Exhibit 10.93
SENIOR SUBORDINATED SECURITY AGREEMENT
THIS SENIOR SUBORDINATED SECURITY AGREEMENT dated as of December 22,
2006 (as the same may be supplemented, modified, amended, restated or replaced
from time to time in the manner provided herein, this "AGREEMENT") is by
XXXXXXX.XXX INC., a Delaware corporation (the "PARENT"), XXXXXXX ADVANCED
AESTHETICS, INC., a Delaware corporation ("KAA"), ADVANCED AESTHETICS SUB, INC.
a Delaware corporation ("AAI"), ADVANCED AESTHETICS, LLC, a Delaware limited
liability company ("AAL"), XXXXXXX ADVANCED AESTHETICS, LLC, a Delaware limited
liability company ("XXXXXXX ADVANCED"), ANUSHKA PBG, LLC, a Delaware limited
liability company ("ANUSHKA PBG"), ANUSHKA BOCA, LLC, a Delaware limited
liability company ("ANUSHKA BOCA"), WILD HARE, LLC, a Delaware limited liability
company ("WILD HARE"), XXXXXXXX CORPORATION, a Florida corporation ("XXXXXXXX"),
ANUSHKA PBG ACQUISITION SUB, LLC, a Delaware limited liability company ("ANUSHKA
ACQUISITION"), ANUSHKA BOCA ACQUISITION SUB, LLC, a Delaware limited liability
company ("BOCA ACQUISITION") and WILD HARE ACQUISITION SUB, LLC, a Delaware
limited liability company ("WILD HARE ACQUISITION", and together with KAA, AAI,
AAL, Xxxxxxx Advanced, Anushka PBG, Anushka Boca, Wild Hare, Dischino, Anushka
Acquisition and Boca Acquisition, the "SUBSIDIARIES" and together with Parent,
each a "PLEDGOR" and collectively, the "PLEDGORS") in favor of and with VICIS
CAPITAL MASTER FUND LLC, XXXXXXX INVESTMENTS LLC, XXXXXX X. XXXXXX, XXXXXXX
XXXXXXXX, XXXXXX XXXXXXX, XXXXX XXXXXXXX, XXX XXXXXXXXXX, XXXX XXXXXX, CSFN I
LLC and XXXX XXXXXXXX (each a "SENIOR SUBORDINATED LENDER" and collectively, the
"SENIOR SUBORDINATED LENDERS").
The Parent and the Senior Subordinated Lenders are each party
to that certain Loan Agreement dated as of December 22, 2006 (as the same may
have been and hereafter may be supplemented, modified, amended, restated or
replaced from time to time in the manner provided therein, the "SENIOR
SUBORDINATED LOAN AGREEMENT"), pursuant to which the Senior Subordinated Lenders
have made a senior subordinated term loan (the "SENIOR SUBORDINATED LOAN") in
the principal amount of Three Million Dollars ($3,000,000) for capital
expenditures, general working capital and all costs and expenses connected with
the Senior Subordinated Loan. The Senior Subordinated Loan is evidenced by the
Senior Subordinated Promissory Note issued to the Senior Subordinated Lenders by
the Parent and dated as of December 22, 2006 (the "SENIOR SUBORDINATED NOTE").
The Obligations under (and as defined in) the Senior Subordinated Loan Agreement
and Senior Subordinated Note are guarantied pursuant to a separate Unconditional
Guaranty made by each Subsidiary in favor of the Senior Subordinated Lenders and
dated as of December 22, 2006 (as the same may have been and hereafter may be
supplemented, modified, amended, restated or replaced from time to time in the
manner provided therein, each a "SENIOR SUBORDINATED SUBSIDIARY GUARANTY", and
collectively, the "SENIOR SUBORDINATED SUBSIDIARY GUARANTIES").
The Parent also is a party to that certain Securities Purchase
Agreement dated as of June 30, 2006 (as the same may have been and hereafter may
be supplemented, modified, amended, restated or replaced from time to time in
the manner provided therein, the "SENIOR PURCHASE AGREEMENT"), with Laurus
Master Fund, Ltd. ("LAURUS"), pursuant to which Laurus purchased a Secured Term
Note in the principal amount of Twenty-Five Million Dollars ($25,000,000.00) and
dated July 11, 2006 (as the same may have been and hereafter may be
supplemented, modified, amended, restated or replaced from time to time in the
manner provided therein, the "SENIOR NOTE"). The obligations of the Parent to
Laurus under the Senior Purchase Agreement and Senior Note are guarantied by the
Subsidiaries pursuant to their Subsidiary Guaranty with Laurus dated as of July
11, 2006 (as the same may have been and hereafter may be supplemented, modified,
amended, restated or replaced from time to time in the manner provided therein,
the "SENIOR SUBSIDIARY GUARANTY"), and secured by the "Collateral" (the
"COLLATERAL") as defined in and as granted under that certain Master Security
Agreement by and among the Parent and the Subsidiaries dated as of July 11,
2006, and attached hereto as Exhibit A (as the same may have been and hereafter
may be supplemented, modified, amended, restated or replaced from time to time
in the manner provided therein, the "SENIOR SECURITY AGREEMENT").
