SECURITY AGREEMENT
This
SECURITY
AGREEMENT
(this
“Agreement”),
dated
as of March 31, 2008, is made by and among the Grantors listed on the signature
pages hereof (collectively, jointly and severally, the “Grantors”
and
each, individually, a “Grantor”),
and
the Secured Parties listed on the signature pages hereof (collectively, the
“Secured
Parties”
and
each, individually, a “Secured
Party”).
WITNESSETH:
WHEREAS,
pursuant to that certain Securities Purchase Agreement dated as of even date
herewith (as amended, restated, supplemented, or otherwise modified from time
to
time, including all schedules thereto, the “Purchase
Agreement”)
by and
among GENEREX BIOTECHNOLOGY CORPORATION, a Delaware corporation (“Parent”),
and
Secured Parties, Parent has agreed to sell, and Secured Parties have agreed
to
purchase, severally and not jointly, certain Notes and Warrants, and
WHEREAS,
in
order to induce the Secured Parties to purchase the Notes and Warrants as
provided for in the Purchase Agreement, Grantors have agreed to grant a
continuing security interest in and to the Collateral in order to secure the
prompt and complete payment, observance and performance of the Secured
Obligations, and
NOW,
THEREFORE,
for and
in consideration of the recitals made above and other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined
Terms.
All
capitalized terms used herein (including in the preamble and recitals hereof)
without definition shall have the meanings ascribed thereto in the Purchase
Agreement. Any terms used in this Agreement that are defined in the Code shall
be construed and defined as set forth in the Code unless otherwise defined
herein or in the Purchase Agreement; provided,
however,
that if
the Code is used to define any term used herein and if such term is defined
differently in different Articles of the Code, the definition of such term
contained in Article 9 of the Code shall govern. In addition to those terms
defined elsewhere in this Agreement, as used in this Agreement, the following
terms shall have the following meanings:
(a) “Account”
means
an account (as that term is defined in the Code).
(b) “Account
Debtor”
means
an account debtor (as that term is defined in the Code).
(c) “Bankruptcy
Code”
means
title 11 of the United States Code, as in effect from time to time.
(d) “Books”
means
books and records (including each Grantor’s Records indicating, summarizing, or
evidencing such Grantor’s assets (including the Collateral) or liabilities, each
Grantor’s Records relating to such Grantor’s business operations or financial
condition, and each Grantor’s goods or General Intangibles related to such
information).
(e) “Chattel
Paper”
means
chattel paper (as that term is defined in the Code) and includes tangible
chattel paper and electronic chattel paper.
(f) “Code”
means
the New York Uniform Commercial Code, as in effect from time to time;
provided,
however,
that in
the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection, priority, or remedies with respect to any Secured
Party’s Lien on any Collateral is governed by the Uniform Commercial Code as
enacted and in effect in a jurisdiction other than the State of New York, the
term “Code” shall mean the Uniform Commercial Code as enacted and in effect in
such other jurisdiction solely for purposes of the provisions thereof relating
to such attachment, perfection, priority, or remedies.
(g) “Collateral”
has
the
meaning specified therefor in Section
2.
(h) “Commencement
Notice”
means
a
written notice, given by any Secured Party to the other Secured Parties in
accordance with the notice provisions set forth in the Purchase Agreement,
pursuant to which such Secured Party notifies the other Secured Parties of
the
existence of one or more Events of Default and of such Secured Party’s intent to
commence the exercise of one or more of the remedies provided for under this
Agreement with respect to all or any portion of the Collateral as a consequence
thereof, which notice shall incorporate a reasonably detailed description of
each Event of Default then existing and of the remedial action proposed to
be
taken.
(i) “Commercial
Tort Claims”
means
commercial tort claims (as that term is defined in the Code), and includes
those
commercial tort claims listed on Schedule
1
attached
hereto..
(j) “Control
Agreement”
means
a
control agreement, in form and substance satisfactory to Secured Parties,
executed and delivered by a Grantor, one or more Secured Parties, and the
applicable securities intermediary (with respect to a Securities Account) or
bank (with respect to a Deposit Account).
(k) “Copyrights”
means
copyrights and copyright registrations, and also includes (i) the copyright
registrations and recordings thereof and all applications in connection
therewith listed on Schedule
2
attached
hereto and made a part hereof, (ii) all reissues, continuations, extensions
or
renewals thereof, (iii) all income, royalties, damages and payments now and
hereafter due or payable under and with respect thereto, including payments
under all licenses entered into in connection therewith and damages and payments
for past or future infringements or dilutions thereof, (iv) the right to xxx
for
past, present and future infringements and dilutions thereof, (v) the goodwill
of each Grantor’s business symbolized by the foregoing or connected therewith,
and (vi) all of each Grantor’s rights corresponding thereto throughout the
world.
(l) “Copyright
Security Agreement”
means
each Copyright Security Agreement among Grantors, or any of them, and Secured
Parties, in substantially the form of Exhibit
A
attached
hereto, pursuant to which Grantors have granted to each Secured Party a security
interest in all their respective Copyrights.
(m) “Deposit
Account”
means
a
deposit account (as that term is defined in the Code).
(n) “Equipment”
means
equipment (as that term is defined in the Code).
(o) “Event
of Default”
has
the
meaning specified therefor in the
Notes.
(p) “Foreign
Intellectual Property”
means
all Copyrights, Intellectual Property Licenses, Patents, and Trademarks to
the
extent registered, filed or subsisting under the laws of any Governmental
Authority other than the United States of America or Canada.
2
(q) “General
Intangibles”
means
general intangibles (as that term is defined in the Code) and, in any event,
includes payment intangibles, contract rights, rights to payment, rights arising
under common law, statutes, or regulations, choses or things in action, goodwill
(including the goodwill associated with any Trademark, Patent, or Copyright),
Patents, Trademarks, Copyrights, URLs and domain names, industrial designs,
other industrial or Intellectual Property or rights therein or applications
therefor, whether under license or otherwise, programs, programming materials,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable
from pension funds, route lists, rights to payment and other rights under any
royalty or licensing agreements, including Intellectual Property Licenses,
infringement claims, computer programs, information contained on computer disks
or tapes, software, literature, reports, catalogs, pension plan refunds, pension
plan refund claims, insurance premium rebates, tax refunds, and tax refund
claims, interests in a partnership or limited liability company which do not
constitute a security under Article 8 of the Code, and any other personal
property other than Commercial Tort Claims, money, Accounts, Chattel Paper,
Deposit Accounts, goods, Investment Related Property, Negotiable Collateral,
and
oil, gas, or other minerals before extraction.
(r) “Governmental
Authority”
means
any domestic or foreign federal, state, local, or other governmental or
administrative body, instrumentality, board, department, or agency or any court,
tribunal, administrative hearing body, arbitration panel, commission, or other
similar dispute-resolving panel or body.
(s) “Grantor”
and
“Grantors”
have
the meanings specified therefor in the recitals to this Agreement.
(t) “Guaranties”
means
each Guaranty dated of even date herewith executed by Guarantors in favor of
any
or all of the Secured Parties, together with any other guaranty or similar
agreement now or hereafter executed by a Guarantor in favor of any or all of
the
Secured Parties in connection with the Notes or any of the other Transaction
Documents.
(u) “Guarantor”
means
each Grantor, other than Parent, and each other Person that now or hereafter
executes a Guaranty.
(v) “Insolvency
Proceeding”
means
any proceeding commenced by or against any Person under any provision of the
Bankruptcy Code or under any other state or federal bankruptcy or insolvency
law
or any equivalent laws in any other jurisdiction, assignments for the benefit
of
creditors, formal or informal moratoria, compositions, extensions generally
with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
(w) “Intellectual
Property”
means
Patents, Copyrights, Trademarks, the goodwill associated with such Trademarks,
trade secrets and customer lists, and Intellectual Property
Licenses.
(x) “Intellectual
Property Licenses”
means
rights under or interests in any patent, trademark, copyright or other
intellectual property, including software license agreements with any other
party, whether the applicable Grantor is a licensee or licensor under any such
license agreement, including the license agreements listed on Schedule
3 attached
hereto and made a part hereof.
(y) “Inventory”
means
inventory (as that term is defined in the Code).
(z) “Investment
Related Property”
means
(i) investment property (as that term is defined in the Code), and (ii) all
of
the following (regardless of whether classified as investment property under
the
Code): all Pledged Interests, Pledged Operating Agreements, and Pledged
Partnership Agreements.
3
(aa) “Lien”
has
the
meaning specified therefor in the
Notes.
(bb) “Negotiable
Collateral”
means
letters of credit, letter-of-credit rights, instruments, promissory notes,
drafts, and documents.
(cc) “New
Subsidiary”
has
the
meaning specified therefor in the
Notes.
(dd) “Notes”
has
the
meaning specified therefor in the Purchase Agreement.
(ee) “Parent”
has
the
meaning specified therefor in the recitals to this Agreement.
(ff) “Patents”
means
patents and patent applications, and also includes (i) the patents and patent
applications listed on Schedule
4
attached
hereto and made a part hereof, (ii) all renewals thereof, (iii) all income,
royalties, damages and payments now and hereafter due or payable under and
with
respect thereto, including payments under all licenses entered into in
connection therewith and damages and payments for past or future infringements
or dilutions thereof, (iv) the right to xxx for past, present and future
infringements and dilutions thereof, and (v) all of each Grantor’s rights
corresponding thereto throughout the world.
(gg) “Patent
Security Agreement”
means
each Patent Security Agreement among Grantors and Secured Parties in
substantially the form of Exhibit
B
attached
hereto, pursuant to which Grantors have granted to each Secured Party a security
interest in all their respective Patents.
(hh) “Permitted
Liens”
has
the
meaning specified therefor in the
Notes.
(ii) “Permitted
Secured Party”
means,
with respect to the exercise of any remedy provided for under this Agreement,
any Secured Party that has delivered a Commencement Notice with respect to
the
exercise of such remedy to the other Secured Parties and has not received a
Veto
Notice with respect thereto within the Veto Period; provided,
however,
that
there shall only be a single Permitted Secured Party that may exercise any
specific remedy at any one time (it being agreed that if a Commencement Notice
is delivered by more than one Secured Party with respect to any remedy provided
for under this Agreement, then the first Secured Party to deliver a Commencement
Notice and not receive a Veto Notice within the Veto Period shall be the only
Secured Party that may exercise such remedy).
(jj) “Person”
means
an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
(kk) “Pledged
Companies”
means,
each Person listed on Schedule
5
hereto
as a “Pledged Company”, together with each other Person all or a portion of
whose Stock is acquired or otherwise owned by a Grantor after the date
hereof.
(ll) “Pledged
Interests”
means
all of each Grantor’s right, title and interest in and to all of the Stock now
or hereafter owned by such Grantor, regardless of class or designation,
including all substitutions therefor and replacements thereof, all proceeds
thereof and all rights relating thereto, also including any certificates
representing the Stock, the right to receive any certificates representing
any
of the Stock, all warrants, options, share appreciation rights and other rights,
contractual or otherwise, in respect thereof, and the right to receive
dividends, distributions of income, profits, surplus, or other compensation
by
way of income or liquidating distributions, in cash or in kind, and cash,
instruments, and other property from time to time received, receivable, or
otherwise distributed in respect of or in addition to, in substitution of,
on
account of, or in exchange for any or all of the foregoing.
4
(mm) “Pledged
Operating Agreements”
means
all of each Grantor’s rights, powers, and remedies under the limited liability
company operating agreements of each of the Pledged Companies that are limited
liability companies.
