EXHIBIT 10.5
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GUARANTEE AND COLLATERAL AGREEMENT
made by
NITINOL MEDICAL TECHNOLOGIES, INC.
and certain of its Subsidiaries
in favor of
▇.▇. ▇▇▇▇▇▇▇ & CO.,
as Agent
Dated as of July 8, 1998
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TABLE OF CONTENTS
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SECTION 1. DEFINED TERMS .................................................. 1
1.1 Definitions .......................................................... 1
1.2 Other Definitional Provisions ........................................ 5
SECTION 2. GUARANTEE ...................................................... 5
2.1 Guarantee ............................................................ 5
2.2 Right of Contribution ................................................ 6
2.3 No Subrogation ....................................................... 6
2.4 Amendments, etc. with respect to the Borrower Obligations ............ 7
2.5 Guarantee Absolute and Unconditional ................................. 7
2.6 Reinstatement ........................................................ 8
2.7 Payments ............................................................. 9
2.8 Subordination of Guarantee. .......................................... 9
SECTION 3. GRANT OF SECURITY INTEREST ..................................... 9
SECTION 4. REPRESENTATIONS AND WARRANTIES ................................ 10
4.1 Representations in Note Purchase Agreement .......................... 10
4.2 Title; No Other Liens ............................................... 10
4.3 Perfected First Priority Liens ...................................... 10
4.4 Chief Executive Office .............................................. 10
4.5 Inventory and Equipment ............................................. 11
4.6 Pledged Securities .................................................. 11
4.7 Receivables ......................................................... 11
SECTION 5. COVENANTS ..................................................... 11
5.1 Covenants in Note Purchase Agreement ................................ 11
5.2 Maintenance of Insurance ............................................ 11
5.3 Payment of Obligations .............................................. 12
5.4 Maintenance of Perfected Security Interest; Further Documentation ... 12
5.5 Changes in Locations, Name, etc. .................................... 13
5.6 Notices ............................................................. 13
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5.7 Pledged Securities .................................................. 13
5.8 Receivables ......................................................... 15
5.9 Intellectual Property ............................................... 15
SECTION 6. REMEDIAL PROVISIONS ........................................... 17
6.1 Certain Matters Relating to Receivables ............................. 17
6.2 Communications with Obligors; Grantors Remain Liable ................ 17
6.3 Pledged Stock ....................................................... 18
6.4 Proceeds to be Turned Over To Agent ................................. 19
6.5 Application of Proceeds ............................................. 19
6.6 Code and Other Remedies ............................................. 20
6.7 Registration Rights ................................................. 21
6.8 Waiver; Deficiency .................................................. 22
SECTION 7. THE AGENT ..................................................... 22
7.1 Agent's Appointment as Attorney-in-Fact, etc. ....................... 22
7.2 Duty of Agent ....................................................... 24
7.3 Execution of Financing Statements ................................... 24
7.4 Authority of Agent .................................................. 24
SECTION 8. MISCELLANEOUS ................................................. 25
8.1 Amendments in Writing ............................................... 25
8.2 Notices ............................................................. 25
8.3 No Waiver by Course of Conduct; Cumulative Remedies ................. 25
8.4 Enforcement Expenses; Indemnification ............................... 25
8.5 Successors and Assigns .............................................. 26
8.6 Counterparts ........................................................ 26
8.7 Severability ........................................................ 26
8.8 Section Headings .................................................... 26
8.9 Integration ......................................................... 26
8.10 GOVERNING LAW ....................................................... 27
8.11 Submission To Jurisdiction; Waivers ................................. 27
8.12 Acknowledgments ..................................................... 27
8.13 WAIVER OF JURY TRIAL ................................................ 28
8.14 Additional Grantors ................................................. 28
8.15 Releases ............................................................ 28
SCHEDULES
1 Notice Addresses of Guarantors
2 Description of Pledged Securities
3. Filings and Other Actions Required to Perfect Security Interests
4 Location of Offices and Jurisdiction of Incorporation
5. Location of Inventory and Equipment
6. Intellectual Property
ANNEX
1 Assumptions
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of
July 8, 1998, made by each of the parties listed on Schedule A hereto (together
with any other entity that may become a party hereto as provided herein, the
"Grantors"), in favor of ▇.▇. ▇▇▇▇▇▇▇ & CO., as Agent (in such capacity, the
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"Agent") for WHITNEY SUBORDINATED DEBT FUND, L.P. (the "Purchaser") and any
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holder of any Note from time to time (such holders, together with the Purchaser,
being the "Lenders") pursuant to the Subordinated Note and Common Stock Purchase
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Agreement (the "Note Purchase Agreement") dated the date hereof among the
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Purchaser, Nitinol Medical Technologies, Inc. (the "Borrower") and, for certain
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purposes, the Agent.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Note Purchase Agreement, the Purchaser shall
purchase the WSDF Note from the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the sale of the WSDF Note under the Note Purchase Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Purchaser to purchase the WSDF Note from the Borrower under the Note Purchase
Agreement that the Grantors shall have executed and delivered this Agreement to
the Agent for the benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Purchaser to enter into the Note Purchase Agreement and to purchase the WSDF
Note from the Borrower, each Grantor hereby agrees with the Agent, for the
benefit of the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined
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in the Note Purchase Agreement and used herein shall have the meanings given to
them in the Note Purchase Agreement, and the following terms which are defined
in the Uniform Commercial Code in effect in the State of New York on the date
hereof are
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used herein as so defined: Accounts, Chattel Paper, Documents, Equipment,
Instruments, Inventory and Investment Property.
(b) The following terms shall have the following meanings:
"Agreement" means this Guarantee and Collateral Agreement, as the same
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may be amended, supplemented or otherwise modified from time to time.
