EXHIBIT 10.52
AMENDED AND RESTATED SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is made and entered into as
of October 26, 2001, by and between Bionutrics, Inc., a Nevada corporation
("Borrower"), whose chief executive office is located at 0000 X. Xxxxxxxxx Xxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, and HealthSTAR Holdings, LLC, Ropart
Investments, LLC, Xiagen Ltd., Xxxxxx X. Xxxx, Xxxxxxx XxXxxxxxx, Xxxx
Xxxxxxxxxx, and Xxxxxxx X. Xxxxxxx and any other party who signs this Agreement
as a lender (collectively, "Lenders"), and Xxxxxxx XxXxxxxxx, as agent for
Lenders ("Agent").
RECITALS
A. Borrower has requested, and Lenders have severally and not jointly
agreed to make, a multiple advance loan to Borrower in an amount not to exceed
Seven Hundred Thousand Dollars ($700,000.00) (the "Loan").
B. Lenders have requested, and Agent has agreed, that Agent act as
their agent for purposes of administering the Loan and holding the collateral
for the Loan.
C. Borrower and Pharmaceutical Marketing Brands, Inc. entered into that
certain Promissory Note dated September 7, 2001 ("Original Note") and Security
Agreement dated September 7, 2001 (the "Original Security Agreement").
D. Pharmaceutical Marketing Brands, Inc. assigned all of its rights,
title, and interest in the Original Note and Original Security Agreement to
HealthSTAR Holdings LLC.
E. Borrower and HealthSTAR Holdings LLC wish to amend and restate the
Original Security Agreement and desire to have the other Lenders become party to
this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth in this Agreement, the parties hereby agree as follows:
1. SECURITY INTEREST
Borrower hereby grants to Lenders a security interest (the "Security
Interest") in all property or assets, or all rights or interests in property or
assets, of Borrower except for the Pledged Collateral as defined in and covered
by that certain Amended and Restated Loan and Stock Pledge Agreement of even
date herewith by and between Borrower, Lenders, and Agent (the "Loan
Agreement"), whether now owned or existing or hereafter acquired or arising and
wherever located, and all proceeds and products thereof (collectively, the
"Collateral"), including, without limitation:
(a) All accounts (including health-care-insurance
receivables), accounts receivable, receivables, contract rights, rights to
payment, chattel paper (including tangible chattel paper and electronic chattel
paper), leases, instruments (including notes, promissory
notes, and certificates of deposit), documents of title and general intangibles
(including payment intangibles, computer programs and software, URLs, tax refund
claims, license fees, patents, patent applications, trademarks, trademark
applications, trade names, copyrights, copyright applications, all intellectual
property of any nature, and rights to xxx and recover for past infringement of
patents, trademarks and copyrights);
(b) All inventory (including raw materials, work-in-process or
materials used or consumed in the business of Borrower), whether in the
possession of Borrower, warehouseman, bailee or any other person or entity;
(c) All machinery, furniture, fixtures, and other goods and
equipment;
(d) All documents (including negotiable and nonnegotiable
documents of title);
(e) All letter-of-credit rights;
(f) All monies, certificates of deposit, deposit accounts,
investment properties (including all securities), whether or not held in a
general or special account of deposit (including any account or deposit held
jointly by Borrower with any other person or entity, or for safekeeping or
otherwise, except to the extent specifically prohibited by law);
(g) All rights under contracts of insurance (including
insurance refund claims) covering any of the above-described property;
(h) All attachments, accessions, tools, parts, supplies,
increases and additions to and all replacements of and substitutions for any of
the above-described property;
(i) All products of any of the above-described property;
(j) All proceeds of any of the above-described property;
(k) All supporting obligations of every nature of any of the
above-described property; and
(l) All books and records pertaining to any of the
above-described property, including any computer readable memory and any
computer hardware or software necessary to process such memory (collectively,
the "Books and Records").
