Exhibit 10.14
Security Agreement dated as of January 1, 2005 between Ardent Pharmaceuticals,
Inc and Bioaccelerate, Inc.
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is dated as of 1st January, 2005, by
ARDENT PHARMACEUTICALS, INC., a North Carolina corporation (the "Grantor"), in
favor of BIOACCELERATE INC, a Delaware corporation (the "Lender").
Recitals
WHEREAS, pursuant to that certain letter agreement (the "Letter Agreement") of
even date herewith between the Grantor and Lender, Lender has made available a
senior, secured credit facility in the aggregate principal amount of up to Two
Million Dollars ($2,000,000);
WHEREAS, pursuant to that certain Note of even date herewith, issued by the
Grantor in favor of the Lender (as the same may from time to time be amended,
modified, supplemented or restated, the "Note"), Grantor has promised to pay the
Obligations (as defined herein) to the Lender; and
WHEREAS, the obligations of the Lender under the Letter Agreement are subject to
the condition, among others, that Grantor shall have executed and delivered to
Lender this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by Grantor, Grantor hereby represents,
covenants and agrees with Lender as follows:
1. Definitions.
a. When used in this Agreement the following terms shall have the
following meanings (such meanings being equally applicable to both
the singular and plural forms of the terms defined):
"Collateral" has the meaning assigned to such term in Section 2 of
this Agreement.
"Contracts" means all contracts (including any customer, vendor,
supplier, service or maintenance contract), leases, licenses, undertakings,
purchase orders, permits, franchise agreements or other agreements (other than
any right evidenced by Chattel Paper, Documents or Instruments), whether in
written or electronic form, in or under which Grantor now holds or hereafter
acquires any right, title or interest, including, without limitation, with
respect to an Account, any agreement relating to the terms of payment or the
terms of performance thereof.
"Copyrights" means all of the following now owned or hereafter acquired or
created (as a work for hire for the benefit of Grantor) by Grantor or in which
Grantor now holds or hereafter acquires or receives any right or interest, in
whole or in part: (a) all copyrights, whether registered or unregistered, held
pursuant to the laws of the United States, any State thereof or any other
country; (b) registrations, applications, recordings and proceedings in the
United States Copyright Office or in any similar office or agency of the United
States, any State thereof or any other country; (c) any continuations, renewals
or extensions thereof; (d) any registrations to be issued in any pending
applications, and shall include any right or interest in and to work protectable
by any of the foregoing which are presently or in the future owned, created or
authorized (as a work for hire for the benefit of Grantor) or acquired by
Grantor, in whole or in part; (e) prior versions of works covered by copyright
and all works based upon, derived from or incorporating such works; (f) income,
royalties, damages, claims and payments now and hereafter due and/or payable
with respect to copyrights, including, without limitation, damages, claims and
recoveries for past, present or future infringement; (g) rights to xxx for past,
present and future infringements of any copyright; and (h) any other rights
corresponding to any of the foregoing rights throughout the world.
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"Obligations" has the meaning set forth in Section 3 of this Agreement.
"Patents" means all of the following in which Grantor now holds or
hereafter acquires any interest: (a) all letters patent of the United States or
any other country, all registrations and recordings thereof and all applications
for letters patent of the United States or any other country, including, without
limitation, registrations, recordings and applications 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; (b) all reissues, divisions,
continuations, renewals, continuations-in-part or extensions thereof; (c) all
xxxxx patents, divisionals and patents of addition; (d) all patents to issue in
any such applications; (e) income, royalties, damages, claims and payments now
and hereafter due and/or payable with respect to patents, including, without
limitation, damages, claims and recoveries for past, present or future
infringement; and (f) rights to xxx for past, present and future infringements
of any patent.
"Trademark" means any of the following in which Grantor now holds or
hereafter acquires any interest: (a) all trademarks, whether registered or
unregistered, held pursuant to the laws of the United States, and State thereof,
or any country (b) registrations, applications, recordings and proceedings 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; (c) any
continuations, renewals or extensions thereof; (d) any registrations to be
issued in any pending applications (e) income, royalties, damages, claims and
payments now and hereafter due and/or payable with respect to trademarks,
including, without limitation, damages, claims and recoveries for past, present
or future infringement; (g) rights to xxx for past, present and future
infringements of any trademark; and (h) any other rights corresponding to any of
the foregoing rights throughout the world.