(nn) “Pledged
Partnership Agreements”
means
all of each Grantor’s rights, powers, and remedies under the partnership
agreements of each of the Pledged Companies that are partnerships.
(oo) “PPSA”
means
the Personal Property Security Act (Ontario), as in effect from time to
time.
(pp) “Proceeds”
has
the
meaning specified therefor in Section
2.
(qq) “Purchase
Agreement”
has
the
meaning specified therefor in the recitals to this Agreement.
(rr) “Real
Property”
means
any estates or interests in real property now owned or hereafter acquired by
any
Grantor and the improvements thereto.
(ss) “Records”
means
information that is inscribed on a tangible medium or which is stored in an
electronic or other medium and is retrievable in perceivable form.
(tt) “Secured
Obligations”
mean
all of the present and future payment and performance obligations of Grantors
arising under this Agreement, the Notes, the Guaranties, and the other
Transaction Documents, including, without duplication, reasonable attorneys’
fees and expenses and any interest, fees, or expenses that accrue after the
filing of an Insolvency Proceeding, regardless of whether allowed or allowable
in whole or in part as a claim in any Insolvency Proceeding.
(uu) “Securities
Account”
means
a
securities account (as that term is defined in the Code).
(vv) “Security
Documents”
means,
collectively, this Agreement, each Copyright Security Agreement, each Patent
Security Agreement, each Trademark Security Agreement, each Control Agreement,
and each other security agreement, pledge agreement, assignment, mortgage,
security deed, deed of trust, and other agreement or document executed and
delivered by a Grantor as security for any of the Secured Obligations.
(ww) “Security
Interest”
and
“Security
Interests”
have
the meanings specified therefor in Section
2.
(xx) “Significant
Secured Party”
means,
on any date of determination, any Secured Party holding twenty percent (20%)
or
more of the aggregate principal amount of Notes outstanding on such
date.
(yy) “Stock”
means
all shares, options, warrants, interests (including membership and partnership
interests), participations, or other equivalents (regardless of how designated)
of or in a Person, whether voting or nonvoting, including common stock,
preferred stock, or any other “equity security” (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the United States
Securities and Exchange Commission and any successor thereto under the
Securities Exchange Act of 1934, as in effect from time to time).
5
(zz) “Supporting
Obligations”
means
supporting obligations (as such term is defined in the Code).
(aaa) “Trademarks”
means
trademarks, trade names, trademark applications, service marks, service xxxx
applications, and also includes (i) the trade names, trademarks, trademark
applications, service marks, and service xxxx applications listed on
Schedule
6
attached
hereto and made a part hereof, and (ii) all renewals thereof, (iii) all income,
royalties, damages and payments now and hereafter due or payable under and
with
respect thereto, including payments under all licenses entered into in
connection therewith and damages and payments for past or future infringements
or dilutions thereof, (iv) the right to xxx for past, present and future
infringements and dilutions thereof, (v) the goodwill of each Grantor’s business
symbolized by the foregoing or connected therewith, and (vi) all of each
Grantor’s rights corresponding thereto throughout the world.
(bbb) “Trademark
Security Agreement”
means
each Trademark Security Agreement among Grantors and Secured Parties in
substantially the form of Exhibit
C
attached
hereto, pursuant to which Grantors have granted to each Secured Party a security
interest in all their respective Trademarks.
(ccc) “Transaction
Documents”
has
the
meaning specified therefor in the Purchase Agreement.
(ddd) “URL”
means
“uniform resource locator,” an internet web address.
(eee) “Veto
Notice”
means,
with respect to any Commencement Notice, a written notice given by any
Significant Secured Party to the other Secured Parties in accordance with the
notice provisions set forth in the Purchase Agreement pursuant to which such
Significant Secured Party notifies the other Secured Parties of its objection
to
the commencement of the remedial action specified in such Commencement Notice
and certifies that, to the best of its knowledge, it is a Significant Secured
Party.
(fff) “Veto
Period”
means,
with respect to any Commencement Notice, the period of ten (10) consecutive
calendar days following the delivery of such Commencement Notice to the Secured
Parties.
(ggg) “Warrants”
has
the
meaning specified therefor in the Purchase Agreement.
2. Grant
of Security.
Each
Grantor hereby unconditionally grants, assigns, and pledges to each Secured
Party a separate, continuing security interest (each, a “Security
Interest”
and,
collectively, the “Security
Interests”)
in all
assets of such Grantor (other than real property) whether now owned or hereafter
acquired or arising and wherever located, including, without limitation, such
Grantor’s right, title, and interest in and to the following, whether now owned
or hereafter acquired or arising and wherever located (collectively, the
“Collateral”):
(a) all
of
such Grantor’s Accounts;
(b) all
of
such Grantor’s Books;
(c) all
of
such Grantor’s Chattel Paper;
(d) all
of
such Grantor’s Deposit Accounts;
(e) all
of
such Grantor’s Equipment and fixtures;
(f) all
of
such Grantor’s General Intangibles;
6
(g) all
of
such Grantor’s Inventory;
(h) all
of
such Grantor’s Investment Related Property;
(i) all
of
such Grantor’s Negotiable Collateral;
(j) all
of
such Grantor’s rights in respect of Supporting Obligations;
(k) all
of
such Grantor’s Commercial Tort Claims;
(l) all
of
such Grantor’s money, cash, cash equivalents, or other assets of each such
Grantor that now or hereafter come into the possession, custody, or control
of
any Secured Party;
(m) all
of
the proceeds and products, whether tangible or intangible, of any of the
foregoing, including proceeds of insurance or Commercial Tort Claims covering
or
relating to any or all of the foregoing, and any and all Accounts, Books,
Chattel Paper, Deposit Accounts, Equipment, General Intangibles, Inventory,
Investment Related Property, Negotiable Collateral, Supporting Obligations,
money, or other tangible or intangible property resulting from the sale, lease,
license, exchange, collection, or other disposition of any of the foregoing,
the
proceeds of any award in condemnation with respect to any of the foregoing,
any
rebates or refunds, whether for taxes or otherwise, and all proceeds of any
such
proceeds, or any portion thereof or interest therein, and the proceeds thereof,
and all proceeds of any loss of, damage to, or destruction of the above, whether
insured or not insured, and, to the extent not otherwise included, any
indemnity, warranty, or guaranty payable by reason of loss or damage to, or
otherwise with respect to any of the foregoing (the “Proceeds”).
Without limiting the generality of the foregoing, the term "Proceeds" includes
whatever is receivable or received when Investment Related Property or proceeds
are sold, exchanged, collected, or otherwise disposed of, whether such
disposition is voluntary or involuntary, and includes proceeds of any indemnity
or guaranty payable to any Grantor or any Secured Party from time to time with
respect to any of the Investment Related Property.
3. Security
for Obligations.
This
Agreement and the Security Interests created hereby secure the payment and
performance of the Secured Obligations, whether now existing or arising
hereafter. Without limiting the generality of the foregoing, this Agreement
secures the payment of all amounts which constitute part of the Secured
Obligations and would be owed by Grantors, or any of them, to Secured Parties,
or any of them, but for the fact that they are unenforceable or not allowable
due to the existence of an Insolvency Proceeding involving any Grantor.
4. Grantors
Remain Liable.
Anything herein to the contrary notwithstanding, (a) each of the Grantors shall
remain liable under the contracts and agreements included in the Collateral,
including the Pledged Operating Agreements and the Pledged Partnership
Agreements, to perform all of the duties and obligations thereunder to the
same
extent as if this Agreement had not been executed, (b) the exercise by Secured
Parties, or any of them, of any of the rights hereunder shall not release any
Grantor from any of its duties or obligations under such contracts and
agreements included in the Collateral, and (c) no Secured Party shall have
any
obligation or liability under such contracts and agreements included in the
Collateral by reason of this Agreement, nor shall any Secured Party be obligated
to perform any of the obligations or duties of any Grantors thereunder or to
take any action to collect or enforce any claim for payment assigned hereunder.
Until an Event of Default shall occur and be continuing, except as otherwise
provided in this Agreement or any other Transaction Document, Grantors shall
have the right to possession and enjoyment of the Collateral for the purpose
of
conducting the ordinary course of their respective businesses, subject to and
upon the terms hereof and the other Transaction Documents. Without limiting
the
generality of the foregoing, it is the intention of the parties hereto that
record and beneficial ownership of the Pledged Interests, including all voting,
consensual, and dividend rights, shall remain in the applicable Grantor until
the occurrence of an Event of Default and until any Secured Party shall notify
the applicable Grantor of such Secured Party's exercise of voting, consensual,
or dividend rights with respect to the Pledged Interests pursuant to
Section
15
hereof.
7
5. Representations
and Warranties.
Each
Grantor hereby represents and warrants as follows:
(a) The
exact
legal name of each of the Grantors is set forth on the signature pages of this
Agreement.
(b) Schedule
7
attached
hereto sets forth all Real Property owned or leased by Grantors as of the date
hereof.
(c) As
of the
date hereof, (i) no Grantor has any interest in, or title to, any Copyrights,
Intellectual Property Licenses, Patents, or Trademarks except as set forth
on
Schedules
2, 3, 4
and
6,
respectively, attached hereto, and (ii) none of the Foreign Intellectual
Property is material to the business, properties, assets, liabilities,
operations (including results thereof), condition (financial or otherwise)
or
prospects of any Grantor. This Agreement is effective to create a valid and
continuing Lien on such Copyrights, Intellectual Property Licenses, Patents
and
Trademarks set forth on Schedules
2, 3, 4
and
6,
respectively, and, upon filing of the Copyright Security Agreement with the
United States Copyright Office and filing of the Patent Security Agreement
and
the Trademark Security Agreement with the United State Patent and Trademark
Office, and the filing of appropriate financing statements in the jurisdictions
listed on Schedule
8
hereto,
all action necessary or desirable to perfect the Security Interests under the
laws of the United States of America and Canada in and to each Grantor’s
Patents, Trademarks, or Copyrights has been taken and such perfected Security
Interests are enforceable as such as against any and all creditors of and
purchasers from any Grantor. No Grantor has any interest in any Copyright that
is necessary and material to the operation of such Grantor’s business, except
for those Copyrights identified on Schedule
2
attached
hereto which have been registered with the United States Copyright
Office.
(d) This
Agreement creates a valid security interest in the Collateral of each of
Grantors, to the extent a security interest therein can be created under the
Code and the PPSA, securing the payment of the Secured Obligations. Except
to
the extent a security interest in the Collateral cannot be perfected by the
filing of a financing statement under the Code or the PPSA, all filings and
other actions necessary or desirable to perfect and protect such security
interest have been duly taken or will have been taken upon the filing of
financing statements listing each applicable Grantor, as a debtor, and Secured
Parties, as secured parties, in the jurisdictions listed next to such Grantor’s
name on Schedule
8
attached
hereto. Upon the making of such filings, Secured Parties shall each have a
first
priority perfected security interest (subject only to Permitted Liens) in the
Collateral of each Grantor to the extent such security interest can be perfected
by the filing of a financing statement. All action by any Grantor necessary
to
protect and perfect such security interest on each item of Collateral has been
duly taken. Notwithstanding the foregoing or the provisions of Section
5(c)
hereof,
Grantors do not represent that they have taken, nor shall they be required
to
take, any action (other than the filing of financing statements under the Code
and PPSA) to perfect or record any Security Interest in Foreign Intellectual
Property, except as set forth in Section
6(g)
hereof.