2. SECURED OBLIGATIONS
The Collateral shall secure, in such order of priority as Lenders may
elect, the following (collectively, the "Secured Obligations"):
(a) payment and performance of all obligations of Borrower
under the terms of the Amended and Restated Loan and Stock Pledge Agreement, of
even date herewith (the "Loan Agreement"), between Borrower and Lenders,
together with all extensions, modifications, substitutions or renewals thereof,
or other advances made thereunder;
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(b) payment and performance of all obligations of Borrower
under the terms of the Amended and Restated Consolidated Multiple Advance
Non-Revolving Note, of even date herewith (the "Note"), in the original
principal amount of $700,000, executed by Borrower in favor of Lenders, together
with all extensions, modifications, substitutions or renewals thereof, or other
advances made thereunder;
(c) payment and performance of every obligation, covenant and
agreement of Borrower contained in this Agreement, together with all extensions,
modifications, substitutions or renewals hereof;
(d) payment and performance of every obligation, covenant and
agreement of Borrower contained in each of the Loan Documents (as defined in the
Loan Agreement), together with all extensions, modifications, substitutions or
renewals thereof; and
(e) payment and performance of all other obligations and
liabilities of Borrower to Lenders, whether now existing or hereafter incurred
or created, whether voluntary or involuntary, whether due or not due, whether
absolute or contingent, or whether incurred directly or acquired by Lenders by
assignment or otherwise.
Unless Borrower shall have otherwise agreed in writing, the Secured Obligations,
for purposes of this Agreement, shall not include "consumer credit" subject to
the disclosure requirements of the Federal Truth in Lending Act or any
regulations promulgated thereunder.
3. REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower hereby represents and warrants to Lender that:
3.1 Use. The Collateral is or will be used or produced primarily for
business purpose of Borrower.
3.2 Location. The Collateral, including, without limitation, the Books
and Records will be kept at the facilities of Borrower.
3.3 Title. Borrower is the owner of, and has good title to, the
Collateral free of all security interests or other encumbrances and the Security
Interest, and no financing statement covering the Collateral is filed or
recorded in any public office except for those in connection with the Original
Security Agreement.
3.4 Chief Executive Office. The address of Borrower set forth in the
preamble of this Agreement is the chief executive office of Borrower.
4. COVENANTS OF BORROWER
4.1 Maintenance. Borrower shall keep and maintain the Collateral in
good condition and repair and shall not use the Collateral in violation of any
provision of this Agreement or any applicable statute, ordinance or regulation
or any policy of insurance insuring the Collateral.
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4.2 Insurance. To the extent insurable, Borrower will keep the
Collateral insured against damage and loss, in amounts and by insurance
companies, acceptable to Lenders. Borrower understand that the policy must
provide that any insurance proceeds will be paid to Lenders and shall provide
Agent with not less than 30 days' prior written notice of termination,
cancellation or non-renewal. The Borrower will deliver the policy to Lenders
upon Lenders' request.
4.3 Payments of Charges. Borrower shall pay when due all taxes,
assessments and other charges which may be levied or assessed against the
Collateral.
4.4 Fixtures and Accessions. Borrower shall prevent any portion of the
Collateral that is not a fixture from being or becoming a fixture and shall
prevent any portion of the Collateral from being or becoming an accession to
other goods that are not part of the Collateral.
4.5 Notice to Lenders. Borrower shall give Lenders 45 days' prior
written notice of any change: (i) in the location of any of the facilities of
Borrower; (ii) in the location of the Collateral, including, without limitation,
the Books and Records; or (iii) of the names under which it does business.
4.6 Inspections. Lender or its agents may inspect the Collateral at
reasonable times and may enter into any premises where the Collateral is or may
be located.
4.7 Payment of Charges. If Borrower fails to pay any taxes,
assessments, expenses or charges, or fails to keep all of the Collateral free
from other security interests, encumbrances or claims except for Permitted
Liens, or fails to keep the Collateral in good condition and repair, or fails to
procure and maintain insurance thereon, or to perform otherwise as required
herein, Lender may advance the monies necessary to pay the same, to accomplish
such repairs, to procure and maintain such insurance or to so perform. Lender is
hereby authorized to enter upon any property in the possession or control of
Borrower for such purposes.
4.8 Rights and Powers. All rights, powers and remedies granted Lender
herein, or otherwise available to Lender, are for the sole benefit and
protection of Lender, and Lender may exercise any such right, power or remedy at
its option and in its sole and absolute discretion without any obligation to do
so. In addition, if under the terms hereof, Lender is given two or more
alternative courses of action, Lender may elect any alternative or combination
of alternatives at its option and in its sole and absolute discretion. All
monies advanced by Lender under the terms hereof and all amounts paid, suffered
or incurred by Lender in exercising any authority granted herein, including,
without limitation, attorneys' fees, shall be added to the Secured Obligations,
shall be secured by the Collateral, shall bear interest at the highest rate
payable on any of the Secured Obligations until paid, and shall be due and
payable by Borrower to Lender immediately without demand.
