security
interest therein as a General Intangible and (iii) to the extent requested by the Administrative
Agent, all such Pledged Collateral held by a securities intermediary is covered by a control
agreement among such Grantor, the securities intermediary and the Administrative Agent pursuant to
which the Administrative Agent has Control.
3.12. Deposit Accounts and Securities Accounts. All of such Grantor’s Deposit Accounts
and Securities Accounts are listed on Exhibit “H”.
ARTICLE IV
COVENANTS
From the date of this Security Agreement and thereafter until this Security Agreement is
terminated, each of the Initial Grantors agrees, and from and after the effective date of any
Security Agreement Supplement applicable to any Grantor (and after giving effect to supplements to
each of the Exhibits hereto with respect to such subsequent Grantor as attached to such Security
Agreement Supplement) and thereafter until this Security Agreement is terminated each such
subsequent Grantor agrees:
4.1. General.
4.1.1 Inspection. Each Grantor will permit the Administrative Agent or any
Secured Party, by its representatives and agents (i) to inspect the Collateral, (ii) to
examine and make copies of the records of such Grantor relating to the Collateral and (iii)
to discuss the Collateral and the related records of such Grantor with, and to be advised as
to the same by, such Grantor’s officers and employees (and, in the case of any Receivable,
with any person or entity which is or may be obligated thereon), all at such reasonable
times and intervals as the Administrative Agent or such Secured Party may determine, upon
reasonable notice by the Administrative Agent or such Secured Party to such Grantor and all
at such Grantor’s expense.
4.1.2 Taxes. Such Grantor will pay when due all taxes, assessments and
governmental charges and levies upon the Collateral owned by such Grantor, except (i) those
which are being contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside in accordance with GAAP and with respect to which no
Lien exists, and (ii) those which by reason of the amount involved or the remedies available
to the taxing authority could not reasonably be expected to have a Material Adverse Effect.
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4.1.3 Records and Reports; Notification of Default. Each Grantor shall keep and
maintain complete, accurate and proper books and records with respect to the Collateral
owned by such Grantor, and furnish to the Administrative Agent, such reports relating to the
Collateral as the Administrative Agent shall from time to time reasonably request. Each
Grantor will give prompt notice in writing to the Administrative Agent and the Lenders of
the occurrence of any Default or Event of Default and of any other development, financial or
otherwise, which might materially and adversely affect the Collateral.
4.1.4 Financing Statements and Other Actions; Defense of Title. Each Grantor
hereby authorizes the Administrative Agent to file, and if requested will execute and
deliver to the Administrative Agent, all financing statements describing the Collateral
owned by such Grantor and other documents and take such other actions as may from time to
time reasonably be requested by the Administrative Agent in order to maintain a first
priority, perfected security interest in and, if applicable, Control of, the Collateral
owned by such Grantor, subject to Liens permitted under Section 6.02 of the Credit
Agreement, provided that nothing herein shall be deemed to constitute an agreement to
subordinate any of the Liens of the Administrative Agent under the Loan Documents to any
Liens otherwise permitted under Section 6.02 of the Credit Agreement. Such financing
statements may describe the Collateral in the same manner as described herein or may contain
an indication or description of collateral that describes such property in any other manner
as the Administrative Agent may determine, in its sole discretion, is necessary, advisable
or prudent to ensure that the perfection of the security interest in the Collateral granted
to the Administrative Agent herein, including, without limitation, describing such property
as “all assets of the debtor whether now owned or hereafter acquired and wheresoever
located, including all accessions thereto and proceeds thereof.” To the extent requested by
the Borrower in connection with Intellectual Property being sold, disposed or otherwise
transferred to a third-party purchaser, the Administrative Agent shall confirm in writing
that Collateral does not include Intellectual Property and shall prepare and provide such
UCC-3 amendments as are reasonably requested by the Borrower demonstrating that such
Intellectual Property does not constitute Collateral, such confirmations and UCC-3
amendments to be in form and substance reasonably satisfactory to the Administrative Agent.
Each Grantor will take any and all actions necessary to defend title to the Collateral owned
by such Grantor against all persons and to defend the security interest of the
Administrative Agent in such Collateral and the priority thereof against any Lien not
expressly permitted hereunder.
4.1.5 Disposition of Collateral. No Grantor will sell, lease or otherwise
dispose of the Collateral owned by such Grantor except (i) so long as no Default has
occurred and is continuing, dispositions specifically permitted pursuant to Section 6.03 of
the Credit Agreement, (ii) until such time during the continuation of a Default as such
Grantor receives a notice from the Administrative Agent instructing such Grantor to cease
such transactions, sales or leases of Inventory in the ordinary course of business, and
(iii) until such time as such Grantor receives a notice from the Administrative Agent
pursuant to Article VII, proceeds of Inventory and Accounts collected in the
ordinary course of business.
4.1.6 Liens. No Grantor will create, incur, or suffer to exist any Lien on the
Collateral owned by such Grantor except Liens permitted pursuant to Section 6.02 of the
Credit Agreement, provided, that nothing herein shall be deemed to constitute an agreement
to subordinate any of the Liens of the Administrative Agent under the Loan Documents to any
Liens otherwise permitted under Section 6.02 of the Credit Agreement.
4.1.7 Change in Corporate Existence, Type or Jurisdiction of Organization,
Location, Name. Each Grantor will:
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| (i) | preserve its existence and corporate structure as in effect on the Effective Date; | ||
| (ii) | not change its name or jurisdiction of organization; | ||
| (iii) | not maintain its place of business (if it has only one) or its chief executive office (if it has more than one place of business) at a location other than a location specified in Exhibit “A”; and | ||
| (iv) | not (i) have any Inventory, Equipment or Fixtures or proceeds or products thereof (other than Inventory and proceeds thereof disposed of as permitted by Section 4.1.5) at a location other than a location specified in Exhibit “A”, (ii) change its taxpayer identification number or (iii) change its mailing address, |
unless, in each such case, such Grantor shall have given the Administrative Agent not less
than ten (10) days’ prior written notice of such event or occurrence and the Administrative
Agent shall have either (x) determined in good faith that such event or occurrence will not
adversely affect the validity, perfection or priority of the Administrative Agent’s security
interest in the Collateral, or (y) taken such steps (with the cooperation of such Grantor to
the extent necessary or advisable) as are necessary or advisable to properly maintain the
validity, perfection and priority of the Administrative Agent’s security interest in the
Collateral owned by such Grantor.
4.1.8 Other Financing Statements. No Grantor will suffer to exist or authorize
the filing of any financing statement naming it as debtor covering all or any portion of the
Collateral owned by such Grantor, except any financing statement authorized under
Section 4.1.4 hereof. Each Grantor acknowledges that it is not authorized to file
any financing statement or amendment or termination statement with respect to any financing
statement filed in connection herewith without the prior written consent of the
Administrative Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.
4.2. Receivables.
4.2.1 Certain Agreements on Receivables. During the occurrence and continuation
of a Default, no Grantor will make or agree to make any discount, credit, rebate or other
reduction in the original amount owing on a Receivable or accept in satisfaction of a
Receivable less than the original amount thereof. Notwithstanding the foregoing, such
Grantor may reduce the amount of Accounts arising from the sale of Inventory or the
rendering of services in accordance with its present policies and in the ordinary course of
business and as otherwise permitted under the Credit Agreement, whether or not a Default has
occurred and is continuing.
4.2.2 Collection of Receivables. Except as otherwise provided in this Security
Agreement, each Grantor will collect and enforce, at such Grantor’s sole expense, all
amounts due or hereafter due to such Grantor under the Receivables owned by such Grantor.
4.2.3 Delivery of Invoices. Each Grantor will deliver to the Administrative
Agent immediately upon its request during the continuation of a Default duplicate invoices
with respect to each Account owned by such Grantor bearing such language of assignment as
the Administrative Agent shall specify.