8
(e) (i)
Except for the Security Interests created hereby, such Grantor is and will
at
all times be the sole holder of record and the legal and beneficial owner,
free
and clear of all Liens other than Permitted Liens, of the Pledged Interests
indicated on Schedule
5
as being
owned by such Grantor and, when acquired by such Grantor, any Pledged Interests
acquired after the date hereof; (ii) all of the Pledged Interests are duly
authorized, validly issued, fully paid and nonassessable and the Pledged
Interests constitute or will constitute the percentage of the issued and
outstanding Stock of the Pledged Companies of such Grantor identified on
Schedule
5
hereto;
(iii) such Grantor has the right and requisite authority to pledge the
Investment Related Property pledged by such Grantor to each Secured Party as
provided herein; (iv) all actions necessary or desirable to perfect, establish
the first priority of, or otherwise protect, Secured Parties’ respective Liens
in the Investment Related Collateral, and the proceeds thereof, have been duly
taken, (A) upon the execution and delivery of this Agreement; (B) upon the
taking of possession by any Secured Party of any certificates constituting
the
Pledged Interests, to the extent such Pledged Interests are represented by
certificates, together with undated powers endorsed in blank by the applicable
Grantor; (C) upon the filing of financing statements in the applicable
jurisdiction set forth on Schedule
8
attached
hereto for such Grantor with respect to the Pledged Interests of such Grantor
that are not represented by certificates, and (D) with respect to any Securities
Accounts, upon the delivery of Control Agreements with respect thereto; and
(v)
each Grantor has delivered to and deposited with any Secured Party (or, with
respect to any Pledged Interests created or obtained after the date hereof,
will
deliver and deposit in accordance with Sections
6(a)
and
8
hereof)
all certificates representing the Pledged Interests owned by such Grantor to
the
extent such Pledged Interests are represented by certificates, and undated
powers endorsed in blank with respect to such certificates. None of the Pledged
Interests owned or held by such Grantor has been issued or transferred in
violation of any securities registration, securities disclosure, or similar
laws
of any jurisdiction to which such issuance or transfer may be
subject.
(f) No
consent, approval, authorization, or other order or other action by, and no
notice to or filing with, any Governmental Authority or any other Person is
required (i) for the grant of a Security Interest by such Grantor in and to
the
Collateral pursuant to this Agreement or for the execution, delivery, or
performance of this Agreement by such Grantor, or (ii) for the exercise by
any
Secured Party of the voting or other rights provided in this Agreement with
respect to Investment Related Property or the remedies in respect of the
Collateral pursuant to this Agreement, except (A) as may be required in
connection with such disposition of Investment Related Property by laws
affecting the offering and sale of securities generally and (B) for any consent
that may be required for the assignment of any Intellectual Property License
that expressly provides that such Intellectual Property License is not
assignable (or is not assignable without the consent of the other party to
such
Intellectual Property License).
6. Covenants.
Each
Grantor, jointly and severally, covenants and agrees with each Secured Party
that from and after the date of this Agreement and until the date of termination
of this Agreement in accordance with Section
24
hereof
(but only to the extent the particular assets described in this Section 6
constitute Collateral hereunder):
(a) Possession
of Collateral.
In the
event that any Collateral, including proceeds, is evidenced by or consists
of
Negotiable Collateral, Investment Related Property, or Chattel Paper, and if
and
to the extent that perfection or priority of Secured Parties’ respective
Security Interests is dependent on or enhanced by possession, the applicable
Grantor, immediately upon the request of any Secured Party, shall execute such
other documents and instruments as shall be requested by such Secured Party
or,
if applicable, endorse and deliver physical possession of such Negotiable
Collateral, Investment Related Property, or Chattel Paper to such Secured Party,
together with such undated powers endorsed in blank as shall be requested by
such Secured Party. Without limiting the foregoing, on or before April 30,
2008,
Grantors shall deliver physical possession of all stock certificates evidencing
the Pledged Interests described on Schedule
5
attached
hereto, together with undated powers endorsed in blank with respect thereto
and
in form acceptable to Secured Parties.
9
(b) Chattel
Paper.
(i) Each
Grantor shall take all steps reasonably necessary to grant each Secured Party
control of all Chattel Paper in accordance with the Code and the PPSA and all
“transferable records” as that term is defined in Section 16 of the Uniform
Electronic Purchase Act and Section 201 of the federal Electronic Signatures
in
Global and National Commerce Act as in effect in any relevant jurisdiction;
and
(ii) If
any
Grantor retains possession of any Chattel Paper or instruments (which retention
of possession shall be subject to the extent permitted hereby and by the
Purchase Agreement), promptly upon the request of any Secured Party, such
Chattel Paper and instruments shall be marked with the following legend: “This
writing and the obligations evidenced or secured hereby are subject to the
Security Interests of [names of Secured Parties]”.
(c) Control
Agreements.
(i) Each
Grantor shall, (A) with respect to each Deposit Account of such Grantor
maintained with any bank as of the date hereof, use such Grantor’s commercially
reasonable best efforts to obtain and deliver to Secured Parties, on or before
April 30, 2008, an authenticated Control Agreement from such Grantor and the
bank maintaining such Deposit Account, and (B) with respect to any Deposit
Account established by such Grantor after the date hereof, obtain and deliver
to
Secured Parties, at the time such Deposit Account is established, an
authenticated Control Agreement from such Grantor and the bank with which such
Deposit Account is established; and
(ii) Upon
request of any Secured Party, each Grantor shall obtain authenticated Control
Agreements from each issuer of uncertificated securities, securities
intermediary, or commodities intermediary issuing or holding any financial
assets or commodities to or for any Grantor.
(d) Letter-of-Credit
Rights.
Each
Grantor that is or becomes the beneficiary of a letter of credit shall promptly
(and in any event within 2 Business Days after becoming a beneficiary), notify
Secured Parties thereof and, upon the request by any Secured Party, enter into
a
multi-party agreement with Secured Parties and the issuing or confirming bank
with respect to letter-of-credit rights assigning such letter-of-credit rights
to Secured Parties and directing all payments thereunder to Secured Parties,
all
in form and substance satisfactory to Secured Parties.
(e) Commercial
Tort Claims.
Each
Grantor shall promptly (and in any event within 2 Business Days of receipt
thereof), notify Secured Parties in writing upon incurring or otherwise
obtaining a Commercial Tort Claim after the date hereof and, upon request of
any
Secured Party, promptly amend Schedule
1
to this
Agreement to describe such after-acquired Commercial Tort Claim in a manner
that
reasonably identifies such Commercial Tort Claim, and hereby authorizes the
filing of additional financing statements or amendments to existing financing
statements describing such Commercial Tort Claims, and agrees to do such other
acts or things deemed necessary or desirable by any Secured Party to give
Secured Parties a first priority, perfected security interest in any such
Commercial Tort Claim.
(f) Government
Contracts.
If any
Account or Chattel Paper arises out of a contract or contracts with the United
States of America, the federal government of Canada, or any department, agency,
or instrumentality of either such government, Grantors shall promptly (and
in
any event within 2 Business Days of the creation thereof) notify Secured Parties
thereof in writing and execute any instruments or take any steps reasonably
required by any Secured Party in order that all moneys due or to become due
under such contract or contracts shall be assigned to Secured Parties, and
shall
provide written notice thereof and take all other appropriate actions under
the
Assignment of Claims Act or other applicable law to provide each Secured Party
a
first-priority perfected Security Interest in such contract.
10
(g) Intellectual
Property.
(i) In
the
event any Grantor acquires any interest in any Trademark, Patent, Copyright,
or
Intellectual Property License (including, without limitation, any Foreign
Intellectual property) after the date hereof, Grantors will promptly notify
each
Secured Party thereof;
(ii) Grantors
shall, at their sole cost and expense, execute and deliver to Secured Parties
one or more Copyright Security Agreements, Trademark Security Agreements, Patent
Security Agreements or other appropriate agreements and instruments as may
be
requested by any Secured Party, for recording with the United States Patent
and
Trademark Office, the United States Copyright Office, or any other applicable
Governmental Authority (including, without limitation, Governmental Authorities
outside of the United States of America), to further evidence and perfect
Secured Parties’ respective Liens on (A) all Trademarks, Patents and Copyrights
registered, filed or subsisting under the laws of the United States of America
or Canada, or any Intellectual Property License relating thereto, and (B) to
the
extent requested by any Secured Party, any Foreign Intellectual
Property;
(iii) Each
Grantor shall have the duty (A) to promptly xxx for infringement,
misappropriation, or dilution with respect to its rights in material
Intellectual Property and to recover any and all damages for such infringement,
misappropriation, or dilution, (B) to prosecute diligently any trademark
application or service xxxx application that is part of the material Trademarks
pending as of the date hereof or hereafter until the termination of this
Agreement, (C) to prosecute diligently any patent application that is part
of
the material Patents pending as of the date hereof or hereafter until the
termination of this Agreement, and (D) to take all reasonable and necessary
action to preserve and maintain all of such Grantor’s material Trademarks,
material Patents, material Copyrights, material Intellectual Property Licenses,
and its rights therein, including the filing of applications for renewal,
affidavits of use, affidavits of noncontestability and opposition and
interference and cancellation proceedings. Each Grantor shall promptly file
an
application with the United States Copyright Office for any material Copyright
that has not been registered with the United States Copyright Office. Each
Grantor shall promptly file an application with the United States Patent and
Trademark Office for any material Patent or material Trademark that has not
been
registered with the United States Patent and Trademark Office. Any expenses
incurred in connection with the foregoing shall be borne by the appropriate
Grantor. Each Grantor further agrees not to abandon any material Trademark,
material Patent, material Copyright, or material Intellectual Property License;
(iv) Grantors
acknowledge and agree that Secured Parties shall have no duties with respect
to
the Trademarks, Patents, Copyrights, or Intellectual Property Licenses. Without
limiting the generality of this Section
6(g),
Grantors acknowledge and agree that no Secured Party shall be under any
obligation to take any steps necessary to preserve rights in the Trademarks,
Patents, Copyrights, or Intellectual Property Licenses against any other Person,
but any Secured Party may do so at its option from and after the occurrence
and
during the continuance of an Event of Default, and all expenses incurred in
connection therewith (including reasonable fees and expenses of attorneys and
other professionals) shall be for the sole account of the Grantors and shall
be
deemed to be Secured Obligations.
11
(h) Investment
Related Property.
(i) If
any
Grantor shall receive or become entitled to receive any Pledged Interests after
the date hereof, it shall promptly (and in any event within 2 Business Days
of
receipt thereof) identify such Pledged Interests in a written notice to Secured
Parties;
(ii) All
sums
of money and property paid or distributed in respect of the Investment Related
Property which are received by any Grantor shall be held by the Grantors in
trust for the benefit of Secured Parties segregated from such Grantor’s other
property, and such Grantor shall deliver it forthwith to the Secured Parties
in
the exact form received;
(iii) Each
Grantor shall promptly deliver to Secured Parties a copy of each notice or
other
communication received by it in respect of any Pledged Interests;
(iv) No
Grantor shall make or consent to any material amendment or other modification
or
waiver with respect to any Pledged Interests, Pledged Operating Agreement,
or
Pledged Partnership Agreement, or enter into any agreement or permit to exist
any restriction with respect to any Pledged Interests other than pursuant to
the
Purchase Agreement;
(v) Each
Grantor agrees that it will cooperate with Secured Parties in obtaining all
necessary approvals and making all necessary filings under federal, state,
local, or foreign law in connection with the Security Interests on the
Investment Related Property or any sale or transfer thereof; and
(vi) As
to all
limited liability company or partnership interests issued under any Pledged
Operating Agreement or Pledged Partnership Agreement, each Grantor hereby
represents, warrants and covenants that the Pledged Interests issued pursuant
to
such agreement (A) are not and shall not be dealt in or traded on securities
exchanges or in securities markets, (B) do not and will not constitute
investment company securities, and (C) are not and will not be held by such
Grantor in a securities account. In addition, none of the Pledged Operating
Agreements, the Pledged Partnership Agreements, or any other agreements
governing any of the Pledged Interests issued under any Pledged Operating
Agreement or Pledged Partnership Agreement, provide or shall provide that such
Pledged Interests are securities governed by Article 8 of the Uniform Commercial
Code as in effect in any relevant jurisdiction.
