EXHIBIT 10.22
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT (this "Agreement"), dated as of March 31,
2004, is by and among the parties identified as "Grantors" on the signature
pages hereto and such other parties as may become Grantors hereunder after the
date hereof (individually a "Grantor", and collectively the "Grantors") and
Technology Investment Capital Corp., as collateral agent (in such capacity,
together with its successors in such capacity, "Collateral Agent") for the
Purchasers (as defined below).
WHEREAS, Advanced Aesthetics, Inc., a Delaware corporation (the "Parent"),
Anushka PBG Acquisition Sub, LLC, a Delaware limited liability company ("Anushka
PBG"), Anushka Boca Acquisition Sub, LLC, a Delaware limited liability company
("Anushka Boca"), Wild Hare Acquisition Sub, LLC, a Delaware limited liability
company ("Wild Hare"), ▇▇▇▇▇▇▇▇ Corporation, a Florida corporation ("▇▇▇▇▇▇▇▇")
and Advanced K, LLC, a Delaware limited liability company ("Advanced K" and each
of Anushka PBG, Anushka Boca, Wild Hare, ▇▇▇▇▇▇▇▇ and Advanced K being herein
called a "Co-Borrower" or "Borrower") have entered into a Note and Warrant
Purchase Agreement dated as of the date hereof (as amended and in effect from
time to time, the "Purchase Agreement"), among the Co-Borrowers, the Parent and
the purchasers party thereto ("Purchasers"), pursuant to which the Purchasers,
subject to the terms and conditions contained therein, are to purchase from the
Co-Borrowers senior secured promissory notes and otherwise extend credit to the
Co-Borrowers; and
WHEREAS, it is a condition precedent to the Purchasers' purchasing the
senior secured promissory notes and otherwise extending credit to the
Co-Borrowers under the Purchase Agreement that each Grantor execute and deliver
to the Collateral Agent for the benefit of the Purchasers a pledge and security
agreement in substantially the form hereof; and
WHEREAS, the Grantors wish to grant security interests in favor of the
Collateral Agent for the benefit of the Purchasers as herein provided;
NOW THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. All capitalized terms used herein without definitions
shall have the respective meanings provided therefor in the Purchase Agreement.
As used herein the term "Obligations" shall mean all principal, interest
(including interest accrued after the filing of a bankruptcy or similar petition
whether or not a claim therefor is enforceable), fees, expenses and indemnities
payable from time to time by the Company, the Grantors or any Subsidiary under
the Transaction Documents, including reimbursements under Section 11. The term
"State", as used herein, means the State of New York. All terms defined in the
Uniform Commercial Code of the State and used herein shall have the same
definitions herein as specified therein. However, if a term
is defined in Article 9 of the Uniform Commercial Code of the State differently
than in another Article of the Uniform Commercial Code of the State, the term
has the meaning specified in Article 9.
2. GRANT OF SECURITY INTEREST. The Grantors hereby grant to the Collateral
Agent for the benefit of the Purchasers, to secure the payment and performance
in full of all of the Obligations, a security interest in and so pledges to the
Collateral Agent for the benefit of the Purchasers the following properties,
assets and rights of the Grantors, wherever located, whether now owned or
hereafter acquired or arising, and all proceeds and products thereof (all of the
same being hereinafter called the "Collateral"):
(i) goods (including inventory, equipment and any accessions thereto),
(ii) instruments (including promissory notes),
(iii) documents,
(iv) accounts (including hea1th-care-insurance receivables),
(v) chattel paper (whether tangible or electronic),
(vi) deposit accounts,
(vii) letter-of-credit rights (whether or not the letter of credit is
evidenced by a writing),
(viii) commercial tort claims,
(ix) securities and all other investment property,
(x) supporting obligations,
(xi) contract rights or rights to the payment of money, insurance claims
and proceeds,
(xii) general intangibles including, without limitation, all payment
intangibles, patents, patent applications, trademarks, trademark applications,
trade names, copyrights, copyright applications, software, engineering drawings,
service marks, customer lists, goodwill, and all licenses, permits, agreements
of any kind or nature pursuant to which the Grantors possess, use or have
authority to possess or use property (whether tangible or intangible) of others
or others possess, use or have authority to possess or use property (whether
tangible or intangible) of the Grantors, and all recorded data of any kind or
nature, regardless of the medium of recording including, without limitation, all
software, writings, plans, specifications and schematics; and
(xiii) all now existing and hereafter acquired or arising (A) Capital
Units, equity securities or interests or other Investment Property (including
the Capital Units described on Schedule A hereto), (B) all cash dividends and
cash distributions with respect to the
-2-
foregoing ("Dividends"), (C) all non-cash dividends paid on capital securities,
liquidating dividends paid on capital securities, shares of capital securities
resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any capital securities constituting
Collateral (excluding Dividends, "Distributions"), and (D) all certificates,
agreements (including stockholders agreements, partnership agreements, operating
agreements and limited liability company agreements), books, records, writings,
data bases, information and other property relating to, used or useful in
connection with, evidencing, embodying, incorporating or referring to, any of
the foregoing.
The Collateral Agent acknowledges that the attachment of its security interest
in any commercial tort claim as original collateral is subject to the Grantor's
compliance with ss.4.7.
Notwithstanding the foregoing, Collateral shall not include any of the following
(collectively, the "Excluded Collateral") (1) vehicles subject to a certificate
of title statute, (2) rights under licenses, permits and contracts in which a
security interest may not be granted except to the extent that such prohibition
is not enforceable under the applicable Uniform Commercial Code, provided, that
the Grantors shall not permit any such prohibitions in any contracts, licenses
and permits entered into after the date hereof except in the ordinary course
either consistent with past practice, and (3) assets subject to any Permitted
Liens that are purchase money security interests or that secure capitalized
leases of equipment or inventory, in each case where the security agreement or
other instrument creating such Permitted Lien prohibits the granting of a
security interest in such assets to Collateral Agent or results in an event of
default under such security agreement or instrument, provided that the security
interest in any such assets shall automatically attach hereunder when and after
any such Permitted Liens are discharged or released or when the assets
encumbered by such Permitted Liens no longer are subject to such restrictions.
In addition, upon the sale of Collateral in accordance with the terms of the
Purchase Agreement, the security interests granted herein with respect to such
Collateral shall automatically terminate.
3. AUTHORIZATION TO FILE FINANCING STATEMENTS. The Grantors hereby
irrevocably authorize the Collateral Agent at any time and from time to time to
file in any applicable Uniform Commercial Code jurisdiction any initial
financing statements and amendments thereto against each Grantor that (a)
indicate the Collateral (i) as all assets of such Grantor or words of similar
effect, regardless of whether any particular asset comprised in the Collateral
falls within the scope of Article 9 of the Uniform Commercial Code of the State
or such jurisdiction, or (ii) as being of an equal or lesser scope or with
greater detail, and (b) contain any other information required by part 5 of
Article 9 of the Uniform Commercial Code of the State for the sufficiency or
filing office acceptance of any financing statement or amendment, including (i)
whether such Grantor is an organization, the type of organization and any
organization identification number issued to such Grantor and, (ii) in the case
of a financing statement filed as a fixture filing or indicating Collateral as
as-extracted collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. The Grantors agree to furnish any such
-3-
information to the Collateral Agent promptly upon request. Each Grantor also
ratifies its authorization for the Collateral Agent to have filed in any Uniform
Commercial Code jurisdiction any like initial financing statements or amendments
thereto if filed prior to the date hereof.
4. OTHER ACTIONS. Further to insure the attachment, perfection and first
priority (subject to Permitted Liens) of, and the ability of the Collateral
Agent to enforce, the Collateral Agent's security interest in the Collateral,
the Grantors agree, in each case at the Grantor's own expense, to take the
following actions with respect to the following Collateral:
4.1. PROMISSORY NOTES AND TANGIBLE CHATTEL PAPER. If any Grantor
shall at any time hold or acquire any promissory notes or tangible chattel
paper, such Grantor shall forthwith endorse, pledge and deliver the same
to the Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Collateral Agent may from time to
time specify.
4.2. DEPOSIT ACCOUNTS. For each deposit account (each, a "Deposit
Account") that any Grantor at any time opens or maintains at any
depository bank (each, a "Depository Bank"), the Grantor shall, at the
Collateral Agent's request and option, pursuant to an agreement in form
and substance satisfactory to the Collateral Agent (each, a "Deposit
Account Control Agreement"), either (a) cause the Depositary Bank to agree
to comply at any time with instructions from the Collateral Agent to such
Depositary Bank directing the disposition of funds from time to time
credited to such Deposit Account, without further consent of the Grantor,
or (b) arrange for the Collateral Agent to become the customer of the
Depositary Bank with respect to the Deposit Account, with the Grantors
being permitted, only with the consent of the Collateral Agent, to
exercise rights to withdraw funds from such Deposit Account. The
Collateral Agent agrees with the Grantors that the Collateral Agent shall
not give any such instructions or withhold any withdrawal rights from the
Grantors, unless an Event of Default has occurred and is continuing, or,
after giving effect to any withdrawal not otherwise permitted by the
Transaction Documents, would occur. The provisions of this paragraph shall
not apply to (i) any Deposit Account for which the Grantors, the
Depositary Bank and the Collateral Agent have entered into a cash
collateral agreement specially negotiated among any Grantor, the
Depositary Bank and the Collateral Agent for the specific purpose set
forth therein (ii) Deposit Accounts for which the Collateral Agent is the
depositary, and (iii) items on deposit in any Deposit Account constituting
sales tax remittances. Notwithstanding the foregoing, only the Collateral
Agent shall have the right to withdraw funds from the Escrow Account and
the Collateral Agent shall be entitled to do so as provided in the
Purchase Agreement and also be entitled to withdraw funds therefrom during
the continuance of any Event of Default.
