SECURITY AGREEMENT
EXHIBIT B
This
SECURITY AGREEMENT, dated as of January 11, 2010 (this “Agreement”), is
among Adamis
Pharmaceuticals Corporation, a Delaware corporation (the “Company”), each of
the Subsidiaries of the Company other than Biosyn, Inc. and Cellegy Holdings,
Inc. (such Subsidiaries, the “Guarantors”, and together
with the Company, collectively the “Debtor” or “Debtors”), in favor
of GEMINI STRATEGIES, LLC, as collateral agent (“Agent”) for all the holder(s)
of the Company’s 10% Senior Secured Convertible Notes issued or to be issued in
the original aggregate principal amount of up to $1,500,000 (the “Notes”) pursuant to
the Purchase Agreement (as defined below) (collectively, together with their
endorsees, transferees and assigns, the “Secured Parties”, and
each individually, a “Secured
Party”).
W
I T N E S S E T H:
WHEREAS,
pursuant to that certain Securities Purchase Agreement dated on or about the
date hereof between the Debtor and the Secured Parties (the “Purchase Agreement”),
the Secured Parties have severally agreed to extend the loans to the Debtor
evidenced by the Notes;
WHEREAS,
pursuant to the terms hereof the Guarantors
jointly and severally agree to guarantee and act as surety for payment of such
Notes;
WHEREAS,
in order to induce the Secured Parties to extend the loans evidenced by the
Notes, each Debtor has agreed to execute and deliver to the Secured Parties this
Agreement and to grant the Secured Parties a security interest in certain
property of such Debtor to secure the prompt payment, performance and discharge
in full of all of the Company’s obligations under the Notes and other
Transaction Documents; and
WHEREAS,
the rights of each Secured Party hereunder shall be pari passu with each other
Secured Party and enforced through the agent for the Secured Parties appointed
pursuant to Section 18 hereunder;
NOW,
THEREFORE, in consideration of the agreements herein contained and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Certain Definitions. As used
in this Agreement, the following terms shall have the meanings set forth in this
Section 1. Terms used but not otherwise defined in this Agreement
that are defined in Article 9 of the UCC (such as “account”, “chattel paper”,
“commercial tort claim”, “deposit account”, “document”, “equipment”, “fixtures”,
“general intangibles”, “goods”, “instruments”, “inventory”, “investment
property”, “letter-of-credit rights”, “proceeds” and “supporting obligations”)
shall have the respective meanings given such terms in Article 9 of the
UCC.
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(a) “Collateral” means the
collateral in which the Secured Parties are granted a security interest by this
Agreement and which shall include the following personal property of the Debtor,
whether presently owned or existing or hereafter acquired or coming into
existence, wherever situated, and all additions and accessions thereto and all
substitutions and replacements thereof, and all proceeds, products and accounts
thereof, including without limitation all proceeds from the sale or transfer of
the Collateral and of insurance covering the same and of any tort claims in
connection therewith, and all dividends, interest,
cash, notes, securities, equity interest or other property at any time and from
time to time acquired, receivable or otherwise distributed in respect of, or in
exchange for, any or all of the Pledged Securities (as defined
below):
(i) All
goods, including without limitation (A) all machinery, equipment, computers,
motor vehicles, trucks, tanks, boats, ships, appliances, furniture, special and
general tools, fixtures, test and quality control devices and other equipment of
every kind and nature and wherever situated, together with all documents of
title and documents representing the same, all additions and accessions thereto,
replacements therefor, all parts therefor, and all substitutes for any of the
foregoing and all other items used and useful in connection with the Debtor’s
businesses and all improvements thereto; and (B) all inventory;
(ii) All
contract rights and other general intangibles, including without limitation, all
Intellectual Property, all partnership interests, membership interests, stock or
other securities, licenses,
distribution and other agreements, computer software (whether “off-the-shelf”,
licensed from any third party or developed by the Debtor), computer software
development rights, leases, franchises, customer lists, quality control
procedures, grants and rights, goodwill, trademarks, service marks, trade
styles, trade names, patents, patent applications, copyrights, and income tax
refunds;
(iii) All
accounts, together with all instruments, all documents of title representing any
of the foregoing, all rights in any merchandising, goods, equipment, motor
vehicles and trucks which any of the same may represent, and all right, title,
security and guaranties with respect to each account, including any right of
stoppage in transit;
(iv) All
documents, letter-of-credit rights, instruments and chattel paper;
(v) All
commercial tort claims;
(vi) All
deposit accounts and all cash (whether or not deposited in such deposit
accounts);
(vii) All
investment property;
(viii) All
supporting obligations;
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(ix) All
files, records, books of account, business papers, and computer programs,
including without limitation and all
files, records, books, ledger cards, correspondence, computer programs, tapes,
disks, digital storage media and related data processing software
that at any time evidence or contain information relating to any of the
Collateral set forth in clauses (i)-(viii) above or are otherwise necessary or
helpful in the collection thereof or realization thereupon; and
(x) the
products, profits and proceeds of all of the foregoing Collateral set forth in
clauses (i)-(ix) above, and all payments under insurance (whether or not the
Secured Party is the loss payee thereof) or under any indemnity, warranty or
guaranty, payable by reason or loss or damage to, or otherwise with respect to,
any of the foregoing Collateral set forth in clauses (i)-(ix)
above.
Without limiting the generality of the foregoing, the
“Collateral” shall include all investment property and general
intangibles respecting ownership and/or other equity interests in each
Subsidiary, including, without limitation, the shares of capital stock and the
other equity interests listed on Schedule H hereto (as the same may be modified from time to time
pursuant to the terms hereof), and any other shares of capital stock and/or
other equity interests of any other direct or indirect subsidiary of the Debtor
obtained in the future, and, in each case, all certificates representing such
shares and/or equity interests and, in each case, all rights, options, warrants,
stock, other securities and/or equity interests that may hereafter be received,
receivable or distributed in respect of, or exchanged for, any of the foregoing
and all rights arising under or in connection with the Pledged Securities,
including, but not limited to, all dividends, interest and
cash.
Notwithstanding
the foregoing, nothing herein shall be deemed to constitute an assignment of any
asset which, in the event of an assignment, becomes void by operation of
applicable law or the assignment of which is otherwise prohibited by applicable
law (in each case to the extent that such applicable law is not overridden by
Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law);
provided, however, that to the
extent permitted by applicable law, this Agreement shall create a valid security
interest in such asset and, to the extent permitted by applicable law, this
Agreement shall create a valid security interest in the proceeds of such
asset.
(b) “Intellectual
Property” means the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including without limitation
(i) all copyrights arising under the laws of the United States, any other
country or any political subdivision thereof, whether registered or unregistered
and whether published or unpublished, all registrations and recordings thereof,
and all applications in connection therewith, including without limitation all
registrations, recordings and applications in the United States Copyright
Office, (ii) all letters patent of the United States, any other country or any
political subdivision thereof, all reissues and extensions thereof, and all
applications for letters
patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, (iii) all trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade dress, service marks, logos, domain names and other source or
business identifiers, and all goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, or
otherwise, and all common law rights related thereto, (iv) all trade secrets
arising under the laws of the United States, any other country or any political
subdivision thereof, (v) all rights to obtain any reissues, renewals or
extensions of the foregoing, (vi) all licenses for any of the foregoing, whether
verbal or in writing, regardless of whether Debtor is a licensee or licensor
under any such license agreement, including without limitation that certain
License Agreement dated as of July 28, 2006 between Adamis and Nevagen LLC, a
Nevada corporation, pursuant to which Adamis licensed certain patents specified
therein, among other things, as amended on December 29, 2008 and
(vii) all causes of action for infringement of the
foregoing.
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(c) “Majority in
Interest” means, at any time of
determination, at least 67% in interest (based on then-outstanding principal
amounts of Notes at the time of such determination) of the Secured
Parties.
(d) “Necessary
Endorsement” means undated stock powers
endorsed in blank or other proper instruments of assignment duly executed and
such other instruments or documents as the Agent (as that term is defined below)
may reasonably request.
(e) “Obligations” means
all of the liabilities and obligations (primary, secondary, direct, contingent,
sole, joint or several) due or to become due, or that are now or may be
hereafter contracted or acquired, or owing to, of the Debtor to the Secured
Parties under this Agreement, the Notes, any guarantee of the Notes, the other
Transaction Documents and any other instruments, agreements or other documents
executed and/or delivered in connection herewith or therewith, whether now or
hereafter existing, voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from any of the Secured Parties as a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to
time. Without limiting the generality of the foregoing, the term
“Obligations” shall include, without limitation: (i) principal of and interest
on the Notes and the loans extended pursuant thereto; (ii) any and all other
fees, indemnities, costs, obligations and liabilities of the Debtor from time to
time under or in connection with this Agreement, the Notes, any guarantee of the
Notes, the other Transaction Documents and any other instruments, agreements or
other documents executed and/or delivered in connection herewith or therewith;
and (iii) all amounts (including
but not limited to post-petition interest) in respect of the foregoing that
would be payable but for the fact that the obligations to pay such amounts are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the
Debtor.