The Parent and Laurus also are parties to that certain
subordinated Securities Purchase Agreement dated as of December 22, 2006 (as the
same may have been and hereafter may be supplemented, modified, amended,
restated or replaced from time to time in the manner provided therein, the
"SENIOR SUBORDINATED PURCHASE AGREEMENT"), pursuant to which Laurus purchased a
subordinated Secured Term Note in the principal amount of One Million Dollars
($1,000,000.00) and dated December 22, 2006 (as the same may have been and
hereafter may be supplemented, modified, amended, restated or replaced from time
to time in the manner provided therein, the "SENIOR SUBORDINATED LAURUS NOTE").
Pursuant to the Reaffirmation, Ratification and Amendment Agreement among the
Parent, the Subsidiaries and Laurus dated December 22, 2006 (as the same may
have been and hereafter may be supplemented, modified, amended, restated or
replaced from time to time in the manner provided therein, the "SENIOR
REAFFIRMATION"), the subordinated obligations of the Parent to Laurus under the
Senior Subordinated Purchase Agreement and Senior Subordinated Laurus Note are
guarantied by the Subsidiaries pursuant to their Senior Subsidiary Guaranty and
secured by the Collateral granted under the Senior Security Agreement.
The Parent, Laurus, the Senior Subordinated Lenders and each
Subordinated Lender (as defined therein) are parties to that certain
Subordination Agreement dated as of December 22, 2006 (as the same may have been
and hereafter may be supplemented, modified, amended, restated or replaced from
time to time in the manner provided therein, the "SUBORDINATION AGREEMENT"),
pursuant to which (among other things) the obligations owed and liens granted by
the Pledgors to the Senior Subordinated Lenders are subordinated to the
obligations owed and liens granted to Laurus, and the obligations owed and any
liens granted to the Subordinated Lenders are subordinated to the obligations
owed and liens granted to both Laurus and the Senior Subordinated Lenders.
Section 1. CERTAIN DEFINED TERMS. Capitalized terms used and
not otherwise defined shall have the meanings set forth in the Senior Purchase
Agreement, the Senior Security Agreement, the Senior Subsidiary Guaranty, the
Senior Reaffirmation, the Senior Subordinated Loan Agreement, and/or each Senior
Subordinated Subsidiary Guaranty.
Section 2. GRANT OF SECURITY INTEREST. Subject to the terms
and provisions of the Subordination Agreement, as security for the timely and
full payment and satisfaction of any and all of the "Obligations" under (and as
defined in) the Senior Subordinated Loan Agreement and Senior Subordinated Note
(the "PARENT'S OBLIGATIONS") and the obligations of each of the Subsidiaries
under its respective Senior Subordinated Subsidiary Guaranty (the "GUARANTORS'
2
OBLIGATIONS", and together with the Parent's Obligations, the "PLEDGORS'
OBLIGATIONS"), each Pledgor hereby absolutely, unconditionally and irrevocably
pledges, assigns, conveys, mortgages, transfers and delivers to the Senior
Subordinated Lenders, and grants to the Senior Subordinated Lenders a continuing
security interest in and to, the "Collateral" as defined in the Master Security
Agreement (including, without limitation, any and all accounts, instruments,
chattel paper, documents of title and trust receipts (and the goods covered
thereby, wherever located), letter of credit rights, financial assets,
investment property, securities, securities accounts and security entitlements,
deposit accounts, contract rights, inventory, equipment, fixtures and other
goods, warranties, casualty and other insurance policies and rights, commercial
tort claims and other litigation claims and rights, tradenames, software,
payment intangibles, and other general intangibles of such Pledgor, and any and
all computer programming data and other books and records of such Pledgor), IN
EACH CASE whether now or hereafter existing, acquired or created and wherever
located, whether any of the foregoing items is now or hereafter owned
beneficially or of record and whether now or hereafter owned individually,
jointly or otherwise, together with the products and proceeds thereof, all
collections, payments and other distributions and realizations with respect
thereto, any and all other rights, powers, privileges, remedies and interests of
each Pledgor therein, thereto or thereunder, and any and all renewals,
substitutions, modifications and extensions of any and all of the items in the
foregoing subsections.
