EXHIBIT 12
GENERAL SECURITY AGREEMENT
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General Security Agreement dated June 13, 2003, made by BioVest
International, Inc. a Delaware corporation ("Debtor") having an office at 0000
Xxxxxxxxx Xxxx., Xxxxxxxxxxx, XX 00000, in favor of each of the parties listed
in Exhibit B hereto ( each of whom shall be a "Secured Party").
Debtor hereby agrees in favor of the Secured Parties as follows:
1. In consideration for loans made or to be made to BioVest substantially
for the benefit of Debtor by the Secured Parties, evidenced by the Promissory
Notes of BioVest in the principal amounts set forth on Schedule B hereto,
payable to the order of Secured Parties (such notes, as amended, modified,
supplemented, replaced or substituted from time to time, being herein referred
to as the "Notes"), Debtor hereby grants to the Secured Parties a security
interest, pari passu, in the Collateral described in Section 2, to secure the
full and prompt payment, performance of the Notes (the "Obligations").
2. The Collateral is described on Schedule A annexed hereto as part hereof
and on any separate schedule(s) identified as Collateral at any time or from
time to time furnished by Debtor to the Secured Parties (all of which are hereby
deemed part of this Security Agreement).
3. The term Default as used in this Security Agreement shall mean any event
of default, as such term is defined in the Notes.
4. Upon the occurrence and during the continuance of any Default, Secured
Party shall have all rights and remedies of a Secured Party under the UCC.
5. Provided Secured Party is the prevailing party, Debtor hereby agrees to
pay all reasonable out-of-pocket expenses incurred by Secured Party in
connection with the enforcement of the Notes or this Security Agreement
including, without limitation, the fees and disbursements of counsel to Secured
Party.
6. Debtor shall deliver to Secured Party on the date of execution of this
Security Agreement duly executed UCC-1 financing statements with respect to the
Collateral. Upon the payment in full or conversion of the Notes and satisfaction
of all Obligations in accordance with the Notes, the security interest granted
hereby in the Collateral shall terminate and all rights to the Collateral under
this Agreement shall revert to Debtor. Upon any such termination, the Secured
Party shall execute and deliver UCC -3 financing statement releases or other
documents of release reasonably requested by Debtor.
7. Secured Party may not assign his rights and obligation hereunder.
8. All terms herein shall have the meanings as defined in the UCC, unless
the context otherwise requires. No provision hereof shall be modified, altered,
waived, released, terminated or limited except by a written instrument expressly
referring to this Security
Agreement and to such provision, and executed by the Parties to be charged. The
execution and delivery of this Security Agreement has been authorized by the
Board of Directors of Debtor and by any necessary vote or consent of
stockholders of Debtor. This Security Agreement and all Obligations shall be
binding upon the successors and assigns of Debtor and shall, together with the
rights and remedies of Secured Party hereunder, inure to the benefit of Secured
Party, their executors, administrators, successors, endorsees and assigns. This
Security Agreement and the Obligations shall be governed in all respects by the
laws of the State of Delaware applicable to contracts executed and to be
performed in such state. If any term of this Security Agreement shall be held to
be invalid, illegal or unenforceable, the validity of all other terms hereof
shall in no way be affected thereby. Secured Party is authorized to annex hereto
any schedules referred to herein. Debtor acknowledges receipt of a copy of this
Security Agreement.
9. The Security Parties rights hereunder and the secured interest if the
secured parties hereunder are limited by the Investment Agreement, as amended,
which provisions are expressly incorporated herein by reference and made a part
hereof. The Secured Party's rights pursuant to this Security Agreement (and the
security interest granted hereby) is subordinate in all rights, including the
right of payment, to: (i) all existing secured debts of the Company outstanding
on the date of execution of this Security Agreement, including but not limited
to the security interests listed on Schedule C hereto, and (ii)all future
security interests granted from time to time by Debtor if, and only if such
future security interest is approved by the designated Representatives of the
Secured Parties, who shall be Xx. Xxxxxxxxxxx Xxxxxxxxxx and Xxxxx X. Xxxxxx,
Xx., up to an aggregate amount of $5,000,000.00 and accrued interest thereon.
("Senior Debt"). Such Senior Debt shall NOT include debt owed to Accentia, Inc.
and/or its affiliates . Secured Parties unconditionally agree to execute any
documents reasonably requested in writing by Debtor to reflect or carry out the
subordination of Secured parties to existing and future Senior Debt. Failure of
Secured Parties to execute requested subordination documentation within twenty
calendar days of written request shall result in an automatic termination of the
security interest created by this Security Agreement and Debtor shall be
authorized to immediately file documents reflecting such termination of the
Secured Parties security interest in any appropriate jurisdicition. Any existing
or future holder of Senior Debt shall be deemed a third party beneficiary of
this provision and shall be permitted to rely on this provision, the
unconditional agreement of the Secured Parties to subordinate their security
interest to Senior Debt and shall have the right to enforce same in their own
name.
