EXHIBIT 10.4
EXECUTION VERSION
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SECOND LIEN GUARANTY AND SECURITY AGREEMENT
Dated as of June 26, 2007
among
IM US Holdings, LLC,
as Borrower,
and
Each Grantor
From Time to Time Party Hereto
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
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TABLE OF CONTENTS
ARTICLE I DEFINED TERMS.................................................... 1
Section 1.1 Definitions................................................ 1
Section 1.2 Certain Other Terms........................................ 4
ARTICLE II GUARANTY........................................................ 5
Section 2.1 Guaranty................................................... 5
Section 2.2 Limitation of Guaranty..................................... 5
Section 2.3 Contribution............................................... 5
Section 2.4 Authorization; Other Agreements............................ 5
Section 2.5 Guaranty Absolute and Unconditional........................ 6
Section 2.6 Waivers.................................................... 7
Section 2.7 Reliance................................................... 7
ARTICLE III GRANT OF SECURITY INTEREST..................................... 7
Section 3.1 Collateral................................................. 7
Section 3.2 Grant of Security Interest in Collateral; Delivery of
Collateral................................................. 8
ARTICLE IV REPRESENTATIONS AND WARRANTIES.................................. 9
Section 4.1 Title; No Other Liens...................................... 9
Section 4.2 Perfection and Priority.................................... 9
Section 4.3 Jurisdiction of Organization; Chief Executive Office....... 10
Section 4.4 Locations of Inventory, Equipment and Books and Records.... 10
Section 4.5 Pledged Collateral......................................... 10
Section 4.6 Instruments and Tangible Chattel Paper Formerly Accounts... 10
Section 4.7 Intellectual Property...................................... 10
Section 4.8 Commercial Tort Claims..................................... 11
Section 4.9 Specific Collateral........................................ 11
Section 4.10 Promissory Notes........................................... 11
Section 4.11 Representations and Warranties of the Second Lien Credit
Agreement.................................................. 11
ARTICLE V COVENANTS........................................................ 11
Section 5.1 Maintenance of Perfected Security Interest; Further
Documentation and Consents................................. 11
Section 5.2 Changes in Locations, Name, Etc............................ 12
Section 5.3 Pledged Collateral; Other Matters.......................... 13
Section 5.4 Accounts................................................... 13
Section 5.5 Commodity Contracts........................................ 13
Section 5.6 Delivery of Instruments and Tangible Chattel Paper and
Control of Investment Property, Letter-of-Credit Rights and
Electronic Chattel Paper................................... 13
Section 5.7 Intellectual Property...................................... 14
Section 5.8 Notice of Commercial Tort Claims........................... 15
Section 5.9 Compliance with Second Lien Credit Agreement............... 16
ARTICLE VI REMEDIAL PROVISIONS............................................. 16
Section 6.1 Code and Other Remedies.................................... 16
Section 6.2 Accounts and Payments in Respect of General Intangibles.... 19
Section 6.3 Pledged Collateral......................................... 20
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Section 6.4 Proceeds to be Turned over to and Held by Administrative
Agent...................................................... 21
Section 6.5 Sale of Pledged Collateral................................. 21
Section 6.6 Deficiency................................................. 22
ARTICLE VII THE ADMINISTRATIVE AGENT....................................... 22
Section 7.1 Administrative Agent's Appointment as Attorney-in-Fact..... 22
Section 7.2 Authorization to File Financing Statements................. 23
Section 7.3 Authority of Administrative Agent.......................... 24
Section 7.4 Duty; Obligations and Liabilities.......................... 24
ARTICLE VIII MISCELLANEOUS................................................. 24
Section 8.1 Reinstatement.............................................. 24
Section 8.2 Release of Collateral...................................... 25
Section 8.3 Independent Obligations.................................... 25
Section 8.4 No Waiver by Course of Conduct............................. 26
Section 8.5 Amendments in Writing...................................... 26
Section 8.6 Additional Grantors; Additional Pledged Collateral......... 26
Section 8.7 Notices.................................................... 26
Section 8.8 Successors and Assigns..................................... 26
Section 8.9 Counterparts............................................... 26
Section 8.10 Severability............................................... 27
Section 8.11 Governing Law.............................................. 27
Section 8.12 Jurisdiction............................................... 27
Section 8.13 Waiver of Jury Trial....................................... 27
Section 8.14 Subordination.............................................. 28
Section 8.15 Relation to First Lien Loan Documents...................... 29
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ANNEXES AND SCHEDULES
Annex 1 Form of Pledge Amendment
Annex 2 Form of Joinder Agreement
Annex 3 Form of Intellectual Property Security Agreement
Schedule 1 Commercial Tort Claims
Schedule 2 Filings
Schedule 3 Jurisdiction of Organization; Chief Executive Office
Schedule 4 Location of Inventory and Equipment
Schedule 5 Pledged Collateral
Schedule 6 Intellectual Property
Schedule 7 Promissory Notes
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SECOND LIEN GUARANTY AND SECURITY AGREEMENT, dated as of June 26,
2007, by IM US HOLDINGS, LLC, a Delaware limited liability company (the
"Borrower"), INVERNESS MEDICAL INNOVATIONS, INC., a Delaware corporation
("Holdings") and each of the other entities listed on the signature pages hereof
or that becomes a party hereto pursuant to Section 8.6 (together with the
Borrower and Holdings, the "Grantors"), in favor of General Electric Capital
Corporation ("GE Capital"), as administrative agent and collateral agent (in
such capacity, together with its successors and permitted assigns, the
"Administrative Agent") for the Lenders and each other Secured Party (each as
defined in the Second Lien Credit Agreement referred to below).
WITNESSETH:
WHEREAS, pursuant to the Second Lien Credit Agreement dated as of June
26, 2007 (as the same may be modified from time to time, the "Second Lien Credit
Agreement"), among the Borrower, Holdings, the Lenders from time to time party
thereto and GE Capital, as administrative agent and collateral agent for the
Lenders, the Lenders have severally agreed to make extensions of credit to the
Borrower upon the terms and subject to the conditions set forth therein;
WHEREAS, each Grantor has agreed to guaranty the Obligations (as
defined in the Second Lien Credit Agreement) of each other Loan Party;
WHEREAS, each Grantor will derive substantial direct and indirect
benefits from the making of the extensions of credit under the Second Lien
Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit to the Borrower under the Second
Lien Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent;
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders and the Administrative Agent to enter into the Second Lien Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby agrees with the
Administrative Agent as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions. (a) Capitalized terms used herein without
definition are used as defined in the Second Lien Credit Agreement.
(b) The following terms have the meanings given to them in the UCC and
terms used herein without definition that are defined in the UCC have the
meanings given to them in the UCC (such meanings to be equally applicable to
both the singular and plural forms of the terms defined): "account", "account
debtor", "as-extracted collateral", "certificated security", "chattel paper",
"commercial tort claim", "commodity contract", "deposit account", "electronic
chattel paper", "equipment", "farm products", "fixture", "general intangible",
"goods", "health-care-insurance receivable", "instruments", "inventory",
"investment property", "letter-of-credit right", "proceeds", "record",
"securities account", "security", "supporting obligation" and "tangible chattel
paper".
SECOND LIEN GUARANTY AND SECURITY AGREEMENT
IM US HOLDINGS, LLC
(c) The following terms shall have the following meanings:
"Affiliate Guarantor" means any Guarantor that is a Subsidiary or
other Affiliate of the Borrower other than the Excluded Foreign Subsidiaries.
"Agreement" means this Guaranty and Security Agreement.
"Applicable IP Office" means the United States Patent and Trademark
Office, the United States Copyright Office or any similar office, authority or
agency within or outside the United States.
"Collateral" has the meaning specified in Section 3.1.
"Excluded Equity" means any voting stock in excess of 66% of the
outstanding voting stock of any Excluded Foreign Subsidiary that is a first-tier
subsidiary of the relevant Grantor. For the purposes of this definition, "voting
stock" means, with respect to any issuer, the issued and outstanding shares of
each class of Stock of such issuer entitled to vote (within the meaning of
Treasury Regulations Section 1.956-2(c)(2)).
"Excluded Property" means, collectively, (i) Excluded Equity, (ii) any
permit or license of, or any Contractual Obligation entered into by, any Grantor
(A) that prohibits or requires the consent of any Person other than the Borrower
and its Affiliates as a condition to the creation by such Grantor of a Lien on
any right, title or interest in such permit, license or Contractual Obligation
or any Stock or Stock Equivalent related thereto or (B) to the extent that any
Requirement of Law applicable thereto prohibits the creation of a Lien thereon,
but only, with respect to the prohibition in (A) and (B), to the extent, and for
as long as, such prohibition is not terminated or rendered unenforceable or
otherwise deemed ineffective by the UCC or any other Requirement of Law or
required consent is not obtained (and immediately upon the lapse, termination,
unenforceability or ineffectiveness of any such prohibition or grant of such
required consent, the Collateral shall include, and Grantors shall be deemed to
have automatically granted a security interest in, all such permits, licenses,
Contractual Obligations or Stock or Stock Equivalents no longer subject to such
prohibition or required consent), (iii) any fixed or capital assets (including
any associated software or other general intangibles) owned by any Grantor that
is subject to a purchase money Lien or a Capital Lease if the Contractual
Obligation pursuant to which such Lien is granted (or in the document providing
for such Capital Lease) prohibits or requires the consent of any Person other
than the Borrower and its Affiliates as a condition to the creation of any other
Lien on such equipment, (iv) any "intent to use" Trademark applications for
which a statement of use, or an amendment to allege use, has not been accepted
by the U.S. Patent and Trademark Office (but only until such statement, or an
amendment to allege use, is accepted), (v) capital stock or other equity
interests of the P&G JV Companies, (vi) any and all Target Margin Stock and
identifiable proceeds thereof, (vii) capital stock or other equity interest of
Iris Merger Sub, Inc. until the effectiveness of the merger in connection with
the Cholestech Acquisition, (viii) Selfcare Technology, Inc.'s 50% joint venture
interests in SelfCare-PMB, LLC, (ix) any capital stock or other equity interest
of Orgenics Ltd. held by Holdings and (x) any property in which, as of the date
hereof, any Grantor has granted a security interest pursuant to either (A) the
Master Security Agreement made by and between Biosite Incorporated and Key
Equipment Finance, dated as of September 27, 2001, and as amended by Amendment
No. 01 to Master Security Agreement and Amendment No. 02 to Master Security
Agreement, together with any Promissory Note issued in connection with such
Master Security Agreement, or (B) the Equipment Finance Agreement between
Biosite Incorporated and U.S. Bancorp Equipment
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Finance, Inc., dated as of May 19, 2004, together with any schedules thereto,
each of the foregoing referred to in this clause (x) as amended through the date
hereof; provided, however, "Excluded Property" shall not include any proceeds,
products, substitutions or replacements of Excluded Property (unless such
proceeds, products, substitutions or replacements would otherwise constitute
Excluded Property).
"Foreign Registered IP" means any Intellectual Property registered (or
for which an application for registration has been filed) in any Applicable IP
Office outside of the United States.
"Guaranteed Obligations" has the meaning set forth in Section 2.1.
"Guarantor" means each Grantor other than the Borrower.
"Guaranty" means the guaranty of the Guaranteed Obligations made by
the Guarantors as set forth in this Agreement.
"Intercompany Obligations" has the meaning set forth in Section
8.14(a).
"Pledged Certificated Stock" means all certificated securities and any
other Stock or Stock Equivalent of any Person evidenced by a certificate,
instrument or other similar document (as defined in the UCC), in each case owned
by any Grantor, and any distribution in the form of any certificated securities,
Stock or Stock Equivalent made on, in respect of or in exchange for the
foregoing from time to time, exceeding $250,000 in the aggregate for any
particular issuer thereof, including all Stock and Stock Equivalents listed on
Schedule 5. Pledged Certificated Stock excludes all Excluded Property that would
otherwise constitute "Pledged Certificated Stock".
"Pledged Collateral" means, collectively, the Pledged Stock and the
Pledged Debt Instruments, excluding all Excluded Property that would otherwise
constitute "Pledged Collateral".
