EXHIBIT 10.25
SECURITY AGREEMENT
SECURITY AGREEMENT (this "Agreement"), dated as of May 23, 2005,
by and among CalbaTech, Inc., a Nevada corporation ("Company"), and
the secured parties signatory hereto and their respective endorsees,
transferees and assigns (collectively, the "Secured Party").
W I T N E S S E T H:
WHEREAS, pursuant to a Securities Purchase Agreement, dated the
date hereof, between Company and the Secured Party (the "Purchase
Agreement"), Company has agreed to issue to the Secured Party and the
Secured Party has agreed to purchase from Company certain of
Company's 10% Callable Secured Convertible Notes, due three years
from the date of issue (the "Notes"), which are convertible into
shares of Company's Common Stock, par value $.001 per share (the
"Common Stock"). In connection therewith, Company shall issue the
Secured Party certain Common Stock purchase warrants (the
"Warrants"); and
WHEREAS, in order to induce the Secured Party to purchase the
Notes, Company has agreed to execute and deliver to the Secured Party
this Agreement for the benefit of the Secured Party and to grant to
it a first priority security interest in certain property of Company
to secure the prompt payment, performance and discharge in full of
all of Company's obligations under the Notes and exercise and
discharge in full of Company's obligations under the Warrants.
NOW, THEREFORE, in consideration of the agreements herein
contained and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. Certain Definitions. As used in this Agreement, the
following terms shall have the meanings set forth in this Section 1.
Terms used but not otherwise defined in this Agreement that are
defined in Article 9 of the UCC (such as "general intangibles" and
"proceeds") shall have the respective meanings given such terms in
Article 9 of the UCC.
(a) "Collateral" means the collateral in which the Secured
Party is granted a security interest by this Agreement and which
shall include the following, whether presently owned or existing or
hereafter acquired or coming into existence, and all additions and
accessions thereto and all substitutions and replacements thereof,
and all proceeds, products and accounts thereof, including, without
limitation, all proceeds from the sale or transfer of the Collateral
and of insurance covering the same and of any tort claims in
connection therewith:
(i) All Goods of the Company, including, without
limitations, all machinery, equipment, computers, motor
vehicles, trucks, tanks, boats, ships, appliances,
furniture, special and general tools, fixtures, test and
quality control devices and other equipment of every kind
and nature and wherever situated, together with all
documents of title and documents representing the same, all
additions and accessions thereto, replacements therefor,
all parts therefor, and all substitutes for any of the
foregoing and all other items used and useful in connection
with the Company's businesses and all improvements thereto
(collectively, the "Equipment"); and
(ii) All Inventory of the Company; and
(iii) All of the Company's contract rights and
general intangibles, including, without limitation, all
partnership interests, stock or other securities, licenses,
distribution and other agreements, computer software
development rights, leases, franchises, customer lists,
quality control procedures, grants and rights, goodwill,
trademarks, service marks, trade styles, trade names,
patents, patent applications, copyrights, deposit accounts,
and income tax refunds (collectively, the "General
Intangibles"); and
(iv) All Receivables of the Company including all
insurance proceeds, and rights to refunds or
indemnification whatsoever owing, together with all
instruments, all documents of title representing any of the
foregoing, all rights in any merchandising, goods,
equipment, motor vehicles and trucks which any of the same
may represent, and all right, title, security and
guaranties with respect to each Receivable, including any
right of stoppage in transit; and
(v) All of the Company's documents, instruments and
chattel paper, files, records, books of account, business
papers, computer programs and the products and proceeds of
all of the foregoing Collateral set forth in clauses (i)-
(iv) above.
(b) "Company" shall mean, collectively, Company and all of
the subsidiaries of Company, a list of which is contained in Schedule
A, attached hereto.
(c) "Obligations" means all of the Company's obligations
under this Agreement and the Notes, in each case, whether now or
hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time
decreased or extinguished and later decreased, created or incurred,
and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or
recovered directly or indirectly from the Secured Party as a
preference, fraudulent transfer or otherwise as such obligations may
be amended, supplemented, converted, extended or modified from time
to time.
(d) "UCC" means the Uniform Commercial Code, as currently
in effect in the State of New York.
2. Grant of Security Interest. As an inducement for the
Secured Party to purchase the Notes and to secure the complete and
timely payment, performance and discharge in full, as the case may
be, of all of the Obligations, the Company hereby, unconditionally
and irrevocably, pledges, grants and hypothecates to the Secured
Party, a continuing security interest in, a continuing lien upon, an
unqualified right to possession and disposition of and a right of
set-off against, in each case to the fullest extent permitted by law,
all of the Company's right, title and interest of whatsoever kind and
nature in and to the Collateral (the "Security Interest").