(i) Transfers
and Other Liens.
Grantors shall not (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the
Collateral, except as expressly permitted by this Agreement and the other
Transaction Documents, or (ii) create or permit to exist any Lien upon or with
respect to any of the Collateral of any of Grantors, except for Permitted Liens.
The inclusion of Proceeds in the Collateral shall not be deemed to constitute
consent by any Secured Party to any sale or other disposition of any of the
Collateral except as expressly permitted in this Agreement or the other
Transaction Documents.
(j) Other
Actions as to Any and All Collateral.
Each
Grantor shall promptly (and in any event within 2 Business Days of acquiring
or
obtaining such Collateral) notify Secured Parties in writing upon (i) acquiring
or otherwise obtaining any Collateral after the date hereof consisting of
Trademarks, Patents, registered Copyrights, Intellectual Property Licenses,
Investment Related Property, Chattel Paper (electronic, tangible or otherwise),
documents (as defined in Article 9 of the Code), promissory notes (as defined
in
the Code, or instruments (as defined in the Code) or (ii) any amount payable
under or in connection with any of the Collateral being or becoming evidenced
after the date hereof by any Chattel Paper, documents, promissory notes, or
instruments and, in each such case upon the request of any Secured Party,
promptly execute such other documents, or if applicable, deliver such Chattel
Paper, other documents or certificates evidencing any Investment Related
Property and do such other acts or things deemed necessary or desirable by
any
Secured Party to protect Secured Parties’ respective Security Interests
therein.
12
(k) Certain
Acknowledgments. Grantors
will use their best efforts to obtain, on or before April 30, 2008, from any
creditors designated by any Secured Party with registrations under the PPSA
a
form of non-interest letter and/or acknowledgement and confirmation, in form
and
substance acceptable to Secured Parties, confirming that such creditors (i)
have
been granted security relating only to specific assets (and, for certainty,
not
general security) described in such letter or confirmation (the "Specified
Assets"),
and
(ii) will not rely on the existing registrations to perfect a security interest
in any assets of Grantors other than the Specified Assets.
7. Relation
to Other Transaction Documents.
The
provisions of this Agreement shall be read and construed with the Transaction
Documents referred to below in the manner so indicated.
(a) Purchase
Agreement and Notes.
In the
event of any conflict between any provision in this Agreement and a provision
in
the Purchase Agreement or Notes, such provision of the Purchase Agreement or
Notes shall control, except to the extent the applicable provision in this
Agreement is more restrictive with respect to the rights of Grantors or imposes
more burdensome or additional obligations on Grantors, in which event the
applicable provision in this Agreement shall control.
(b) Patent,
Trademark, Copyright Security Agreements.
The
provisions of the Copyright Security Agreements, Trademark Security Agreements,
and Patent Security Agreements are supplemental to the provisions of this
Agreement, and nothing contained in the Copyright Security Agreements, Trademark
Security Agreements or the Patent Security Agreements shall limit any of the
rights or remedies of any Secured Party hereunder.
8. Further
Assurances.
(a) Each
Grantor agrees that from time to time, at its own expense, such Grantor will
promptly execute and deliver all further instruments and documents, and take
all
further action, that may be necessary or that any Secured Party may reasonably
request, in order to perfect and protect the Security Interests granted or
purported to be granted hereby or to enable any Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any of the Collateral.
(b) Each
Grantor authorizes the filing by any Secured Party of financing or continuation
statements, or amendments thereto, and such Grantor will execute and deliver
to
such Secured Party such other instruments or notices, as may be necessary or
as
such Secured Party may reasonably request, in order to perfect and preserve
the
Security Interests granted or purported to be granted hereby.
(c) Each
Grantor authorizes any Secured Party at any time and from time to time to file,
transmit, or communicate, as applicable, financing statements and amendments
(i)
describing the Collateral as “all personal property of debtor” or “all assets of
debtor” or words of similar effect, (ii) describing the Collateral as being of
equal or lesser scope or with greater detail, or (iii) that contain any
information required by part 5 of Article 9 of the Code for the sufficiency
or
filing office acceptance. Each Grantor also hereby ratifies any and all
financing statements or amendments previously filed by any Secured Party in
any
jurisdiction.
13
(d) Each
Grantor acknowledges that it is not authorized to file any financing statement
or amendment or termination statement with respect to any financing statement
filed in connection with this Agreement without the prior written consent of
each Secured Party affected thereby, subject to such Grantor's rights under
Section 9-509(d)(2) of the Code.
9. Secured
Parties’ Right to Perform Contracts, Exercise Rights, etc.
Upon
the occurrence and during the continuance of an Event of Default, any Secured
Party (a) may proceed to perform any and all of the obligations of any Grantor
contained in any contract, lease, or other agreement and exercise any and all
rights of any Grantor therein contained as fully as such Grantor itself could,
(b) shall have the right to use any Grantor’s rights under Intellectual Property
Licenses in connection with the enforcement of the Secured Party’s rights
hereunder, including the right to prepare for sale and sell any and all
Inventory and Equipment now or hereafter owned by any Grantor and now or
hereafter covered by such licenses, and (c) shall have the right to request
that
any Stock that is pledged hereunder be registered in the name of such Secured
Party or any of its nominees.
10. Secured
Parties Appointed Attorney-in-Fact.
Each
Grantor, on behalf of itself and each New
Subsidiary
of such Grantor, hereby irrevocably appoints each Secured Party as the
attorney-in-fact of such Grantor and each such New
Subsidiary.
In the event any Grantor or New
Subsidiary
fails to execute or deliver in a timely manner any Transaction Document which
such Grantor or New
Subsidiary
now or at any time hereafter is required to execute or deliver pursuant to
the
terms of the Purchase Agreement or any other Transaction Document, each Secured
Party shall have full authority in the place and stead of such Grantor or
New
Subsidiary,
and in the name of such Grantor, such New
Subsidiary
or otherwise, to execute and deliver each such Transaction Document. Without
limitation of the foregoing, each Secured Party shall have full authority in
the
place and stead of each Grantor and each New
Subsidiary,
and in the name of any such Grantor, any such New
Subsidiary
or otherwise, at such time as an Event of Default has occurred and is
continuing, to take any action and to execute any instrument which such Secured
Party may reasonably deem necessary or advisable to accomplish the purposes
of
this Agreement, including:
(a) to
ask,
demand, collect, xxx for, recover, compromise, receive and give acquittance
and
receipts for moneys due and to become due under or in connection with any
Collateral of such Grantor or New
Subsidiary;
(b) to
receive and open all mail addressed to such Grantor or New
Subsidiary
and to notify postal authorities to change the address for the delivery of
mail
to such Grantor or New
Subsidiary
to that of such Secured Party;
(c) to
receive, indorse, and collect any drafts or other instruments, documents,
Negotiable Collateral or Chattel Paper;
(d) to
file
any claims or take any action or institute any proceedings which such Secured
Party may deem necessary or desirable for the collection of any of the
Collateral of such Grantor or New
Subsidiary
or otherwise to enforce the rights of any Secured Party with respect to any
of
the Collateral;
(e) to
repair, alter, or supply goods, if any, necessary to fulfill in whole or in
part
the purchase order of any Person obligated to such Grantor or New
Subsidiary
in respect of any Account of such Grantor or New
Subsidiary;
(f) to
use
any labels, Patents, Trademarks, trade names, URLs, domain names, industrial
designs, Copyrights, advertising matter or other industrial or intellectual
property rights, in advertising for sale and selling Inventory and other
Collateral and to collect any amounts due under Accounts, contracts or
Negotiable Collateral of such Grantor or New
Subsidiary;
and
14
(g) such
Secured Party shall have the right, but shall not be obligated, to bring suit
in
its own name to enforce the Trademarks, Patents, Copyrights and Intellectual
Property Licenses and, if such Secured Party shall commence any such suit,
the
appropriate Grantor or New
Subsidiary
shall, at the request of such Secured Party, do any and all lawful acts and
execute any and all proper documents reasonably required by such Secured Party
in aid of such enforcement.
To
the
extent permitted by law, each Grantor hereby ratifies, for itself and each
of
its New
Subsidiaries,
all that such attorney-in-fact shall lawfully do or cause to be done by virtue
hereof. This power of attorney is coupled with an interest and shall be
irrevocable until this Agreement is terminated.
11. Secured
Parties May Perform.
If any
of Grantors fails to perform any agreement contained herein, any Secured Party
may itself perform, or cause performance of, such agreement, and the reasonable
expenses of such Secured Party incurred in connection therewith shall be
payable, jointly and severally, by Grantors.
12. Secured
Parties’ Duties; Bailee for Perfection.
The
powers conferred on Secured Parties hereunder are solely to protect the Secured
Parties respective interests in the Collateral and shall not impose any duty
upon any Secured Party in favor of any Grantor or any other Secured Party to
exercise any such powers. Except for the safe custody of any Collateral in
its
actual possession and the accounting for moneys actually received by it
hereunder, no Secured Party shall have any duty to any Grantor or any other
Secured Party as to any Collateral or as to the taking of any necessary steps
to
preserve rights against prior parties or any other rights pertaining to any
Collateral. A Secured Party shall be deemed to have exercised reasonable care
in
the custody and preservation of any Collateral in its actual possession if
such
Collateral is accorded treatment substantially equal to that which such Secured
Party accords its own property. Each Secured Party agrees that, with respect
to
any Collateral at any time or times in its possession and in which any other
Secured Party has a Lien, the Secured Party in possession of any such Collateral
shall be the bailee of each other Secured Party solely for purposes of
perfecting (to the extent not otherwise perfected) each other Secured Party’s
Lien in such Collateral, provided that no Secured Party shall be obligated
to
obtain or retain possession of any such Collateral. Without limiting the
generality of the foregoing, Secured Parties and Grantors hereby agree that
any
Secured Party that is in possession of any Collateral at such time as the
Secured Obligations owing to such Secured Party have been paid in full may
re-deliver such Collateral to the applicable Grantor or, if requested by any
Secured Party prior such re-delivery, may deliver such Collateral (unless
otherwise restricted by applicable law or court order and subject in all events
to the receipt of an indemnification of all liabilities arising from such
delivery) to the requesting Secured Party, without recourse to or representation
or warranty by the Secured Party in such possession.
13. Collection
of Accounts, General Intangibles and Negotiable Collateral.
At any
time upon the occurrence and during the continuation of an Event of Default,
any
Secured Party may (a) notify Account Debtors of any Grantor that the Accounts,
General Intangibles, Chattel Paper or Negotiable Collateral have been assigned
to such Secured Party or that such Secured Party has a security interest
therein, and (b) collect the Accounts, General Intangibles and Negotiable
Collateral directly, and any collection costs and expenses shall constitute
part
of such Grantor's Secured Obligations under the Purchase Agreement.