4.3. INVESTMENT PROPERTY. If any Grantor shall at any time hold or
acquire any certificated securities, the Grantor shall forthwith endorse,
pledge and deliver the same to the Collateral Agent, accompanied by such
instruments of
-4-
transfer or assignment duly executed in blank as the Collateral Agent may
from time to time specify. If any securities now or hereafter acquired by
any Grantor are uncertificated and are issued to the Grantor or its
nominee directly by the issuer thereof, the Grantor shall immediately
notify the Collateral Agent thereof and, at the Collateral Agent's request
and option, pursuant to an agreement in form and substance satisfactory to
the Collateral Agent, either (a) cause the issuer to agree to comply with
instructions from the Collateral Agent as to such securities, without
further consent of the Grantor or such nominee, or (b) arrange for the
Collateral Agent to become the registered owner of the securities. If any
securities, whether certificated or uncertificated, or other investment
property now or hereafter acquired by any Grantor are held by the Grantor
or its nominee through a securities intermediary or commodity
intermediary, the Grantor shall immediately notify the Collateral Agent
thereof and, at the Collateral Agent's request and option, pursuant to an
agreement in form and substance satisfactory to the Collateral Agent,
either (i) cause such securities intermediary or (as the case may be)
commodity intermediary to agree to comply with entitlement orders or other
instructions from the Collateral Agent to such securities intermediary as
to such securities or other investment property, or (as the case may be)
to apply any value distributed on account of any commodity contract as
directed by the Collateral Agent to such commodity intermediary, in each
case without further consent of the Grantor or such nominee, or (ii) in
the case of financial assets or other investment property held through a
securities intermediary, arrange for the Collateral Agent to become the
entitlement holder with respect to such investment property, with the
Grantor being permitted, only with the consent of the Collateral Agent, to
exercise rights to withdraw or otherwise deal with such investment
property. The Collateral Agent agrees with the Grantors that the
Collateral Agent shall not give any such entitlement orders or
instructions or directions to any such issuer, securities intermediary or
commodity intermediary, and shall not withhold its consent to the exercise
of any withdrawal or dealing rights by the Grantors, unless an Event of
Default has occurred and is continuing, or, after giving effect to any
such investment and withdrawal rights not otherwise permitted by the
Transaction Documents, would occur. The provisions of this paragraph shall
not apply to any financial assets credited to a securities account for
which the Collateral Agent is the securities intermediary.
4.4. COLLATERAL IN THE POSSESSION OF A BAILEE. If any goods are at
any time in the possession of a bailee, the Grantors shall promptly notify
the Collateral Agent thereof and, if requested by the Collateral Agent,
shall promptly obtain an acknowledgement from the bailee, in form and
substance satisfactory to the Collateral Agent, that the bailee holds such
Collateral for the benefit of the Collateral Agent and shall act upon the
instructions of the Collateral Agent, without the further consent of the
Grantor. The Collateral Agent agrees with the Grantors that the Collateral
Agent shall not give any such instructions unless an Event of Default has
occurred and is continuing or would occur after taking into account any
action by the Grantors with respect to the bailee.
-5-
4.5. ELECTRONIC CHATTEL PAYER AND TRANSFERABLE RECORDS. If any
Grantor at any time holds or acquires an interest in any electronic
chattel paper or any "transferable record," as that term is defined in
Section 201 of the federal Electronic Signatures in Global and National
Commerce Act, or in ss.16 of the Uniform Electronic Transactions Act as in
effect in any relevant jurisdiction, the Grantor shall promptly notify the
Collateral Agent thereof and, at the request of the Collateral Agent,
shall take such action as the Collateral Agent may reasonably request to
vest in the Collateral Agent control, under ss.9-105 of the Uniform
Commercial Code, of such electronic chattel paper or control under Section
201 of the federal Electronic Signatures in Global and National Commerce
Act or, as the case may be, ss.16 of the Uniform Electronic Transactions
Act, as so in effect in such jurisdiction, of such transferable record.
The Collateral Agent agrees with the Grantors that the Collateral Agent
will arrange, pursuant to procedures satisfactory to the Collateral Agent
and so long as such procedures will not result in the Collateral Agent's
loss of control, for the Grantors to make alterations to the electronic
chattel paper or transferable record permitted under UCC ss.9-105 or, as
the case may be, Section 201 of the federal Electronic Signatures in
Global and National Commerce Act or ss.16 of the Uniform Electronic
Transactions Act for a party in control to make without loss of control,
unless an Event of Default has occurred and is continuing or would occur
after taking into account any action by the Grantors with respect to such
electronic chattel paper or transferable record.
4.6. LETTER-OF-CREDIT RIGHTS. If any Grantor is at any time a
beneficiary under a letter of credit now or hereafter issued in favor of
the Grantor, the Grantor shall promptly notify the Collateral Agent
thereof and, at the request and option of the Collateral Agent, the
Grantor shall, pursuant to an agreement in form and substance satisfactory
to the Collateral Agent, either (i) arrange for the issuer and any
confirmer of such letter of credit to consent to an assignment to the
Collateral Agent of the proceeds of any drawing under the letter of credit
or (ii) arrange for the Collateral Agent to become the transferee
beneficiary of the letter of credit, with the Collateral Agent agreeing,
in each case, that the proceeds of any drawing under the letter to credit
are to be applied as provided in the Purchase Agreement.
4.7. COMMERCIAL TORT CLAIMS. If any Grantor shall at any time hold
or acquire a commercial tort claim, the Grantor shall immediately notify
the Collateral Agent in a writing signed by the Grantor of the brief
details thereof and grant to the Collateral Agent in such writing a
security interest therein and in the proceeds thereof, all upon the terms
of this Agreement, with such writing to be in form and substance
satisfactory to the Collateral Agent.
5. OTHER ACTIONS AS TO ANY AND ALL COLLATERAL. The Grantors further agree
to take any other action reasonably requested by the Collateral Agent to insure
the attachment, perfection and first priority (subject to Permitted Liens) of,
and the ability of the Collateral Agent to enforce, the Collateral Agent's
security interest in any and all of the Collateral including, without
limitation, (a) executing, delivering and, where
-6-
appropriate, filing financing statements and amendments relating thereto under
the Uniform Commercial Code, to the extent, if any, that any Grantor's signature
thereon is required therefor, (b) causing the Collateral Agent's name to be
noted as secured party on any certificate of title for a titled good if such
notation is a condition to attachment, perfection or priority of, or ability of
the Collateral Agent to enforce, the Collateral Agent's security interest in
such Collateral, (c) complying with any provision of any statute, regulation or
treaty of the United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or priority of, or ability of
the Collateral Agent to enforce, the Collateral Agent's security interest in
such Collateral, (d) obtaining governmental and other third party consents and
approvals, including without limitation any consent of any licensor, lessor or
other person obligated on Collateral, (e) subject to the Collateral Exception,
obtaining waivers from landlords in form and substance satisfactory to the
Collateral Agent, (f) taking all actions required by any earlier versions of the
Uniform Commercial Code or by other law, as applicable in any relevant Uniform
Commercial Code jurisdiction, or by other law as applicable in any foreign
jurisdiction, (g) delivery to the Collateral Agent of stock certificates (and
stock powers duly executed in blank in favor of the Collateral Agent) covering
all of the Capital Units described on Schedule A, and (h) if the Maturity Date
is extended, at the time of such extension entering into with Collateral Agent
and a service company reasonably acceptable to Collateral Agent and Grantors, a
contract requiring (i) the service company to file continuation statements and
(ii) the Grantors to pay the cost of all filings and creation of continuation
and termination statements .
6. RELATION TO OTHER SECURITY DOCUMENTS. The provisions of this Agreement
supplement the provisions of the other Transaction Documents. Nothing contained
in any such Transaction Document shall derogate from any of the rights or
remedies of the Collateral Agent hereunder. The provisions of this Agreement
shall be read and construed with the other Security Documents referred to below
in the manner so indicated.