3. Representations, Warranties, Covenants and Agreements of
the Company. The Company represents and warrants to, and covenants
and agrees with, the Secured Party as follows:
(a) The Company has the requisite corporate power and
authority to enter into this Agreement and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by
the Company of this Agreement and the filings contemplated therein
have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company. This
Agreement constitutes a legal, valid and binding obligation of the
Company enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditor's rights generally.
(b) The Company represents and warrants that it has no
place of business or offices where its respective books of account
and records are kept (other than temporarily at the offices of its
attorneys or accountants) or places where Collateral is stored or
located, except as set forth on Schedule A attached hereto;
(c) The Company is the sole owner of the Collateral
(except for non-exclusive licenses granted by the Company in the
ordinary course of business), free and clear of any liens, security
interests, encumbrances, rights or claims, except as provided in its
SEC filings, and is fully authorized to grant the Security Interest
in and to pledge the Collateral. There is not on file in any
governmental or regulatory authority, agency or recording office an
effective financing statement, security agreement, license or
transfer or any notice of any of the foregoing (other than those that
have been filed in favor of the Secured Party pursuant to this
Agreement) covering or affecting any of the Collateral. So long as
this Agreement shall be in effect, the Company shall not execute and
shall not knowingly permit to be on file in any such office or agency
any such financing statement or other document or instrument (except
to the extent filed or recorded in favor of the Secured Party
pursuant to the terms of this Agreement).
(d) No part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any
Collateral or the Company's use of any Collateral violates the rights
of any third party. There has been no adverse decision to the
Company's claim of ownership rights in or exclusive rights to use the
Collateral in any jurisdiction or to the Company's right to keep and
maintain such Collateral in full force and effect, and there is no
proceeding involving said rights pending or, to the best knowledge of
the Company, threatened before any court, judicial body,
administrative or regulatory agency, arbitrator or other governmental
authority.
(e) The Company shall at all times maintain its books of
account and records relating to the Collateral at its principal place
of business and its Collateral at the locations set forth on Schedule
A attached hereto and may not relocate such books of account and
records or tangible Collateral unless it delivers to the Secured
Party at least 30 days prior to such relocation (i) written notice of
such relocation and the new location thereof (which must be within
the United States) and (ii) evidence that appropriate financing
statements and other necessary documents have been filed and recorded
and other steps have been taken to perfect the Security Interest to
create in favor of the Secured Party valid, perfected and continuing
first priority liens in the Collateral.
(f) This Agreement creates in favor of the Secured Party a
valid security interest in the Collateral securing the payment and
performance of the Obligations and, upon making the filings described
in the immediately following sentence, a perfected first priority
security interest in such Collateral. Except for the filing of
financing statements on Form-1 under the UCC with the jurisdictions
indicated on Schedule B, attached hereto, no authorization or
approval of or filing with or notice to any governmental authority or
regulatory body is required either (i) for the grant by the Company
of, or the effectiveness of, the Security Interest granted hereby or
for the execution, delivery and performance of this Agreement by the
Company or (ii) for the perfection of or exercise by the Secured
Party of its rights and remedies hereunder.
(g) On the date of execution of this Agreement, the
Company will deliver to the Secured Party one or more executed UCC
financing statements on Form-1 with respect to the Security Interest
for filing with the jurisdictions indicated on Schedule B, attached
hereto and in such other jurisdictions as may be requested by the
Secured Party.
(h) The execution, delivery and performance of this
Agreement does not conflict with or cause a breach or default, or an
event that with or without the passage of time or notice, shall
constitute a breach or default, under any agreement to which the
Company is a party or by which the Company is bound. No consent
(including, without limitation, from stock holders or creditors of
the Company) is required for the Company to enter into and perform
its obligations hereunder.