15
14. Disposition
of Pledged Interests by Secured Party.
None of
the Pledged Interests existing as of the date of this Agreement are, and none
of
the Pledged Interests hereafter acquired on the date of acquisition thereof
will
be, registered or qualified under the various federal, state or other securities
laws of the United States or any other jurisdiction, and disposition thereof
after an Event of Default may be restricted to one or more private (instead
of
public) sales in view of the lack of such registration. Each Grantor understands
that in connection with such disposition, any Secured Party may approach only
a
restricted number of potential purchasers and further understands that a sale
under such circumstances may yield a lower price for the Pledged Interests
than
if the Pledged Interests were registered and qualified pursuant to federal,
state and other securities laws and sold on the open market. Each Grantor,
therefore, agrees that: (a) if a Secured Party shall, pursuant to the terms
of
this Agreement, sell or cause the Pledged Interests or any portion thereof
to be
sold at a private sale, such Secured Party shall have the right to rely upon
the
advice and opinion of any nationally recognized brokerage or investment firm
(but shall not be obligated to seek such advice and the failure to do so shall
not be considered in determining the commercial reasonableness of such action)
as to the best manner in which to offer the Pledged Interest or any portion
thereof for sale and as to the best price reasonably obtainable at the private
sale thereof; and (b) such reliance shall be conclusive evidence that such
Secured Party has handled the disposition in a commercially reasonable
manner.
15. Voting
Rights.
(a) Upon
the
occurrence and during the continuation of an Event of Default, (i) any Secured
Party may, at its option, and with 2 Business Days prior notice to any Grantor,
and in addition to all rights and remedies available to Secured Parties under
any other agreement, at law, in equity, or otherwise, exercise all voting
rights, and all other ownership or consensual rights in respect of the Pledged
Interests owned by such Grantor, but under no circumstances is any Secured
Party
obligated by the terms of this Agreement to exercise such rights, and (ii)
if
such Secured Party duly exercises its right to vote any of such Pledged
Interests, each Grantor hereby appoints such Secured Party, such Grantor's
true
and lawful attorney-in-fact and IRREVOCABLE PROXY to vote such Pledged Interests
in any manner that such Secured Party deems advisable for or against all matters
submitted or which may be submitted to a vote of shareholders, partners or
members, as the case may be. The power-of-attorney granted hereby is coupled
with an interest and shall be irrevocable.
(b) For
so
long as any Grantor shall have the right to vote the Pledged Interests owned
by
it, such Grantor covenants and agrees that it will not, without the prior
written consent of Secured Parties, vote or take any consensual action with
respect to such Pledged Interests which would materially adversely affect the
rights of Secured Parties exercising the voting rights owned by such Grantor
or
the value of the Pledged Interests.
16. Remedies.
Upon
the occurrence and during the continuance of an Event of Default:
(a) Any
Secured Party may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein, in the other Transaction Documents,
or
otherwise available to it, all the rights and remedies of a secured party on
default under the Code, the PPSA or any other applicable law. Without limiting
the generality of the foregoing, each Grantor expressly agrees that, in any
such
event, any Secured Party without any demand, advertisement, or notice of any
kind (except a notice specified below of time and place of public or private
sale) to or upon any of Grantors or any other Person (all and each of which
demands, advertisements and notices are hereby expressly waived to the maximum
extent permitted by the Code or by any other applicable law), may take immediate
possession of all or any portion of the Collateral and (i) require Grantors
to,
and each Grantor hereby agrees that it will at its own expense and upon request
of such Secured Party forthwith, assemble all or part of the Collateral as
directed by such Secured Party and make it available to such Secured Party
at
one or more locations where such Grantor regularly maintains Inventory, and
(ii)
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of such Secured
Party’s offices or elsewhere, for cash, on credit, and upon such other terms as
such Secured Party may deem commercially reasonable. Each Grantor agrees that,
to the extent notice of sale shall be required by law, at least 10 days notice
to any of Grantors of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification
and specifically such notice shall constitute a reasonable “authenticated
notification of disposition” within the meaning of Section 9-611 of the Code. No
Secured Party shall be obligated to make any sale of Collateral regardless
of
notice of sale having been given. Any Secured Party may adjourn any public
or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
16
(b) Any
Secured Party may seek the appointment of a receiver, receiver-manager or keeper
(a “Receiver”) under the laws of Canada or any Province thereof to take
possession of all or any portion of the Collateral or to operate same and,
to
the maximum extent permitted by law, may seek the appointment of such a Receiver
without the requirement of prior notice or a hearing. Any such Receiver shall,
so far as concerns responsibility for his/her acts, be deemed agent of the
applicable Grantor and not any Secured Party, and no Secured Party shall be
in
any way responsible for any misconduct, negligence or non-feasance on the part
of any such Receiver, his/her servants or employees. Subject to the provisions
of the instrument appointing him/her, any such Receiver shall have power to
take
possession of Collateral, to preserve Collateral or its value, to carry on
or
concur in carrying on all or any part of the business of the applicable Grantor,
and to sell, lease, license or otherwise dispose of or concur in selling,
leasing, licensing or otherwise disposing of Collateral. To facilitate the
foregoing powers, any such Receiver may, to the exclusion of all others,
including Grantors, enter upon, use and occupy all premises owned or occupied
by
Grantors wherein Collateral may be situated, maintain Collateral upon such
premises, borrow money on a secured or unsecured basis, and use Collateral
directly in carrying on Grantors’ business or as security for loans or advances
to enable the Receiver to carry on Grantors’ business or otherwise, as such
Receiver shall, in its discretion, determine. Except as may be otherwise
directed by a Secured Party, all money received from time to time by such
Receiver in carrying out his/her appointment shall be received in trust for
and
paid over to Secured Parties. Every such Receiver may, in the discretion of
any
Secured Party, be vested with all or any of the rights and powers of any Secured
Party. Any Secured Party may, either directly or through its nominees, exercise
any or all powers and rights given to a Receiver by virtue of the foregoing
provisions of this paragraph.
(c) Each
Secured Party is hereby granted a license or other right to use, without
liability for royalties or any other charge, each Grantor’s labels, Patents,
Copyrights, rights of use of any name, trade secrets, trade names, Trademarks,
service marks and advertising matter, URLs, domain names, industrial designs,
other industrial or intellectual property or any property of a similar nature,
whether owned by any of Grantors or with respect to which any of Grantors have
rights under license, sublicense, or other agreements (but only to the extent
(i) such license, sublicense or agreement does not prohibit such use by such
Secured Party and (ii) such Grantor will not be in default under such license,
sublicense, or other agreement as a result of such use by such Secured Party),
as it pertains to the Collateral, in preparing for sale, advertising for sale
and selling any Collateral, and each Grantor’s rights under all licenses and all
franchise agreements shall inure to the benefit of such Secured
Party.
(d) Any
cash
held by any Secured Party as Collateral and all proceeds received by any Secured
Party in respect of any sale of, collection from, or other realization upon
all
or any part of the Collateral shall be applied against the Secured Obligations
in the order set forth in Section 17 hereof. In the event the proceeds of
Collateral are insufficient to satisfy all of the Secured Obligations in full,
each Grantor shall remain jointly and severally liable for any such
deficiency.
(e) Each
Grantor hereby acknowledges that the Secured Obligations arose out of a
commercial transaction, and agrees that if an Event of Default shall occur
and
be continuing any Secured Party shall have the right to an immediate writ of
possession without notice of a hearing. Without limitation of Section 16(b)
hereof, each Secured Party shall have the right to the appointment of a receiver
for the properties and assets of each of Grantors, and each Grantor hereby
consents to such rights and such appointment and hereby waives any objection
such Grantors may have thereto or the right to have a bond or other security
posted by any Secured Party.
17
(f) Notwithstanding
anything in this Agreement to the contrary, each Secured Party agrees that
it
will not exercise any remedy provided for under this Agreement with respect
to
all or any portion of the Collateral unless such Secured Party is a Permitted
Secured Party (provided that the foregoing shall not prevent any Secured Party
from commencing or participating in any Insolvency Proceeding or taking any
action (other than with respect to the Collateral) to enforce the payment or
performance of any Grantors’ obligations under any of the Notes, Guaranties or
other Transaction Documents). This Section 16(f) is not intended to confer
any
rights or benefits upon Grantors, or any of them, or any other Person except
Secured Parties, and no Person (including any or all Grantors) other than
Secured Parties shall have any right to enforce any of the provisions of
this Section 16(f). As between Grantors, or any of them, and any Secured
Party, any action that such Secured Party may take under this Agreement shall
be
conclusively presumed to have been authorized and approved by the other Secured
Parties.
17. Priority
of Liens; Application of Proceeds of Collateral.
Each
Secured Party hereby acknowledges and agrees that, notwithstanding the time
or
order of the filing of any financing statement or other registration or document
with respect to the Collateral and the Security Interests, or any provision
of
this Agreement, any other Security Document, the Code, the PPSA or other
applicable law, solely as amongst the Secured Parties, the separate Security
Interests of the Secured Parties shall have the same rank and priority;
provided, that, the foregoing shall not apply to any Security Interest of a
Secured Party that is void or voidable as a matter of law. In furtherance
thereof, all proceeds of Collateral received by any Secured Party shall be
applied as follows:
(a) first,
ratably
to pay any expenses due to any of the Secured Parties (including, without
limitation, the reasonable costs and expenses paid or incurred by any Secured
Party to correct any default under or enforce any provision of the Transaction
Documents, or after the occurrence of any Event of Default in gaining possession
of, maintaining, handling, preserving, storing, shipping, selling, preparing
for
sale, or advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated) or indemnities then due to any
of
the Secured Parties under the Transaction Documents, until paid in
full;
(b) second,
ratably
to pay any fees or premiums then due to any of the Secured Parties under the
Transaction Documents, until paid in full;
(c) third,
ratably
to pay interest due in respect of the Secured Obligations then due to any of
the
Secured Parties, until paid in full;
(d) fourth,
ratably
to pay the principal amount of all Secured Obligations then due to any of the
Secured Parties, until paid in full;
(e) fifth,
ratably
to pay any other Secured Obligations then due to any of the Secured Parties;
and
(f) sixth,
to
Grantors or such other Person entitled thereto under applicable
law.
18
18. Remedies
Cumulative.
Each
right, power, and remedy of any Secured Party as provided for in this Agreement
or in any Transaction Document or now or hereafter existing at law or in equity
or by statute or otherwise shall be cumulative and concurrent and shall be
in
addition to every other right, power, or remedy provided for in this Agreement
or in the Transaction Documents or now or hereafter existing at law or in equity
or by statute or otherwise, and the exercise or beginning of the exercise by
any
Secured Party, of any one or more of such rights, powers, or remedies shall
not
preclude the simultaneous or later exercise by such Secured Party of any or
all
such other rights, powers, or remedies.
19. Marshaling.
No
Secured Party shall be required to marshal any present or future collateral
security (including but not limited to the Collateral) for, or other assurances
of payment of, the Secured Obligations or any of them or to resort to such
collateral security or other assurances of payment in any particular order,
and
all of its rights and remedies hereunder and in respect of such collateral
security and other assurances of payment shall be cumulative and in addition
to
all other rights and remedies, however existing or arising. To the extent that
it lawfully may, each Grantor hereby agrees that it will not invoke any law
relating to the marshaling of collateral which might cause delay in or impede
the enforcement of any Secured Party’s rights and remedies under this Agreement
or under any other instrument creating or evidencing any of the Secured
Obligations or under which any of the Secured Obligations is outstanding or
by
which any of the Secured Obligations is secured or payment thereof is otherwise
assured, and, to the extent that it lawfully may, each Grantor hereby
irrevocably waives the benefits of all such laws.