4.2.4 Disclosure of Counterclaims on Receivables. If (i) any discount, credit
or agreement to make a rebate or to otherwise reduce the amount owing on a Receivable owned
by such Grantor exists or (ii) if, to the knowledge of such Grantor, any dispute, setoff,
claim,
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counterclaim or defense exists or has been asserted or threatened with respect to a
Receivable, such Grantor will disclose such fact to the Administrative Agent in writing in
connection with the inspection by the Administrative Agent of any record of such Grantor
relating to such Receivable and in connection with any invoice or report furnished by such
Grantor to the Administrative Agent relating to such Receivable.
4.2.5 Electronic Chattel Paper. Each Grantor shall take all steps necessary to
grant the Administrative Agent Control of all electronic chattel paper in accordance with
the UCC and all “transferable records” as defined in each of the Uniform Electronic
Transactions Act and the Electronic Signatures in Global and National Commerce Act.
4.3. Maintenance of Goods. Each Grantor will do all things necessary to maintain,
preserve, protect and keep the Inventory and the Equipment owned by such Grantor in good repair,
working order and saleable condition (ordinary wear and tear excepted) and make all necessary and
proper repairs, renewals and replacements so that its business carried on in connection therewith
may be properly conducted at all times, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
4.4. Instruments, Securities, Chattel Paper, Documents and Pledged Deposits. Each
Grantor will (i) deliver to the Administrative Agent immediately upon execution of this Security
Agreement the originals of all Chattel Paper, Securities (to the extent certificated) and
Instruments (to the extent in an amount in excess of $2,000,000 in the case of intercompany notes)
constituting Collateral (if any then exist), (ii) hold in trust for the Administrative Agent upon
receipt and immediately thereafter deliver to the Administrative Agent any Chattel Paper,
Securities and Instruments constituting Collateral, (iii) upon the designation of any Pledged
Deposits (as set forth in the definition thereof), deliver to the Administrative Agent such Pledged
Deposits which are evidenced by certificates included in the Collateral endorsed in blank, marked
with such legends and assigned as the Administrative Agent shall specify, (iv) upon the
Administrative Agent’s request, after the occurrence and during the continuation of a Default,
deliver to the Administrative Agent (and thereafter hold in trust for the Administrative Agent upon
receipt and immediately deliver to the Administrative Agent) any Document evidencing or
constituting Collateral, and (v) upon the Administrative Agent’s request, deliver to the
Administrative Agent a duly executed amendment to this Security Agreement, in the form of
Exhibit “I” hereto (the “Amendment”), pursuant to which such Grantor will pledge
such additional Collateral. Such Grantor hereby authorizes the Administrative Agent to attach each
Amendment to this Security Agreement and agrees that all additional Collateral owned by it set
forth in such Amendments shall be considered to be part of the Collateral.
4.5. Uncertificated Securities and Certain Other Investment Property. Each Grantor
will permit the Administrative Agent from time to time to cause the appropriate issuers (and, if
held with a securities intermediary, such securities intermediary) of uncertificated securities or
other types of Investment Property not represented by certificates which are Collateral owned by
such Grantor to xxxx their books and records with the numbers and face amounts of all such
uncertificated securities or other types of Investment Property not represented by certificates and
all rollovers and replacements therefor to reflect the Lien of the Administrative Agent granted
pursuant to this Security Agreement. To the extent requested by the Administrative Agent, each
Grantor will use all commercially reasonable efforts, with respect to Investment Property
constituting Collateral owned by such Grantor held with a financial intermediary, to cause such
financial intermediary to enter into a control agreement with the Administrative Agent in form and
substance reasonably satisfactory to the Administrative Agent.
4.6. Stock and Other Ownership Interests.
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4.6.1 Changes in Capital Structure of Issuers. Except as permitted in the
Credit Agreement, or with respect to NXTHERA, Inc. to the extent it does not constitute a
Subsidiary, no Grantor will (i) permit or suffer any issuer of privately held corporate
securities or other ownership interests in a corporation, partnership, joint venture or
limited liability company constituting Collateral owned by such Grantor to dissolve,
liquidate, retire any of its capital stock or other Instruments or Securities evidencing
ownership, reduce its capital or merge or consolidate with any other entity, or (ii) vote
any of the Instruments, Securities or other Investment Property in favor of any of the
foregoing except to the extent permitted under Section 6.03 of the Credit Agreement.
4.6.2 Issuance of Additional Securities. No Grantor will permit or suffer the
issuer of privately held corporate securities or other ownership interests in a corporation,
partnership, joint venture or limited liability company constituting Collateral to issue any
such securities or other ownership interests, any right to receive the same or any right to
receive earnings, except to such Grantor.
4.6.3 Registration of Pledged Securities and other Investment Property. Each
Grantor will permit any registrable Collateral owned by such Grantor to be registered in the
name of the Administrative Agent or its nominee at any time at the option of the Required
Lenders following the occurrence and during the continuance of an Event of Default and
without any further consent of such Grantor.
4.6.4 Exercise of Rights in Pledged Securities and other Investment Property.
Each Grantor will permit the Administrative Agent or its nominee at any time after the
continuance of a Default, without notice, to exercise or refrain from exercising any and all
voting and other consensual rights pertaining to the Collateral owned by such Grantor or any
part thereof, and to receive all dividends and interest in respect of such Collateral.
4.7. Deposit Accounts. Each Grantor will (i) upon the Administrative Agent’s request,
cause each bank or other financial institution in which it maintains (a) a Deposit Account (with an
average daily balance in excess of $2,000,000) to enter into a control agreement with the
Administrative Agent, in form and substance satisfactory to the Administrative Agent in order to
give the Administrative Agent Control of the Deposit Account or (b) other deposits (general or
special, time or demand, provisional or final) to be notified of the security interest granted to
the Administrative Agent hereunder and cause each such bank or other financial institution to
acknowledge such notification in writing and (ii) upon the Administrative Agent’s request after the
occurrence and during the continuance of a Default, deliver to each such bank or other financial
institution a letter, in form and substance acceptable to the Administrative Agent, transferring
ownership of the Deposit Account to the Administrative Agent or transferring dominion and control
over each such other deposit to the Administrative Agent until such time as no Default exists. In
the case of deposits maintained with Lenders, the terms of such letter shall be subject to the
provisions of the Credit Agreement regarding setoffs.
4.8. Letter-of-Credit Rights. Each Grantor will, upon the Administrative Agent’s
request, cause each issuer of a letter of credit, to consent to the assignment of proceeds of such
letter of credit in order to give the Administrative Agent Control of the Letter of Credit Rights
to such letter of credit.
4.9. Federal, State or Municipal Claims. Each Grantor will notify the Administrative
Agent of any Collateral owned by such Grantor which constitutes a claim against the United States
government or any state or local government or any instrumentality or agency thereof, the
assignment of which claim is restricted by federal, state or municipal law. Furthermore, in the
event the aggregate amount
of such claims are in excess of $2,000,000, each Grantor will execute and deliver to the
Administrative Agent
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such documents, agreements and instruments, and will take such further actions (including, without
limitation, the taking of necessary actions under the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.)), which the Administrative Agent may,
from time to time, reasonably request, to ensure perfection and priority of the Liens hereunder in
respect of Accounts and General Intangibles owing by any government or instrumentality or agency
thereof, all at the expense of the Borrower.
4.10. No Interference. Each Grantor agrees that it will not interfere with any right,
power and remedy of the Administrative Agent provided for in this Security Agreement or now or
hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of
the exercise by the Administrative Agent of any one or more of such rights, powers or remedies.