"UCC" means the Uniform Commercial Code as the same may from time to time be in
effect in the State of New York; provided, however, in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of Lender's security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, the term "UCC" shall mean the Uniform Commercial Code (including the
Articles thereof) as in effect at such time in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions. In
addition, the following terms shall have the meanings set forth for such terms
in the UCC: "Account," "Account Debtor," "Chattel Paper" (including tangible and
electronic chattel paper), "Commercial Tort Claims," "Commodity Account,"
"Deposit Account," "Documents," "Equipment," "Fixtures," "Fixture Filing,"
"General Intangible" (including, without limitation, Payment Intangibles,
Copyrights, Patents, Trademarks, designs, drawings, technical information,
marketing plans, customer lists, trade secrets, proprietary or confidential
information, inventions (whether or not patentable), procedures, know-how,
models and data), "Instrument," "Intellectual Property," "Inventory" (including
all goods held for sale or lease or to be furnished under a contract of service,
and including returns and repossessions), "Investment Property" (including
Securities, Securities Accounts and Securities entitlements), "Letter-of-Credit
Right" (whether or not the letter of credit is evidenced by a writing), "Payment
Intangibles," "Proceeds," "Promissory Notes," "Securities," "Securities
Account," "Securities Entitlement" and "Supporting Obligations." Each of the
foregoing terms shall include all of such items now owned, or hereafter
acquired, by Grantor.
b. Except as otherwise defined herein, all capitalized terms used in
this Agreement have the meanings stated in the Note.
2. Grant of Security. As collateral security for the full, prompt, complete
and final payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of all the Obligations, Grantor hereby grants
to Lender a lien on and security interest in, all of Grantor's right,
title and interest in, to and under the following, whether now owned or
hereafter acquired (all of which being collectively referred to herein as
the "Collateral"):
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a. All Accounts of Grantor (including, but not limited to, and
notwithstanding anything in this Agreement to the contrary, any and
all proceeds, money or accounts under all Contracts (without
exception).
b. All Chattel Paper of Grantor;
c. All Contracts of Grantor;
d. All Deposit Accounts of Grantor;
e. All Documents of Grantor;
f. All Equipment of Grantor; (Excepting those leased items as defined
in Appendix 1 of this document)
g. All Fixtures of Grantor; (Excepting those leased items as defined in
Appendix 1 of this document)
h. All General Intangibles of Grantor;
i. All Instruments of Grantor, including, without limitation,
Promissory Notes;
j. All Inventory of Grantor;
k. All Investment Property of Grantor;
l. All Letter-of Credit Rights of Grantor;
m. All Supporting Obligations of Grantor;
n. All property of Grantor held by Lender, including, without
limitation, all property of every description now or hereafter in
the possession or custody of or in transit to Lender for any
purpose, including, without limitation, safekeeping, collection or
pledge, for the account of Grantor, or as to which Grantor may have
any right or power;
o. All other goods and personal property of Grantor wherever located,
whether tangible or intangible, and whether now owned or hereafter
acquired, existing, leased or consigned by or to Grantor, except
those goods and personal property which are excluded pursuant to
Section 2(c) or 2(h) hereunder, and excluded under Appendix 1 from
2f & 2g; and
p. To the extent not otherwise included, all Proceeds of each of the
foregoing and all accessions to, substitutions and replacements for
and rents, profits and products of each of the foregoing.
If Grantor shall at any time acquire a Commercial Tort Claim, Grantor shall
promptly notify the Lender in a writing signed by Grantor of the brief details
thereof and grant to Lender 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 Lender.
Grantor hereby authorizes the Lender to file, without Grantor's signature
thereon and at Grantor's expense, financing statements, continuation statements
(including "in lieu" continuation statements) and amendments thereto, that
describe the Collateral and which contain any other information required by Part
5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any
financing statement, continuation statement or amendment, including if Grantor
is an organization, the type of organization and any organization identification
number issued to Grantor.