"Pledged Debt Instruments" means all right, title and interest of any
Grantor in instruments evidencing any Indebtedness owed to such Grantor or other
obligations, and any distribution in the form of any instrument evidencing any
such Indebtedness made on, in respect of or in exchange for the foregoing from
time to time, including all such instruments described on Schedule 5 issued by
the obligors named therein, excluding all Excluded Property that would otherwise
constitute "Pledged Debt Instruments".
"Pledged Investment Property" means any investment property of any
Grantor, and any distribution of property in the form of any such investment
property made on, in respect of or in exchange for the foregoing from time to
time, other than any Pledged Stock or Pledged Debt Instruments, excluding all
Excluded Property that would otherwise constitute "Pledged Investment Property".
"Pledged Stock" means all Pledged Certificated Stock and all Pledged
Uncertificated Stock, excluding all Excluded Property that would otherwise
constitute "Pledged Stock".
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"Pledged Uncertificated Stock" means any Stock or Stock Equivalent of
any Person that is not Pledged Certificated Stock, including all right, title
and interest of any Grantor as a limited or general partner in any partnership
not constituting Pledged Certificated Stock or as a member of any limited
liability company, all right, title and interest of any Grantor in, to and under
any Constituent Document of any partnership or limited liability company to
which it is a party, and any distribution of property in the form of any such
stock or stock equivalent made on, in respect of or in exchange for the
foregoing from time to time, including in each case those interests set forth on
Schedule 5, to the extent such interests are not certificated, excluding all
Excluded Property that would otherwise constitute "Pledged Uncertificated
Stock".
"Secured Obligations" has the meaning set forth in Section 3.2.
"Security Cash Collateral Account" means a Cash Collateral Account
that is not a L/C Cash Collateral Account.
"Senior Obligations" has the meaning set forth in Section 8.14(a).
"Software" means (a) all computer programs, including source code and
object code versions, (b) all data, databases and compilations of data, whether
machine readable or otherwise, and (c) all documentation, training materials and
configurations related to any of the foregoing.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the State of New York; provided, however, that, in the event that, by reason
of mandatory provisions of any applicable Requirement of Law, any of the
attachment, perfection or priority of the Administrative Agent's or any other
Secured Party's security interest in any Collateral is governed by the Uniform
Commercial Code of a jurisdiction other than the State of New York, "UCC" shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of the definitions related to or otherwise used in
such provisions.
"Vehicles" means all vehicles covered by a certificate of title law of
any state.
Section 1.2 Certain Other Terms. (a) The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of such
terms. The terms "herein", "hereof" and similar terms refer to this Agreement as
a whole and not to any particular Article, Section or clause in this Agreement.
References herein to an Annex, Schedule, Article, Section or clause refer to the
appropriate Annex or Schedule to, or Article, Section or clause in this
Agreement. Where the context requires, provisions relating to any Collateral
when used in relation to a Grantor shall refer to such Grantor's Collateral or
any relevant part thereof.
(b) Section 1.5 (Interpretation) of the Second Lien Credit Agreement
is applicable to this Agreement as and to the extent set forth therein.
(c) The term "payment in full" or "paid in full" with respect to the
Obligations, the Secured Obligations or the Senior Obligations means upon (A)
termination of the Commitments, (B) payment and satisfaction in full of all
Loans and all other Obligations that the Administrative Agent has been notified
in writing are then due and payable by the holder of such obligation, (C)
deposit of cash collateral with respect to all contingent Obligations (other
than contingent indemnification obligations as to which no claim has been
asserted), in amounts
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required under Section 9.3 of the Second Lien Credit Agreement and on terms and
conditions and with parties satisfactory to the Administrative Agent and each
Indemnitee that is owed such Obligations and (D) to the extent requested by the
Administrative Agent, receipt by the Secured Parties of liability releases from
the Loan Parties each in form and substance acceptable to the Administrative
Agent.
ARTICLE II
GUARANTY
Section 2.1 Guaranty. To induce the Lenders to make the Loans, each
Guarantor hereby, jointly and severally, absolutely, unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, the full
and punctual payment when due, whether at stated maturity or earlier, by reason
of acceleration, mandatory prepayment or otherwise in accordance with any Loan
Document, of all the Obligations of each other Loan Party whether existing on
the date hereof or hereinafter incurred or created (the "Guaranteed
Obligations"). This Guaranty by each Guarantor hereunder constitutes a guaranty
of payment and not of collection. Each Guarantor agrees that its obligations
under this Agreement shall not be discharged until the Obligations (other than
contingent indemnification obligations as to which no claim has been asserted)
are paid in full. Each Guarantor shall be regarded, and shall be in the same
position, as principal debtor with respect to the Guaranteed Obligations.
Section 2.2 Limitation of Guaranty. Any term or provision of this Guaranty
or any other Loan Document to the contrary notwithstanding, the maximum
aggregate amount for which any Affiliate Guarantor shall be liable hereunder
shall not exceed the maximum amount for which such Affiliate Guarantor can be
liable without rendering this Guaranty or any other Loan Document, as it relates
to such Affiliate Guarantor, subject to avoidance under applicable Requirements
of Law relating to fraudulent conveyance or fraudulent transfer (including the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and
Section 548 of title 11 of the United States Code or any applicable provisions
of comparable Requirements of Law) (collectively, "Fraudulent Transfer Laws").
Any analysis of the provisions of this Guaranty for purposes of Fraudulent
Transfer Laws shall take into account the right of contribution established in
Section 2.3 and, for purposes of such analysis, give effect to any discharge of
intercompany debt as a result of any payment made under the Guaranty.
Section 2.3 Contribution. To the extent that any Affiliate Guarantor shall
be required hereunder to pay any portion of any Guaranteed Obligation exceeding
the greater of (a) the amount of the economic benefit actually received by such
Affiliate Guarantor from the Loans and other Obligations and (b) the amount such
Affiliate Guarantor would otherwise have paid if such Affiliate Guarantor had
paid the aggregate amount of the Guaranteed Obligations (excluding the amount
thereof repaid by the Borrower) in the same proportion as such Affiliate
Guarantor's net worth on the date enforcement is sought hereunder bears to the
aggregate net worth of all the Affiliate Guarantors on such date, then such
Guarantor shall be reimbursed by such other Affiliate Guarantors for the amount
of such excess, pro rata, based on the respective net worth of such other
Affiliate Guarantors on such date.
Section 2.4 Authorization; Other Agreements. The Secured Parties are hereby
authorized, without notice to or demand upon any Guarantor and without
discharging or otherwise affecting the obligations of any Guarantor hereunder
and without incurring any liability hereunder, from time to time, to do each of
the following:
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(a) (i) modify, amend, supplement or otherwise change, (ii) accelerate
or otherwise change the time of payment or (iii) waive or otherwise consent to
noncompliance with, any Guaranteed Obligation or any Loan Document;
(b) apply to the Guaranteed Obligations any sums by whomever paid or
however realized to any Guaranteed Obligation in such order as provided in the
Loan Documents;
(c) refund at any time any payment received by any Secured Party in
respect of any Guaranteed Obligation;
(d) (i) Sell, exchange, enforce, waive, substitute, liquidate,
terminate, release, abandon, fail to perfect, subordinate, accept, substitute,
surrender, exchange, affect, impair or otherwise alter or release any Collateral
for any Guaranteed Obligation or any other guaranty therefor in any manner, (ii)
receive, take and hold additional Collateral to secure any Guaranteed
Obligation, (iii) add, release or substitute any one or more other Guarantors,
makers or endorsers of any Guaranteed Obligation or any part thereof and (iv)
otherwise deal in any manner with the Borrower and any other Guarantor, maker or
endorser of any Guaranteed Obligation or any part thereof; and
(e) settle, release, compromise, collect or otherwise liquidate the
Guaranteed Obligations.
Section 2.5 Guaranty Absolute and Unconditional. Each Guarantor hereby
waives and agrees not to assert any defense, whether arising in connection with
or in respect of any of the following or otherwise, and hereby agrees that its
obligations under this Guaranty are irrevocable, absolute and unconditional and
shall not be discharged as a result of or otherwise affected by any of the
following (which may not be pleaded and evidence of which may not be introduced
in any proceeding with respect to this Guaranty, in each case except as
otherwise agreed in writing by the Administrative Agent):
(a) the invalidity or unenforceability of any obligation of the
Borrower or any other Guarantor under any Loan Document or any other agreement
or instrument relating thereto (including any amendment, consent or waiver
thereto), or any security for, or other guaranty of, any Guaranteed Obligation
or any part thereof, or the lack of perfection or continuing perfection or
failure of priority of any security for the Guaranteed Obligations or any part
thereof;
(b) the absence of (i) any attempt to collect any Guaranteed
Obligation or any part thereof from the Borrower or any other Guarantor or other
action to enforce the same or (ii) any action to enforce any Loan Document or
any Lien thereunder;
(c) the failure by any Person to take any steps to perfect and
maintain any Lien on, or to preserve any rights with respect to, any Collateral;
(d) any workout, insolvency, bankruptcy proceeding, reorganization,
arrangement, liquidation or dissolution by or against the Borrower, any other
Guarantor or any of the Borrower's other Subsidiaries or Affiliates or any
procedure, agreement, order, stipulation, election, action or omission
thereunder, including any discharge or disallowance of, or bar or stay against
collecting, any Guaranteed Obligation (or any interest thereon) in or as a
result of any such proceeding;
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(e) any foreclosure, whether or not through judicial sale, and any
other Sale of any Collateral or any election following the occurrence of an
Event of Default by any Secured Party to proceed separately against any
Collateral in accordance with such Secured Party's rights under any applicable
Requirement of Law; or
(f) any other defense, setoff, counterclaim or any other circumstance
that might otherwise constitute a legal or equitable discharge of the Borrower,
any other Guarantor or any of the Borrower's other Subsidiaries or Affiliates,
in each case other than the payment in full of the Guaranteed Obligations.
Section 2.6 Waivers. Each Guarantor hereby unconditionally and irrevocably
waives and agrees not to assert any claim, defense, setoff or counterclaim based
on diligence, promptness, presentment, requirements for any demand or notice
hereunder including any of the following: (a) any demand for payment or
performance and protest and notice of protest, (b) any notice of acceptance, (c)
any presentment, demand, protest or further notice or other requirements of any
kind with respect to any Guaranteed Obligation (including any accrued but unpaid
interest thereon) becoming immediately due and payable and (d) any other notice
in respect of any Guaranteed Obligation or any part thereof, and any defense
arising by reason of any disability or other defense of the Borrower or any
other Guarantor. Each Guarantor further unconditionally and irrevocably agrees,
until payment in full of the Obligations in accordance with Section 1.2(c), not
to (x) enforce or otherwise exercise any right of subrogation or any right of
reimbursement or contribution or similar right against the Borrower or any other
Guarantor by reason of any Loan Document or any payment made thereunder or (y)
if an Event of Default shall have occurred and be continuing, assert any claim,
defense, setoff or counterclaim it may have against any other Loan Party or set
off any of its obligations to such other Loan Party against obligations of such
Loan Party to such Guarantor. No obligation of any Guarantor hereunder shall be
discharged other than by complete performance and payment in full.
Section 2.7 Reliance. Each Guarantor hereby assumes responsibility for
keeping itself informed of the financial condition of the Borrower, each other
Guarantor and any other guarantor, maker or endorser of any Guaranteed
Obligation or any part thereof, and of all other circumstances bearing upon the
risk of nonpayment of any Guaranteed Obligation or any part thereof that
diligent inquiry would reveal, and each Guarantor hereby agrees that no Secured
Party shall have any duty to advise any Guarantor of information known to it
regarding such condition or any such circumstances. In the event any Secured
Party, in its sole discretion, undertakes at any time or from time to time to
provide any such information to any Guarantor, such Secured Party shall be under
no obligation to (a) undertake any investigation not a part of its regular
business routine, (b) disclose any information that such Secured Party, pursuant
to accepted or reasonable commercial finance or banking practices, wishes to
maintain confidential or (c) make any future disclosures of such information or
any other information to any Guarantor.