6.1. COPYRIGHT SECURITY AGREEMENTS. If required by the Collateral
Agent, concurrently herewith each Grantor is also executing and delivering
to the Collateral Agent the Copyright Security Agreement (attached hereto
as Exhibit I) pursuant to which the Grantor is granting to the Collateral
Agent security interests in certain Collateral consisting of copyrights,
and copyright registrations. The provisions of the Copyright Security
Agreement are supplemental to the provisions of this Agreement, and
nothing contained in the Copyright Security Agreement shall derogate from
any of the rights or remedies of the Collateral Agent hereunder. Neither
the delivery of, nor anything contained in, the Copyright Security
Agreement shall be deemed to prevent or postpone the time of attachment or
perfection of any security interest in such Collateral created hereby.
7. REPRESENTATIONS AND WARRANTIES CONCERNING GRANTOR'S LEGAL STATUS. Each
Grantor has previously delivered to the Collateral Agent a certificate signed by
each Grantor and entitled "Perfection Certificate" (the "Perfection
Certificate"). Each Grantor represents and warrants to the Collateral Agent as
follows: (a) the Grantor's exact legal
-7-
name is that indicated on the Perfection Certificate and on the signature page
hereof, (b) the Grantor is an organization of the type and organized in the
jurisdiction set forth in the Perfection Certificate, (c) the Perfection
Certificate accurately sets forth the Grantor's organizational identification
number or accurately states that the Grantor has none, (d) the Perfection
Certificate accurately sets forth the Grantor's place of business or, if more
than one, its chief executive office as well as the Grantor's mailing address if
different and (e) all other information set forth on the Perfection Certificate
pertaining to the Grantor is accurate and complete.
8. COVENANTS CONCERNING GRANTOR'S LEGAL STATUS. Each Grantor covenants
with the Collateral Agent as follows: (a) without providing at least 30 days
prior written notice to the Collateral Agent, the Grantor will not change its
name, its place of business or, if more than one, chief executive office, or its
mailing address or organizational identification number if it has one, (b) if
the Grantor does not have an organizational identification number and later
obtains one, the Grantor shall forthwith notify the Collateral Agent of such
organizational identification number, and (c) the Grantor will not change its
type of organization, jurisdiction of organization or other legal structure.
9. REPRESENTATIONS AND WARRANTIES CONCERNING COLLATERAL. Each Grantor
further represents and warrants to the Collateral Agent as follows: (a) the
Grantor is the owner of or has other rights in or power to transfer the
Collateral, free from any adverse lien, security interest or other encumbrance,
except for the security interest created by this Agreement and the Permitted
Liens, (b) none of the Collateral constitutes, or is the proceeds of, "farm
products" as defined in ss.9-102(a)(34) of the Uniform Commercial Code of the
State, (c) none of the account debtors or other persons obligated on any of the
Collateral is a governmental authority subject to the Federal Assignment of
Claims Act or like federal, state or local statute or rule in respect of such
Collateral, (d) the Grantor holds no commercial tort claim except as indicated
on Schedule B hereto as modified from time to time, and (e) the Grantor has at
all times operated its business in compliance with all applicable provisions of
the federal Fair Labor Standards Act, as amended, and with all applicable
provisions of federal, state and local statutes and ordinances dealing with the
control, shipment, storage or disposal of hazardous materials or substances and
(f) all other information set forth on the Perfection Certificate pertaining to
the Collateral is accurate and complete.
10. COVENANTS CONCERNING COLLATERAL ETC. Each Grantor further covenants
with the Collateral Agent as follows: (a) the Collateral, to the extent not
delivered to the Collateral Agent pursuant to ss.4, will be kept at those
locations listed on the Perfection Certificate and the Grantor will not remove
the Collateral from such locations, without providing at least 30 days prior
written notice to the Collateral Agent, (b) except for the security interest
herein granted and Permitted Liens, the Grantor shall be the owner of or have
other rights in the Collateral free from any lien, security interest or other
encumbrance, and the Grantor shall defend the same against all claims and
demands of all persons at any time claiming the same or any interests therein
adverse to the Collateral Agent, (c) the Grantor shall not pledge, mortgage or
create, or suffer to exist a security interest in the Collateral in favor of any
person other than the Collateral Agent except for
-8-
Permitted Liens, (d) the Grantor will not use the Collateral in violation of any
policy of insurance thereon, (e) the Grantor will permit the Collateral Agent,
or its designee, to inspect the Collateral, wherever located, at any reasonable
time during business hours upon prior notice, , (f) the Grantor will pay
promptly when due all taxes, assessments, governmental charges and levies upon
the Collateral or incurred in connection with the use or operation of such
Collateral or incurred in connection with this Agreement other than any taxes
contested in good faith and for which appropriate reserves have been established
by the Grantor, (g) the Grantor will continue to operate, its business in
compliance with all applicable provisions of the federal Fair Labor Standards
Act, as amended, and with all applicable provisions of federal, state and local
statutes and ordinances dealing with the control, shipment, storage or disposal
of hazardous materials or substances, and (h) the Grantor will not sell or
otherwise dispose, or offer to sell or otherwise dispose, of the Collateral or
any interest therein except for as permitted by the Purchase Agreement.
11. INSURANCE.
11.1. MAINTENANCE OF INSURANCE. Each Grantor will maintain with
financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as shall
be in accordance with general practices of businesses engaged in similar
activities in similar geographic areas. Such insurance shall be in such
minimum amounts that the Grantor will not be deemed a coinsurer under
applicable insurance laws, regulations and policies and otherwise shall be
in such amounts, contain such terms, be in such forms and be for such
periods as may be reasonably satisfactory to the Collateral Agent. In
addition, all such insurance shall be payable to the Collateral Agent as
loss payee. Without limiting the foregoing, the Grantors will (i) keep all
of its physical property insured with casualty or physical hazard
insurance on an "all risks" basis, with broad form flood and earthquake
coverages and electronic data processing coverage, with a full replacement
cost endorsement and an "agreed amount" clause in an amount equal to 100%
of the full replacement cost of such property, (ii) maintain all such
workers' compensation or similar insurance as may be required by law and
(iii) maintain, in amounts and with deductibles equal to those generally
maintained by businesses engaged in similar activities in similar
geographic areas, general public liability insurance against claims of
bodily injury, death or property damage occurring, on, in or about the
properties of the Grantors; business interruption insurance; and product
liability insurance.
11.2. INSURANCE PROCEEDS. The proceeds of any casualty insurance in
respect of any casualty loss of any of the Collateral shall, subject to
the rights, if any, of other parties with a prior interest in the property
covered thereby, (i) so long as no Default or Event of Default has
occurred and is continuing and to the extent that the amount of such
proceeds is less than $500,000, be disbursed to the Grantor for direct
application by the Grantor solely to the repair or replacement of the
Grantor's property so damaged or destroyed and (ii) in all other
circumstances, be held by the Collateral Agent as cash collateral for the
-9-
Obligations and (except to the extent disbursed pursuant to the next
sentence) may be applied to the Obligations pursuant to Section 2.5 of the
Purchase Agreement. The Collateral Agent may, at its sole option, disburse
from time to time all or any part of such proceeds so held as cash
collateral, upon such terms and conditions as the Collateral Agent may
reasonably prescribe, for direct application by the Grantor solely to the
repair or replacement of the Grantor's property so damaged or destroyed,
or the Collateral Agent may apply all or any part of such proceeds to the
Obligations.
11.3. NOTICE OF CANCELLATION ETC. All policies of insurance shall
provide for at least 30 days prior written cancellation notice to the
Collateral Agent. In the event of failure by any Grantor to provide and
maintain insurance as herein provided, the Collateral Agent may, at its
option, provide such insurance and charge the amount thereof to the
Grantor. Each Grantor shall furnish the Collateral Agent with certificates
of insurance and policies evidencing compliance with the foregoing
insurance provision.
12. COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL.
12.1. EXPENSES INCURRED BY COLLATERAL AGENT. In its discretion, the
Collateral Agent may discharge taxes and other encumbrances at any time
levied or placed on any of the Collateral, make repairs thereto and pay
any necessary filing fees or, if any Grantor fails to do so, insurance
premiums. Each Grantor agrees to reimburse the Collateral Agent on demand
for any and all expenditures so made. The Collateral Agent shall have no
obligation to the Grantors to make any such expenditures, nor shall the
making thereof relieve the Grantor of any default. Any expenses incurred
under this Section 12 shall constitute Obligations.
12.2. COLLATERAL AGENT'S OBLIGATIONS AND DUTIES. Anything herein to
the contrary notwithstanding, each Grantor shall remain liable under each
contract or agreement comprised in the Collateral to be observed or
performed by the Grantor thereunder. The Collateral Agent shall not have
any obligation or liability under any such contract or agreement by reason
of or arising out of this Agreement or the receipt by the Collateral Agent
of any payment relating to any of the Collateral, nor shall the Collateral
Agent be obligated in any manner to perform any of the obligations of the
Grantor under or pursuant to any such contract or agreement, to make
inquiry as to the nature or sufficiency of any payment received by the
Collateral Agent in respect of the Collateral or as to the sufficiency of
any performance by any party under any such contract or agreement, to
present or file any claim, to take any action to enforce any performance
or to collect the payment of any amounts which may have been assigned to
the Collateral Agent or to which the Collateral Agent may be entitled at
any time or times. The Collateral Agent's sole duty with respect to the
custody, safe keeping and physical preservation of the Collateral in its
possession, under ss.9-207 of the Uniform Commercial Code of the State or
otherwise, shall be to deal with such Collateral in the same manner as the
Collateral Agent deals with similar property for its own account.
