SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made this 26th day of October, 2011, by and between VACCINOGEN, INC., a Maryland corporation whose address is 0000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000 (“Debtor”), and THE XXXXX FOUNDATION, INC., a Maryland corporation whose address is 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxx 00000 (“Secured Party”). In consideration of credit extended by Secured Party to Debtor, Debtor and Secured Party agree as follows:
1. Defined Terms. All of the terms used herein without definition which are defined by the Maryland Uniform Commercial Code shall have the meanings assigned to them by the Maryland Uniform Commercial Code, as amended from time to time, unless and to the extent varied by this Agreement. The use of the singular herein may also refer to the plural and vice versa, and use of the neuter or any gender shall be applicable to any other gender or to the neuter. As used herein, the following terms shall have the following meanings:
“Collateral” shall mean the property described on Schedule A attached hereto and incorporated herein and all the proceeds thereof, including any cash or other property to which Debtor shall become entitled for any reason whatsoever in respect of, as an addition to, in substitution for or in exchange for any of such property, including, without limitation, any interest, dividends, distributions, settlements or exchanges of any kind in respect of such property, whether in the ordinary course of business or, if applicable, in connection with any merger, consolidation, reorganization, recapitalization, reclassification, stock split, liquidation or increase or reduction of capital in respect of any issuer of any of the Collateral; provided, however, that the term “Collateral” shall not include (a) any rights or interest of Debtor under any contract, lease, permit, license, instrument or other agreement entered into by Debtor if under the terms of such contract, lease, permit, license, instrument or agreement, or applicable law with respect thereto, the grant of a security interest or lien therein is prohibited and such prohibition has not been waived or the consent of the other party to such contract, lease, permit, license, instrument or agreement has not been obtained, but only, in each case, to the extent and for so long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the Uniform Commercial Code or other applicable law, or (b) any of the “Collateral” as defined in that certain New Security Agreement made as of October 31, 2007 by and between (i) Intracel Holdings Corporation (predecessor in interest to Debtor) and (ii) Organon BioSciences International B.V. and Organon Teknika Corporation, to the extent and for so long as the prohibition against the granting of a security interest in such Collateral contained in such New Security Agreement remains in effect.
“Documents” shall mean, individually and collectively, all promissory notes, security agreements and other documents and instruments, whether now existing or hereafter executed, and evidencing, securing or otherwise relating to any of the Obligations.
“Event of Default” shall have the meaning given to such term in the Note.
“Note” shall mean that certain Promissory Note of even date herewith made by Debtor to the order of Secured Party, as may from time to time hereafter be amended, modified, restated, extended, renewed or replaced.
“Obligations” shall mean all present and future debts, liabilities and obligations of Debtor to Secured Party hereunder and all other present and future debts, liabilities and obligations of Debtor to Secured Party of every kind and description, matured or unmatured, under or in connection with the Note.
3. Representations and Warranties. Debtor represents, warrants and covenants that (a) Debtor is the absolute sole owner of the Collateral and the Collateral is and shall remain, so long as any of the Obligations remain unpaid, free and clear of all liens, security interests, encumbrances and claims of every kind excepting only security interests of Secured Party and other Permitted Encumbrances (as defined in the Note and Warrant Purchase Agreement), (b) Debtor is a “registered organization” as defined in Section 9-102 of the Uniform Commercial Code “organized solely” under the law of the State of Maryland within the meaning of Section 9-102(a)(70) of the Uniform Commercial Code, (c) the location of the Debtor for purposes of Section 9-307 of the Uniform Commercial Code is and shall remain the State of Maryland, and (d) Debtor’s organizational identification number for purposes of Section 9-516 of the Uniform Commercial Code is D13848726.
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(a) Debtor agrees that Secured Party may, but shall not be required to, pay or satisfy any taxes, charges, assessments, security interests or liens of any kind with respect to or encumbering any of the Collateral, and Secured Party shall be the sole judge of the legality or validity thereof and the amount necessary to discharge the same. All payments, charges, costs and expenses (including reasonable and documented attorney’s fees) made or incurred by Secured Party in exercising any of its rights, powers or remedies under this Agreement or applicable law shall be secured hereby and paid by Debtor to Secured Party on written demand.