5. USE OF COLLATERAL BY BORROWER
Until the occurrence of an Event of Default, Borrower may use the
Collateral in any lawful manner in the ordinary course of Borrower's business.
Borrower cannot sell the Collateral except for inventory in the ordinary course
of Borrower's business.
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6. COLLATERAL IN THE POSSESSION OF LENDER
6.1 Care. Lenders shall use such reasonable care in handling,
preserving and protecting the Collateral in their possession as they use in
handling similar property for their own account. Lenders, however, shall have no
liability for the loss, destruction, or disappearance of any Collateral unless
there is affirmative proof of a lack of due care. A lack of due care shall not
be implied solely by virtue of any loss, destruction or disappearance.
6.2 Preservation of Collateral. Borrower shall be solely responsible
for taking any and all actions to preserve rights against all Obligors. Lenders
shall not be obligated to take any such actions whether or not the Collateral is
in Lenders' possession. Borrower waives presentment and protest with respect to
any instrument included in the Collateral on which Borrower is in any way liable
and waives notice of any action taken by Lenders with respect to any instrument,
document or chattel paper included in any Collateral that is in the possession
of Lenders.
7. EVENTS OF DEFAULT; REMEDIES
7.1 Events of Default. The occurrence of any of the following events or
conditions shall constitute an "Event of Default":
(a) the Borrower fails to pay any of the principal, interest
or other charges on the Note at the time such payment is required to be made
under the Note, including any applicable grace period therein.;
(b) the Borrower fails to perform any promise contained in
this Agreement or in the Note or other agreement relating to the Loan, or in any
other promissory note or agreement between Borrower and Lenders;
(c) any statement made by the Borrower in connection with the
Loan proves to have been misleading when it was made; or
(d) Lenders acting through Agent consider themselves insecure
(that is, if anything happens that, in Lenders' judgment, makes it unlikely the
Loan will be paid)
7.2 Remedies. Upon the occurrence of any Event of Default, and at any
time while such Event of Default is continuing, Lender shall have the right to
declare all or any part of the Secured Obligations to be immediately due and
payable, and the same, with all costs and charges, shall be collectible
thereupon by action at law.
7.3 Purchase of Collateral. Lenders, so far as may be lawful, may
purchase all or any part of the Collateral offered at any public or private sale
made in the enforcement of Lenders' rights and remedies hereunder.
7.4 Notice. Any demand or notice of sale, disposition or other intended
action hereunder or in connection herewith, whether required by the UCC or
otherwise, shall be deemed to be commercially reasonable and effective if such
demand or notice is given to Borrower at
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least 10 days prior to such sale, disposition or other intended action, in the
manner provided herein for the giving of notices.
7.5 Additional Remedies. In addition to any remedies provided herein
for an Event of Default, Lenders shall have all the rights and remedies afforded
a secured party under the UCC and all other legal and equitable remedies allowed
under applicable law. No failure on the part of Lenders to exercise any of its
rights hereunder arising upon any Event of Default shall be construed to
prejudice its rights upon the occurrence of any other or subsequent Event of
Default. No delay on the part of Lenders in exercising any such rights shall be
construed to preclude Lenders from the exercise thereof at any time while that
Event of Default is continuing. Lenders may enforce any one or more rights or
remedies hereunder successively or concurrently. By accepting payment or
performance of any of the Secured Obligations after its due date, Lenders shall
not thereby waive the agreement contained herein that time is of the essence,
nor shall Lenders waive either their right to require prompt payment or
performance when due of the remainder of the Secured Obligations or their right
to consider the failure to so pay or perform an Event of Default.
8. MISCELLANEOUS PROVISIONS
8.1 Power of Attorney. Borrower hereby appoints Agent, on behalf of
Lenders, as its true and lawful attorney-in-fact, with full power of
substitution to do the following: (i) to demand, collect, receive, receipt for,
xxx and recover all sums of money or other property which may now or hereafter
become due, owing or payable from the Collateral; (ii) to execute, sign and
endorse any and all claims, instruments, receipts, checks, drafts or warrants
issued in payment for the Collateral; (ii) to settle or compromise any and all
claims arising under the Collateral, and, in the place and stead of Borrower to
execute and deliver its release and settlement for the claim; (iv) to file any
claim or claims or to take any action or institute or take part in any
proceedings, either in its own name or in the name of Borrower, or otherwise,
which in the discretion of Agent may seem to be necessary or advisable; and (v)
to execute any documents necessary to perfect or continue the Security Interest.