ARTICLE III
GRANT OF SECURITY INTEREST
Section 3.1 Collateral. For the purposes of this Agreement, all of the
following property now owned or at any time hereafter acquired by a Grantor or
in which a Grantor now has or at any time in the future may acquire any right,
title or interests is collectively referred to as the "Collateral":
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(a) all accounts, chattel paper, deposit accounts, documents (as
defined in the UCC), equipment, general intangibles, instruments, inventory,
investment property and any supporting obligations related thereto (including
any Pledged Collateral);
(b) the commercial tort claims described on Schedule 1 and on any
supplement thereto received by the Administrative Agent pursuant to Section 5.9;
(c) all books and records pertaining to the other property described
in this Section 3.1;
(d) all property of such Grantor held by any Secured Party, including
all property of every description, in the custody of or in transit to such
Secured Party for any purpose, including safekeeping, collection or pledge, for
the account of such Grantor or as to which such Grantor may have any right or
power, including but not limited to cash;
(e) all other goods (including but not limited to fixtures) and
personal property of such Grantor, whether tangible or intangible and wherever
located
(f) in the case of the pledge of the shares of Inverness Medical
Switzerland GmbH ("Swissco"), 100% of such shares held by Inverness Medical
Holding Corp. II ("IMIHC II") as of the date hereof as shown on Schedule 5
hereto and none of the shares or other equity interest held by Inverness Medical
International Holding Corp. ("IMIHC") as of the date hereof as shown on Schedule
5, or, should their ownership of the shares of Swissco change after the date
hereof, in all events, only 66% of all of the total shares held by IMIHC and
IMIHC II in the aggregate in Swissco); and
(g) to the extent not otherwise included, all proceeds of the
foregoing;
provided, however, that "Collateral" shall not include any Excluded Property;
and provided, further, that if and when any property shall cease to be Excluded
Property, such property shall automatically be deemed at all times from and
after the date hereof to constitute Collateral.
Section 3.2 Grant of Security Interest in Collateral; Delivery of
Collateral. (a) Each Grantor, as collateral security for the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Obligations of such Grantor (the "Secured Obligations"),
hereby mortgages, pledges and hypothecates to the Administrative Agent for the
benefit of the Secured Parties, and grants to the Administrative Agent for the
benefit of the Secured Parties a Lien on and security interest in, all of its
right, title and interest in, to and under the Collateral of such Grantor.
(b) With respect to any provision in this Agreement which requires any
Loan Party to deliver possession or control of any negotiable document,
instrument, certificated securities, promissory notes, deposit accounts,
security accounts, commodity accounts, and letter of credit rights or other
Collateral requiring possession or control thereof in order to perfect the
security interest of the Administrative Agent therein under the UCC, until the
Revolving Credit Termination Date and the Term Loan Commitment Termination Date
(each as defined in the First Lien Credit Agreement), no such delivery or giving
of control to the Administrative Agent shall be required to the extent such
Collateral is required to be delivered to or control is required to be given to
the First Lien Administrative Agent in accordance with the First Lien Loan
Documents,
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it being understood that the First Lien Administrative Agent is acting as agent
and bailee for the benefit of the Administrative Agent pursuant to the terms of
the Intercreditor Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the L/C Issuers and the Administrative Agent to
enter into the Loan Documents, each Grantor hereby represents and warrants each
of the following to the Administrative Agent, the Lenders, the L/C Issuers and
the other Secured Parties:
Section 4.1 Title; No Other Liens. Except for the Lien granted to the
Administrative Agent pursuant to this Agreement and other Permitted Liens under
any Loan Document (including Section 4.2), such Grantor owns each item of the
Collateral free and clear of any and all Liens. Such Grantor (a) is the record
and beneficial owner of the Collateral pledged by it hereunder constituting
instruments or certificated securities and (b) has rights in or the power to
transfer each other item of Collateral in which a Lien is granted by it
hereunder, free and clear of any other Lien, other than Permitted Liens.
Section 4.2 Perfection and Priority. The security interest granted pursuant
to this Agreement constitutes a valid and continuing perfected security interest
in favor of the Administrative Agent, for the benefit of the Secured Parties, in
all Collateral subject, for the following Collateral, to the occurrence of the
following: (i) in the case of all Collateral in which a security interest may be
perfected by filing a financing statement under the UCC, the completion of the
filings and other actions specified on Schedule 2 (which, in the case of all
filings and other documents referred to on such schedule, have been delivered to
the Administrative Agent in completed and duly authorized form), (ii) with
respect to any deposit account, the execution of Control Agreements, (iii) in
the case of all Copyrights, Trademarks and Patents for which UCC filings are
insufficient, all appropriate filings having been made with the United States
Copyright Office, the United States Patent and Trademark Office, or any other
Applicable IP Office or similar office, agency or authority outside the United
States, as applicable, (iv) in the case of letter-of-credit rights that are not
supporting obligations of Collateral, the execution of a Contractual Obligation
granting control to the Administrative Agent over such letter-of-credit rights,
(v) in the case of electronic chattel paper, the completion of all steps
necessary to grant control to the Administrative Agent over such electronic
chattel paper and (vi) in the case of Vehicles, the actions required under
Section 5.1(e). Such security interest shall be prior to all other Liens on the
Collateral, except for Customary Permitted Liens and Liens permitted by Section
8.2(c), (d), (e), (h), (i) and (j) of the Second Lien Credit Agreement, having
priority over the Administrative Agent's Lien or unless otherwise permitted by
any Loan Document upon (i) in the case of all Pledged Certificated Stock,
Pledged Debt Instruments and Pledged Investment Property, the delivery to the
Administrative Agent of such Pledged Certificated Stock, Pledged Debt
Instruments and Pledged Investment Property consisting of instruments and
certificates, in each case properly endorsed for transfer to the Administrative
Agent or in blank, (ii) in the case of all Pledged Investment Property not in
certificated form, the execution of Control Agreements with respect to such
investment property and (iii) in the case of all other instruments and tangible
chattel paper that are not Pledged Certificated Stock, Pledged Debt Instruments
or Pledged Investment Property, the delivery to the Administrative Agent of such
instruments and tangible chattel paper. Except as set forth in this Section 4.2,
all actions by each Grantor necessary or desirable to protect and perfect the
Lien granted hereunder on the
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Collateral have been duly taken as of the date hereof and all such actions shall
be taken by each Grantor at such times required under Section 5.7.
Section 4.3 Jurisdiction of Organization; Chief Executive Office. Such
Grantor's (a) jurisdiction of organization or formation, (b) exact legal name
(as it appears in such Grantor's Constituent Documents), (c) organizational
identification number, if any, issued by the jurisdiction of organization or
formation, (d) type of organization, (e) Federal Taxpayer Identification Number,
(f) location of its chief executive office or sole place of business, (g) legal
name or jurisdiction of organization or formation if different than otherwise
provided in this Section 4.3 within the prior five (5)-year period, in each case
as of the date hereof, is specified on Schedule 3.
Section 4.4 Locations of Inventory, Equipment and Books and Records. On the
date hereof, such Grantor's inventory and equipment (other than inventory or
equipment in transit) with an aggregate value in excess of $1,000,000 per
location and material books and records concerning the Collateral are kept at
the locations listed on Schedule 4.
Section 4.5 Pledged Collateral. (a) The Pledged Stock pledged by such
Grantor hereunder (a) as of the date hereof is listed on Schedule 5 and if the
issuer is a Subsidiary of such Grantor, constitutes that percentage of the
issued and outstanding equity of all classes of each issuer thereof as set forth
on Schedule 5, (b) if the issuer is a Subsidiary of such Grantor, has been duly
authorized, validly issued and is fully paid and nonassessable (other than
Pledged Stock in limited liability companies and partnerships) and (c) if the
issuer is a Subsidiary of such Grantor, constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws affecting
creditors' rights generally or by general equitable principles relating to
enforceability.
(b) As of the Closing Date, all Pledged Collateral (other than Pledged
Uncertificated Stock) and all Pledged Investment Property, in each case,
consisting of instruments and certificates, has been delivered to the
Administrative Agent in accordance with Section 5.3(a), except to the extent
provided for under Section 7.15 of the Second Lien Credit Agreement.
(c) Upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall be entitled to exercise all of the
rights of the Grantor granting the security interest in any Pledged Stock of any
issuer that is a wholly owned subsidiary of such Grantor, and a transferee or
assignee of such Pledged Stock shall become a holder of such Pledged Stock to
the same extent as such Grantor.
Section 4.6 Instruments and Tangible Chattel Paper Formerly Accounts. No
amount payable to such Grantor under or in connection with any account is
evidenced by any instrument or tangible chattel paper that has not been
delivered to the Administrative Agent, properly endorsed for transfer, to the
extent delivery is required by Section 5.6(a).
Section 4.7 Intellectual Property. Schedule 6 sets forth, as of the date
hereof, a true and complete list in all material respects of the Patents,
Trademarks and Copyrights owned by such Grantor and registered by such Grantor
or subject to applications for registration by such Grantor in any applicable IP
Office, including (i) the Grantor that is the owner thereof, (ii) the title of
such Patent, Trademark, or Copyright, (iii) if applicable, the jurisdiction in
which such
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item has been registered or in which an application for registration has been
filed and (iv) if applicable and if determined and available, the registration
or application number and registration or application date. From time to time,
at the Administrative Agents' reasonable request, each Grantor shall deliver a
list of (i) material inbound IP Licenses of such Grantor, (ii) to the extent
available or applicable, all material outbound IP Licenses to non-Affiliates and
(iii) material Internet Domain Names.
Section 4.8 Commercial Tort Claims. The only commercial tort claims of any
Grantor existing on the date hereof (regardless of whether the amount, defendant
or other material facts can be determined and regardless of whether such
commercial tort claim has been asserted, threatened or has otherwise been made
known to the obligee thereof or whether litigation has been commenced for such
claims) are those listed on Schedule 1, which sets forth such information
separately for each Grantor.
Section 4.9 Specific Collateral. None of the Collateral is or is proceeds
or products of farm products, as-extracted collateral, health-care-insurance
receivables or timber to be cut.
Section 4.10 Promissory Notes. Schedule 7 hereto sets forth for each
Grantor a list of all promissory notes and debt securities in the form of
instruments payable or due to such Grantor by or from any other Person
(including any other Grantor) that will not be repaid on the Closing Date.
Section 4.11 Representations and Warranties of the Second Lien Credit
Agreement. The representations and warranties as to such Grantor and its
Subsidiaries made by the Borrower in Article IV (Representations and Warranties)
of the Second Lien Credit Agreement are true and correct (A) if the relevant
date is the Closing Date, on and as of such date and (B) otherwise, in all
material respects (provided, that if any representation or warranty is by its
terms qualified by concepts of materiality, such representation shall be true
and correct in all respects) on and as of such date or, to the extent such
representations and warranties expressly relate to an earlier date, on and as of
such earlier date.
ARTICLE V
COVENANTS
Each Grantor agrees with the Administrative Agent to the following,
until payment in full of the Obligations in accordance with Section 1.2(c) and
unless the Required Lenders otherwise consent in writing:
Section 5.1 Maintenance of Perfected Security Interest; Further
Documentation and Consents. (a) Generally. Such Grantor shall not use or permit
any Collateral to be used in violation of any provision of any Loan Document or
any Related Document, or in violation in any material respect of any Requirement
of Law or any policy of insurance covering the Collateral.
(b) Such Grantor shall maintain the security interest created by this
Agreement as a perfected security interest having at least the priority
described in Section 4.2 and shall defend such security interest and such
priority against the claims and demands of all Persons.
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(c) Subject to the reporting requirements contained in Section 5.7,
such Grantor shall furnish to the Administrative Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other documents in connection with the Collateral as the Administrative
Agent may reasonably request, all in reasonable detail and in form and substance
satisfactory to the Administrative Agent.