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3. Security for Obligations. This Agreement secures the payment of (i) all of
the unpaid principal amount of, and accrued interest on (including any
interest that accrues after the commencement of any bankruptcy proceeding)
the Note, (ii) the obligation of Grantor to pay any fees, costs and
expenses of Lender under the Note, and (iii) all other obligations,
liabilities and indebtedness owed by Grantor to the Lender under the Note,
in each case, whether now existing or hereafter incurred (collectively,
the "Obligations").
4. Rights of Lender; Collection of Accounts.
a. Grantor expressly agrees that Grantor shall remain liable under each
of its Contracts to observe and perform all the conditions and
obligations to be observed and performed by it thereunder and that
Grantor shall perform all of its duties and obligations thereunder
such that the Grantor shall not be deemed to be in breach of each
such Contract. The Lender shall not have any obligation or liability
under any Contract by reason of or arising out of this Agreement or
the granting to the Lender of a lien therein or the receipt by the
Lender of any payment relating to any Contract pursuant hereto, nor
shall the Lender be required or obligated in any manner to perform
or fulfill any of the obligations of Grantor under or pursuant to
any Contract, or to make any payment, or to make any inquiry as to
the nature or the sufficiency of any payment received by them or the
sufficiency of any performance by any party under any Contract, or
to present or file any claim, or to take any action to collect or
enforce any performance or the payment of any amounts which may have
been assigned to them or to which they may be entitled at any time
or times.
b. The Lender authorizes Grantor to collect its accounts, provided that
such collection is performed in a prudent and businesslike manner,
and the Lender may, upon the occurrence and during the continuation
of any Event of Default and without notice, limit or terminate said
authority at any time. Upon the occurrence and during the
continuance of any Event of Default, at the request of the Lender,
Grantor shall deliver to Lender all original and other documents
which created and/or relate to such accounts, including, without
limitation, all original orders, invoices and shipping receipts.
c. The Lender may at any time, upon the occurrence and during the
continuance of any Event of Default, without notifying Grantor of
its intention to do so, notify Account Debtors of Grantor, parties
to the Contracts of Grantor, obligors in respect of Instruments of
Grantor and obligors in respect of Chattel Paper of Grantor that the
Accounts and the right, title and interest of Grantor in, to and
under such Contracts, Instruments and Chattel Paper have been
assigned to Lender and that payments thereunder or with respect
thereto are to be made directly to the Lender. Upon the request of
the Lender, Grantor shall promptly so notify such Account Debtors,
parties to such Contracts, obligors in respect of such Instruments
and obligors in respect of such Chattel Paper. Upon the occurrence
and during the continuance of any Event of Default, the Lender may,
in Lender's name or in the name of others, communicate with such
Account Debtors, parties to such Contracts, obligors in respect of
such Instruments and obligors in respect of such Chattel Paper to
verify with such parties, to the Lender's satisfaction, the
existence, amount and terms of any such Accounts, Contracts,
Instruments or Chattel Paper. Notwithstanding the foregoing, Lender
shall not notify or otherwise communicate with any parties to
Contracts or Account Debtors of Grantor except upon the occurrence
of any Event of Default.
d. Without limiting the foregoing and Lender's rights as set forth in
the foregoing, any action by the Lender pursuant to or as described
in Section 4(b) or Section 4(c) hereof shall be in compliance with
the provisions set forth in Section 12(b)(v) hereof.
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5. Representations and Warranties of Grantor. Grantor represents and warrants
as follows:
a. Grantor is a corporation duly organized, existing and in good
standing under the laws of the Delaware, (b) has the legal power to
own its property and to carry on its business as now being
conducted, and (c) is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the
properties owned or leased by it therein or in which the transaction
of its business makes such qualification necessary, except where the
failure to so qualify or be in good standing would not have a
Material Adverse Effect;
b. Grantor is, and as to Collateral acquired by it from time to time
after the date hereof Grantor will be, the owner of all Collateral
free from any liens, other than liens created hereby and other than
Permitted Liens;
c. This Agreement creates, for the benefit and security of Lender in
respect of the Obligations, a legally valid and binding lien on,
pledge of, and security interest in the Collateral and, upon the
filing of a UCC Financing Statement, and any applicable filings with
respect to Copyrights, Patents or Trademarks in respect of the
Collateral, such lien, pledge and security interest will be
perfected and will have priority over the claims of any other
present and future creditors of the Company (other than Permitted
Liens or liens upon such of the Collateral that must be perfected by
possession or control of such Collateral); and
d. Grantor's chief executive office, principal place of business and
the place where Grantor maintains its records concerning the
Collateral are each presently located at the address set forth on
the signature page hereof; and Grantor's Federal taxpayer
identification number and Grantor's organizational identification
number under the laws of the State in which Grantor, as a registered
organization, was organized are as set forth on the signature page
hereto.
