EXHIBIT 10.14
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is made and entered into as of
October 12, 2005, by and between Uluru, Inc., a Delaware corporation (the
"Borrower"), Xxxxx X. Xxxx, the Borrower's controlling shareholder (the
"Shareholder"), and Oxford Ventures, Inc. ("Lender"), a Nevada corporation.
RECITALS:
The Borrower has issued and delivered or will issue and deliver to the
Lender a Secured Bridge Promissory Note in the principal amount of the
Commitment, as hereinafter defined, dated as of the date of this Agreement (the
"Note"). Pursuant to the Note, the Borrower has agreed to grant a security
interest in and to the Collateral (as defined in this Agreement) on the terms
and conditions set forth in this Agreement and the Shareholder has agreed to
grant a security interest in and to the Borrower Control shares (as defined
herein).
NOW, THEREFORE, for and in consideration of the Debt (as defined in this
Agreement), and of the premises and intending to be legally bound, the parties
covenant and agree as follows:
1. Definitions. In addition to the words and terms defined elsewhere in
this Agreement, the following words and terms shall have the
following meanings, unless the context otherwise clearly requires:
"Accounts" shall have the meaning given to that term in the Code and shall
include without limitation all rights of the Borrower, whenever acquired,
to payment for goods sold or leased or for services rendered, whether or
not earned by performance.
"As-extracted Collateral" shall have the meaning given to that term under
the Code.
"Borrower Control Shares" shall have the meaning given to that term in the
Bridge Loan Agreement.
"Bridge Loan Agreement" shall mean the Bridge Loan and Control Share
Pledge and Security Agreement by and between the Borrower, the Shareholder
and the Lender dated as of even date herewith.
"Chattel Paper" shall have the meaning given to that term in the Code and
shall include without limitation all writings owned by the Borrower or,
whenever acquired, which evidence both a monetary obligation and a
security interest in or a lease of specific goods.
"Code" shall mean the Uniform Commercial Code as in effect on the date of
this Agreement and as amended from time to time, of the state or states
having jurisdiction with respect to all or any portion of the Collateral
from time to time.
"Collateral" shall mean all tangible and intangible assets of Borrower,
including, without limitation, collectively the Accounts, As-extracted
Collateral, Chattel Paper, Deposit Accounts, Documents, Equipment,
Fixtures, all intellectual property and other assets that make up the
Asset Acquisition (as such term is defined in the Bridge Loan Agreement),
General Intangibles, Instruments, Intellectual Property, Inventory,
Investment Property and Proceeds of each of them, as well as the meaning
ascribed to that term in Section 2.
"Commitment" shall have the meaning given to that term in the Bridge Loan
Agreement.
"Cure Period" shall mean the period of seventy-five (75) days following
written notice by Lender to Borrower of an Event of Default; provided,
however, that there shall be no Cure Period for an Event of Default under
Sections 6.1(e) or 6.1(f) of the Bridge Loan Agreement.
"Debt" shall mean (i) all indebtedness, both principal and interest, of
the Borrower to the Lender now or after the date of this Agreement
evidenced by the Note, (ii) all other debts, liabilities, duties and
obligations of the Borrower to the Lender arising after the date of this
Agreement contracted or incurred, whether arising under or in connection
with the Loan Documents or arising under or in connection with any other
agreement, instrument, or undertaking made by or for the benefit of the
Borrower to or for the benefit of the Lender, (iii) all costs and expenses
incurred by the Lender in the collection of any of the indebtedness
described in this paragraph or in connection with the enforcement of any
of the duties and obligations of the Borrower to the Lender described in
this paragraph, including reasonable attorneys' and paralegals' fees and
expenses, and (iv) all future advances made by the Lender for the
maintenance, protection, preservation or enforcement of, or realization
upon, the Collateral or any portion of the Collateral, including advances
for storage, transportation charges, taxes, insurance, repairs and the
like.
"Deposit Accounts" shall have the meaning given to that term in the Code
and shall include a demand, time, savings, passbook or similar account
maintained with a bank, savings bank, savings and loan association, credit
union, trust company or other organization that is engaged in the business
of banking.
