Exhibit 10.7
Exhibit 4.01-B
to
Credit Agreement
AMENDED AND RESTATED SECURITY AGREEMENT dated as of June 11,
1999, among Zuellig Botanical Extracts, Inc., a Delaware corporation,
ZetaPharm, Inc., a New York corporation, Xxxxxx Drug Company, Inc., a
Delaware corporation (each, a "Debtor" and collectively, the "Debtors"),
and Xxxxx Fargo Bank, National Association (the "Secured Party").
Each of the Debtors has previously executed a Continuing Guaranty
in favor of the Secured Party, dated as of December 8, 1998 (each a
"Guaranty"), pursuant to which it has guaranteed the obligations of Zuellig
Group N.A., Inc. ("ZGNA") to the Secured Party under that certain Credit
Agreement dated as of December 8, 1998 between ZGNA and the Secured Party
(the "Prior Credit Agreement"; such obligations of ZGNA are referred to
below as the "Guaranteed Indebtedness").
Each of the Debtors has previously granted to the Secured Party,
pursuant to a Third Party Security Agreement dated as of December 8, 1998,
as amended (each, an "Original Security Agreement"), a security interest in
certain Collateral (as defined in such Original Security Agreement) as
security for the performance of its obligations under its Guaranty.
Reference is hereby made to the Credit Agreement dated as of
June 11, 1999 (as amended, supplemented or modified from time to time, the
"Credit Agreement") among the Debtors, Xxxxxx, Inc., Xxxxxxx Laboratories,
Inc. and the Secured Party. Terms used herein as defined terms and not
otherwise defined herein shall have the meanings given thereto in the
Credit Agreement. The Secured Party has agreed to make Loans to the
Debtors and the other Borrowers, all upon the terms and subject to the
conditions specified in the Credit Agreement. The obligation of the
Secured Party to make Loans is conditioned on, among other things, the
grant by each Debtor to the Lender of a security interest in all of such
Debtor's Collateral (as hereinafter defined).
The Guaranteed Indebtedness will be satisfied simultaneously with the
making of the initial Loans pursuant to the Credit Agreement. The Debtors
and the Secured Party intend and agree that: (i) simultaneously therewith,
the obligations of the Debtors in connection with the transactions
contemplated by the Credit Agreement ("New Obligations") shall be
substituted for the obligations of the Debtors in respect of the Guaranteed
Indebtedness; (ii) the security interest granted by each Debtor to the
Secured Party pursuant to its Original Security Agreement, and the Secured
Party's status as the holder of a perfected security interest in the assets
of each Debtor, shall remain in full force and effect notwithstanding such
substitution; and (iii) the New Obligations will be secured by the
Collateral simultaneously with the satisfaction of the Guaranteed
Indebtedness. Consequently, the Debtors and the Secured Party have agreed
to amend and restate the Original Security Agreement as herein set forth.
NOW, THEREFORE, the parties agree that the Original Security
Agreement is hereby amended and restated in its entirety to read as
follows:
ARTICLE I.
Section 1.01 Definitions. In addition to the terms defined above, the
following words and terms shall have the respective meanings as follows:
"Account Debtor" shall mean any Person who is or may become
obligated under, with respect to or on account of an Account Receivable.
"Accounts Receivable" shall mean in respect of any Debtor, (i)
all present and future "accounts," "chattel paper" and "documents," as such
terms are defined in the Uniform Commercial Code in effect in any
applicable jurisdiction, of such Debtor, (ii) without limiting the
foregoing, all right, title and interest, and all the rights, remedies,
security and Liens, in, to and in respect of any Accounts Receivable of
such Debtor, including, without limitation, all right, title and interest
of such Person in any returned goods, all guaranties or other contracts of
suretyship with respect to Accounts Receivable, deposits, or other security
for the obligation of any Account Debtor, any credit or other insurance,
any rights to stoppage in transit, replevin, reclamation, or resale, and
(iii) without limiting the foregoing, all right, title and interest of such
Debtor in, to and in respect of invoices or other documents or instruments
with respect to, or otherwise representing or evidencing, any Account
Receivable.
"Agreement" shall mean this Security Agreement, as it shall be
amended, supplemented or otherwise modified from time to time.
"Collateral" shall mean and collectively refer to all of the
present and future right, title and interest of each Debtor in (i) all of
its Accounts Receivable, General Intangibles, Inventory, Equipment and
Records, and all other personal property of such Debtor and (ii) all
Proceeds, rent, issues, profits, and products of, and all distributions and
collections in respect of, the foregoing property described in clause (i);
in each case whether now owned or hereafter acquired and wherever located.
"Collateral Assignment" means the Collateral Assignment of
Trademarks, Trademark Applications, Patents and Patent Applications
substantially in the form of Exhibit 1.01-A to this Agreement.
"Equipment" shall mean, in respect of any Debtor, all present and
future machinery, equipment (including all manufacturing, warehouse, and
office equipment), fixtures, trade fixtures, engineering drawings and
diagrams, tools and tooling (including any rights in respect of tools or
tooling in the possession of others), computer and other data processing
equipment, furniture, office, production or data processing supplies on
hand or in transit, other miscellaneous supplies and other tangible
property of any kind now owned or hereafter acquired by such Debtor or in
which such Debtor now has or may hereafter acquire any right, title or
interest and wheresoever located, in all its forms, including, without
limitation, all "equipment" of such Debtor within the meaning of the
Uniform Commercial Code in effect in any applicable jurisdiction, and all
such property located in any plant, warehouse, office or other space
leased, owned or occupied by such Debtor and all of such Debtor's interest
in all leasehold improvements and any and all additions, accessions and
appurtenances thereto, substitutions therefor and replacements thereof,
together with all attachments, components, parts and accessories installed
thereon or affixed thereto.
"General Intangibles" shall mean, in respect of any Debtor, all
general intangibles of such Person of every nature, whether now existing or
hereafter acquired, arising or created, and shall include, in any event,
all "general intangibles" within the meaning of the Uniform Commercial Code
in effect in any applicable jurisdiction, and, without limiting the
foregoing, all Intellectual Property, all goodwill and deposit accounts and
all contracts, causes of action and choses in action, suits, judgments,
statutory and other claims and demands, whether or not now known to exist,
including in respect of intercompany loans, and including all Federal,
state and other income tax refunds of such Person and all rights and claims
of subrogation, recoupment, contribution or indemnity (whether in equity,
at law, by contract or otherwise) of such Person against any other Person,
including any letter of credit, guarantee, claim, security interest, or
other security held to secure payment by an Account Debtor of any Account
Receivable.