-10-
13. SECURITIES AND DEPOSITS. The Collateral Agent may at any time
following and during the continuance of an Event of Default, at its option,
transfer to itself or any nominee any securities constituting Collateral,
receive any income thereon and hold such income as additional Collateral or
apply it to the Obligations. Whether or not any Obligations are due, the
Collateral Agent may following and during the continuance of an Event of Default
demand, ▇▇▇ for, collect, or make any settlement or compromise which it deems
desirable with respect to the Collateral. Regardless of the adequacy of
Collateral or any other security for the Obligations, any deposits or other sums
at any time credited by or due from the Collateral Agent to the Grantors may at
any time be applied to or set off against any of the Obligations then due and
owing.
14. NOTIFICATION TO ACCOUNT DEBTORS AND OTHER PERSONS OBLIGATED ON
COLLATERAL. If an Event of Default shall have occurred and be continuing, the
Grantors shall, at the request of the Collateral Agent, notify account debtors
and other persons obligated on any of the Collateral of the security interest of
the Collateral Agent in any account, chattel paper, general intangible,
instrument or other Collateral and that payment thereof is to be made directly
to the Collateral Agent or to any financial institution designated by the
Collateral Agent as its agent therefor, and the Collateral Agent may itself, if
an Event of Default shall have occurred and be continuing, without notice to or
demand upon the Grantor, so notify account debtors and other persons obligated
on Collateral. After the making of such a request or the giving of any such
notification, the Grantors shall hold any proceeds of collection of accounts,
chattel paper, general intangibles, instruments and other Collateral received by
the Grantor as trustee for the Collateral Agent without commingling the same
with other funds of the Grantor and shall turn the same over to the Collateral
Agent in the identical form received, together with any necessary endorsements
or assignments. The Collateral Agent shall apply the proceeds of collection of
accounts, chattel paper, general intangibles, instruments and other Collateral
received by the Collateral Agent to the Obligations, such proceeds to be
immediately entered after final payment in cash or other immediately available
funds of the items giving rise to them.
15. INVESTMENT PROPERTY. (i) The Grantors, at their cost and expense
(including the cost and expense of any of the following referenced consents,
approvals etc.) will promptly execute and deliver or cause the execution and
delivery of all applications, certificates, instruments, registration
statements, and all other documents and papers the Collateral Agent may request
during the continuance of an Event of Default in connection with the obtaining
of any consent, approval, registration, qualification, permit, license,
accreditation, or authorization of any other official body or other Person
necessary or appropriate for the effective exercise of any rights hereunder or
under the other Transaction Documents. Without limiting the generality of the
foregoing, the Grantors agree that in the event the Collateral Agent shall
exercise its rights hereunder or pursuant to the other Transaction Documents
during the continuance of an Event of Default, to sell, transfer, or otherwise
dispose of, or vote, consent, operate, or take any other action in connection
with any of the Collateral, the Grantors shall execute and deliver (or cause to
be executed and delivered) all applications, certificates, assignments and other
documents that the Collateral Agent requests to facilitate such actions and
shall otherwise promptly, fully, and diligently cooperate with the Collateral
-11-
Agent and any other Persons in making any application for the prior consent or
approval of any official body or any other Person to the exercise by the
Collateral Agent or any such rights relating to all or any of the Collateral.
(ii) The Grantors agree promptly upon the occurrence and continuance of an
Event of Default and without any request therefor by the Collateral Agent, so
long as such Event of Default shall continue, (i) to deliver (properly endorsed
where required hereby or requested by Collateral Agent) to the Collateral Agent
all Dividends and Distributions with respect to Investment Property and all
proceeds of the Collateral, in each case thereafter received by the Grantor, all
of which shall be held by Collateral Agent as additional Collateral; and (ii)
with respect to Collateral consisting of general partner interests or limited
liability company interests, to make modifications to all necessary documents to
admit the Collateral Agent as a general partner or member, respectively.
(iii) Except when an Event of Default has occurred and is continuing, the
Grantors may continue to vote all Investment Property included in the Collateral
except in a manner which is inconsistent or in violation of the Transaction
Documents. The Grantors agree promptly upon the occurrence and continuance of an
Event of Default, so long as such Event of Default shall continue, (i) that
Collateral Agent may exercise (to the exclusion of the Grantor) the voting power
and all other incidental rights of ownership with respect to any Collateral
constituting Investment Property of the Grantor and the Grantor hereby grants
Collateral Agent an irrevocable proxy, exercisable under such circumstances, to
vote such Investment Property; and (ii) that it shall promptly deliver to the
Collateral Agent such additional proxies and other documents as may be necessary
to allow the Agent to exercise such voting power.
(iv) All Dividends, Distributions, interest, principal, cash payments,
payment intangibles and proceeds which may at any time and from time to time be
held by any Grantor but which the Grantor is then obligated to deliver to the
Collateral Agent, shall, until delivery to the Collateral Agent, be held by the
Grantor separate and apart from its other property in trust for the Collateral
Agent. The Collateral Agent agrees that unless an Event of Default shall have
occurred and be continuing, the Grantors will have the exclusive voting power
with respect to any Investment Property constituting the Grantor's Collateral
and the Collateral Agent will, upon the written request of any Grantor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by the Grantor which are necessary to allow the Grantor to exercise
that voting power; provided that no vote shall be cast, or consent, waiver, or
ratification given, or action taken by the Grantor that would violate any
provision of any Transaction Document.
The Grantors hereby acknowledge that the sale by Collateral Agent of any
Investment Property pursuant to the terms hereof in compliance with the
Securities Act, as well as applicable "Blue Sky" or other state securities laws
may require strict limitations as to the manner in which Collateral Agent or any
subsequent transferee of the Investment Property may dispose thereof. The
Grantors acknowledge and agree that, to protect Collateral Agent's interests, it
may be necessary to sell the Investment Property at
-12-
a price less than the maximum price attainable if a sale were delayed or made in
another manner, such as a public offering under the Securities Act. The Grantors
do not have an objection to a sale in such manner and the Grantors agree that
Collateral Agent does not have an obligation to obtain the maximum possible
price for all or any part of the Investment Property. Without limiting the
generality of the foregoing, the Grantors agree that Collateral Agent may,
pursuant to the terms hereof and subject to applicable law, from time to time
attempt to sell all or any part of the Investment Property by a private
placement, restricting the bidders and prospective purchasers to those Persons
who will represent and agree that they are purchasing for investment only and
not for distribution. In so doing, Collateral Agent may solicit offers to buy
the Investment Property or any part thereof for cash from a limited number of
investors deemed by Collateral Agent, in its reasonable judgment, to be
institutional investors or other responsible Persons who might be interested in
purchasing the Investment Property. If Collateral Agent shall solicit such
offers, then acceptance by Collateral Agent of one of the offers shall be deemed
to be a commercially reasonable method of disposition of the Collateral.
16. POWER OF ATTORNEY.
16.1. APPOINTMENT AND POWERS OF COLLATERAL AGENT. The Grantors
hereby irrevocably constitute and appoint the Collateral Agent and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of the Grantors or in the Collateral Agent's own name, for
the purpose of carrying out the terms of this Agreement, to take any and
all appropriate action and to execute any and all documents and
instruments that may be necessary or desirable to accomplish the purposes
of this Agreement and, without limiting the generality of the foregoing,
hereby gives said attorney the power and right, on behalf of the Grantors,
without notice to or assent by the Grantors, to do the following:
(a) upon the occurrence and during the continuance of an Event
of Default, generally to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral in such
manner as is consistent with the Uniform Commercial Code of the
State and as fully and completely as though the Collateral Agent
were the absolute owner thereof for all purposes, and to do at the
Grantors' expense, at any time, or from time to time, all acts and
things which the Collateral Agent deems necessary to protect,
preserve or realize upon the Collateral and the Collateral Agent's
security interest therein, in order to effect the intent of this
Agreement, all as fully and effectively as the Grantor might do,
including, without limitation, (i) the filing and prosecuting of
registration and transfer applications with the appropriate federal
or local agencies or authorities with respect to trademarks,
copyrights and patentable inventions and processes, (ii) upon
written notice to the Grantors, the exercise of voting rights with
respect to voting securities, which rights may be exercised, if the
Collateral Agent so elects, with a view to causing the liquidation
in a commercially reasonable manner of assets of the issuer of any
such securities and (iii) the execution, delivery and recording, in
-13-
connection with any sale or other disposition of any Collateral, of
the endorsements, assignments or other instruments of conveyance or
transfer with respect to such Collateral; and
(b) to the extent that the Grantors' authorization given in
ss.2 is not sufficient, to file such financing statements with
respect hereto, with or without the Grantor' signature, or a
photocopy of this Agreement in substitution for a financing
statement, as the Collateral Agent may deem appropriate and to
execute in the Grantor's name such financing statements and
amendments thereto and continuation statements which may require the
Grantor's signature.