Section 3. CONSTRUCTION. This Agreement is delivered at the
request of the Senior Subordinated Lenders pursuant to and in accordance with
the Senior Subordinated Loan Agreement. This Agreement shall be governed by and
construed in accordance with Sections 3 through 13 of the Master Security
Agreement, and the Lenders shall have (in addition to those granted by the UCC
and other applicable law) all of the rights, powers, privileges, remedies and
interests granted to "Laurus" as the secured party thereunder, which Sections
are hereby incorporated by reference as if fully set forth herein, IN EACH CASE
as if (a) each Pledgor were an "Assignor", (b) the Senior Subordinated Lenders
collectively were "Laurus", (c) this Agreement were the "Master Security
Agreement", (d) the Senior Subordinated Note were the "Note", (e) the Senior
Subordinated Loan Agreement was the "Securities Purchase Agreement", (f) the
Financing Documents were the "Related Agreements", (g) the Pledgors' Obligations
were the "Obligations" referred to in those Sections, and (h) the Collateral was
the "Collateral" referred to in those Sections. To the extent not inconsistent
with the preceding, this Agreement also shall be governed by and construed in
accordance with the provisions of the Senior Subordinated Guaranties, which
provisions are hereby incorporated by reference as if fully set forth herein, IN
EACH CASE as if (a) each Pledgor were a "Guarantor", and (b) each Senior
Subordinated Lender were a "Lender". In the event of any conflict between the
terms of the Senior Subordinated Loan Agreement and the terms of this Agreement,
the terms of the Subordinated Loan Agreement shall prevail.
Section 4. ACCEPTANCE; FINANCING STATEMENTS; COUNTERPARTS.
Each Pledgor hereby absolutely, unconditionally, irrevocably and expressly
waives forever acceptance and notice of any acceptance of this Agreement or any
other Financing Document. By accepting this Agreement, each Senior Subordinated
Lender agrees to be bound by all of the agreements and other terms and
provisions applicable to the Senior Subordinated Lenders contained herein
(whether as a Senior Subordinated Lender or a "party") and acknowledges and
agrees that it is a party hereto for such contractual purposes (but without
making any Senior Subordinated Lender
3
in any way liable or responsible for any of the Obligations of any Pledgor).
Each Pledgor hereby acknowledges and agrees that, prior to the execution of this
Agreement, each Pledgor reviewed the initial UCC financing statements respecting
the Collateral prepared by the Senior Subordinated Lenders and authorized the
Senior Subordinated Lenders to file them (I.E., "prefile") in such jurisdictions
as the Senior Subordinated Lenders deemed necessary or desirable, and each
Pledgor hereby confirms and ratifies the authority of the Senior Subordinated
Lenders to make each such filing. This Agreement may be executed in two or more
counterpart copies of the entire document or of signature pages to the document,
each of which may be executed by one or more of the parties hereto or thereto
and each of which may be sent by telecopy, email or other electronic means, but
all of which, when taken together, shall constitute a single agreement binding
upon all of the parties hereto.
Section 5. ENTIRE AGREEMENT. Except as otherwise expressly
provided in Section 3 above, this Agreement contains the entire agreement and
understanding of the parties and supersedes and completely replaces all prior
and other representations, warranties, promises, assurances and other agreements
and understandings (whether written, oral, express, implied or otherwise) among
the parties with respect to the matters contained in this Agreement.
PLEDGORS:
XxxxXxx.Xxx Inc.
By:
-------------------------------------------------
Name:
Title:
Address:
Xxxxxxx Advanced Aesthetics, Inc.
By:
-------------------------------------------------
Name:
Title:
Address:
Advanced Aesthetics Sub, Inc.
By:
-------------------------------------------------
Name:
Title:
Address:
4
Advanced Aesthetics, LLC
By:
-------------------------------------------------
Name:
Title:
Address:
Xxxxxxx Advanced Aesthetics, LLC
By:
-------------------------------------------------
Name:
Title:
Address:
Anushka PBG, LLC
By:
-------------------------------------------------
Name:
Title:
Address:
Anushka Boca, LLC
By:
-------------------------------------------------
Name:
Title:
Address:
Wild Hare, LLC
By:
-------------------------------------------------
Name:
Title:
Address:
5
XXXXXXXX CORPORATION
By:
-------------------------------------------------
Name:
Title:
Address:
Anushka PBG Acquisition Sub, LLC
By:
-------------------------------------------------
Name:
Title:
Address:
Anushka Boca Acquisition Sub, LLC
By:
-------------------------------------------------
Name:
Title:
Address:
Wild Hare Acquisition Sub, LLC
By:
-------------------------------------------------
Name:
Title:
Address:
6