(i) The Company shall at all times maintain the liens and
Security Interest provided for hereunder as valid and perfected first
priority liens and security interests in the Collateral in favor of
the Secured Party until this Agreement and the Security Interest
hereunder shall terminate pursuant to Section 11. The Company hereby
agrees to defend the same against any and all persons. The Company
shall safeguard and protect all Collateral for the account of the
Secured Party. At the request of the Secured Party, the Company will
sign and deliver to the Secured Party at any time or from time to
time one or more financing statements pursuant to the UCC (or any
other applicable statute) in form reasonably satisfactory to the
Secured Party and will pay the cost of filing the same in all public
offices wherever filing is, or is deemed by the Secured Party to be,
necessary or desirable to effect the rights and obligations provided
for herein. Without limiting the generality of the foregoing, the
Company shall pay all fees, taxes and other amounts necessary to
maintain the Collateral and the Security Interest hereunder, and the
Company shall obtain and furnish to the Secured Party from time to
time, upon demand, such releases and/or subordinations of claims and
liens which may be required to maintain the priority of the Security
Interest hereunder.
(j) The Company will not transfer, pledge, hypothecate,
encumber, license (except for non-exclusive licenses granted by the
Company in the ordinary course of business), sell or otherwise
dispose of any of the Collateral without the prior written consent of
the Secured Party.
(k) The Company shall keep and preserve its Equipment,
Inventory and other tangible Collateral in good condition, repair and
order and shall not operate or locate any such Collateral (or cause
to be operated or located) in any area excluded from insurance
coverage.
(l) The Company shall, within ten (10) days of obtaining
knowledge thereof, advise the Secured Party promptly, in sufficient
detail, of any substantial change in the Collateral, and of the
occurrence of any event which would have a material adverse effect on
the value of the Collateral or on the Secured Party's security
interest therein.
(m) The Company shall promptly execute and deliver to the
Secured Party such further deeds, mortgages, assignments, security
agreements, financing statements or other instruments, documents,
certificates and assurances and take such further action as the
Secured Party may from time to time request and may in its sole
discretion deem necessary to perfect, protect or enforce its security
interest in the Collateral including, without limitation, the
execution and delivery of a separate security agreement with respect
to the Company's intellectual property ("Intellectual Property
Security Agreement") in which the Secured Party has been granted a
security interest hereunder, substantially in a form acceptable to
the Secured Party, which Intellectual Property Security Agreement,
other than as stated therein, shall be subject to all of the terms
and conditions hereof.
(n) The Company shall permit the Secured Party and its
representatives and agents to inspect the Collateral at any time, and
to make copies of records pertaining to the Collateral as may be
requested by the Secured Party from time to time.
(o) The Company will take all steps reasonably necessary
to diligently pursue and seek to preserve, enforce and collect any
rights, claims, causes of action and accounts receivable in respect
of the Collateral.
(p) The Company shall promptly notify the Secured Party in
sufficient detail upon becoming aware of any attachment,
garnishment, execution or other legal process levied against any
Collateral and of any other information received by the Company that
may materially affect the value of the Collateral, the Security
Interest or the rights and remedies of the Secured Party hereunder.
(q) All information heretofore, herein or hereafter
supplied to the Secured Party by or on behalf of the Company with
respect to the Collateral is accurate and complete in all material
respects as of the date furnished.
(r) Schedule A attached hereto contains a list of all of
the subsidiaries of Company.
4. Defaults. The following events shall be "Events of
Default":
(a) The occurrence of an Event of Default (as defined in
the Notes) under the Notes;
(b) Any representation or warranty of the Company in this
Agreement or in the Intellectual Property Security Agreement shall
prove to have been incorrect in any material respect when made;
(c) The failure by the Company to observe or perform any
of its obligations hereunder or in the Intellectual Property Security
Agreement for ten (10) days after receipt by the Company of notice of
such failure from the Secured Party; and
(d) Any breach of, or default under, the Warrants.
5. Duty To Hold In Trust. Upon the occurrence of any Event of
Default and at any time thereafter, the Company shall, upon receipt
by it of any revenue, income or other sums subject to the Security
Interest, whether payable pursuant to the Notes or otherwise, or of
any check, draft, note, trade acceptance or other instrument
evidencing an obligation to pay any such sum, hold the same in trust
for the Secured Party and shall forthwith endorse and transfer any
such sums or instruments, or both, to the Secured Party for
application to the satisfaction of the Obligations.
6. Rights and Remedies Upon Default. Upon occurrence of any
Event of Default and at any time thereafter, the Secured Party shall
have the right to exercise all of the remedies conferred hereunder
and under the Notes, and the Secured Party shall have all the rights
and remedies of a secured party under the UCC and/or any other
applicable law (including the Uniform Commercial Code of any
jurisdiction in which any Collateral is then located). Without
limitation, the Secured Party shall have the following rights and
powers:
(a) The Secured Party shall have the right to take
possession of the Collateral and, for that purpose, enter, with the
aid and assistance of any person, any premises where the Collateral,
or any part thereof, is or may be placed and remove the same, and the
Company shall assemble the Collateral and make it available to the
Secured Party at places which the Secured Party shall reasonably
select, whether at the Company's premises or elsewhere, and make
available to the Secured Party, without rent, all of the Company's
respective premises and facilities for the purpose of the Secured
Party taking possession of, removing or putting the Collateral in
saleable or disposable form.
