EXHIBIT 10.55
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is entered into as of this 8th day of March,
1999, by and between TECHNICLONE CORPORATION, a Delaware corporation ("DEBTOR")
and BIOTECHNOLOGY DEVELOPMENT, LTD., a Nevada limited partnership ("SECURED
PARTY").
R E C I T A L S:
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WHEREAS, Debtor is indebted to Secured Party in the principal sum of
$3,300,000, pursuant to that certain Secured Promissory Note dated March 1,
1999, made by Debtor to the order of Secured Party (the "PROMISSORY NOTE"); and
WHEREAS, this Security Agreement is intended by the parties hereto to
create a security interest in the collateral described herein in favor of
Secured Party to secure all of the obligations of Debtor under the Promissory
Note.
IN CONSIDERATION of the mutual covenants herein contained and for other
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by each of the parties hereto, the parties hereto do hereby agree
as follows:
1. SECURITY INTEREST.
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As security for the performance of the obligations and indebtedness
represented by the Promissory Note, Debtor hereby grants to Secured Party a
security interest in the following collateral, whether now owned or hereafter
acquired by Debtor (the "Collateral"):
All assets of Debtor, and all additions and accessions thereto,
substitutions and replacements therefor, and all proceeds thereof,
EXCLUDING, HOWEVER, any inventory, furniture, fixtures and/or equipment
which (i) are used in the commercialization of Oncolym(R) (including,
without limitation, the manufacture, scale-up, radiolabeling, testing,
packaging or commercial production of such product) and are not located
on the premises of Debtor in the City of Tustin, California; or (ii)
serve as security to any bank, financial institution or other
institutional creditor or lender to whom Debtor is or may become
indebted with respect to the repayment of borrowed money or with
respect to any equipment lease financing agreement or arrangement, and
all additions and accessions thereto, substitutions and replacements
therefor and all proceeds thereof, and FURTHER EXCLUDING any and all
intangible property and intellectual property of Debtor and any and all
rights with respect thereto, and all additions and accessions thereto,
substitutions and replacements therefor, and all proceeds thereof
(including, without limitation, any patents and patent applications and
any extensions thereof, supplements thereto and improvements thereon,
any trade marks, trade names and applications therefor and extensions
thereof, any copyrights or copyright applications and extensions
thereof, and any trade secrets, know-how, formulae, processes, methods,
methodologies, designs and any and all other intellectual property and
any and all rights with respect thereto of any kind or nature
whatsoever and any goodwill associated therewith).
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Debtor and Secured Party agree that the security interest created
hereby has attached to the Collateral to the extent permitted by law, and that
it will attach to additional portions of the Collateral hereinafter acquired by
Debtor, as the requirements for attachment are otherwise met. The parties hereto
agree that all of the Collateral is tangible personal property of Debtor.
2. POSSESSION AND LOCATION OF COLLATERAL.
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Unless and until any default occurs hereunder, Debtor shall have
possession of the Collateral for its use and enjoyment in any lawful manner not
inconsistent with this Agreement or the Promissory Note. The Collateral will be
kept at Debtor's principal place of business and will not be moved therefrom
without the prior written consent of Secured Party, except that Debtor may make
sales of inventory, furniture, fixtures or equipment items in the ordinary
course of business. The consent of Secured Party required hereby shall not be
unreasonably withheld.
3. FINANCING STATEMENTS.
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Debtor shall join with Secured Party in executing one or more financing
statements (e.g. Form UCC-1) or other documents pursuant to the provisions of
the California Commercial Code, or any other applicable law, relating to the
perfection of the Secured Party's security interest in the Collateral, in form
reasonably satisfactory to Secured Party.
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4. TRANSFER, LIENS AND ENCUMBRANCES.
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Title to the Collateral will remain in and continue to be vested in
Debtor. Debtor will not sell, offer to sell or otherwise transfer the
Collateral, any portion thereof, or any interest therein, without the prior
written consent of Secured Party, except that Debtor may make sales of
inventory, furniture, fixtures or equipment items in the ordinary course of
business. The consent of Secured Party required hereby shall not be unreasonably
withheld. Notwithstanding the foregoing, in no event shall Debtor sell any fixed
asset with a value in excess of $100,000 without the written consent of Secured
Party which it may grant in its sole and absolute discretion. In addition,
Debtor will keep the Collateral free from any lien, security interest or
encumbrance, unless Secured Party shall consent otherwise in writing which
consent shall not be unreasonably withheld.
5. RISK OF LOSS AND INSPECTION OF COLLATERAL.
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Debtor shall have all risk of loss of the Collateral and will keep the
Collateral in good order and repair and insured against loss or theft in
commercially reasonable amounts. Secured Party shall have the right, at any
reasonable time, to examine and inspect the Collateral.
6. EVENTS OF DEFAULT.
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Debtor shall be in default under this Agreement upon the occurrence of
any of the following events or conditions ("EVENTS OF DEFAULT"):
(1) The failure of Debtor to perform any obligation or covenant set
forth herein or in the Promissory Note;
(2) The filing by or against Debtor of any petition under any
bankruptcy, reorganization, insolvency, or other law providing for the relief of
debtors or the making of any assignment for the benefit of creditors; or
(3) The failure of Debtor to pay principal and interest under the terms
of the Promissory Note.
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7. REMEDIES UPON DEFAULT.
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Upon the occurrence of any Event of Default hereunder, and if, upon
written notice of such default delivered to the Debtor, the specified default is
not cured within fifteen (15) days of receipt of such notice, Secured Party may,
at its option, declare all amounts secured hereby immediately due and payable
and shall have the right to conduct a public or private sale of the Collateral
pursuant to and in accordance with the California Commercial Code. Upon Debtor's
default pursuant to this Section 7, the parties hereto shall have all of the
rights and remedies available to them under the California Commercial Code.
Secured Party may require Debtor to assemble the Collateral and make it
available to Secured Party at a place to be designated by Secured Party which is
reasonably convenient to both parties. All rights and remedies of Secured Party
shall be cumulative and may be exercised successively or concurrently and
without impairing Secured Party's interest in the Collateral.
8. NOTICE.
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All written notices required or permitted pursuant to this Agreement
shall be sent by certified mail, return receipt requested, or delivered by hand
to the parties hereto at the following address, or at any such other address
which any party hereto may, by written notice, have designated pursuant to this
section:
"Debtor": Techniclone Corporation
00000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
"Secured Party": Biotechnology Development, Ltd.
000 Xxxxx Xxxxxxx, Xxxxx 000,
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, General Partner
9. APPLICABLE LAW.
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This Agreement is to be construed and interpreted in accordance with
the laws of the State of California and venue, in the event of any dispute,
shall be in the state of federal courts located in Orange County, California.
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10. INUREMENT.
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This Agreement shall be binding upon, and shall inure to the benefit
of, the parties hereto, their successors and assigns, and may be altered,
amended or changed only by an instrument in writing signed by the parties
hereto.
11. ATTORNEY'S FEES.
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In the event of any dispute or controversy concerning the subject
matter hereof, the prevailing party shall be entitled to recover from the other
party all reasonable costs, fees and expenses, including without limitation, all
attorneys' fees and related costs.
12. COUNTERPARTS.
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This Agreement may be signed in one or more counterparts, each of which
shall be deemed an original and all of which, when taken together, shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
DEBTOR: TECHNICLONE CORPORATION,
------- a Delaware corporation
By: \S\ XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx, President
SECURED PARTY: BIOTECHNOLOGY DEVELOPMENT, LTD.,
-------------- a Nevada limited partnership
By: \S\ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx, General Partner
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