20. Acknowledgment.
(a) Each
Secured Party hereby agrees and acknowledges that no other Secured Party has
agreed to act for it as an administrative or collateral agent, and each Secured
Party is and shall remain solely responsible for the attachment, perfection
and
priority of all Liens created by this Agreement or any other Security Document
in favor of such Secured Party. No Secured Party shall have by reason of
this Agreement or any other Transaction Document an agency or fiduciary
relationship with any other Secured Party. No Secured Party (which term, as
used
in this sentence, shall include reference to each Secured Party’s officers,
directors, employees, attorneys, agents and affiliates and to the officers,
directors, employees, attorneys and agents of such Secured Party’s affiliates)
shall: (i) have any duties or responsibilities except those expressly set
forth in this Agreement and the other Security Documents or (ii) be
required to take, initiate or conduct any enforcement action (including any
litigation, foreclosure or collection proceedings hereunder or under any of
the
other Security Documents). Without limiting the foregoing, no Secured Party
shall have any right of action whatsoever against any other Secured Party as
a
result of such Secured Party acting or refraining from acting hereunder or
under
any of the Security Documents except as a result and to the extent of losses
caused by such Secured Party’s actual gross negligence or
willful misconduct (it being understood and agreed by each Secured Party
that the delivery by any Significant Secured Party of one or more Veto Notices
shall not be deemed to be or construed as gross negligence or willful misconduct
on the part of the Secured Party delivering any such Veto Notice). No Secured
Party assumes any responsibility for any failure or delay in performance or
breach by any Grantor or any Secured Party of its obligations under this
Agreement or any other Transaction Document. No Secured Party makes to any
other Secured Party any express or implied warranty, representation or guarantee
with respect to any Secured Obligations, Collateral, Transaction Document or
Grantor. No Secured Party nor any of its officers, directors, employees,
attorneys or agents shall be responsible to any other Secured Party or any
of
its officers, directors, employees, attorneys or agents for: (i) any
recitals, statements, information, representations or warranties contained
in
any of the Transaction Documents or in any certificate or other document
furnished pursuant to the terms hereof; (ii) the execution, validity,
genuineness, effectiveness or enforceability of any of the Transaction
Documents; (iii) the validity, genuineness, enforceability, collectibility,
value, sufficiency or existence of any Collateral, or the attachment, perfection
or priority of any Lien therein; or (iv) the assets, liabilities, financial
condition, results of operations, business, creditworthiness or legal status
of
any Grantor or any Account Debtor. No Secured Party nor any of its officers,
directors, employees, attorneys or agents shall have any obligation to any
other
Secured Party to ascertain or inquire into the existence of any default or
Event
of Default, the observance or performance by any Grantor of any of the
duties or agreements of such Grantor under any of the Transaction Documents
or
the satisfaction of any conditions precedent contained in any of the Transaction
Documents.
19
(b) Each
Secured Party hereby acknowledges and represents that it has, independently
and
without reliance upon any other Secured Party, and based upon such documents,
information and analyses as it has deemed appropriate, made its own credit
analysis of each Grantor and its own decision to enter into the Transaction
Documents and to purchase Notes and Warrants, and each Secured Party has
made such inquiries concerning the Transaction Documents, the Collateral and
each Grantor as such Secured Party feels necessary and appropriate, and has
taken such care on its own behalf as would have been the case had it entered
into the Transaction Documents without any other Secured Party. Each Secured
Party hereby further acknowledges and represents that the other Secured Parties
have not made any representations or warranties to it concerning any Grantor,
any of the Collateral or the legality, validity, sufficiency or enforceability
of any of the Transaction Documents. Each Secured Party also hereby acknowledges
that it will, independently and without reliance upon the other Secured Parties,
and based upon such financial statements, documents and information as it deems
appropriate at the time, continue to make and rely upon its own credit decisions
in taking or refraining to take any other action under this Agreement or
the Transaction Documents. No Secured Party shall have any duty or
responsibility to provide any other Secured Party with any notices, reports
or
certificates furnished to such Secured Party by any Grantor or any credit or
other information concerning the affairs, financial condition, business or
assets of any Grantor (or any of its affiliates) which may come into possession
of such Secured Party.
21. Indemnity
and Expenses.
(a) Each
Grantor agrees to indemnify all Secured Parties from and against all claims,
lawsuits and liabilities (including reasonable attorneys’ fees) arising out of
or resulting from this Agreement (including enforcement of this Agreement)
or
any other Transaction Document, except claims, losses or liabilities resulting
from the gross negligence or willful misconduct of the party seeking
indemnification as determined by a final non-appealable order of a court of
competent jurisdiction. This provision shall survive the termination of this
Agreement and the Transaction Documents and the repayment of the Secured
Obligations.
(b) Grantors,
jointly and severally, shall, upon demand, pay to each Secured Party all of
the
costs and expenses which such Secured Party may incur in connection with (i)
the
administration of this Agreement, (ii) the custody, preservation, use or
operation of, or, upon an Event of Default, the sale of, collection from, or
other realization upon, any of the Collateral in accordance with this Agreement
and the Transaction Documents, (iii) the exercise or enforcement of any of
the
rights of such Secured Party hereunder or (iv) the failure by any Grantor to
perform or observe any of the provisions hereof.
22. Merger,
Amendments; Etc.
THIS
AGREEMENT, TOGETHER WITH THE OTHER PURCHASE DOCUMENTS, REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No waiver of any provision of this
Agreement, and no consent to any departure by any of Grantors herefrom, shall
in
any event be effective unless the same shall be in writing and signed by each
Secured Party, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No amendment
of
any provision of this Agreement shall be effective unless the same shall be
in
writing and signed by each Secured Party and each of Grantors to which such
amendment applies.
20
23. Addresses
for Notices.
All
notices and other communications provided for hereunder (a) shall be given
in
the form and manner set forth in the Purchase Agreement and (b) shall be
delivered, (i) in the case of notice to any Grantor, by delivery of such notice
to Parent at Parent’s address specified in the Purchase Agreement or at such
other address as shall be designated by Parent in a written notice to each
of
the Secured Parties, and (ii) in the case of notice to any Secured Party, by
delivery of such notice to such Secured Party at its address specified in the
Purchase Agreement or at such other address as shall be designated by such
Secured Party in a written notice to Parent and each other Secured
Party.
24. Separate,
Continuing Security Interests; Assignments under Transaction
Documents.
This
Agreement shall create a separate, continuing security interest in the
Collateral in favor of each Secured Party and shall (a) remain in full force
and
effect until the Secured Obligations have been paid in full in cash in
accordance with the provisions of the Transaction Documents, (b) be binding
upon
each of Grantors, and their respective successors and assigns, and (c) inure
to
the benefit of, and be enforceable by, the Secured Parties and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Secured Party may, in accordance with the provisions
of the Transaction Documents, assign or otherwise transfer all or any portion
of
its rights and obligations under the Transaction Documents to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Secured Party herein or otherwise. Upon payment
in full in cash of the Secured Obligations in accordance with the provisions
of
the Transaction Documents,
the
Security Interests granted hereby shall terminate and all rights to the
Collateral shall revert to Grantors or any other Person entitled thereto. At
such time, each Secured Party will authorize the filing of appropriate
termination statements to terminate such Security Interests. No transfer or
renewal, extension, assignment, or termination of this Agreement or of the
Purchase Agreement, any other Transaction Document, or any other instrument
or
document executed and delivered by any Grantor to any Secured Party nor any
additional loans made by any Secured Party to any Grantor, nor the taking of
further security, nor the retaking or re-delivery of the Collateral to Grantors,
or any of them, by any Secured Party, nor any other act of Secured Parties,
or
any of them, shall release any of Grantors from any obligation, except a release
or discharge executed in writing by all Secured Parties. No Secured Party shall
by any act, delay, omission or otherwise, be deemed to have waived any of its
rights or remedies hereunder, unless such waiver is in writing and signed by
such Secured Party and then only to the extent therein set forth. A waiver
by
any Secured Party of any right or remedy on any occasion shall not be construed
as a bar to the exercise of any such right or remedy which such Secured Party
would otherwise have had on any other occasion.
25. Governing
Law; Jurisdiction; Service of Process; Jury Trial.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper; provided,
however,
that
any suit seeking enforcement against any Collateral or other property may be
brought, at any Secured Party’s option, in the courts of any jurisdiction where
such Secured Party elects to bring such action or where such Collateral or
other
property may be found. Each party hereby irrevocably waives personal service
of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Without limitation
of
the foregoing, each Grantor other than Parent hereby irrevocably appoints Parent
as such Grantor’s agent for purposes of receiving and accepting any service of
process hereunder or under any of the other Security Documents. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
21
26. Miscellaneous.
(a) This
Agreement may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall
be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement. Delivery of an executed counterpart
of this Agreement by telefacsimile or other electronic method of transmission
shall be equally as effective as delivery of an original executed counterpart
of
this Agreement. Any party delivering an executed counterpart of this Agreement
by telefacsimile or other electronic method of transmission also shall deliver
an original executed counterpart of this Agreement but the failure to deliver
an
original executed counterpart shall not affect the validity, enforceability,
and
binding effect of this Agreement. The foregoing shall apply to each other
Security Document mutatis
mutandis.
(b) Any
provision of this Agreement which is prohibited or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in that jurisdiction or affecting
the validity or enforceability of such provision in any other
jurisdiction.
(c) Headings
used in this Agreement are for convenience only and shall not be used in
connection with the interpretation of any provision hereof.
(d) The
pronouns used herein shall include, when appropriate, either gender and both
singular and plural, and the grammatical construction of sentences shall conform
thereto.
(e) Unless
the context of this Agreement or any other Transaction Document clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the terms “includes” and “including” are not
limiting, and the term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase “and/or.” The words “hereof,” “herein,”
“hereby,” “hereunder,” and similar terms in this Agreement or any other
Transaction Document refer to this Agreement or such other Transaction Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Transaction Document, as the case may be. Section,
subsection, clause, schedule, and exhibit references herein are to this
Agreement unless otherwise specified. Any reference in this Agreement or in
any
other Transaction Document to any agreement, instrument, or document shall
include all alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements, thereto and
thereof, as applicable (subject to any restrictions on such alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements set forth herein). Any reference herein
or in any other Transaction Document to the satisfaction or repayment in full
of
the Secured Obligations shall mean the repayment in full in cash of all Secured
Obligations other than unasserted contingent indemnification Secured
Obligations. Any reference herein to any Person shall be construed to include
such Person’s successors and assigns. Any requirement of a writing contained
herein or in any other Transaction Document shall be satisfied by the
transmission of a Record and any Record so transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.
22
IN
WITNESS WHEREOF, the undersigned parties hereto have executed this Agreement
by
and through their duly authorized officers, as of the day and year first above
written.