6. As to the Collateral.
a. Notwithstanding anything to the contrary contained herein, the
assignment by Grantor herein stated is intended to be an assignment
for security purposes and is not intended to divest Grantor of its
ownership of the Collateral, except as otherwise provided herein.
b. So long as no Event of Default has occurred and is continuing, (i)
Grantor shall retain title to and record ownership of the
Collateral, and (ii) Grantor shall be entitled to receive any and
all income or distributions made with respect to the Collateral,
except as provided in Section 6(c) hereof.
c. Upon the occurrence and during the continuance of an Event of
Default, all income and proceeds of the Collateral which are
received by Grantor shall be (i) received in trust for the benefit
of the Lender, (ii) segregated from other funds of Grantor, and
(iii) forthwith paid over by Grantor to the Lender (for application
in accordance with this Agreement) in the same form as so received.
7. Covenants of Grantor. Grantor covenants and agrees with Lender that unless
approved by Lender:
a. Grantor shall not sell, assign (by operation of law or otherwise),
or otherwise transfer any of the Collateral, or attempt or contract
to do so, or grant any option with respect to any of the Collateral,
except Inventory in the ordinary course of business.
b. Grantor shall not change its name, identity or corporate structure
in any manner, nor change its jurisdiction of organization, relocate
its chief executive office, principal place of business or its
principal records with respect to the Collateral, or allow the
relocation of any Collateral, in each case without thirty (30) days'
prior written notice to the Lender.
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c. Grantor shall not, directly or indirectly, create or permit to exist
any lien upon or with respect to any of the Collateral, and shall
defend the Collateral against, and take such other action as is
necessary to remove, any lien on the Collateral, except for the lien
created hereby and any Permitted Liens.
d. Grantor shall maintain all tangible Collateral in good condition and
repair, ordinary wear and tear excepted.
e. Grantor shall maintain on the Collateral property damage and
liability insurance in such amounts, against such risks, and in such
forms and with such companies as are customarily maintained by
businesses similar to Grantor. Each such policy shall not be
materially altered or canceled, and the coverage will not be
materially reduced, in any case, without at least thirty (30) days'
prior written notice to the Lender. Grantor shall provide the Lender
with satisfactory evidence of such insurance coverage at the request
of the Lender.
f. Grantor shall promptly pay when due all property and other taxes,
assessments and government charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against,
the Collateral, except to the extent the validity thereof is being
contested in good faith and by appropriate proceedings and adequate
reserves are being maintained in connection therewith; provided that
this Section 7(f) shall not apply to claims for labor, materials or
supplies which Payee consents in writing shall be excluded herewith,
notwithstanding that such claims, if unpaid, might become a lien or
charge upon such properties or any part thereof.
g. Grantor shall keep and maintain at its own cost and expense
satisfactory and reasonably complete records of the Collateral.
Grantor shall furnish the Lender with such information regarding the
Collateral as the Lender may reasonably request from time to time
and shall allow the Lender, upon reasonable notice, access during
normal business hours to inspect the Collateral and Grantor's
records, accounts and books pertaining to the Collateral, provided
that no restriction as to normal business hours shall be required
during the continuance of an Event of Default.
h. Grantor shall not knowingly take or omit to take any action, the
taking or omission of which might impair Lender's lien on the
Collateral or adversely affect the value of the Collateral.
i. Upon the occurrence and during the continuance of any Event of
Default, Grantor shall not grant any extension of the time of
payment of any of its Accounts, Chattel Paper, Instruments or
amounts due under any of its Contracts or Documents, compromise,
compound or settle the same for less than the full amount thereof,
release, wholly or partly, any Person liable for the payment
thereof, or allow any credit or discount whatsoever thereon other
than trade discounts and rebates granted in the ordinary course of
Grantor's business.