16.2. RATIFICATION BY GRANTORS. To the extent permitted by law, the
Grantors hereby ratify all that said attorney shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.
16.3. NO DUTY ON COLLATERAL AGENT. The powers conferred on the
Collateral Agent hereunder are solely to protect its interests in the
Collateral and shall not impose any duty upon it to exercise any such
powers. The Collateral Agent shall be accountable only for the amounts
that it actually receives as a result of the exercise of such powers and
neither it nor any of its officers, directors, employees or agents shall
be responsible to the Grantor for any act or failure to act, except for
the Collateral Agent's own gross negligence or willful misconduct.
17. REMEDIES. If an Event of Default shall have occurred and be
continuing, the Collateral Agent may, without notice to or demand upon the
Grantors, declare this Agreement to be in default, and the Collateral Agent
shall thereafter have in any jurisdiction in which enforcement hereof is sought,
in addition to all other rights and remedies, the rights and remedies of a
Collateral Agent under the Uniform Commercial Code of the State or of any
jurisdiction in which Collateral is located, including, without limitation, the
right to take possession of the Collateral, and for that purpose the Collateral
Agent may, so far as the Grantors can give authority therefor, enter upon any
premises on which the Collateral may be situated and remove the same therefrom.
The Collateral Agent may in its discretion require the Grantors to assemble all
or any part of the Collateral at such location or locations within the
jurisdiction(s) of the Grantors' principal office(s) or at such other locations
as the Collateral Agent may reasonably designate. Unless the Collateral is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, the Collateral Agent shall give to the Grantors at
least ten Business Days prior written notice of the time and place of any public
sale of Collateral or of the time after which any private sale or any other
intended disposition is to be made. The Grantors hereby acknowledge that ten
Business Days prior written notice of such sale or sales shall be reasonable
notice. In addition, the Grantors waive any and all rights that it may have to a
judicial hearing in advance of the enforcement of any of the Collateral Agent's
rights hereunder, including, without
-14-
limitation, its right following an Event of Default to take immediate possession
of the Collateral and to exercise its rights with respect thereto.
18. STANDARDS FOR EXERCISING REMEDIES. To the extent that applicable law
imposes duties on the Collateral Agent to exercise remedies in a commercially
reasonable manner, the Grantors acknowledge and agree that it is not
commercially unreasonable for the Collateral Agent (a) to fail to incur expenses
reasonably deemed significant by the Collateral Agent to prepare Collateral for
disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (b) 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, (c) to fail to exercise collection remedies against account debtors
or other persons obligated on Collateral or to remove liens or encumbrances on
or any adverse claims against Collateral, (d) 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, (e) to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (f) to
contact other persons, whether or not in the same business as the Grantor, for
expressions of interest in acquiring all or any portion of the Collateral, (g)
to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the collateral is of a specialized nature, (h) 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
capability of doing so, or that match buyers and sellers of assets, (i) to
dispose of assets in wholesale rather than retail markets, (j) to disclaim
disposition warranties, (k) to purchase insurance or credit enhancements to
insure the Collateral Agent against risks of loss, collection or disposition of
Collateral or to provide to the Collateral Agent a guaranteed return from the
collection or disposition of Collateral, or (1) to the extent deemed appropriate
by the Collateral Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Collateral Agent in
the collection or disposition of any of the Collateral. The Grantors acknowledge
that the purpose of this ss.18 is to provide non-exhaustive indications of what
actions or omissions by the Collateral Agent would not be commercially
unreasonable in the Collateral Agent's exercise of remedies against the
Collateral and that other actions or omissions by the Collateral Agent shall not
be deemed commercially unreasonable solely on account of not being indicated in
this ss.18. Without limitation upon the foregoing, nothing contained in this
ss.18 shall be construed to grant any rights to the Grantors or to impose any
duties on the Collateral Agent that would not have been granted or imposed by
this Agreement or by applicable law in the absence of this ss.18.
19. NO ORAL CHANGE; AMENDMENTS; SECURITY AGREEMENT SUPPLEMENTS FOR
ADDITIONAL GRANTORS. No amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by the Grantors and the Collateral
Agent, and no waiver of any provision of this Agreement, and no consent to any
departure by the Grantors therefrom, shall be effective unless it is in writing
and signed by the Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. Notwithstanding the foregoing, additional
-15-
Persons may become Grantors under this Agreement without consent of any other
Grantor through execution and delivery to the Collateral Agent of an Assumption
Agreement in the form of Annex 1 hereto or any other form of supplement
acceptable to the Collateral Agent. Nothing in this Section 19 shall be
construed to permit any Grantor to form a Subsidiary unless expressly permitted
to do so under the Purchase Agreement.
20. SURETYSHIP WAIVERS BY GRANTORS. Each Grantor waives demand, notice,
protest, notice of acceptance of this Agreement, notice of loans made, credit
extended, Collateral received or delivered or other action taken in reliance
hereon and all other demands and notices of any description. With respect to
both the Obligations and the Collateral, the Grantors assent to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Collateral Agent may deem advisable. The Collateral
Agent shall have no duty as to the collection or protection of the Collateral or
any income thereon, nor as to the preservation of rights against prior parties,
nor as to the preservation of any rights pertaining thereto beyond the safe
custody thereof as set forth in ss.11.2. The Grantors further waive any and all
other suretyship defenses.
21. MARSHALLING. The Collateral Agent shall not be required to marshal any
present or future collateral security (including but not limited to this
Agreement and the Collateral) for, or other assurances of payment of, the
Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of its rights hereunder
and in respect of such collateral security and other assurances of payment shall
be cumulative and in addition to all other rights, however existing or arising.
To the extent that it lawfully may, the Grantors hereby agree that it will not
invoke any law relating to the marshalling of collateral which might cause delay
in or impede the enforcement of the Collateral Agent's rights under this
Agreement or under any other instrument creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any
of the Obligations is secured or payment thereof is otherwise assured, and, to
the extent that it lawfully may, the Grantors hereby irrevocably waive the
benefits of all such laws.
22. PROCEEDS OF DISPOSITIONS; EXPENSES. The Grantors shall pay to the
Collateral Agent on demand any and all expenses, including reasonable attorneys'
fees and disbursements, incurred or paid by the Collateral Agent in protecting,
preserving or enforcing the Collateral Agent's rights under or in respect of any
of the Obligations or any of the Collateral. After deducting all of said
expenses, the residue of any proceeds of collection or sale of the Obligations
or Collateral shall, to the extent actually received in cash, be applied to the
payment of the Obligations in such order or preference as the Collateral Agent
may determine, proper allowance and provision being made for any Obligations not
then due. Upon the final payment and satisfaction in full of all of the
Obligations and after making any payments required by Sections 9-608(a)(1)(C) or
9615(a)(3) of the Uniform Commercial Code of the State, any excess shall be
returned to
-16-
the Grantors, and the Grantors shall remain liable for any deficiency in the
payment of the Obligations.
23. OVERDUE AMOUNTS. Until paid, all amounts due and payable by the
Grantors hereunder shall be a debt secured by the Collateral and shall bear,
whether before or after judgment, interest at the rate of interest set forth in
Section 2.2(d) of the Purchase Agreement.
24. GOVERNING LAW; CONSENT TO JURISDICTION.
(a) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State (other than those
conflict of law rules that would defer to the substantive laws of
another jurisdiction). Without in any way limiting the preceding
choice of law, the parties elect to be governed by the law of the
State in accordance with, and are relying (at least in part) on,
Section 5-1401 of the General Obligations Law of the State, as
amended, or any corresponding or succeeding provisions thereof.
(b) Submission to Jurisdiction. The Grantors hereby submit to
the nonexclusive jurisdiction of the United States District Court
for the Southern District of New York and of the Supreme Court of
the State of New York sitting in New York County (including its
Appellate Division), and of any other appellate court in the State
of New York, for the purposes of all legal proceedings arising out
of or relating to this Agreement or the transactions contemplated
hereby.
(c) Waiver of Venue. The Grantors hereby irrevocably waive, to
the fullest extent permitted by applicable law, any objection that
it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an
inconvenient forum. Withount in any way limiting the preceding
consents to jurisdiction and venue, the parties agree to submit to
the jurisdiction of the courts of the State of New York in
accordance with Section 5-1402 of the General Obligations Law of the
State, as amended, or any corresponding or succeeding provisions
thereof.
(d) Service of Process. Each party to this Agreement
irrevocably consents to service of process in the manner provided
for notices in Section 11.5 of the Purchase Agreement. Nothing in
this Agreement will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
25. WAIVER OF JURY TRIAL. THE GRANTORS AND THE COLLATERAL AGENT HEREBY
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY
-17-
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
26. MISCELLANEOUS; AGREEMENT TO BE BOUND BY PROVISIONS OF TRANSACTION
DOCUMENTS APPLICABLE TO GRANTOR. The headings of each section of this Agreement
are for convenience only and shall not define or limit the provisions thereof.