This power is a power coupled with an interest and is given as security for the
Secured Obligations, and the authority hereby conferred is and shall be
irrevocable and shall remain in full force and effect until renounced by Agent
or Agent is replaced by a Successor Agent.
8.2 Indemnification. In addition to the indemnities contained in the
Loan Agreement, Borrower agrees to indemnify, defend, protect and hold harmless
Agent, Lenders, and their affiliates and their respective successors, assigns
and shareholders and the directors, officers, employees, agents and attorneys of
the foregoing (collectively, the "Indemnified Parties") for, from and against
any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including, without limitation, the fees and disbursements of
counsel for such Indemnified Parties in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
such Indemnified Parties are designated parties thereto) that may be imposed on,
incurred by, or asserted against the Indemnified Parties, in any manner relating
to or arising out of this Agreement or the Loan Documents (the "Indemnified
Liabilities"); provided, however, that Borrower shall have no obligation to an
Indemnified Party hereunder with respect
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to Indemnified Liabilities arising from the gross negligence or willful
misconduct of that Indemnified Party.
8.3 Other Security. The acceptance of this Agreement by Lenders shall
not be considered a waiver of or in any way to affect or impair any other
security that Lenders may have, acquire simultaneously herewith, or hereafter
acquire for the payment or performance of the Secured Obligations, nor shall the
taking by Lenders at any time of any such additional security be construed as a
waiver of or in any way to affect or impair the Security Interest. Lenders may
resort, for the payment or performance of the Secured Obligations, to their
several securities therefor in such order and manner as it may determine.
8.4 Actions by Lenders. Without notice or demand, without affecting the
obligations of Borrower hereunder, and without affecting the Security Interest
or the priority thereof, Lenders, from time to time, may: (i) extend the time
for payment of all or any part of the Secured Obligations, accept a renewal note
therefor, reduce the payments thereon, release any person liable for all or any
part thereof, or otherwise change the terms of all or any part of the Secured
Obligations; (ii) take and hold other security for the payment or performance of
the Secured Obligations and enforce, exchange, substitute, subordinate, waive or
release any such security; (iii) join in any extension or subordination
agreement; or (iv) release any part of the Collateral from the Security
Interest.
8.5 Waivers. Borrower waives and agrees not to assert: (i) any right to
require Lenders to proceed against any guarantor, to proceed against or exhaust
any other security for the Secured Obligations, to pursue any other remedy
available to Lenders, or to pursue any remedy in any particular order or manner;
(ii) the benefits of any legal or equitable doctrine or principle of
marshalling; (iii) the benefits of any statute of limitations affecting the
enforcement hereof; (iv) demand, diligence, presentment for payment, protest and
demand, and notice of extension, dishonor, protest, demand and nonpayment,
relating to the Secured Obligations; and (v) any benefit of, and any right to
participate in, any other security now or hereafter held by Lenders.
8.6 Definitions. All undefined capitalized terms used herein shall have
the meaning given them in the Loan Agreement. Otherwise the terms herein shall
have the meanings in and be construed under the UCC.
8.7 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Arizona, without regard to the choice
of law rules of the State of Arizona.
8.8 Jurisdiction and Venue. Borrower, Agent, and Lenders hereby
expressly agree that in the event any actions or other legal proceedings are
initiated by or against Borrowers, Agent, or Lenders involving any alleged
breach or failure by any party to pay, perform or observe any sums, obligations
or covenants to be paid, performed or observed by it under this Agreement, or
involving any other claims or allegations arising out of the transactions
evidenced or contemplated by this Agreement, regardless of whether such actions
or proceedings shall be for damages, specific performance or declaratory relief
or otherwise, such actions shall be brought in Maricopa County, Arizona and
Middlesex County, New Jersey; and Borrower, Agent, and Lenders hereby submit to
the jurisdiction of the State of Arizona and State of New Jersey for
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such purposes and agree that the venue of such actions or proceedings shall
properly lie in Maricopa County, Arizona and Middlesex County, New Jersey; and
Borrower, Agent, and Lenders hereby waive any and all defenses to such
jurisdiction and venue.
8.9 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same agreement.