j. Grantor shall (i) protect, defend and maintain the validity and
enforceability of the Copyrights, Patents and Trademarks, (ii) use
commercially reasonable efforts to detect infringements of the
Copyrights, Patents and Trademarks and promptly advise the Lender in
writing of material infringements detected, and (iii) not allow any
material Copyrights, Patents or Trademarks to be abandoned,
forfeited or dedicated to the public without the written consent of
the Lender, unless any such abandonment is appropriate in accordance
with reasonable and customary business practice.
k. Grantor shall not execute or authorize to be filed in any public
office any UCC financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) except
UCC financing statements filed or to be filed in respect of and
covering the lien created by this Agreement.
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l. Grantor shall not amend, modify, waive, take any action or fail to
take any action with respect to all or a portion of any Contract
which Grantor reasonably expects or should expect would adversely
affect Lender's interest in the Collateral (including, but not
limited to, the value of the Collateral) or which affect the timing,
value or amount of any proceeds due under any Contract.
8. Further Assurances. Grantor agrees, at any time and from time to time, at
the expense of Grantor, and upon request of the Lender, to promptly
execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, in order to perfect
and protect any security interest granted or purported to be granted
hereby or to enable the Lender to exercise and enforce Lender's rights and
remedies hereunder with respect to any Collateral, including, without
limitation, (i) delivering and causing to be filed any financing or
continuation statements (including "in lieu" continuation statements)
under the UCC with respect to the security interests granted hereby, (ii)
obtaining "control" by or on behalf of Lender of any Investment Property,
Deposit Accounts, Letter-of-Credit Rights or Electronic Chatter Paper
(with reference to applicable provisions of the UCC with respect to
"control" for such items of Collateral), (iii) placing the interest of the
Lender as lienholders on the certificate of title (or similar evidence of
ownership) of any Equipment constituting Collateral owned by Grantor which
is covered by a certificate of title (or similar evidence of ownership),
(iv) filing or cooperating with the Lender in filing any forms or other
documents required to be recorded with the United States Patent and
Trademark Office, United States Copyright Office, or any actions, filings,
recordings or registrations in any foreign jurisdiction or under any
international treaty, required to secure or protect Lender's interest in
the Collateral, (v) transferring Collateral to the possession of the
Lender (if a security interest in such Collateral can only be perfected by
possession), (vi) executing and delivering or causing to be delivered
written notice to insurers of Lender's security interest in, or claim in
or under, any policy of insurance (including unearned premiums), and (vii)
using its best efforts to obtain acknowledgements from bailees having
possession of any Collateral and waivers of liens from landlords and
mortgagees of any location where any of the Collateral may from time to
time be stored or located. If Grantor executes and delivers any document
or instrument pursuant to this Section 8, such document or instrument
shall be in form and substance reasonably satisfactory to the Lender and a
copy thereof shall be provided by Grantor to the Lender; and if Grantor
takes any other action pursuant to this Section 8, such action shall be
taken with the prior written consent of the Lender and notice thereof
shall be given by Grantor to the Lender.
9. Security Interest Absolute. All rights of the Lender and the assignment
and security interest hereunder, and all obligations of Grantor hereunder,
shall remain in full force and effect and shall secure the Obligations,
and shall be absolute and unconditional, irrespective of:
a. any change in the time, manner or place of payment 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 Note; or
b. any taking, exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Obligations; or
c. any manner of application of any Collateral, or proceeds thereof, to
all or any of the Obligations or any manner of sale or other
disposition of any Collateral; or
d. any other circumstances other than releases, waivers and the like by
the Lender that might otherwise constitute a defense available to,
or a discharge of, Grantor's obligations hereunder or Lender's
security interest hereunder.
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10. Continuing Security Interest; Sale of Participations; Release of
Collateral. This Agreement shall create a continuing security interest in
the Collateral and shall (i) remain in full force and effect until the
payment in full of the Obligations (subject to Section 14 hereof), (ii) be
binding upon Grantor, its successors and its permitted assigns under the
Note, and (iii) inure to the benefit of, and be enforceable by (subject to
the terms hereof), the Lender and its successors and assigns. No sales of
participations in, and no other sales, assignments, transfers or other
dispositions of, any agreement governing or instrument evidencing the
Obligations or any portion thereof or interest therein by the Lender shall
in any manner affect the lien granted to the Lender hereunder. Subject to
Section 14 hereof, upon the payment in full of the Obligations, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to Grantor. Upon any such termination, the Lender
will, at Grantor' expense, execute and deliver to Grantor such documents
as Grantor shall reasonably request to evidence such termination. The
Lender shall, at the request of Grantor, deliver any document reasonably
necessary to release any lien granted hereunder with respect to any
Collateral Grantor is transferring.