10. All notices and other communications under this Agreement shall be in
writing and shall be deemed given when delivered personally, by overnight mail
or mailed by certified mail, return receipt requested, to the parties (and shall
also be transmitted by facsimile to the persons receiving copies thereof) at the
following addresses (or to such other address as a party may have specified by
notice given to the other party pursuant to this provision):
If to BioVest: BioVest International, Inc.
0000 Xxxxxxxxx Xxxx.
Xxxxxxxxxxx, XX 00000
Attn: Xx. Xxxxx X'Xxxxxxx
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With a copy to: Xxxxxx X. Xxxxxx, Esq.
000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
If to Secured Parties:
With a copy to: Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxxx Wise & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
11. Each of the Secured Parties as defined herein has been provided with a
copy of this Security Agreement and has signed an acknowledgement (to be
attached hereto as Schedule D) signifying their receipt and acceptance of the
provisions hereof.
IN WITNESS WHEREOF, the undersigned has executed or caused this security
agreement to be executed in the State of New York on the date first above set
forth.
BIOVEST INTERNATIONAL INC.
By______________________________________
Xxxxx X. Xxxxx, Secretary to the Board
Address of Debtor:
0000 Xxxxxxxxx Xxxx.
Xxxxxxxxxxx XX 00000
SCHEDULE A
"Collateral" shall mean all of Debtor's right, title and interest in and to
all of Debtor's personal property and intangible property (in each case,
wherever located and whether now owned or hereafter made, developed or acquired
by Debtor): (a) all equipment, computer hardware, machinery, furniture,
fixtures, vehicles, trucks, cars, and tangible personal property
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of Debtor, and all accessions and attachments to or relating to any of the
foregoing; (b) all books, records, computer software and other property relating
to or referring to any of the foregoing; (c) all patents, trade secrets,
know-how, trade names, trade styles, service marks, all other intellectual
property rights, all rights associated with the foregoing, and goodwill; (d) all
other property of the Debtor; (e) all guaranties or other agreements securing or
relating to any of the items referred to in subparagraphs (a)-(d) above, or
acquired for the purpose of securing and enforcing any of such items; (f) all
present and future accounts, contract rights, general intangibles, chattel
paper, documents and instruments, as such terms are defined in the New York
Uniform Commercial Code, including, without limitation, all accounts receivable
and other receivables of any kind, and all obligations for the payment of money
arising out of the sale of goods, rendition of services or the lease or license
by Debtor of its property; and (g) all proceeds and products of any of the
foregoing in whatever form, including, without limitation, any claims against
third parties for loss or damage to or destruction of any or all of the
foregoing and cash, negotiable instruments and other instruments for the payment
of money, chattel paper, security agreements or other documents.
In the event of a Default as defined in the Notes, the Secured Party is
hereby granted a license or other right to use, without charge, Debtor's labels,
patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks, and advertising matter, or any property of a similar
nature, in completing production of, advertising for sale, and selling the
Collateral and, in connection with the Secured Party's exercise of its rights
under this Note, Debtor's rights under all licenses and all franchise agreements
shall inure to the Secured Party's benefit. In the event of a Default, the
entire right, title, and interest in and to the following patents will be
assigned from Debtor to Secured Party: patent numbers 4,582,875; 4,889,812;
4,894,342; 5,656,421; 5,998,184; 5,416,022; 5,330,915; 5,541,105; 5,631,006;
4,804,628; 4,629,686; 4,650,766; 4,973,558; 5,202,254; and 6,001,585. Such
assignment of these patents further includes assignment of any reissue patents,
reexamination certificates, foreign counterpart patents, and any other
intellectual-property rights based on these patents or on any patents that issue
from applications that share a priority claim in whole or with these patents. ;
BUT EXCLUDING: (i) the Company's rights in that certain Cooperative Research and
Development Agreement for Non-Hodgkin Lymphoma Therapeutic Cancer Vaccine
between the Company and the National Cancer Institute (as hereafter amended and
supplemented), (ii) and the Company's rights arising from and relating to
Non-Hodgkin Lymphoma Therapeutic Cancer Vaccine, and in each case, (x) whether
tangible or intangible; (y) all and any proceeds from any sale, lease, license
or other disposition thereof, and (z) all proceeds and products thereof).
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Schedule B
Promissory Notes
Promissory Note in the Amount of dated
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SCHEDULE C
Note to Xxxx & Xxxxx Xxxxxx......$50,000
Note to Xxx & Xxxxx Xxxxx.........$50,000
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SCHEDULE D
The undersigned, being "Secured Parties" under this agreement, hereby
acknowledge receipt of a copy of this agreement and their acceptance of the
terms hereof, and further acknowledge that the security terms contained herein
shall supersede and amend any such security terms contained in the Notes secured
hereby.
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