GRANTORS:
|
GENEREX
BIOTECHNOLOGY CORPORATION, a Delaware corporation
|
||
By:
|
/s/
Xxxx X. Xxxxx
|
||
Name:
|
Xxxx
X. Xxxxx
|
||
Title:
|
Chief
Financial Officer
|
||
By:
|
/s/
Xxxx X. Xxxxxxxx
|
||
Name:
|
Xxxx
X. Xxxxxxxx
|
||
Title:
|
Executive
Vice President, General Counsel
|
||
ANTIGEN
EXPRESS, INC., a Delaware corporation
|
|||
By:
|
/s/
Xxxx X. Xxxxx
|
||
Name:
|
Xxxx
X. Xxxxx
|
||
Title:
|
Director
|
||
GENEREX
PHARMACEUTICALS (USA) LLC, a North Carolina limited liability
company
|
|||
By:
|
/s/
Xxxx X. Xxxxxxxx
|
||
Name:
|
Xxxx
X. Xxxxxxxx
|
||
Title:
|
Sole
Manager
|
||
GENEREX
MARKETING & DISTRIBUTION INC., an Ontario
corporation
|
|||
By:
|
/s/
Xxxx X. Xxxxx
|
||
Name:
|
Xxxx
X. Xxxxx
|
||
Title:
|
Director
|
||
GENEREX
PHARMACEUTICALS INC., an Ontario corporation
|
|||
By:
|
/s/
Xxxx X. Xxxxx
|
||
Name:
|
Xxxx
X. Xxxxx
|
||
Title:
|
Secretary-Treasurer
|
23
1097346
ONTARIO INC., an Ontario corporation
|
|||
By:
|
/s/
Xxxx X. Xxxxx
|
||
Name:
|
Xxxx
X. Xxxxx
|
||
Title:
|
Secretary-Treasurer
|
||
GENEREX (BERMUDA), INC., a corporation existing pursuant
to the Bermuda Companies Act
|
|||
By:
|
/s/
Xxxx X. Xxxxxxxx
|
||
Name:
|
Xxxx
X. Xxxxxxxx
|
||
Title:
|
Director
|
SECURED
PARTIES:
|
CRANSHIRE
CAPITAL, L.P.
|
||
By:
|
Downsview
Capital, Inc.
|
||
Its:
|
General
Partner
|
||
By:
|
/s/
Xxxxxxxx X. Xxxxx
|
||
Name:
|
Xxxxxxxx
X. Xxxxx
|
||
Title:
|
President
|
||
SMITHFIELD
FIDUCIARY LLC
|
|||
By:
|
/s/
Xxxx X. Chill
|
||
Name:
|
Xxxx
X. Chill
|
||
Title:
|
Authorized
Signatory
|
||
IROQUOIS
MASTER FUND LTD.
|
|||
By:
|
/s/
Xxxxxx Xxxxxxxxx
|
||
Name:
|
Xxxxxx
Xxxxxxxxx
|
||
Title:
|
Authorized
Signatory
|
||
IROQUOIS
CAPITAL OPPORTUNITY FUND L.P.
|
|||
By:
|
/s/
Xxxxxx Xxxxxxxxx
|
||
Name:
|
Xxxxxx
Xxxxxxxxx
|
||
Title:
|
Authorized
Signatory
|
||
PORTSIDE
GROWTH AND OPPORTUNITY FUND
|
|||
By:
|
/s/
Xxxxxxx X. Xxxxx
|
||
Name:
|
Xxxxxxx
X. Xxxxx
|
||
Title:
|
Authorized
Signatory
|
||
XXXXXXXX
INVESTMENT MASTER FUND LTD.
|
|||
By:
|
/s/
Xxxxxxx Xxxxxxxx
|
||
Name:
|
Xxxxxxx
Xxxxxxxx
|
||
Title:
|
Managing
Director
|
EXHIBIT
A
COPYRIGHT
SECURITY AGREEMENT
This
COPYRIGHT SECURITY AGREEMENT (this “Copyright
Security Agreement”)
is
made this __ day of _______, 200__, by the Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors”
and
each individually “Grantor”),
in
favor of the Secured Parties under and as defined in the below-described
Security Agreement.
WITNESSETH:
WHEREAS,
pursuant to that certain Securities Purchase Agreement dated as of March 31,
2008 (as amended, restated, supplemented, or otherwise modified from time to
time, including all schedules thereto, the “Purchase
Agreement”)
by and
among GENEREX BIOTECHNOLOGY CORPORATION, a Delaware corporation (“Parent”),
and
Secured Parties, Parent has agreed to sell, and Secured Parties have agreed
to
purchase, severally and not jointly, certain Notes and Warrants, and
WHEREAS,
in order to induce the Secured Parties to purchase the Notes and Warrants as
provided for in the Purchase Agreement, Grantors have executed and delivered
to
Secured Parties that certain Security Agreement of even date herewith (including
all annexes, exhibits or schedules thereto, as from time to time amended,
restated, supplemented or otherwise modified, the “Security
Agreement”);
WHEREAS,
pursuant to the Security Agreement, Grantors are required to execute and deliver
to Secured Parties this Copyright Security Agreement;
NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantors hereby agree as
follows:
1. DEFINED
TERMS.
All
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Security Agreement or the Purchase Agreement.
2. GRANT
OF SECURITY INTEREST IN COPYRIGHT COLLATERAL.
Each
Grantor hereby grants to each Secured Party a continuing first priority security
interest in all of such Grantor’s right, title and interest in, to and under the
following, whether presently existing or hereafter created or acquired
(collectively, the “Copyright
Collateral”):
(a) all
of
such Grantor's Copyrights and Copyright Intellectual Property Licenses to which
it is a party including those referred to on Schedule
I
hereto;
(b) all
reissues, continuations or extensions of the foregoing; and
(c) all
products and proceeds of the foregoing, including any claim by such Grantor
against third parties for past, present or future infringement or dilution
of
any Copyright or any Copyright licensed under any Intellectual Property
License.
3. SECURITY
FOR OBLIGATIONS.
This
Copyright Security Agreement and the Security Interests created hereby secures
the payment and performance of all the Secured Obligations, whether now existing
or arising hereafter. Without limiting the generality of the foregoing, this
Copyright Security Agreement secures the payment of all amounts which constitute
part of the Secured Obligations and would be owed by Grantors, or any of them,
to Secured Parties, or any of them, whether or not they are unenforceable or
not
allowable due to the existence of an Insolvency Proceeding involving any
Grantor.
4. SECURITY
AGREEMENT.
The
security interests granted pursuant to this Copyright Security Agreement are
granted in conjunction with the security interests granted to Secured Parties
pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms
that the rights and remedies of Secured Parties with respect to their respective
security interests in the Copyright Collateral made and granted hereby are
more
fully set forth in the Security Agreement, the terms and provisions of which
are
incorporated by reference herein as if fully set forth herein.
5. AUTHORIZATION
TO SUPPLEMENT.
To the
extent required under the Security Agreement, Grantors shall give Secured
Parties prompt notice in writing of any additional copyright registrations
or
applications therefor after the date hereof. Grantors hereby authorize Secured
Parties unilaterally to modify this Agreement by amending Schedule
I
to
include any material future registered copyrights or applications therefor
of
Grantors. Notwithstanding the foregoing, no failure to so modify this Copyright
Security Agreement or amend Schedule
I
shall in
any way affect, invalidate or detract from any Secured Party’s continuing
security interest in all Collateral, whether or not listed on Schedule
I.
6. COUNTERPARTS.
This
Copyright Security Agreement may be executed in any number of counterparts,
each
of which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument. In proving this
Copyright Security Agreement or any other Transaction Document in any judicial
proceedings, it shall not be necessary to produce or account for more than
one
such counterpart signed by the party against whom such enforcement is sought.
Any signatures delivered by a party by facsimile transmission or by e-mail
transmission shall be deemed an original signature hereto.
7. CONSTRUCTION.
Unless
the context of this Copyright Security Agreement or any other Transaction
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Copyright
Security Agreement or any other Transaction Document refer to this Copyright
Security Agreement or such other Transaction Document, as the case may be,
as a
whole and not to any particular provision of this Copyright Security Agreement
or such other Transaction Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Copyright Security
Agreement unless otherwise specified. Any reference in this Copyright Security
Agreement or in any other Transaction Document to any agreement, instrument,
or
document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). Any
reference herein or in any other Transaction Document to the satisfaction or
repayment in full of the Secured Obligations shall mean the repayment in full
in
cash of all Secured Obligations other than unasserted contingent indemnification
Secured Obligations. Any reference herein to any Person shall be construed
to
include such Person’s successors and assigns. Any requirement of a writing
contained herein or in any other Transaction Document shall be satisfied by
the
transmission of a Record and any Record so transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.
IN
WITNESS WHEREOF, each Grantor has caused this Copyright Security Agreement
to be
executed and delivered by its duly authorized officer as of the date first
set
forth above.
GENEREX
BIOTECHNOLOGY CORPORATION,
a Delaware corporation
|
|
By:
|
|
Name:
|
|
Title:
|
|
ANTIGEN
EXPRESS, INC., a Delaware corporation
|
|
By:
|
|
Name:
|
|
Title:
|
|
GENEREX
PHARMACEUTICALS (USA) LLC, a
North Carolina limited liability company
|
|
By:
|
|
Name:
|
|
Title:
|
|
GENEREX
MARKETING & DISTRIBUTION INC., an
Ontario corporation
|
|
By:
|
|
Name:
|
|
Title:
|
|
GENEREX
PHARMACEUTICALS INC., an
Ontario corporation
|
|
By:
|
|
Name:
|
|
Title:
|
|
1097346
ONTARIO INC., an
Ontario corporation
|
|
By:
|
|
Name:
|
|
Title:
|
GENEREX
(BERMUDA), INC., a
corporation existing pursuant to the Bermuda Companies
Act
|
|
By:
|
|
Name:
|
|
Title:
|
SCHEDULE
I
to
COPYRIGHT
SECURITY AGREEMENT
Copyright
Registrations
Grantor
|
Country
|
|
|
Copyright
|
|
|
Registration No.
|
|
|
Registration Date
|
|||
Copyright
Licenses
EXHIBIT
B
PATENT
SECURITY AGREEMENT
This
PATENT SECURITY AGREEMENT (this "Patent
Security Agreement")
is
made this ___ day of _________, 200__, by the Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors”
and
each individually “Grantor”),
in
favor of the Secured Parties under and as defined in the below-described
Security Agreement.
WITNESSETH:
WHEREAS,
pursuant to that certain Securities Purchase Agreement dated as of March 31,
2008 (as amended, restated, supplemented, or otherwise modified from time to
time, including all schedules thereto, the “Purchase
Agreement”)
by and
among GENEREX BIOTECHNOLOGY CORPORATION, a Delaware corporation (“Parent”),
and
Secured Parties, Parent has agreed to sell, and Secured Parties have agreed
to
purchase, severally and not jointly, certain Notes and Warrants, and
WHEREAS,
in order to induce the Secured Parties to purchase the Notes and Warrants as
provided for in the Purchase Agreement, Grantors have executed and delivered
to
Secured Parties that certain Security Agreement of even date herewith (including
all annexes, exhibits or schedules thereto, as from time to time amended,
restated, supplemented or otherwise modified, the “Security
Agreement”);
WHEREAS,
pursuant to the Security Agreement, Grantors are required to execute and deliver
to Secured Parties this Patent Security Agreement;
NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantors hereby agree as
follows:
1. DEFINED
TERMS.
All
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Security Agreement or the Purchase Agreement.
2. GRANT
OF SECURITY INTEREST IN PATENT COLLATERAL.
Each
Grantor hereby grants to each Secured Party a continuing first priority security
interest in all of such Grantor’s right, title and interest in, to and under the
following, whether presently existing or hereafter created or acquired
(collectively, the “Patent
Collateral”):
(a) all
of
its Patents and Patent Intellectual Property Licenses to which it is a party
including those referred to on Schedule
I
hereto;
(b) all
reissues, continuations or extensions of the foregoing; and
(c) all
products and proceeds of the foregoing, including any claim by such Grantor
against third parties for past, present or future infringement or dilution
of
any Patent or any Patent licensed under any Intellectual Property
License.