"Intellectual Property" shall mean, in respect of any Debtor, all
intellectual and similar property of such Debtor of every kind and nature
now owned or hereafter acquired by such Debtor, including inventions,
designs, patents, patent applications, copyrights, copyright registrations,
applications to register copyrights, licenses, trademarks (including
service marks), trademark or service xxxx applications, trade names, trade
secrets, inventions, discoveries, processes, formulae, techniques,
scientific, technical or marketing data, confidential or proprietary
technical and business information, know-how, show-how or other data or
information, software and databases and all embodiments or fixations
thereof and related documentation, registrations and franchises, and all
additions, improvements and accessions to, and books and records describing
or used in connection with, any of the foregoing.
"Inventory" shall mean, in respect of any Debtor, all present and
future inventory of such Debtor of every type or description, including all
goods now owned or hereafter acquired, held for sale or lease, or furnished
or to be furnished under contracts of service or consumed in such Debtor's
business (including all such goods that have been returned or repossessed),
whether raw, in process or finished, all materials or equipment useable in
processing the same, scrap inventory, spare parts, all supplies, all
packaging materials, all documents of title covering any inventory and all
additions and accessions thereto, and shall include, in any event, all
"inventory" within the meaning of the Uniform Commercial Code in effect in
any applicable jurisdiction, wherever located.
"Obligations" shall mean, collectively, (a) the due and punctual
payment of (i) the principal of and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans when and as due, whether at maturity, by
acceleration, upon one or more dates on which repayment or prepayment is
required, or otherwise, (ii) each payment required to be made by the
Debtors or any other Borrower under the Credit Agreement in respect of any
Letter of Credit when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to provide
cash collateral and (iii) all other monetary obligations, including fees,
costs, expenses and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding), of the Debtors or any other Borrower to the Secured Party
under the Credit Agreement or any other Loan Documents (including this
Agreement), and (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Debtors or any other
Borrower under or pursuant to the Credit Agreement and under the other Loan
Documents (including this Agreement).
"Perfection Certificate" shall have the meaning given thereto in
Section 2.02(c).
"Proceeds" shall have the meaning assigned to it under the
Uniform Commercial Code and, in any event, shall include but not be limited
to any consideration received from the sale, exchange, lease or other
disposition of any asset or property which constitutes Collateral, any
distribution in respect thereof or payment or collection thereon, and any
payment received from any insurer or other Person as a result of the
destruction, loss, theft or other involuntary conversion of whatever nature
of any asset or property that constitutes Collateral, and shall include all
cash and negotiable instruments received or held by the Secured Party
pursuant to any lockbox or similar arrangement relating to the payment of
Accounts Receivable.
"Records" shall mean, in respect of any Debtor, all instruments,
files, ledgers and books of account and other records of such Debtor,
including all customer lists, computer programs, computer disks and tapes,
printouts and other materials upon which is stored any information relating
to such Debtor's business, now owned or hereafter acquired, wherever
located.
Section 1.02 Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include,"
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation." All references herein to Articles, Sections,
Exhibits, and Schedules shall be deemed references to Articles and Sections
of, and Exhibits and Schedules to, this Agreement unless the context shall
otherwise require. References to provisions of statutes, rules,
regulations, and other documents shall be deemed to include successor
provisions thereto. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time.
ARTICLE II.
Section 2.01 Security Interest. As security for the due and punctual
payment and performance of the Obligations, each Debtor hereby mortgages,
pledges, assigns, transfers, sets over, hypothecates, conveys, grants and
delivers to the Secured Party, for the benefit of the Secured Party, a
first priority security interest in all of such Debtor's right, title and
interest in, to and under the Collateral.
Section 2.02 Representations, Warranties and Covenants. Each Debtor
hereby represents and warrants to, and covenants with, the Secured Party,
as follows:
(a) Except for the foregoing security interest granted to the Secured
Party, such Debtor is and will at all times continue to be the direct owner
of, and have good and marketable title to the Collateral in respect of
which it has purported to grant a security interest hereunder, free and
clear of all Liens, and has not made and will not make any assignment,
pledge, hypothecation or transfer of, or create or suffer to exist any Lien
on, any such Collateral other than in favor of, and for the benefit of, the
Secured Party.
(b) Such Debtor (i) has, and at all times will have,
good right and full legal power and authority to grant, confirm and
continue the security interest granted hereunder and to execute, deliver
and perform its obligations hereunder, all without the consent or approval
of any party, other than any such consent or approval as has been obtained
and (ii) will defend its title and interest to the Collateral and the
security interest (and priority thereof) of the Secured Party against any
and all attachments, Liens or other impediments of any nature, however
arising, of all persons whomsoever.
(c) The Perfection Certificate in the form of Exhibit
2.02 hereto (the "Perfection Certificate") has been duly prepared,
completed and executed and the information set forth therein is correct and
complete. Fully executed Uniform Commercial Code financing statements or
other appropriate filings, recordings or registrations (other than the
Collateral Assignment and, in respect of copyrights, such as would be made
in the United States Copyright Office) containing descriptions of the
Collateral have been filed in each governmental, municipal or other office
specified in Schedule 6 to the Perfection Certificate, which are all the
filings, recordings and registrations that are necessary to publish notice
of and protect the validity of and to establish a valid and perfected
security interest in favor of the Secured Party in respect of all
Collateral (other than copyrights, to the extent that recordings and
registration in the United States Copyright Office may be necessary and
other than with respect to the Intellectual Property described in the
Collateral Assignment) in which the security interest granted hereunder may
be perfected by filing, recording or registration in the United States (or
any political subdivision thereof) and its territories and possessions, and
no further or subsequent filing, refiling, recording, rerecording,
registration or reregistration is necessary in any such jurisdiction,
except (i) as provided under applicable law with respect to the filing of
continuation statements, (ii) that recordation in addition to registration
of any unregistered copyrights in the United States Copyright Office may be
necessary with respect to Collateral consisting of copyrights, and (iii)
that recordation of the Collateral Assignment with the United States Patent
and Trademark Office ("PTO") is necessary with respect to the Collateral
described in the Collateral Assignment.
(d) Such Debtor will not (i) change its chief
executive office or Taxpayer Identification Number or remove its Records,
except if otherwise permitted hereunder and if to a location within the
continental United States and upon at least thirty (30) days' prior written
notice to the Secured Party thereof or (ii) change its name (or do business
under other names), identity or structure (including by merger or
consolidation, whether or not permitted under the Credit Agreement) unless
the Secured Party shall have received at least thirty (30) days' prior
notice thereof and (in any such case under clause (i) or (ii)) prior to
effecting or permitting any such change such Debtor shall have taken such
action, satisfactory to the Secured Party, to maintain the security
interest of the Secured Party in all the Collateral granted hereunder at
all times valid, fully perfected and in full force and effect.
