FIRST AMENDED AND RESTATED SECURITY AGREEMENT
Exhibit
10.4
FIRST
AMENDED AND RESTATED SECURITY AGREEMENT
This
First Amended and Restated Security Agreement (the “Agreement”) is made as of
October 17, 2007 by BioTime, Inc., as the “Debtor,” in favor and for the benefit
of Xxxxxx X. Xxxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxx, Broadwood Partners,
L.P., individually and collectively, as the “Secured Party,” and amends and
restates that certain Security Agreement dated April 12, 2006.
PREMISES
A. Debtor
and Secured Party have entered into that certain First Amended and Restated
Revolving Line of Credit Agreement of even date (the “Credit Agreement”),
pursuant to which Debtor may borrow funds from Secured Party;
B. Debtor
has delivered to certain Secured Parties Amended and Restated Revolving Credit
Notes, dated April 12, 2006, in the aggregate principal amount of $200,000,
and
has delivered to certain Secured Parties Revolving Credit Notes, dated October
__, 2007, in the aggregate principal amount of $800,000 (collectively, the
“Notes” and each a “Note”) evidencing Debtor’s obligation to pay funds advanced
by Secured Party under the Credit Agreement;
C. Debtor
is
entering into this Agreement to secure its obligations under the Credit
Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, Debtor
hereby agrees as follows:
1. Creation
of Security Interest.
Debtor
hereby conveys, assigns, transfers, and grants to Secured Party a first priority
perfected security interest in all of Debtor’s present and hereafter acquired
right, title, and interest in and to the Collateral (as defined in Section
3
below). Secured Party may record a UCC-1 Financing Statement concerning the
Collateral.
2. Secured
Obligations.
This
Agreement and the security interests granted and created under this Agreement
secure the prompt payment in full in cash and the full performance of each
and
all of the following obligations (collectively, the “Secured
Obligations”):
2.1 each
and
every obligation, covenant, and agreement of Debtor contained in, arising
under,
in connection with, or evidenced by each of the Notes;
2.2 the
obligations, covenants and agreements of Debtor under the Credit Agreement;
and
2.3 each
and
every obligation, covenant, and agreement of Debtor contained in, arising
under,
or in connection with, or evidenced by this Agreement.
3.
Collateral.
As used in this Agreement, the term Collateral means (a) of Debtor’s right,
title, and interest in and to all royalties, license fees, and other amounts
payable by Hospira, Inc. or any successor under that certain Exclusive License
Agreement, dated April 23, 1997, between Debtor and Xxxxxx Laboratories,
Inc.
(as the predecessor in interest to Hospira, Inc.), as modified by a letter
agreement and as amended by that certain Amendment to BioTime License Agreement,
dated January 9, 2006 (the “Hospira License”), and (b) all accounts, accounts
receivable, notes, and instruments evidencing any obligation of payment by
Hospira, Inc. under the Hospira License ; and (c) all proceeds of the Collateral
described in clauses (a) and (b) of this Section 3, including but not limited
to, money, accounts, general intangibles, securities, deposit accounts,
investment property, documents, chattel paper, instruments, and insurance
proceeds and interests therein. Debtor represents and warrants to and for
the
benefit of Secured Party that Debtor’s title to the Collateral described in
clause (a) of the preceding sentence is free and clear of all liens, pledges,
encumbrances, equities, and claims of any kind whatsoever except for the
security interest created by this Agreement.
4.
Further
Assurances. Debtor hereby further agrees to procure, execute, and
deliver on demand and Debtor hereby irrevocably appoints Secured Party as
Debtor’s attorney in fact to execute, acknowledge, deliver, and, if appropriate,
file and record such endorsements, assignments, consents, security agreements,
financing statements, control agreements, or other instruments, documents,
or
writings as Secured Party may request or require in order to perfect or continue
the perfection and the priority of the security interests created or agreed
to
be created by this Agreement.
5.
Transfers
and Other Liens. Without the prior written consent of Secured Party,
Debtor shall not (a) sell, contract to sell, pledge, encumber, assign,
hypothecate, alienate, convey, dispose, or otherwise transfer the Collateral,
or
any interest therein, whether voluntarily, involuntarily, or by operation
of
law, except for sales of inventory in the ordinary course of business, (b)
consent or agree to any alteration, modification, or amendment to the Hospira
License that would reduce the royalties payable by Hospira , (c) waive any
right
of payment, or grant any grace period or extension of time for the payment,
of
any royalties by Hospira under the Hospira License, (d) create or permit
to
exist any lien, encumbrance, mortgage, pledge, security interest or charge
of
any kind upon or concerning any of the Collateral, except for the security
interest created by this Agreement, or (e) take any action concerning the
Collateral that is inconsistent with the provisions and purposes of this
Agreement. Any sale, contract to sell, pledge, conveyance, hypothecation,
alienation, encumbrance, disposition, assignment, or other transfer of any
of
the Collateral or any alteration, modification, or amendment of any of the
Collateral in a manner that would delay or reduce royalty payments, or the
grant
of any grace period or extension of time for the performance of any obligation
due for the benefit of Debtor or Secured Party under or concerning any of
the
Collateral made, permitted, or suffered without Secured Party’s prior written
consent shall constitute an Event of Default under this Agreement.