"Borrower Obligations" means the unpaid principal of and interest on
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(including, without limitation, interest accruing after the maturity of the
Notes and interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing petition interest is
allowed in such proceeding) the Notes and all other obligations and liabilities
of the Borrower to the Agent or to any Lender, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred which may arise under, out of, or in connection with, this Agreement,
any other Loan Document, or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all fees, charges and disbursements of counsel to the Agent
or to any Lender that are required to be paid by the Borrower pursuant hereto or
otherwise).
"Capital Stock" means any and all shares, interests, participations or
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other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Collateral": as defined in Section 3.
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"Collateral Account": any collateral account established by the Agent
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as provided in Section 6.1 or 6.4.
"Copyrights": (i) all copyrights arising under the laws of the United
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States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in Schedule 6), all registrations and
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recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United
States Copyright Office, and (ii) the right to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor as
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licensor or licensee (including, without limitation, those listed in Schedule
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6), granting
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any right under any Copyright, including, without limitation, the grant of
rights to manufacture, distribute, exploit and sell materials derived from any
Copyright.
"Fully Satisfied" means with respect to any Obligation as of any date,
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(i) the principal amount of and interest accrued to such date on such Obligation
shall have been paid in full in cash, (ii) all fees, expenses and other amounts
then due and payable with respect to such Obligation shall have been paid in
full in cash and (iii) if such Obligation relates to the Notes, such Notes shall
have expired or irrevocably been terminated.
"General Intangibles": all "general intangibles" as such term is
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defined in Section 9106 of the Uniform Commercial Code in effect in the State of
New York on the date hereof and, in any event, including, without limitation,
with respect to any Grantor, all contracts, agreements, instruments and
indentures in any form, and portions thereof, to which such Grantor is a party
or under which such Grantor has any right, title or interest or to which such
Grantor or any property of such Grantor is subject, as the same may from time to
time be amended, supplemented or otherwise modified, including, without
limitation, (i) all rights of such Grantor to receive moneys due and to become
due to it thereunder or in connection therewith, (ii) all rights of such Grantor
to damages arising thereunder and (iii) all rights of such Grantor to perform
and to exercise all remedies thereunder, in each case to the extent the grant by
such Grantor of a security interest pursuant to this Agreement in its right,
title and interest in such contract, agreement, instrument or indenture is not
prohibited by such contract, agreement, instrument or indenture without the
consent of any other party thereto, would not give any other party to such
contract, agreement, instrument or indenture the right to terminate its
obligations thereunder, or is permitted with consent to the extent that all
necessary consents to such grant of a security interest have been obtained from
the other parties thereto (it being understood that the foregoing shall not be
deemed to obligate such Grantor to obtain such consents); provided, that the
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foregoing limitation shall not affect, limit, restrict or impair the grant by
such Grantor of a security interest pursuant to this Agreement in any Receivable
or any money or other amounts due or to become due under any such contract,
agreement, instrument or indenture.
"Guarantor Obligations": with respect to any Guarantor, the collective
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reference to (i) the Borrower Obligations and (ii) all obligations and
liabilities of such Guarantor which may arise under or in connection with this
Agreement or any other Loan Document to which such Guarantor is a party, in each
case whether on account of guarantee obligations, reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Agent or to the Lenders that are
required to be paid by such Guarantor pursuant to the terms of this Agreement or
any other Loan Document).
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"Guarantors": the collective reference to each Grantor other than the
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Borrower.
"Intellectual Property": the collective reference to all rights,
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priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, the Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to
▇▇▇ at law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages from any and all past
infringements.
"Intercompany Note": any promissory note evidencing loans made by any
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Grantor to any Affiliate thereof.
"Issuers": the collective reference to each issuer of a Pledged
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Security.
"New York UCC": the Uniform Commercial Code as from time to time in
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effect in the State of New York.
"Loan Documents" means this Agreement, the Note Purchase Agreement and
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the Notes.
"Obligations": (i) in the case of the Borrower, the Borrower
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Obligations, and (ii) in the case of each Guarantor, its Guarantor Obligations.
"Patents": (i) all letters patent of the United States, any other
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country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without limitation,
any of the foregoing referred to in Schedule 6, (ii) all applications for
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letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including, without limitation,
any of the foregoing referred to in Schedule 6, and (iii) all rights to obtain
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any reissues or extensions of the foregoing.
"Patent License": all agreements, whether written or oral, providing
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for the grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 6.
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"Pledged Notes": all promissory notes listed on Schedule 2, all
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Intercompany Notes at any time issued to any Grantor and all other promissory
notes issued to or held by any Grantor (other than promissory notes issued in
connection with extensions of trade credit by any Grantor in the ordinary course
of business).
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"Pledged Securities": the collective reference to the Pledged Notes
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and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on Schedule 2,
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together with any other shares, stock certificates, options or rights of any
nature whatsoever in respect of the Capital Stock of any Person that may be
issued or granted to, or held by, any Grantor while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in Section 9-306(l)
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of the Uniform Commercial Code in effect in the State of New York on the date
hereof and, in any event, shall include, without limitation, all dividends or
other income from the Pledged Securities, collections thereon or distributions
or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or for
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services rendered, whether or not such right is evidenced by an Instrument or
Chattel Paper and whether or not it has been earned by performance (including,
without limitation, any Account).
"Securities Act": the Securities Act of 1933, as amended.
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"Trademarks": (i) all trademarks, trade names, corporate names,
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company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, including, without limitation, any of the foregoing
referred to in Schedule 6, and (ii) the right to obtain all renewals thereof.