4.11. Insurance. In the event any Collateral is located in any area that has been
designated by the Federal Emergency Management Agency as a “Special Flood Hazard Area”, each
Grantor shall purchase and maintain flood insurance on such Collateral (including any personal
property which is located on any real property leased by such Loan Party within a “Special Flood
Hazard Area”). The amount of flood insurance required by this Section shall be in an amount equal
to the lesser of the total Commitment or the total replacement cost value of the improvements.
4.12. Commercial Tort Claims. If, after the date hereof, any Grantor identifies the
existence of a Commercial Tort Claim belonging to such Grantor that has arisen in the course of
such Grantor’s business in addition to the Commercial Tort Claims described in Exhibit “F”,
which are all of such Grantor’s Commercial Tort Claims as of the Effective Date, then such Grantor
shall give the Administrative Agent prompt notice thereof, but in any event not less frequently
than quarterly. Each Grantor agrees promptly upon request by the Administrative Agent to execute
and deliver to the Administrative Agent any supplement to this Security Agreement or any other
document reasonably requested by the Administrative Agent to evidence the grant of a security
interest therein in favor of the Administrative Agent.
4.13. Updating of Exhibits to Security Agreement. The Borrower will provide to the
Administrative Agent, concurrently with the delivery of the certificate of a Financial Officer of
the Borrower as required by Section 5.01(c) of the Credit Agreement, updated versions of
the Exhibits to this Security Agreement (provided that if there have been no changes to any such
Exhibits since the previous updating thereof required hereby, the Borrower shall indicate that
there has been “no change” to the applicable Exhibit(s)); provided that, other than with
respect to the changes described in clauses (i) and (ii) of Section 4.1.7 and so long as the
Leverage Ratio is less than 3.0 to 1.0, the Borrower may elect to not provide such updates until
the earlier of (x) the delivery of such certificate in respect of its annual financial statements
described in Section 5.01(a) of the Credit Agreement and (y) the delivery of each
certificate required by Section 5.01(c) of the Credit Agreement after there are Loans
outstanding under the Credit Agreement in excess of $20,000,000.
ARTICLE V
DEFAULT
5.1. The occurrence of any one or more of the following events shall constitute a Default:
5.1.1 Any representation or warranty made by or on behalf of any Grantor under or in
connection with this Security Agreement shall be materially false as of the date on which
made.
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5.1.2 The breach by any Grantor of any of the terms or provisions of Article IV
or Article VII.
5.1.3 The breach by any Grantor (other than a breach which constitutes a Default under
Section 5.1.1 or 5.1.2 hereof) of any of the terms or provisions of this
Security Agreement which is not remedied within thirty (30) days after the giving of written
notice to such Grantor by the Administrative Agent.
5.1.4 Any material portion of the Collateral shall be transferred or otherwise disposed
of, either voluntarily or involuntarily, in any manner not permitted by Section 4.1.5
or 8.8 hereof or shall be lost, stolen, damaged or destroyed.
5.1.5 The occurrence of any “Event of Default” under, and as defined in, the Credit
Agreement.
5.2. Remedies.
5.2.1 Upon the occurrence of a Default, the Administrative Agent may, and at the direction of
the Required Lenders shall, exercise any or all of the following rights and remedies:
| (i) | Those rights and remedies provided in this Security Agreement, the Credit Agreement, or any other Loan Document, provided that this clause (i) shall not be understood to limit any rights or remedies available to the Administrative Agent and the Secured Parties prior to a Default. | ||
| (ii) | Those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral) or under any other applicable law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement. | ||
| (iii) | Give notice of sole control or any other instruction under any Deposit Account Control Agreement or other control agreement with any securities intermediary and take any action therein with respect to such Collateral. | ||
| (iv) | Without notice (except as specifically provided in Section 8.1 hereof or elsewhere herein, demand or advertisement of any kind to any Grantor or any other Person) enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at any Grantor’s premises of elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Administrative Agent may deem commercially reasonable. | ||
| (v) | Concurrently with written notice to the applicable Grantor, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, to exercise the voting and all other rights as a holder with respect thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect |
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| to the Pledged Collateral as though the Administrative Agent was the outright owner thereof. |
5.2.2 The Administrative Agent, on behalf of the Secured Parties, may comply with any
applicable state or federal law requirements in connection with a disposition of the
Collateral, and such compliance will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.
5.2.3 The Administrative Agent shall have the right upon any such public sale or sales
and, to the extent permitted by law, upon any such private sale or sales, to purchase for
the benefit of the Administrative Agent and the other Secured Parties, the whole or any part
of the Collateral so sold, free of any right of equity redemption, which equity redemption
the Grantor hereby expressly releases.
5.2.4 Until the Administrative Agent is able to effect a sale, lease, or other
disposition of Collateral, the Administrative Agent shall have the right to hold or use
Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of
preserving Collateral or its value or for any other purpose deemed appropriate by the
Administrative Agent. The Administrative Agent may, if it so elects, seek the appointment of
a receiver or keeper to take possession of Collateral and to enforce any of the
Administrative Agent’s remedies (for the benefit of the Administrative Agent and other
Secured Parties), with respect to such appointment without prior notice or hearing as to
such appointment.
5.2.5 If, after the Credit Agreement has terminated by its terms and all of the Secured
Obligations have been paid in full, there remain outstanding Swap Obligations or Banking
Services Obligations, the Required Lenders may exercise the remedies provided in this
Section 5.2 upon the occurrence of any event which would allow or require the termination or
acceleration of any Swap Obligations or Banking Services Obligations.
5.2.6 Notwithstanding the foregoing, neither the Administrative Agent nor any other
Secured Party shall be required to (i) make any demand upon, or pursue or exhaust any of
their rights or remedies against, any Grantor, any other obligor, guarantor, pledgor or any
other Person with respect to the payment of the Secured Obligations or to pursue or exhaust
any of their rights or remedies with respect to any Collateral therefor or any direct or
indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Secured
Obligations or to resort to the Collateral or any such guarantee in any particular order, or
(iii) effect a public sale of any Collateral.
5.2.7 Each Grantor recognizes that the Administrative Agent may be unable to effect a
public sale of any or all the Pledged Collateral and may be compelled to resort to one or
more private sales thereof in accordance with Section 5.2.1 above. Each Grantor also
acknowledges that any private sale may result in prices and other terms less favorable to
the seller than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall not be deemed to have been made in a commercially
unreasonable manner solely by virtue of such sale being private. The Administrative Agent
shall be under no obligation to delay a sale of any of the Pledged Collateral for the period
of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register
such securities for public sale under the Securities Act of 1933, as amended, or under
applicable state securities laws, even if the applicable Grantor and the issuer would agree
to do so.
5.3. Grantors’ Obligations Upon Default. Upon the request of the Administrative Agent
after the occurrence of a Default, each Grantor will:
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5.3.1 Assembly of Collateral. Assemble and make available to the Administrative
Agent the Collateral and all books and records relating thereto at any place or places
specified by the Administrative Agent.
5.3.2 Secured Party Access. Permit the Administrative Agent, by the
Administrative Agent’s representatives and agents, to enter, occupy and use any premises
where all or any part of the Collateral, or the books and records relating thereto, or both,
are located, to take possession of all or any part of the Collateral, or the books and
records relating thereto, or both, to remove all or any part of the Collateral, or the books
and records relating thereto, or both, and to conduct sales of the Collateral, without any
obligation to pay the Grantor for such use and occupancy.
5.3.3 Take, or cause an issuer of Pledged Collateral to take, any and all actions
necessary to register or qualify the Pledged Collateral to enable the Administrative Agent
to consummate a public sale or other disposition of the Pledged Collateral.