(e) Such Debtor shall not permit or suffer any of the
Equipment or Inventory to be located at any place other than the locations
specified in the Perfection Certificate (except in connection with sales of
such Inventory permitted in the ordinary course of business) unless the
Secured Party shall have received thirty (30) days' prior written notice
thereof and such Debtor shall have taken such action, satisfactory to the
Secured Party, to maintain the security interest in such Equipment or
Inventory at all times following such change of location valid, fully
perfected and in full force and effect.
(f) Such Debtor shall at all times keep such accurate
and complete accounting records with respect to the Collateral as is
consistent with its current practices and in accordance with such prudent
and standard practices used in industries that are the same as or similar
to those in which such Debtor is engaged and, at such time or times as the
Secured Party may reasonably request, promptly prepare and deliver to the
Secured Party a duly certified schedule or schedules in form and detail
reasonably satisfactory to the Secured Party showing the identity, amount
and location of any and all Collateral.
(g) The security interest of the Secured Party
hereunder constitutes a valid security interest in all the Collateral, and
such security interest secures the payment and performance of the
Obligations, prior to any other Lien in any of the Collateral.
(h) The security interest of the Secured Party
hereunder constitutes a fully perfected security interest in all of the
Collateral in which a security interest may be perfected by filing or
recording except (i) for recordation or registration in respect of
copyrights) and (ii) to the extent that perfection of such security
interest in the Intellectual Property described in the Collateral
Assignment depends upon recordation of such Collateral Assignment with the
PTO, as to which, when the Collateral Assignment is recorded with the PTO,
the security interest of the Secured Party hereunder shall be a fully
perfected security interest in such Intellectual Property.
(i) Such Debtor has not and will not consent to the
filing or recording by any Person of, or in respect of, any Lien in any
Collateral (except by or on behalf of the Secured Party in respect of the
security interest hereunder).
Section 2.03 No Assumption of Liability. The security interest
hereunder is granted as security only and shall not subject the Secured
Party to, or in any way alter or modify, any obligation or liability of any
Debtor with respect to or arising out of any of the Collateral. Each
Debtor shall remain liable to, at its own cost and expense, duly and
punctually observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and each Debtor agrees to indemnify and hold harmless the Secured
Party from and against any and all liability for such performance.
Section 2.04 Periodic Certification. Each year, at the time that
delivery of annual financial statements with respect to the preceding
fiscal year is required pursuant to the Credit Agreement, each Debtor shall
deliver to the Secured Party a certificate executed by the chief financial
officer of such Debtor setting forth the information required pursuant to
Section 2 of the Perfection Certificate.
Section 2.05 Matters Relating to Collateral.
(a) Each Debtor agrees, at its expense, to execute, acknowledge, deliver
and cause to be duly filed all such further instruments and documents and
take all such actions as the Secured Party may from time to time reasonably
request to better assure, preserve, protect and perfect the security
interest and the rights and remedies created hereby, including the payment
of any fees and taxes required in connection with the execution and
delivery of this Agreement, the granting of the security interest hereunder
and the filing of any financing statements or other documents in connection
herewith. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any promissory note or other
instrument (other than a check issued in payment in the ordinary course of
business and timely deposited), such note or instrument shall be
immediately pledged and delivered to the Secured Party, duly endorsed in a
manner satisfactory to the Secured Party (and shall be received and held
uncommingled in trust for the benefit of the Secured Party pending such
endorsement and delivery).
(b) The Secured Party and such persons as the Secured Party may
reasonably designate shall have the right, at any reasonable time or times
upon reasonable notice and at the respective Debtor's own cost and expense,
to inspect the Collateral, all Records related thereto (and to make
extracts and copies from such Records) and the premises upon which any of
the Collateral is located, to discuss any Debtor's affairs with the
officers of such Debtor and its independent accountants and to verify under
reasonable procedures the validity, amount, quality, quantity, value,
condition and status of or any other matter relating to, the Collateral,
including, in the case of Accounts Receivable or Collateral in the
possession of any third party, by contacting Account Debtors or the third
party in possession of such Collateral for the purpose of making such a
verification.
(c) At its option, the Secured Party may discharge past due taxes,
assessments, charges, fees or Liens, at any time levied or placed on the
Collateral (or any part thereof), and may pay for the maintenance and
preservation of the Collateral to the extent any Debtor fails to do so as
required by this Agreement or the other Loan Documents, and each Debtor
agrees to reimburse the Secured Party on demand for any payment made or any
reasonable and documented expense incurred by the Secured Party pursuant to
the foregoing authorization; provided, however, that nothing in this
paragraph shall be interpreted as excusing any Debtor from the performance
of, or imposing any obligation on the Secured Party to cure or perform, any
covenants or other promises of any Debtor with respect to taxes,
assessments, charges, fees or Liens or maintenance as set forth herein or
in the other Loan Documents.
(d) If at any time any Debtor shall take and perfect a security interest
in any property of an Account Debtor or any other Person to secure payment
and performance of an Account Receivable, such Debtor shall promptly assign
such security interest to the Secured Party. Such assignment need not be
filed of public record unless necessary to continue the perfected status of
the security interest against creditors of and transferees from the Account
Debtor or other person granting the security interest.
Section 2.06 Use of Collateral. The Debtors may use but not dispose
of the Collateral in any lawful manner not inconsistent with the provisions
of this Agreement, the Credit Agreement or any other Loan Document, except
that the Debtors may dispose of Collateral (including sale of Inventory in
the ordinary course of business) to the extent expressly permitted by
provisions of the Loan Documents. Without limiting the generality of the
foregoing, each Debtor agrees that it shall not permit any Inventory to be
in the possession or control of any warehouseman, bailee, agent or
processor at any time unless such warehouseman, bailee, agent or processor
shall have been notified of the security interest hereunder and shall have
agreed in a writing in form and substance reasonably satisfactory to the
Secured Party to hold the Inventory subject to the security interest
hereunder and the instructions of the Secured Party and to waive and
release any Lien held by it with respect to such Inventory, whether arising
by operation of law or otherwise.
Section 2.07 Modifications, etc.
(a) None of the Debtors will, without the Secured
Party's prior written consent, grant any extension of the time of payment
of any of the Accounts Receivable, compromise, compound or settle the same
for less than the full amount thereof, release, wholly or partly, any
person liable for the payment thereof or allow any credit or discount
whatsoever thereon, other than extensions, credits, discounts, compromises
or settlements granted or made in the ordinary course of business and
consistent with prior practice. After a default or an Event of Default
shall have occurred and during the continuation thereof, the Secured Party
may notify the Debtors not to grant or make any such extension, credit,
discount, compromise, or settlement under any circumstances without its
prior written consent.