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"Trademark License": any agreement, whether written or oral, providing
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for the grant by or to any Grantor of any right to use any Trademark, including,
without limitation, any of the foregoing referred to in Schedule 6.
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1.2 Other Definitional Provisions. (a) The words "hereof," "herein,"
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
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(c) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
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severally, unconditionally and irrevocably, guarantees to the Agent, for the
benefit of the Lenders and their respective successors, indorsees, transferees
and assigns, the prompt and complete payment and performance by the Borrower
when due (whether at the stated maturity, by acceleration or otherwise) of the
Borrower Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Agent or any Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full.
(e) No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Agent or any
Lender from the Borrower, any of the Guarantors, any other guarantor or any
other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Borrower Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment (other than any payment made by such
Guarantor in respect of the Borrower Obligations or any payment received or
collected from such Guarantor in respect of the Borrower Obligations), remain
liable for the Borrower Obligations up to the maximum liability of such
Guarantor hereunder until the Borrower Obligations are Fully Satisfied.
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2.2 Right of Contribution. Each Guarantor hereby agrees that to the
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extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Agent and the Lenders, and each Guarantor shall remain
liable to the Agent and the Lenders for the full amount guaranteed by such
Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any Guarantor
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hereunder or any set-off or application of funds of any Guarantor by the Agent
or any Lender, no Guarantor shall be entitled to be subrogated to any of the
rights of the Agent or any Lender against the Borrower or any other Guarantor or
any collateral security or guarantee or right of offset held by the Agent or any
Lender for the payment of the Borrower Obligations, nor shall any Guarantor seek
or be entitled to seek any contribution or reimbursement from the Borrower or
any other Guarantor in respect of payments made by such Guarantor hereunder,
until all amounts owing to the Agent and the Lenders by the Borrower on account
of the Borrower Obligations are Fully Satisfied. If any amount shall be paid to
any Guarantor on account of such subrogation rights at any time when all of the
Borrower Obligations shall not have been Fully Satisfied, such amount shall be
held by such Guarantor in trust for the Agent and the Lenders, segregated from
other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Agent, if required), to be
applied against the Borrower Obligations, whether matured or unmatured, in such
order as the Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations. Each
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Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Agent or any Lender may be rescinded by the Agent or
such Lender and any of the Borrower Obligations continued, and the Borrower
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Agent or any Lender, and the Note Purchase Agreement and the other Loan
Documents and any other documents executed and delivered in connection therewith
may be amended, modified, supplemented or terminated, in whole or in part, as
the Agent (or the Lenders pursuant to the Note Purchase Agreement, as the case
may be) may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Agent or any Lender for the
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payment of the Borrower Obligations may be sold, exchanged, waived, surrendered
or released. Neither the Agent nor any Lender shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Borrower Obligations or for the guarantee contained in this Section 2 or
any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any
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and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by the Agent or any
Lender upon the guarantee contained in this Section 2, or acceptance of the
guarantee contained in this Section 2. The Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2. All dealings between the Borrower and any of the
Guarantors, on the one hand, and the Agent and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or any of the Guarantors with respect to the
Borrower Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Note Purchase Agreement or any other Loan Document, any of
the Borrower Obligations or any other collateral security therefor or guarantee
or right of offset with respect thereto at any time or from time to time held by
the Agent or any Lender, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by the Borrower or any other Person against the Agent or any Lender, or
(c) any other circumstance whatsoever (with or without notice to or knowledge of
the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the
Agent or any Lender may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
the Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with
respect thereto, and any failure by the Agent or any Lender to make any such
demand, to pursue such other rights or remedies or to collect any payments from
the Borrower, any other Guarantor or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of the Borrower, any other Guarantor or any other Person or any
such collateral security, guarantee or right of offset shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available
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as a matter of law, of the Agent or any Lender against any Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2 shall
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continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by the Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
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hereunder will be paid to the Agent without set-off or counterclaim in United
States dollars, if possible, at the office of the Agent, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ or as otherwise designated to the Guarantor from time to
time.
2.8 Subordination of Guarantee. Notwithstanding any other provision
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of the guarantee contained in this Section 2, the guarantee set forth herein is
subordinate and junior in right of payment to all Senior Indebtedness (as
defined in the Notes) to the extent and as provided in Section 7 of the Notes.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Agent, and hereby
grants to the Agent, for the benefit of the Lenders, a security interest in, all
of the following property now owned or at any time hereafter acquired by such
Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the "Collateral"), as
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collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of such Grantor's
Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Documents;
(d) all Equipment;
(e) all General Intangibles;
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(f) all Instruments;
(g) all Intellectual Property;
(h) all Inventory;
(i) all Pledged Securities;
(j) all Investment Property;
(k) all books and records pertaining to the Collateral; and
(l) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing and all collateral security and
guarantees given by any Person with respect to any of the
foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Purchaser to enter into the Note Purchase Agreement and
to induce the Lenders to purchase the Notes, each Grantor hereby represents and
warrants to the Agent and each Lender that:
4.1 Representations in Note Purchase Agreement. In the case of each
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Guarantor, the representations and warranties set forth in Article 5 of the Note
Purchase Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the Agent and each Lender shall be entitled
to rely on each of them as if they were fully set forth herein, provided that
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each reference in each such representation and warranty to the Borrower's
knowledge shall, for the purposes of this Section 4.1, be deemed to be a
reference to such Guarantor's knowledge.
4.2 Title; No Other Liens. Except for the security interest granted
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to the Agent for the benefit of the Lenders pursuant to this Agreement and the
other Liens permitted to exist on the Collateral by the Note Purchase Agreement,
such Grantor owns each item of the Collateral free and clear of any and all
Liens or claims of others. No financing statement or other public notice with
respect to all or any part of the Collateral is on file or of record in any
public office, except such as have been filed in favor of the Agent, for the
ratable benefit of the Lenders, pursuant to this Agreement or as are permitted
by the Note Purchase Agreement.