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(f)
“Organizational
Documents” means with respect to any Debtor, the documents by which such
Debtor was organized (such as a certificate of incorporation, certificate of
limited partnership or articles of organization, and including without
limitation any certificates of designation for preferred stock or other forms of
preferred equity) and which relate to the internal governance of such Debtor
(such as bylaws, a partnership agreement or an operating, limited liability or
members agreement).
(g) “Pledged Securities”
shall have the meaning ascribed to such term in Section 4(i).
(h) “Transaction
Documents” shall have the meaning ascribed to such term in the Purchase
Agreement.
(i)
“UCC” means the
Uniform Commercial Code of the State of New York and/or any other applicable law
of any state or states which has jurisdiction with respect to all, or any
portion of, the Collateral or this Agreement from time to time. It is
the intent of the parties that defined terms in the UCC should be construed in
their broadest sense so that the term “Collateral” will be construed in its
broadest sense. Accordingly if there are, from time to time, changes
to defined terms in the UCC that broaden the definitions, they are incorporated
herein and if existing definitions in the UCC are broader than the amended
definitions, the existing ones shall be controlling.
2. Grant of Security Interest in
Collateral. As an inducement for the Secured Parties to extend the loans
as evidenced by the Notes and to secure the complete and timely payment,
performance and discharge in full, as the case may be, of all of the
Obligations, each Debtor hereby unconditionally and irrevocably pledges, grants
and hypothecates to the Secured Parties a first priority security interest in
and to, a lien upon and a right of set-off against all of their respective
right, title and interest of whatsoever kind and nature in and to, the
Collateral (a “Security Interest”
and, collectively, the “Security
Interests”).
3. Delivery of Certain
Collateral. As requested by the
Collateral Agent, the Debtor shall deliver or cause to be delivered to the Agent
(a) any and all certificates and other instruments representing or evidencing
the Pledged Securities, together with all Necessary Endorsements, and (b) any
and all certificates and other instruments or documents representing any of the
other Collateral, in each case, together with all Necessary
Endorsements. The Debtor is, contemporaneously with the execution
hereof, delivering to the Agent, or has previously delivered to the Agent, a
true and correct copy of each Organizational Document governing any of the
Pledged Securities.
4. Representations, Warranties,
Covenants and Agreements of the Debtors. Except as set forth under the
corresponding section of the disclosure schedules delivered to the Secured
Parties concurrently herewith (the “Disclosure
Schedules”), which
Disclosure Schedules shall be deemed a part hereof, each Debtor represents and
warrants to, and covenants and agrees with, the Secured Parties as
follows:
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(a) Each
Debtor has the requisite corporate, partnership, limited liability company or
other power and authority to enter into this Agreement and otherwise to carry
out its obligations hereunder. The execution, delivery and
performance by each Debtor of this Agreement and the filings contemplated
therein have been duly authorized by all necessary action on the part of such
Debtor and no further action is required by such Debtor. This
Agreement has been duly executed by each Debtor. This Agreement
constitutes the legal, valid and binding obligation of each Debtor, enforceable
against each Debtor in accordance with its terms.
(b) The
Debtors have no place of business or offices where their respective books of
account and records are kept (other than temporarily at the offices of its
attorneys or accountants) or places where Collateral is stored or located,
except as set forth on Schedule A attached
hereto. No Debtor owns any real property. Except as
disclosed on Schedule
A, none of such Collateral is in the possession of any consignee, bailee,
warehouseman, agent or processor.
(c) Except
for Permitted Liens (as defined in the Notes) and except as set forth on Schedule B attached
hereto, the Debtors are the sole owner of the Collateral, free and clear of any
liens, security interests, encumbrances, rights or claims, and are fully
authorized to grant the Security Interests. Except as set forth on
Schedule B
attached hereto, there is not on file in any governmental or regulatory
authority, agency or recording office an effective financing statement, security
agreement, license or transfer or any notice of any of the foregoing (other than
those that will be filed in favor of the Secured Parties pursuant to this
Agreement) covering or affecting any of the Collateral, and the lien search
reports provided to Gemini counsel on or about December 21, 2009 contain all
financing statements on record against the Debtors. Except as set
forth on Schedule
B attached hereto and except pursuant to this Agreement, as long as any
Note is outstanding, the Debtors shall not execute and shall not authorize or
knowingly permit to exist on file in any such office or agency any other
financing statement or other document or instrument (except to the extent filed
or recorded in favor of the Secured Parties pursuant to the terms of this
Agreement) without the prior written consent of a
Majority-in-Interest.
(d) No
written claim has been received that any material Collateral or Debtor's use of
any material Collateral violates the rights of any third party. There has been
no adverse decision to any Debtor's claim of ownership rights in or exclusive
rights to use the Collateral in any jurisdiction or to any Debtor's right to
keep and maintain such Collateral in full force and effect, and there is no
proceeding involving said rights pending or, to the best knowledge of any
Debtor, threatened before any court, judicial body, administrative or regulatory
agency, arbitrator or other governmental authority.
Each
Debtor shall at all times maintain its books of account and records relating to
the Collateral at its principal place of business and its Collateral at the
locations set forth on Schedule A attached
hereto and may not relocate such books of
account and records or tangible Collateral unless it delivers to the Secured
Parties at least 30 days prior to such relocation (i) written notice of such
relocation and the new location thereof (which must be within the United States)
and (ii) evidence that appropriate financing statements under the UCC and other
necessary documents have been filed and recorded and other steps have been taken
to perfect the Security Interests to create in favor of the Secured Parties a
valid, perfected and continuing first priority lien in all the Collateral
(except for the perfection of money, deposit accounts and insurance policies
unless requested by the Secured Parties).
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(e) This
Agreement creates in favor of the Secured Parties a valid security interest in
the Collateral, subject only to Permitted Liens (as defined in the Notes)
securing the payment and performance of the Obligations. Upon making
the filings described in the immediately following paragraph, all security
interests created hereunder in any Collateral which may be perfected by filing
Uniform Commercial Code financing statements shall have been duly
perfected. The execution and delivery of this Agreement and the
filing of the Uniform Commercial Code financing statements in forms attached
hereto and with the descriptions contained therein of the Collateral will create
valid Security Interests in the Collateral and perfect such Security Interest to
the extent such Security Interests may be perfected by the filing of Uniform
Commercial Code financing statements. Without limiting the generality
of the foregoing, other than such execution, delivery and filings no further
consent of any third parties and no authorization, approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for (i) the execution, delivery and performance of this Agreement,
(ii) the creation or perfection of the Security Interests created hereunder in
the Collateral other than Collateral that consists of money, deposit accounts,
insurance policies or vehicles, or (iii) the enforcement of the rights of the
Agent and the Secured Parties hereunder.
(f) The
Debtor hereby authorizes the Agent to file one or more financing statements
under the UCC, with respect to the Security Interests, with the proper filing
and recording agencies in any jurisdiction deemed proper by it.
(g) The
execution, delivery and performance of this Agreement by the Debtor does not (i)
violate any of the provisions of any Organizational Documents of the Debtor or
any judgment, decree, order or award of any court, governmental body or
arbitrator or any applicable law, rule or regulation applicable to the Debtor or
(ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing the Debtor's debt or otherwise) or other understanding to
which the Debtor is a party or by which any property or asset of the Debtor is
bound or affected. All required consents (including without
limitation from stockholders or creditors of the Debtor) necessary for the
Debtor to enter into and perform its obligations hereunder have been
obtained.
(h) The capital stock and other equity interests listed on
Schedule
H hereto (the “Pledged
Securities”) represent all of the capital
stock and other equity interests of the Subsidiaries, and represent all capital
stock and other equity interests owned, directly or indirectly, by the
Company. All of the Pledged Securities are validly issued, fully paid
and nonassessable, and the Company is the legal and beneficial owner of the
Pledged Securities, free and clear of any lien, security interest or other
encumbrance except for the security interests created by this Agreement, other
Permitted Liens (as defined in the Notes) and any transfer restrictions required
by applicable securities law.
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(i)
The ownership and other equity interests in
partnerships and limited liability companies (if any) included in the Collateral (the “Pledged
Interests”) by their express terms do not
provide that they are securities governed by Article 8 of the UCC and are not
held in a securities account or by any financial
intermediary.