(d) At any time and from time to time, upon the written request of the
Administrative Agent, such Grantor shall, for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, (i) promptly and duly execute and deliver, and have recorded,
such further documents, including an authorization to file (or, as applicable,
the filing) of any financing statement or amendment under the UCC (or other
filings under similar Requirements of Law) in effect in any jurisdiction with
respect to the security interest created hereby and (ii) take such further
action as the Administrative Agent may reasonably request, including (A) during
such time as an Event of Default shall have occurred and be continuing, using
its commercially reasonable efforts to secure all approvals necessary or
appropriate for the assignment to or for the benefit of the Administrative Agent
of any Contractual Obligation, including any IP License, held by such Grantor
and to enforce the security interests granted hereunder and (B) executing and
delivering any Control Agreements with respect to deposit accounts and
securities accounts to the extent required under Section 7.11 of the Second Lien
Credit Agreement.
(e) If requested by the Administrative Agent, the Grantor shall
arrange for the Administrative Agent's first priority security interest, subject
to Permitted Liens, to be noted on the certificate of title of each Vehicle and
shall file any other necessary documentation in each jurisdiction that the
Administrative Agent shall deem advisable to perfect its security interests in
any Vehicle.
(f) To ensure that any of the Excluded Property set forth in clause
(ii) of the definition of "Excluded Property" becomes part of the Collateral
(other than Excluded Collateral that exists on the date hereof), such Grantor
shall use good faith efforts, at the Administrative Agent's request, to obtain
any required consents from any Person other than the Borrower and its Affiliates
with respect to any material permit or material license or any material
Contractual Obligation with such Person entered into by such Grantor that
requires such consent as a condition to the creation by such Grantor of a Lien
on any right, title or interest in such permit, license or Contractual
Obligation (other than with respect to any such property which is immaterial) or
any Stock or Stock Equivalent related thereto.
Section 5.2 Changes in Locations, Name, Etc. Except upon 10 days' prior
written notice to the Administrative Agent and delivery to the Administrative
Agent of (a) all documents reasonably requested by the Administrative Agent to
maintain the validity, perfection and priority of the security interests
provided for herein and (b) if applicable, a written supplement to Schedule 4
showing any additional locations at which inventory or equipment shall be kept,
such Grantor shall not do any of the following:
(i) permit any inventory or equipment with an aggregate value in
excess of $1,000,000 for such location to be kept at a location other than
those listed on Schedule 4, except for inventory or equipment in transit,
located at customer sites, or in the possession of a third party for repair
or service in the ordinary course of business;
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(ii) change its jurisdiction of organization or its location (as
defined under Section 9-307 of the UCC), in each case from that referred to
in Section 4.3; or
(iii) change its legal name or organizational identification number,
if any, or corporation, limited liability company, partnership or other
organizational structure to such an extent that any financing statement
filed in connection with this Agreement would become misleading.
Section 5.3 Pledged Collateral; Other Matters. (a) Delivery of Pledged
Collateral. Such Grantor shall (i) promptly after such Grantor obtains
possession thereof, deliver to the Administrative Agent (A) all Pledged
Certificated Stock, (B) all Pledged Debt Instruments in excess of $250,000 in
the aggregate for any particular issuer thereof and (C) all certificates and
instruments evidencing Pledged Investment Property in excess of $250,000 in the
aggregate for any particular issuer thereof and (ii) maintain all other Pledged
Investment Property in a Controlled Securities Account to the extent such
Pledged Investment Property constitutes "investment property" under Section
9-102(a)(49) of the UCC.
(b) Event of Default. During the continuance of an Event of Default,
the Administrative Agent shall have the right, at any time in its discretion and
without notice to the Grantor, to (i) transfer to or to register in its name or
in the name of its nominees any Pledged Collateral or any Pledged Investment
Property and (ii) exchange any certificate or instrument representing or
evidencing any Pledged Collateral or any Pledged Investment Property for
certificates or instruments of smaller or larger denominations.
(c) Cash Distributions with respect to Collateral. Except as provided
in Article VI, such Grantor shall be entitled to receive all cash dividends or
other distributions or payments paid in respect of the Pledged Collateral, the
Pledged Investment Property or any other Collateral.
(d) Voting Rights. Except as provided in Article VI, such Grantor
shall be entitled to exercise all voting, consent and corporate, partnership,
limited liability company and similar rights with respect to the Pledged
Collateral or the Pledged Investment Property; provided, however, that no vote
shall be cast, consent given or right exercised or other action taken by such
Grantor that would result in any violation of any provision of any Loan
Document.
Section 5.4 Accounts. If an Event of Default shall have occurred and be
continuing, the Administrative Agent shall have the right to make test
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and such Grantor shall furnish all such
assistance and information as the Administrative Agent may reasonably require in
connection therewith. If an Event of Default shall have occurred and be
continuing, upon the Administrative Agent's request, such Grantor shall cause
independent public accountants or others satisfactory to the Administrative
Agent to furnish to the Administrative Agent reports showing reconciliations,
aging and test verifications of, and trial balances for, the accounts.
Section 5.5 Commodity Contracts. Such Grantor shall not have any commodity
contract other than subject to a Control Agreement.
Section 5.6 Delivery of Instruments and Tangible Chattel Paper and Control
of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper.
(a) If any amount in excess of $500,000 payable under or in connection with any
Collateral owned by such Grantor
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shall be or become evidenced by an instrument or tangible chattel paper other
than such instrument delivered in accordance with Section 5.3(a) and in the
possession of the Administrative Agent, at the request of the Administrative
Agent, such Grantor shall ▇▇▇▇ all such instruments and tangible chattel paper
with the following legend: "This writing and the obligations evidenced or
secured hereby are subject to the security interest of General Electric Capital
Corporation, as Administrative Agent" and, at the request of the Administrative
Agent, shall promptly deliver such instrument or tangible chattel paper to the
Administrative Agent, duly indorsed in a manner satisfactory to the
Administrative Agent.
(b) Such Grantor shall not grant "control" (within the meaning of such
term under Article 9-106 of the UCC) over any investment property to any Person
other than the Administrative Agent and the First Lien Agent.
(c) If such Grantor is or becomes the beneficiary of a letter of
credit that is (i) not a supporting obligation of any Collateral and (ii) in
excess of $500,000, such Grantor shall promptly, and in any event within 3
Business Days after becoming a beneficiary, notify the Administrative Agent
thereof and thereafter, if requested by the Administrative Agent and consented
to by the issuer of such letter of credit or any nominated person, enter into a
Contractual Obligation with the Administrative Agent, the issuer of such letter
of credit or such nominated person with respect to the letter-of-credit rights
under such letter of credit assigning such letter-of-credit rights to the
Administrative Agent in a manner sufficient to grant control for the purposes of
Section 9-107 of the UCC (or any similar section under any equivalent UCC). The
provisions of the Contractual Obligation shall be in form and substance
reasonably satisfactory to the Administrative Agent.
(d) If any amount in excess of $500,000 payable under or in connection
with any Collateral owned by such Grantor shall be or become evidenced by
electronic chattel paper, such Grantor shall take all steps necessary to grant
the Administrative Agent control of all such electronic chattel paper for the
purposes of Section 9-105 of the UCC (or any similar section under any
equivalent UCC) and all "transferable records" as defined in each of the Uniform
Electronic Transactions Act and the Electronic Signatures in Global and National
Commerce Act.
Section 5.7 Intellectual Property. (a) Grantors shall deliver to
Administrative Agent within 30 days of each anniversary of the Closing Date, and
at such times reasonably requested by the Administrative Agent, a complete and
accurate list of each Grantor's (i) registered United States Patents and all
applications therefor, (ii) registered United States Trademarks and all
applications therefor, (iii) registered United States Copyrights and all
applications therefore and (iv) Foreign Registered IP and all applications
therefor, and promptly upon receipt of such supplement from Administrative
Agent, the applicable Grantors shall execute and deliver a supplement hereto (in
form and substance satisfactory to Administrative Agent) to evidence
Administrative Agent's Lien on such Patents, Trademarks or Copyrights, and the
general intangibles of such Grantor relating thereto or represented thereby,
subject to the limitations in Section 5.7(f) with respect to Foreign Registered
IP.
(b) Each Grantor shall notify Administrative Agent promptly if it
knows or has reason to know that any application or registration relating to any
Patent, Trademark or Copyright (now or hereafter existing) may become abandoned
or dedicated to the public, or of any adverse determination or development
(including the institution of, or any such determination or development in, any
proceeding in the Applicable IP Office or any court) regarding such Grantor's
ownership of any such Patent, Trademark or Copyright, its right to register the
same, or
14
to keep and maintain the same, in each case, unless Grantor determines, in its
reasonable business judgment and in good faith, that the prosecution or
maintenance of any application or registration is not, or is no longer, material
in the conduct of the business as a whole of the Group Members; provided, that
any notice provided for above shall only be required with respect to such
Patent, Trademark or Copyright registered or acquired by such Grantor after the
Closing Date following the Administrative Agent's receipt of such information
required with respect thereto pursuant to Section 5.7(a).
(c) Each Grantor shall take all actions necessary or reasonably
requested by Administrative Agent to maintain and pursue each application, to
obtain the relevant registration and to maintain the registration of each of the
Patents or Trademarks (now or hereafter existing), including the filing of
applications for renewal, affidavits of use, affidavits of noncontestability and
opposition and interference and cancellation proceedings, in each case, unless
such Grantor determines, in its reasonable business judgment and in good faith,
that the prosecution or maintenance of any application or registration is not,
or is no longer, necessary or desirable in the conduct of its business.
(d) In the event that any material item of the Patent, Trademark and
Copyright Collateral is infringed upon, or misappropriated or diluted by a third
party, such Grantor shall notify Administrative Agent promptly after such
Grantor learns thereof. Such Grantor shall, unless such Grantor shall reasonably
determine that such Patent, Trademark and Copyright Collateral is not material
to the conduct of the business or operations as a whole of the Group Members,
promptly take such actions to enforce its rights and protect such Patent,
Trademark and Copyright Collateral, whether by action, suit, proceeding or
otherwise, as such Grantor shall deem necessary or appropriate under the
circumstances in its reasonable business judgment or as Administrative Agent may
otherwise reasonably request.
(e) At such times as required under Sections 5.7(a) and 5.7(f), such
Grantor shall execute and deliver to the Administrative Agent in form and
substance reasonably acceptable to the Administrative Agent and suitable for
filing in the Applicable IP Office the short-form intellectual property security
agreements in the form attached hereto as Annex 3 for all Copyrights, Trademarks
and Patents of such Grantor.
(f) At Administrative Agent's request (after consideration of the cost
and expense of recording the Administrative Agent's Lien in any Foreign
Registered IP against the value of such Foreign Registered IP), such owner of
any Foreign Registered IP shall execute and deliver to the Administrative Agent
a short form intellectual property security agreement in form and substance
reasonably acceptable to the Administrative Agent and suitable for filing in the
Applicable IP Office.
Section 5.8 Notice of Commercial Tort Claims. Such Grantor agrees that, if
it shall acquire any interest in any commercial tort claim with an aggregate
value in excess of $500,000 (whether from another Person or because such
commercial tort claim shall have come into existence), (i) such Grantor shall,
promptly upon such acquisition, deliver to the Administrative Agent, in each
case in form and substance satisfactory to the Administrative Agent, a notice of
the existence and nature of such commercial tort claim and a supplement to
Schedule 1 containing a specific description of such commercial tort claim, (ii)
Section 3.1 shall apply to such commercial tort claim and (iii) such Grantor
shall execute and deliver to the Administrative Agent, in each case in form and
substance reasonably satisfactory to the Administrative Agent, any document, and
take all other action, deemed by the Administrative Agent to be reasonably
15
necessary or appropriate for the Administrative Agent to obtain, on behalf of
the Lenders, a perfected security interest having at least the priority set
forth in Section 4.2 in all such commercial tort claims. Any supplement to
Schedule 1 delivered pursuant to this Section 5.9 shall, after the receipt
thereof by the Administrative Agent, become part of Schedule 1 for all purposes
hereunder other than in respect of representations and warranties made prior to
the date of such receipt.
Section 5.9 Compliance with Second Lien Credit Agreement. Such Grantor
agrees to comply with all covenants and other provisions applicable to it under
the Second Lien Credit Agreement, including Sections 2.17 (Taxes), 11.3 (Costs
and Expenses) and 11.4 (Indemnities) of the Second Lien Credit Agreement and
agrees to the same submission to jurisdiction as that agreed to by the Borrower
in the Second Lien Credit Agreement.