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4.3 Perfected First Priority Liens. The security interests granted
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pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
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referred to on said Schedule, have been delivered to the Agent in completed and
duly executed form) will constitute valid perfected security interests in all of
the Collateral in favor of the Agent, for the benefit of the Lenders, as
collateral security for such Grantor's Obligations, enforceable in accordance
with the terms hereof against all creditors of such Grantor and any Persons
purporting to purchase any Collateral from such Grantor and (b) are prior to all
other Liens on the Collateral in existence on the date hereof except for (i)
Liens permitted by the Note Purchase Agreement.
4.4 Chief Executive Office. On the date hereof, such Grantor's
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jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 4.
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4.5 Inventory and Equipment. On the date hereof, the Inventory and
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the Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5.
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4.6 Pledged Securities. (a) The shares of Pledged Stock pledged by
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such Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor except that,
if the Issuer is organized under the laws of any jurisdiction outside the United
States, then the shares of Pledged Stock pledged by such Grantor hereunder
constitute all the issued and outstanding shares of all classes of the Capital
Stock of such Issuer owned by such Grantor up to 65% of such shares of each
class of Capital Stock of such Issuer.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Securities pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement.
4.7 Receivables. None of the obligors on any Receivables is a
-----------
Governmental Authority.
11
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Agent and the Lenders that,
from and after the date of this Agreement until the Obligations shall have been
Fully Satisfied.
5.1 Covenants in Note Purchase Agreement. In the case of each
------------------------------------
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 Maintenance of Insurance. (a) Such Grantor will maintain, with
------------------------
financially sound and reputable companies, insurance policies (i) insuring the
Inventory and Equipment against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Agent and (ii) insuring such
Grantor, the Agent and the Lenders against liability for personal injury and
property damage relating to such Inventory and Equipment, such policies to be in
such form and amounts and having such coverage as may be reasonably satisfactory
to the Agent and the Lenders.
(b) As soon as practicable following the Closing Date, all such
insurance shall (i) provide that no cancellation, material reduction in amount
or material change in coverage thereof shall be effective until at least 30 days
after receipt by the Agent of written notice thereof, (ii) name the Agent as
insured party or loss payee, (iii) if reasonably requested by the Agent, include
a breach of warranty clause and (iv) be reasonably satisfactory in all other
respects to the Agent.
(c) The Borrower shall deliver to the Agent and the Lenders a report
of a reputable insurance broker with respect to such insurance during the month
of June in each calendar year and such supplemental reports with respect thereto
as the Agent may from time to time reasonably request.
5.3 Payment of Obligations. Such Grantor will pay and discharge or
----------------------
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
12
therein. Notwithstanding anything to the contrary in the foregoing sentence,
the Borrower shall not be in default under this Section 5.3 unless the aggregate
amount of non-contested Indebtedness or obligations which the Borrower and its
Subsidiaries have so failed to pay, discharge or satisfy before they become
delinquent and which remain delinquent at the time of determination is more than
$50,000 in the aggregate.
5.4 Maintenance of Perfected Security Interest; Further Documentation.
-----------------------------------------------------------------
(a) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority described in
Section 4.3 and shall defend such security interest against the claims and
demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Agent and the Lenders from time
to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the Agent
may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written request of the
Agent and at the sole expense of such Grantor, such Grantor will promptly and
duly execute and deliver, and have recorded, such further instruments and
documents and take such further actions as the Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted, including, without limitation, the
filing of any financing or continuation statements under the Uniform Commercial
Code (or other similar laws) in effect in any jurisdiction with respect to the
security interests created hereby.
5.5 Changes in Locations, Name, etc. Such Grantor will not, except
--------------------------------
upon 15 days' prior written notice to the Agent and delivery to the Agent of (a)
all additional executed financing statements and other documents reasonably
requested by the Agent to maintain the validity, perfection and priority of the
security interests provided for herein and (b) if applicable, a written
supplement to Schedule 5 showing any additional location at which Inventory or
----------
Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a location
other than those listed on Schedule 5;
----------
(ii) change the location of its chief executive office or sole place
of business from that referred to in Section 4.4; or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Agent in
connection with this Agreement would become misleading.
13
5.6 Notices. Such Grantor will advise the Agent and the Lenders
-------
promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Note Purchase Agreement) on any of the Collateral which
would adversely affect the ability of the Agent to exercise any of its remedies
hereunder, and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
5.7 Pledged Securities. (a) If such Grantor shall become entitled to
------------------
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights in respect of
the Capital Stock of any Issuer, whether in addition to, in substitution of, as
a conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the Agent and the Lenders, hold the same in trust for the Agent and the Lenders
and deliver the same forthwith to the Agent in the exact form received, duly
indorsed by such Grantor to the Agent, if required, together with an undated
stock power covering such certificate duly executed in blank by such Grantor and
with, if the Agent so requests, signature guaranteed, to be held by the Agent,
subject to the terms hereof, as additional collateral security for the
Obligations. Any sums paid upon or in respect of the Pledged Securities upon
the liquidation or dissolution of any Issuer shall be paid over to the Agent to
be held by it hereunder as additional collateral security for the Obligations,
and in case any distribution of capital shall be made on or in respect of the
Pledged Securities or any property shall be distributed upon or with respect to
the Pledged Securities pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Agent, be delivered to the Agent to be held by it
hereunder as additional collateral security for the Obligations. If any sums of
money or property so paid or distributed in respect of the Pledged Securities
shall be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Agent hold such money or property in trust
for the Lenders, segregated from other funds of such Grantor, as additional
collateral security for the Obligations.