5.4. License. The Administrative Agent is hereby granted a license or other right to
use, following the occurrence and during the continuance of a Default, without charge, each
Grantor’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks, customer lists and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in completing production of, advertising for sale, and
selling any Collateral, and, following the occurrence and during the continuance of a Default, such
Grantor’s rights under all licenses and all franchise agreements shall inure to the Administrative
Agent’s benefit for the limited purpose of liquidating the Collateral. In addition, each Grantor
hereby irrevocably agrees that the Administrative Agent may, following the occurrence and during
the continuance of a Default, sell any of such Grantor’s Inventory directly to any person,
including without limitation persons who have previously purchased such Grantor’s Inventory from
such Grantor and in connection with any such sale or other enforcement of the Administrative
Agent’s rights under this Security Agreement, may sell Inventory which bears any trademark owned by
or licensed to such Grantor and any Inventory that is covered by any copyright owned by or licensed
to such Grantor and the Administrative Agent may finish any work in process and affix any trademark
owned by or licensed to such Grantor and sell such Inventory as provided herein.
ARTICLE VI
WAIVERS, AMENDMENTS AND REMEDIES
No delay or omission of the Administrative Agent or any Secured Party to exercise any right or
remedy granted under this Security Agreement shall impair such right or remedy or be construed to
be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any
such right or remedy shall not preclude any other or further exercise thereof or the exercise of
any other right or remedy. No waiver, amendment or other variation of the terms, conditions or
provisions of this Security Agreement whatsoever shall be valid unless in writing signed by the
Administrative Agent and each Grantor, and then only to the extent in such writing specifically set
forth, provided that the addition of any Subsidiary as a Grantor hereunder by execution of a
Security Agreement Supplement in the form of Annex I (with such modifications as shall be
acceptable to the Administrative Agent) shall not require receipt of any consent from or execution
of any documentation by any other Grantor party hereto. All rights and remedies contained in this
Security Agreement or by law afforded shall be cumulative and all shall be available to the
Administrative Agent and the Secured Parties until the Secured Obligations have been paid in full.
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ARTICLE VII
PROCEEDS; COLLECTION OF RECEIVABLES
7.1. Lockboxes. Upon request of the Administrative Agent after the occurrence and
during the continuation of a Default, each Grantor shall execute and deliver to the Administrative
Agent irrevocable lockbox agreements in the form provided by or otherwise acceptable to the
Administrative Agent, which agreements shall be accompanied by an acknowledgment by the bank where
the lockbox is located of the Lien of the Administrative Agent granted hereunder and of irrevocable
instructions to wire all amounts collected therein to a special collateral account at the
Administrative Agent.
7.2. Collection of Receivables. The Administrative Agent may at any time after the
occurrence and during the continuation of a Default, by giving each Grantor written notice, elect
to require that the Receivables be paid directly to the Administrative Agent for the benefit of the
Secured Parties. In such event, each Grantor shall, and shall permit the Administrative Agent to,
promptly notify the account debtors or obligors under the Receivables owned by such Grantor of the
Administrative Agent’s interest therein and direct such account debtors or obligors to make payment
of all amounts then or thereafter due under such Receivables directly to the Administrative Agent.
Upon receipt of any such notice from the Administrative Agent, each Grantor shall thereafter hold
in trust for the Administrative Agent, on behalf of the Secured Parties, all amounts and proceeds
received by it with respect to the Receivables and Other Collateral and immediately and at all
times thereafter deliver to the Administrative Agent all such amounts and proceeds in the same form
as so received, whether by cash, check, draft or otherwise, with any necessary endorsements. The
Administrative Agent shall hold and apply funds so received as provided by the terms of
Sections 7.3 and 7.4 hereof.
7.3. Special Collateral Account. After the occurrence and during the continuation of a
Default, the Administrative Agent may require all cash proceeds of the Collateral to be deposited
in a special non-interest bearing cash collateral account with the Administrative Agent and held
there as security for the Secured Obligations. No Grantor shall have any control whatsoever over
said cash collateral account. If no Secured Obligations are outstanding or if the outstanding
Secured Obligations are cash collateralized as required under the Credit Agreement, the
Administrative Agent shall immediately deposit the collected balances in said cash collateral
account into the applicable Grantor’s general operating account with the Administrative Agent. If
there are Secured Obligations outstanding, and such Secured Obligations are not cash collateralized
as may be required under the Credit Agreement, the Administrative Agent may (and shall, at the
direction of the Required Lenders), from time to time, apply the collected balances in said cash
collateral account to the payment of the Secured Obligations whether or not the Secured Obligations
shall then be due.
7.4. Application of Proceeds. The proceeds of the Collateral shall be applied by the
Administrative Agent to payment of the Secured Obligations as provided under Section 2.18
of the Credit Agreement.
ARTICLE VIII
GENERAL PROVISIONS
8.1. Notice of Disposition of Collateral; Condition of Collateral. Each Grantor hereby
waives notice of the time and place of any public sale or the time after which any private sale or
other disposition of all or any part of the Collateral may be made. To the extent such notice may
not be waived under applicable law, any notice made shall be deemed reasonable if sent to the
Borrower,
addressed as set forth in Article IX, at least ten (10) days prior to (i) the date of
any such public sale or (ii) the time after which
15
any such private sale or other disposition may be made. The Administrative Agent shall have
no obligation to clean-up or otherwise prepare the Collateral for sale. To the maximum extent
permitted by applicable law, each Grantor waives all claims, damages, and demands against the
Administrative Agent or any other Secured Party arising out of the repossession, retention or sale
of the Collateral, except such as arise solely out of the gross negligence or willful misconduct of
the Administrative Agent or such other Secured Party as finally determined by a court of competent
jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives
and relinquishes the benefit and advantage of, and covenants not to assert against the
Administrative Agent or any other Secured Party, any valuation, stay, appraisal, extension,
moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety
now or hereafter existing which, but for this provision, might be applicable to the sale of any
Collateral made under the judgment, order or decree of any court, or privately under the power of
sale conferred by this Security Agreement, or otherwise. Except as otherwise specifically provided
herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum
extent permitted by applicable law) of any kind in connection with this Security Agreement or any
Collateral.
8.2. Limitation on Administrative Agent’s and other Secured Parties’ Duty with Respect to
the Collateral. The Administrative Agent shall have no obligation to clean-up or otherwise
prepare the Collateral for sale. The Administrative Agent and each other Secured Party shall use
reasonable care with respect to the Collateral in its possession or under its control. Neither the
Administrative Agent nor any other Secured Party shall have any other duty as to any Collateral in
its possession or control or in the possession or control of any agent or nominee of the
Administrative Agent or such other Secured Party, or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto. To the extent that
applicable law imposes duties on the Administrative Agent to exercise remedies in a commercially
reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for the
Administrative Agent (i) to fail to incur expenses deemed significant by the Administrative Agent
to prepare Collateral for disposition or otherwise to transform raw material or work in process
into finished goods or other finished products for disposition, (ii) to fail to obtain third party
consents for access to Collateral to be disposed of, or to obtain or, if not required by other law,
to fail to obtain governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against
account debtors or other Persons obligated on Collateral or to remove Liens on or any adverse
claims against Collateral, (iv) to exercise collection remedies against account debtors and other
Persons obligated on Collateral directly or through the use of collection agencies and other
collection specialists, (v) to advertise dispositions of Collateral through publications or media
of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact
other Persons, whether or not in the same business as such Grantor, for expressions of interest in
acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers
to assist in the disposition of Collateral, whether or not the Collateral is of a specialized
nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of
assets of the types included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail
markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi)
to purchase insurance or credit enhancements to insure the Administrative Agent against risks of
loss, collection or disposition of Collateral or to provide to the Administrative Agent a
guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed
appropriate by the Administrative Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Administrative Agent in the collection
or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this
Section 8.2 is to provide non-exhaustive indications of what actions or omissions by the
Administrative Agent would be commercially reasonable in the Administrative Agent’s exercise of
remedies against the Collateral and that other actions or omissions
by the Administrative Agent shall not be deemed commercially unreasonable solely on account of
not being indicated in this Section 8.2. Without limitation upon the foregoing, nothing
contained in this Section 8.2 shall be construed to grant
16
any rights to any Grantor or to impose any duties on the Administrative Agent that would not have
been granted or imposed by this Security Agreement or by applicable law in the absence of this
Section 8.2.