ARTICLE VI
REMEDIAL PROVISIONS
Section 6.1 Code and Other Remedies. (a) UCC Remedies. During the existence
and continuance of an Event of Default, the Administrative Agent may exercise,
in addition to all other rights and remedies granted to it in this Agreement and
in any other instrument or agreement securing, evidencing or relating to any
Secured Obligation, all rights and remedies of a secured party under the UCC or
any other applicable law.
(b) Disposition of Collateral. Without limiting the generality of the
foregoing, the Administrative Agent may, 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), during the existence and continuance of any Event of Default
(personally or through its agents or attorneys), (i) enter upon the premises
where any Collateral is located, without any obligation to pay rent, through
self-help, without judicial process, without first obtaining a final judgment or
giving any Grantor or any other Person notice or opportunity for a hearing on
the Administrative Agent's claim or action, (ii) collect, receive, appropriate
and realize upon any Collateral and (iii) Sell, grant option or options to
purchase and deliver any Collateral (enter into Contractual Obligations 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 any Secured Party 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 Administrative Agent shall have the right,
upon any such public sale or sales and, to the extent permitted by the UCC and
other applicable Requirements of Law, upon any such private sale, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption of any Grantor, which right or equity is hereby waived and released.
(c) Management of the Collateral. Each Grantor further agrees, that,
during the existence and continuance of any Event of Default, (i) at the
Administrative Agent's request, it shall assemble the Collateral and make it
available to the Administrative Agent at places that the Administrative Agent
shall reasonably select, whether at such Grantor's premises or elsewhere, (ii)
without limiting the foregoing, the Administrative Agent also has the right to
require that each Grantor store and keep any Collateral pending further action
by the Administrative Agent and, while any such Collateral is so stored or kept,
provide such guards and
16
maintenance services as shall be necessary to protect the same and to preserve
and maintain such Collateral in good condition, (iii) until the Administrative
Agent is able to Sell any Collateral, the Administrative Agent shall have the
right to hold or use such Collateral to the extent that it deems appropriate for
the purpose of preserving the Collateral or its value or for any other purpose
deemed appropriate by the Administrative Agent and (iv) the Administrative Agent
may, if it so elects, seek the appointment of a receiver or keeper to take
possession of any Collateral and to enforce any of the Administrative Agent's
remedies (for the benefit of the Secured Parties), with respect to such
appointment without prior notice or hearing as to such appointment. The
Administrative Agent shall not have any obligation to any Grantor to maintain or
preserve the rights of any Grantor as against third parties with respect to any
Collateral while such Collateral is in the possession of the Administrative
Agent.
(d) Application of Proceeds. The Administrative Agent shall apply the
cash proceeds of any action taken by it pursuant to this Section 6.1, after
deducting all reasonable costs and expenses of every kind incurred in connection
therewith or incidental to the care or safekeeping of any Collateral or in any
way relating to the Collateral or the rights of the Administrative Agent and any
other Secured Party hereunder, including reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Secured Obligations, as
set forth in the Second Lien Credit Agreement, and only after such application
and after the payment by the Administrative Agent of any other amount required
by any Requirement of Law, need the Administrative Agent account for the
surplus, if any, to any Grantor.
(e) Direct Obligation. Neither the Administrative Agent nor any other
Secured Party shall be required to make any demand upon, or pursue or exhaust
any right or remedy against, any Grantor, any other Loan Party or any other
Person with respect to the payment of the Obligations or to pursue or exhaust
any right or remedy with respect to any Collateral therefor or any direct or
indirect guaranty thereof. All of the rights and remedies of the Administrative
Agent and any other Secured Party under any Loan Document shall be cumulative,
may be exercised individually or concurrently and not exclusive of any other
rights or remedies provided by any Requirement of Law. To the extent it may
lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes
the benefit and advantage of, and covenants not to assert against the
Administrative Agent or any Lender, any valuation, stay, appraisement,
extension, redemption or similar laws and any and all rights or defenses it may
have as a surety, now or hereafter existing, arising out of the exercise by them
of any rights hereunder. If any notice of a proposed sale or other disposition
of any 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.
(f) Commercially Reasonable. To the extent that applicable
Requirements of Law impose duties on the Administrative Agent to exercise
remedies in a commercially reasonable manner, each Grantor acknowledges and
agrees that it is not commercially unreasonable for the Administrative Agent to
do any of the following:
(i) fail to incur significant costs, expenses or other Liabilities
reasonably deemed as such by the Administrative Agent to prepare any
Collateral for disposition or otherwise to complete raw material or work in
process into finished goods or other finished products for disposition;
(ii) fail to obtain Permits, or other consents, for access to any
Collateral to Sell or for the collection or Sale of any Collateral, or, if
not required by other
17
Requirements of Law, fail to obtain Permits or other consents for the
collection or disposition of any Collateral;
(iii) fail to exercise remedies against account debtors or other
Persons obligated on any Collateral or to remove Liens on any Collateral or
to remove any adverse claims against any Collateral;
(iv) advertise dispositions of any Collateral through publications or
media of general circulation, whether or not such Collateral is of a
specialized nature or to contact other Persons, whether or not in the same
business as any Grantor, for expressions of interest in acquiring any such
Collateral;
(v) exercise collection remedies against account debtors and other
Persons obligated on any Collateral, directly or through the use of
collection agencies or other collection specialists, hire one or more
professional auctioneers to assist in the disposition of any Collateral,
whether or not such Collateral is of a specialized nature or, to the extent
deemed appropriate by the Administrative Agent, obtain the services of
other brokers, investment bankers, consultants and other professionals to
assist the Administrative Agent in the collection or disposition of any
Collateral, or utilize Internet sites that provide for the auction of
assets of the types included in the Collateral or that have the reasonable
capacity of doing so, or that match buyers and sellers of assets to dispose
of any Collateral;
(vi) dispose of assets in wholesale rather than retail markets;
(vii) disclaim disposition warranties, such as title, possession or
quiet enjoyment; or
(viii) purchase insurance or credit enhancements to insure the
Administrative Agent against risks of loss, collection or disposition of
any Collateral or to provide to the Administrative Agent a guaranteed
return from the collection or disposition of any Collateral.
Each Grantor acknowledges that the purpose of this Section 6.1 is to provide a
non-exhaustive list of actions or omissions that are commercially reasonable
when exercising remedies against any Collateral and that other actions or
omissions by the Secured Parties shall not be deemed commercially unreasonable
solely on account of not being indicated in this Section 6.1. Without limitation
upon the foregoing, nothing contained in this Section 6.1 shall be construed to
grant any rights to any Grantor or to impose any duties on the Administrative
Agent that would not have been granted or imposed by this Agreement or by
applicable Requirements of Law in the absence of this Section 6.1.
(g) IP Licenses. For the purpose of enabling the Administrative Agent
to exercise rights and remedies under this Section 6.1 (including in order to
take possession of, collect, receive, assemble, process, appropriate, remove,
realize upon, Sell or grant options to purchase any Collateral) at such time as
the Administrative Agent shall be lawfully entitled to exercise such rights and
remedies, upon the occurrence and during the continuance of an Event of Default,
each Grantor hereby grants to the Administrative Agent, for the benefit of the
Secured Parties, (i) an irrevocable, non-exclusive, worldwide license
(exercisable without payment of royalty or other compensation to such Grantor),
including in such license the right to sublicense,
18
use and practice any Intellectual Property now owned or hereafter acquired by
such Grantor and access to all media in which any of the licensed items may be
recorded or stored and to all Software and programs used for the compilation or
printout thereof and (ii) an irrevocable license (without payment of rent or
other compensation to such Grantor) to use, operate and occupy all Real Property
owned, operated, leased, subleased or otherwise occupied by such Grantor.
(h) P&G Joint Venture. The Administrative Agent, on behalf of the
Lenders and L/C Issuer, hereby covenants that in connection with the exercise of
remedies against the Collateral, including in connection with any foreclosure
upon the Collateral, not to: (a) take any action which would cause the license
rights under the P&G JV License Agreements to become owned by, licensed to, or
sublicensed to, as applicable, any Person who is not either a "Licensee" or
"Affiliate", as applicable, under the applicable P&G JV License Agreement, or
(b) exercise any remedies against or transfer the capital stock or other equity
interests of the P&G JV Companies to any Person who is not either a "Licensee"
or "Affiliate" or "sublicensee" under the P&G JV License Agreements, to the
extent and upon such terms and conditions as may be agreed to in writing by the
Administrative Agent in its discretion. As used herein "P&G JV License
Agreements" mean, collectively, (i) the Settlement and Cross-License agreement,
effective September 25, 1998, by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Ltd., Unilever NV, Unilever PLC, CONOPCO, Inc. and Unipath Limited and (ii) the
License Agreement, effective August 6, 1997, by and between Selfcare, Inc. and
PBM-Selfcare, LLC.
Section 6.2 Accounts and Payments in Respect of General Intangibles. (a) In
addition to, and not in substitution for, any similar requirement in the Second
Lien Credit Agreement, if required by the Administrative Agent at any time
during the existence and continuance of an Event of Default, any payment of
accounts or payment in respect of general intangibles, when collected by any
Grantor, shall be promptly (and, in any event, within 5 Business Days) deposited
by such Grantor in the exact form received, duly indorsed by such Grantor to the
Administrative Agent, in a Security Cash Collateral Account, subject to
withdrawal by the Administrative Agent as provided in Section 6.4. Until so
turned over, such payment shall be held by such Grantor in trust for the
Administrative Agent, segregated from other funds of such Grantor. Each such
deposit of proceeds of accounts and payments in respect of general intangibles
shall be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit.
(b) At any time during the existence and continuance of an Event of
Default:
(i) each Grantor shall, upon the Administrative Agent's request,
deliver to the Administrative Agent all copies (or originals if
specifically requested) and other documents evidencing, and relating to,
the Contractual Obligations and transactions that gave rise to any account
or any payment in respect of general intangibles, including all original
orders, invoices and shipping receipts and notify account debtors that the
accounts or general intangibles have been collaterally assigned to the
Administrative Agent and that payments in respect thereof shall be made
directly to the Administrative Agent;
(ii) the Administrative Agent may, without notice, at any time during
the continuance of an Event of Default, limit or terminate the authority of
a Grantor to collect its accounts or amounts due under general intangibles
or any thereof and, in its own name or in the name of others, communicate
with account debtors to verify with them to the Administrative Agent's
satisfaction the existence, amount and terms of any account or
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amounts due under any general intangible. In addition, the Administrative
Agent may at any time enforce such Grantor's rights against such account
debtors and obligors of general intangibles; and
(iii) each Grantor shall take all actions, deliver all documents and
provide all information necessary or reasonably requested by the
Administrative Agent to ensure any Internet Domain Name is registered.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each account and each payment in respect of general
intangibles 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. No Secured Party shall have any obligation or
liability under any agreement giving rise to an account or a payment in respect
of a general intangible by reason of or arising out of any Loan Document or the
receipt by any Secured Party of any payment relating thereto, nor shall any
Secured Party be obligated in any manner to perform any obligation of any
Grantor under or pursuant to any agreement giving rise to an account or a
payment in respect of a general intangible, 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 that may have been assigned to it or to which it may be
entitled at any time or times.
Section 6.3 Pledged Collateral. (a) Voting Rights. During the existence and
continuance of an Event of Default, upon notice by the Administrative Agent to
the relevant Grantor or Grantors, the Administrative Agent or its nominee may
exercise (A) any voting, consent, corporate and other right pertaining to the
Pledged Stock at any meeting of shareholders, partners or members, as the case
may be, of the relevant issuer or issuers of Pledged Stock or otherwise and (B)
any right of conversion, exchange and subscription and any other right,
privilege or option pertaining to the Pledged Stock as if it were the absolute
owner thereof (including the right to exchange at its discretion any Pledged
Stock upon the merger, amalgamation, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or equivalent
structure of any issuer of Pledged Stock, the right to deposit and deliver any
Pledged Stock with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Administrative Agent may
determine), all without liability except to account for property actually
received by it; provided, however, that the Administrative 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.