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6.
Additional
Covenants of Debtor. In addition to all other covenants and agreements
of Debtor set forth in this Agreement, Debtor agrees to (a) give Secured
Party
thirty (30) days prior written notice of any change in Debtor’s name, state of
incorporation or organization, or place of business, or, if Debtor has more
than
one place of business, its head office or office in which Debtor’s records
relating to the Collateral are kept; (b) to appear in and defend any action
or
proceeding which may affect Debtor’s title to or Secured Party’s interest in any
Collateral; and (c) to keep separate, accurate, and complete records of the
Collateral, and to provide Secured Party with such records and such other
reports and information relating to Collateral as Secured Party may request
from
time to time.
7.
Certain
Notifications and Distributions With Respect To Collateral. Upon the
occurrence and continuance of an Event of Default, Secured Party shall have
the
rights set forth in this Section. Secured Party may at any time, and from
time
to time, notify Hospira or any successor account debtor that (a) an account
or
instrument constituting Collateral has been assigned to Secured Party, and
(b)
all distributions and payments and the performance of all obligations in
any way
related to the Collateral are to be made directly to Secured Party. If Debtor
receives any payments of money, securities, or any tangible or intangible
property on account of or with respect to any of the Collateral at any time
during which an Event of Default shall have occurred and be continuing, such
payments will be received by Debtor in trust for, and immediately paid over
to
Secured Party. Any collections received by Secured Party or received by Debtor
and delivered to Secured Party shall be applied to the Secured Obligations,
first to the expenses of collection, second to the payment of accrued interest,
and third to the payment of principal; provided, that any amounts remaining
after payment in full of all expenses, interest, and principal shall be returned
to Debtor. Secured Party shall have the right to receive, receipt for, endorse,
assign, deposit, and deliver, in Secured Party’s name or in the name of Debtor,
any and all checks, notes, drafts, and other instruments for the payment
of
money constituting proceeds of or otherwise relating to the Collateral. Debtor
hereby authorizes Secured Party to affix, by facsimile signature or otherwise,
the general or special endorsement of Debtor, in such manner as Secured Party
shall deem advisable, to any such instrument in the event the same has been
delivered to Secured Party without appropriate endorsement, and Secured Party
and any collecting bank are hereby authorized to consider such an endorsement
as
being by Debtor to the same extent as though it were manually executed by
Debtor, regardless of by whom or under what circumstances or by what authority
such facsimile signature or other endorsement is actually affixed, without
duty
of inquiry or responsibility as to such matters, and Debtor hereby waives
demand, presentment, protest, and notice of protest or dishonor and all other
notices of every kind and nature with respect to any such instrument.
8. Rights
Upon Event of Default.
8.1 Upon
the occurrence of an Event of Default under this Agreement, Secured Party
shall
have, in addition to all other rights and remedies that Secured Party may
have
at law or in equity, under Section 7 of this Agreement, or under any other
agreement executed by Debtor in favor of Secured Party, all rights and remedies
of a secured party under the California Commercial Code, which rights and
remedies of Secured Party shall be cumulative and non-exclusive. In addition,
upon the occurrence of an Event of Default, Secured Party shall have the
following rights and remedies, all of which may be exercised with or without
further notice to Debtor: (i) to directly receive any and all payments and
distributions of money, securities or any tangible or intangible property
on or
in any way related to the Collateral; (ii) to
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settle,
compromise, or release, on terms acceptable to Secured Party, in whole or
in
part, any amounts owing on the Collateral; (iii) to enforce payment and to
prosecute any action or proceeding with respect to any and all of the
Collateral; (iv) to foreclose the liens and security interests created under
this Agreement or under any other agreement relating to the Collateral by
any
available procedure, with or without judicial process; (v) to sell, assign,
or
otherwise dispose of the Collateral or any part thereof, either at public
or
private sale for cash, on credit, or otherwise, with or without representations
or warranties, and upon such terms as shall be acceptable to Secured Party;
all
at Secured Party’s sole option and as Secured Party in their sole discretion may
deem advisable.
8.2
Debtor
shall be given reasonable notice of the time and place of any public sale
of the
Collateral, or of the time on or after which any private sale or other intended
disposition is to be made. If required under applicable law, Secured Party
may
be the purchaser at any public sale. Ten days notice of any public or private
sale or other disposition shall be considered to be reasonable notice.
9. Disposition
of Proceeds. After satisfaction in full of the Secured Obligations,
the balance of the proceeds of sale then remaining shall be paid first to
satisfy obligations secured by any other subordinate security interests or
subordinate liens (including but not limited to attachment liens and execution
liens) in the Collateral as provided in the California Commercial Code, and
then
any remaining balance of the proceeds shall be paid to the Debtor.