8.10 Entire Agreement. This Agreement contains the entire agreement and
understanding of the parties with respect to the subject matter hereof,
supersede all other prior understandings, oral or written, with respect to the
subject matter hereof, and are intended by Agent, Lenders and Borrower as the
final, complete and exclusive statement of the terms agreed to by them.
8.11 Amendments. No amendment, modification, change, waiver, release or
discharge hereof and hereunder shall be effective unless evidenced by an
instrument in writing and signed by the party against whom enforcement is
sought.
8.12 Section Headings. The section headings set forth in this Agreement
are for convenience only and shall not have substantive meaning hereunder or be
deemed part of this Agreement.
8.13 Time of Essence. Time is of the essence of this Agreement and each
and every provision hereof.
8.14 Severability. If any provision hereof is invalid or unenforceable,
the other provisions hereof shall remain in full force and effect and shall be
liberally construed in favor of Lender in order to effectuate the other
provisions hereof.
8.15 Binding Nature. This provisions of this Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their heirs,
personal representatives, successors and assigns. The term "Lenders" shall
include not only the original Lenders hereunder but also any future owner and
holder, including, without limitation, pledgees, of note or notes evidencing the
Secured Obligations. The provisions hereof shall apply to the parties according
to the context thereof and without regard to the number or gender of words or
expressions used.
8.16 Construction. This Agreement shall be construed as a whole, in
accordance with its fair meaning, and without regard to or taking into account
any presumption or other rule of law requiring construction against the party
preparing this Agreement. As used here, the words "include(s)" means
"include(s), without limitation," and the word "including" means "including, but
not limited to."
8.17 Continuing Agreement. This is a continuing Agreement which shall
remain in full force and effect until actual receipt by Lenders of written
notice of its revocation as to future transactions and shall remain in full
force and effect thereafter until all of the Secured Obligations incurred
before the receipt of such notice, and all of the Secured Obligations incurred
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thereafter under commitments extended by Lenders before the receipt of such
notice, shall have been paid and performed in full.
8.18 Notices. All notices required or permitted to be given hereunder
shall be in accordance with provisions of the Loan Agreement.
8.19 Copy. A carbon, photographic or other reproduced copy of this
Agreement and/or any financing statement relating hereto shall be sufficient for
filing and/or recording as a financing statement.
8.20 Conflicts. In the event any provision of this Agreement is
inconsistent with any provision of the Loan Agreement, the provision of the Loan
Agreement shall prevail.
IN WITNESS WHEREOF, this Agreement was executed by Borrower and Lender
as of the date first set forth above.
"BORROWER"
BIONUTRICS, INC., a Nevada corporation
By: /S/ XXXXXX X. XXXX
Name: Xxxxxx X. Xxxx
Title: President
Address of Borrower:
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
"AGENT"
Xxxxxxx XxXxxxxxx
/S/ XXXXXXX XxXXXXXXX
Address of Xxxxxxx XxXxxxxxx:
c/o Inverness
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
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"LENDERS"
HEALTHSTAR HOLDINGS LLC, as a Lender
By: /S/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Managing Member
Address of HealthSTAR Holdings LLC:
000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Xxxxxxx XxXxxxxxx, as a Lender
/S/ XXXXXXX XxXXXXXXX
Address of Xxxxxxx XxXxxxxxx:
c/o Inverness
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xiagen Ltd., as a Lender
By: /S/ XXXXXXX XxXXXXXXX
Name: Xxxxxxx XxXxxxxxx
Title: Chairman
Address of Xiagen Ltd.:
c/o Inverness
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Ropart Investments, LLC, as a Lender
By: /S/ XXXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: Managing Member
Address of Ropart Investments LLC:
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
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Xxxxxxxxx X. Xxxxxxxxxx, as a Lender
/S/ XXXXXXXXX X. XXXXXXXXXX
___________________________________
Address of Xxxxxxxxx X. Xxxxxxxxxx:
X.X. Xxx 0000
Xxxx Xxxxx, XX 00000
Xxxxxx X. Xxxx, as a Lender
/S/ XXXXXX X. XXXX
___________________________________
Address of Xxxxxx X. Xxxx:
0000 X. Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx, as a Lender
/S/ XXXXXXX X. XXXXXXX
___________________________________
Address of Xxxxxxx X. Xxxxxxx
000 Xxxxx Xxx.
Xxx Xxxx, XX 00000
____________________, as a Lender
___________________________________
Address of Lender
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