(b) The Secured Party shall have the right to operate the
business of the Company using the Collateral and shall have the right
to assign, sell, lease or otherwise dispose of and deliver all or any
part of the Collateral, at public or private sale or otherwise,
either with or without special conditions or stipulations, for cash
or on credit or for future delivery, in such parcel or parcels and at
such time or times and at such place or places, and upon such terms
and conditions as the Secured Party may deem commercially reasonable,
all without (except as shall be required by applicable statute and
cannot be waived) advertisement or demand upon or notice to the
Company or right of redemption of the Company, which are hereby
expressly waived. Upon each such sale, lease, assignment or other
transfer of Collateral, the Secured Party may, unless prohibited by
applicable law which cannot be waived, purchase all or any part of
the Collateral being sold, free from and discharged of all trusts,
claims, right of redemption and equities of the Company, which are
hereby waived and released.
7. Applications of Proceeds. The proceeds of any such sale,
lease or other disposition of the Collateral hereunder shall be
applied first, to the expenses of retaking, holding, storing,
processing and preparing for sale, selling, and the like (including,
without limitation, any taxes, fees and other costs incurred in
connection therewith) of the Collateral, to the reasonable attorneys'
fees and expenses incurred by the Secured Party in enforcing its
rights hereunder and in connection with collecting, storing and
disposing of the Collateral, and then to satisfaction of the
Obligations, and to the payment of any other amounts required by
applicable law, after which the Secured Party shall pay to the
Company any surplus proceeds. If, upon the sale, license or other
disposition of the Collateral, the proceeds thereof are insufficient
to pay all amounts to which the Secured Party is legally entitled,
the Company will be liable for the deficiency, together with interest
thereon, at the rate of 15% per annum (the "Default Rate"), and the
reasonable fees of any attorneys employed by the Secured Party to
collect such deficiency. To the extent permitted by applicable law,
the Company waives all claims, damages and demands against the
Secured Party arising out of the repossession, removal, retention or
sale of the Collateral, unless due to the gross negligence or willful
misconduct of the Secured Party.
8. Costs and Expenses. The Company agrees to pay all out-of-
pocket fees, costs and expenses incurred in connection with any
filing required hereunder, including without limitation, any
financing statements, continuation statements, partial releases
and/or termination statements related thereto or any expenses of any
searches reasonably required by the Secured Party. The Company shall
also pay all other claims and charges which in the reasonable opinion
of the Secured Party might prejudice, imperil or otherwise affect the
Collateral or the Security Interest therein. The Company will also,
upon demand, pay to the Secured Party the amount of any and all
reasonable expenses, including the reasonable fees and expenses of
its counsel and of any experts and agents, which the Secured Party
may incur in connection with (i) the enforcement of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, or (iii) the
exercise or enforcement of any of the rights of the Secured Party
under the Notes. Until so paid, any fees payable hereunder shall be
added to the principal amount of the Notes and shall bear interest at
the Default Rate.
9. Responsibility for Collateral. The Company assumes all
liabilities and responsibility in connection with all Collateral, and
the obligations of the Company hereunder or under the Notes and the
Warrants shall in no way be affected or diminished by reason of the
loss, destruction, damage or theft of any of the Collateral or its
unavailability for any reason.