(j)
Except for Permitted Liens (as defined in the Notes), until no Notes are
outstanding, each Debtor shall at all times maintain in favor of the Secured
Parties the liens and Security Interests provided for hereunder as valid and
perfected first priority liens and security interests in all the
Collateral. Each Debtor hereby agrees to defend the same against the
claims of any and all persons and entities. Each Debtor shall
safeguard and protect in a reasonable manner all Collateral for the account of
the Secured Parties. At the request of the Agent, each Debtor will
sign and deliver to the Agent on behalf of the Secured Parties at any time or
from time to time one or more financing statements pursuant to the UCC in form
reasonably satisfactory to the Agent and will pay the cost of filing the same in
all public offices wherever filing is, or is deemed by the Agent to be,
necessary or desirable to effect the rights and obligations provided for
herein. Without limiting the generality of the foregoing, each Debtor
shall pay all fees, taxes and other amounts necessary to maintain the Collateral
and the Security Interests hereunder, and each Debtor shall obtain and furnish
to the Agent from time to time, upon demand, such releases and/or subordinations
of claims and liens which may be required to maintain the priority of the
Security Interests hereunder.
(k) While
any Note is outstanding no Debtor will transfer, pledge, hypothecate, encumber,
license, sell or otherwise dispose of any of the Collateral, other than, so long
as there is no Event of Default, (i) licenses granted by a Debtor in the
ordinary course of business or sales of inventory or other obsolete assets in
the ordinary course of business, or (ii) the use of cash by the Company and its
Subsidiaries in the ordinary course of business, (iii) the use of cash to
satisfy Indebtedness to the extent
due before the Maturity Date, which Indebtedness exists on the Original Issue
Date and is described on a schedule to the Purchase Agreement (so long as such terms have not been amended since
the Closing Date), (iv) transfers of such assets or rights by the Company
and its Subsidiaries that, in the aggregate, do not have a fair market value in
excess of $25,000, or (v) transfers between Debtors (as long as the Secured
Parties maintain the same security interest (including the priority and
perfection of such security interest) in all such Collateral that the Secured
Parties maintained before such transfer), without the prior written consent of
all the Secured Parties.
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(l)
Each Debtor shall keep and preserve its equipment, inventory and other tangible
Collateral in good condition, repair and order and shall not operate or locate
any material portion of such Collateral (or cause to be operated or located) in
any area excluded from insurance coverage.
(m) Each Debtor shall maintain with financially sound and
reputable insurers, insurance with respect to the Collateral, including
Collateral hereafter acquired, against loss or damage of the kinds and in the
amounts customarily insured against by entities of established reputation having
similar properties similarly situated and in such amounts as are customarily
carried under similar circumstances by other such entities and otherwise as is
prudent for entities engaged in similar businesses but in any event sufficient
to cover the full replacement cost thereof. If requested by the Agent, each Debtor shall cause each
insurance policy issued in connection herewith to provide, and the insurer
issuing such policy to certify to the Agent, that (a) the Agent will be named as
lender loss payee and additional insured under each such insurance policy; (b)
if such insurance be proposed to be cancelled or materially changed for any
reason whatsoever, such insurer will promptly notify the Agent and such
cancellation or change shall not be effective as to the Agent for at least
thirty (30) days after receipt by the Agent of such notice, unless the effect of
such change is to extend or increase coverage under the policy; and (c) the
Agent will have the right (but no obligation) at its election to remedy any
default in the payment of premiums within thirty (30) days of notice from the
insurer of such default. Copies of any such policies or the related
certificates, in each case, naming the Agent as lender loss payee and additional
insured shall be delivered to the Agent at least annually and at the time any
new policy of insurance is issued.
(n) Each
Debtor shall promptly, but no later than ten (10) days after obtaining knowledge
thereof, advise the Secured Parties, through the Agent, in sufficient detail of
any material change in the Collateral and of the occurrence of any event which
would have a material adverse effect on the value of the Collateral or on the
Secured Parties’ security interest therein.
(o) Each
Debtor shall promptly execute and deliver to the Agent such further deeds,
mortgages, assignments, security agreements, financing statements or other
instruments, documents, certificates and assurances and take such further action
as the Agent may from time to time reasonably request and may in its reasonable
discretion deem necessary to perfect, protect or enforce the Secured Parties’
security interest in the Collateral including without limitation, if applicable,
the execution and delivery of a separate security agreement with respect to the
Debtor’s Intellectual Property (“Intellectual Property
Security Agreement”) in which the Secured Parties have been granted a
security interest hereunder, substantially in a form reasonably acceptable to
the Agent, which Intellectual Property Security Agreement, other than as stated
therein, shall be subject to all of the terms and conditions
hereof.
(p) Each
Debtor shall permit the Agent and its representatives and agents to inspect the
Collateral during normal business hours and upon reasonable prior notice, and to
make copies of records pertaining to the Collateral as may be reasonably
requested by the Agent from time to time, provided that Agent and its representatives
agree to treat and hold any non-public information which the Debtors indicate is
confidential as confidential information of the Debtors (except to the extent
required to be disclosed pursuant to legal process).
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(q) Each
Debtor shall take all steps reasonably necessary to diligently pursue and seek
to preserve, enforce and collect any rights, claims, causes of action and
accounts receivable in respect of the Collateral.
(r)
Each Debtor shall promptly notify the Secured Parties in sufficient detail upon
becoming aware of any attachment, garnishment, execution or other legal process
levied against any Collateral and of any other information received by such
Debtor that may materially and adversely affect the value of the Collateral, the
Security Interests or the rights and remedies of the Secured Parties
hereunder.
(s) All
information heretofore, herein or hereafter supplied to the Secured Parties by
or on behalf of any Debtor with respect to the Collateral is and will be
accurate and complete in all material respects as of the date
furnished.
(t)
The Debtors shall at all times preserve and keep in full force and effect their
respective valid existence and good standing and any rights and franchises
material to its business.
(u) No
Debtor will change its name, type of organization, jurisdiction of organization,
organizational identification number (if it has one), legal or corporate
structure, or identity, or add any new fictitious name unless it provides at
least 30 days prior written notice to the Secured Parties of such change and, at
the time of such written notification, such Debtor provides any financing
statements or fixture filings necessary to perfect and continue the perfection
of the Security Interests granted and evidenced by this Agreement.
(v) Except
in the ordinary course of business, no Debtor may consign any of its inventory
or sell any of its inventory on xxxx and hold, sale or return, sale on approval,
or other conditional terms of sale without the consent of the Agent which shall
not be unreasonably withheld.
(w) No
Debtor may relocate its chief executive office to a new location without
providing 30 days prior written notification thereof to the Secured Parties and
so long as, at the time of such written notification, such Debtor provides any
financing statements or fixture filings necessary to perfect and continue the
perfection of the Security Interests granted and evidenced by this
Agreement.
(x) Each
Debtor was organized and remains organized solely under the laws of the state
set forth next to such Debtor’s name in Schedule D attached
hereto, which Schedule
D sets forth each Debtor’s organizational identification number or, if
any Debtor does not have one, states that one does not exist.
(y) (i)
The actual name of each Debtor is the name set forth in Schedule D attached
hereto; (ii) no Debtor has any trade names except as set forth on Schedule E attached
hereto; (iii) no Debtor has used any name other than that stated in
the preamble hereto or as set forth on Schedule E for the
preceding five years; and (iv) no entity has merged into any Debtor or been
acquired by any Debtor within the past five years except as set forth on Schedule
E.
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(z) At
any time and from time to time that any Collateral consists of instruments,
certificated securities or other items that require or permit possession by the
secured party to perfect the Security Interest created hereby, the applicable
Debtor shall notify the Agent of such Collateral and, promptly following Agent’s
request, deliver such Collateral to the Agent.
(aa) Each Debtor, in its capacity as issuer, hereby agrees to
comply with any and all orders and instructions of the Agent regarding the
Pledged Interests consistent with the terms of this Agreement without the
further consent of any Debtor as contemplated by Section 8-106 (or any successor
section) of the UCC. Further, each Debtor agrees that it shall not
enter into a similar agreement (or one that would confer “control” within the
meaning of Article 8 of the UCC) with any other person or entity while any Notes
are outstanding. For
clarification, nothing in this paragraph is intended to prohibit the Merger
(provided that upon Closing of the Merger, the Company, La Jolla and its
subsidiaries shall enter into such Security Agreement and Guarantees and file
such financing statements as may be necessary or appropriate to ensure the
continued first priority perfected liens against the Collateral in favor of the
Secured Parties) (except for the perfection of money, deposit accounts
and insurance policies unless requested by the Secured Parties).
(bb) Each
Debtor shall cause all tangible chattel paper constituting Collateral to be
delivered to the Agent, or, if such delivery is not possible, then to cause such
tangible chattel paper to contain a legend noting that it is subject to the
security interest created by this Agreement. To the extent that any
Collateral consists of electronic chattel paper, the applicable Debtor shall
cause the underlying chattel paper to be “marked” within the meaning of Section
9-105 of the UCC (or successor section thereto).
(cc) If
there is any investment property or deposit account included as Collateral that
can be perfected by “control” through an account control agreement, the
applicable Debtor shall, promptly upon written request of the Agent following
the occurrence of an Event of Default, cause such an account control agreement,
in form and substance in each case satisfactory to the Agent, to be entered into
and delivered to the Agent for the benefit of the Secured Parties.