11. Lender's Duties. The powers conferred on the Lender hereunder are solely
to protect Lender's interest in the Collateral as a secured party and
shall not impose any duty upon the Lender to exercise any such powers.
Except for the safe custody of any Collateral in Lender's possession and
the accounting for money actually received by Lender hereunder, the Lender
shall not have any duty as to any Collateral or as to the taking of any
necessary steps to preserve any rights pertaining to any Collateral. The
Lender shall not have any responsibility or liability for the collection
of any proceeds of any Collateral or by reason of any invalidity, lack of
value or uncollectability of any of the Collateral. The Lender shall be
deemed to have exercised reasonable care in the custody and preservation
of any Collateral in the Lender's possession if such Collateral is
accorded treatment substantially equal to that which the Lender accords
its own property.
12. Events of Default; Remedies Upon Default; Actions by Lender.
a. The occurrence of an Event of Default under and as defined in the
Note shall constitute an "Event of Default" hereunder.
b. If any Event of Default shall have occurred:
i. The Lender may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or
otherwise available to Lender (or any of them), all the rights
and remedies of a secured party on default under the UCC
(whether or not the UCC applies to the affected Collateral),
and may also, without notice of any kind or demand of
performance or other demand (all and each of which demands and
notices are hereby expressly waived to the maximum extent
provided by the UCC and other applicable law) reclaim, take
possession, recover, store, maintain, finish, repair, prepare
for sale or lease, advertise for sale or lease and sell the
Collateral or any part thereof in one or more parcels at
public or private sale, at any exchange, broker's board or at
the Lender's offices or elsewhere, for cash, on credit, or for
future delivery, and upon such other terms as the Lender may
deem commercially reasonable. In connection with the
liquidation, sale or other disposition of the Collateral, the
Lender is granted a non-exclusive, royalty-free license or
other right to use, without charge, Grantor' labels, patents,
copyrights, trade secrets, trade names, trademarks, service
marks, or any similar property as it pertains to the
Collateral, in completing a liquidation, sale or other
disposition of the Collateral. The Lender shall not be
obligated to make any sale of Collateral regardless of notice
of sale having been given. The Lender may adjourn any public
or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so
adjourned. Grantor agrees that in any sale of any of the
Collateral, whether at a foreclosure sale or otherwise, the
Lender is hereby authorized to comply with any limitation or
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restriction in connection with such sale as it may be advised
by counsel is necessary in order to avoid any violation of
applicable law (including compliance with such procedures as
may restrict the number of prospective bidders and the Lender,
require that such prospective bidders and the Lender have
certain qualifications and restrict such prospective bidders
and the Lender to Persons who will represent and agree that
they are purchasing for their own account for investment and
not with a view to the distribution or resale of such
Collateral), and Grantor further agrees that such compliance
shall not result in such sale being considered or deemed not
to have been made in a commercially reasonable manner, nor
shall the Lender be liable or accountable to Grantor for any
discount allowed by reason of the fact that such Collateral is
sold in compliance with any such limitation or restriction.
ii. Grantor authorizes the Lender, on the terms set forth herein,
to enter the premises where the Collateral (or any part of it)
is located, to take possession of the Collateral (or any part
of it), and to pay, purchase, contract, or compromise any
encumbrance, charge or lien which, in the opinion of the
Lender, appears to be prior or superior to its security
interest. Grantor further agrees, at the Lender's request, to
assemble the Collateral and make it available to the Lender at
places which the Lender shall reasonably select. To the
maximum extent permitted by applicable law, Grantor hereby
waives all claims, damages, and demands against the Lender
arising out of the repossession, retention or sale of the
Collateral.
iii. The Lender may sell Collateral without giving warranties as to
such Collateral. The Lender may specifically disclaim any
warranties of title or the like. The foregoing will not be
considered adversely to affect the commercial reasonableness
of any sale of Collateral.
iv. If the Lender sells any of the Collateral upon credit, Grantor
will be credited only with, and at the time of, payments
actually made by the purchaser in such sale received by the
purchaser and applied to the indebtedness of such purchaser.