8.3. Compromises and Collection of Collateral. Each Grantor and the Administrative
Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors
with respect to certain of the Receivables, that certain of the Receivables may be or become
uncollectible in whole or in part and that the expense and probability of success in litigating a
disputed Receivable may exceed the amount that reasonably may be expected to be recovered with
respect to a Receivable. In view of the foregoing, each Grantor agrees that the Administrative
Agent may at any time and from time to time, if a Default has occurred and is continuing,
compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount
as the Administrative Agent in its sole discretion shall determine or abandon any Receivable, and
any such action by the Administrative Agent shall be commercially reasonable so long as the
Administrative Agent acts in good faith based on information known to it at the time it takes any
such action.
8.4. Secured Party Performance of Grantor’s Obligations. Without having any obligation
to do so, the Administrative Agent may perform or pay any obligation which any Grantor has agreed
to perform or pay in this Security Agreement and such Grantor shall reimburse the Administrative
Agent for any reasonable amounts paid by the Administrative Agent pursuant to this Section
8.4. Each Grantor’s obligation to reimburse the Administrative Agent pursuant to the preceding
sentence shall be a Secured Obligation payable on demand.
8.5. Authorization for Secured Party to Take Certain Action. Each Grantor irrevocably
authorizes the Administrative Agent at any time and from time to time in the sole discretion of the
Administrative Agent and appoints the Administrative Agent as its attorney in fact (i) to execute
on behalf of such Grantor as debtor and to file financing statements necessary or desirable in the
Administrative Agent’s sole discretion to perfect and to maintain the perfection and priority of
the Administrative Agent’s security interest in the Collateral, (ii) to indorse and collect any
cash proceeds of the Collateral, (iii) to file a carbon, photographic or other reproduction of this
Security Agreement or any financing statement with respect to the Collateral as a financing
statement and to file any other financing statement or amendment of a financing statement (which
does not add new collateral or add a debtor) in such offices as the Administrative Agent in its
sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority
of the Administrative Agent’s security interest in the Collateral, (iv) to contact and enter into
one or more agreements with the issuers of uncertificated securities which are Collateral owned by
such Grantor and which are Securities or with financial intermediaries holding other Investment
Property as may be necessary or advisable to give the Administrative Agent Control over such
Securities or other Investment Property, (v) subject to the terms of Section 4.1.5 hereof,
to enforce payment of the Instruments, Accounts and Receivables in the name of the Administrative
Agent or such Grantor, (vi) to apply the proceeds of any Collateral received by the Administrative
Agent to the Secured Obligations as provided in Article VII and (vii) to discharge past due
taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens as are
specifically permitted hereunder or under any other Loan Document), and each Grantor agrees to
reimburse the Administrative Agent on demand for any reasonable payment made or any reasonable
expense incurred by the Administrative Agent in connection therewith, provided that this
authorization shall not relieve any Grantor of any of its obligations under this Security Agreement
or under the Credit Agreement.
8.6. Specific Performance of Certain Covenants. Each Grantor acknowledges and agrees
that a breach of any of the covenants contained in Sections 4.1.5, 4.1.6,
4.4, 5.3, or 8.8 or in Article VII hereof will cause irreparable
injury to the Administrative Agent and the Secured Parties, that the Administrative Agent and
Secured Parties have no adequate remedy at law in respect of such breaches and therefore agrees,
without limiting the right of the Administrative Agent or the Secured Parties to seek and obtain
17
specific performance of other obligations of the Grantors contained in this Security Agreement,
that the covenants of the Grantors contained in the Sections referred to in this Section
8.6 shall be specifically enforceable against the Grantors.
8.7. Use and Possession of Certain Premises. Upon the occurrence of a Default, the
Administrative Agent shall be entitled to occupy and use any premises owned or leased by the
Grantors where any of the Collateral or any records relating to the Collateral are located until
the Secured Obligations are paid or the Collateral is removed therefrom, whichever first occurs,
without any obligation to pay any Grantor for such use and occupancy.
8.8. Dispositions Not Authorized. No Grantor is authorized to sell or otherwise
dispose of the Collateral except as set forth in Section 4.1.5 hereof and notwithstanding
any course of dealing between any Grantor and the Administrative Agent or other conduct of the
Administrative Agent, no authorization to sell or otherwise dispose of the Collateral (except as
set forth in Section 4.1.5 hereof) shall be binding upon the Administrative Agent or the
Secured Parties unless such authorization is in writing signed by the Administrative Agent with the
consent or at the direction of the Required Lenders.
8.9. Reinstatement. This Security Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against any Grantor for liquidation or
reorganization, should any Grantor become insolvent or make an assignment for the benefit of any
creditor or creditors or should a receiver or trustee be appointed for all or any significant part
of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Secured Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether as a “voidable preference,” “fraudulent
conveyance,” or otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
8.10. Benefit of Agreement. The terms and provisions of this Security Agreement shall
be binding upon and inure to the benefit of the Grantors, the Administrative Agent and the Secured
Parties and their respective successors and assigns (including all persons who become bound as a
debtor to this Security Agreement), except that the Grantors shall not have the right to assign
their rights or delegate their obligations under this Security Agreement or any interest herein,
without the prior written consent of the Administrative Agent. No sales of participations,
assignments, transfers, or other dispositions of any agreement governing the Secured Obligations or
any portion thereof or interest therein shall in any manner impair the Lien granted to the
Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties,
hereunder.
8.11. Survival of Representations. All representations and warranties of the Grantors
contained in this Security Agreement shall survive the execution and delivery of this Security
Agreement.
8.12. Taxes and Expenses. Any taxes payable or ruled payable by a Federal or State
authority in respect of this Security Agreement shall be paid by the Grantors, together with
interest and penalties, if any. The Grantors shall reimburse the Administrative Agent for any and
all reasonable out-of-pocket expenses and internal charges (including the fees, charges and
disbursements of one U.S. counsel and one additional local counsel and regulatory counsel in each
applicable jurisdiction and additional counsel in light of actual or potential conflicts of
interest or the availability of different claims or defenses) paid or incurred by the
Administrative Agent in connection with the preparation, execution, delivery, administration,
collection and enforcement of this Security Agreement and in the audit, analysis, administration,
collection, preservation or sale of the Collateral (including the expenses and charges
18
associated with any periodic or special audit of the Collateral). Any and all costs and expenses
incurred by the Grantors in the performance of actions required pursuant to the terms hereof shall
be borne solely by the Grantors.
8.13. Headings. The title of and section headings in this Security Agreement are for
convenience of reference only, and shall not govern the interpretation of any of the terms and
provisions of this Security Agreement.
8.14. Termination. This Security Agreement shall continue in effect (notwithstanding
the fact that from time to time there may be no Secured Obligations outstanding) until (i) any and
all commitments to extend credit under the Loan Documents have terminated, and the Credit Agreement
has terminated pursuant to its express terms and (ii) all of the Secured Obligations (other than
Unliquidated Obligations) have been indefeasibly paid in cash and performed in full (or with
respect to any outstanding Letters of Credit, a cash deposit or backup Letter of Credit has been
delivered to the Administrative Agent as required by the Credit Agreement) and no commitments of
the Administrative Agent or the Secured Parties which would give rise to any Obligations are
outstanding.