(dd) To
the extent that any Collateral consists of letter-of-credit rights, the
applicable Debtor shall, promptly upon written request of the Agent following
the occurrence of an Event of Default, cause the issuer of each underlying
letter of credit to consent to an assignment of the proceeds thereof to the
Secured Parties.
(ee) To
the extent that any Collateral is in the possession of any third party, the
applicable Debtor shall notify the Agent (unless such possession occurs in the
ordinary course of business) and, following Agent’s request, join with the Agent
in notifying such third party of the Secured Parties’ security interest in such
Collateral
and shall use its reasonable best efforts to obtain an acknowledgement and
agreement from such third party with respect to the Collateral, in form and
substance reasonably satisfactory to the Agent.
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(ff)
If any Debtor shall at any time hold or acquire a commercial tort claim in an
amount exceeding $50,000, such Debtor shall promptly notify the Agent in a
writing signed by such Debtor of the particulars thereof and grant to the
Secured Parties in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form
and substance reasonably satisfactory to the Agent.
(gg) Each
Debtor shall immediately provide written notice to the Secured Parties of any
material accounts which arise out of contracts with any governmental authority
and, to the extent necessary to perfect or continue the perfected status of the
Security Interests in such accounts and proceeds thereof, shall execute and
deliver to the Agent an assignment of claims for such accounts and cooperate
with the Agent in taking any other steps required, in its judgment, under the
Federal Assignment of Claims Act or any similar federal, state or local statute
or rule to perfect or continue the perfected status of the Security Interests in
such accounts and proceeds thereof.
(hh) Each
Debtor shall cause each subsidiary of such
Debtor to immediately become a party hereto (an “Additional Debtor”),
by executing and delivering an Additional Debtor Joinder in substantially the
form of Annex A
attached hereto and comply with the provisions hereof applicable to the
Debtors. Concurrent therewith, the Additional Debtor shall deliver
replacement schedules for, or supplements to all other Schedules to (or referred
to in) this Agreement, as applicable, which replacement schedules shall
supersede, or supplements shall modify, the Schedules then in
effect. The Additional Debtor shall also deliver such opinions of
counsel, authorizing resolutions, good standing certificates, incumbency
certificates, organizational documents, financing statements and other
information and documentation as the Agent may reasonably
request. Upon delivery of the foregoing to the Agent, the Additional
Debtor shall be and become a party to this Agreement with the same rights and
obligations as the Debtors, for all purposes hereof as fully and to the same
extent as if it were an original signatory hereto and shall be deemed to have
made the representations, warranties and covenants set forth herein as of the
date of execution and delivery of such Additional Debtor Joinder, and all
references herein to the “Debtors” shall be deemed to include each Additional
Debtor.
(ii)
Each Debtor shall vote the Pledged Securities to
comply with the covenants and agreements set forth herein and in the
Notes.
(jj)
Each Debtor shall register the pledge of the
applicable Pledged Securities on the books of such Debtor. Each
Debtor shall notify each issuer of Pledged Securities to register the pledge of
the applicable Pledged Securities in the name of the Secured Parties on the
books of such issuer. Further, if requested by Agent and except with
respect to certificated securities delivered to the Agent, the applicable Debtor
shall deliver to the Agent an acknowledgement of pledge (which, where
appropriate, shall comply with the requirements of the relevant UCC with respect to perfection by registration) signed
by the issuer of the applicable Pledged Securities, which acknowledgement shall
confirm that: (a) it has registered the pledge on its books and records; and (b)
at any time directed by the Agent during the continuation of an Event of
Default, such issuer will transfer the record ownership of such Pledged
Securities into the name of any designee of the Agent, will take such steps as
may be necessary to effect the transfer, and will comply with all other
instructions of the Agent regarding such Pledged Securities without the further
consent of the applicable Debtor.
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(kk) In the event that, upon an occurrence of an Event of
Default, the Agent shall sell all or any of the Pledged Securities to another
party or parties (herein called the “Transferee”) or shall purchase or retain all or any of the Pledged
Securities, each Debtor shall, to the extent applicable: (i) deliver to the
Agent or the Transferee, as the case may be, the articles of incorporation,
bylaws, minute books, stock certificate books, corporate seals, deeds, leases,
indentures, agreements, evidences of indebtedness, books of account, financial
records and all other Organizational Documents and records of the Debtors and
their direct and indirect subsidiaries; (ii) use its best efforts to obtain
resignations of the persons then serving as officers and directors of the
Debtors and their direct and indirect subsidiaries, if so requested; and (iii)
use its best efforts to obtain any approvals that are required by any
governmental or regulatory body in order to permit the sale of the Pledged
Securities to the Transferee or the purchase or retention of the Pledged
Securities by the Agent and allow the Transferee or the Agent to continue the
business of the Debtors and their direct and indirect
subsidiaries.
(ll)
Without limiting the generality of the other obligations of the Debtor
hereunder, Debtor shall promptly (i) cause the security interest contemplated
hereby with respect to all Intellectual Property registered at the United States
Patent and Trademark Office to be duly recorded at the applicable office, and
(ii) give the Agent notice whenever it acquires (whether absolutely or by
license) or creates any additional material Intellectual Property.
(mm) Each
Debtor will from time to time, at the joint and several expense of the Debtors,
promptly execute and deliver all such further instruments and documents, and
take all such further action as may be necessary or desirable, or as the Agent
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Secured Parties to
exercise and enforce their rights and remedies hereunder and with respect to any
Collateral or to otherwise carry out the purposes of this
Agreement.
(nn) Schedule F attached
hereto lists all of the patents, patent applications, trademarks, trademark
applications, registered copyrights, and domain names owned by any Debtor as of
the date hereof. Schedule F lists all
material licenses in favor of the Debtor for the use of any patents, trademarks,
copyrights and domain names as of the date hereof. All material
patents and trademarks of the Debtors have been duly recorded at the United
States Patent and Trademark Office and all material copyrights of the Debtors
have been duly recorded at the United States Copyright Office. Adamis
Laboratories, Inc. owns all the registered trademarks set forth on Schedule F, which
were acquired by such
Debtor pursuant to a purchase and assignment; the Company and such Debtor agree
to cause such assignment of such trademarks to such Debtor to be recorded in the
United States Patent and Trademark Office within 30 days following the Closing
Date, with evidence thereof forwarded to the Agent within 60 days following the
Closing Date.
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(oo) Except
as set forth on Schedule G attached
hereto, none of the account debtors or other persons or entities obligated on
any of the Collateral is a governmental authority covered by the Federal
Assignment of Claims Act or any similar federal, state or local statute or rule
in respect of such Collateral.
5. Effect of Pledge on Certain
Rights. If any of the Collateral subject to this Agreement
consists of nonvoting equity or ownership interests (regardless of class,
designation, preference or rights) that may be converted into voting equity or
ownership interests upon the occurrence of certain events (including without
limitation upon the transfer of all or any of the other stock or assets of the
issuer), it is agreed that the pledge of such equity or ownership interests
pursuant to this Agreement or the enforcement of any of the Agent’s rights
hereunder shall not be deemed to be the type of event which would trigger such
conversion rights notwithstanding any provisions in the Organizational Documents
or agreements to which any Debtor is subject or to which any Debtor is
party.
6. Defaults. The following events
shall be “Events of
Default”:
(a)
The occurrence of an Event of Default (as defined in the Notes) under the
Notes;
(b) Any
representation or warranty of any Debtor in this Agreement shall prove to have
been incorrect in any material respect when made;
(c) The
failure by any Debtor to observe or perform any of its obligations hereunder for
ten (10) business days after delivery to such Debtor of notice of such failure
by or on behalf of a Secured Party unless such default is capable of cure but
cannot be cured within such time frame and such Debtor is using best efforts to
cure same in a timely fashion; or
(d)
If any material provision of this Agreement shall at any time for any reason be
declared to be null and void, or the validity or enforceability thereof shall be
contested by any Debtor, or a proceeding shall be commenced by any Debtor, or by
any governmental authority having jurisdiction over any Debtor, seeking to
establish the invalidity or unenforceability thereof, or any Debtor shall deny
that any Debtor has any liability or obligation purported to be created under
this Agreement.
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7. Duty to Hold in
Trust.
(a)
Upon and during the continuance of any Event of Default, each Debtor shall, upon
receipt of any revenue, income, dividend,
interest or other sums subject to the Security Interests, whether payable
pursuant to the Notes or otherwise, or of any check, draft, note, trade
acceptance or other instrument evidencing an obligation to pay any such sum,
hold the same in trust for the Secured Parties and shall forthwith endorse and
transfer any such sums or instruments, or both, to the Secured Parties, pro-rata
in proportion to their respective then-currently outstanding principal amount of
Notes for application to the satisfaction of the Obligations.