In the event the purchaser in such sale fails to pay for the
Collateral, the Lender may resell the Collateral and Grantor
shall be credited with the proceeds of the resale in
accordance with the preceding sentence. In the event the
Lender purchase any of the Collateral being sold, the Lender
may pay for the Collateral by crediting some or all of the
amounts described in clauses first, second, third and fourth
of Section 12(b)(vi) hereof.
v. Any cash held by the Lender as Collateral and all cash
proceeds received by the Lender in respect of any sale of,
collection from, or other realization upon, all or any part of
the Collateral or the exercise of any other remedies
consequent upon an Event of Default shall be applied in whole
or in part by the Lender against all or any part of the
Obligations in the following order:
First, to the Lender in an amount sufficient to pay in full
the Obligations, including all reasonable fees, costs,
expenses, liabilities and advances incurred or made by the
Lender in connection with the sale, disposition or other
realization of the Collateral, including without limitation,
reasonable attorneys' fees;
Second, upon payment in full of all the Obligations, to
Grantor or to whomsoever may be lawfully entitled to receive
such surplus.
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vi. Grantor shall remain liable for any deficiency if the proceeds
of any sale or disposition of the Collateral are insufficient
to fully pay the Obligations, and Grantor also shall be liable
for the reasonable costs and expenses (including reasonable
attorneys' fees and expenses) incurred by Lender to collect
such deficiency.
vii. Grantor hereby waives presentment, demand, protest or any
notice (to the maximum extent permitted by applicable law) of
any kind in connection with this Agreement or any Collateral.
13. Expenses. Grantor shall upon demand pay to the Lender the amount of any
and all reasonable expenses, including the reasonable and necessary fees
and expenses the Lender's counsel and of any experts and agents, which the
Lender may incur in connection with (a) the administration of this
Agreement, (b) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (c) the exercise
or enforcement of any of the rights of the Lender hereunder, or (d) the
failure by Grantor to perform or observe any of the provisions hereof or
of under the Note.
14. Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against
Grantor for liquidation or reorganization, should Grantor become insolvent
or make an assignment for the benefit of creditors or should a receiver or
trustee be appointed for all or any significant part of Grantor's property
and assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or
any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a "voidable preference," "fraudulent conveyance,"
or otherwise, all as though such payment or performance had not been made.
In the event that any payment, or any part thereof, is rescinded, reduced,
restored or returned, the Obligations shall be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced, restored
or returned.
15. Amendments, Etc. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by Grantor herefrom, shall in any
event be effective unless the same shall be in writing and signed by the
parties necessary to amend the Note, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose
for which given.
16. Cumulative Remedies. The rights and remedies hereunder provided are
cumulative and may be exercised singly or concurrently, and are not
exclusive of any rights and remedies provided by law. The Lender shall not
by any act, delay, omission or otherwise be deemed to have waived any of
their respective rights or remedies hereunder, nor shall any single or
partial exercise of any right or remedy hereunder on any one occasion
preclude the further exercise thereof or the exercise of any other right
or remedy.
17. Lender May Perform; Reimbursement; Power of Attorney.
a. If Grantor fails to perform any obligation of Grantor under this
Agreement, the Lender may, but shall not have the obligation to,
without prior notice to or obtaining the consent of Grantor, perform
that obligation on behalf of Grantor, including, without limitation,
obtaining insurance coverage for the Collateral and satisfying tax
obligations or liens on the Collateral. Grantor shall reimburse the
Lender on demand for all reasonable expenses and reasonable
attorneys' fees incurred by the Lender in performing any such
obligation, including interest at the interest rate specified in the
Note.
b. Grantor hereby absolutely and irrevocably constitutes and appoints
the Lender as Grantor's true and lawful agent and attorney-in-fact,
with full power of substitution, in the name of Grantor: (a) to take
any and all such action as the Lender or any of its agents, nominees
or attorneys may, in its or their sole and absolute discretion,
reasonably determine as necessary or advisable for the purpose of
maintaining, preserving or protecting the security constituted by
this Agreement or any of the rights, remedies, powers or privileges
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of the Lender under this Agreement; and (b) generally, in the name
of Grantor to exercise all or any of the powers, authorities and
discretions, conferred on or reserved to the Lender by or pursuant
to this Agreement, and (without prejudice to the generality of any
of the foregoing) to seal and deliver or otherwise perfect any deed,
assurance, agreement, instrument or act as the Lender may deem
proper in or for the purpose of exercising any of such powers,
authorities or discretions, in each case. Grantor hereby ratifies
and confirms, and hereby agrees to ratify and confirm, whatever
lawful acts the Lender or any of its agents, nominees or attorneys
shall do or purport to do in the exercise of the power of attorney
granted to the Lender pursuant to this Section 17(b), which power of
attorney, being given for security, is irrevocable. Notwithstanding
anything to the contrary in this Section 17(b), no such action as
Grantor's true and lawful agent and attorney-in-fact may be taken by
Lender except upon the occurrence of any Event of Default.
18. Addresses for Notices. All notices and other communications to any party
provided for hereunder shall be in writing and mailed by registered or
certified mail, return receipt requested, to the addresses for the Grantor
and the Lender set forth on the signature pages hereto, or, as to any
party, to such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms
of this Section 18: All such notices and other communications shall be
effective (i) upon personal delivery to the party to be notified; (ii) on
the date of first attempted delivery after having been sent by registered
or certified mail, return receipt requested, postage prepaid; (iii) one
(1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt.
19. Forbearance; Delay. Any forbearance, failure or delay by the Lender in
exercising any right, power or remedy hereunder shall not preclude the
exercise thereof. Every right, power or remedy of the Lender shall
continue in full force and effect until such right, power or remedy is
specifically waived by an instrument in writing executed by the Lender.
20. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
21. Successors and Assigns. This Agreement is for the benefit of the Lender
and its successors and assigns, and in the event of an assignment of all
or any of the Obligations, the rights hereunder, to the extent applicable
to the indebtedness so assigned, may be transferred with such
indebtedness. This Agreement shall be binding on the Grantor and its
respective successors and assigns.
22. Consent To Jurisdiction And Service Of Process. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF GRANTOR
AND LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE GRANTOR AND LENDER
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.
EACH OF GRANTOR AND LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED
BY NEW YORK LAW.
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23. Waiver Of Jury Trial. EACH OF GRANTOR AND LENDER WAIVES ITS RIGHT TO A
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
PARTY AGAINST ANY OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. EACH OF GRANTOR AND LENDER AGREES THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
WITHOUT LIMITING THE FOREGOING, EACH OF GRANTOR AND LENDER FURTHER AGREES
THAT ITS RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION
AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
24. Advice of Counsel; Construction. Each of Grantor and Lender represents and
warrants that it has discussed this Agreement, including, without
limitation, Section 22 and Section 23 hereof, with its counsel. The
parties hereto have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provisions of the Agreement.
25. Headings. The various headings in this Agreement are inserted for
convenience only and shall not affect the meanings or interpretation of
this Agreement or any provision hereof.
26. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York determined
without reference to principles of conflicts of law, except to the extent
that the validity or perfection of any security interest created
hereunder, or remedies hereunder, in respect of any item of the Collateral
is governed by the laws of a jurisdiction other than the State of New
York.
27. Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute an original.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
ARDENT PHARMACEUTICALS, INC.
By: /s/ Xxxxxxx X. Xxxx
------------------------
Name: Xxxxxxx X. Xxxx
Title: CFO
By: /s/ Xxxxxxxxxxx Every
------------------------
Name: Xxxxxxxxxxx Every
Title: President and CEO
Enhance Biotech, Inc.
BIOACCELERATE, INC.
------------------------
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: CFO
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Appendix 1
The following items shall be excluded from the terms of this Security Agreement
for the duration of the present leasehold arrangements with the lessor under
agreement reference: GE/Oxford Venture Finance LLC Master Security & Loan
Agreement No: 4114151 of February 21, 2001
The items included are detailed in the attached schedules:
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