(b) Proxies. In order to permit the Administrative Agent to exercise
the voting and other consensual rights that it may be entitled to exercise
pursuant hereto and to receive all dividends and other distributions that it may
be entitled to receive hereunder, (i) each Grantor shall promptly execute and
deliver (or cause to be executed and delivered) to the Administrative Agent all
such proxies, dividend payment orders and other instruments as the
Administrative Agent may from time to time reasonably request and (ii) without
limiting the effect of clause (i) above, such Grantor hereby grants to the
Administrative Agent an irrevocable proxy to vote all or any part of the Pledged
Stock and to exercise all other rights, powers, privileges and remedies to which
a holder of the Pledged Stock would be entitled (including giving or withholding
written consents of shareholders, partners or members, as the case may be,
calling special meetings of shareholders, partners or members, as the case may
be, and voting at such meetings), which proxy shall be effective, automatically
and without the necessity of any
20
action (including any transfer of any Pledged Stock on the record books of the
issuer thereof) by any other person (including the issuer of such Pledged Stock
or any officer or agent thereof), during the continuance of an Event of Default
and which proxy shall only terminate upon the payment in full of the Obligations
in accordance with Section 1.2(c).
(c) Authorization of Issuers. Each Grantor hereby expressly
irrevocably authorizes and instructs, without any further instructions from such
Grantor, each issuer of any Pledged Stock pledged hereunder by such Grantor to
(i) comply with any instruction received by it from the Administrative Agent in
writing that states that an Event of Default exists and is continuing and is
otherwise in accordance with the terms of this Agreement and each Grantor agrees
that such issuer shall be fully protected from Liabilities to such Grantor in so
complying and (ii) if required by the Administrative Agent at any time during
the existence or continuance of an Event of Default, pay any dividend or make
any other payment with respect to the Pledged Stock directly to the
Administrative Agent.
Section 6.4 Proceeds to be Turned over to and Held by Administrative Agent.
If required by the Administrative Agent at any time during the existence or
continuance of an Event of Default, all proceeds of any Collateral received by
any Grantor hereunder in cash or Cash Equivalents shall be held by such Grantor
in trust for the Administrative Agent and the other Secured Parties, segregated
from other funds of such Grantor, and shall, promptly upon receipt by any
Grantor, be turned over to the Administrative Agent in the exact form received
(with any necessary endorsement). Only so long as an Event of Default exists,
all such proceeds of Collateral and any other proceeds of any Collateral
received by the Administrative Agent in cash or Cash Equivalents shall be held
by the Administrative Agent in a Security Cash Collateral Account. All proceeds
being held by the Administrative Agent in a Security Cash Collateral Account (or
by such Grantor in trust for the Administrative Agent) shall continue to be held
as collateral security for the Secured Obligations and shall not constitute
payment thereof until applied as provided in the Second Lien Credit Agreement.
Section 6.5 Sale of Pledged Collateral. (a) Each Grantor recognizes that
the Administrative Agent may be unable to effect a public sale of any Pledged
Collateral by reason of certain prohibitions contained in the Securities Act and
applicable state or foreign securities laws or otherwise or may determine that a
public sale is impracticable, not desirable or not commercially reasonable and,
accordingly, may resort to one or more private sales thereof to a restricted
group of purchasers that shall 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, to the
extent that the Administrative Agent elects to conduct such private sale, such
election shall be deemed commercially reasonable; provided that such private
sale is conducted in a commercially reasonable manner. The Administrative Agent
shall be under no obligation to delay a sale of any Pledged Collateral 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.
(b) 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 any
portion of the Pledged Collateral pursuant to this Section 6.5 valid and binding
and in compliance with all applicable Requirements of Law. Each Grantor further
agrees that a breach of any covenant contained in this Section 6.5 will cause
irreparable injury to the Administrative Agent and other Secured
21
Parties, that the Administrative Agent and the other Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 6.5 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defense against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Second Lien Credit Agreement.
Section 6.6 Deficiency. Each Grantor shall remain liable for any deficiency
if the proceeds of any sale or other disposition of any Collateral are
insufficient to pay in full the Obligations in accordance with Section 1.2(c)
including, the fees and disbursements of any attorney employed by the
Administrative Agent or any other Secured Party to collect such deficiency.
ARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.1 Administrative Agent's Appointment as Attorney-in-Fact. (a)
Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any Related Person thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of the Loan Documents, to
take any appropriate action and to execute any document or instrument that may
be necessary or desirable to accomplish the purposes of the Loan Documents, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent and its Related Persons the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any of the
following when an Event of Default exists and is continuing:
(i) in the name of such Grantor, in its own name or otherwise, take
possession of and indorse and collect any check, draft, note, acceptance or
other instrument for the payment of moneys due under any account or general
intangible 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 Administrative Agent for the purpose of
collecting any such moneys due under any account or general intangible or
with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property owned by or licensed to
the Grantors, execute, deliver and have recorded any document that the
Administrative Agent may request to evidence, effect, publicize or record
the Administrative Agent's 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 any Collateral, effect any repair or pay any insurance
called for by the terms of the Second Lien Credit Agreement (including all
or any part of the premiums therefor and the costs thereof);
(iv) execute, in connection with any sale provided for in Section 6.1
or Section 6.5, any document to effect or otherwise necessary or
appropriate in relation to evidence the Sale of any Collateral; or
22
(v) (A) direct any party liable for any payment under any Collateral
to make payment of any moneys due or to become due thereunder directly to
the Administrative Agent or as the Administrative Agent shall direct, (B)
ask or demand for, and collect and receive payment of and receipt for, any
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral, (C) sign and indorse any
invoice, freight or express ▇▇▇▇, ▇▇▇▇ of lading, storage or warehouse
receipt, draft against debtors, assignment, verification, notice and other
document in connection with any Collateral, (D) commence and prosecute any
suit, action or proceeding at law or in equity in any court of competent
jurisdiction to collect any Collateral and to enforce any other right in
respect of any Collateral, (E) defend any actions, suits, proceedings,
audits, claims, demands, orders or disputes brought against such Grantor
with respect to any Collateral, (F) settle, compromise or adjust any such
actions, suits, proceedings, audits, claims, demands, orders or disputes
and, in connection therewith, give such discharges or releases as the
Administrative Agent may deem appropriate, (G) assign any Intellectual
Property owned by the Grantors or any IP Licenses of the Grantors
throughout the world on such terms and conditions and in such manner as the
Administrative Agent shall in its sole discretion determine, including the
execution and filing of any document necessary to effectuate or record such
assignment and (H) generally, Sell, ▇▇▇▇▇ ▇ ▇▇▇▇ on, make any Contractual
Obligation with respect to and otherwise deal with, any Collateral as fully
and completely as though the Administrative Agent were the absolute owner
thereof for all purposes and do, at the Administrative Agent's option, at
any time or from time to time, all acts and things that the Administrative
Agent deems necessary to protect, preserve or realize upon any Collateral
and the Secured Parties' security interests therein and to effect the
intent of the Loan Documents, all as fully and effectively as such Grantor
might do.
(b) If any Grantor fails to perform or comply with any Contractual
Obligation contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such Contractual Obligation.
(c) The expenses of the Administrative Agent incurred in connection
with actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate set forth in Section 2.9 (Interest) of the Second Lien Credit
Agreement, from the date of payment by the Administrative Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue of this Section 7.1. 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.
Section 7.2 Authorization to File Financing Statements. Each Grantor
authorizes the Administrative Agent and its Related Persons, at any time and
from time to time, to file or record financing statements, amendments thereto,
and other filing or recording documents or instruments with respect to any
Collateral in such form and in such offices as the Administrative Agent
reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement, and such financing statements and
amendments may described the Collateral covered thereby as "all assets of the
debtor". A photographic or other reproduction of this Agreement shall be
sufficient as a financing statement or other filing or recording document
23
or instrument for filing or recording in any jurisdiction. Such Grantor also
hereby ratifies its authorization for the Administrative Agent to have filed any
initial financing statement or amendment thereto under the UCC (or other similar
laws) in effect in any jurisdiction if filed prior to the date hereof.
Section 7.3 Authority of Administrative Agent. Each Grantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative 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 Administrative
Agent and the other Secured Parties, be governed by the Second Lien Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Administrative Agent and the
Grantors, the Administrative Agent shall be conclusively presumed to be acting
as agent for the Secured Parties 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 7.4 Duty; Obligations and Liabilities. (a) Duty of Administrative
Agent. The Administrative Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession shall
be to deal with it in the same manner as the Administrative Agent deals with
similar property for its own account. The powers conferred on the Administrative
Agent hereunder are solely to protect the Administrative Agent's interest in the
Collateral and shall not impose any duty upon the Administrative Agent to
exercise any such powers. The Administrative Agent shall be accountable only for
amounts that it receives as a result of the exercise of such powers, and neither
it nor any of its Related Persons shall be responsible to any Grantor for any
act or failure to act hereunder, except for their own gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
In addition, the Administrative Agent shall not be liable or responsible for any
loss or damage to any Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehousemen, carrier, forwarding agency,
consignee or other bailee if such Person has been selected by the Administrative
Agent in good faith.
(b) Obligations and Liabilities with respect to Collateral. No Secured
Party and no Related Person thereof shall be liable for failure to demand,
collect or realize upon any Collateral or for 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 any Collateral. The powers conferred on the
Administrative Agent hereunder shall not impose any duty upon any other Secured
Party to exercise any such powers. The other Secured Parties 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 respective 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 as finally determined by a court of competent jurisdiction.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Reinstatement. Each Grantor agrees that, if any payment made by
any Loan Party or other Person and applied to the Secured Obligations is at any
time annulled,
24
avoided, set aside, rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be refunded or repaid, or the proceeds of
any Collateral are required to be returned by any Secured Party to such Loan
Party, its estate, trustee, receiver or any other party, including any Grantor,
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or repayment, any Lien or other Collateral
securing such liability shall be and remain in full force and effect, as fully
as if such payment had never been made. If, prior to any of the foregoing, (a)
any Lien or other Collateral securing such Grantor's liability hereunder shall
have been released or terminated by virtue of the foregoing or (b) any provision
of the Guaranty hereunder shall have been terminated, cancelled or surrendered,
such Lien, other Collateral or provision shall be reinstated in full force and
effect and such prior release, termination, cancellation or surrender shall not
diminish, release, discharge, impair or otherwise affect the obligations of any
such Grantor in respect of any Lien or other Collateral securing such obligation
or the amount of such payment.
Section 8.2 Release of Collateral. (a) At the time provided in clause
(b)(iii) of Section 10.10 (Release of Collateral or Guarantors) of the Second
Lien Credit Agreement, the Collateral shall be released from the Lien created
hereby and this Agreement and all obligations (other than those expressly stated
to survive such termination) of the Administrative 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. Each Grantor is hereby authorized to file UCC amendments at such time
evidencing the termination of the Liens so released. At the request of any
Grantor following any such termination, the Administrative Agent shall deliver
to such Grantor any Collateral of such Grantor held by the Administrative Agent
hereunder and execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such termination.
(b) If the Administrative Agent shall be directed or permitted
pursuant to clause (i) or (ii) of Section 10.10(b) of the Second Lien Credit
Agreement to release any Lien or any Collateral, such Collateral shall be
released from the Lien created hereby to the extent provided under, and subject
to the terms and conditions set forth in, such clauses (i) and (ii). In
connection therewith, the Administrative Agent, at the request of any Grantor,
shall execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such release.
(c) At the time provided in Section 10.10(a) of the Second Lien Credit
Agreement and at the request of the Borrower, a Grantor shall be released from
its obligations hereunder in the event that all the Securities of such Grantor
shall be Sold to any Person that is not an Affiliate of Holdings, the Borrower
and the Subsidiaries of the Borrower in a transaction permitted by the Loan
Documents.