(b)
If any Debtor shall become entitled to receive or
shall receive any securities or other property (including without limitation
shares of Pledged Securities or instruments representing Pledged Securities
acquired after the date hereof, or any options, warrants, rights or other
similar property or certificates representing a dividend, or any distribution in
connection with any recapitalization, reclassification or increase or reduction
of capital, or issued in connection with any reorganization of such Debtor or
any of its direct or indirect subsidiaries) in respect of the Pledged Securities
(whether as an addition to, in substitution of, or in exchange for, such Pledged
Securities or otherwise) and Debtor owns such securities, such Debtor agrees to
hold in trust for the Secured Parties and deliver any and all certificates or
instruments evidencing the same to the Agent on or before the close of business
on the fifth business day following the receipt thereof by such Debtor, in the
exact form received together with the Necessary Endorsements, to be held by the
Agent subject to the terms of this Agreement as Collateral; provided, however,
that such securities shall be subject to the same restrictions on transfer and
voting that would be applicable to such Debtor.
8. Rights and Remedies Upon
Default.
(a)
Upon and during the continuance of any Event of Default, the Secured Parties,
acting through the Agent, shall have the right to exercise all of the remedies
conferred hereunder and under the Notes, the Guarantees and other
Transaction Documents, and the Secured Parties, acting through the Agent, shall
have all the rights and remedies of a secured party under the
UCC. Without limitation, the Agent, for the benefit of the Secured
Parties, shall have the following rights and powers:
(i) The
Agent shall have the right to take possession of the Collateral and, for that
purpose, enter, with the aid and assistance of any person, any premises where
the Collateral, or any part thereof, is or may be placed and remove the same,
and each Debtor shall assemble the Collateral and make it available to the Agent
at places which the Agent shall reasonably select, whether at such Debtor's
premises or elsewhere, and make available to the Agent, without rent, all of
such Debtor’s respective premises and facilities for the purpose of the Agent
taking possession of, removing or putting the Collateral in saleable or
disposable form.
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(ii) Upon notice to the Debtors by the Agent, all rights of
each Debtor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise and all rights of each Debtor to receive the
dividends and interest which it would otherwise be authorized to receive and
retain, shall cease. Upon such notice, the Agent shall have the right
to receive, for the benefit of the Secured Parties, any interest, cash dividends
or other payments on the Collateral and, at the option of the Agent, to exercise
in such Agent’s discretion all voting rights pertaining
thereto. Without limiting the generality of the foregoing, the Agent
shall have the right (but not the obligation) to exercise all rights with
respect to the Collateral as it were the sole and absolute owner thereof,
including without limitation to vote and/or to exchange, at its sole discretion,
any or all of the Collateral in connection with a merger, reorganization,
consolidation, recapitalization or other readjustment concerning or involving
the Collateral or any Debtor or any of its direct or indirect
subsidiaries.
(iii) The
Agent shall have the right to operate the business of each Debtor using the
Collateral and shall have the right to assign, sell, lease or otherwise dispose
of and deliver all or any part of the Collateral, at public or private sale or
otherwise, either with or without special conditions or stipulations, for cash
or on credit or for future delivery, in such parcel or parcels and at such time
or times and at such place or places, and upon such terms and conditions as the
Agent may deem commercially reasonable, all without (except as shall be required
by applicable statute and cannot be waived) advertisement or demand upon or
notice to any Debtor or right of redemption of a Debtor, which are hereby
expressly waived. Upon each such sale, lease, assignment or other
transfer of Collateral, the Agent, for the benefit of the Secured Parties, may,
unless prohibited by applicable law which cannot be waived, purchase all or any
part of the Collateral being sold, free from and discharged of all trusts,
claims, right of redemption and equities of any Debtor, which are hereby waived
and released.
(iv) The
Agent shall have the right (but not the obligation) to notify any account
debtors and any obligors under instruments or accounts to make payments directly
to the Agent, on behalf of the Secured Parties, and to enforce the Debtors’
rights against such account debtors and obligors.
(v) The
Agent, for the benefit of the Secured Parties, may (but is not obligated to)
direct any financial intermediary or any other person or entity holding any
investment property to transfer the same to the Agent, on behalf of the Secured
Parties, or its designee.
(vi) The
Agent may (but is not obligated to) transfer any or all Intellectual Property
registered in the name of the Debtor at the United States Patent and Trademark
Office and/or Copyright Office into the name of the Secured Parties or any
designee or any purchaser of any Collateral.
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(b) The Agent shall comply with any applicable law in
connection with a disposition of Collateral and such compliance will not be
considered adversely to affect the commercial reasonableness of any sale of the
Collateral. The Agent may sell the Collateral without giving any
warranties and may specifically disclaim such warranties. If the
Agent sells any of the Collateral on credit, the Debtors will only be credited
with payments actually made by the purchaser. In addition, each
Debtor waives any and all rights that it may have to a judicial hearing in
advance of the enforcement of any of the Agent’s rights and remedies hereunder,
including without limitation the Agent’s right following an Event of Default to
take immediate possession of the Collateral and to exercise its rights and
remedies with respect thereto.
(c)
For the purpose of enabling the Agent to further exercise rights and remedies
under this Section 8 or elsewhere provided by agreement or applicable law, the
Debtor hereby grants to the Agent, for the benefit of the Agent and the Secured
Parties, an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to such Debtor) to use, license or sublicense
following an Event of Default, any Intellectual Property now owned or hereafter
acquired by such Debtor, and wherever the same may be located, and including in
such license access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof.
9. Inter
Secured Party Rights; Transaction/Applications of Proceeds.
(a) All
Obligations owed to the Secured Parties shall rank in the order of priority
paripassu and pro-rata in proportion to
each Secured Party’s outstanding principal amount of Notes at any given time
that a determination needs to be made of pro-rata holdings. If
an Event of Default occurs and any party hereto collects proceeds pursuant to
its rights under any Obligations, the Agent shall be immediately notified and
such payment shall be shared with all of the other Secured Parties as set forth
above. Notwithstanding
anything to the contrary contained in the Purchase Agreement or any document
executed in connection with the Obligations and irrespective of: (i) the time,
order or method of attachment or perfection of the security interests created in
favor of Secured Parties; (ii) the time or order of filing or recording of
financing statements or other documents filed or recorded to perfect security
interests in any Collateral; (iii) anything contained in any filing or agreement
to which any Secured Party now or hereafter may be a party; and (iv) the rules
for determining perfection or priority under the Uniform Commercial Code or any
other law governing the relative priorities of secured creditors, each of the
Secured Parties acknowledges that (x) all other Secured Parties have a valid
security interest in the Collateral and (y) the security interests of the
Secured Parties in any Collateral pursuant to any outstanding Obligations shall
be pari passu with each other
and enforced pursuant to the terms of this Agreement through the Agent.
Each Secured Party, severally and not jointly with the other Secured Parties,
shall indemnify, defend, and hold harmless the other Secured Parties against and
in respect of any and all claims, demands, losses, costs, expenses, obligations,
liabilities, damages, recoveries, and deficiencies,
including interest, penalties, and reasonable professional and attorneys’ fees,
including those arising from settlement negotiations, that the other Secured
Parties shall incur or suffer, which arise, result from, or relate to a breach
of, or failure by such Secured Party to perform under this Agreement.
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(b) The
proceeds of any such sale, lease or other disposition of the Collateral
hereunder or from payments made on account of any insurance policy insuring any
portion of the Collateral shall be applied first, to the expenses of retaking,
holding, storing, processing and preparing for sale, selling, and the like
(including without limitation any taxes, fees and other costs incurred in
connection therewith) of the Collateral, then to the reasonable attorneys’ fees
and expenses incurred by the Agent in enforcing the Secured Parties’ rights
hereunder and in connection with collecting, storing and disposing of the
Collateral, then to satisfaction of the Obligations pro rata among the Secured
Parties (based on then-outstanding principal amounts of Notes at the time of any
such determination), and then to the payment of any other amounts required by
applicable law. If, upon the sale, license or other disposition of
the Collateral, the proceeds thereof are insufficient to pay all amounts to
which the Secured Parties are legally entitled, the Debtors will be liable for
the deficiency, together with interest thereon, at the rate of 24% per annum or
the lesser amount permitted by applicable law (the “Default Rate”), and the
reasonable fees of any attorneys employed by the Secured Parties to collect such
deficiency. To the extent permitted by applicable law, each Debtor
waives all claims, damages and demands against the Secured Parties arising out
of the repossession, removal, retention or sale of the Collateral, unless due
solely to the gross negligence or willful misconduct of the Secured Parties as
determined by a final judgment (not subject to further appeal) of a court of
competent jurisdiction.