(b) Without the prior written consent of the Agent, such Grantor will
not (i) vote to enable, or take any other action to permit, any Issuer to issue
any stock or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock or other
14
equity securities of any nature of any Issuer, except to the extent such stock
or other equity securities are pledged to the Lenders pursuant hereto, (ii)
sell, assign, transfer, exchange, or otherwise dispose of, or grant any option
with respect to, the Pledged Securities or Proceeds thereof (except pursuant to
a transaction expressly permitted by the Note Purchase Agreement), (iii) create,
incur or permit to exist any Lien or option in favor of, or any claim of any
Person with respect to, any of the Pledged Securities or Proceeds thereof, or
any interest therein, except for the security interests created by this
Agreement or (iv) enter into any agreement or undertaking restricting the right
or ability of such Grantor or the Agent to sell, assign or transfer any of the
Pledged Securities or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the Pledged
Securities issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Agent promptly in writing of the
occurrence of any of the events described in Section 5.7(a) with respect to the
Pledged Securities issued by it and (iii) the terms of Sections 6.3(c) and 6.7
shall apply to it, mutatis mutandis, with respect to all actions that may be
----------------
required of it pursuant to Section 6.3(c) or 6.7 with respect to the Pledged
Securities issued by it.
5.8 Receivables. (a) Other than in the ordinary course of business
-----------
consistent with its past practice or with the prior written consent of the
Agent, such Grantor will not (i) grant any extension of the time of payment of
any Receivable, (ii) compromise or settle any Receivable for less than the full
amount thereof, (iii) release, wholly or partially, any Person liable for the
payment of any Receivable, (iv) allow any credit or discount whatsoever on any
Receivable or (v) amend, supplement or modify any Receivable in any manner that
could adversely affect the value thereof.
(b) Such Grantor will deliver to the Agent a copy of each material
demand, notice or document received by it that questions or calls into doubt the
validity or enforceability of more than 5% of the aggregate amount of the then
outstanding Receivables.
5.9 Intellectual Property. (a) Such Grantor (either itself or
---------------------
through licensees) will (i) continue to use each material Trademark on each and
every trademark class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such
Trademark, (iii) use such Trademark with the appropriate notice of registration
and all other notices and legends required by applicable Requirements of Law,
(iv) not adopt or use any ▇▇▇▇ which is confusingly similar or a colorable
imitation of such Trademark unless the Agent, for the benefit of
15
the Lenders, shall obtain a perfected security interest in such ▇▇▇▇ pursuant to
this Agreement, and (v) not (and not permit any licensee or sublicensee thereof
to) do any act or knowingly omit to do any act whereby such Trademark may become
invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any material Patent may become forfeited,
abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will employ
each material Copyright and (ii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
material portion of the Copyrights may become invalidated or otherwise impaired.
Such Grantor will not (either itself or through licensees) do any act whereby
any material portion of the Copyrights may fall into the public domain.
(d) Such Grantor (either itself or through licensees) will not do any
act that knowingly infringes the intellectual property rights of any other
Person.
(e) Such Grantor will notify the Agent and the Lenders immediately if
it knows, or has reason to know, that any application or registration relating
to any material Intellectual Property may become forfeited, abandoned or
dedicated to the public, or of any adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
the United States Copyright Office or any court or tribunal in any country)
regarding such Grantor's ownership of, or the validity of, any material
Intellectual Property or such Grantor's right to register the same or to own and
maintain the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Agent within five Business Days after the last day of the fiscal
quarter in which such filing occurs. Upon request of the Agent, such Grantor
shall execute and deliver, and have recorded, any and all agreements,
instruments, documents, and papers as the Agent may request to evidence the
Agent's and the Lenders' security interest in any Copyright, Patent or Trademark
and the goodwill and general intangibles of such Grantor relating thereto or
represented thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(h) In the event that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, such Grantor shall (i) take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the Agent
after it learns thereof.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The Agent shall
---------------------------------------
have the right to make test verifications of the Receivables in any manner and
through any medium that it reasonably considers advisable, and each Grantor
shall furnish all such assistance and information as the Agent may require in
connection with such test verifications. At any time and from time to time,
upon the Agent's reasonable request and at the expense of the relevant Grantor,
such Grantor shall cause independent public accountants or others reasonably
satisfactory to the Agent to furnish to the Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables.
(b) The Agent hereby authorizes each Grantor to collect such Grantor's
Receivables (or enter into arrangements with a third party for such collection),
subject to the Agent's reasonable direction and control and the Agent may
curtail or terminate said authority at any time after the occurrence and during
the continuance of an Event of Default. If required by the Agent at any time
after the occurrence and during the continuance of an Event of Default, any
payments of Receivables, when collected by any Grantor, (i) shall be forthwith
(and, in any event, within two Business Days) deposited by such Grantor in the
exact form received, duly indorsed by such Grantor to the Agent if required, in
a Collateral Account maintained under the sole dominion and control of the
Agent, subject to withdrawal by the Agent for the account of the Lenders only as
provided in Section 6.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Agent and the Lenders, segregated from other funds of
such Grantor. Each such deposit of Proceeds of Receivables shall be accompanied
by a report identifying in reasonable detail the nature and source of the
payments included in the deposit.
(c) At the Agent's request, each Grantor shall deliver to the Agent
all original and other documents evidencing, and relating to, the agreements and
17
transactions which gave rise to the Receivables, including, without limitation,
all original orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The
----------------------------------------------------
Agent in its own name or in the name of others may at any time after the
occurrence and during the continuance of an Event of Default communicate with
obligors under the Receivables to verify with them to the Agent's satisfaction
the existence, amount and terms of any Receivables.