This Agreement and all rights and obligations hereunder shall be binding upon
the Grantors and their respective successors and assigns, and shall inure to the
benefit of the Collateral Agent and its successors and assigns. If any term of
this Agreement shall be held to be invalid, illegal or unenforceable, the
validity of all other terms hereof shall in no way be affected thereby, and this
Agreement shall be construed and be enforceable as if such invalid, illegal or
unenforceable term had not been included herein. The Grantors acknowledge
receipt of a copy of this Agreement. Each Grantor agrees to be bound by each
provision of every other Transaction Document which purports to be applicable to
it as if such provision were set forth herein.
[Remainder of Page intentionally left blank.]
-18-
IN WITNESS WHEREOF, intending to be legally bound, the Grantors and
Collateral Agent have caused this Agreement to be duly executed as of the date
first above written.
GRANTORS:
ADVANCED AESTHETICS, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ANUSHKA PBG ACQUISITION SUB, LLC
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ANUSHKA BOCA ACQUISITION SUB, LLC
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
WILD HARE ACQUISITION SUB, LLC
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇▇ CORPORATION
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
-2-
ADVANCED K, LLC
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ANUSHKA PBG, LLC
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ANUSHKA BOCA, LLC
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
WILD HARE, LLC
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ADVANCED AESTHETICS SUB, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ADVANCED AESTHETICS, LLC
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
-3-
-4-
COLLATERAL AGENT:
Technology Investment Capital Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: COO
-5-
SCHEDULE A
CAPITAL UNITS
Pledged Stock
SHARES OWNERSHIP CERTIFICATE
PLEDGOR ISSUER PLEDGED PERCENTAGE NUMBER(S)
------- ------ ------- ---------- ---------
Advanced Aesthetics, Inc. Advanced Aesthetics Sub, Inc. 10,000,000 100% 30
Advanced Aesthetics, LLC ▇▇▇▇▇▇▇▇ Corporation 50 100% 2
Pledged LLC Units
LLC UNITS OWNERSHIP
PLEDGOR ISSUER PLEDGED PERCENTAGE
------- ------ ------- ----------
Advanced Aesthetics, Sub, Inc. Advanced Aesthetics, LLC 100 100% 1
Advanced Aesthetics, LLC Anushka PBG, LLC 100 100% 1
Advanced Aesthetics, LLC Anushka Boca, LLC 100 100% 1
Advanced Aesthetics, LLC Wild Hare, LLC 100 100% 1
Advanced PBG, Inc. Anushka PBG Acquisition Sub, LLC 100 100% 1
Anushka Boca, LLC Anushka Boca Acquisition Sub, LLC 100 100% 1
Wild Hare, LLC Wild Hare Acquisition Sub, LLC 100 100% 1
Advanced Aesthetics, LLC Advanced K, LLC 100 100% 1
SCHEDULE B
COMMERCIAL TORT CLAIMS
None
-6-
EXHIBIT I
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT SECURITY AGREEMENT, dated as of March __, 2004 (this
"Agreement"), is by and among the parties identified as "Grantors" on the
signature pages hereto and such other parties as may become Grantors hereunder
after the date hereof (individually a "Grantor", and collectively the
"Grantors") and Technology Investment Capital Corp., as collateral agent (in
such capacity, together with its successors in such capacity, "Collateral
Agent") for the Purchasers (as defined below).
Grantor and Collateral Agent hereby agree as follows:
SECTION 1.
Definitions; Interpretation.
(a) Terms Defined in Purchase Agreement. All capitalized terms used in
this Agreement and not otherwise defined herein shall have the meanings assigned
to them in the Purchase Agreement.
(b) Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Collateral" has the meaning set forth in Section 2.
"Copyright Office" means the United States Copyright Office.
"Purchase Agreement" means that certain Note and Warrant Purchase
Agreement, dated as of the date hereof, among Advanced Aesthetics, Inc., a
Delaware corporation, Anushka PBG Acquisition Sub, LLC, a Delaware limited
liability company, Anushka Boca Acquisition Sub, LLC, a Delaware limited
liability company, Wild Hare Acquisition Sub, LLC, a Delaware limited liability
company, ▇▇▇▇▇▇▇▇ Corporation, a Florida corporation, and Advanced K, LLC, a
Delaware limited liability company, Technology Investment Capital Corp., as
Collateral Agent, and the Purchasers named therein, as it may modified,
supplemented and amended from time to time.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York.
(c) Terms Defined in UCC. Where applicable in the context of this
Agreement and except as otherwise defined herein, terms used in this Agreement
shall have the meanings assigned to them in the UCC.
(d) Construction. In this Agreement, the following rules of
construction and interpretation shall be applicable: (i) no reference to
"proceeds" in this Agreement
-7-
authorizes any sale, transfer, or other disposition of any Collateral by
Grantor; (ii) "includes" and "including" are not limiting; (iii) "or" is not
exclusive; and (iv) "all" includes "any" and "any" includes "all." To the extent
not inconsistent with the foregoing, the rules of construction and
interpretation applicable to the Purchase Agreement shall also be applicable to
this Agreement and are incorporated herein by this reference.
SECTION 2.
Security Interest.
(a) Grant of Security Interest. As security for the payment and
performance of the Obligations, Grantor hereby assigns, transfers and conveys to
the Collateral Agent, and grants a security interest in and mortgage to the
Collateral Agent for the benefit of the Purchasers of, all of Grantor's right,
title and interest in, to and under the following property, in each case whether
now or hereafter existing or arising or in which Grantor now has or hereafter
owns, acquires or develops an interest and wherever located (collectively, the
"Collateral"):
(i) All of Grantor's present and future United States
registered copyrights and copyright registrations, including Grantor's
United States registered copyrights and copyright registrations listed
in Schedule A to this Agreement, all of Grantor's present and future
United States applications for copyright registrations, including
Grantor's United States applications for copyright registrations listed
in Schedule B to this Agreement, and all of Grantor's present and
future copyrights that are not registered in the Copyright Office
including, without limitation, derivative works (collectively, the
"Copyrights"), and any and all royalties, payments, and other amounts
payable to Grantor in connection with the Copyrights, together with all
renewals and extensions of the Copyrights, the right to recover for all
past, present, and future infringements of the Copyrights, and all
manuscripts, documents, writings, tapes, disks, storage media, computer
programs, computer databases, computer program flow diagrams, source
codes, object codes and all tangible property embodying or
incorporating the Copyrights, and all other rights of every kind
whatsoever accruing thereunder or pertaining thereto;
(ii) All of Grantor's right, title and interest in and to any
and all present and future license agreements with respect to the
Copyrights;
(iii) All present and future accounts and other rights to
payment arising from, in connection with or relating to the Copyrights;
and
(iv) All cash and non-cash proceeds of any and all of the
foregoing.
(b) Continuing Security Interest. Grantor agrees that this Agreement
shall create a continuing security interest in the Collateral which shall remain
in effect until terminated in accordance with Section 11.
-8-
SECTION 3.
Supplement to Security Agreement.
This Agreement has been entered into in conjunction with the security
interests granted to Collateral Agent under the Security Agreement, and other
security documents referred to therein. The rights and remedies of Collateral
Agent with respect to the security interests granted herein are without
prejudice to, and are in addition to those set forth in the Security Agreement
or any other security documents referred to therein, all terms and provisions of
which are incorporated herein by reference.
SECTION 4.
Representations and Warranties.
Grantor represents and warrants to Collateral Agent that:
(a) Copyright Registrations. A true and correct list of all of
Grantor's United States registered copyrights and copyright registrations is set
forth in Schedule A.
(b) Applications for Copyright Registration. A true and correct list of
all of Grantor's United States applications for copyright registrations is set
forth in Schedule B.
SECTION 5.
Further Acts.
On a continuing basis, Grantor shall make, execute, acknowledge and
deliver, and file and record in the proper filing and recording places, all such
instruments and documents, and take all such action as may be necessary or
advisable or may be requested by Collateral Agent to carry out the intent and
purposes of this Agreement, or for assuring, confirming or protecting the grant
or perfection of the security interest granted or purported to be granted
hereby, to ensure Grantor's compliance with this Agreement or to enable
Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to the Collateral, including any documents for filing with the Copyright
Office or any applicable state office. Collateral Agent may record this
Agreement, an abstract thereof, or any other document describing Collateral
Agent's interest in the Copyrights with the Copyright Office, at the expense of
Grantor. In addition, Grantor authorizes Collateral Agent to file financing
statements describing the Collateral in any UCC filing office deemed appropriate
by Collateral Agent. If the Grantor shall at any time hold or acquire a
commercial tort claim arising with respect to the Collateral, the Grantor shall
immediately notify Collateral Agent in a writing signed by the Grantor of the
brief details thereof and grant to the Collateral Agent in such writing a
security interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance satisfactory to
the Collateral Agent.
-9-
SECTION 6.
Authorization to Supplement.
Grantor shall give Collateral Agent prompt notice of any additional
United States copyright registrations or applications therefor after the date
hereof. Grantor authorizes Collateral Agent unilaterally to modify this
Agreement by amending Schedule A or B to include any future United States
registered copyrights or applications therefor of Grantor. Notwithstanding the
foregoing, no failure to so modify this Agreement or amend Schedules A or B
shall in any way affect, invalidate or detract from Collateral Agent's
continuing security interest in all Collateral, whether or not listed on
Schedule A or B.