10. Securities
Law Provision. Each Debtor recognizes that the Agent may be
limited in its ability to effect a sale to the public of all or part of the
Pledged Securities by reason of certain prohibitions in the Securities Act of
1933, as amended, or other federal or state securities laws (collectively, the
“Securities Laws”), and may be compelled to resort to one or more sales to a
restricted group of purchasers who may be required to agree to acquire the
Pledged Securities for their own account, for investment and not with a view to
the distribution or resale thereof. Each Debtor agrees that sales so
made may be at prices and on terms less favorable than if the Pledged Securities
were sold to the public and that the Agent has no obligation to delay the sale
of any Pledged Securities for the period of time necessary to register the
Pledged Securities for sale to the public under the Securities
Laws. Each Debtor shall cooperate with the Agent in its attempt to
satisfy any requirements under the Securities Laws (including without limitation
registration thereunder if requested by the Agent) applicable to the sale of the
Pledged Securities by the Agent.
11. Costs and Expenses. Each
Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses
incurred in connection with any filing required hereunder, including without
limitation any financing statements pursuant to the UCC, continuation
statements, partial releases and/or termination statements related thereto or
any expenses of any searches reasonably required by the Agent. The
Debtors shall also pay all other claims and charges which in the reasonable
opinion of the Agent are reasonably likely to prejudice, imperil or otherwise
adversely affect the Collateral or the Security
Interests therein. The Debtors will also, upon demand, pay to the
Agent the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, which the Agent,
for the benefit of the Secured Parties, may incur in connection with (i) the
enforcement of this Agreement, (ii) the custody or preservation of, or the sale
of, collection from, or other realization upon, any of the Collateral, or (iii)
the exercise or enforcement of any of the rights of the Secured Parties under
the Notes. Until so paid, any fees payable hereunder shall be added
to the principal amount of the Notes and shall bear interest at the Default
Rate.
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12. Responsibility for Collateral.
The Debtors assume all liabilities and responsibility in connection with all
Collateral, and the Obligations shall in no way be affected or diminished by
reason of the loss, destruction, damage or theft of any of the Collateral or its
unavailability for any reason. Without limiting the generality of the
foregoing, (a) neither the Agent nor any Secured Party (i) has any duty (either
before or after an Event of Default) to collect any amounts in respect of the
Collateral or to preserve any rights relating to the Collateral, or (ii) has any
obligation to clean-up or otherwise prepare the Collateral for sale, and (b)
each Debtor shall remain obligated and liable under each contract or agreement
included in the Collateral to be observed or performed by such Debtor
thereunder. Neither the Agent nor any Secured Party shall have any
obligation or liability under any such contract or agreement by reason of or
arising out of this Agreement or the receipt by the Agent or any Secured Party
of any payment relating to any of the Collateral, nor shall the Agent or any
Secured Party be obligated in any manner to perform any of the obligations of
any Debtor under or pursuant to any such contract or agreement, to make inquiry
as to the nature or sufficiency of any payment received by the Agent or any
Secured Party in respect of the Collateral or as to the sufficiency of any
performance by any party under any such contract or agreement, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to the Agent or to which the
Agent or any Secured Party may be entitled at any time or times.
13. Security Interests Absolute.
All rights of the Secured Parties and all obligations of the Debtors hereunder,
shall be absolute and unconditional, irrespective of: (a) any lack of validity
or enforceability of this Agreement, the Notes, any other Transaction Documents
or any agreement entered into in connection with the foregoing, or any portion
hereof or thereof; (b) any change in the time, manner or place of payment or
performance of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from the Notes, any
other Transaction Documents or any other agreement entered into in connection
with the foregoing; (c) any exchange, release or nonperfection of any of the
Collateral, or any release or amendment or waiver of or consent to departure
from any other collateral for, or any guarantee, or any other security, for all
or any of the Obligations; (d) any action by the Secured Parties to obtain,
adjust, settle and cancel in its sole discretion any insurance claims or matters
made or arising in connection with the Collateral; or (e) any other circumstance
which might otherwise constitute any legal or equitable defense available to a
Debtor, or a discharge of all or any part of the Security Interests granted
hereby. Until the Obligations shall have been paid and performed in
full, the rights of the Secured Parties shall continue even if the Obligations
are barred for any reason, including without limitation the running of the
statute of limitations or bankruptcy. Each Debtor expressly waives
presentment, protest, notice of protest, demand, notice of nonpayment and demand
for performance. In the event that at any time any transfer of any
Collateral or any payment received by the Secured Parties hereunder shall be
deemed by final order of a court of competent jurisdiction to have been a
voidable preference or fraudulent conveyance under the bankruptcy or insolvency
laws of the United States, or shall be deemed to be otherwise due to any party
other than the Secured Parties, then, in any such event, each Debtor’s
obligations hereunder shall survive cancellation of this Agreement, and shall
not be discharged or satisfied by any prior payment thereof and/or cancellation
of this Agreement, but shall remain a valid and binding obligation enforceable
in accordance with the terms and provisions hereof. Each Debtor
waives all right to require the Secured Parties to proceed against any other
person or to apply any Collateral
which the Secured Parties may hold at any time, or to marshal assets, or to
pursue any other remedy. Each Debtor waives any defense arising by
reason of the application of the statute of limitations to any obligation
secured hereby.
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14. Term of Agreement. This
Agreement and the Security Interests shall terminate, automatically and without any action on the part of
the Agent or Secured Parties, on the date on which all payments under the
Notes have been indefeasibly paid in full and no Notes are outstanding;
provided, however, that all indemnities of the parties hereto contained in this
Agreement (including without limitation Annex B hereto) shall
survive and remain operative and in full force and effect regardless of the
termination of this Agreement; and provided further that this Agreement and the
Security Interests hereunder shall be reinstated and in full force and effect in
the event any repayment of the Notes is subject to being invalidated, declared
to be fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company or any
other Person. The Agent and Secured
Parties shall, at Debtor’s request and expense, take any and all action required
to discharge any and all security interests
and release to Debtor any and all Collateral in the Agent’s or Secured Parties’
possession or control. The Secured Parties hereby agree that the
Debtor shall have the right to take all necessary action to cause the
termination and release of all security interests granted hereunder upon
termination of this Agreement.
15. Power of Attorney; Further
Assurances.
(a)
Each Debtor authorizes the Agent, and does hereby make, constitute and appoint
the Agent and its officers, agents, successors or assigns with full power of
substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in
the name of the Agent or such Debtor, to, after the occurrence and during the
continuance of an Event of Default, (i) endorse any note, checks, drafts, money
orders or other instruments of payment (including payments payable under or in
respect of any policy of insurance) in respect of the Collateral that may come
into possession of the Agent; (ii) sign and endorse any financing statement
pursuant to the UCC or any invoice, freight or express xxxx, xxxx of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other documents
relating to the Collateral; (iii) pay or discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on or threatened
against the Collateral; (iv) demand, collect, receive, compromise, settle and
xxx for monies due in respect of the Collateral; (v) transfer any Intellectual
Property or provide licenses respecting any Intellectual Property; and (vi)
generally, at the option of the Agent, and at the expense of the Debtors, at any
time, or from time to time, execute and deliver any and all documents and
instruments and do all acts and things which the Agent deems necessary to
protect, preserve and realize upon the Collateral and the Security Interests
granted therein in order to effect the intent of this Agreement, the Notes and
other Transaction Documents all as fully and effectually as the Debtors might or
could do; and each Debtor hereby ratifies all that said attorney shall lawfully
do or cause to be done by virtue hereof. This power of attorney is
coupled with an interest and shall be irrevocable for the term of this Agreement
and thereafter as long as any of the Obligations shall be
outstanding. The designation set forth
herein shall be deemed to amend and supersede any inconsistent provision in the
Organizational Documents or other documents or agreements to which the Debtor is
subject or to which the Debtor is a party. Without limiting the generality of the
foregoing, after the occurrence and during the continuance of an Event of
Default, each Secured Party is specifically authorized to execute and file any
applications for or instruments of transfer and assignment of any patents,
trademarks, copyrights or other Intellectual Property with the United States
Patent and Trademark Office and the United States Copyright Office.
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(b) On
a continuing basis, each Debtor will make, execute, acknowledge, deliver, file
and record, as the case may be, with the proper filing and recording agencies in
any jurisdiction, including without limitation the jurisdictions indicated on
Schedule C
attached hereto, all such instruments, and take all such action as may
reasonably be deemed necessary or advisable, or as reasonably requested by the
Agent, to perfect the Security Interests granted hereunder and otherwise to
carry out the intent and purposes of this Agreement, or for assuring and
confirming to the Agent the grant or perfection of a perfected security interest
in all the Collateral under the UCC.
(c)
Each Debtor hereby irrevocably appoints the Agent as such Debtor’s
attorney-in-fact, with full authority in the place and instead of such Debtor
and in the name of such Debtor, from time to time in the Agent’s discretion, to
take any action and to execute any instrument which the Agent may deem necessary
or advisable to accomplish the purposes of this Agreement (including without
limitation the perfection of the security interests granted herein), including
the filing, in its sole discretion, of one or more financing or continuation
statements and amendments thereto, relative to any of the Collateral without the
signature of such Debtor where permitted by law, which financing statements may
(but need not) describe the Collateral as “all assets” or “all personal
property” or words of like import, and ratifies all such actions taken by the
Agent. This power of attorney is coupled with an interest and shall
be irrevocable for the term of this Agreement.