"Documents" shall have the meaning given to that term in the Code and
shall include without limitation all warehouse receipts (as defined by the
Code) and other documents of title (as defined by the Code) owned by the
Borrower, whenever acquired.
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"Equipment" shall have the meaning given to that term in the Code and
shall include without limitation all goods owned by the Borrower, whenever
acquired and wherever located, used or brought for use primarily in the
business or for the benefit of the Borrower and not included in Inventory
of the Borrower, together with all attachments, accessories and parts used
or intended to be used with any of those goods or Fixtures, whether now or
in the future installed therein or thereon or affixed thereto, as well as
all substitutes and replacements thereof in whole or in part.
"Escrow Agent" shall mean Gottbetter & Partners, LLP.
"Escrow Agreement" shall mean the Pledge and Escrow Agreement among the
Borrower, the Lender, Xxxxx X. Xxxx and the Escrow Agent with respect to
the Pledged Shares and the Borrower Control Shares.
"Event of Default" shall mean (i) any of the Events of Default described
in the Note or the Loan Documents, or (ii) any default by the Borrower in
the performance of its obligations under this Agreement.
"Fixtures" shall have the meaning given to that term in the Code, and
shall include without limitation leasehold improvements.
"General Intangibles" shall have the meaning given to that term in the
Code and shall include, without limitation, all leases under which the
Borrower now or in the future leases and or obtains a right to occupy or
use real or personal property, or both, all of the other contract rights
of the Borrower, whenever acquired, and customer lists, choses in action,
claims (including claims for indemnification), books, records, patents,
copyrights, trademarks, blueprints, drawings, designs and plans, trade
secrets, methods, processes, contracts, licenses, license agreements,
formulae, tax and any other types of refunds, returned and unearned
insurance premiums, rights and claims under insurance policies, and
computer information, software, records and data now owned or acquired
after the date of this Agreement by the Borrower.
"Instruments" shall have the meaning given to that term in the Code and
shall include, without limitation, all negotiable instruments (as defined
in the Code), all certificated securities (as defined in the Code) and all
other writings which evidence a right to the payment of money now or after
the date of this Agreement owned by the Borrower.
"Inventory" shall have the meaning given to that term in the Code and
shall include without limitation all goods owned by the Borrower, whenever
acquired and wherever located, held for sale or lease or furnished or to
be furnished under contracts of service, and all raw materials, work in
process and materials owned by the Borrower and used or consumed in the
Borrower's business, whenever acquired and wherever located.
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"Investment Property," "Securities Intermediary" and "Commodities
Intermediary" each shall have the meaning set forth in the Code.
"Know-How" means all documented and undocumented research, ideas, data,
theories, conclusions, reports, drawings, designs, blueprints, schematics,
exhibits, models, prototypes, source code, object code, flow charts,
manuals, processes, specifications, formulae, product configurations,
notes, inventions (whether or not patentable and whether or not reduced to
practice) and any other information of any kind developed, in development
or maintained by the Borrower or any of their respective employees, agents
or representatives relating to any goods or services sold or licensed or
offered for sale or license by the Borrower or goods or services which the
Borrower has a present intention to sell or license.
"Loan Documents" shall mean collectively, this Agreement, the Note, the
Bridge Loan Agreement, the Escrow Agreement and all other agreements,
documents and instruments executed and delivered in connection therewith,
as each may be amended, supplemented or modified from time to time.
"Permitted Liens" shall mean all (i) all existing liens on the assets of
the Borrower which have been disclosed to the Lender by the Borrower in
the Bridge Loan Agreement, and (ii) all purchase money security interests
hereinafter incurred by the Borrower in the ordinary course of business to
the extent permitted by the Bridge Loan Agreement.
"Pledged Shares" shall mean the Borrower Control Shares.
"Proceeds" shall have the meaning given to that term in the Code and shall
include without limitation whatever is received when Collateral or
Proceeds are sold, exchanged, collected or otherwise disposed of, whether
cash or non-cash, and includes without limitation proceeds of insurance
payable by reason of loss of or damage to Collateral.