Section 8.3 Independent Obligations. The obligations of each Grantor
hereunder are independent of and separate from the Secured Obligations and the
Guaranteed Obligations. If any Secured Obligation or Guaranteed Obligation is
not paid when due, or upon any Event of Default, the Administrative Agent may,
at its sole election, proceed directly and at once, without notice, against any
Grantor and any Collateral to collect and recover the full amount of any Secured
Obligation or Guaranteed Obligation then due, without first proceeding against
any other Grantor, any other Loan Party or any other Collateral and without
first joining any other Grantor or any other Loan Party in any proceeding.
25
Section 8.4 No Waiver by Course of Conduct. No Secured Party shall by any
act (except by a written instrument pursuant to Section 8.5), 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 any Secured Party, 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 any Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy that such
Secured Party would otherwise have on any future occasion.
Section 8.5 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 11.1 of the Second Lien Credit Agreement; provided,
however, that annexes to this Agreement may be supplemented (but no existing
provisions may be modified and no Collateral may be released) through Pledge
Amendments and Joinder Agreements, in substantially the form of Annex 1 and
Annex 2, respectively, in each case duly executed by the Administrative Agent
and each Grantor directly affected thereby.
Section 8.6 Additional Grantors; Additional Pledged Collateral. (a) Joinder
Agreements. If, at the option of the Borrower or as required pursuant to Section
7.10 of the Second Lien Credit Agreement, the Borrower shall cause any
Subsidiary that is not a Grantor to become a Grantor hereunder, such Subsidiary
shall execute and deliver to the Administrative Agent a joinder agreement
substantially in the form of Annex 2 (each, a "Joinder Agreement") and shall
thereafter for all purposes be a party hereto and have the same rights, benefits
and obligations as a Grantor party hereto on the Closing Date.
(b) Pledge Amendments. To the extent any Pledged Collateral has not
been delivered as of the Closing Date, such Grantor shall deliver a pledge
amendment duly executed by the Grantor in substantially the form of Annex 1
(each, a "Pledge Amendment"). Such Grantor authorizes the Administrative Agent
to attach each Pledge Amendment to this Agreement.
Section 8.7 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 11.11 of the Second Lien Credit Agreement; provided,
however, that any such notice, request or demand to or upon any Grantor shall be
addressed to the Borrower's notice address set forth in such Section 11.11 of
the Second Lien Credit Agreement.
Section 8.8 Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of each Grantor and shall inure to the benefit of
each Secured Party and their successors and assigns; provided, however, that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative Agent.
Section 8.9 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart. Delivery of an executed signature page of this Agreement by
26
facsimile transmission or by Electronic Transmission shall be as effective as
delivery of a manually executed counterpart hereof.
Section 8.10 Severability. Any provision of this Agreement being held
illegal, invalid or unenforceable in any jurisdiction shall not affect any part
of such provision not held illegal, invalid or unenforceable, any other
provision of this Agreement or any part of such provision in any other
jurisdiction.
Section 8.11 Governing Law. This Agreement and the rights and obligations
of the parties hereto shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.
Section 8.12 Jurisdiction.
(a) Submission to Jurisdiction. Any legal action or proceeding with
respect to any Loan Document may be brought in the courts of the State of New
York located in the City of New York, Borough of Manhattan, or of the United
States of America for the Southern District of New York and, by execution and
delivery of this Agreement, each party hereto hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The parties hereto (and, to the extent set forth in any other
Loan Document, each other Loan Party) hereby irrevocably waive any objection,
including any objection to the laying of venue or based on the grounds of forum
non conveniens, that any of them may now or hereafter have to the bringing of
any such action or proceeding in such jurisdictions.
(b) Service of Process. Each Grantor (and, to the extent set forth in
any other Loan Document, each other Loan Party) hereby irrevocably waives
personal service of any and all legal process, summons, notices and other
documents and other service of process of any kind and consents to such service
in any suit, action or proceeding brought in the United States of America with
respect to or otherwise arising out of or in connection with any Loan Document
by any means permitted by applicable Requirements of Law, including by the
mailing thereof (by registered or certified mail, postage prepaid) to the
address of the Borrower specified in Section 11.11 of the Second Lien Credit
Agreement (and shall be effective when such mailing shall be effective, as
provided therein). Each Grantor (and, to the extent set forth in any other Loan
Document, each other Loan Party) agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(c) Non-Exclusive Jurisdiction. Nothing contained in this Section 8.12
shall affect the right of the Administrative Agent or any Lender to serve
process in any other manner permitted by applicable Requirements of Law or
commence legal proceedings or otherwise proceed against any Grantor in any other
jurisdiction.
Section 8.13 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER
FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES
27
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 8.12.
Section 8.14 Subordination.
(a) Each Grantor executing this Agreement covenants and agrees that
the payment of all indebtedness, principal, interest (including interest which
accrues after the commencement of any case or proceeding in bankruptcy, or for
the reorganization of any Loan Party), fees, charges, expenses, attorneys' fees
and any other sum, obligation or liability owing by any other Grantor to such
Grantor, including any intercompany trade payables or royalty or licensing fees
(collectively, the "Intercompany Obligations"), is subordinated, to the extent
and in the manner provided in this Section 8.14, to the prior payment in full of
all Secured Obligations (other than contingent indemnification obligations as to
which no claim has been asserted) (herein, the "Senior Obligations") and that
the subordination is for the benefit of Administrative Agent and the other
Secured Parties, and Administrative Agent may enforce such provisions directly.
(b) Each Grantor executing this Agreement hereby (i) authorizes
Administrative Agent to demand specific performance of the terms of this Section
8.14, whether or not any other Grantor shall have complied with any of the
provisions hereof applicable to it, at any time when such Grantor shall have
failed to comply with any provisions of this Section 8.14 which are applicable
to it and (ii) irrevocably waives (to the maximum extent permitted by
Requirement of Law) any defense based on the adequacy of a remedy at law, which
might be asserted as a bar to such remedy of specific performance.
(c) Upon any distribution of assets of any Loan Party in any
dissolution, winding up, liquidation or reorganization (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or otherwise):
(i) Administrative Agent and other Secured Parties shall first be
entitled to receive payment in full in cash of the Senior Obligations
before any Grantor is entitled to receive any payment on account of the
Intercompany Obligations.
(ii) Any payment or distribution of assets of any Grantor of any kind
or character, whether in cash, property or securities, to which any other
Grantor would be entitled except for the provisions of this Section
8.14(c), shall be paid by the liquidating trustee or agent or other Person
making such payment or distribution directly to Administrative Agent, to
the extent necessary to make payment in full of all Senior Obligations
(other than contingent indemnification obligations as to which no claim has
been asserted) remaining unpaid after giving effect to any concurrent
payment or distribution or provisions therefore to Administrative Agent and
the other Secured Parties.
(iii) In the event that notwithstanding the foregoing provisions of
this Section 8.14(c), any payment or distribution of assets of any Grantor
of any kind or character, whether in cash, property or securities, shall be
received by any other Grantor on account of the Intercompany Obligations
before all Senior Obligations (other than contingent indemnification
obligations as to which no claim has been asserted) are paid in full, such
payment or distribution shall be received and held in trust for and shall
be paid over to Administrative Agent for application to the payment of the
Senior Obligations (other than
28
contingent indemnification obligations as to which no claim has been
asserted) until all of the Senior Obligations (other than contingent
indemnification obligations as to which no claim has been asserted) shall
have been paid in full, after giving effect to any concurrent payment or
distribution or provision therefore to Administrative Agent and other
Secured Parties.
(d) No right of Administrative Agent and the other Secured Parties or
any other present or future holders of any Senior Obligations to enforce the
subordination provisions herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of any Grantor or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
any Grantor with the terms hereof, regardless of any knowledge thereof which any
such holder may have or be otherwise charged with.
Section 8.15 Relation to First Lien Loan Documents.
(a) The parties hereto acknowledge that the Administrative Agent's
rights and the Grantor's obligations hereunder are subject to the First Lien
Loan Documents and the Intercreditor Agreement, dated as of June 26, 2007 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Intercreditor Agreement"), among IM US Holdings, LLC, Inverness Medical
Innovations, Inc., General Electric Capital Corporation, as First Lien Agent,
General Electric Capital Corporation, as Second Lien Agent and certain other
persons party or that may become party thereto from time to time..
(b) Notwithstanding anything herein to the contrary, the lien and
security interest granted to the Second Lien Agent pursuant to this Agreement
and the exercise of any right or remedy by the Second Lien Agent hereunder are
subject to the provisions of the Intercreditor Agreement. In the event of any
conflict between the terms of the Intercreditor Agreement and this Agreement,
the terms of the Intercreditor Agreement shall govern and control.
[SIGNATURE PAGES FOLLOW]
29
IN WITNESS WHEREOF, each of the undersigned has caused this Second
Lien Guaranty and Security Agreement to be duly executed and delivered as of the
date first above written.
BORROWER
IM US HOLDINGS, LLC,
as Grantor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
The following Persons are signatories to this Guaranty and Security
Agreement in their capacity as Grantors.
INVERNESS MEDICAL INNOVATIONS, INC.
ADVANTAGE DIAGNOSTICS CORPORATION
APPLIED BIOTECH, INC.
BINAX, INC.
FIRST CHECK DIAGNOSTICS CORP.
FOREFRONT DIAGNOSTICS, INC.
INCA ACQUISITION, INC.
INNOVATIVE MOBILITY, LLC
INSTANT TECHNOLOGIES, INC.
INVERNESS MEDICAL - BIOSTAR, INC.
INVERNESS MEDICAL INTERNATIONAL
HOLDING CORP.
INVERNESS MEDICAL INTERNATIONAL HOLDING
CORP. II
INNOVATIONS RESEARCH, LLC
INVERNESS MEDICAL, LLC
ISCHEMIA TECHNOLOGIES, INC.
IVC INDUSTRIES, INC.
INNOVACON, INC.
OSTEX INTERNATIONAL, INC.
QUALITY ASSURED SERVICES, INC.
SELFCARE TECHNOLOGY, INC.
SPDH, INC.
UNIPATH ONLINE, INC.
▇▇▇▇▇▇▇ LABORATORIES, LLC, as Grantors
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Financial Officer &
Treasurer, Vice President,
Finance, Vice President, Vice
President, Finance, Vice
President, Finance, Vice
President, Treasurer, Chief
Financial Officer, Vice
President, Finance, Vice
President, Finance, President,
President, Vice President,
Finance, Vice President, Finance,
Vice President, Finance,
Vice President, Finance, Vice
President, Finance, Vice
President, Finance, Chief
Financial Officer, Vice
President, Finance, President,
Vice President, Vice President
2
ACCEPTED AND AGREED
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Duly Authorized Signatory
3
ANNEX 1
TO
SECOND LIEN GUARANTY AND SECURITY AGREEMENT(1)
FORM OF PLEDGE AMENDMENT
This PLEDGE AMENDMENT, dated as of __________ __, 20__, is delivered
pursuant to Section 8.6 of the Second Lien Guaranty and Security Agreement,
dated as of June 26, 2007, by IM US Holdings, LLC (the "Borrower"), the
undersigned Grantor and the other Affiliates of the Borrower from time to time
party thereto as Grantors in favor of General Electric Capital Corporation, as
administrative agent and collateral agent for the Secured Parties referred to
therein (the "Guaranty and Security Agreement"). Capitalized terms used herein
without definition are used as defined in the Guaranty and Security Agreement.
The undersigned hereby agrees that this Pledge Amendment may be
attached to the Guaranty and Security Agreement and that the Pledged Collateral
listed on Annex 1-A to this Pledge Amendment shall be and become part of the
Collateral referred to in the Guaranty and Security Agreement and shall secure
all of the Obligations of the Loan Parties on the terms set forth therein.
The undersigned hereby represents and warrants that each of the
representations and warranties contained in Sections 4.1, 4.2, and 4.5 of the
Guaranty and Security Agreement is true and correct on and as of the date hereof
with respect to the undersigned and the Pledged Collateral on Annex 1-A to this
Pledge Amendment as if made on and as of such date.
[GRANTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Annex 1-A
PLEDGED STOCK
NUMBER OF SHARES,
ISSUER CLASS CERTIFICATE NO(S). PAR VALUE UNITS OR INTERESTS
------ ----- ------------------ --------- ------------------
PLEDGED DEBT INSTRUMENTS
ISSUER DESCRIPTION OF DEBT CERTIFICATE NO(S). FINAL MATURITY PRINCIPAL AMOUNT
------ ------------------- ------------------ -------------- ----------------
2
ACKNOWLEDGED AND AGREED
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATION
as Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
3
ANNEX 2
TO
SECOND LIEN GUARANTY AND SECURITY AGREEMENT
FORM OF JOINDER AGREEMENT
This JOINDER AGREEMENT, dated as of _________ __, 20__, is delivered
pursuant to Section 8.6 of the Second Lien Guaranty and Security Agreement,
dated as of June 26, 2007, by IM US Holdings, LLC (the "Borrower") and the
Affiliates of the Borrower from time to time party thereto as Grantors in favor
of the General Electric Capital Corporation, as administrative agent and
collateral agent for the Secured Parties referred to therein (the "Guaranty and
Security Agreement"). Capitalized terms used herein without definition are used
as defined in the Guaranty and Security Agreement.
By executing and delivering this Joinder Agreement, the undersigned,
as provided in Section 8.6 of the Guaranty and Security Agreement, hereby
becomes a party to the Guaranty and Security Agreement as a Grantor thereunder
with the same force and effect as if originally named as a Grantor therein and,
without limiting the generality of the foregoing, the undersigned (i) as
collateral security for the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations, hereby mortgages, pledges and hypothecates to the Administrative
Agent, for the benefit of the Secured Parties, and grants to the Administrative
Agent, for the benefit of the Secured Parties, a lien on and security interest
in, all of its right, title and interest in, to and under the Collateral on the
terms set forth in the Guaranty and Security Agreement of the undersigned and
expressly assumes all obligations and liabilities of a Grantor thereunder and
(ii) hereby unconditionally and irrevocably guarantees, as primary obligor and
not merely as surety, the full and punctual payment when due, whether at stated
maturity or earlier, by reason of acceleration, mandatory prepayment or
otherwise in accordance with any Loan Document, of all the Guaranteed
Obligations on the terms set forth in the Guaranty and Security Agreement. The
undersigned hereby agrees to be bound as a Grantor for the purposes of the
Guaranty and Security Agreement.
The information set forth in Annex 1-A is hereby added to the
information set forth in Schedules 1 through 7 to the Guaranty and Security
Agreement. By acknowledging and agreeing to this Joinder Agreement, the
undersigned hereby agree that this Joinder Agreement may be attached to the
Guaranty and Security Agreement and that the Pledged Collateral listed on Annex
1-A to this Joinder Amendment shall be and become part of the Collateral
referred to in the Guaranty and Security Agreement and shall secure all Secured
Obligations of the Loan Parties on the terms set forth in the Guaranty and
Security Agreement.
The undersigned hereby represents and warrants that each of the
representations and warranties contained in Article IV of the Guaranty and
Security Agreement (as amended to reflect the inclusion of the information set
forth in Annex 1-A in Schedules 1 through 7 to the Guaranty and Security
Agreement) applicable to it is true and correct with respect to it on and as of
the date hereof as if made on and as of such date (except for any
representations and warranties made as of an earlier date in which case such
representations and warranties shall be true and correct as of such earlier
date).
IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement
to be duly executed and delivered as of the date first above written.
A2-1
[ADDITIONAL GRANTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
A2-2
ACKNOWLEDGED AND AGREED
as of the date first above written:
[EACH GRANTOR PLEDGING
ADDITIONAL COLLATERAL]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION
as Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
▇▇-▇
▇▇▇▇▇ ▇
▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ AND SECURITY AGREEMENT
FORM OF SECOND LIEN INTELLECTUAL PROPERTY SECURITY AGREEMENT
THIS SECOND LIEN INTELLECTUAL PROPERTY SECURITY AGREEMENT, dated as of
June 26, 2007, is made by each of the entities listed on the signature pages
hereof (each a "Grantor" and, collectively, the "Grantors"), in favor of General
Electric Capital Corporation ("GE Capital"), as administrative agent and
collateral agent (in such capacity, together with its successors and permitted
assigns, the "Administrative Agent") for the Lenders and the L/C Issuers (as
defined in the Second Lien Credit Agreement referred to below).
WITNESSETH:
WHEREAS, pursuant to the Second Lien Credit Agreement, dated as of
June 26, 2007 (as amended, restated, supplemented or otherwise modified from
time to time, the "Second Lien Credit Agreement"), among the Borrower, Holdings
and the Lenders from time to time party thereto and Administrative Agent and the
Lenders have severally agreed to make extensions of credit to the Borrower upon
the terms and subject to the conditions set forth therein;
WHEREAS, each Grantor has agreed, pursuant to a Second Lien Guaranty
and Security Agreement of dated as of June 26, 2007 herewith in favor of the
Administrative Agent (the "Guaranty and Security Agreement"), to guarantee the
Obligations (as defined in the Second Lien Credit Agreement) of the other Loan
Parties; and
WHEREAS, all of the Grantors are party to the Guaranty and Security
Agreement pursuant to which the Grantors are required to execute and deliver
this Intellectual Property Security Agreement.
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders and the Administrative Agent to enter into the Second Lien Credit
Agreement and to induce the Lenders to make or continue to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Administrative Agent as follows:
Section 1. Defined Terms. Capitalized terms used herein without definition
are used as defined in the Guaranty and Security Agreement.
Section 2. Grant of Security Interest in Intellectual Property Collateral.
Each Grantor, as collateral security for the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of the Secured Obligations on the terms set forth in the Loan Documents, hereby
mortgages, pledges and hypothecates to the Administrative Agent, for the benefit
of the Secured Parties, and grants to the Administrative Agent, for the benefit
of the Secured Parties, a Lien on and security interest in, all of its right,
title and interest in, to and under the following Collateral of such Grantor
(the "Intellectual Property Collateral"):
(a) Copyrights.
(i) all of its Copyrights and registrations and applications for
registration thereof and all registered IP Licenses and applications
therefor providing for the grant to such Grantor of any right under any
Copyright, including, without limitation, those referred to on Schedule 1A
hereto;
A3-1
(ii) all renewals, reversions and extensions of the foregoing;
(iii) all income, royalties, proceeds and Liabilities at any time
due or payable or asserted under and with respect to any of the foregoing,
including, without limitation, all rights to ▇▇▇ and recover at law or in
equity for any past, present and future infringement, misappropriation,
dilution, violation or other impairment thereof, other than, in the case of
clauses (i) through (iii), with respect to Excluded Property.
(b) Patents.
(i) all of its registered Patents and applications for
registration therefor and all registered IP Licenses and applications
thereof providing for the grant to such Grantor of any right under any
Patent, including, without limitation, those referred to on Schedule 1B
hereto;
(ii) all reissues, reexaminations, continuations,
continuations-in-part, divisionals, renewals and extensions of the
foregoing;
(iii) all income, royalties, proceeds and Liabilities at any time
due or payable or asserted under and with respect to any of the foregoing,
including, without limitation, all rights to ▇▇▇ and recover at law or in
equity for any past, present and future infringement, misappropriation,
dilution, violation or other impairment thereof, other than, in the case of
clauses (i) through (iii), with respect to Excluded Property.
(c) Trademarks.
(i) all of its Trademarks and applications for registration
thereof and all registered IP Licenses and applications therefor providing
for the grant to such Grantor of any right under any Trademark, including,
without limitation, those referred to on Schedule 1C hereto;
(ii) all renewals and extensions of the foregoing;
(iii) all goodwill of the business connected with the use of, and
symbolized by, each such Trademark; and
(iv) all income, royalties, proceeds and Liabilities at any time
due or payable or asserted under and with respect to any of the foregoing,
including, without limitation, all rights to ▇▇▇ and recover at law or in
equity for any past, present and future infringement, misappropriation,
dilution, violation or other impairment thereof, other than, in the case of
clauses (i) through (iii), with respect to Excluded Property.
Section 3. Guaranty and Security Agreement. The security interest granted
pursuant to this Intellectual Property Security Agreement is granted in
conjunction with the security interest granted to the Administrative Agent
pursuant to the Guaranty and Security Agreement and each Grantor hereby
acknowledges and agrees that the rights and remedies of the Administrative Agent
with respect to the security interest in the Intellectual Property Collateral
made and granted hereby are more fully set forth in the Guaranty and Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
A3-2
Section 4. Grantor Remains Liable. Each Grantor hereby agrees that,
anything herein to the contrary notwithstanding, such Grantor shall assume full
and complete responsibility for the prosecution, defense, enforcement or any
other necessary or desirable actions in connection with such Grantor's
Intellectual Property Collateral and IP Licenses subject to a security interest
hereunder.
Section 5. Counterparts. This Intellectual Property Security Agreement may
be executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart.
Section 6. Governing Law. This Intellectual Property Security Agreement and
the rights and obligations of the parties hereto shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
[SIGNATURE PAGES FOLLOW]
A3-3
IN WITNESS WHEREOF, each Grantor has caused this Second Lien
Intellectual Property Security Agreement to be executed and delivered by its
duly authorized officer as of the date first set forth above.
INVERNESS MEDICAL INNOVATIONS, INC.
ADVANTAGE DIAGNOSTICS CORPORATION
APPLIED BIOTECH, INC.
BINAX, INC.
FIRST CHECK DIAGNOSTICS CORP.
FOREFRONT DIAGNOSTICS, INC.
INCA ACQUISITION, INC.
INNOVATIVE MOBILITY, LLC
INSTANT TECHNOLOGIES, INC.
INVERNESS MEDICAL - BIOSTAR, INC.
INVERNESS MEDICAL INTERNATIONAL
HOLDING CORP.
INVERNESS MEDICAL INTERNATIONAL
HOLDING CORP. II
INNOVATIONS RESEARCH, LLC
INVERNESS MEDICAL, LLC
ISCHEMIA TECHNOLOGIES, INC.
IVC INDUSTRIES, INC.
INNOVACON, INC.
OSTEX INTERNATIONAL, INC.
QUALITY ASSURED SERVICES, INC.
SELFCARE TECHNOLOGY, INC.
SPDH, INC.
UNIPATH ONLINE, INC.
▇▇▇▇▇▇▇ LABORATORIES, LLC, as Grantors
By:
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Financial Officer &
Treasurer, Vice President,
Finance, Vice President, Vice
President, Finance, Vice
President, Finance, Vice
President, Treasurer, Chief
Financial Officer, Vice
President, Finance, Vice
President, Finance, President,
President, Vice President,
Finance, Vice President, Finance,
Vice President, Finance, Vice
President, Finance, Vice
President, Finance, Vice
President, Finance, Chief
Financial Officer, Vice
President, Finance, President,
Vice President, Vice President
A3-4
ACCEPTED AND AGREED
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATION
as Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
A3-5
SCHEDULE 1A
TO
SECOND LIEN INTELLECTUAL PROPERTY SECURITY AGREEMENT
A. REGISTERED COPYRIGHTS
[Include Owner, Registration Number and Date]
B. COPYRIGHT APPLICATIONS
[Include Owner, Application Number and Date]
C. REGISTERED IP LICENSES AND ANY APPLICATIONS THEREFOR
[Include complete legal description of agreement (name of agreement,
parties and date)]
A3-I
SCHEDULE 1B
TO
SECOND LIEN INTELLECTUAL PROPERTY SECURITY AGREEMENT
A. REGISTERED PATENTS
[Include Owner, Registration Number and Date]
B. PATENT APPLICATIONS
[Include Owner, Application Number and Date]
C. REGISTERED IP LICENSES AND ANY APPLICATIONS THEREFOR
[Include complete legal description of agreement (name of agreement,
parties and date)]
A3-II
SCHEDULE 1C
TO
SECOND LIEN INTELLECTUAL PROPERTY SECURITY AGREEMENT
D. REGISTERED TRADEMARKS
[Include Owner, Registration Number and Date]
E. TRADEMARK APPLICATIONS
[Include Owner, Application Number and Date]
F. REGISTERED IP LICENSES AND ANY APPLICATIONS THEREFOR
[Include complete legal description of agreement (name of agreement,
parties and date)]
A3-III