16. Notices. All notices,
requests, demands and other communications hereunder shall be subject to the
notice provision of the Purchase Agreement.
17. Other Security. To the extent
that the Obligations are now or hereafter secured by property other than the
Collateral or by the guarantee, endorsement or property of any other person,
firm, corporation or other entity, then the Agent shall have the right, in its
sole discretion, to pursue, relinquish, subordinate, modify or take any other
action with respect thereto, without in any way modifying or affecting any of
the Secured Parties’ rights and remedies hereunder.
21
18. Appointment of
Agent. The Secured Parties hereby appoint Gemini Strategies,
LLC or its appointed agent to act as their agent (“Gemini” or “Agent”) for purposes
of exercising any and all rights and remedies of the Secured Parties hereunder.
Such appointment shall continue until revoked in writing by a Majority in Interest, at which time a Majority in
Interest shall appoint a new Agent. The Agent shall have the
rights, responsibilities and immunities set forth in Annex B
hereto.
19. Miscellaneous.
(a)
No course of dealing between the Debtors and the Secured Parties, nor any
failure to exercise, nor any delay in exercising, on the part of the Secured
Parties, any right, power or privilege hereunder or under the Notes shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege.
(b) All
of the rights and remedies of the Secured Parties with respect to the
Collateral, whether established hereby or by the Notes or by any other
agreements, instruments or documents or by law, shall be cumulative and may be
exercised singly or concurrently.
(c)
This Agreement, together with the exhibits and schedules hereto, contain the
entire understanding of the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, oral or written, with
respect to such matters, which the parties acknowledge have been merged into
this Agreement and the exhibits and schedules hereto. No provision of
this Agreement may be waived, modified, supplemented or amended except in a
written instrument signed, in the case of an amendment, by the Debtors and a
Majority in Interest or, in the case of a waiver, by the party against whom
enforcement of any such waived provision is sought.
(d)
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(e)
No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such
right.
22
(f)
This Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company and the
Guarantors may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Secured Party (other than by
merger). Any Secured Party may assign any or all of its rights under
this Agreement to any Person to whom such Secured Party assigns or transfers any
Securities, provided such transferee agrees in writing to be bound, with respect
to the transferred Securities, by the provisions of this Agreement that apply to
the “Secured Parties.”
(g) Each
party shall take such further action and execute and deliver such further
documents as may be necessary or appropriate in order to carry out the
provisions and purposes of this Agreement.
(h) All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each Debtor agrees that all
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and the Notes (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York,
Borough of Manhattan. Each Debtor 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
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court or that such proceeding is improper. Each party hereto
hereby irrevocably waives personal service of process and consents to process
being served in any such proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Agreement or the transactions contemplated
hereby. If any party shall commence a proceeding to enforce any
provisions of this Agreement, then the prevailing party in such proceeding shall
be reimbursed by the other party for its reasonable attorney’s fees and other
costs and expenses incurred with the investigation, preparation and prosecution
of such proceeding.
(i)
This Agreement may be executed in any number of counterparts, each of which when
so executed shall be deemed to be an original and, all of which
taken together shall constitute one and the same Agreement. In the
event that any signature is delivered by facsimile transmission or e-mail
transmission, such signature shall create a valid binding obligation of the
party executing the same (or on whose behalf such signature is executed) with
the same force and effect as if such facsimile signature were the original
thereof.
23
(j) All
Debtors (including without limitation any Additional Debtor joined hereto) shall
be jointly and severally be liable for the obligations of each Debtor to the
Secured Parties hereunder.
(k) Each
Debtor shall indemnify, reimburse and hold harmless the Agent and the Secured
Parties and their respective partners, members, shareholders, officers,
directors, employees and agents (and any other persons with other titles that
have similar functions) (collectively, “Indemnitees”) from
and against any and all losses, claims, liabilities, damages, penalties, suits,
costs and expenses, of any kind or nature, (including fees relating to the cost
of investigating and defending any of the foregoing) imposed on, incurred by or
asserted against such Indemnitee in any way related to or arising from or
alleged to arise from this Agreement or the Collateral, except any such losses,
claims, liabilities, damages, penalties, suits, costs and expenses which result
from any violation of the terms or provisions of this Agreement or the
agreements underlying the Obligations or the negligence or willful misconduct of
the Indemnitee. This indemnification provision is in addition to, and
not in limitation of, any other indemnification provision in the Notes, the
Purchase Agreement or any other agreement, instrument or other document executed
or delivered in connection herewith or therewith.
(l)
Nothing in this Agreement shall be construed to
subject the Agent or any Secured Party to liability as a partner or member in or
of any Debtor or any of its direct or indirect subsidiaries, nor shall the Agent
or any Secured Party be deemed to have assumed any obligations under any
partnership agreement or limited liability company agreement, as applicable, of
any such Debtor or any of its direct or indirect subsidiaries or otherwise,
unless and until any such Secured Party exercises its right to be substituted
for such Debtor as a partner or member, as applicable, pursuant
hereto.
(m) To the extent that the grant of the security interest in
the Collateral and the enforcement of the terms hereof require the consent,
approval or action of any partner or member, as applicable, of any Debtor or any
direct or indirect subsidiary of any Debtor or compliance with any provisions of
any of the Organizational Documents, the Debtors hereby grant such consent and
approval and waive any such noncompliance with the terms of said
documents.
[SIGNATURE
PAGES FOLLOW]
24
IN
WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be
duly executed on the day and year first above written.
ADAMIS
PHARMACEUTICALS CORPORATION
|
||
By:
|
/s/
Xxxxxx X. Xxxxx
|
|
Name:
|
Xxxxxx
X. Xxxxx
|
|
Title:
|
CEO
|
ADAMIS
CORPORATION
|
||
By:
|
/s/
Xxxxxx X. Xxxxx
|
|
Name:
|
Xxxxxx
X. Xxxxx
|
|
Title:
|
CEO
|
ADAMIS
LABORATORIES, INC.
|
||
By:
|
/s/
Xxxxxxx X. Xxxx
|
|
Name:
|
Xxxxxxx
X. Xxxx
|
|
Title:
|
President
|
ADAMIS
VIRAL THERAPIES, INC.
|
||
By:
|
/s/
Xxxxxx X. Xxxxx
|
|
Name:
|
Xxxxxx
X. Xxxxx
|
|
Title:
|
CEO
|
[SIGNATURE
PAGE OF HOLDERS FOLLOWS]
25
[SIGNATURE
PAGE OF HOLDERS TO ADMP SECURITY AGREEMENT]
GEMINI
MASTER FUND, LTD.
|
||
By:
|
GEMINI
STRATEGIES, LLC, as investment
manager
|
By:
|
/s/ Xxxxxx Xxxxxxx | |
Xxxxxx
Xxxxxxx, Managing Member
|
GEMINI STRATEGIES, LLC, as
Agent
By:
|
/s/ Xxxxxx Xxxxxxx | |
Xxxxxx
Xxxxxxx, Managing Member
|
KINGSBROOK
OPPORTUNITIES MASTER FUND LP
By:
|
KINGSBROOK
OPPORTUNITIES GP LLC, its general
partner
|
By:
|
/s/ Xxxx X. Chill | |
Xxxx
X. Chill, Managing Member
|
ALPHA
CAPITAL ANSTALT
By:
|
/s/ Xxxxx Xxxxxxx | |
Xxxxx
Xxxxxxx
|
WHALEHAVEN
CAPITAL FUND LTD.
By:
|
/s/ Xxxxx Xxxxxxxx | |
Xxxxx
Xxxxxxxx
|
MICRO
PIPE FUND I, LLC
By:
|
XXXXXXXXXX
INVESTMENT MANAGEMENT, LLC
|
By:
|
/s/ Xxxxx Xxxxxxxxx | |
Xxxxx Xxxxxxxxx |
CRANSHIRE
CAPITAL, L.P.
By:
|
DOWNSVIEW
CAPITAL, INC.
|
By:
|
/s/ Xxxxxxxx Xxxxx | |
Xxxxxxxx
Xxxxx, President
|
26
ANNEX
A
to
SECURITY
AGREEMENT
|
FORM
OF ADDITIONAL DEBTOR JOINDER
|
Security
Agreement dated as of January 11, 2010 made by
ADAMIS
PHARMACEUTICALS CORPORATION
and its
subsidiaries party thereto from time to time, as Debtors
to and in
favor of
the
Secured Parties identified therein (the “Security
Agreement”)
Reference
is made to the Security Agreement as defined above; capitalized terms used
herein and not otherwise defined herein shall have the meanings given to such
terms in, or by reference in, the Security Agreement.