(b) Upon the request of the Agent at any time after the occurrence and
during the continuance of an Event of Default, each Grantor shall notify
obligors on the Receivables that the Receivables have been assigned to the Agent
for the benefit of the Lenders and that payments in respect thereof shall be
made directly to the Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the
Agent nor any Lender shall have any obligation or liability under any Receivable
(or any agreement giving rise thereto) by reason of or arising out of this
Agreement or the receipt by the Agent or any Lender of any payment relating
thereto, nor shall the Agent or any Lender be obligated in any manner to perform
any of the obligations of any Grantor under or pursuant to any Receivable (or
any agreement giving rise thereto), to make any payment, to make any inquiry as
to the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, 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 it or to which it may be entitled at
any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
-------------
occurred and be continuing and the Agent shall have given notice to the relevant
Grantor of the Agent's intent to exercise its corresponding rights pursuant to
Section 6.3(b), each Grantor shall be permitted to receive all cash dividends
paid in respect of the Pledged Stock and all payments made in respect of the
Pledged Notes, in each case paid in the normal course of business of the
relevant Issuer and consistent with past practice, to the extent permitted in
the Note Purchase Agreement, and to exercise all voting and corporate rights
with respect to the Pledged Securities; provided, however, that no vote shall be
-------- -------
cast or corporate right exercised or other action taken which, in the Agent's
reasonable judgment, would impair the Collateral or which would be inconsistent
with or result in any violation of any provision of the Note Purchase Agreement,
this Agreement or any other Loan Document.
18
(b) If an Event of Default shall occur and be continuing and the Agent
shall give notice of its intent to exercise such rights to the relevant Grantor
or Grantors, (i) the Agent shall have the right to receive any and all cash
dividends, payments or other Proceeds paid in respect of the Pledged Securities
and make application thereof to the Obligations in the order set forth in
Section 6.5, and (ii) any or all of the Pledged Securities shall be registered
in the name of the Agent or its nominee, and the Agent or its nominee may
thereafter exercise (x) all voting, corporate and other rights pertaining to
such Pledged Securities at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Pledged Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any Issuer, or upon the
exercise by any Grantor or the Agent of any right, privilege or option
pertaining to such Pledged Securities, and in connection therewith, the right to
deposit and deliver any and all of the Pledged Securities with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Agent may determine), all without liability except to
account for property actually received by it, but the Agent shall have no duty
to any Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Pledged Securities pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Agent in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Securities directly to the Agent.
6.4 Proceeds to be Turned Over To Agent. In addition to the rights of
-----------------------------------
the Agent and the Lenders specified in Section 6.1 with respect to payments of
Receivables, if an Event of Default shall occur and be continuing, all Proceeds
received by any Grantor consisting of cash, checks and other near-cash items
shall be held by such Grantor in trust for the Agent and the Lenders, segregated
from other funds of such Grantor, and shall, forthwith upon receipt by such
Grantor, be turned over to the Agent in the exact form received by such Grantor
(duly indorsed by such Grantor to the Agent, if required). All Proceeds
received by the Agent hereunder shall be held by the Agent in a Collateral
Account maintained under its sole dominion and control. All Proceeds while held
by the Agent in a Collateral Account (or by such Grantor in trust for the Agent
and the Lenders) shall continue to be held as collateral security for all the
19
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be agreed upon
-----------------------
by the Borrower and the Agent, or, if an Event of Default shall have occurred
and be continuing, at any time at the Agent's election, the Agent may apply all
or any part of Proceeds constituting Collateral, whether or not held in any
Collateral Account, and any proceeds of the guarantee set forth in Section 2, in
payment of the Obligations in the following order:
First, to pay incurred and unpaid fees and expenses of the Agent
-----
under the Loan Documents;
Second, to the Agent, for application by it towards payment of
------
amounts then due and owing and remaining unpaid in respect of the Obligations,
pro rata among the Lenders according to the amounts of the Obligations then due
--- ----
and owing and remaining unpaid to the Lenders;
Third, to the Agent, for application by it towards prepayment of the
-----
Obligations, pro rata among the Lenders according to the amounts of the
--- ----
Obligations then held by the Lenders; and
Fourth, any balance of such Proceeds remaining after the obligations
------
of the Loan Parties under the Loan Documents have been paid in full shall be
paid over to the Borrower or to whomsoever may be lawfully entitled to receive
the same.
6.6 Code and Other Remedies. If an Event of Default shall occur and
-----------------------
be continuing, the Agent, on behalf of the Lenders, may exercise, in addition to
all other rights and remedies granted to them in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured party under the New York UCC or any other
applicable law. Without limiting the generality of the foregoing, the Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Agent or any Lender shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any
20
such private sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in any Grantor, which right
or equity is hereby waived and released. Each Grantor further agrees, at the
Agent's request, to assemble the Collateral and make it available to the Agent
at places which the Agent shall reasonably select, whether at such Grantor's
premises or elsewhere. The Agent shall apply the net proceeds of any action
taken by it pursuant to this Section 6.6, after deducting all reasonable costs
and expenses of every kind incurred in connection therewith or incidental to the
care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Agent and the Lenders hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Obligations, in such order as the Agent may elect,
and only after such application and after the payment by the Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(l)(c) of the New York UCC, need the Agent account for the surplus, if any,
to any Grantor. To the extent permitted by applicable law, each Grantor waives
all claims, damages and demands it may acquire against the Agent or any Lender
arising out of the exercise by them of any rights hereunder except any such
claims arising out of the Agent or any Lender's gross negligence or wilful
misconduct. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.