8.15. Entire Agreement. This Security Agreement embodies the entire agreement and
understanding between the Grantors and the Administrative Agent relating to the Collateral and
supersedes all prior agreements and understandings among the Grantors and the Administrative Agent
relating to the Collateral.
| 8.16. Governing Law; Jurisdiction; Waiver of Jury Trial. |
8.16.1 THIS SECURITY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
8.16.2 Each Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the Southern District
of New York, and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Security Agreement or any other Loan Document, or for recognition
or enforcement of any judgment, and each Grantor hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such Federal court.
Each Grantor agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. Nothing in this Security Agreement or any other Loan Document
shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may
otherwise have
to bring any action or proceeding relating to this Security Agreement or any other Loan
Document against any Grantor or its properties in the courts of any jurisdiction.
8.16.3 Each Grantor hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or relating to
this Security Agreement or any other Loan Document in any court referred to in Section
8.16.2. Each Grantor hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
19
8.16.4 Each party to this Security Agreement irrevocably consents to service of process
in the manner provided for notices in Article IX of this Security Agreement, and each of the
Grantors hereby appoints the Borrower as its agent for service of process. Nothing in this
Security Agreement or any other Loan Document will affect the right of any party to this
Security Agreement to serve process in any other manner permitted by law.
8.16.5 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN
DOCUMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH GRANTOR (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER GRANTOR HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER GRANTOR WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (B) ACKNOWLEDGES THAT IT AND THE OTHER GRANTORS HAVE BEEN INDUCED TO ENTER INTO THIS SECURITY
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
8.17. Indemnity. Each Grantor hereby agrees, jointly with the other Grantors and
severally, to indemnify the Administrative Agent and the Secured Parties (each such Person, an
“Indemnitee”), and their respective successors, assigns, agents and employees, from and against any
and all liabilities, damages, penalties, suits, costs, and expenses of any kind and nature
(including, without limitation, all expenses of litigation or preparation therefor whether or not
the Administrative Agent or any Secured Party is a party thereto) imposed on, incurred by or
asserted against the Administrative Agent or the Secured Parties, or their respective successors,
assigns, agents and employees, in any way relating to or arising out of this Security Agreement or
any other Loan Document, or the manufacture, purchase, acceptance, rejection, ownership, delivery,
lease, possession, use, operation, condition, sale, return or other disposition of any Collateral
(including, without limitation, latent and other defects, whether or not discoverable by the
Administrative Agent or the Secured Parties or any Grantor, and any claim for patent, trademark or
copyright infringement); provided that such indemnity shall not, be available to any
Indemnitee to the extent that such liabilities, damages, penalties, suits, costs, and expenses are
determined by a court of competent jurisdiction in a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
8.18. Subordination of Intercompany Indebtedness. Each Grantor agrees that any and
all claims of such Grantor against any other Grantor (each an “Obligor”) with respect to
any “Intercompany Indebtedness” (as hereinafter defined), any endorser, obligor or any other
guarantor of all or any part of the Secured Obligations, or against any of its properties shall be
subordinate and subject in right of payment to the prior payment, in full and in cash, of all
Secured Obligations, provided that, and not in contravention of the foregoing, so long as no
Default or Event of Default has occurred and is continuing, such Grantor may make loans to and
receive payments in the ordinary course of business with respect to such Intercompany Indebtedness
from each such Obligor to the extent not prohibited by the terms of this Security Agreement and the
other Loan Documents. Notwithstanding any right of any Grantor to ask, demand, xxx for, take or
receive any payment from any Obligor, all rights, liens and security interests of such Grantor,
whether now or hereafter arising and howsoever existing, in any assets of any other Obligor shall
be and are subordinated to the rights of the Secured Parties and the Administrative Agent in those
assets. No Grantor shall have any right to
possession of any such asset or to foreclose upon any such asset, whether by judicial action
or otherwise, unless and until this Security Agreement has terminated in accordance with
Section 8.14. If all or any part of the assets of any Obligor, or the proceeds thereof, are
20
subject to any distribution, division or application to the creditors of such Obligor, whether
partial or complete, voluntary or involuntary, and whether by reason of liquidation, bankruptcy,
arrangement, receivership, assignment for the benefit of creditors or any other action or
proceeding, or if the business of any such Obligor is dissolved or if substantially all of the
assets of any such Obligor are sold, then, and in any such event (such events being herein referred
to as an “Insolvency Event”), any payment or distribution of any kind or character, either
in cash, securities or other property, which shall be payable or deliverable upon or with respect
to any indebtedness of any Obligor to any Grantor (“Intercompany Indebtedness”)
shall be paid or delivered directly to the Administrative Agent for application on any of the
Secured Obligations, due or to become due, until such Secured Obligations (other than contingent
indemnity obligations) shall have first been fully paid and satisfied (in cash). Should any
payment, distribution, security or instrument or proceeds thereof be received by the applicable
Grantor upon or with respect to the Intercompany Indebtedness after any Insolvency Event and prior
to the termination of this Security Agreement in accordance with Section 8.14, such Grantor
shall receive and hold the same in trust, as trustee, for the benefit of the Secured Parties and
shall forthwith deliver the same to the Administrative Agent, for the benefit of the Secured
Parties, in precisely the form received (except for the endorsement or assignment of the Grantor
where necessary), for application to any of the Secured Obligations, due or not due, and, until so
delivered, the same shall be held in trust by the Grantor as the property of the Secured Parties.
If any such Grantor fails to make any such endorsement or assignment to the Administrative Agent,
the Administrative Agent or any of its officers or employees is irrevocably authorized to make the
same. Each Grantor agrees that until the termination of this Security Agreement in accordance with
Section 8.14, no Grantor will assign or transfer to any Person (other than the
Administrative Agent or the Borrower or another Grantor) any claim any such Grantor has or may have
against any Obligor.
8.19. Severability. Any provision in this Security Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable, or invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of this Security Agreement are declared to be
severable.
8.20. Counterparts. This Security Agreement may be executed in counterparts (and by
different parties hereto in different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. Delivery of an executed
counterpart of a signature page of this Security Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Security Agreement.
ARTICLE IX
NOTICES
9.1. Sending Notices. Any notice required or permitted to be given under this
Security Agreement shall be sent (and deemed received) in the manner and to the addresses set forth
in Section
9.01 of the Credit Agreement. Any notice delivered to the Borrower shall be deemed to have
been delivered to all of the Grantors.
9.2. Change in Address for Notices. Each of the Grantors, the Administrative Agent and
the Lenders may change the address for service of notice upon it by a notice in writing to the
other parties.
21
ARTICLE X
THE ADMINISTRATIVE AGENT
JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the Secured Parties
hereunder pursuant to Article VIII of the Credit Agreement. It is expressly understood and agreed
by the parties to this Security Agreement that any authority conferred upon the Administrative
Agent hereunder is subject to the terms of the delegation of authority made by the Secured Parties
to the Administrative Agent pursuant to the Credit Agreement, and that the Administrative Agent has
agreed to act (and any successor Administrative Agent shall act) as such hereunder only on the
express conditions contained in such Article VIII. Any successor Administrative Agent appointed
pursuant to Article VIII of the Credit Agreement shall be entitled to all the rights,
interests and benefits of the Administrative Agent hereunder.