(b) Without limiting any other provisions of this Agreement, upon the
occurrence and during the continuation of an Event of Default, the Secured
Party may, in its sole discretion, in its name or in the name of any
Debtor, or otherwise, demand, xxx for, collect or receive any money or
property at any time payable or receivable on account of or in exchange
for, or make any compromise or settlement deemed desirable with respect to,
any of the Collateral, but shall be under no obligation to do so, and the
Secured Party may extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, or release, any of the
Collateral, without thereby incurring responsibility to, or discharging or
otherwise affecting any liability of, any Debtor. The Secured Party will
not be required to take any steps to preserve any rights against prior
parties to the Collateral. The Secured Party may (but shall not be
obligated to), after notice to any Debtor, make such payments and take all
such other action as the Secured Party deems necessary to protect its
security interest in the Collateral hereunder and/or the value thereof, and
the Secured Party is hereby authorized (without limiting the general nature
of any authority elsewhere herein conferred) to pay, purchase, contest, or
compromise any Lien on any of the Collateral.
ARTICLE III.
Section 3.01 Remedies, Possession, Sale of Collateral, etc.
(a) Upon the occurrence and during the continuation
of an Event of Default, each Debtor agrees to deliver each item of
Collateral to the Secured Party on demand, and it is agreed that the
Secured Party shall have the right (subject to applicable law) to take any
of or all the following actions at the same or different times: (i) in
respect of any Collateral consisting of Intellectual Property, on demand,
to cause the security interest hereunder therein to become an assignment,
transfer and conveyance of any or all such Collateral by such Debtor to the
Secured Party; or to license or, to the extent permitted by applicable law,
sublicense, whether general, special or otherwise, and whether on an
exclusive or non-exclusive basis, any such Collateral throughout the world
on such terms and conditions and in such manner as the Secured Party shall
determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers cannot be obtained), and (ii) with
or without legal process and with or without previous notice or demand for
performance, to take possession of the Collateral and without liability for
trespass to enter any premises where the Collateral may be located for the
purpose of taking possession of or removing the Collateral, to demand and
receive Collateral from any Person in possession thereof, to take such
measures as it may deem necessary or proper for the care or protection
thereof, and, generally, to exercise any and all rights afforded to a
secured party under the Uniform Commercial Code or other applicable law.
Without limiting the generality of the foregoing, the Secured Party may
sell or cause to be sold, whenever it shall decide, in one or more sales or
parcels, at such prices as it may deem best, and for cash, on credit or for
future delivery, without assumption of any credit risk, all or any portion
of the Collateral, at any broker's board or at public or private sale,
without demand of performance or notice of intention to sell or of time or
place of sale (except ten (10) days' written notice to the Debtors of the
time and place of such sale, which the Debtors hereby agree to be
commercially reasonable, and such other notices as may be required by
applicable statute and cannot be waived), the Secured Party shall have the
right to assign, transfer and deliver to the purchaser or purchasers
thereof the Collateral so sold, and any Person may be the purchaser of all
or any portion of the Collateral so sold and thereafter hold the same
absolutely, free from any claim or right of whatever kind, including any
equity of redemption of any Debtor, any such demand, notice, claim, right
or equity being hereby expressly waived and released. At any sale or sales
made pursuant to this Agreement, the Secured Party may bid for or purchase,
free from any claim or right of whatever kind, including any equity of
redemption of any Debtor, any such demand, notice, claim, right or equity
being hereby expressly waived and released, all or any portion of the
Collateral offered for sale, and may make any payment on account thereof by
using any claim for money then due and payable to the Secured Party from
any Debtor as a credit against the purchase price, and may hold, retain and
dispose of such property without further accountability to such Debtor in
respect thereof. At any such sale, the Collateral, or portion thereof, to
be sold may be sold in one lot as an entirety or in separate parcels, as
the Secured Party may (in its sole and absolute discretion) determine. The
Secured Party shall not be obligated to make any sale of any Collateral if
it shall determine not to do so, regardless of the fact that notice of sale
of such Collateral shall have been given. The Secured Party may, without
notice or publication, except as may be required by applicable statute and
cannot be waived, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place fixed
for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or
any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Secured Party until the sale
price is paid in full by the purchaser or purchasers thereof, but the
Secured Party shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in
case of any such failure, such Collateral may be sold again as if not
previously so sold. For purposes hereof, (i) a written agreement to
purchase the Collateral or any portion thereof shall be treated as a sale
thereof, (ii) the Secured Party shall be free to carry out such sale
pursuant to such agreement and (iii) no Debtor shall be entitled to the
return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Secured Party shall have entered
into such an agreement all Events of Default shall have been remedied and
the Obligations paid in full. The Secured Party shall in any such sale
have no obligation or responsibility whatsoever to make any representations
or warranties with respect to the Collateral or any part thereof, and shall
not be chargeable with any of the obligations or liabilities of any Debtor.
As an alternative to exercising the power of sale herein conferred upon it,
the Secured Party may proceed by a suit or suits at law or in equity to
foreclose upon the Collateral and to sell the Collateral or any portion
thereof pursuant to a judgment or decree of a court or courts having
competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver. Any sale pursuant to the provisions of this Section shall be
deemed to conform to the commercially reasonable standards as provided in
Section 9-504(3) of the Uniform Commercial Code as in effect in the State
of California or its equivalent in other jurisdictions.
(b) Each Debtor hereby agrees that it will indemnify and hold the Secured
Party, and its officers, directors, employees, agents and representatives
harmless (except for their own wilful misconduct or gross negligence) from
and against any and all claims with respect to the Collateral asserted both
before and after the taking of actual possession or control of the
Collateral by the Secured Party pursuant to this Agreement, or arising out
of any act or omission of any party other than the Secured Party prior to
such taking of actual possession or control by the Secured Party, or
arising out of any act or omission of such Debtor, or any agents thereof,
before or after the commencement of such actual possession or control by
the Secured Party. In any action hereunder the Secured Party shall be
entitled to the appointment, without notice, of a receiver to take
possession of all or any portion of the Collateral and to exercise such
powers as the court shall confer upon such receiver. Notwithstanding the
foregoing, upon the occurrence of an Event of Default, and during the
continuation of such Event of Default, the Secured Party shall be entitled
to apply, without prior notice to any Debtor, any cash or cash items
constituting Collateral in the possession of the Secured Party to payment
of the Obligations.