SECTION 7.
Binding Effect.
This Agreement shall be binding upon, inure to the benefit of and be
enforceable by Grantor, Collateral Agent and their respective successors and
assigns. Grantor may not assign, transfer, hypothecate or otherwise convey its
rights, benefits, obligations or duties hereunder except as specifically
permitted by the Purchase Agreement.
SECTION 8.
Governing Law.
This Agreement shall be governed by, and construed in accordance with,
the law of the State of New York, except as required by mandatory provisions of
law or to the extent the perfection or priority of the security interests
hereunder, or the remedies hereunder, in respect of any Collateral are governed
by the law of a jurisdiction other than the State of New York.
SECTION 9.
Entire Agreement; Amendment.
No amendment of any provision of this Agreement shall be effective
unless it is in writing and signed by the Grantors and the Collateral Agent, and
no waiver of any provision of this Agreement, and no consent to any departure by
the Grantors there from, shall be effective unless it is in writing and signed
by the Collateral Agent, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Notwithstanding the foregoing, (i) additional Persons may become Grantors under
this Agreement without consent of any other Grantor through execution and
delivery to the Collateral Agent of an Assumption Agreement in the form of Annex
1 hereto or any other form of supplement acceptable to the Collateral Agent, and
(ii) Collateral Agent unilaterally may re-execute this Agreement or modify,
amend or supplement the Schedules hereto as provided in Section 6 hereof. To the
extent that any provision of this Agreement conflicts with any provision of the
Purchase Agreement, the
-10-
provision giving Collateral Agent greater rights or remedies shall govern, it
being understood that the purpose of this Agreement is to add to, and not
detract from, the rights granted to Collateral Agent under the Purchase
Agreement. Nothing in this Section 9 shall be construed to permit any Grantor to
form a Subsidiary unless expressly permitted to do so under the Purchase
Agreement.
SECTION 10.
Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement. Delivery of an executed counterpart
of this Agreement by facsimile shall be equally as effective as delivery of a
manually executed counterpart. Any party hereto delivering a counterpart of this
Agreement by facsimile shall also deliver a manually executed counterpart, but
the failure to so deliver a manually executed counterpart shall not affect the
validity, enforceability, or binding effect hereof.
SECTION 11.
Termination.
Upon payment and performance in full of all Obligations, the security
interests created by this Agreement shall terminate and Collateral Agent (at
Grantor's expense) shall promptly execute and deliver to Grantor such documents
and instruments reasonably requested by Grantor as shall be necessary to
evidence termination of all such security interests given by Grantor to
Collateral Agent hereunder, including cancellation of this Agreement by written
notice from Collateral Agent to the Copyright Office.
SECTION 12.
No Inconsistent Requirements.
Grantor acknowledges that this Agreement and the other documents,
agreements and instruments entered into or executed in connection herewith may
contain covenants and other terms and provisions variously stated regarding the
same or similar matters, and Grantor agrees that all such covenants, terms and
provisions are cumulative and all shall be performed and satisfied in accordance
with their respective terms.
SECTION 13.
Severability.
If one or more provisions contained in this Agreement shall be invalid,
illegal or unenforceable in any respect in any jurisdiction or with respect to
any party, such invalidity, illegality or unenforceability in such jurisdiction
or with respect to such party
-11-
shall, to the fullest extent permitted by applicable law, not invalidate or
render illegal or unenforceable any such provision in any other jurisdiction or
with respect to any other party, or any other provisions of this Agreement.
SECTION 14.
Notices.
All notices and other communications hereunder shall be in writing and
shall be mailed, sent or delivered in accordance with the Purchase Agreement.
-12-
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
[GRANTOR]
By:_________________
Name:
Title:
COLLATERAL AGENT:
Technology Investment Capital Corp.
By:
-------------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Operating Officer
-13-
SCHEDULE A
TO THE COPYRIGHT SECURITY AGREEMENT
Grantor: [___]
Registered Copyrights
------------------------------------- ----------------------------------- -----------------------------------
Title of Work Registration Number Date of Registration
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
-14-
SCHEDULE B
TO THE COPYRIGHT SECURITY AGREEMENT
Grantor: [___]
Copyright Applications
------------------------------------------------------- -----------------------------------------------------
Title of Work Application Number
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
-15-
Annex 1 to
Copyright Security Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 200__, made by
______________________________ (the "Additional Grantor"), in favor of
Technology Investment Capital Corp., as Collateral Agent (the "Collateral
Agent") for the benefit of the Purchasers from time to time under the Note and
Warrant Purchase Agreement dated as of March __, 2004 (as it may be amended,
supplemented or restated from time to time, the "Purchase Agreement") among
Advanced Aesthetics, Inc., a Delaware corporation (the "Parent"), Anushka PBG
Acquisition Sub, LLC, a Delaware limited liability company ("Anushka PBG"),
Anushka Boca Acquisition Sub, LLC, a Delaware limited liability company
("Anushka Boca"), Wild Hare Acquisition Sub, LLC, a Delaware limited liability
company ("Wild Hare"), ▇▇▇▇▇▇▇▇ Corporation, a Florida corporation ("▇▇▇▇▇▇▇▇")
and Advanced K, LLC, a Delaware limited liability company ("Advanced K" and each
of Anushka PBG, Anushka Boca, Wild Hare, ▇▇▇▇▇▇▇▇ and Advanced K being herein
called a "Co-Borrower" or "Borrower"), the Collateral Agent and the Purchasers
named therein. All capitalized terms not defined herein shall have the meaning
ascribed to them in such Purchase Agreement.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, in connection with the Purchase Agreement, the Parent, the
Co-Borrowers and certain of its Affiliates (other than the Additional Grantor)
have entered into the Copyright Security Agreement dated as of March __, 2004
(as it may be amended, supplemented or otherwise modified from time to time, the
"Copyright Security Agreement") in favor of the Collateral Agent for the benefit
of the Purchasers; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Copyright Security
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. COPYRIGHT SECURITY AGREEMENT. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 9 of the
Copyright Security Agreement, hereby becomes a party to the Copyright Security
Agreement as a Grantor thereunder with the same force and effect as if
originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder.
2. REPRESENTATIONS AND WARRANTIES CONCERNING GRANTOR'S LEGAL STATUS. The
Additional Grantor has previously delivered to the Collateral Agent a
certificate signed by the Additional Grantor and entitled "Perfection
Certificate" (the "Perfection Certificate"). The Additional Grantor represents
and warrants to the Collateral Agent as follows: (a) the Additional Grantor's
exact legal name is that
-16-
indicated on the Perfection Certificate and on the signature page hereof, (b)
the Additional Grantor is an organization of the type and organized in the
jurisdiction set forth in the Perfection Certificate, (c) the Perfection
Certificate accurately sets forth the Additional Grantor's organizational
identification number or accurately states that the Additional Grantor has none,
(d) the Perfection Certificate accurately sets forth the Additional Grantor's
place of business or, if more than one, its chief executive office as well as
the Additional Grantor's mailing address if different (e) all other information
set forth on the Perfection Certificate pertaining to the Grantor is accurate
and complete including but not limited to information pertaining to copyrights
and (f) each of the representations and warranties contained in the Transaction
Documents relating to it are true and correct on and as the date hereof (after
giving effect to this Assumption Agreement) as if made on and as of such date.
3. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
WITHOUT IN ANY WAY LIMITING THE PRECEDING CHOICE OF LAW, THE UNDERSIGNED (AND BY
ITS ACCEPTANCE HEREOF, THE COLLATERAL AGENT) ELECTS TO BE GOVERNED BY NEW YORK
LAW IN ACCORDANCE WITH, AND ARE RELYING (AT LEAST IN PART) ON SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, AS AMENDED, OR ANY
CORRESPONDING OR SUCCEEDING PROVISIONS THEREOF
IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement
to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
-17-
SCHEDULE B
COMMERCIAL TORT CLAIMS
None
-18-
Annex 1 to
Pledge and Security Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 200__, made by
______________________________ (the "Additional Grantor"), in favor of
Technology Investment Capital Corp., as Collateral Agent (the "Collateral
Agent") for the benefit of the Purchasers from time to time under the Note and
Warrant Purchase Agreement dated as of March __, 2004 (as it may be amended,
supplemented or restated from time to time, the "Purchase Agreement") among
Advanced Aesthetics, Inc., a Delaware corporation (the "Parent"), Anushka PBG
Acquisition Sub, LLC, a Delaware limited liability company ("Anushka PBG"),
Anushka Boca Acquisition Sub, LLC, a Delaware limited liability company
("Anushka Boca"), Wild Hare Acquisition Sub, LLC, a Delaware limited liability
company ("Wild Hare"), ▇▇▇▇▇▇▇▇ Corporation, a Florida corporation ("▇▇▇▇▇▇▇▇")
and Advanced K, LLC, a Delaware limited liability company ("Advanced K" and each
of Anushka PBG, Anushka Boca, Wild Hare, ▇▇▇▇▇▇▇▇ and Advanced K being herein
called a "Co-Borrower" or "Borrower"), the Collateral Agent and the Purchasers
named therein. All capitalized terms not defined herein shall have the meaning
ascribed to them in such Purchase Agreement.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, in connection with the Purchase Agreement, the Parent, the
Co-Borrowers and certain of its Affiliates (other than the Additional Grantor)
have entered into the Pledge and Security Agreement dated as of March __, 2004
(as it may be amended, supplemented or otherwise modified from time to time, the
"Security Agreement") in favor of the Collateral Agent for the benefit of the
Purchasers; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Security Agreement;
NOW, THEREFORE, IT IS AGREED:
1. SECURITY AGREEMENT. By executing and delivering this Assumption
Agreement, the Additional Grantor, as provided in Section 19 of the Security
Agreement, hereby becomes a party to the Security Agreement as a Grantor
thereunder with the same force and effect as if originally named therein as a
Grantor and, without limiting the generality of the foregoing, hereby expressly
assumes all obligations and liabilities of a Grantor thereunder.