[Signature Pages Follow]
22
IN WITNESS WHEREOF, each of the Grantors and the Administrative Agent have executed this
Security Agreement as of the date first above written.
| AMERICAN MEDICAL SYSTEMS, INC., as a Grantor |
||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||
| Name: | Xxxx X. Xxxxxxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
| AMERICAN MEDICAL SYSTEMS HOLDINGS, INC., as a Grantor |
||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||
| Name: | Xxxx X. Xxxxxxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
| AMS SALES CORPORATION, as a Grantor |
||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||
| Name: | Xxxx X. Xxxxxxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
| LASERSCOPE, as a Grantor |
||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||
| Name: | Xxxx X. Xxxxxxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
| AMS RESEARCH CORPORATION, as a Grantor |
||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||
| Name: | Xxxx X. Xxxxxxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
Signature Page to Pledge and Security Agreement
| JPMORGAN CHASE BANK, N.A., as Administrative Agent |
||||
| By: | /s/ Xxxx Xxxxxxxx | |||
| Name: | Xxxx Xxxxxxxx | |||
| Title: | Vice President | |||
Signature Page to Pledge and Security Agreement
Exhibit “A”
(See Sections 3.3, 3.4, 3.5 and 4.1.7 of
Security Agreement)
Prior names, jurisdiction of formation, place of business (if Grantor has only one place of
business), chief executive office (if Grantor has more than one place of business), mergers and
mailing address:
American Medical Systems Holdings, Inc.
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx XX 00000
Attention: Xxxxx Xxxx
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx XX 00000
Attention: Xxxxx Xxxx
Tax Id# 00-0000000
Entity Id# 3196262
State of Incorporation: Delaware
Entity Id# 3196262
State of Incorporation: Delaware
American Medical Systems, Inc.
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx XX 00000
Attention: Xxxxx Xxxx
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx XX 00000
Attention: Xxxxx Xxxx
Tax Id# 00-0000000
Entity Id# 2922261
State of Incorporation: Delaware
Entity Id# 2922261
State of Incorporation: Delaware
AMS Research Corporation
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx XX 00000
Attention: Xxxxx Xxxx
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx XX 00000
Attention: Xxxxx Xxxx
Tax Id# 00-0000000
Entity Id# 2451184
State of Incorporation: Delaware
Entity Id# 2451184
State of Incorporation: Delaware
AMS Sales Corporation
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx XX 00000
Attention: Xxxxx Xxxx
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx XX 00000
Attention: Xxxxx Xxxx
Tax Id# 00-0000000
Entity Id# 3445596
State of Incorporation: Delaware
Entity Id# 3445596
State of Incorporation: Delaware
Laserscope
0000 Xxxxxxx Xxxxx Xxx
Xxxx, XX 00000
Attention: Xxxxx Xxxx
0000 Xxxxxxx Xxxxx Xxx
Xxxx, XX 00000
Attention: Xxxxx Xxxx
Tax Id# 00-0000000
Entity Id# C1249512
State of Incorporation: California
Entity Id# C1249512
State of Incorporation: California
Locations of Real Property, Inventory, Equipment and Fixtures:
| A. | Owned Locations of Inventory, Equipment and Fixtures of the Grantors: | |
| 00000 Xxxx Xxxx Xxxx Xxxxxxxxxx XX 00000 Title Holder: American Medical Systems, Inc. |
| B. | Leased Locations of Inventory, Equipment and Fixtures of the Grantors (Include Landlord’s Name): | |
| 0000 Xxxxxxx Xxxxx Xxx Xxxx, XX 00000 Lessee: Laserscope |
||
| 0000 Xxxxxxx Xxxxx Xxx Xxxx, XX 00000 Lessee: Laserscope |
| C. | Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of warehouse operator or other bailee or consignee of Inventory and Equipment of the Grantors): | |
| Xxxxx and Minor 0000 Xxxxxx Xxxxxxxxxxxx Xxx Xxxxxxxxxx XX |
||
| DSV Solutions X.X. Xxxxxxxxxx 00, 0000 Xxxxx, Xxxxxxx |
||
| Expeditors 0000 Xxxxxxxx Xxxxxxxxxx Xxxxxxxx XX 00000 |
EXHIBIT “B”
(See Section 3.8 of Security Agreement)
(See Section 3.8 of Security Agreement)
A. [Reserved]
B. Aircraft/engines, ships, vessels, railcars, other vehicles and similar equipment governed by
federal statute:
| Description | Registration Number | |
2001 Dodge 1500
|
VIN Number: 1B7H16Y31S285710 |
EXHIBIT “C”
(See Section 3.8 of Security Agreement)
Legal description, county and street address of property on which Fixtures are located:
Legal Description:
Xxxx 0, 0 xxx 0, Xxxxx 0, Xxxx 2 Ninth Addition, Hennepin County, Minnesota.
And
Xxx 0, Xxxxx 0, Xxxx 0 Xxxxx Xxxxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxxxx except that part of said Lot 9
legally described as follows: That part of Xxx 0, Xxxxx 0, Xxxx 2 Ninth Addition, described as
lying Westerly, Southwesterly and Southerly of a line described as commencing at the most
Southeasterly corner of said Lot 9; thence Westerly along the South line of said Lot 9 a distance
of 100.05 feet to its intersection with a line 100.00 feet Westerly of and parallel with that
particular East line of said Lot 9 that bears North 2 degrees 44 minutes 49 seconds East from the
point of commencement, to the point of beginning of the line to be described; thence Northerly
along said parallel line and its extension a distance of 107.53 feet; thence Northwesterly,
deflecting to the left 40 degrees 12 minutes 51 seconds a distance of 88.84 feet; thence Westerly,
deflecting to the left 43 degrees 41 minutes 52 seconds a distance of 299.45 feet to the
Southwesterly line of said Lot 9 and said line there terminating.
Note for information:
The following portion of the above property is Abstract:
Xxxx 0 xxx 0, Xxxxx 0, Xxxx 2 Ninth Addition, except that part thereof embraced within Xxx 0,
Xxxxx 0, Xxxx 0 Xxxxxx Xxxxxxxx.
The balance of the above property is Torrens.
Abstract property
Torrens property: Certificate of Title No. 1012588
Torrens property: Certificate of Title No. 1012588
Property Address:
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx XX 00000
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx XX 00000
Name and Address of Record Owner:
American Medical Systems, Inc.
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx XX 00000
American Medical Systems, Inc.
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx XX 00000
EXHIBIT “D”
(See Section 3.11 of Security Agreement)
List of Instruments, Pledged Securities and other Investment Property
INSTRUMENTS
Intercompany Notes Payable
Intercompany Notes Payable
| Holder | Maker | Amount | ||||
| NONE | ||||||
SECURITIES
Stock
| Certificate | Number of | % of Existing | ||||||
| Holder | Issuer | Number | Shares | Shares | ||||
American Medical Systems
Holdings, Inc. |
American Medical Systems, Inc. | 1 | 100 | 100% | ||||
American Medical Systems,
Inc. |
Laserscope | 2 | 1,000 | 100% | ||||
Laserscope |
Laserscope International, Inc. | CS-1 | 1,000 | 100% | ||||
Laserscope |
InnovaQuartz Incorporated | 6 | 15,000 | 100% | ||||
American Medical Systems,
Inc. |
Solarant Medical, Inc. | 2 | 100 | 100% | ||||
American Medical Systems,
Inc. |
AMS Sales Corporation | 1 | 100 | 100% | ||||
American Medical Systems,
Inc. |
AMS Research Corporation | 2 | 1,000 | 100% | ||||
American Medical Systems,
Inc. |
TherMatrx, Inc. | 1 | 1,000 | 100% | ||||
AMS Sales Corporation |
AMS India, Inc. | 1 | 100 | 100% | ||||
American Medical Systems,
Inc. |
NXThera, Inc. | PB-5 | 8,713,693 | 19.5% |
Bonds
Issuer
|
Number | Face Amount | Coupon Rate | Maturity | ||||
NONE
Government and Other Securities
Issuer
|
Number | Type | Face Amount | Coupon Rate | Maturity | |||||
NONE
OTHER INVESTMENT PROPERTY
(CERTIFICATED AND UNCERTIFICATED):
(CERTIFICATED AND UNCERTIFICATED):
Issuer
|
Description of Collateral | Percentage Ownership Interest | ||
NONE
EXHIBIT “E”
(See Section 3.1 of Security Agreement)
OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED
California Secretary of State
Laserscope
Delaware Secretary of State
American Medical Systems Holdings, Inc.