6.7 Registration Rights. (a) If the Agent shall determine to
-------------------
exercise its right to sell any or all of the Pledged Stock pursuant to Section
6.6, and if in the opinion of the Agent it is necessary or advisable to have the
Pledged Stock, or that portion thereof to be sold, registered under the
provisions of the Securities Act or other similar law of any jurisdiction in
which an Issuer is located, the relevant Grantor will cause the Issuer thereof
to (i) execute and deliver, and cause the directors and officers of such Issuer
to execute and deliver, all such instruments and documents, and do or cause to
be done all such other acts as may be, in the reasonable opinion of the Agent,
necessary or advisable to register the Pledged Stock, or that portion thereof to
be sold, under the provisions of the Securities Act or other similar law of any
jurisdiction in which an Issuer is located, (ii) use its best efforts to cause
the registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Agent, are necessary or advisable, all in conformity with the requirements of
the Securities Act and the rules and regulations of the Securities and Exchange
Commission or other similar law of any jurisdiction in which an Issuer is
located, applicable thereto. Each Grantor agrees to cause such Issuer to comply
with the provisions of the securities or "Blue Sky" laws of any and all
jurisdictions which the Agent shall designate and to make available to its
security holders, as soon as practicable, an earnings statement (which need not
be audited) which will in the case of
21
United States resident Issuers, satisfy the provisions of Section 11(a) of the
Securities Act.
(b) Each Grantor recognizes that the Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Each Grantor acknowledges
and agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Agent and the Lenders,
that the Agent and the Lenders have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section 6.7 shall be specifically enforceable against such Grantor, and such
Grantor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no Event of
Default has occurred under the Note Purchase Agreement.
6.8 Waiver; Deficiency. Each Grantor waives and agrees not to assert
------------------
any rights or privileges which it may acquire under Section 9-112 of the New
York UCC. Each Grantor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the
Agent or any Lender to collect such deficiency.
SECTION 7. THE AGENT
7.1 Agent's Appointment as Attorney-in-Fact, etc. (a) Each Grantor
---------------------------------------------
hereby irrevocably constitutes and appoints the Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful attorney-in-
fact with full
22
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or in its 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 which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the generality
of the foregoing, each Grantor hereby gives the Agent the power and right, on
behalf of such Grantor, without notice to or assent by such Grantor, to do any
or all of the following:
(i) in the name of such Grantor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or with respect to any other Collateral and file any claim or
take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Agent for the purpose of collecting any
and all such moneys due under any Receivable or with respect to any other
Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments, documents
and papers as the Agent may request to evidence the Agent's and the
Lenders' security interest in such Intellectual Property and the goodwill
and general intangibles of such Grantor relating thereto or represented
thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section
6.6 or 6.7, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Agent or as the Agent shall direct; (2) ask or
demand for, collect, and receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (3) sign and indorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and
other documents in connection with any of the Collateral; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (5)
defend any suit, action or proceeding brought against such
23
Grantor with respect to any Collateral; (6) settle, compromise or adjust
any such suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Agent may deem appropriate; (7) assign any
Copyright, Patent or Trademark (along with the goodwill of the business to
which any such Copyright, Patent or Trademark pertains), throughout the
world for such term or terms, on such conditions, and in such manner, as
the Agent shall in its sole discretion determine; and (8) generally, sell,
transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Agent were
the absolute owner thereof for all purposes, and do, at the Agent's option
and such Grantor's expense, at any time, or from time to time, all acts and
things which the Agent deems necessary to protect, preserve or realize upon
the Collateral and the Agent's and the Lenders' security interests therein
and to effect the intent of this Agreement, all as fully and effectively as
such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the Agent
agrees that it will not exercise any rights under the power of attorney provided
for in this Section 7.1(a) unless an Event of Default shall have occurred and be
continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
(c) The reasonable expenses of the Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due payments of principal under the Notes from the date
of payment by the Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released pursuant to Section 8.16(a) hereof.
7.2 Duty of Agent. The Agent's sole duty with respect to the custody,
-------------
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the
same manner as the Agent deals with similar property for its own account.
Neither the Agent, any Lender nor any of their respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for
24
any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Grantor or any other Person or
to take any other action whatsoever with regard to the Collateral or any part
thereof. The powers conferred on the Agent and the Lenders hereunder are solely
to protect the Agent's and the Lenders' interests in the Collateral and shall
not impose any duty upon the Agent or any Lender to exercise any such powers.
The Agent and the Lenders shall be accountable only for amounts that they
actually receive as a result of the exercise of such powers, and neither they
nor any of their officers, directors, employees or agents shall be responsible
to any Grantor for any act or failure to act hereunder, except for their own
gross negligence or willful misconduct.
7.3 Execution of Financing Statements. Pursuant to Section 9-402 of
---------------------------------
the New York UCC and any other applicable law, each Grantor authorizes the Agent
to file or record financing statements and other filing or recording documents
or instruments with respect to the Collateral without the signature of such
Grantor in such form and in such offices as the Agent reasonably determines
appropriate to perfect the security interests of the Agent under this Agreement.
A photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction.
7.4 Authority of Agent. Each Grantor acknowledges that the rights and
------------------
responsibilities of the Agent under this Agreement with respect to any action
taken by the Agent or the exercise or non-exercise by the Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Agent and the
Lenders, be governed by such agreements with respect thereto as may exist from
time to time among them, but, as between the Agent and the Grantors, the Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
---------------------
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 11.6 of the Note Purchase Agreement.
8.2 Notices. All notices, requests and demands to or upon the Agent
-------
or any Grantor hereunder shall be effected in the manner provided for in Section
11.3 of the Subordinated Note and Stock Purchase Agreement; provided that any
--------
such notice, request or demand to or upon any Guarantor shall be addressed to
such Guarantor at its notice address set forth on Schedule 1.