Section 3.02 Grant of License to Use Intellectual Property. Subject
to any exclusive license heretofore granted by any Debtor to any Person,
for the purpose of enabling the Secured Party to exercise its rights and
remedies hereunder, each Debtor hereby grants to the Secured Party an
irrevocable, non-exclusive license (exercisable without payment of royalty
or other compensation to such Debtor) to use, license or sublicense any of
the Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Debtor to the extent of the interest of such Debtor
therein at such time, and wherever the same may be located, and including
in such license reasonable access to all media in which any of the licensed
items may be recorded or stored and to all computer software and programs
used for the compilation or printout thereof. The use of such licenses by
the Secured Party shall be exercised, at the option of the Secured Party
upon the occurrence and during the continuation of an Event of Default,
provided that any license, sublicense or other transaction entered into by
the Secured Party in accordance herewith shall be binding upon each Debtor
notwithstanding any subsequent cure of an Event of Default. In operating
under the license granted by each Debtor pursuant to this Section, the
Secured Party agrees that the goods sold and services rendered under the
trademarks included in the Intellectual Property shall be of a nature and
quality substantially consistent with those theretofore offered under the
trademarks by such Debtor and such Debtor shall have the right to inspect
during the term of such license, at any reasonable time or times upon
reasonable notice to the Secured Party, and at such Debtor's own cost and
expense, representative samples of goods sold and services rendered under
the trademarks.
Section 3.03 Application of Proceeds.
(a) Each Debtor hereby agrees that it shall upon the occurrence and
during the continuation of an Event of Default, (i) immediately turn over
to the Secured Party any instruments (with appropriate endorsements) or
other items constituting Collateral not then in the possession of the
Secured Party, the possession of which is required for the perfection of
the Secured Party's security interest, each of which shall be held in trust
for the benefit of the Secured Party and not commingled prior to its coming
into the Secured Party's possession, and (ii) take all steps necessary to
cause all sums, monies, royalties, fees, commissions, charges, payments,
advances, income, profits and other amounts constituting Proceeds of any
Collateral to be deposited directly in an account of the Debtors (or any of
them) with the Secured Party and to cause the same to be applied to the
satisfaction of the Obligations.
(b) All proceeds from any collection or sale of the Collateral pursuant
hereto, all Collateral consisting of cash, and all deposits in accounts of
any Debtor with the Secured Party shall be applied (i) first, to the
payment of the fees and expenses of the Secured Party incurred pursuant to
this Agreement or any other Loan Document, including costs and expenses of
collection or sale, reimbursement of any advances, and any other costs or
expenses in connection with the exercise of any rights or remedies
hereunder or thereunder (including reasonable fees and disbursements of
counsel, including counsel employed in-house by the Secured Party), (ii)
second, to the payment in full of the Obligations owed to the Secured Party
in respect of the Loans and LC Disbursements, and (iii) third, to the
payment of the Obligations (other than those referred to above). Any
amounts remaining after such applications shall be remitted to the Debtors
or as a court of competent jurisdiction may otherwise direct. The Secured
Party shall have absolute discretion as to the time of application of any
such proceeds, cash or balances in accordance with this Agreement.
Section 3.04 Power of Attorney.
(a) Each Debtor does hereby irrevocably make, constitute and appoint the
Secured Party or any officer or designee thereof its true and lawful
attorney-in-fact with full power in the name of the Secured Party, and of
such Debtor, with power of substitution, to, upon the occurrence and during
the continuation of an Event of Default, receive, open and dispose of all
mail addressed to such Debtor, to endorse any note, check, draft, money
order, or other evidence of payment relating to the Collateral that may
come into the possession of the Secured Party, with full power and right to
cause the mail of such Debtor to be transferred to the Secured Party's own
offices or otherwise; to communicate with any Account Debtor in respect of
any Accounts Receivable; to commence or prosecute any suits, actions or
proceedings to collect or otherwise realize upon any Collateral or enforce
any rights in respect thereof, to settle, compromise, adjust or defend any
claims in respect of any Collateral; to notify any Account Debtors or
otherwise require them to make payment directly to the Secured Party; to
use, sell, assign, transfer, pledge, make any agreement with respect to or
otherwise deal with all or any of the Collateral, and to do any and all
other acts necessary or proper to carry out the intent of this Agreement
and each other Loan Document and the grant, confirmation and continuation
of the security interests hereunder and thereunder. Such power of attorney
is coupled with an interest and is irrevocable, and shall survive the
bankruptcy, insolvency or dissolution of any or all of the Debtors.
Nothing herein contained shall be construed as requiring or obligating the
Secured Party to make any commitment or to make any inquiry as to the
nature or sufficiency of any payment received by the Secured Party, or to
present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in
respect thereof or any property covered thereby. The Secured Party shall
be accountable only for amounts actually received as a result of the
exercise of the powers granted to it herein, and neither it nor its
officers, directors, employees or agents shall be responsible to any Debtor
for any act or failure to act hereunder, except for its own gross
negligence or willful misconduct. The provisions of this Section shall in
no event relieve any Debtor of any of its obligations hereunder or under
the other Loan Documents with respect to the Collateral or any part thereof
or impose any obligation on the Secured Party to proceed in any particular
manner with respect to the Collateral or any part thereof, or in any way
limit the exercise by the Secured Party of any other or further right that
it may have on the date of this Agreement or hereafter, whether hereunder,
under any other Loan Document, by law or otherwise. Any sale of Collateral
pursuant to the provisions of this Section shall be deemed to conform to
the commercially reasonable standards as provided in Section 9-504(3) of
the Uniform Commercial Code as in effect in the State of California or its
equivalent in other jurisdictions.
(b) Without limiting the preceding paragraph, each Debtor does hereby
further irrevocably make, constitute and appoint the Secured Party or any
officer or designee thereof its true and lawful attorney-in-fact with full
power in the name of the Secured Party, and of such Debtor, with power of
substitution, (i) to enforce all of such Debtor's rights under and pursuant
to all agreements with respect to the Collateral, all for the sole benefit
of the Secured Party, (ii) to enter into and perform such agreements as may
be reasonably necessary in order to carry out the terms, covenants and
conditions of this Agreement that are required to be observed or performed
by such Debtor, (iii) to execute such other and further mortgages, pledges
and assignments of the Collateral and filings or recordations in respect
thereof as the Secured Party may require for the purpose of protecting,
maintaining or enforcing the security interest of the Secured Party
hereunder, (iv) to act as authorized in Section 3.05, and (v) to do any and
all other things reasonably necessary or proper to carry out the intention
of this Agreement and the grant, confirmation, continuation and perfection
of the security interests hereunder. Such power of attorney is coupled
with an interest and is irrevocable, and shall survive the insolvency,
bankruptcy, or dissolution of any or all of the Debtors.