2. REPRESENTATIONS AND WARRANTIES CONCERNING GRANTOR'S LEGAL STATUS. The
Additional Grantor has previously delivered to the Collateral Agent a
certificate signed by the Additional Grantor and entitled "Perfection
Certificate" (the "Perfection Certificate") (form of Perfection Certificate to
be completed is attached hereto as Schedule 1). The Additional Grantor
represents and warrants to the Collateral Agent as follows: (a) the Additional
Grantor's exact legal name is that indicated on the
-19-
Perfection Certificate and on the signature page hereof, (b) the Additional
Grantor is an organization of the type and organized in the jurisdiction set
forth in the Perfection Certificate, (c) the Perfection Certificate accurately
sets forth the Additional Grantor's organizational identification number or
accurately states that the Additional Grantor has none, (d) the Perfection
Certificate accurately sets forth the Additional Grantor's place of business or,
if more than one, its chief executive office as well as the Additional Grantor's
mailing address if different (e) all other information set forth on the
Perfection Certificate pertaining to the Grantor is accurate and complete and
(f) each of the representations and warranties contained in the Transaction
Documents relating to it are true and correct on and as the date hereof (after
giving effect to this Assumption Agreement) as if made on and as of such +date.
3. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
(OTHER THAN THOSE CONFLICT OF LAW RULES THAT WOULD DEFER TO THE SUBSTANTIVE LAWS
OF ANOTHER JURISDICTION). WITHOUT IN ANY WAY LIMITING THE PRECEDING CHOICE OF
LAW, THE UNDERSIGNED (AND BY ITS ACCEPTANCE HEREOF, THE COLLATERAL AGENT) ELECTS
TO BE GOVERNED BY NEW YORK LAW IN ACCORDANCE WITH, AND ARE RELYING (AT LEAST IN
PART) ON SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK,
AS AMENDED, OR ANY CORRESPONDING OR SUCCEEDING PROVISIONS THEREOF.
IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement
to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:___________________________
Name:
Title:
-20-
SCHEDULE 1
TO
ASSUMPTION AGREEMENT TO PLEDGE AND SECURITY AGREEMENT
PERFECTION CERTIFICATE
The undersigned, the ________________________________ and
______________________________ of [Additional Grantor] a Delaware limited
liability company (the "Company"), hereby certifies, with reference to a certain
Pledge and Security Agreement dated as of ____________ (terms defined in such
Security Agreement having the same meanings herein as specified therein),
between the Grantors and Technology Investment Capital Corp., ("TICC")
1. Names. (a) The exact corporate name of the Company as that name appears
on its [Certificate of Incorporation] is as follows:
(b) The following is a list of all other names (including trade names or
similar appellations) used by the Company, or any other business or organization
to which the Company became the successor by merger, consolidation, acquisition,
change in form, nature or jurisdiction of organization or otherwise, now or at
any time during the past five years:
2. Other Identifying Factors. (a)The following is the type of organization
of the Company:
(b) The following is the jurisdiction of the Company's organization:
(c) The following is the Company's state issued organizational
identification number [state "None" if the state does not issue such a number]:
(d) The following is the Company's federal employer identification number:
(e) Attached hereto as Schedule 2 is the information required above in
this ss.2 for any other business or organization to which the Company became the
successor by merger, consolidation, acquisition, change in form, nature or
jurisdiction of organization or otherwise, now or at any time during the past
five years:
3. Chief Executive Office.
(a) The chief executive office of the Company is located at the following
address:
-21-
Address County State
(b) The principal mailing address of the Company is the following address,
if different from the chief executive office address:
Mailing Address County State
4. Other Current Locations.
(a) The following are all other locations in the United States of America
in which the Company maintains any books or records relating to any of the
Collateral consisting of accounts, contract rights, chattel paper, general
intangibles or mobile goods:
Address County State
(b) The following are all other places of business of the Company in the
United States of America:
Address County State
(c) The following are all other locations in the United States of America
where any of the Collateral consisting of inventory or equipment is located:
Address County State
-22-
(d) The following are the names and addresses of all persons or entities
other than the Company, such as lessees, consignees, warehousemen or purchasers
of chattel paper, which have possession or are intended to have possession of
any of the Collateral consisting of chattel paper, inventory or equipment:
Name Mailing Address County State
5. Prior Locations. (a) Set forth below is the information required by
ss.3 and by subparagraphs (a) and (b) of ss.4 with respect to each location or
place of business previously maintained by the Company at any time during the
past five years in a state in which the Company has previously maintained a
location or place of business at any time during the past four months:
Address County State
(b) Set forth below is the information required by subparagraphs (c) and
(d) of ss.4 with respect to each other location at which, or other person or
entity with which, any of the Collateral consisting of inventory or equipment
has been previously held at any time during the past twelve months:
Name Address County State
-23-
6. Fixtures. Attached hereto as Schedule 6 is the information required by
UCC ss.9-402(5) or by Rev. UCC ss.9-502(b) of each state in which any of the
Collateral consisting of fixtures are or are to be located and the name and
address of each real estate recording office where a mortgage on the real estate
on which such fixtures are or are to be located would be recorded.
7. Intellectual Property. Attached hereto as Schedule 7 is a complete list
of all United States and foreign patents, copyrights, trademarks, trade names
and service marks registered or for which applications are pending in the name
of the Company.
8. Securities; Instruments. Attached hereto as Schedule 8 is a complete
list of all stocks, bonds, debentures, notes and other securities and investment
property owned by the Company (provide name of issuer, a description of security
and value):
9. Motor Vehicles. The following is a complete list of all motor vehicles
owned by the Company (describe each vehicle by make, model and year and indicate
for each the state in which registered and the state in which based):
Vehicle State of Registration State in Which Based
10. Other Titled Collateral. The following is a complete list of aircraft
and boats and all other inventory, equipment and other goods of the Company
which are subject to any certificate of title or other registration statute of
the United States, any state or any other jurisdiction (provide description of
covered goods and indicate registration system and jurisdiction):
------------------------------------- ----------------------------------- -----------------------------------
Goods Registration System Jurisdiction
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
-24-
11. Bank Accounts. The following is a complete list of all bank accounts
(including securities and commodities accounts) maintained by the Company
(provide name and address of depository bank, type of account and account
number):
---------------------------- -------------------------- -------------------------- --------------------------
Depository Bank Bank Address Type of Account Acct. No.
---------------------------- -------------------------- -------------------------- --------------------------
---------------------------- -------------------------- -------------------------- --------------------------
12. Unusual Transactions. Except for those purchases, acquisitions and
other transactions described on Schedule 2 or on Schedule 12 attached hereto,
all of the Collateral has been originated by the Company in the ordinary course
of the Company's business or consists of goods which have been acquired by the
Company in the ordinary course from a person in the business of selling goods of
that kind.
13. Termination Statements. An authorized termination statement on Form
UCC-3 in form acceptable to TICC has been duly filed in each applicable
jurisdiction identified in ▇▇.▇▇.[2], 3, 4 and 5 or on Schedules 2 and 12
hereto[ or, in the case of Schedule 2 or 12, a release acceptable to TICC from
the Collateral Agent of the person from which the Company purchased or otherwise
acquired the Collateral identified on Schedule 2 or 12], has been delivered to
TICC. Attached hereto as Schedule 13 is a true copy of each such filing duly
acknowledged by the filing officer[ and of each such release].
14. Schedule of Filing. Attached hereto as Schedule 14 is a schedule
setting forth filing information with respect to the filings described in ss.13
above.
15. Filing Fees. All filing fees and taxes payable in connection with the
filings described in ss.13 have been paid.
IN WITNESS WHEREOF, we have hereunto signed this Certificate on
----------.
-------------------------------------------
Title:
-------------------------------------------
Title:
SCHEDULE 2
SCHEDULE 6
SCHEDULE 7
SCHEDULE 8
SCHEDULE 12
SCHEDULE 13
SCHEDULE 14