----------
25
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
---------------------------------------------------
Agent nor any Lender shall by any act (except by a written instrument pursuant
to Section 8.1), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Agent or any Lender, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Agent or
any Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Agent or such Lender would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees
-------------------------------------
to pay or reimburse each Lender and the Agent for all its reasonable costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the reasonable fees and disbursements of counsel
to each Lender and of counsel to the Agent.
(b) Each Guarantor agrees to pay, and to save the Agent and the
Lenders harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes which
may be payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the Agent and the
Lenders harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Borrower
would be required to do so pursuant to Article 7 of the Note Purchase Agreement.
(d) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Note Purchase Agreement and
the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon the
----------------------
successors and assigns of each Grantor and shall inure to the benefit of the
Agent and the Lenders and their successors and assigns; provided that no Grantor
--------
may assign,
26
transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of the Agent.
8.6 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.7 Severability. Any provision of this Agreement which is prohibited
------------
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.8 Section Headings. The Section headings used in this Agreement are
----------------
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
8.9 Integration. This Agreement and the other Loan Documents
-----------
represent the agreement of the Grantors, the Agent and the Lenders with respect
to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Agent or any Lender relative
to subject matter hereof and thereof not expressly set forth or referred to
herein or in the other Loan Documents.
8.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.11 Submission To Jurisdiction; Waivers. Each Grantor hereby
-----------------------------------
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
27
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the Agent
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
8.12 Acknowledgments. Each Grantor hereby acknowledges that:
---------------
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party;
(b) neither the Agent nor any Lender has any fiduciary relationship
with or duty to any Grantor arising out of or in connection with this Agreement
or any of the other Loan Documents, and the relationship between the Grantors,
on the one hand, and the Agent and Lenders, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Grantors and the Lenders.
8.13 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
--------------------
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.14 Additional Grantors. Each Subsidiary of the Borrower that is
-------------------
required to become a party to this Agreement pursuant to Section 8.1(j) of the
Note Purchase Agreement shall become a Grantor for all purposes of this
Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Annex 1 hereto.
28
8.15 Releases. (a) At such time as the Obligations shall have been
--------
Fully Satisfied, the Collateral shall be released from the Liens created hereby,
and this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At
the request and sole expense of any Grantor following any such termination, the
Agent shall deliver to such Grantor any Collateral held by the Agent hereunder,
and execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Note Purchase
Agreement, then the Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. At the request and sole expense of the Borrower, a Guarantor
shall be released from its obligations hereunder in the event that all the
Capital Stock of such Guarantor shall be sold, transferred or otherwise disposed
of in a transaction permitted by the Note Purchase Agreement; provided that the
--------
Borrower shall have delivered to the Agent, at least ten Business Days prior to
the date of the proposed release, a written request for release identifying the
relevant Guarantor and the terms of the sale or other disposition in reasonable
detail, including the price thereof and any expenses in connection therewith,
together with a certification by the Borrower stating that such transaction is
in compliance with the Note Purchase Agreement and the other Loan Documents.
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
and Collateral Agreement to be duly executed and delivered as of the date first
above written.
NITINOL MEDICAL TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: EVP/CFO
29
NMT NEUROSCIENCES (INTERNATIONAL), INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer and Secretary
NMT INVESTMENTS CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer and Clerk
NMT NEUROSCIENCES (US), INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer and Secretary
30
NMT NEUROSCIENCES (IP), INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer and Secretary
CORDIS INNOVASIVE SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer and Secretary
NMT HEART, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer and Secretary
31
SCHEDULE A
THE GRANTORS
------------
Nitinol Medical Technologies, Inc.
NMT NeuroSciences (International), Inc.
NMT Investments Corp.
NMT NeuroSciences (US), Inc.
NMT NeuroSciences (IP), Inc.
Cordis Innovasive Systems, Inc.
NMT Heart, Inc.
32
Annex I to
Guarantee and Collateral Agreement
----------------------------------
ASSUMPTION AGREEMENT, dated as of ___________________, 199 , made by
-
____________________________, a _______________ corporation (the "Additional
----------
Grantor"), in favor of ▇.▇. ▇▇▇▇▇▇▇ & Co., as agent (in such capacity, the
-------
"Agent") for the Lenders, as defined in the Guarantee and Collateral Agreement
------
referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Note Purchase Agreement.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Nitinol Medical Technologies, Inc. (the "Borrower"), the
--------
Lenders and the Agent have entered into a Subordinated Note and Common Stock
Purchase Agreement, dated as of July 8, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Note Purchase Agreement");
-----------------------
WHEREAS, in connection with the Subordinated Note and Common Stock
Purchase Agreement, the Borrower and certain of its Affiliates (other than the
Additional Grantor) have entered into the Guarantee and Collateral Agreement,
dated as of July 8, 1998 (as amended, supplemented or otherwise modified from
time to time, the "Guarantee and Collateral Agreement") in favor of the Agent
----------------------------------
for the benefit of the Lenders;
WHEREAS, the Note Purchase Agreement requires the Additional Grantor
to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering
----------------------------------
this Assumption Agreement, the Additional Grantor, as provided in Section 8.14
of the Guarantee and Collateral Agreement, hereby becomes a party to the
Guarantee and Collateral 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. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in Schedules
___________/1/ to the Guarantee and Collateral Agreement. The Additional
-
Grantor hereby represents and warrants that each of the representations and
warranties contained in Section 4 of the Guarantee and Collateral Agreement is
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.
___________
/1/ Refer to each Schedule which needs to be supplemented.
-
33
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
-------------
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
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:
34