Section 3.05 Financing Statements, Direct Payments, Confirmation of
Receivables and Audit Rights. Each Debtor hereby authorizes the Secured
Party to file Uniform Commercial Code financing statements (and any other
filings) required in connection with the perfection or preservation of the
security interest hereunder in respect of all or any part of the
Collateral, and amendments thereto and continuations thereof with regard to
such Collateral, without its signature, or, in the alternative, to execute
such items on behalf of such Debtor pursuant to the powers of attorney
granted in the preceding Section. Each Debtor further authorizes the
Secured Party to confirm with any Account Debtor the amounts payable to
such Debtor with regard to the Collateral and to participate with such
Debtor in the audits of its respective Account Debtors. Each Debtor hereby
further authorizes the Secured Party upon the occurrence and during the
continuation of an Event of Default to notify any Account Debtor that all
sums payable to such Debtor relating to the Collateral shall be paid
directly to the Secured Party.
Section 3.06 Termination. The security interest granted hereunder
shall terminate when all the Obligations have been fully, finally and
indefeasibly paid and performed, the Total Exposure of the Secured Party
shall be zero, and the Commitments of the Secured Party shall have
terminated. Thereupon, the Secured Party will execute and deliver, at each
Debtor's expense, Uniform Commercial Code termination statements reasonably
requested by such Debtor evidencing the release of the security interest
hereunder, all without recourse to or warranty by the Secured Party.
Section 3.07 Remedies Not Exclusive. The remedies conferred upon or
reserved to the Secured Party in this Article and elsewhere in this
Agreement are intended to be in addition to, and not in limitation of, any
other remedy available to the Secured Party.
ARTICLE IV.
MISCELLANEOUS
Section 4.01 No Discharge. All rights of the Secured Party hereunder,
the security interest granted hereunder, and the obligations of each Debtor
under this Agreement shall be absolute and unconditional and shall remain
in full force and effect without regard to, and shall not be released,
discharged or in any way diminished by (i) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document (including
this Agreement), any agreement with respect to any of the Obligations or
any other agreement or instrument relating to any of the foregoing, (ii)
any change in the time, manner or place of payment of, or in any other term
of, all or any of the Obligations or any other amendment or waiver of or
any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument relating to the foregoing,
(iii) any exchange, release or nonperfection of any other collateral, or
any release or amendment or waiver of or consent to or departure from any
guaranty, for all or any of the Obligations, (iv) any exercise or
nonexercise by the Secured Party of any right, remedy, power or privilege
under or in respect of this Agreement, any other Loan Document or
applicable law, including, without limitation, any failure by the Secured
Party to setoff or release in whole or in part any balance of any deposit
account or credit on its books in favor of any Debtor or any waiver,
consent, extension, indulgence or other action or inaction in respect of
any thereof, or (v) any other act or thing or omission or delay to do any
other act or thing which may or might in any manner or to any extent vary
the risk of any Debtor or would otherwise, but for this specific provision
to the contrary, operate as a discharge of or exonerate any Debtor as a
matter of law.
Section 4.02 Amendment; Waiver. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by any Debtor
therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Secured Party. Any such waiver, consent or
approval shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on any Debtor in any case
shall entitle any Debtor to any other or further notice or demand in the
same, similar or other circumstances. No waiver by the Secured Party of
any breach or default of or by any Debtor under this Agreement shall be
deemed a waiver of any other previous breach or default or any thereafter
occurring.
Section 4.03 Survival; Severability.
(a) All covenants, agreements, representations and warranties made by the
Debtors herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other
Loan Document shall be considered to have been relied upon by the Secured
Party and shall survive the making by the Secured Party of the Loans, and
the execution and delivery to the Secured Party of the Notes evidencing
such Loans, regardless of any investigation made by the Secured Party or on
its behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any other fee or amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid or the LC Exposure does not equal zero and as long as the
Commitments have not been terminated.
(b) Any provision of this Agreement that is illegal, invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such illegality, invalidity or
unenforceability without invalidating the remaining provisions hereof or
affecting the legality, validity or enforceability of such provisions in
any other jurisdiction. The parties hereto agree to negotiate in good
faith to replace any illegal, invalid or unenforceable provision of this
Agreement with a legal, valid and enforceable provision that, to the extent
possible, will preserve the economic bargain of this Agreement, or to
otherwise amend this Agreement to achieve such result.
Section 4.04 Successors and Assigns. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Debtor or the Secured Party
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns. No Debtor may assign or transfer
any of its rights or obligations hereunder or any interest herein or in the
Collateral except as expressly contemplated by this Agreement or the other
Loan Documents (and any such attempted assignment shall be void).
Section 4.05 Arbitration. (a) Agreement. Upon the demand of either
the Secured Party or any Debtor (which demand of such Debtor will bind all
of the Debtors), any Dispute shall be resolved by binding arbitration
(except as set forth in paragraph (e) below) in accordance with the terms
of this Agreement. A "Dispute" shall mean any action, dispute, claim or
controversy of any kind, whether in contract or tort, statutory or common
law, legal or equitable, now existing or hereafter arising under or in
connection with, or in any way pertaining to, this Agreement or any of the
other Loan Documents, or any past, present or future extensions of credit
and other activities, transactions or obligations of any kind related
directly or indirectly to this Agreement or any of the other Loan
Documents, including without limitation, any of the foregoing arising in
connection with the exercise of any self-help, ancillary or other remedies
pursuant to this Agreement or any of the other Loan Documents. Any party
may by summary proceedings bring an action in court to compel arbitration
of a Dispute. Any party who fails or refuses to submit to arbitration
following a lawful demand by the other party shall bear all costs and
expenses incurred by such other party in compelling arbitration of any
Dispute.
(b) Governing Rules. Arbitration proceedings shall be administered by
the American Arbitration Association ("AAA") or such other administrator as
the parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved
in accordance with the Federal Arbitration Act (Title 9 of the United
States Code), notwithstanding any conflicting choice of law provision in
this Agreement or any of the other Loan Documents. The arbitration shall
be conducted at a location in California selected by the AAA or other
administrator. If there is any inconsistency between the terms hereof and
any such rules, the terms and procedures set forth herein shall control.
All statutes of limitation applicable to any Dispute shall apply to any
arbitration proceeding. All discovery activities shall be expressly
limited to matters directly relevant to the Dispute being arbitrated.
Judgment upon any award rendered in an arbitration may be entered in any
court having jurisdiction; provided however, that nothing contained herein
shall be deemed to be a waiver by the Secured Party of the protections
afforded to it under 12 U.S.C. Paragraph 91 or any similar applicable state
law.