The
undersigned hereby agrees that upon delivery of this Additional Debtor Joinder
to the Secured Parties referred to above (or the Agent on their behalf), the
undersigned shall (a) be an Additional Debtor under the Security Agreement, (b)
have all the rights and obligations of the Debtors under the Security Agreement
as fully and to the same extent as if the undersigned was an original signatory
thereto, and (c) be deemed to have made the representations and warranties set
forth therein as of the date of execution and delivery of this Additional Debtor
Joinder. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE
UNDERSIGNED SPECIFICALLY GRANTS TO THE SECURED PARTIES A SECURITY INTEREST IN
THE COLLATERAL OWNED BY IT AS MORE FULLY SET FORTH IN THE SECURITY AGREEMENT AND
ACKNOWLEDGES AND AGREES TO THE WAIVER OF JURY TRIAL PROVISIONS SET FORTH
THEREIN.
Attached
hereto are supplemental and/or replacement Schedules to the Security Agreement,
as applicable. An executed copy of this Joinder shall be delivered to
the Secured Parties (or the Agent on their behalf), and the Secured Parties may
rely on the matters set forth herein on or after the date
hereof. This Joinder shall not be modified, amended or terminated
without the prior written consent of the Secured Parties.
IN
WITNESS WHEREOF, the undersigned has caused this Joinder to be executed in the
name and on behalf of the undersigned.
[Name
of Additional Debtor]
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
Address:
|
Dated:
27
ANNEX
B
to
SECURITY
AGREEMENT
THE
AGENT
1. Appointment. The Secured Parties
(all capitalized terms used herein and not otherwise defined shall have the
respective meanings provided in the Security Agreement to which this Annex B is
attached (the "Agreement")), by
their acceptance of the benefits of the Agreement, hereby designate Gemini
Strategies, LLC (“Gemini” or “Agent”) as the Agent
to act as specified herein and in the Agreement. Each Secured Party
shall be deemed irrevocably to authorize the Agent to take such action on its
behalf under the provisions of the Agreement and any other Transaction Document
(as such term is defined in the Notes) and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the Agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. The Agent may perform any of its
duties hereunder by or through its agents or employees.
2. Nature of Duties. The Agent shall
have no duties or responsibilities except those expressly set forth in the
Agreement. Neither the Agent nor any of its partners, members,
shareholders, officers, directors, employees or agents shall be liable for any
action taken or omitted by it as such under the Agreement or hereunder or in
connection herewith or therewith, be responsible for the consequence of any
oversight or error of judgment or answerable for any loss, unless caused solely
by its or their gross negligence or willful misconduct as determined by a final
judgment (not subject to further appeal) of a court of competent
jurisdiction. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of the Agreement or
any other Transaction Document a fiduciary relationship in respect of any Debtor
or any Secured Party; and nothing in the Agreement or any other Transaction
Document, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of the Agreement or any other
Transaction Document except as expressly set forth herein and therein. At the
expense of the Company, promptly following the Closing the Agent shall file such
UCC-1 financing statements with such filing offices as may be reasonably
requested by the Requisite Purchasers, including without limitation UCC-1
financing statements covering the Collateral in the jurisdictions indicated on
Schedule C to the Agreement.
3. Lack of Reliance on the
Agent. Independently and without reliance upon the Agent, each
Secured Party, to the extent it deems appropriate, has made and shall continue
to make (i) its own independent investigation of the financial condition and
affairs of the Company and its subsidiaries in connection with such Secured
Party’s investment in the Debtors, the creation and continuance of the
Obligations, the transactions contemplated by the Transaction Documents, and the
taking or not taking of any action in connection therewith, and (ii) its own
appraisal of the creditworthiness of the Company and its subsidiaries, and of
the value of the Collateral from time to time, and the Agent shall have no duty
or responsibility, either initially or on a continuing basis, to provide any
Secured Party with any credit, market or other information with respect thereto,
whether coming into its possession before any Obligations are incurred or at any
time or times thereafter. The Agent shall not be responsible to the
Debtors or any Secured Party for any recitals, statements, information,
representations or warranties herein or
in any document, certificate or other writing delivered in connection herewith,
or for the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectability, priority or sufficiency of the Agreement or any
other Transaction Document, or for the financial condition of the Debtors or the
value of any of the Collateral, or be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of the Agreement or any other Transaction Document, or the financial
condition of the Debtors, or the value of any of the Collateral, or the
existence or possible existence of any default or Event of Default under the
Agreement, the Notes or any of the other Transaction
Documents.
28
4. Certain Rights of the
Agent. The Agent shall have the right to take any action with
respect to the Collateral, on behalf of all of the Secured
Parties. To the extent practical, the Agent shall request
instructions from the Secured Parties with respect to any material act or action
(including failure to act) in connection with the Agreement or any other
Transaction Document, and shall be entitled to act or refrain from acting in
accordance with the instructions of Secured Parties holding a majority in
principal amount of Notes (based on then-outstanding principal amounts of Notes
at the time of any such determination); if such instructions are not provided
despite the Agent’s request therefor, the Agent shall be entitled to refrain
from such act or taking such action, and if such action is taken, shall be
entitled to appropriate indemnification from the Secured Parties in respect of
actions to be taken by the Agent; and the Agent shall not incur liability to any
person or entity by reason of so refraining. Without limiting the
foregoing, (a) no Secured Party shall have any right of action whatsoever
against the Agent as a result of the Agent acting or refraining from acting
hereunder in accordance with the terms of the Agreement or any other Transaction
Document, and the Debtors shall have no right to question or challenge the
authority of, or the instructions given to, the Agent pursuant to the foregoing,
and (b) the Agent shall not be required to take any action which the Agent
believes (i) could reasonably be expected to expose it to personal liability or
(ii) is contrary to this Agreement, the Transaction Documents or applicable
law.
5. Reliance. The Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, cablegram, radiogram, order or other document or telephone
message signed, sent or made by the proper person or entity, and, with respect
to all legal matters pertaining to the Agreement and the other Transaction
Documents and its duties thereunder, upon advice of counsel selected by it, and
upon all other matters pertaining to this Agreement and the other Transaction
Documents and its duties thereunder, upon advice of other experts selected by
it. Anything to the contrary notwithstanding, the Agent shall have no
obligation whatsoever to any Secured Party to assure that the Collateral exists
or is owned by the Debtors or is cared for, protected or insured or that the
liens granted pursuant to the Agreement have been properly or sufficiently or
lawfully created, perfected, or enforced or are entitled to any particular
priority.
6. Indemnification. To the extent
that the Agent is not reimbursed and indemnified by the Debtors, the Secured
Parties will jointly and severally reimburse and indemnify the Agent, in
proportion to their initially purchased respective principal amounts of Notes,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
performing its duties hereunder or under the Agreement or any other Transaction
Document, or in any way relating to or arising out of the Agreement or any other
Transaction Document except for those determined by a final judgment (not
subject to further appeal) of a court of competent jurisdiction to have resulted
solely from the Agent's own gross negligence or willful
misconduct. Prior to taking any action hereunder as Agent, the Agent
may require each Secured Party to deposit with it sufficient sums as it
determines in good faith is necessary to protect the Agent for costs and
expenses associated with taking such action.
29
7. Resignation by the Agent.
(a) The
Agent may resign from the performance of all its functions and duties under the
Agreement and the other Transaction Documents at any time by giving 30 days'
prior written notice (as provided in the Agreement) to the Debtors and the
Secured Parties. Such resignation shall take effect upon the
appointment of a successor Agent pursuant to clauses (b) and (c)
below.
(b) Upon
any such notice of resignation, the Secured Parties, acting by a Majority in Interest, shall appoint a successor
Agent hereunder.
(c) If
a successor Agent shall not have been so appointed within said 30-day period,
the Agent shall then appoint a successor Agent who shall serve as Agent until
such time, if any, as the Secured Parties appoint a successor Agent as provided
above. If a successor Agent has not been appointed within such 30-day
period, the Agent may petition any court of competent jurisdiction or may
interplead the Debtors and the Secured Parties in a proceeding for the
appointment of a successor Agent, and all fees, including, but not limited to,
extraordinary fees associated with the filing of interpleader and expenses
associated therewith, shall be payable by the Debtors on demand.
(d) Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations under the
Agreement. After any retiring Agent’s resignation or removal hereunder as
Agent, the provisions of the Agreement including this Annex B shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent.
8. Rights with respect to
Collateral. Each Secured
Party agrees with all other Secured Parties and the Agent (i) that it shall not,
and shall not attempt to, exercise any rights with respect to its security
interest in the Collateral, whether pursuant to any other agreement or otherwise
(other than pursuant to this Agreement), or take or institute any action against
the Agent or any of the other Secured Parties in respect of the Collateral or
its rights hereunder (other than any such action arising from the breach of this
Agreement) and (ii) that such Secured Party has no other rights with respect to
the Collateral other than as set forth in this Agreement and the other
Transaction Documents.
30