10. Security Interest Absolute. All rights of the Secured
Party and all Obligations of the Company hereunder, shall be absolute
and unconditional, irrespective of: (a) any lack of validity or
enforceability of this Agreement, the Notes, the Warrants or any
agreement entered into in connection with the foregoing, or any
portion hereof or thereof; (b) any change in the time, manner or
place of payment or performance 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 Notes, the Warrants or any other
agreement entered into in connection with the foregoing; (c) any
exchange, release or nonperfection of any of the Collateral, or any
release or amendment or waiver of or consent to departure from any
other collateral for, or any guaranty, or any other security, for all
or any of the Obligations; (d) any action by the Secured Party to
obtain, adjust, settle and cancel in its sole discretion any
insurance claims or matters made or arising in connection with the
Collateral; or (e) any other circumstance which might otherwise
constitute any legal or equitable defense available to the Company,
or a discharge of all or any part of the Security Interest granted
hereby. Until the Obligations shall have been paid and performed in
full, the rights of the Secured Party shall continue even if the
Obligations are barred for any reason, including, without limitation,
the running of the statute of limitations or bankruptcy. The Company
expressly waives presentment, protest, notice of protest, demand,
notice of nonpayment and demand for performance. In the event that
at any time any transfer of any Collateral or any payment received by
the Secured Party hereunder shall be deemed by final order of a court
of competent jurisdiction to have been a voidable preference or
fraudulent conveyance under the bankruptcy or insolvency laws of the
United States, or shall be deemed to be otherwise due to any party
other than the Secured Party, then, in any such event, the Company's
obligations hereunder shall survive cancellation of this Agreement,
and shall not be discharged or satisfied by any prior payment thereof
and/or cancellation of this Agreement, but shall remain a valid and
binding obligation enforceable in accordance with the terms and
provisions hereof. The Company waives all right to require the
Secured Party to proceed against any other person or to apply any
Collateral which the Secured Party may hold at any time, or to
marshal assets, or to pursue any other remedy. The Company waives
any defense arising by reason of the application of the statute of
limitations to any obligation secured hereby.
11. Term of Agreement. This Agreement and the Security
Interest shall terminate on the date on which all payments under the
Notes have been made in full and all other Obligations have been paid
or discharged. Upon such termination, the Secured Party, at the
request and at the expense of the Company, will join in executing any
termination statement with respect to any financing statement
executed and filed pursuant to this Agreement.
12. Power of Attorney; Further Assurances.
(a) The Company authorizes the Secured Party, and does
hereby make, constitute and appoint it, and its respective officers,
agents, successors or assigns with full power of substitution, as the
Company's true and lawful attorney-in-fact, with power, in its own
name or in the name of the Company, to, after the occurrence and
during the continuance of an Event of Default, (i) endorse any notes,
checks, drafts, money orders, or other instruments of payment
(including payments payable under or in respect of any policy of
insurance) in respect of the Collateral that may come into possession
of the Secured Party; (ii) to sign and endorse any UCC financing
statement or any invoice, freight or express xxxx, xxxx of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other
documents relating to the Collateral; (iii) to pay or discharge
taxes, liens, security interests or other encumbrances at any time
levied or placed on or threatened against the Collateral; (iv) to
demand, collect, receipt for, compromise, settle and xxx for monies
due in respect of the Collateral; and (v) generally, to do, at the
option of the Secured Party, and at the Company's expense, at any
time, or from time to time, all acts and things which the Secured
Party deems necessary to protect, preserve and realize upon the
Collateral and the Security Interest granted therein in order to
effect the intent of this Agreement, the Notes and the Warrants, all
as fully and effectually as the Company might or could do; and the
Company hereby ratifies all that said attorney shall lawfully do or
cause to be done by virtue hereof. This power of attorney is coupled
with an interest and shall be irrevocable for the term of this
Agreement and thereafter as long as any of the Obligations shall be
outstanding.
(b) On a continuing basis, the Company will make, execute,
acknowledge, deliver, file and record, as the case may be, in the
proper filing and recording places in any jurisdiction, including,
without limitation, the jurisdictions indicated on Schedule B,
attached hereto, all such instruments, and take all such action as
may reasonably be deemed necessary or advisable, or as reasonably
requested by the Secured Party, to perfect the Security Interest
granted hereunder and otherwise to carry out the intent and purposes
of this Agreement, or for assuring and confirming to the Secured
Party the grant or perfection of a security interest in all the
Collateral.
(c) The Company hereby irrevocably appoints the Secured
Party as the Company's attorney-in-fact, with full authority in the
place and stead of the Company and in the name of the Company, from
time to time in the Secured Party's discretion, to take any action
and to execute any instrument which the Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement,
including the filing, in its sole discretion, of one or more
financing or continuation statements and amendments thereto, relative
to any of the Collateral without the signature of the Company where
permitted by law.
13. Notices. All notices, requests, demands and other
communications hereunder shall be in writing, with copies to all the
other parties hereto, and shall be deemed to have been duly given
when (i) if delivered by hand, upon receipt, (ii) if sent by
facsimile, upon receipt of proof of sending thereof, (iii) if sent by
nationally recognized overnight delivery service (receipt requested),
the next business day or (iv) if mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, four days
after posting in the U.S. mails, in each case if delivered to the
following addresses:
If to the Company: CalbaTech, Inc.