(c) No Waiver; Provisional Remedies, Self-Help and Foreclosure. No
provision hereof shall limit the right of the Secured Party to exercise
self-help remedies such as setoff, foreclosure against or sale of any real
or personal property Collateral or security, or to obtain provisional or
ancillary remedies, including without limitation injunctive relief,
sequestration, attachment, garnishment or the appointment of a receiver,
from a court of competent jurisdiction before, after or during the pendency
of any arbitration or other proceeding. The exercise of any such remedy
shall not waive the right of any party to compel arbitration or reference
hereunder.
(d) Arbitrator Qualifications and Powers; Awards. Arbitrators must be
active members of the California State Bar or retired judges of the state
or federal judiciary of California, with expertise in the substantive laws
applicable to the subject matter of the Dispute. Arbitrators are empowered
to resolve Disputes by summary rulings in response to motions filed prior
to the final arbitration hearing. Arbitrators (i) shall resolve all
Disputes in accordance with the substantive law of the State of California,
(ii) may grant any remedy or relief that a court of the State of California
could order or grant within the scope hereof and such ancillary relief as
is necessary to make effective any award, and (iii) shall have the power to
award recovery of all costs and fees, to impose sanctions and to take such
other actions as they deem necessary to the same extent a judge could
pursuant to the Federal Rules of Civil Procedure, the California Rules of
Civil Procedure or other applicable law. Any Dispute in which the amount
in controversy is $5,000,000 or less shall be decided by a single
arbitrator who shall not render an award of greater than $5,000,000
(including damages, costs, fees and expenses). By submission to a single
arbitrator, each party expressly waives any right or claim to recover more
than $5,000,000. Any Dispute in which the amount in controversy exceeds
$5,000,000 shall be decided by majority vote of a panel of three
arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations.
(e) Judicial Review. Notwithstanding anything herein to the contrary, in
any arbitration in which the amount in controversy exceeds $25,000,000, the
arbitrators shall be required to make specific, written findings of fact
and conclusions of law. In such arbitrations (i) the arbitrators shall not
have the power to make any award which is not supported by substantial
evidence or which is based on legal error, (ii) an award shall not be
binding upon the parties unless the findings of fact are supported by
substantial evidence and the conclusions of law are not erroneous under the
substantive law of the State of California, and (iii) the parties shall
have in addition to the grounds referred to in the Federal Arbitration Act
for vacating, modifying or correcting an award the right to judicial review
of (A) whether the findings of fact rendered by the arbitrators are
supported by substantial evidence, and (B) whether the conclusions of law
are erroneous under the substantive law of the State of California.
Judgment confirming an award in such a proceeding may be entered only if a
court determines the award is supported by substantial evidence and not
based on legal error under the substantive law of the State of California.
(f) Real Property Collateral; Judicial Reference. Notwithstanding
anything herein to the contrary, no Dispute shall be submitted to
arbitration if the Dispute concerns Collateral comprised of real property
or interests therein unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or
benefits that might accrue to them by virtue of the single action rule
statute of California, thereby agreeing that all indebtedness and
obligations of the parties, and all mortgages, liens and security interests
securing such indebtedness and obligations, shall remain fully valid and
enforceable. If any such Dispute is not submitted to arbitration, the
Dispute shall be referred to a referee in accordance with California Code
of Civil Procedure Section 638 et seq., and this general reference
agreement is intended to be specifically enforceable in accordance with
said Section 638. A referee with the qualifications required herein for
arbitrators shall be selected pursuant to the AAA's selection procedures.
Judgment upon the decision rendered by a referee shall be entered in the
court in which such proceeding was commenced in accordance with California
Code of Civil Procedure Sections 644 and 645.
(g) Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within one hundred eighty (180) days of the filing
of the Dispute with the AAA. No arbitrator or other party to an
arbitration proceeding may disclose the existence, content or results
thereof, except for disclosures of information by a party required in the
ordinary course of its business, by applicable law or regulation, or to the
extent necessary to exercise any judicial review rights set forth herein.
If more than one agreement for arbitration by or between the parties
potentially applies to a Dispute, the arbitration provision most directly
related to this Agreement or the relevant Loan Documents or the subject
matter of the Dispute shall control. This arbitration provision shall
survive termination, amendment or expiration of this Agreement and any of
the other Loan Documents or any relationship between the parties.
Section 4.06 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF CALIFORNIA.
(b) Each Debtor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Superior
Court of the State of California sitting in Los Angeles County and of the
United States District Court for the Central District of California, and
any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement not subject to arbitration under
Section 4.05, or for recognition or enforcement of any judgment or arbitral
award, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such California State or, to the
extent permitted by law, such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement
(other than Section 4.05, if applicable) shall affect any right that the
Secured Party may otherwise have to bring any action or proceeding relating
to this Agreement against any Debtor or its properties in the courts of any
jurisdiction.
(c) Each Debtor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court
referred to in the preceding paragraph. Each of the parties hereto
irrevocably waives, to the fullest extent permitted by law, the defense of
an inconvenient forum to the maintenance of such action or proceeding in
any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 4.08. Nothing in
this Agreement will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
Section 4.07 Headings. The Article and Section headings in this
Agreement are for convenience only and shall not affect the construction
hereof.
Section 4.08 Notices. Notices, consents and other communications
provided for herein shall (except as otherwise expressly permitted herein)
be in writing and given as provided in Section 8.01 of the Credit
Agreement. Communications and notices to any Debtor shall be given to it
at its address set forth in Schedule 4.08 hereto.
Section 4.09 Reimbursement of the Secured Party.
(a) The Debtors jointly and severally agree to pay upon demand to the
Secured Party the amount of any and all reasonable and documented expenses,
including the reasonable and documented fees and expenses of its counsel
(including counsel employed in-house by the Secured Party) and of any
experts or agents, that the Secured Party may incur in connection with (i)
the administration of this Agreement (including the customary fees and
expenses of the Secured Party for any audits conducted by it with respect
to the Accounts Receivable or Inventory), (ii) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of the
Collateral, (iii) the exercise or enforcement of any of the rights of the
Secured Party hereunder, or (iv) the failure by any Debtor to perform or
observe any of the provisions hereof. If the Debtors shall fail to do any
act or thing that they have covenanted to do hereunder or any
representation or warranty of the Debtors hereunder shall be breached, the
Secured Party may (but shall not be obligated to) do the same or cause it
to be done or remedy any such breach and there shall be added to the
Obligations the cost or expense incurred by the Secured Party in so doing.
(b) Without limitation of their indemnification obligations under the
other Loan Documents, the Debtors jointly and severally agree to indemnify
the Secured Party and its officers, directors, employees, agents,
attorneys, and representatives ("Indemnitees") against, and hold each of
them harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees and expenses, incurred
by or asserted against any of them arising out of, in any way connected
with, or as a result of, the execution, delivery or performance of this
Agreement or any claim, litigation, investigation or proceeding relating
hereto or to the Collateral, whether or not any Indemnitee is a party
thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses have resulted from the gross negligence or willful
misconduct of such Indemnitee.