American Medical Systems, Inc.
AMS Research Corporation
AMS Sales Corporation
EXHIBIT “F”
(See Definition of “Commercial Tort Claims”)
(See Definition of “Commercial Tort Claims”)
COMMERCIAL TORT CLAIMS
[Describe parties, case number (if applicable), nature of dispute]
In the matter captioned American Medical Systems, Inc. and Laserscope vs. Biolitec, Inc.
venued in the United States District Court for the District of Massachusetts, case no. 07-CV-30109,
AMS is suing Biolitec for infringement of an AMS patent. We have also asserted a false advertising
claim against Biolitec.
EXHIBIT “G”
(See Section 3.10 of Security Agreement)
(See Section 3.10 of Security Agreement)
FEDERAL EMPLOYER IDENTIFICATION NUMBER;
STATE ORGANIZATION NUMBER; JURISDICTION OF INCORPORATION
STATE ORGANIZATION NUMBER; JURISDICTION OF INCORPORATION
| Federal Employer | State of | State | ||||||
| Identification | Type of | Organization or | Organization | |||||
| GRANTOR | Number | Organization | Incorporation | Number | ||||
American Medical Systems, Inc.
|
00-0000000 | Corporation | Delaware | 3196262 | ||||
American Medical Systems Holdings, Inc.
|
00-0000000 | Corporation | Delaware | 2922261 | ||||
AMS Research Corporation
|
00-0000000 | Corporation | Delaware | 2451184 | ||||
AMS Sales Corporation
|
00-0000000 | Corporation | Delaware | 3445596 | ||||
Laserscope
|
00-0000000 | Corporation | California | C1249512 |
EXHIBIT “H”
(See Section 3.12 of Security Agreement)
DEPOSIT ACCOUNTS
| Name of Grantor | Name of Institution | Account Number | ||
American Medical Systems
Holdings, Inc.
|
Citibank New York | 00000000 | ||
American Medical Systems
Holdings, Inc.
|
Citibank New York | 00000000 | ||
American Medical Systems,
Inc.
|
Citibank New York | 00000000 | ||
AMS Research Corporation
|
Citibank New York | 00000000 | ||
AMS Sales Corporation
|
Citibank New York | 00000000 | ||
AMS India, Inc.
|
Citibank New York | 00000000 | ||
American Medical Systems,
Inc.
|
Citibank Delaware | 00000000 | ||
American Medical Systems,
Inc.
|
Citibank Delaware | 00000000 |
SECURITIES ACCOUNTS
| Name of Grantor | Name of Institution | Account Number | ||
American Medical Systems, Inc.
|
Bank of America Securities, LLC | 383361 | ||
American Medical Systems, Inc.
|
US Bancorp | 388000341 | ||
American Medical Systems, Inc.
|
Xxxxxx Xxxxxxx Xxxxx Xxxxxx LLC | 000-00000-00 350 |
EXHIBIT “I”
(See Section 4.4 of Security Agreement)
AMENDMENT
This Amendment, dated ________________, 20____ is delivered pursuant to Section 4.4 of the
Security Agreement referred to below. All defined terms herein shall have the meanings ascribed
thereto or incorporated by reference in the Security Agreement. The undersigned hereby certifies
that the representations and warranties in Article III of the Security Agreement are and continue
to be true and correct. The undersigned further agrees that this Amendment may be attached to that
certain Pledge and Security Agreement, dated April 15, 2011, between the undersigned, as the
Grantors, and JPMorgan Chase Bank, N.A., as the Administrative Agent, (the “Security Agreement”)
and that the Collateral listed on Schedule I to this Amendment shall be and become a part
of the Collateral referred to in said Security Agreement and shall secure all Secured Obligations
referred to in said Security Agreement.
| By: | ||||
| Name: | ||||
| Title: | ||||
9
SCHEDULE I TO AMENDMENT
STOCKS
| Percentage of | ||||||||||
| Certificate | Number of | Outstanding | ||||||||
| Name of Grantor | Issuer | Number(s) | Shares | Class of Stock | Shares | |||||
BONDS
| Name of Grantor | Issuer | Number | Face Amount | Coupon Rate | Maturity | |||||
GOVERNMENT SECURITIES
| Name of Grantor | Issuer | Number | Type | Face Amount | Coupon Rate | Maturity | ||||||
OTHER SECURITIES OR OTHER INVESTMENT PROPERTY
(CERTIFICATED AND UNCERTIFICATED)
(CERTIFICATED AND UNCERTIFICATED)
| Percentage Ownership | ||||||
| Name of Grantor | Issuer | Description of Collateral | Interest | |||
[Add description of custody accounts or arrangements with securities intermediary, if applicable]
10
ANNEX I
to
Reference is hereby made to the Pledge and Security Agreement (as amended, restated,
supplemented or otherwise modified from time to time, the “Agreement”), dated as of April 15, 2011,
made by each of AMERICAN MEDICAL SYSTEMS HOLDINGS, INC., a Delaware corporation (“Holdings”),
AMERICAN MEDICAL SYSTEMS, INC., a Delaware corporation (the “Borrower”) and the other Subsidiaries
of the Borrower listed on the signature pages thereto (together with the Borrower, the “Initial
Grantors”, and together with any additional Subsidiaries, including the undersigned, which become
parties thereto by executing a Supplement in substantially the form hereof, the “Grantors”), in
favor of the Administrative Agent. Capitalized terms used herein and not defined herein shall have
the meanings given to them in the Agreement.
By its execution below, the undersigned, [NAME OF NEW GRANTOR], a
[__________] [corporation/limited liability company/limited partnership] (the “New Grantor”) agrees
to become, and does hereby become, a Grantor under the Agreement and agrees to be bound by the
Agreement as if originally a party thereto. The New Grantor hereby collaterally assigns and pledges
to the Administrative Agent for the benefit of the Secured Parties, and grants to the
Administrative Agent for the benefit of the Secured Parties, a security interest in all of the New
Grantor’s right, title and interest in and to the Collateral, whether now owned or hereafter
acquired, to secure the prompt and complete payment and performance of the Secured Obligations;
provided that, the amount of Equity Interests in any First-Tier Foreign Subsidiary that is an
Affected Foreign Subsidiary pledged or required to be pledged to the Administrative Agent hereunder
or under any other Collateral Document shall be automatically limited to the Voting Stock of such
First-Tier Foreign Subsidiary representing not more than 65% of the total Voting Power of all
outstanding Voting Stock of such First-Tier Foreign Subsidiary (and the term “Collateral” shall not
include any other Equity Interests of such First-Tier Foreign Subsidiary). For the avoidance of
doubt, the grant of a security interest herein shall not be deemed to be an assignment of
intellectual property rights owned by the New Grantor.
By its execution below, the undersigned represents and warrants as to itself that all of the
representations and warranties contained in the Agreement are true and correct in all respects as
of the date hereof. The New Grantor represents and warrants that the supplements to the Exhibits
to the Agreement attached hereto are true and correct in all respects and that such supplements set
forth all information required to be scheduled under the Agreement with respect to the New Grantor.
The New Grantor shall take all steps necessary and required under the Agreement to perfect, in
favor of the Administrative Agent, a first-priority security interest in and lien against the New
Grantor’s Collateral.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.
IN WITNESS WHEREOF, the New Grantor has executed and delivered this Security Agreement
Supplement as of this ___________ day of ____________, 20__.
1
| [NAME OF NEW GRANTOR] |
||||
| By: | ||||
| Title: | ||||
2