(b) Beyond the exercise of reasonable care to assure the safe custody of any of the Collateral while in the possession of Secured Party, Secured Party shall have no duty or liability to collect any cash or other property due in respect thereof or to protect or preserve any rights pertaining thereto, and shall be relieved of all responsibility for the Collateral upon surrendering same to Debtor.
(c) No failure or delay on the part of Secured Party in exercising any right, power or remedy hereunder, under any of the Documents or under applicable law shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The rights and remedies herein provided are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law or by any of the Documents.
(d) The provisions of this Agreement are severable, and if any clause or provision hereof shall be held invalid or unenforceable in whole or in part, such invalidity or unenforceability shall not affect the remainder of such clause or provision nor any other clause or provision of this Agreement.
(e) This Agreement shall inure to the benefit of Secured Party, its successors and assigns, and shall be binding upon Debtor and Debtor’s successors and assigns.
(f) The construction, performance and enforcement of this Agreement shall be governed by the internal laws of the State of Maryland. References herein to the Maryland Uniform Commercial Code shall mean the Uniform Commercial Code as the same may be in effect from time to time in the State of Maryland.
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(g) Any notice or other communication in connection with this Agreement shall be sent by registered mail or by telecopy. If sent by registered mail, such notice shall be deemed to have been given when received by the party to whom directed, provided that any such notice or communication shall be addressed to a party hereto at the address given for such party on the first page hereof (or at such other address as such party shall specify in writing to the other parties hereto). Notwithstanding the foregoing, if delivery of any notice by registered mail is refused by the party to whom it has been directed, such notice may be sent by regular mail, and shall be deemed given when deposited in the mail, postage prepaid, at the address given for such party on the first page hereof (or at such other address as such party shall specify in writing to the other parties hereto). If sent by telecopy, a notice shall be deemed to have been given when the telecopy is transmitted to the following telecopier numbers and an electronic confirmation of receipt is received (or if transmission is not made during normal business hours on a business day, the first business day thereafter): (a) if to Secured Party, to 410/539-6579, and (b) if to Debtor, to 301/631-2970.
(h) This Agreement may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute one and the same instrument.
(i) The headings contained in the titling of this Agreement are intended to be used for convenience only and shall not be used or deemed to limit or diminish any of the provisions hereof.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed or caused to be executed this Security Agreement under seal as of the date first above written.
DEBTOR: | ||||
WITNESS/ATTEST: | VACCINOGEN, INC. | |||
By: | /s/ Xxxxxxx X. Xxxxxx | (SEAL) | ||
Xxxxxxx X. Xxxxxx | ||||
Chief Executive Officer | ||||
SECURED PARTY: | ||||
THE XXXXX FOUNDATION, INC. | ||||
[ILLEGIBLE] | By: | /s/ Xxxxxx X. Xxxxx, Xx. | (SEAL) | |
Xxxxxx X. Xxxxx, Xx. | ||||
President |
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SCHEDULE A
The Collateral consists of the following assets and properties now owned or at any time hereafter acquired by Debtor or in which Debtor now has or at any time hereafter may acquire any right, title or interest:
• all Accounts
• all Chattel Paper;
• all Deposit Accounts;
• all Documents;
• all Equipment;
• all General Intangibles;
• all Instruments;
• all Inventory;
• all Investment Property;
• all Letter-of-Credit Rights;
• all Supporting Obligations;
• all books and records pertaining to the Collateral; and
• to the extent not otherwise included, all Proceeds and products of any and all of the oregoing and all collateral security and guarantees given by any person with respect to any of the foregoing.
Each capitalized term used in this Schedule A but not otherwise defined in the foregoing Security Agreement, and which is defined in the Maryland Uniform Commercial Code, shall have the meaning specified in the Maryland Uniform Commercial Code.
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