10.
Events
of Default. The occurrence of any of the following shall constitute an Event
of Default under this Agreement:
10.1 Secured
Party shall fail or cease to have a first priority perfected security interest
in the Collateral or any part of the Collateral unless caused by any action
taken by Secured Party;
10.2 Debtor
defaults in the performance of any covenant or agreement contained in this
Agreement;
10.3 Debtor
defaults in the payment or performance of any Secured Obligation;
10.4 An
Event
of Default as defined in the Notes has occurred with respect to any of the
Notes; and
10.5 The
occurrence of any other event under this Agreement that is specifically
described elsewhere within this Agreement as an Event of Default.
11. Amendments. This
Agreement may not be altered or amended except with the written consent of
Debtor and the Secured Party.
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12. Binding
on Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of Debtor and Secured Party and their respective heirs,
executors, personal representatives, successors and assigns.
13. Notices.
All notices and other communications required or permitted to be given pursuant
to this Agreement shall be in writing and shall be deemed given four (4)
days
after being deposited in the United States mail, certified postage prepaid,
return receipt requested, or when delivered by hand, by messenger or express
air
freight service to the address for notice shown in the Credit Agreement.
Any
party may change its address for notice by giving notice to the other party
in
the same manner as provided in this section.
14. Governing
Law. This Agreement shall be governed by and construed under the laws
of the State of California without regard to conflicts of law. Where applicable
and except as otherwise defined in this Agreement, the terms used in this
Agreement shall have the meanings given them in the California Commercial
Code.
15. Attorneys
Fees and Costs of Enforcement. Debtor agrees to pay
all reasonable attorneys’ fees incurred by Secured Party in connection with
enforcement of any of Secured Party’s rights and remedies under this Agreement,
whether or not any proceeding is commenced to enforce or protect such rights
and
remedies. All advances, charges, costs, and expenses, including without
limitation, reasonable attorneys’ fees, incurred or paid by Secured Party in
exercising any right, power, or remedy conferred by this Agreement, or in
the
enforcement thereof, shall be added to and shall become a part of the Secured
Obligations, payable by Debtor on demand with interest thereon at a rate
of
interest equal to the lesser of: (i) the rate provided in the Note for interest
payable after an Event of Default, or (ii) the maximum rate of interest
permitted by law.
16. Waivers
by Debtor. Debtor expressly waives any right to require Secured Party
to (a) proceed against any person, (b) marshal assets or proceed against
or
exhaust Collateral or any part thereof, or (c) pursue any other remedy in
Secured Party’s power; and Debtor waives any defense arising by reason of any
disability or other defense of any other person or entity, or by reason of
the
cessation from any cause whatsoever of the liability of Debtor or any other
person or entity. Debtor consents and agrees that Secured Party may, at any
time
and from time to time, without notice or demand, and without affecting the
enforceability or continuing effectiveness of this Agreement: (i) accept
new or
additional instruments, documents, or agreements in exchange for or relative
to
any or all of the Secured Obligations; (ii) accept partial payments on or
partial performance of any or all of the Secured Obligations; (iii) receive
and
hold additional security or guaranties for any or all of the Secured Obligations
or any part thereof; (iv) release, reconvey, terminate, waive, abandon,
fail to perfect, subordinate, exchange, substitute, transfer, and enforce
any
security or guaranties; (v) apply any Collateral or other security and direct
the order or manner of sale thereof as Secured Party may determine;(vi) consent
to the transfer of any Collateral or other security for any or all of the
Secured Obligations; and (vii) bid and purchase at any sale of
Collateral.
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17. Cumulative
Rights of Secured Party. The rights, powers, and remedies given to
Secured Party by this Agreement shall be in addition to all rights, powers,
and
remedies given to Secured Party by virtue of any statute, rule of law, or
any
other agreement between Debtor and Secured Party. Any forbearance or failure
or
delay by Secured Party in exercising any right, power, or remedy under this
Agreement shall not preclude the further exercise thereof; and every right,
power, and remedy of Secured Party shall continue in full force and effect
until
such right, power, or remedy is specifically waived by an instrument in writing
signed by Secured Party.
18.
Termination.
Secured Party’s security interest in the Collateral shall terminate upon the
satisfaction in full of all Secured Obligations, and at that time Secured
Party
shall return to Debtor all Collateral then in Secured Party’s
possession.
19. Power
of Attorney. Debtor hereby irrevocably appoints Secured Party as
attorney-in-fact of Debtor, with full power of substitution, to sign any
document necessary to transfer title to any of the Collateral and to do all
acts
necessary or incident to the powers granted under this Agreement to Secured
Party, as fully as Debtor might, including without limitation, the execution
and
recordation of any claim of lien on behalf of and in the name of
Debtor.
DEBTOR
BIOTIME,
INC.
By:
/s/ Xxxxxxx X.
Xxxx
Chief
Executive Officer
By:
/s/ Xxxxxx
Xxxxxx
Secretary
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