3. SECURITY
FOR OBLIGATIONS.
This
Patent Security Agreement and the Security Interests created hereby secures
the
payment and performance of all the Secured Obligations, whether now existing
or
arising hereafter. Without limiting the generality of the foregoing, this Patent
Security Agreement secures the payment of all amounts which constitute part
of
the Secured Obligations and would be owed by Grantors, or any of them, to
Secured Parties, or any of them, whether or not they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any
Grantor.
4. SECURITY
AGREEMENT.
The
security interests granted pursuant to this Patent Security Agreement are
granted in conjunction with the security interests granted to Secured Parties
pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms
that the rights and remedies of Secured Parties with respect to their respective
security interests in the Patent Collateral made and granted hereby are more
fully set forth in the Security Agreement, the terms and provisions of which
are
incorporated by reference herein as if fully set forth herein.
5. AUTHORIZATION
TO SUPPLEMENT.
If any
Grantor shall obtain rights to any new patentable inventions or become entitled
to the benefit of any patent application or patent for any reissue, division,
or
continuation, of any patent, the provisions of this Patent Security Agreement
shall automatically apply thereto. To the extent required under the Security
Agreement, Grantors shall give prompt notice in writing to Secured Parties
with
respect to any such new patent rights. Without limiting Grantors' obligations
under this Section
5,
Grantors hereby authorize Secured Parties unilaterally to modify this Agreement
by amending Schedule
I
to
include any such material new patent rights of Grantors. Notwithstanding the
foregoing, no failure to so modify this Patent Security Agreement or amend
Schedule
I
shall in
any way affect, invalidate or detract from any Secured Party's continuing
security interest in all Collateral, whether or not listed on Schedule
I.
6. COUNTERPARTS.
This
Patent Security Agreement may be executed in any number of counterparts, each
of
which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument. In proving this
Patent Security Agreement or any other Transaction Document in any judicial
proceedings, it shall not be necessary to produce or account for more than
one
such counterpart signed by the party against whom such enforcement is sought.
Any signatures delivered by a party by facsimile transmission or by e-mail
transmission shall be deemed an original signature hereto.
7. CONSTRUCTION.
Unless
the context of this Patent Security Agreement or any other Transaction Document
clearly requires otherwise, references to the plural include the singular,
references to the singular include the plural, the terms “includes” and
“including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Patent
Security Agreement or any other Transaction Document refer to this Patent
Security Agreement or such other Transaction Document, as the case may be,
as a
whole and not to any particular provision of this Patent Security Agreement
or
such other Transaction Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Patent Security
Agreement unless otherwise specified. Any reference in this Patent Security
Agreement or in any other Transaction Document to any agreement, instrument,
or
document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). Any
reference herein or in any other Transaction Document to the satisfaction or
repayment in full of the Secured Obligations shall mean the repayment in full
in
cash of all Secured Obligations other than unasserted contingent indemnification
Secured Obligations. Any reference herein to any Person shall be construed
to
include such Person’s successors and assigns. Any requirement of a writing
contained herein or in any other Transaction Document shall be satisfied by
the
transmission of a Record and any Record so transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.
IN
WITNESS WHEREOF, each Grantor has caused this Patent Security Agreement to
be
executed and delivered by its duly authorized officer as of the date first
set
forth above.
GENEREX
BIOTECHNOLOGY CORPORATION, a Delaware corporation
By:
|
|
Name:
|
|
Title:
|
|
ANTIGEN
EXPRESS, INC., a Delaware corporation
|
|
By:
|
|
Name:
|
|
Title:
|
|
GENEREX
PHARMACEUTICALS (USA) LLC, a North Carolina limited liability
company
|
|
By:
|
|
Name:
|
|
Title:
|
|
GENEREX
MARKETING & DISTRIBUTION INC., an Ontario
corporation
|
|
By:
|
|
Name:
|
|
Title:
|
|
GENEREX
PHARMACEUTICALS INC., an Ontario corporation
|
|
By:
|
|
Name:
|
|
Title:
|
|
1097346
ONTARIO INC., an Ontario corporation
|
|
By:
|
|
Name:
|
|
Title:
|
GENEREX
(BERMUDA), INC.,
a
corporation existing pursuant to the Bermuda Companies
Act
|
|
By:
|
|
Name:
|
|
Title:
|
EXHIBIT
C
TRADEMARK
SECURITY AGREEMENT
This
TRADEMARK SECURITY AGREEMENT (this “Trademark
Security Agreement”)
is
made this ___ day of _________, 200__, by the Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors”
and
each individually “Grantor”),
in
favor of the Secured Parties under and as defined in the below-described
Security Agreement.
WITNESSETH:
WHEREAS,
pursuant to that certain Securities Purchase Agreement dated as of March 31,
2008 (as amended, restated, supplemented, or otherwise modified from time to
time, including all schedules thereto, the “Purchase
Agreement”)
by and
among GENEREX BIOTECHNOLOGY CORPORATION, a Delaware corporation (“Parent”),
and
Secured Parties, Parent has agreed to sell, and Secured Parties have agreed
to
purchase, severally and not jointly, certain Notes and Warrants, and
WHEREAS,
in order to induce the Secured Parties to purchase the Notes and Warrants as
provided for in the Purchase Agreement, Grantors have executed and delivered
to
Secured Parties that certain Security Agreement of even date herewith (including
all annexes, exhibits or schedules thereto, as from time to time amended,
restated, supplemented or otherwise modified, the “Security
Agreement”);
WHEREAS,
pursuant to the Security Agreement, Grantors are required to execute and deliver
to Secured Parties this Trademark Security Agreement;
NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantors hereby agree as
follows:
1. DEFINED
TERMS.
All
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Security Agreement or the Purchase Agreement.
2. GRANT
OF SECURITY INTEREST IN TRADEMARK COLLATERAL.
Each
Grantor hereby grants to each Secured Party a continuing first priority security
interest in all of such Grantor’s right, title and interest in, to and under the
following, whether presently existing or hereafter created or acquired
(collectively, the “Trademark
Collateral”):
(a) all
of
its Trademarks and Trademark Intellectual Property Licenses to which it is
a
party including those referred to on Schedule
I
hereto;
(b) all
goodwill, trade secrets, proprietary or confidential information, technical
information, procedures, formulae, quality control standards, designs, operating
and training manuals, customer lists, and other General Intangibles with respect
to the foregoing;
(c) all
reissues, continuations or extensions of the foregoing;
(d) all
goodwill of the business connected with the use of, and symbolized by, each
Trademark and each Trademark Intellectual Property License; and
(e) all
products and proceeds of the foregoing, including any claim by such Grantor
against third parties for past, present or future (i) infringement or dilution
of any Trademark or any Trademark licensed under any Intellectual Property
License or (ii) injury to the goodwill associated with any Trademark or any
Trademark licensed under any Intellectual Property License.
3. SECURITY
FOR OBLIGATIONS.
This
Trademark Security Agreement and the Security Interests created hereby secures
the payment and performance of all the Secured Obligations, whether now existing
or arising hereafter. Without limiting the generality of the foregoing, this
Trademark Security Agreement secures the payment of all amounts which constitute
part of the Secured Obligations and would be owed by Grantors, or any of them,
to Secured Parties, or any of them, whether or not they are unenforceable or
not
allowable due to the existence of an Insolvency Proceeding involving any
Grantor.
4. SECURITY
AGREEMENT.
The
security interests granted pursuant to this Trademark Security Agreement are
granted in conjunction with the security interests granted to Secured Parties
pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms
that the rights and remedies of Secured Parties with respect to their respective
security interests in the Trademark Collateral made and granted hereby are
more
fully set forth in the Security Agreement, the terms and provisions of which
are
incorporated by reference herein as if fully set forth herein.
5. AUTHORIZATION
TO SUPPLEMENT.
If any
Grantor shall obtain rights to any new trademarks, the provisions of this
Trademark Security Agreement shall automatically apply thereto. To the extent
required under the Security Agreement, Grantors shall give prompt notice in
writing to Secured Parties with respect to any such new trademarks or renewal
or
extension of any trademark registration. Without limiting Grantors' obligations
under this Section
5,
Grantors hereby authorize Secured Parties unilaterally to modify this Agreement
by amending Schedule
I
to
include any such material new trademark rights of Grantors. Notwithstanding
the
foregoing, no failure to so modify this Trademark Security Agreement or amend
Schedule
I
shall in
any way affect, invalidate or detract from any Secured Party's continuing
security interest in all Collateral, whether or not listed on Schedule
I.
6. COUNTERPARTS.
This
Trademark Security Agreement may be executed in any number of counterparts,
each
of which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument. In proving this
Trademark Security Agreement or any other Transaction Document in any judicial
proceedings, it shall not be necessary to produce or account for more than
one
such counterpart signed by the party against whom such enforcement is sought.
Any signatures delivered by a party by facsimile transmission or by e-mail
transmission shall be deemed an original signature hereto.
7. CONSTRUCTION.
Unless
the context of this Trademark Security Agreement or any other Transaction
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Trademark
Security Agreement or any other Transaction Document refer to this Trademark
Security Agreement or such other Transaction Document, as the case may be,
as a
whole and not to any particular provision of this Trademark Security Agreement
or such other Transaction Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Trademark Security Agreement or
in
any other Transaction Document to any agreement, instrument, or document shall
include all alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements, thereto and
thereof, as applicable (subject to any restrictions on such alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements set forth herein). Any reference herein
or in any other Transaction Document to the satisfaction or repayment in full
of
the Secured Obligations shall mean the repayment in full in cash of all Secured
Obligations other than unasserted contingent indemnification Secured
Obligations. Any reference herein to any Person shall be construed to include
such Person’s successors and assigns. Any requirement of a writing contained
herein or in any other Transaction Document shall be satisfied by the
transmission of a Record and any Record so transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.
IN
WITNESS WHEREOF, each Grantor has caused this Trademark Security Agreement
to be
executed and delivered by its duly authorized officer as of the date first
set
forth above.
GENEREX
BIOTECHNOLOGY CORPORATION, a Delaware corporation
|
|
By:
|
|
Name:
|
|
Title:
|
|
ANTIGEN
EXPRESS, INC., a Delaware corporation
|
|
By:
|
|
Name:
|
|
Title:
|
|
GENEREX
PHARMACEUTICALS (USA) LLC, a North Carolina limited liability
company
|
|
By:
|
|
Name:
|
|
Title:
|
|
GENEREX
MARKETING & DISTRIBUTION INC., an Ontario
corporation
|
|
By:
|
|
Name:
|
|
Title:
|
|
GENEREX
PHARMACEUTICALS INC., an Ontario corporation
|
|
By:
|
|
Name:
|
|
Title:
|
By:
|
|
Name:
|
|
Title:
|
|
GENEREX
(BERMUDA), INC., a corporation existing pursuant to the Bermuda Companies
Act
|
|
Name:
|
|
Title:
|
SCHEDULE
I
to
TRADEMARK
SECURITY AGREEMENT
Trademark
Registrations/Applications
Grantor
|
Country
|
|
|
Xxxx
|
|
|
Application/
Registration No.
|
|
|
App/Reg
Date
|
|||
Trade
Names
Common
Law Trademarks
Trademarks
Not Currently In Use
Trademark
Licenses