(c) Any amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The
provisions of this Section shall remain operative and in full force and
effect regardless of the termination of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of the
Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document or any investigation made by or
on behalf of the Secured Party. All amounts due under this Section shall
be payable on written demand therefor and shall bear interest at the
default rate (as provided in the Credit Agreement).
Section 4.10 Counterparts. (a) This Agreement may be executed in
separate counterparts (telecopy of any executed counterpart having the same
effect as manual delivery thereof), each of which shall constitute an
original, but all of which, when taken together, shall constitute but one
agreement.
Section 4.11 Entire Agreement. Except as expressly herein provided,
this Agreement and the other Loan Documents constitute the entire agreement
among the parties relating to the subject matter hereof. Any previous
agreement among the parties with respect to the transactions contemplated
hereunder is superseded by this Agreement and the other Loan Documents.
Except as expressly provided herein or in the other Loan Documents, nothing
in this Agreement or in any other Loan Document, expressed or implied, is
intended to confer upon any party, other than the parties hereto, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement or such other Loan Documents.
Section 4.12 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY 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 HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers or
representatives as of the day and year first above written.
SECURED PARTY:
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By: ______________________________
Name:
Title:
DEBTORS:
ZUELLIG BOTANICAL EXTRACTS, INC.
By: ______________________________
Name:
Title:
ZETAPHARM, INC.
By: ______________________________
Name:
Title:
XXXXXX DRUG COMPANY, INC.
By: ______________________________
Name:
Title:
Schedule 4.08
to
Security Agreement
Addresses for Notice
Party Mailing Address County
Exhibit 2.02
to
Security Agreement
PERFECTION CERTIFICATE
Reference is made to the Credit Agreement dated as of June 11,
1999 (as supplemented, amended, or modified from time to time, the "Credit
Agreement"), among Xxxxxx, Inc., a Colorado corporation (the "Company"),
Zuellig Botanical Extracts, Inc., a Delaware corporation, ZetaPharm, Inc.,
a New York corporation, Xxxxxx Drug Company, Inc., a Delaware corporation,
Xxxxxxx Laboratories, Inc., a Massachusetts corporation (collectively, the
Borrowers") and Xxxxx Fargo Bank, National Association (the "Lender").
Terms used herein as defined terms and not defined herein shall have the
meanings assigned to such terms in the Credit Agreement and the Security
Documents, as applicable.
The Borrowers have granted to the Lender security interests pursuant
to the Security Documents.
The undersigned, the Chief Financial Officer of the Company, does
hereby certify to the Lender as follows:
1. Names. (a) The exact name of each Borrower, as such name
appears in its respective currently effective certificate of incorporation,
is as set forth on Schedule la hereto.
(b) Set forth on Schedule lb hereto is each other name each
Borrower has had since its organization, together with the date of the
relevant change.
(c) Except as set forth in Schedule 1c hereto, no Borrower has
changed its identity or structure in any way within the past five years.
Changes in identity or structure would include mergers, consolidations and
acquisitions, as well as any change in the form, nature or jurisdiction of
corporate organizations. [If any such change has occurred, include in
Schedule 1c the information required by Sections 1 and 2 of this
certificate as to each acquiree or constituent party to a merger or
consolidation.]
(d) Schedule 1d hereto contains a list of all other names
(including trade names or similar appellations) used by each Borrower or
any of its divisions or other business units in connection with the conduct
of its business or the ownership of its properties at any time during the
past five years.
(e) The Federal Taxpayer Identification Number of each Borrower
is as set forth in Schedule 1e hereto.
2. Current Locations. (a) The chief executive office of each
Borrower is located at the address set forth in Schedule 2a hereto.
(b) Set forth in Schedule 2b hereto are all locations where each
Borrower maintains any books or records relating to any Accounts Receivable
(with each location at which chattel paper, if any, is kept being indicated
by an "*").
(c) Set forth in Schedule 2c hereto are all the places of
business of each Borrower not identified in paragraphs (a) or (b) above.
(d) Set forth in Schedule 2d hereto are all the locations where
each Borrower maintains any Collateral not identified above.
(e) Set forth in Schedule 2e hereto are the names and addressees
of all persons other than the Borrowers who have possession of any of the
Collateral of any Borrower.
3. Unusual Transactions. All Accounts Receivable have been
originated by the Borrowers and all Inventory has been acquired by the
Borrowers in the ordinary course of business.
4. File Search Reports. (a) Attached hereto as Schedule 4a are
true copies of file search reports from the Uniform Commercial Code filing
offices where filings described in Section 5 hereof are to be made.
(b) Attached hereto as Schedule 4b is a true copy of each
financing statement or other filing identified in such file search reports.
5. UCC Filings. A duly signed financing statement on Form UCC-1
in substantially the form of Schedule 5a hereto has been delivered to the
Lender for filing in the respective Uniform Commercial Code filing offices
in the jurisdictions identified in Section 2 hereof.
6. Schedule of Filings. Attached hereto as Schedule 6 is a
schedule setting forth, with respect to the filings described in Section 5
above, each filing office in which such filing is to be made.
7. Equity Ownership. Attached hereto as Schedule 7 is a true and
correct list of all the duly authorized, issued and outstanding stock of
each Borrower (other than the Company), the record and beneficial owners of
such stock, and a description of any voting relationships among the
Company, the other Borrowers and any Affiliate of the Company.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
11th day of June, 1999.
Name:
Title:
Schedule la
to
Perfection Certificate
Exact Name of Each Debtor
1.
2.
3.
4.
5.
Schedule lb
to
Perfection Certificate
Exact Other Name Each Debtor Has Had
1.
2.
Schedule lc
to
Perfection Certificate
Changes in Identity or Corporate Structure
1.
2.
Schedule ld
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Perfection Certificate
Other Names Used
1.
2.
3.
4.
Schedule le
to
Perfection Certificate
Federal Taxpayer Identification Numbers
NAME EIN
Schedule 2a
to
Perfection Certificate
Chief Executive Office of Each Debtor
Name Mailing Address County State
Schedule 2b
to
Perfection Certificate
Location of Books and Records Relating to Accounts Receivable
Name Mailing Address County State
Schedule 2c
to
Perfection Certificate
Other Places of Business of Each Debtor
Name Mailing Address County or Counties State
Schedule 2d
to
Perfection Certificate
Other Collateral Locations
Name Mailing Address County State
Schedule 2e
to
Perfection Certificate
Other Persons Having Collateral
Name Mailing Address County State