"Subsidiary" means any corporation, partnership, joint venture or other
entity in which the Borrower has, directly or indirectly, an equity
interest representing 50% or more of the capital stock thereof or other
equity interests therein.
"Trade Secret Rights" means all documentation, Know-How and other
materials owned by the Borrower that are considered to be proprietary to
the Borrower, is maintained on a confidential or secret basis, and is
generally not known to other persons or entities who are not subject to
confidentiality restrictions.
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2. Security Interest. As security for the full and timely payment of
the Debt in accordance with the terms of the Debt and the performance of the
obligations of the Borrower under the Note and this Agreement, the Borrower
agrees that the Lender shall have, and the Borrower grants and conveys to and
creates in favor of the Lender, a security interest under the Code in and to
such of the Collateral as is now owned or acquired after the date of this
Agreement by the Borrower. As security for the full and timely payment of the
Debt in accordance with the terms of the Debt and the performance of the
obligations of the Borrower under the Note and this Agreement, the Shareholder
grants and conveys to and creates in favor of the Lender a security interest
under the Code in and to the Borrower Control Shares. The security interests
granted to the Lender in this Agreement shall be a first priority security
interest, prior and superior to the rights of all third parties existing on or
arising after the date of this Agreement, subject to the Permitted Liens.
3. Provisions Applicable to the Collateral. The parties agree that the
following provisions shall be applicable to the Collateral:
(a) The Borrower covenants and agrees that at all times during the
term of this Agreement it shall keep accurate and complete books and records
concerning the Collateral that is now owned or acquired after the date of this
Agreement by the Borrower.
(b) The Lender or its representatives shall have the right, upon
reasonable prior written notice to the Borrower and during the regular business
hours of the Borrower, to examine and inspect the Collateral and to review the
books and records of the Borrower concerning the Collateral that is now owned or
acquired after the date of this Agreement by the Borrower and to copy the same
and make excerpts therefrom; provided, however, that from and after the
occurrence of an Event of Default, the rights of inspection and entry shall be
subject to the requirements of the Code.
(c) The Borrower shall at all times during the term of this
Agreement keep the Equipment, Inventory and Fixtures that are now owned or
acquired after the date of this Agreement by the Borrower at its various
locations or, upon written notice to the Lender, at such other locations for
which the Lender has filed financing statements, and at no other location
without 20 days' prior written notice to the Lender, except that the Borrower
shall have the right until one or more Events of Default shall occur to sell or
otherwise dispose of Inventory and other Collateral in the ordinary course of
business.
(d) The Borrower shall not move the location of its principal
executive offices without prior written notification to the Lender.
(e) Without the prior written consent of the Lender, the Borrower
shall not sell, lease or otherwise dispose of any Equipment or Fixtures, except
in the ordinary course of their business.
(f) Promptly upon request of the Lender from time to time, the
Borrower shall furnish the Lender with such information and documents regarding
the Collateral and the Borrower's financial condition, business, assets or
liabilities, at such times and in such form and detail as the Lender may
request.
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(g) At all times during the term of this Agreement, the Borrower
shall deliver to the Lender, upon its written request, without limitation,
(i) all invoices and customer statements rendered to account
debtors, documents, contracts, chattel paper, instruments and other
writings pertaining to the Borrower's contracts or the performance
of the Borrower's contracts,
(ii) evidence of the Borrower's accounts and statements
showing the aging, identification, reconciliation and collection
thereof, and
(iii) reports as to the Borrower's inventory and sales,
shipment, damage or loss thereof, all of the foregoing to be
certified by authorized officers or other employees of the Borrower,
and Borrower shall take all necessary action during the term of this
Agreement to perfect any and all security interests in favor of
Borrower and to assign to Lender all such security interests in
favor of Borrower.
(h) Notwithstanding the security interest in the Collateral
granted to and created in favor of the Lender under this Agreement, the Borrower
shall have the right until one or more Events of Default shall occur, at its own
cost and expense, to collect the Accounts and the Chattel Paper and to enforce
its contract rights.
(i) Upon the continuance of an Event of Default following the
expiration of the applicable Cure Period, the Lender shall have the right, in
its sole discretion, to give notice of the Lender's security interest to account
debtors obligated to the Borrower and to take over and direct collection of the
Accounts and the Chattel Paper, to notify such account debtors to make payment
directly to the Lender and to enforce payment of the Accounts and the Chattel
Paper and to enforce the Borrower's contract rights. It is understood and agreed
by the Borrower that the Lender shall have no liability whatsoever under this
subsection (i) except for its own gross negligence or willful misconduct.
(j) At all times during the term of this Agreement the Borrower
shall promptly deliver to the Lender, upon its written request, all existing
leases, and all other leases entered into by Borrower from time to time,
covering any Equipment or Inventory ("Leased Inventory") which is leased to
third parties.
(l) The Borrower shall not change its name, entity status, federal
taxpayer identification number, or provincial organizational or registration
number, or the state under which it is organized without the prior written
consent of the Lender.
(m) The Borrower shall not close any of its Deposit Accounts or
open any new or additional Deposit Accounts without first giving the Lender at
least fifteen (15) days prior written notice thereof.
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(n) The Borrower shall cooperate with the Lender, at Borrower's
expense, in perfecting Lender's security interest in any of the Collateral,
including the execution of any control agreement(s) required in order to perfect
Lender's security interest in the Deposit Accounts.
(o) Lender may file any necessary financing statements and other
documents Lender deems necessary in order to perfect Lender's security interest
without Borrower's signature. Borrower grants to Lender a power of attorney for
the sole purpose of executing any documents on behalf of Borrower which Lender
deems necessary to perfect Lender's security interest. Such power, coupled with
an interest, is irrevocable.
(p) The parties agree that the Lender shall have the right to
designate and appoint a collateral agent to act for and on behalf of the Lenders
with respect to the Collateral under this Agreement, provided that Borrower is
notified in writing at least ten (10) days in advance of such appointment.
4. Additional Provisions Applicable to the Pledged Shares.
(a) Simultaneously herewith the Shareholder has delivered to the
Escrow Agent one or more certificates representing the Pledged Shares, together
with stock powers duly executed in blank by the Borrower. The Escrow Agent shall
hold such Pledged Shares pursuant to the terms of the Escrow Agreement.
(b) The Pledged Shares shall be held by the Escrow Agent as
security for the timely payment of all of the Borrower's obligations under the
Note and for the Borrower's performance of all of its obligations under this
Agreement, as provided herein.
(c) The Escrow Agreement shall provide that while the Escrow Agent
holds the Pledged Shares as security, the Borrower shall have the right to vote
the Pledged Shares at all meetings of stockholders to the same extent as if such
Pledged Shares were held by Borrower; provided that no Event of Default has
occurred and is continuing following the expiration of the Cure Period and that
the Borrower is not in default in the performance of any term of this Agreement.
In the event of any such a default or continuance of Event of Default following
the expiration of the Cure Period, the Lender shall have the right to the extent
permitted by law to vote and to give consents, ratifications and waivers and
take any other action with respect to the Pledged Shares with the same force and
effect as if the Lender were the absolute and sole owner of the Pledged Shares.
4. Actions with Respect to Accounts. The Borrower irrevocably makes,
constitutes and appoints the Lender its true and lawful attorney-in-fact with
power to sign its name and to take any of the following actions after the
occurrence and prior to the cure of an Event of Default, at any time without
notice to the Borrower and at the Borrower's expense:
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(a) Verify the validity and amount of, or any other matter
relating to, the Collateral by mail, telephone, telegraph or otherwise;
(b) Notify all account debtors that the Accounts have been
assigned to the Lender and that the Lender have a security interest in the
Accounts;
(c) Direct all account debtors to make payment of all Accounts
directly to the Lender;
(d) Take control in any reasonable manner of any cash or non-cash
items of payment or proceeds of Accounts;
(e) Receive, open and dispose of all mail addressed to the
Borrower;
(f) Take control in any manner of any rejected, returned, stopped
in transit or repossessed goods relating to Accounts;
(g) Enforce payment of and collect any Accounts, by legal
proceedings or otherwise, and for such purpose the Lender may:
(1) Demand payment of any Accounts or direct any account
debtors to make payment of Accounts directly to the Lender;
(2) Receive and collect all monies due or to become due to the
Borrower pursuant to the Accounts;
(3) Exercise all of the Borrower's rights and remedies with
respect to the collection of Accounts;
(4) Settle, adjust, compromise, extend, renew, discharge or
release Accounts in a commercially reasonable manner;
(5) Sell or assign Accounts on such reasonable terms, for such
reasonable amounts and at such reasonable times as the Lender
reasonably deems advisable;
(6) Prepare, file and sign the Borrower's name or names on any
Proof of Claim or similar documents in any proceeding filed under
federal or state bankruptcy, insolvency, reorganization or other
similar law as to any account debtor;
(7) Prepare, file and sign the Borrower's name or names on any
notice of lien, claim of mechanic's lien, assignment or satisfaction of
lien or mechanic's lien or similar document in connection with the
Collateral;
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(8) Endorse the name of the Borrower upon any chattel papers,
documents, instruments, invoices, freight bills, bills of lading or
similar documents or agreements relating to Accounts or goods
pertaining to Accounts or upon any checks or other media of payment or
evidence of a security interest that may come into the Lender,
possession;
(9) Sign the name of the Borrower to verifications of Accounts
and notices of Accounts sent by account debtors to the Borrower; or
(10) Take all other actions that the Lender reasonably deems
to be necessary or desirable to protect the Borrower's interest in the
Accounts.
(h) Negotiate and endorse any Document in favor of the Lender or
its designees, covering Inventory which constitutes Collateral, and related
documents for the purpose of carrying out the provisions of this Agreement and
taking any action and executing in the name of Borrower any instrument which the
Lender may reasonably deem necessary or advisable to accomplish the purpose
hereof. Without limiting the generality of the foregoing, the Lender shall have
the right and power to receive, endorse and collect checks and other orders for
the payment of money made payable to the Borrower representing any payment or
reimbursement made under, pursuant to or with respect to, the Collateral or any
part thereof and to give full discharge to the same. The Borrower ratify and
approve all acts of said attorney and agree that said attorney shall not be
liable for any acts of commission or omission, nor for any error of judgment or
mistake of fact or law, except for said attorney's own gross negligence or
willful misconduct. This power, being coupled with an interest, is irrevocable
until the Debt is paid in full (at which time this power shall terminate in
full) and the Borrower shall have performed all of their obligations under this
Agreement. The Borrower further agrees to use its reasonable efforts to assist
the Lender in the collection and enforcement of the Accounts and will not
hinder, delay or impede the Lender in any manner in its collection and
enforcement of the Accounts.
5. Preservation and Protection of Security Interest. The Borrower
represents and warrants that it has, and covenants and agrees that at all times
during the term of this Agreement, it will have, good and marketable title to
the Collateral from time to time owned or acquired by it free and clear of all
mortgages, pledges, liens, security interests, charges or other encumbrances,
except for the Permitted Liens and those junior in right of payment and
enforcement to that of the Lender or in favor of the Lender, and shall defend
the Collateral against the claims and demands of all persons, firms and entities
whomsoever. The Borrower represents and warrants that as of the date of this
Agreement the Lender has, and that all times in the future the Lender will have,
a first priority perfected security interest in the Collateral, prior and
superior to the rights of all third parties in the Collateral existing on the
date of this Agreement or arising after the date of this Agreement, subject to
the Permitted Liens. Except as permitted by this Agreement, the Borrower
covenants and agrees that it shall not, without the prior written consent of the
Lender (i) borrow against the Collateral or any portion of the Collateral from
any other person, firm or entity, except for borrowings which are subordinate to
the rights of the Lender, (ii) grant or create or permit to attach or exist any
mortgage, pledge, lien, charge or other encumbrance, or security interest on, of
or in any of the Collateral or any portion of the Collateral except those in
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favor of the Lender or the Permitted Liens, (iii) permit any levy or attachment
to be made against the Collateral or any portion of the Collateral, except those
subject to the Permitted Liens, or (iv) permit any financing statements to be on
file with respect to any of the Collateral, except financing statements in favor
of the Lender or those with respect to the Permitted Liens. The Borrower shall
faithfully preserve and protect the Lender's security interest in the Collateral
and shall, at their own cost and expense, cause, or assist the Lender to cause
that security interest to be perfected and continue perfected so long as the
Debt or any portion of the Debt is outstanding, unpaid or executory. For
purposes of the perfection of the Lender's security interest in the Collateral
in accordance with the requirements of this Agreement, the Borrower shall from
time to time at the request of the Lender file or record, or cause to be filed
or recorded, such instruments, documents and notices, including assignments,
financing statements and continuation statements, as the Lender may reasonably
deem necessary or advisable from time to time in order to perfect and continue
perfected such security interest. The Borrower shall do all such other acts and
things and shall execute and deliver all such other instruments and documents,
including further security agreements, pledges, endorsements, assignments and
notices, as the Lender in its discretion may reasonably deem necessary or
advisable from time to time in order to perfect and preserve the priority of
such security interest as a first lien security interest in the Collateral prior
to the rights of all third persons, firms and entities, subject to the Permitted
Liens and except as may be otherwise provided in this Agreement. The Borrower
agrees that a carbon, photographic or other reproduction of this Agreement or a
financing statement is sufficient as a financing statement and may be filed
instead of the original.
6. Insurance. Risk of loss of, damage to or destruction of the
Equipment, Inventory and Fixtures is on the Borrower. The Borrower shall insure
the Equipment, Inventory and Fixtures against such risks and casualties and in
such amounts and with such insurance companies as is ordinarily carried by
corporations or other entities engaged in the same or similar businesses and
similarly situated or as otherwise reasonably required by the Lender in its sole
discretion. In the event of loss of, damage to or destruction of the Equipment,
Inventory or Fixtures during the term of this Agreement, the Borrower shall
promptly notify Lender of such loss, damage or destruction. At the reasonable
request of the Lender, each of the Borrower's policies of insurance shall
contain loss payable clauses in favor of the Borrower and the Lender as their
respective interests may appear and shall contain provision for notification of
the Lender thirty (30) days prior to the termination of such policy. At the
request of the Lender, copies of all such policies, or certificates evidencing
the same, shall be deposited with the Lender. If the Borrower fails to effect
and keep in full force and effect such insurance or fails to pay the premiums
when due, the Lender may (but shall not be obligated to) do so for the account
of the Borrower and add the cost thereof to the Debt. The Lender is irrevocably
appointed attorney-in-fact of the Borrower to endorse any draft or check which
may be payable to the Borrower in order to collect the proceeds of such
insurance. Unless an Event of Default has occurred and is continuing, the Lender
will turn over to the Borrower the proceeds of any such insurance collected by
it on the condition that the Borrower apply such proceeds either (i) to the
repair of damaged Equipment, Inventory or Fixtures, or (ii) to the replacement
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of destroyed Equipment, Inventory or Fixtures with Equipment, Inventory or
Fixtures of the same or similar type and function and of at least equivalent
value (in the sole judgment of the Lender), provided such replacement Equipment,
Fixtures or Inventory is made subject to the security interest created by this
Agreement and constitutes a first lien security interest in the Equipment,
Inventory and Fixtures subject only to Permitted Liens and other security
interests permitted under this Agreement, and is perfected by the filing of
financing statements in the appropriate public offices and the taking of such
other action as may be necessary or desirable in order to perfect and continue
perfected such security interest. Any balance of insurance proceeds remaining in
the possession of the Lender after payment in full of the Debt shall be paid
over to the Borrower or its order.
7. Maintenance and Repair. The Borrower shall maintain the Equipment,
Inventory and Fixtures, and every portion thereof, in good condition, repair and
working order, reasonable wear and tear alone excepted, and shall pay and
discharge all taxes, levies and other impositions assessed or levied thereon as
well as the cost of repairs to or maintenance of the same. If the Borrower fails
to do so, the Lender may (but shall not be obligated to) pay the cost of such
repairs or maintenance and such taxes, levies or impositions for the account of
the Borrower and add the amount of such payments to the Debt.
8. Preservation of Rights Against Third Parties; Preservation of
Collateral in Lender's Possession. Until such time as the Lender exercise its
right to effect direct collection of the Accounts and the Chattel Paper and to
effect the enforcement of the Borrower's contract rights, the Borrower assumes
full responsibility for taking any and all commercially reasonable steps to
preserve rights in respect of the Accounts and the Chattel Paper and their
contracts against prior parties. The Lender shall be deemed to have exercised
reasonable care in the custody and preservation of such of the Collateral as may
come into its possession from time to time if the Lender takes such action for
that purpose as the Borrower shall request in writing, provided that such
requested action shall not, in the judgment of the Lender, impair the Lender's
security interest in the Collateral or its right in, or the value of, the
Collateral, and provided further that the Lender receives such written request
in sufficient time to permit the Lender to take the requested action.
9. Events of Default and Remedies.
(a) If any one or more of the Events of Default shall occur or
shall exist, the Lender may upon the expiration of the applicable Cure Period or
at any time thereafter, so long as such default shall continue, foreclose the
lien or security interest in the Collateral in any way permitted by law, or upon
fifteen (15) days prior written notice to the Borrower, sell any or all
Collateral at private sale at any time or place in one or more sales, at such
price or prices and upon such terms, either for cash or on credit, as the
Lender, in its sole discretion, may elect, or sell any or all Collateral at
public auction, either for cash or on credit, as the Lender, in its sole
discretion, may elect, and at any such sale, the Lender may bid for and become
the purchaser of any or all such Collateral. Pending any such action the Lender
may liquidate the Collateral.
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(b) If any one or more of the Events of Default shall occur or
shall exist, the Lender may upon the expiration of the applicable Cure Period,
or at any time thereafter, so long as such default shall continue, grant
extensions to, or adjust claims of, or make compromises or settlements with,
debtors, guarantors or any other parties with respect to Collateral or any
securities, guarantees or insurance applying thereon, without notice to or the
consent of the Borrower, without affecting the Borrower's liability under this
Agreement or the Note. The Borrower waives notice of acceptance, of nonpayment,
protest or notice of protest of any Accounts or Chattel Paper or any of its
contract rights and any other notices to which the Borrower may be entitled.
(c) If any one or more of the Events of Default shall occur or
shall exist and be continuing following the expiration of the applicable Cure
Period, then in any such event, the Lender shall have such additional rights and
remedies in respect of the Collateral or any portion thereof as are provided by
the Code and such other rights and remedies in respect thereof which it may have
at law or in equity or under this Agreement, including without limitation the
right to enter any premises where Equipment, Inventory and/or Fixtures are
located and take possession and control thereof without demand or notice and
without prior judicial hearing or legal proceedings, which the Borrower
expressly waives.
(d) The Lender shall apply the Proceeds of any sale or liquidation
of the Collateral, and, subject to Section 6, any Proceeds received by the
Lender from insurance, first to the payment of the reasonable costs and expenses
incurred by the Lender in connection with such sale or collection, including
without limitation reasonable attorneys' fees and legal expenses, second to the
payment of the Debt, whether on account of principal or interest or otherwise as
the Lender, in its sole discretion, may elect, and then to pay the balance, if
any, to the Borrower or as otherwise required by law. If such Proceeds are
insufficient to pay the amounts required by law, the Borrower shall be liable
for any deficiency.
(e) Upon the occurrence of any Event of Default and such Event of
Default's continuance following the expiration of the applicable Cure Period,
the Borrower shall promptly upon written demand by the Lender assemble the
Equipment, Inventory and Fixtures and make them available to the Lender at a
place or places to be designated by the Lender. The rights of the Lender under
this paragraph to have the Equipment, Inventory and Fixtures assembled and made
available to it is of the essence of this Agreement and the Lender may, at its
election, enforce such right by an action in equity for injunctive relief or
specific performance, without the requirement of a bond.
(f) Notwithstanding anything herein to the contrary, if an Event
of Default is cured prior to the end of the Cure Period (including, but not
limited to, an Event of Default pursuant to Section 6.1(d) of the Bridge Loan
Agreement), the Borrower shall use its best efforts to ensure that the Merger
and the Transactions, as such terms are defined in the Bridge Loan Agreement,
are consummated.
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10. Defeasance. Notwithstanding anything to the contrary contained in
this Agreement upon payment and performance in full of the Debt, this Agreement
shall terminate and be of no further force and effect and the Lender shall
thereupon terminate its security interest in the Collateral. Until such time,
however, this Agreement shall be binding upon and inure to the benefit of the
parties, their successors and assigns, provided that, without the prior written
consent of the Lender, the Borrower may not assign this Agreement or any of its
rights under this Agreement or delegate any of its duties or obligations under
this Agreement and any such attempted assignment or delegation shall be null and
void. This Agreement is not intended and shall not be construed to obligate the
Lender to take any action whatsoever with respect to the Collateral or to incur
expenses or perform or discharge any obligation, duty or disability of the
Borrower.
11. Miscellaneous.
(a) The provisions of this Agreement are intended to be severable.
If any provision of this Agreement shall for any reason be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
of such provision in any other jurisdiction or any other provision of this
Agreement in any jurisdiction.
(b) No failure or delay on the part of the Lender in exercising
any right, remedy, power or privilege under this Agreement and the Note shall
operate as a waiver thereof or of any other right, remedy, power or privilege of
the Lender under this Agreement, the Note or any of the other Loan Documents;
nor shall any single or partial exercise of any such right, remedy, power or
privilege preclude any other right, remedy, power or privilege or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges of the Lender under this Agreement,
the Note and the other Loan Documents are cumulative and not exclusive of any
rights or remedies which they may otherwise have.
(c) All notices, statements, requests and demands given to or made
upon either party in accordance with the provisions of this Agreement shall be
deemed to have been given or made when personally delivered or when deposited in
the United States or Canadian mail, postage prepaid or with private overnight
courier service, charges prepaid, addressed as provided below, with a copy by
facsimile:
If to Borrower:
Uluru, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxx, President and Chief Executive Officer
Telephone: 000 000 0000
Facsimile: 000 000 0000
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with a copy to:
McGuireWoods LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxx , Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Lender:
Oxford Ventures, Inc.
0000 Xxxx Xxx Xxxxxx, Xxxxx 000
Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Gottbetter & Partners, LLP
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Shareholder:
Xxxxx X. Xxxx
c/o Uluru, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: 000 000 0000
Facsimile: 000 000 0000
with a copy to:
McGuireWoods LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxx , Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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(d) The section headings contained in this Agreement are for
reference purposes only and shall not control or affect its construction or
interpretation in any respect.
(e) Unless the context otherwise requires, all terms used in this
Agreement which are defined by the Code shall have the meanings stated in the
Code.
(f) The Code shall govern the settlement, perfection and the
effect of attachment and perfection of the Lender's security interest in the
Collateral, and the rights, duties and obligations of the Lender and the
Borrower with respect to the Collateral. This Agreement shall be deemed to be a
contract under the laws of the State of New York and the execution and delivery
of this Agreement and, to the extent not inconsistent with the preceding
sentence, the terms and provisions of this Agreement shall be governed by and
construed in accordance with the laws of that State.
(g) This Agreement may be executed in several counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same instrument. All of such counterparts shall be read as though one, and
they shall have the same force and effect as though all the signers had signed a
single page.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, and intending to be legally bound, the parties have
executed and delivered this Agreement as of the day and year set forth at the
beginning of this Agreement.
BORROWER:
ULURU, INC.
By: /s/ Xxxxx X. Xxxx
--------------------------------------------
Name: Xxxxx X. Xxxx
Title:
LENDER:
OXFORD VENTURES, INC.
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: President and Chief Executive Officer
THE SHAREHOLDER:
XXXXX X. XXXX
By: /s/ Xxxxx X. Xxxx
--------------------------------------------
Name: Xxxxx X. Xxxx
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