PATIENT SAFETY TECHNOLOGIES, INC. SECURITY AGREEMENT Date: As of January 29, 2009
Exhibit
99.3
Date: As
of January 29, 2009
|
DEBTOR:
|
Patient
Safety Technologies, Inc. (the “Debtor”)
|
|
LENDERS:
|
Lenders
as defined in that certain senior secured note and warrant purchase
agreement (the “Purchase Agreement
“)
|
1. Security Interest and
Collateral. To secure the payment and performance of the Consideration
which the Debtor may now or at any time hereafter owe to the
Lenders:
(a) the
Debtor hereby grants the Lenders a security interest (herein called the
“Security Interest”) in all of the Collateral, as defined below, which may now
be or may at any time hereafter (i) come into the possession or control of
the Lenders, whether such possession or control is given for collateral purposes
or for safekeeping or (ii) be transferred or assigned to the Lenders by any
means permitted under Article 8 of the Uniform Commercial Code;
(b) “Collateral” means the
collateral in which the Lenders 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 and
all securities owned by the Debtor:
(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 pans 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 partnership interests, membership interests, stock or other securities.
rights under any of the organizational documents, agreements related to any
securities owned by the Debtor, 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;
(ix) All
files, records, books of account, business papers, and computer programs;
and
(x)
the products and proceeds of all of the foregoing Collateral set forth in
clauses (i)-(ix) above.
Without limiting the generality of the
foregoing, the “Collateral” shall
include any and all real, personal, intangible and / or any other classification
of assets of the Debtor, which also includes any and all investment property and
general intangibles respecting ownership and/or other equity interests in
subsidiary, SurgiCount Medical, Inc., without limitation, the shares of capital
stock and the other equity interests, 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 any and all
securities owned by the Debtor, 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 proceeds of such
asset.
2
(c) Debtor
hereby acknowledges that Xxxxxx & Xxxx LLP, upon the execution of an escrow
agreement within ten (10) from the date hereof, shall hold the Collateral on
behalf of the Lenders as of this date and until the payment and performance of
the Consideration is fully satisfied in accordance with the Purchase
Agreement.
2. Representations, Warranties
and Covenants. The Debtor represents, warrants and covenants
that:
(a) The
Debtor will duly endorse, in blank, each and every instrument constituting
Collateral by signing on said instrument or by signing a separate document of
assignment or transfer, if required by the Lenders;
(b) The
Debtor is the owner of the Collateral free and clear of all liens, encumbrances,
security interests and restrictions, except the Security Interest and any
restrictive legend appearing on any instrument constituting
Collateral;
(c) The
Debtor will keep the Collateral free and clear of all liens, encumbrances and
security interests, except the Security Interest and any restrictive legend
appearing on any instrument constituting Collateral;
(d) The
Debtor will pay, when due, all taxes and other governmental charges levied or
assessed upon or against any Collateral;
(e) At
any time, upon request by the Lenders, the Debtor will deliver to the Lenders
all notices, financial statements, reports or other communications received by
the Debtor as an owner or holder of the Collateral; and
(f) The
Debtor will upon receipt deliver to the Lenders in pledge as additional
Collateral all securities distributed on account of the Collateral such as stock
dividends and securities resulting from stock splits, reorganizations and
recapitalizations.
3. Rights of the
Lenders. Only the Noteholders Majority, as that term is defined in the
Purchase Agreement, may take action under this Agreement. The Debtor agrees that
the Lenders may at any time, after the occurrence of an Event of Default
(i) notify the obligor on or issuer of any Collateral to make payment to
the Lenders of any amounts due or distributable thereon; (ii) in the
Debtor’s name or the Lenders’ name enforce collection of any Collateral by suit
or otherwise, or surrender, release or exchange all or any part of it, or
compromise, extend or renew for any period any obligation evidenced by the
Collateral; (iii) receive all proceeds of the Collateral; and
(iv) hold any increase or profits received from the Collateral as
additional security for the Consideration, except that any money received from
the Collateral shall, at the Lenders’ option, be applied in reduction of the
Consideration, in such order of application as the Lenders may determine, or be
remitted to the Debtor.
4. Events of Default.
Events of Default under this Agreement shall be the same as under the
Notes.
3
5. Miscellaneous. This
Agreement can be waived, modified, amended, terminated or discharged, and the
Security Interest can be released, only explicitly in a writing signed by the
Noteholders Majority. All rights and remedies of the Lenders shall be cumulative
and may be exercised singularly or concurrently, at the Noteholders Majority’
option, and the exercise or enforcement of any one such right or remedy shall
neither be a condition to nor bar the exercise or enforcement of any other. All
notices to be given to the Debtor shall be deemed sufficiently given if
delivered or mailed by registered or certified mail, postage prepaid, or by
telecopier to the Debtor at its address or telecopier number, as the case may
be, set forth above or at the most recent address or telecopier number shown on
the Lenders’ records. All requests under Section 9-210 of the Uniform Commercial
Code (i) shall be made in a writing signed by a person duly authorized by
Debtor, (ii) shall be personally delivered, sent by registered or certified
mail, return receipt requested, or by overnight courier of national reputation,
(iii) shall be deemed to be sent when received by the Lenders, and (iv)
shall otherwise comply with the requirements of Section 9-210. The Debtor
requests that the Lenders respond to all such requests which on their face
appear to come from an authorized individual and releases the Lenders from any
liability for so responding. This Agreement shall be binding upon and inure to
the benefit of the Debtor and the Lenders and their respective heirs,
representatives, successors and assigns and shall take effect when signed by the
Debtor and delivered to the Lenders, and the Debtor waives notice of the
Lenders’ acceptance hereof. If any provision or application of this Agreement is
held unlawful or unenforceable in any respect, such illegality or
unenforceability shall not affect other provisions or applications which can be
given effect, and this Agreement shall be construed as if the unlawful or
unenforceable provision or application had never been contained herein or
prescribed hereby. All representations and warranties contained in this
Agreement shall survive the execution, delivery and performance of this
Agreement and the creation and payment of the Consideration. This Agreement
shall be governed by the internal laws (other than conflict laws) of the State
of California and, unless the context otherwise requires, all terms used herein
which are defined in Articles 1 and 9 of the Uniform Commercial Code, as in
effect in California, shall have the meanings therein stated. Each party
consents to the personal jurisdiction of the state and federal courts located in
the State of California in connection with any controversy related to this
Agreement, waives any argument that venue in any such forum is not convenient,
and agrees that any litigation initiated by any of them in connection with this
Agreement may be venued in either the state and federal courts located in San
Diego County, California. THE
PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR
PERTAINING TO THIS AGREEMENT.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
4
IN
WITNESS WHEREOF, the Debtor has executed and delivered this Agreement as of the
date first written above.
|
By:
|
|
|
Name:
|
Xxxxx
Xxxxx
|
|
Chief
Executive
Officer
|
|