00000 Xxxxxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, XX 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Secured Party: AJW Partners, LLC
AJW Offshore, Ltd.
AJW Qualified Partners, LLC
New Millennium Capital Partners II, LLC
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: 000-000-0000
With a copy to:
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: 000-000-0000
14. Other Security. To the extent that the Obligations are now
or hereafter secured by property other than the Collateral or by the
guarantee, endorsement or property of any other person, firm,
corporation or other entity, then the Secured Party shall have the
right, in its sole discretion, to pursue, relinquish, subordinate,
modify or take any other action with respect thereto, without in any
way modifying or affecting any of the Secured Party's rights and
remedies hereunder.
15. Miscellaneous.
(a) No course of dealing between the Company and the
Secured Party, nor any failure to exercise, nor any delay in
exercising, on the part of the Secured Party, any right, power or
privilege hereunder or under the Notes shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
(b) All of the rights and remedies of the Secured Party
with respect to the Collateral, whether established hereby or by the
Notes or by any other agreements, instruments or documents or by law
shall be cumulative and may be exercised singly or concurrently.
(c) This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and is intended to
supersede all prior negotiations, understandings and agreements with
respect thereto. Except as specifically set forth in this Agreement,
no provision of this Agreement may be modified or amended except by a
written agreement specifically referring to this Agreement and signed
by the parties hereto.
(d) In the event that any provision of this Agreement is
held to be invalid, prohibited or unenforceable in any jurisdiction
for any reason, unless such provision is narrowed by judicial
construction, this Agreement shall, as to such jurisdiction, be
construed as if such invalid, prohibited or unenforceable provision
had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of
this Agreement is held to be invalid, prohibited or unenforceable in
any jurisdiction, such provision, as to such jurisdiction, shall be
ineffective to the extent of such invalidity, prohibition or
unenforceability without invalidating the remaining portion of such
provision or the other provisions of this Agreement and without
affecting the validity or enforceability of such provision or the
other provisions of this Agreement in any other jurisdiction.
(e) No waiver of any breach or default or any right under
this Agreement shall be considered valid unless in writing and signed
by the party giving such waiver, and no such waiver shall be deemed a
waiver of any subsequent breach or default or right, whether of the
same or similar nature or otherwise.
(f) This Agreement shall be binding upon and inure to the
benefit of each party hereto and its successors and assigns.
(g) Each party shall take such further action and execute
and deliver such further documents as may be necessary or appropriate
in order to carry out the provisions and purposes of this Agreement.
(h) This Agreement shall be construed in accordance with
the laws of the State of New York, except to the extent the validity,
perfection or enforcement of a security interest hereunder in respect
of any particular Collateral which are governed by a jurisdiction
other than the State of New York in which case such law shall govern.
Each of the parties hereto irrevocably submit to the exclusive
jurisdiction of any New York State or United States Federal court
sitting in Manhattan county over any action or proceeding arising out
of or relating to this Agreement, and the parties hereto hereby
irrevocably agree that all claims in respect of such action or
proceeding may be heard and determined in such New York State or
Federal court. The parties hereto agree 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. The parties hereto further waive any objection to
venue in the State of New York and any objection to an action or
proceeding in the State of New York on the basis of forum non
conveniens.
(i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT FOR EACH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON THIS WAIVER IN
THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS
TO A JURY TRIAL FOLLOWING SUCH CONSULTATION. THIS WAIVER IS
IRREVOCABLE, MEANING THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS AND
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF A
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
(j) This Agreement may be executed in any number of
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. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature
is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed on the day and year first above written.
CALBATECH, INC.
By: _____________________________________
Xxxxx XxXxxxx
Chief Executive Officer
AJW PARTNERS, LLC
By: SMS Group, LLC
By: _____________________________________
Xxxxx X. Xxxxxxxx
Manager
AJW OFFSHORE, LTD.
By: First Street Manager II, LLC
By: _____________________________________
Xxxxx X. Xxxxxxxx
Manager
AJW QUALIFIED PARTNERS, LLC
By: AJW Manager, LLC
By: _____________________________________
Xxxxx X. Xxxxxxxx
Manager
NEW MILLENNIUM CAPITAL PARTNERS II, LLC.
By: First Street Manager II, LLC
By: _____________________________________
Xxxxx X. Xxxxxxxx
Manager
SCHEDULE A
Principal Place of Business of the Company:
Locations Where Collateral is Located or Stored:
List of Subsidiaries of the Company:
SCHEDULE B
Jurisdictions:
