SECURITY AGREEMENT
SECURITY AGREEMENT (the "Security Agreement") dated as of April 30,
1998 between HUNTINGDON LIFE SCIENCES INC., a Delaware corporation (the
"Company"), and NATIONAL WESTMINSTER BANK PLC (the "Agent"), as collateral agent
for (i) the banks parties to the Facilities Agreement referred to below (the
"Facility Banks") and (ii) itself, as Overdraft Bank under the New Facility
Letter referred to below (in such capacity, the "Overdraft Bank").
W I T N E S S E T H:
WHEREAS, the Company, Huntingdon Life Sciences Limited, Huntington Life
Sciences Group plc, the Facility Banks and the Agent have entered into a
Facilities Agreement, dated as of November 1, 1995 (as amended, modified,
supplemented or extended from time to time, the "Facilities Agreement") pursuant
to which the Facility Banks have agreed to make certain facilities available to
the Company, Huntingdon Life Sciences Limited and Huntington Life Sciences Group
plc;
WHEREAS, in connection with the Facilities Agreement, the Company
executed and delivered (i) a Guarantee dated as of November 1, 1995 (as amended,
modified, supplemented or extended from time to time, the "Guarantee") in favor
of the Agent for the benefit of the Facility Banks and (ii) a Mortgage, Security
Agreement and Fixture Filing dated as of January 20, 1998 (as amended, modified,
supplemented and extended from time to time, the "Mortgage") in favor of the
Agent for the benefit of the Facility Banks; and
WHEREAS, pursuant to a New Facility Letter dated as of March 17, 1998
(as amended, modified, supplemented and extended from time to time, the "New
Facility Letter") from the Agent, as Overdraft Bank in respect of the new
overdraft facility provided for therein, the Company has agreed to execute and
deliver this Security Agreement to secure its obligations under the Facilities
Agreement, the Guarantee and the New Facility Letter;
NOW, THEREFORE, in consideration of the foregoing, the Company hereby
agrees with the Agent, for the benefit of the Facility Banks and the Overdraft
Bank (the Agent, the Facility Banks and the Overdraft Bank are collectively
referred to herein as the "Secured Parties"), as follows:
SECTION 1. Definitions. Unless otherwise indicated, capitalized
terms used herein and not defined herein shall have the respective meanings
given to them in the Facilities Agreement.
SECTION 2. Grant of Security. The Company hereby assigns, pledges,
transfers and grants to the Agent, for the benefit of the Secured Parties, a
continuing security interest in, and a lien upon, all of the Company's right,
title and interest in, to and under, the following:
(a) The Company's demand deposit account (account number 191 10015)
with The First National Bank of Maryland (the "Pledged Account") and all monies
and credit balances from time to time held in the Pledged Account;
(b) The equipment and property described on Exhibit A hereto, together
with all replacements and subsequent replacements thereof (collectively, the
"Equipment"); and
(c) Any and all proceeds of any of the foregoing.
The property referred to and described in (a), (b) and (c) of this
Section 2 is hereinafter collectively referred to as the "Collateral".
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SECTION 3. Security for Obligations. This Security Agreement secures
the payment of all obligations and liabilities now or hereafter existing of (i)
the Company, Huntingdon Life Sciences Limited and Huntingdon Life Sciences Group
plc to the Agent and the Facility Banks under the Facilities Agreement and the
related documents referred to therein, (ii) the Company to the Agent and the
Facilities Banks under the Guarantee, and (iii) the Company, Huntingdon Life
Sciences Limited and Huntingdon Life Sciences Group plc under the New Facility
Letter and (iv) all other liabilities and obligations of whatever nature of the
Company, Huntingdon Life Sciences Limited and/or Huntingdon Life Sciences Group
plc now or hereafter owed to any one or more of the Secured Parties, such
obligations and liabilities set forth in clauses (i), (ii), (iii) and (iv) are
collectively referred to herein as the "Secured Obligations").
SECTION 4. Covenants.
(a) The Company agrees that from time to time, at its own cost and
expense, the Company will promptly execute and deliver and will cause to be
executed and delivered all further instruments and documents, including, without
limitation, financing and continuation statements, and will take all further
action and will cause all further action to be taken, that the Agent may
reasonably request in order to create, preserve, perfect and protect the
security interest in the Collateral or to enable the Agent to exercise and
enforce its rights and remedies hereunder or to preserve, perfect and protect
the Company's right, title and interest in and to the Collateral.
(b) The Company hereby authorizes the Agent to file one or more
financing or continuation statements, and amendments thereto, and take all such
further action and execute all such further documents and instruments as may be
necessary or desirable in order to create, preserve, perfect and protect the
security interest in the Collateral without the signature of the Company where
permitted by law.
(c) The Company will at all times keep accurate and complete books and
records with respect to the Collateral and agrees that the Agent or its
representative shall have the right at any time and from time to time, upon
reasonable advance notice, to call at the Company's place of business during
normal business hours to inspect and examine the books and records of the
Company relating to the Collateral and to make extracts therefrom and copies
thereof.
(d) The Company hereby covenants with the Agent and each of the other
Secured Parties that it will pay and discharge each of the Secured Obligations
owed by the Company when due to the Agent and the other Secured Parties.
(e) A certificate signed by an officer of the Agent or other Secured
Party (as the case may be) as to the money and liabilities for the time being
due or incurred to the Agent or any other Secured Party, as shown on the books
and records of the Agent or such Secured Party, from or by the Company shall for
all purposes (in the absence of manifest error) be conclusive evidence against
and binding on the Company.
(f) The Company hereby covenants that, without the prior written
consent of the Agent, it shall not nor shall it agree to purport to:
(i) create or permit to exist any lien, security interest or
encumbrance, whether in any such case ranking in priority to or pari passu with
or after the security interest created by this Security Agreement over the whole
or any part of the Collateral, other than liens in favor of mechanics or
materialsmen or for taxes not yet due and payable or which are being contested
in good faith by appropriate proceedings and for which reserves have been
established in accordance with generally accepted accounting principles; or
(ii) sell, assign, transfer, lease, sub-lease, hire, or
otherwise dispose of, whether by means of one or a number of transactions
related or not and whether at one time or over a period of time, the whole or
any part of the Collateral or any interest therein; or
(iii) do or permit to be done any act or thing which might
jeopardize the rights of the Agent in the Collateral or any part thereof and
will not omit or allow the omission of any act which might prevent the rights of
the Agent in the Collateral or any part thereof from being exercised. In
particular, the Company covenants that it shall obtain and effect and keep
effective all permits, licenses and approvals which may from time to time be
required in connection with the Collateral.
(g) The Company covenants and agrees with the Agent that, at all times
during the subsistence of the security interest constituted by or pursuant to
this Security Agreement, the Company will (at its own cost and expense) cause
the Equipment to be insured and to be kept insured with such insurers, in such
amounts and on such terms as maintained by similarly situated companies using
similar items of Equipment in the conduct of their business, but in any event in
an amount not less than the full replacement value thereof.
(h) The Company further covenants and agrees with the Agent that,
during the continuance of this Security Agreement, the Company shall:
(i) fully and promptly comply with all the terms, covenants,
undertakings and conditions of each policy of insurance relating to any part of
the Equipment and will not do, consent, agree to, suffer or permit any act or
omission which may invalidate any policy of insurance relating to any part of
the Equipment or render the same unenforceable in whole or in part;
(ii) ensure that the Agent is included (A) on each policy of liability
insurance relating to any part of the Equipment as an additional insured with no
operational interests in the Equipment with the effect that the provisions of
each policy of insurance, except the limits on liability, shall operate as if
there were a separate policy with and covering each insured and so that the
insurance provided for the Agent under the policy is not invalidated by any act
or omission on the part of the Company or its servants or agents and (B) on each
policy of property damage insurance relating to any part of the Equipment as a
loss payee;
(iii) ensure that all insurance contains a clause to the effect that
the policy may not be terminated, cancelled or materially altered unless at
least 30 days prior notice of the intended termination, cancellation or
alteration has been given to the Agent;
(iv) hold all slips, cover notes and contracts and policies of
insurance relating to the Equipment to the order of the Agent and shall, on the
request of the Agent, deliver the originals or copies thereof to the Agent;
(v) duly and punctually pay all premiums and other moneys due and
payable under all such insurance as aforesaid and promptly upon request by the
Agent provide to the Agent the premium receipts or other evidence of payment
thereof; and
(vi) not terminate or cancel any insurance without the prior delivery
to the Agent of evidence of such replacement insurance coverage in respect of
the Equipment satisfying the requirements set forth herein.
(i) If the Company fails to obtain and maintain insurance coverage in
accordance with the provisions hereof, the Agent shall be entitled, but not
bound, to do so either in its own name or in its name and that of the Company
jointly or in the name of the Company with an endorsement of the Agent's
interest. All amounts expended by the Agent on so obtaining or maintaining any
such insurance shall be reimbursed by the Company to the Agent on demand and
shall carry interest at the Facility Rate from the date such amounts are paid by
the Agent to but not including the date such amounts are repaid in full by the
Company.
(j) All claims and moneys received or receivable under any such
insurance coverage as aforesaid shall at the option of the Company be applied
either in making good the loss or damage in respect of which the same has been
received or in or towards the discharge of the Secured Obligations prior to the
occurrence of an Event of Default (as defined below). Upon the occurrence and
during the continuation of an Event of Default, all claims and moneys received
or receivable under such insurance coverage shall be applied by the Agent in
discharge of the Secured Obligations.
(k) The Company hereby covenants with the Agent that until discharge of
the security interest hereby created:
(i) the Company shall, at its own expense, keep the Equipment and all
parts of the same in good operational repair and condition in all respects, and
to that end (but without limiting the generality of the foregoing) shall carry
out all necessary maintenance, overhauls, replacements and repairs to the
Equipment and all such parts;
(ii) the Company shall, at its own expense, comply with all provisions
having the force of law affecting the Equipment or any of them or any parts
thereof and shall maintain the same in such condition so as to comply with all
laws and regulations of any jurisdiction in which any of the Equipment is
operated or to which any of the Equipment is subject;
(iii) the Company shall not knowingly employ or suffer the employment
of any of the Equipment for any illegal or unlawful purpose;
(iv) the Company shall do all acts and things the Agent may reasonably
require to protect the Agent's interest in the Equipment against the claims of
any other person.
(l) The Company shall indemnify and keep the Agent indemnified against
and on demand reimburse the Agent for:
(i) all reasonable costs and expenses of operating, insuring,
maintaining and repairing the Equipment actually incurred by the Agent;
(ii) all damages, liabilities, claims, reasonable costs and expenses
whatsoever (including financial or consequential loss) which may at any time be
made or claimed by the Company or by an employee, servant, agent or
sub-contractor of the Company or by any third party or parties or by their
respective dependants arising directly or indirectly out of the possession,
management, storage, operation, control, use, leasing, maintenance and/or repair
of any of the Equipment; and
(iii) all losses, damages or expenses which, consequent upon a judgment
being obtained or enforced in respect of the non-payment by the Company of any
amount secured by this Security Agreement, arise or result from any variation
between the date of the said amount becoming due (or the date of the said
judgment being obtained as the case may be) and the date of actual payment
thereof in the rates of exchange between the currency in which such amount was
due and the currency in which such judgment was obtained and this indemnity
granted from time to time shall continue in full force and effect
notwithstanding any judgment in favor of the Agent.
(m) The Company shall pay to the Agent on demand all moneys whatsoever
which the Agent shall expend, be put to or become liable for in or about the
protection or maintenance of the security interest created by this Security
Agreement, or in or about the exercise of its powers hereunder and shall
indemnify the Agent against all existing and future taxes, rates, duties, fees,
charges, assessments, impositions and outgoings whatsoever (whether imposed by
deed or statute or otherwise and whether in the nature of capital or revenue and
even though of a wholly novel character) which now or at any time during the
continuance of the security interest constituted by or pursuant to this Security
Agreement are properly payable in respect of the Collateral or any part thereof.
(n) If any such sums as are referred to in Section 4(m) shall be paid
by the Agent, the same shall be reimbursed by the Company to the Agent on demand
and shall bear interest at the Facility Rate from the date such amounts are paid
by the Agent to but not including the date such amounts are repaid in full by
the Company.
(o) With respect to any amount that the Company is required to pay by
reason of any provision hereunder, including, without limitation, Sections 4(i),
(l), (m) and (n), the Agent shall submit to the Company relevant documentation
to substantiate the requested payment.
(p) Notwithstanding anything herein to the contrary, the Company shall
not be liable for any amounts set forth in Sections 4(l) through (n) hereof
which result from the gross negligence or wilful misconduct of the Agent.
(q) The Company agrees that until discharge of the Security Interest
created herein, the Company shall not establish or maintain any deposit accounts
other than the Pledged Account. The Company further covenants and agrees that it
shall cause all receivables, payments or proceeds from the operation of the
Company's business of any kind whatsoever to be paid directly to, or to be
deposited into, the Pledged Account. Prior to the occurrence of an Event of
Default (as defined below), the Company shall have the right to direct
withdrawals and disbursements from the Pledged Account in the ordinary course of
its business, as set forth in the account letter among the Company, the Agent
and The First National Bank of Maryland, a copy of which is attached hereto as
Exhibit B. For so long as no Event of Default has occurred, the Company shall
have the right to direct the investment of funds in the Pledged Account in the
following investments (collectively, "Permitted Investments") having a maturity
of 90 days or less, as determined by the Company: (i) direct obligations of the
United States and (ii) interest-bearing obligations of any domestic bank having
a short-term credit rating of at least A-1 by Standard and Poors Ratings Group
and at least P-1 by Xxxxx'x Investors Service, Inc.; provided that the Company
may make such investments only if the investment certificates are held in the
Pledged Account.
SECTION 5. Representations and Warranties.
(a) This Security Agreement has been duly authorized by all necessary
action of the Company, and validly and duly executed and delivered to the Agent.
This Security Agreement constitutes the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms.
(b) All of the Equipment is, and each replacement or substitution
thereof and any and all proceeds thereof will be, located at the Company's place
of business and chief executive xxxxxx xx Xxxxxxxx Xxxx, Xxxx Xxxxxxxxx, Xxx
Xxxxxx 00000-0000.
(c) The Company is the legal and beneficial owner of each item of the
Collateral, free and clear of any lien or encumbrance, except for the security
interest created under this Security Agreement. No effective financing statement
or other similar instrument covering any part of the Collateral is on file in
any recording office, except as may have been filed in favor of the Agent,
relating to this Security Agreement.
(d) The Company has possession and exclusive control of the Equipment.
(e) The Company has no deposit accounts other than the Pledged Account
and the accounts set forth on Exhibit B.
(f) Upon filing of UCC-1 forms appropriately completed in Somerset
County, New Jersey, all filings and other action necessary to perfect the
security interest over the Equipment shall have been taken. This Security
Agreement creates a valid, perfected first priority security interest in the
Collateral securing the payment of the Secured Obligations.
SECTION 6. Agent Appointed Attorney-in-Fact. The Company hereby
irrevocably appoints the Agent the Company's attorney-in-fact, with full
authority in the place and stead of the Company and in the name of the Company
or otherwise, from time to time after the occurrence and during the continuation
of an event of default as defined in the Facilities Agreement or an event of
default as defined in the New Facility Letter or any failure by the Company to
keep or perform any covenant or undertaking hereunder which failure shall remain
uncured for three days after the Company's receipt of a notice thereof (each, an
"Event of Default"), to take any action, to execute any instruments and to
exercise any rights, privileges, options, elections or powers of the Company
pertaining or relating to the Collateral which the Agent may deem necessary or
desirable to preserve and enforce its security interest in the Collateral and
otherwise to accomplish the purposes of this Security Agreement. The Agent shall
not have any duty to take any such action, to execute any such instrument, to
exercise any such rights, privileges, options, including, without limitation,
termination options, elections or powers or to sell or otherwise to realize upon
any of the Collateral, as hereinafter authorized, and the Agent shall not be
responsible for any failure to do so or delay in so doing.
SECTION 7. Agent May Perform. If the Company fails to perform any
agreement contained herein, the Agent may (but shall not be obligated to) itself
perform, or cause performance of, such agreement. The Company shall reimburse
the Agent on demand for any amounts paid or any expenses incurred by the Agent
in good faith in connection therewith, and shall carry interest at the Facility
Rate from the date such amounts are paid by the Agent to but not including the
date on which such amounts are repaid in full by the Company.
SECTION 8. Agent's Duties. The powers conferred on the Agent hereunder
are solely to protect its interest in the Collateral for the benefit of the
Secured Parties and shall not impose any duty upon it to exercise any such
powers. Except as expressly provided herein, the Agent shall have no duty to
take any steps to preserve the security interest granted hereby.
SECTION 9. Realization upon Collateral. If an Event of Default shall
occur and be continuing, the Agent may, and at the request of the Secured
Parties shall, for the benefit of the Secured Parties, (i) take any and all
action necessary or appropriate to collect any and all amounts payable under or
with respect to the Collateral, (ii) apply any and all amounts in the Pledged
Account to the Secured Obligations in accordance with Section 9 hereof, (iii)
take possession of the Collateral forthwith or at any time thereafter, in which
case the Company shall marshal and deliver the Collateral to the Agent at such
time and place as the Agent may reasonably specify, and (iv) sell the whole or,
from time to time, any part of the Collateral, by private or public sale, in
such order or otherwise in such manner as the Secured Parties may elect in their
sole discretion. The Agent shall have, with respect to the Collateral, in
addition to any other rights and remedies which may be available to it at law or
in equity or pursuant to this Security Agreement or any other contract or
agreement, all rights and remedies of a secured party under any applicable
version of the Uniform Commercial Code of the relevant jurisdictions relating to
the Collateral, and it is expressly agreed that if the Agent should proceed to
dispose of or utilize the Collateral, or any part thereof, in accordance with
the provisions of said versions of the Uniform Commercial Code, ten days' notice
by the Agent to the Company shall be deemed to be reasonable notice under any
such provision requiring such notice. Any sale of Collateral by the Agent may be
made on such terms as the Secured Parties may specify, without assuming any
credit risk and without any obligation to advertise or give notice of any kind
other than that necessary under applicable law. The Agent and the Secured
Parties shall incur no liability as a result of the sale of the Collateral, or
any part thereof, at any private or public sale. The Company hereby waives, to
the extent permitted by applicable law, any claims against the Agent and the
Secured Parties arising by reason of the fact that the price at which Collateral
may have been sold at such a private sale was less than the price which might
have been obtained at a public sale or was less than the aggregate amount of the
Secured Obligations, even if the Agent accepts the first offer received and does
not offer such Collateral to more than one possible purchaser. In exercising its
rights under this Section 9, the Agent will act in a commercially reasonable
manner.
SECTION 10. Application of Proceeds. The Agent shall apply the proceeds
of any realization upon or sale of the whole or any part of the Collateral after
deducting all reasonable costs and expenses of collection, retaking, handling,
storage, preparation, sale and delivery (including, without limitation,
reasonable counsel's fees and expenses) incurred by it in connection with such
realization or sale to the payment of the Secured Obligations. Any surplus of
such payments or cash proceeds held by the Agent and remaining after payment in
full of all the Secured Obligations shall be paid over to the Company, and the
Company shall remain in all respects liable to the Agent, the Facility Banks and
the Overdraft Bank for any unrecovered balance owing to them.
SECTION 11. Waiver of Stays, etc. To the fullest extent that the
Company may lawfully so agree, the Company agrees that it will not at any time
plead, claim or take the benefit of any appraisement, valuation, stay,
extension, moratorium or redemption law now or hereafter in force to prevent or
delay the enforcement of this Security Agreement or the absolute sale of any
portion of or all of the Collateral or the possession thereof by any purchaser
at any sale under this Security Agreement, and the Company, for itself and all
who may claim under the Company, as far as the Company now or hereafter lawfully
may do so, hereby waives the benefit of all such laws.
SECTION 12. Amendments, etc. No amendment, modification or
waiver of any provision of this Security Agreement, nor consent to any departure
by the Company therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Agent with the consent of the Secured Parties
(or all of the Facility Banks, to the extent required pursuant to the Facilities
Agreement), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 13. Notices. Unless otherwise specified herein, all notices,
requests and other communications to any party hereunder shall be in writing
(including telex, telecopier or similar writing) and shall be given to such
party at its address or telex or telecopier number set forth in the Facilities
Agreement or such other address or telex or telecopier number as such party may
hereafter specify by notice to the other party.
SECTION 14. Continuing Security Interest. This Security Agreement shall
create a continuing security interest in the Collateral and shall (a) remain in
full force and effect until the later of (i) the termination of the commitments
under the Facilities Agreement and the commitments under the New Facility Letter
or (ii) the payment in full of the Secured Obligations (other than
indemnification obligations as to which a claim has not been asserted at this
time), (b) be binding upon the Company and its successors and assigns and (c)
inure to the benefit of the Agent, each of the Secured Parties and their
respective successors, transferees and assigns. Upon the later of (i) the
termination of the commitments under the Facilities Agreement and the
commitments under the New Facility Letter or (ii) the payment in full of the
Secured Obligations (other than indemnification obligations as to which a claim
has not been asserted at such time), the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to the Company. Upon any
such termination and the payment in full of the Secured Obligations (other than
indemnification obligations as to which a claim has not been asserted at such
time), the Agent will, at the expense of the Company, execute and deliver to the
Company such documents as the Company shall reasonably request to evidence such
termination.
SECTION 15. No Waiver; Cumulative Remedies. No failure on the part of
the Agent to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy by the Agent preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
All rights, powers and remedies hereunder are cumulative and are not exclusive
of any other rights, powers and remedies provided by law.
SECTION 16. Responsibility of the Agent.
(a) By accepting the benefits hereof, each Secured Party hereby
irrevocably designates and appoints, subject to Section 16(e) hereof, the Agent
as Agent under this Security Agreement, to take such action on its behalf under
the provisions of this Security Agreement and to exercise such powers and
perform such duties as are expressly delegated to such Agent by the terms of
this Security Agreement, together with such other powers as are reasonably
incidental thereto.
(b) By accepting the benefits hereof, each Secured Party agrees that
(i) neither the Agent, nor any of its directors, officers or employees or agents
shall be liable for any action taken or omitted to be taken by them hereunder,
except for their own gross negligence or willful misconduct, (ii) the Agent
shall not be responsible to the Secured Parties for any statements, warranties
or representations herein, the Facilities Agreement or the related documents
referred to therein, the New Facility Letter, the Guarantee, the Mortgage or any
other documents contemplated thereby, (collectively, the "Financing Documents")
or the value, condition, priority, ownership or sufficiency of the Collateral or
the legality, validity or enforceability of any of the Financing Documents, nor
shall the Agent be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements provided for
in the Financing Documents, (iii) the Agent shall not have any obligation to
determine whether there has occurred any Event of Default or potential Event of
Default, under any Financing Documents, and the Agent shall not be charged with
knowledge of the happening of any event of default or potential event of default
unless it shall have been notified thereof in writing by the Company or a
Secured Party, and (iv) the Agent shall be entitled to rely upon any notice,
consent, certificate, statement or other document believed by it to be genuine
and correct and to have been signed and sent by the proper person or persons
and, in respect of legal matters, upon the opinion of counsel selected by it.
The Agent may seek instructions from the Secured Parties as to the exercise of
its rights, powers and remedies. If the Agent shall be instructed by the Secured
Parties to take any action hereunder, the Agent may, before taking such action,
require that the Secured Parties indemnify the Agent, in a manner reasonably
satisfactory to the Agent, for any liability which the Agent may incur in taking
such action.
(c) Nothing in this Security Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent any obligations
in respect of this Security Agreement or any Collateral except as expressly set
forth herein or therein. With respect to the credit extended by it, the Agent
shall have the same rights and powers under the Financing Documents as any other
Secured Party and may exercise the same as though it were not the Agent, and the
Agent and its affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Company as if it were not the Agent.
(d) The Secured Parties shall indemnify the Agent (to the extent not
reimbursed by the Company, but without limiting the obligations of the Company)
ratably in accordance with their respective interests in the Collateral, for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of this Security Agreement or any other
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or the enforcement of any of the terms hereof or
of any such other documents, provided that no Secured Party shall be liable for
any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Agent.
(e) The Agent may resign (effective upon appointment of a successor) at
any time by giving written notice thereof to the Secured Parties and the
Company. Upon any such resignation, the Secured Parties shall within 30 days
after the Agent shall have given notice of its resignation, appoint a successor
to the Agent, which decision of the Secured Parties shall be binding upon all of
the Secured Parties. Provided no Event of Default has occurred and is
continuing, any successor Agent which is not a party to the Facilities Agreement
shall be approved by the Company, which approval shall not be unreasonably
withheld or delayed. 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 upon the transfer of the Collateral to the successor Agent, the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Security
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Security Agreement.
SECTION 17. GOVERNING LAW; WAIVER OF JURY TRIAL; SEVERABILITY. THIS
SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PROVISIONS THEREOF. THE PARTIES HERETO KNOWINGLY, VOLUNTARILY AND EXPRESSLY
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ENFORCING OR DEFENDING ANY RIGHTS ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE COMPANY ACKNOWLEDGES THAT THE
PROVISIONS OF THIS SECTION 17 HAVE BEEN BARGAINED FOR AND THAT IT HAS BEEN
REPRESENTED BY COUNSEL IN CONNECTION THEREWITH. Any provision of this Security
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.
[signatures begin on next page]
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the date first above written.
HUNTINGDON LIFE SCIENCES INC.
By:______________________________
Name:
Title:
NATIONAL WESTMINSTER BANK PLC,
as Agent
By:______________________________
Name:
Title:
EXHIBIT A
Description of Equipment
Description Cost
($000's)
HPLC systems 210
2 x APOI 365 MS/MS systems 550
X-Xxx xxxx densitometer 95
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855
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EXHIBIT B
Pledged Account Letter
April 30, 1998
The First National Bank of Maryland
00 Xxxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Mail Code 101-515
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Re: Huntingdon Life Sciences Inc.
Gentlemen:
Huntingdon Life Sciences Inc. (the "Company") and National Westminster
Bank plc hereby give you notice that, pursuant to a Security Agreement dated as
of April 30, 1998 between the Company and National Westminster Bank plc, as
agent on behalf of the Secured Parties named therein (in such capacity, the
"Agent")(the "Security Agreement"), the Company has granted to the Agent a
security interest in, all of the right, title and interest of the Company in and
to its demand deposit account with you under account number 191 10015 (the
"Pledged Account") together with all monies, credit balances and certificates,
instruments and other documents evidencing permitted investments held therein to
secure the payment and performance by the Company, Huntingdon Life Sciences,
Limited and Huntingdon Life Sciences Group plc of the Secured Obligations (as
defined in the Security Agreement). It is not necessary that you be familiar
with the terms of the Security Agreement or any related document. You
acknowledge the Agent's security interest in, and lien on, the Pledged Account
and the monies on deposit therein, granted to the Agent by the Company under the
Security Agreement. You agree to act as the agent for the Agent to maintain
possession and control of the Pledged Account in accordance with the terms set
forth herein.
The Company shall be entitled to use the Pledged Account, subject to
your applicable rules, until your receipt from the Agent of notice indicating
that an Event of Default has occurred and is continuing under the Security
Agreement. The Company hereby agrees that, upon your receipt from the Agent of
notice indicating that an Event of Default has occurred and is continuing under
the Security Agreement, as set forth herein, all right, title and interest of
the Company in the Pledged Account shall immediately terminate and you may
refuse to honor any checks, ACH debits, wire transfer instructions, or any other
items which the Company causes to be presented against the Pledged Account after
your receipt of such notice. Upon written notice to you from the Agent that an
Event of Default has occurred and is continuing under the Security Agreement,
you shall not permit any further disbursements from the Pledged Account and
shall immediately transfer all collected funds in the Pledged Account to the
Agent, subject to your set-off and banker's liens rights described below.
You are hereby authorized to follow your usual procedure in the event
the Pledged Account or any checks, drafts or other orders for payment of money
should be or become the subject of any writ, levy, order, attachment,
garnishment or other similar judicial or regulatory order or process ("Order")
and neither the Company nor the Agent shall assert any claim against you for
following your usual procedures in response to any such Order.
Notwithstanding any other provisions in this Agreement, in the event of
the commencement of a case pursuant to The United States Bankruptcy Code, filed
by or against the Company, or in the event of the commencement of any similar
case under state law providing for the relief of debtors or the protection of
creditors by or against the Company, you may act as you deem necessary to comply
with all applicable provisions of governing statutes and court orders and
neither the Company nor the Agent shall assert any claim against you for so
doing.
You acknowledge receipt of the foregoing instructions and, in
connection therewith, hereby confirm that you have not received notice from any
other person of any assignment of or security interest in the Pledged Account.
You agree that all notices to be sent to you with respect to the Pledged Account
shall be addressed as set forth below or such other address as you may specify
in writing:
The First National Bank of Maryland
00 Xxxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Mail Code 101-515
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
with a copy to:
The First National Bank of Maryland
00 Xxxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Mail Code 101-850
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
You agree to provide duplicate monthly statements to the Agent in
accordance with your usual and customary procedures showing all deposits into,
and all disbursements made from, the Pledged Account for the period covered by
such monthly statements. All such duplicate statements shall be provided to the
Agent at the same time such monthly statements are provided to the Company and
shall be addressed as set forth below or such other address as the Agent may
specify by written notice to you:
National Westminster Bank plc,
as Agent
3rd Floor, Juno Court
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx X0 0XX
Attention:
Each of the Company and the Agent acknowledges that you shall have no
obligation, responsibility or liability to verify the accuracy of any
disbursement request or other instrument or writing delivered to you in
connection with the Pledged Account, whether such request is permitted under the
Security Agreement, the Company's use of the proceeds thereof or whether there
exists an Event of Default under the Security Agreement and that you are
entitled to rely on the certificates, notices, instruments and other writings
presented to you in connection therewith. In no event shall you be liable for
any consequential, special, punitive or indirect loss or damage which the Agent
or the Company may incur or suffer in connection with this Agreement.
The invalidity, illegality or unenforceability or any provision of this
Agreement shall not affect the validity, legality or enforceability of any of
the other provisions of this Agreement which shall remain effective.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF MARYLAND. YOU, THE COMPANY AND THE AGENT SPECIFICALLY
WAIVE THE RIGHT TO TRIAL BY JURY IN RESOLVING ANY CLAIM OR COUNTERCLAIM RELATED
TO THE PLEDGED ACCOUNT, THIS AGREEMENT OR YOUR PERFORMANCE HEREUNDER.
The Company hereby releases you and all of your directors, officers,
agents, attorneys or employees (collectively, the "Depository Bank Parties")
from any claim, demand, loss, or liability, the Company may have or bring,
becoming due, arising under, out of, as a result of, in connection with or
related to, this Agreement or your performance and the performance of the
Depository Bank Parties hereunder, provided such claim, demand, loss, liability,
or expense has not directly resulted from the gross negligence or willful
misconduct of you or the Depository Bank Parties. The Company hereby agrees to
pay, indemnify and hold you and the Depository Bank Parties harmless from and
against any and all labilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including, without limitation, legal fees) become due,
arising under, out of, as a result of, in connection with or related to this
Agreement or the performance of you and the Depository Bank Parties hereunder,
provided such claim, demand, loss, liability, or expenses is not directly
resulting from the gross negligence or willful misconduct of you or the
Depository Bank Parties.
The Agent hereby releases you and the Depository Bank Parties from any
claim, demand, loss, or liability, the Agent may have or bring, becoming due,
arising under, out of, as a result of, in connection with or related to, this
Agreement or the performance of you and the Depository Bank Parties hereunder,
provided such claim, demand, loss, liability, or expense has not directly
resulted from the gross negligence or willful misconduct of you or the
Depository Bank Parties. The Agent hereby agrees to fully reimburse you for: (i)
any check, ACH credit or other item which is returned unpaid and the proceeds of
which were received by the Agent hereunder; and (ii) any check, ACH credit or
other item, the proceeds of which were received by the Agent hereunder and which
a Court of competent jurisdiction subsequently holds to have been subject to any
Order, or orders the proceeds returned to or on behalf of the Company. The
Agent's obligations of payment hereunder shall survive the bankruptcy or
insolvency of the Company and upon such bankruptcy or insolvency, you need not
demand payment from the Company or seek to offset any amounts in the Pledged
Account or any other accounts the Company maintains with your prior to demanding
payment from the Agent, even if the Company then has sufficient funds in deposit
with you to pay such amounts.
This Agreement may be terminated at any time by you upon fifteen (15)
days written notice to the Company and the Agent, after which fifteen (15) day
period all of your obligations hereunder shall be terminated, except that you
shall hold sums then remaining in the Pledged Account as a mere bailee pending
(a) your receipt of the mutual instruction of the Agent and the Company to
transfer the same to a successor depository, or (b) your receipt of an order of
a court of competent jurisdiction directing transfer the same. Notwithstanding
the foregoing, the indemnifications and reimbursements provided herein shall
survive this Agreement and shall remain in full force and effect until all
applicable periods of latches or statute of limitation shall expire on any claim
related hereto.
This letter agreement may be executed in two or more counterparts, each
of which shall constitute an original and all of which, taken together, shall
constitute one and the same letter agreement.
NATIONAL WESTMINSTER BANK PLC
By:
Name:
Title:
HUNTINGDON LIFE SCIENCES INC.
By:
Name:
Title:
Accepted and Agreed this
30th day of April, 1998
THE FIRST NATIONAL BANK OF MARYLAND
By:
Name:
Title:
