EXHIBIT 3.3
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is dated as of
November 25th, 2002, by NEURO BIOSCIENCE, INC., a Utah
corporation (the "Grantor"), in favor of JANO HOLDINGS LIMITED, a
Gibraltar corporation (the "Lender").
Recitals
WHEREAS, pursuant to that certain letter agreement (the "Letter
Agreement") of even date herewith between the Grantor and Lender,
Lender has made available a senior, secured credit facility in
the aggregate principal amount of up to Two Million Dollars
($2,000,000);
WHEREAS, pursuant to that certain Note of even date herewith,
issued by the Grantor in favor of the Lender (as the same may
from time to time be amended, modified, supplemented or restated,
the "Note"), Grantor has promised to pay the Obligations (as
defined herein) to the Lender; and
WHEREAS, the obligations of the Lender under the Letter Agreement
are subject to the condition, among others, that Grantor shall
have executed and delivered to Lender this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by Grantor,
Grantor hereby represents, covenants and agrees with Lender as
follows:
1. Definitions.
a. When used in this Agreement the following terms shall have
the following meanings (such meanings being equally applicable to
both the singular and plural forms of the terms defined):
"Collateral" has the meaning assigned to such term in
Section 2 of this Agreement.
"Contracts" means all contracts (including any customer,
vendor, supplier, service or maintenance contract), leases,
licenses, undertakings, purchase orders, permits, franchise
agreements or other agreements (other than any right
evidenced by Chattel Paper, Documents or Instruments),
whether in written or electronic form, in or under which
Grantor now holds or hereafter acquires any right, title or
interest, including, without limitation, with respect to an
Account, any agreement relating to the terms of payment or
the terms of performance thereof.
"Copyrights" means all of the following now owned or
hereafter acquired or created (as a work for hire for the
benefit of Grantor) by Grantor or in which Grantor now holds
or hereafter acquires or receives any right or interest, in
whole or in part: (a) all copyrights, whether registered or
unregistered, held pursuant to the laws of the United
States, any State thereof or any other country; (b)
registrations, applications, recordings and proceedings in
the United States Copyright Office or in any similar office
or agency of the United States, any State thereof or any
other country; (c) any continuations, renewals or extensions
thereof; (d) any registrations to be issued in any pending
applications, and shall include any right or interest in and
to work protectable by any of the foregoing which are
presently or in the future owned, created or authorized (as
a work for hire for the benefit of Grantor) or acquired by
Grantor, in whole or in part; (e) prior versions of works
covered by copyright and all works based upon, derived from
or incorporating such works; (f) income, royalties, damages,
claims and payments now and hereafter due and/or payable
with respect to copyrights, including, without limitation,
damages, claims and recoveries for past, present or future
infringement; (g) rights to xxx for past, present and future
infringements of any copyright; and (h) any other rights
corresponding to any of the foregoing rights throughout the
world.
"Obligations" has the meaning set forth in Section 3 of this
Agreement.
"Patents" means all of the following in which Grantor now
holds or hereafter acquires any interest: (a) all letters
patent of the United States or any other country, all
registrations and recordings thereof and all applications
for letters patent of the United States or any other
country, including, without limitation, registrations,
recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country;
(b) all reissues, divisions, continuations, renewals,
continuations-in-part or extensions thereof; (c) all xxxxx
patents, divisionals and patents of addition; (d) all
patents to issue in any such applications; (e) income,
royalties, damages, claims and payments now and hereafter
due and/or payable with respect to patents, including,
without limitation, damages, claims and recoveries for past,
present or future infringement; and (f) rights to xxx for
past, present and future infringements of any patent.
"Trademark" means any of the following in which Grantor now
holds or hereafter acquires any interest: (a) all
trademarks, whether registered or unregistered, held
pursuant to the laws of the United States, and State
thereof, or any country (b) registrations, applications,
recordings and proceedings in the United States Patent and
Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country; (c)
any continuations, renewals or extensions thereof; (d) any
registrations to be issued in any pending applications (e)
income, royalties, damages, claims and payments now and
hereafter due and/or payable with respect to trademarks,
including, without limitation, damages, claims and
recoveries for past, present or future infringement; (g)
rights to xxx for past, present and future infringements of
any trademark; and (h) any other rights corresponding to any
of the foregoing rights throughout the world.
"UCC" means the Uniform Commercial Code as the same may from
time to time be in effect in the State of New York;
provided, however, in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection
or priority of Lender's security interest in any Collateral
is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term
"UCC" shall mean the Uniform Commercial Code (including the
Articles thereof) as in effect at such time in such other
jurisdiction for purposes of the provisions hereof relating
to such attachment, perfection or priority and for purposes
of definitions related to such provisions. In addition, the
following terms shall have the meanings set forth for such
terms in the UCC: "Account," "Account Debtor," "Chattel
Paper" (including tangible and electronic chattel paper),
"Commercial Tort Claims," "Commodity Account," "Deposit
Account," "Documents," "Equipment," "Fixtures," "Fixture
Filing," "General Intangible" (including, without
limitation, Payment Intangibles, Copyrights, Patents,
Trademarks, designs, drawings, technical information,
marketing plans, customer lists, trade secrets, proprietary
or confidential information, inventions (whether or not
patentable), procedures, know-how, models and data),
"Instrument," "Intellectual Property," "Inventory"
(including all goods held for sale or lease or to be
furnished under a contract of service, and including returns
and repossessions), "Investment Property" (including
Securities, Securities Accounts and Securities
entitlements), "Letter-of-Credit Right" (whether or not the
letter of credit is evidenced by a writing), "Payment
Intangibles," "Proceeds," "Promissory Notes," "Securities,"
"Securities Account," "Securities Entitlement" and
"Supporting Obligations." Each of the foregoing terms shall
include all of such items now owned, or hereafter acquired,
by Grantor.
b. Except as otherwise defined herein, all capitalized terms
used in this Agreement have the meanings stated in the Note.
2. Grant of Security. As collateral security for the full,
prompt, complete and final payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of all
the Obligations, Grantor hereby grants to Lender a lien on and
security interest in, all of Grantor's right, title and interest
in, to and under the following, whether now owned or hereafter
acquired (all of which being collectively referred to herein as
the "Collateral"):
a. All Accounts of Grantor (including, but not limited to, and
notwithstanding anything in this Agreement to the contrary, any
and all proceeds, money or accounts under all Contracts (without
exception).
b. All Chattel Paper of Grantor;
c. All Contracts of Grantor (excluding those contracts set
forth on Schedule A; provided, however, that the foregoing
exclusion shall in no way restrict the assignment of or right to
receive a security interest in or lien on, proceeds, money or
accounts under such contracts);
d. All Deposit Accounts of Grantor;
e. All Documents of Grantor;
f. All Equipment of Grantor;
g. All Fixtures of Grantor;
h. All General Intangibles of Grantor (excluding (a) those
contracts set forth on Schedule A or (b) those General
Intangibles that are prohibited from being assigned or
transferred or granted as a security interest under the contracts
set forth on Schedule A; provided, however, that the foregoing
exclusions shall in no way restrict the assignment of or right to
receive a security interest in or lien on, proceeds, money or
accounts under such contracts);
i. All Instruments of Grantor, including, without limitation,
Promissory Notes;
j. All Inventory of Grantor;
k. All Investment Property of Grantor;
l. All Letter-of Credit Rights of Grantor;
m. All Supporting Obligations of Grantor;
n. All property of Grantor held by Lender, including, without
limitation, all property of every description now or hereafter in
the possession or custody of or in transit to Lender for any
purpose, including, without limitation, safekeeping, collection
or pledge, for the account of Grantor, or as to which Grantor may
have any right or power;
o. All other goods and personal property of Grantor wherever
located, whether tangible or intangible, and whether now owned or
hereafter acquired, existing, leased or consigned by or to
Grantor, except those goods and personal property which are
excluded pursuant to Section 2(c) or 2(h) hereunder; and
p. To the extent not otherwise included, all Proceeds of each
of the foregoing and all accessions to, substitutions and
replacements for and rents, profits and products of each of the
foregoing.
If Grantor shall at any time acquire a Commercial Tort
Claim, Grantor shall promptly notify the Lender in a writing
signed by Grantor of the brief details thereof and grant to
Lender in such writing a security interest therein and in
the proceeds thereof, all upon the terms of this Agreement,
with such writing to be in form and substance reasonably
satisfactory to the Lender.
Grantor hereby authorizes the Lender to file, without
Grantor's signature thereon and at Grantor's expense,
financing statements, continuation statements (including "in
lieu" continuation statements) and amendments thereto, that
describe the Collateral and which contain any other
information required by Part 5 of Article 9 of the UCC for
the sufficiency or filing office acceptance of any financing
statement, continuation statement or amendment, including if
Grantor is an organization, the type of organization and any
organization identification number issued to Grantor.
3. Security for Obligations. This Agreement secures the
payment of (i) all of the unpaid principal amount of, and accrued
interest on (including any interest that accrues after the
commencement of any bankruptcy proceeding) the Note, (ii) the
obligation of Grantor to pay any fees, costs and expenses of
Lender under the Note, and (iii) all other obligations,
liabilities and indebtedness owed by Grantor to the Lender under
the Note, in each case, whether now existing or hereafter
incurred (collectively, the "Obligations").
4. Rights of Lender; Collection of Accounts.
a. Grantor expressly agrees that Grantor shall remain liable
under each of its Contracts to observe and perform all the
conditions and obligations to be observed and performed by it
thereunder and that Grantor shall perform all of its duties and
obligations thereunder such that the Grantor shall not be deemed
to be in breach of each such Contract. The Lender shall not have
any obligation or liability under any Contract by reason of or
arising out of this Agreement or the granting to the Lender of a
lien therein or the receipt by the Lender of any payment relating
to any Contract pursuant hereto, nor shall the Lender be required
or obligated in any manner to perform or fulfill any of the
obligations of Grantor under or pursuant to any Contract, or to
make any payment, or to make any inquiry as to the nature or the
sufficiency of any payment received by them or the sufficiency of
any performance by any party under any Contract, or to present or
file any claim, or to take any action to collect or enforce any
performance or the payment of any amounts which may have been
assigned to them or to which they may be entitled at any time or
times.
b. The Lender authorizes Grantor to collect its accounts,
provided that such collection is performed in a prudent and
businesslike manner, and the Lender may, upon the occurrence and
during the continuation of any Event of Default and without
notice, limit or terminate said authority at any time. Upon the
occurrence and during the continuance of any Event of Default, at
the request of the Lender, Grantor shall deliver to Lender all
original and other documents which created and/or relate to such
accounts, including, without limitation, all original orders,
invoices and shipping receipts.
c. The Lender may at any time, upon the occurrence and during
the continuance of any Event of Default, without notifying
Grantor of its intention to do so, notify Account Debtors of
Grantor, parties to the Contracts of Grantor, obligors in respect
of Instruments of Grantor and obligors in respect of Chattel
Paper of Grantor that the Accounts and the right, title and
interest of Grantor in, to and under such Contracts, Instruments
and Chattel Paper have been assigned to Lender and that payments
thereunder or with respect thereto are to be made directly to the
Lender. Upon the request of the Lender, Grantor shall promptly
so notify such Account Debtors, parties to such Contracts,
obligors in respect of such Instruments and obligors in respect
of such Chattel Paper. Upon the occurrence and during the
continuance of any Event of Default, the Lender may, in Lender's
name or in the name of others, communicate with such Account
Debtors, parties to such Contracts, obligors in respect of such
Instruments and obligors in respect of such Chattel Paper to
verify with such parties, to the Lender's satisfaction, the
existence, amount and terms of any such Accounts, Contracts,
Instruments or Chattel Paper. Notwithstanding the foregoing,
Lender shall not notify or otherwise communicate with any parties
to Contracts or Account Debtors of Grantor except upon the
occurrence of any Event of Default.
d. Without limiting the foregoing and Lender's rights as set
forth in the foregoing, any action by the Lender pursuant to or
as described in Section 4(b) or Section 4(c) hereof shall be in
compliance with the provisions set forth in Section 12(b)(v)
hereof.
5. Representations and Warranties of Grantor. Grantor
represents and warrants as follows:
a. Grantor is a corporation duly organized, existing and in
good standing under the laws of the Delaware, (b) has the legal
power to own its property and to carry on its business as now
being conducted, and (c) is duly qualified to do business and is
in good standing in each jurisdiction in which the character of
the properties owned or leased by it therein or in which the
transaction of its business makes such qualification necessary,
except where the failure to so qualify or be in good standing
would not have a Material Adverse Effect;
b. Grantor is, and as to Collateral acquired by it from time to
time after the date hereof Grantor will be, the owner of all
Collateral free from any liens, other than liens created hereby
and other than Permitted Liens;
c. This Agreement creates, for the benefit and security of
Lender in respect of the Obligations, a legally valid and binding
lien on, pledge of, and security interest in the Collateral and,
upon the filing of a UCC Financing Statement, and any applicable
filings with respect to Copyrights, Patents or Trademarks in
respect of the Collateral, such lien, pledge and security
interest will be perfected and will have priority over the claims
of any other present and future creditors of the Company (other
than Permitted Liens or liens upon such of the Collateral that
must be perfected by possession or control of such Collateral);
and
d. Grantor's chief executive office, principal place of
business and the place where Grantor maintains its records
concerning the Collateral are each presently located at the
address set forth on the signature page hereof; and Grantor's
Federal taxpayer identification number and Grantor's
organizational identification number under the laws of the State
in which Grantor, as a registered organization, was organized are
as set forth on the signature page hereto.
6. As to the Collateral.
a. Notwithstanding anything to the contrary contained herein,
the assignment by Grantor herein stated is intended to be an
assignment for security purposes and is not intended to divest
Grantor of its ownership of the Collateral, except as otherwise
provided herein.
b. So long as no Event of Default has occurred and is
continuing, (i) Grantor shall retain title to and record
ownership of the Collateral, and (ii) Grantor shall be entitled
to receive any and all income or distributions made with respect
to the Collateral, except as provided in Section 6(c) hereof.
c. Upon the occurrence and during the continuance of an Event
of Default, all income and proceeds of the Collateral which are
received by Grantor shall be (i) received in trust for the
benefit of the Lender, (ii) segregated from other funds of
Grantor, and (iii) forthwith paid over by Grantor to the Lender
(for application in accordance with this Agreement) in the same
form as so received.
7. Covenants of Grantor. Grantor covenants and agrees with
Lender that unless approved by Lender:
a. Grantor shall not sell, assign (by operation of law or
otherwise), or otherwise transfer any of the Collateral, or
attempt or contract to do so, or grant any option with respect to
any of the Collateral, except Inventory in the ordinary course of
business.
b. Grantor shall not change its name, identity or corporate
structure in any manner, nor change its jurisdiction of
organization, relocate its chief executive office, principal
place of business or its principal records with respect to the
Collateral, or allow the relocation of any Collateral, in each
case without thirty (30) days' prior written notice to the
Lender.
c. Grantor shall not, directly or indirectly, create or permit
to exist any lien upon or with respect to any of the Collateral,
and shall defend the Collateral against, and take such other
action as is necessary to remove, any lien on the Collateral,
except for the lien created hereby and any Permitted Liens.
d. Grantor shall maintain all tangible Collateral in good
condition and repair, ordinary wear and tear excepted.
e. Grantor shall maintain on the Collateral property damage and
liability insurance in such amounts, against such risks, and in
such forms and with such companies as are customarily maintained
by businesses similar to Grantor. Each such policy shall not be
materially altered or canceled, and the coverage will not be
materially reduced, in any case, without at least thirty (30)
days' prior written notice to the Lender. Grantor shall provide
the Lender with satisfactory evidence of such insurance coverage
at the request of the Lender.
f. Grantor shall promptly pay when due all property and other
taxes, assessments and government charges or levies imposed upon,
and all claims (including claims for labor, materials and
supplies) against, the Collateral, except to the extent the
validity thereof is being contested in good faith and by
appropriate proceedings and adequate reserves are being
maintained in connection therewith; provided that this Section
7(f) shall not apply to claims for labor, materials or supplies
which Payee consents in writing shall be excluded herewith,
notwithstanding that such claims, if unpaid, might become a lien
or charge upon such properties or any part thereof.
g. Grantor shall keep and maintain at its own cost and expense
satisfactory and reasonably complete records of the Collateral.
Grantor shall furnish the Lender with such information regarding
the Collateral as the Lender may reasonably request from time to
time and shall allow the Lender, upon reasonable notice, access
during normal business hours to inspect the Collateral and
Grantor's records, accounts and books pertaining to the
Collateral, provided that no restriction as to normal business
hours shall be required during the continuance of an Event of
Default.
h. Grantor shall not knowingly take or omit to take any action,
the taking or omission of which might impair Lender's lien on the
Collateral or adversely affect the value of the Collateral.
i. Upon the occurrence and during the continuance of any Event
of Default, Grantor shall not grant any extension of the time of
payment of any of its Accounts, Chattel Paper, Instruments or
amounts due under any of its Contracts or Documents, compromise,
compound or settle the same for less than the full amount
thereof, release, wholly or partly, any Person liable for the
payment thereof, or allow any credit or discount whatsoever
thereon other than trade discounts and rebates granted in the
ordinary course of Grantor's business.
j. Grantor shall (i) protect, defend and maintain the validity
and enforceability of the Copyrights, Patents and Trademarks,
(ii) use commercially reasonable efforts to detect infringements
of the Copyrights, Patents and Trademarks and promptly advise the
Lender in writing of material infringements detected, and (iii)
not allow any material Copyrights, Patents or Trademarks to be
abandoned, forfeited or dedicated to the public without the
written consent of the Lender, unless any such abandonment is
appropriate in accordance with reasonable and customary business
practice.
k. Grantor shall not execute or authorize to be filed in any
public office any UCC financing statement (or similar statement
or instrument of registration under the law of any jurisdiction)
except UCC financing statements filed or to be filed in respect
of and covering the lien created by this Agreement.
l. Grantor shall not amend, modify, waive, take any action or
fail to take any action with respect to all or a portion of any
Contract set forth on Schedule A attached hereto which Grantor
reasonably expects or should expect would adversely affect
Lender's interest in the Collateral (including, but not limited
to, the value of the Collateral) or which affect the timing,
value or amount of any proceeds due under any Contract set forth
on Schedule A.
8. Further Assurances. Grantor agrees, at any time and from
time to time, at the expense of Grantor, and upon request of the
Lender, to promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary
or desirable, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable
the Lender to exercise and enforce Lender's rights and remedies
hereunder with respect to any Collateral, including, without
limitation, (i) delivering and causing to be filed any financing
or continuation statements (including "in lieu" continuation
statements) under the UCC with respect to the security interests
granted hereby, (ii) obtaining "control" by or on behalf of
Lender of any Investment Property, Deposit Accounts, Letter-of-
Credit Rights or Electronic Chatter Paper (with reference to
applicable provisions of the UCC with respect to "control" for
such items of Collateral), (iii) placing the interest of the
Lender as lienholders on the certificate of title (or similar
evidence of ownership) of any Equipment constituting Collateral
owned by Grantor which is covered by a certificate of title (or
similar evidence of ownership), (iv) filing or cooperating with
the Lender in filing any forms or other documents required to be
recorded with the United States Patent and Trademark Office,
United States Copyright Office, or any actions, filings,
recordings or registrations in any foreign jurisdiction or under
any international treaty, required to secure or protect Lender's
interest in the Collateral, (v) transferring Collateral to the
possession of the Lender (if a security interest in such
Collateral can only be perfected by possession), (vi) executing
and delivering or causing to be delivered written notice to
insurers of Lender's security interest in, or claim in or under,
any policy of insurance (including unearned premiums), and (vii)
using its best efforts to obtain acknowledgements from bailees
having possession of any Collateral and waivers of liens from
landlords and mortgagees of any location where any of the
Collateral may from time to time be stored or located. If
Grantor executes and delivers any document or instrument pursuant
to this Section 8, such document or instrument shall be in form
and substance reasonably satisfactory to the Lender and a copy
thereof shall be provided by Grantor to the Lender; and if
Grantor takes any other action pursuant to this Section 8, such
action shall be taken with the prior written consent of the
Lender and notice thereof shall be given by Grantor to the
Lender.
9. Security Interest Absolute. All rights of the Lender and
the assignment and security interest hereunder, and all
obligations of Grantor hereunder, shall remain in full force and
effect and shall secure the Obligations, and shall be absolute
and unconditional, irrespective of:
a. any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations or any other
amendment or waiver of or any consent to any departure from the
Note; or
b. any taking, exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent
to departure from any guaranty, for all or any of the
Obligations; or
c. any manner of application of any Collateral, or proceeds
thereof, to all or any of the Obligations or any manner of sale
or other disposition of any Collateral; or
d. any other circumstances other than releases, waivers and the
like by the Lender that might otherwise constitute a defense
available to, or a discharge of, Grantor's obligations hereunder
or Lender's security interest hereunder.
10. Continuing Security Interest; Sale of Participations;
Release of Collateral. This Agreement shall create a continuing
security interest in the Collateral and shall (i) remain in full
force and effect until the payment in full of the Obligations
(subject to Section 14 hereof), (ii) be binding upon Grantor, its
successors and its permitted assigns under the Note, and
(iii) inure to the benefit of, and be enforceable by (subject to
the terms hereof), the Lender and its successors and assigns. No
sales of participations in, and no other sales, assignments,
transfers or other dispositions of, any agreement governing or
instrument evidencing the Obligations or any portion thereof or
interest therein by the Lender shall in any manner affect the
lien granted to the Lender hereunder. Subject to Section 14
hereof, upon the payment in full of the Obligations, the security
interest granted hereby shall terminate and all rights to the
Collateral shall revert to Grantor. Upon any such termination,
the Lender will, at Grantor' expense, execute and deliver to
Grantor such documents as Grantor shall reasonably request to
evidence such termination. The Lender shall, at the request of
Grantor, deliver any document reasonably necessary to release any
lien granted hereunder with respect to any Collateral Grantor is
transferring.
11. Lender's Duties. The powers conferred on the Lender
hereunder are solely to protect Lender's interest in the
Collateral as a secured party and shall not impose any duty upon
the Lender to exercise any such powers. Except for the safe
custody of any Collateral in Lender's possession and the
accounting for money actually received by Lender hereunder, the
Lender shall not have any duty as to any Collateral or as to the
taking of any necessary steps to preserve any rights pertaining
to any Collateral. The Lender shall not have any responsibility
or liability for the collection of any proceeds of any Collateral
or by reason of any invalidity, lack of value or uncollectability
of any of the Collateral. The Lender shall be deemed to have
exercised reasonable care in the custody and preservation of any
Collateral in the Lender's possession if such Collateral is
accorded treatment substantially equal to that which the Lender
accords its own property.
12. Events of Default; Remedies Upon Default; Actions by Lender.
a. The occurrence of an Event of Default under and as defined
in the Note shall constitute an "Event of Default" hereunder.
b. If any Event of Default shall have occurred:
i. The Lender may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or
otherwise available to Lender (or any of them), all the rights
and remedies of a secured party on default under the UCC (whether
or not the UCC applies to the affected Collateral), and may also,
without notice of any kind or demand of performance or other
demand (all and each of which demands and notices are hereby
expressly waived to the maximum extent provided by the UCC and
other applicable law) reclaim, take possession, recover, store,
maintain, finish, repair, prepare for sale or lease, advertise
for sale or lease and sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange,
broker's board or at the Lender's offices or elsewhere, for cash,
on credit, or for future delivery, and upon such other terms as
the Lender may deem commercially reasonable. In connection with
the liquidation, sale or other disposition of the Collateral, the
Lender is granted a non-exclusive, royalty-free license or other
right to use, without charge, Grantor' labels, patents,
copyrights, trade secrets, trade names, trademarks, service
marks, or any similar property as it pertains to the Collateral,
in completing a liquidation, sale or other disposition of the
Collateral. The Lender shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given.
The Lender may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and
place to which it was so adjourned. Grantor agrees that in any
sale of any of the Collateral, whether at a foreclosure sale or
otherwise, the Lender is hereby authorized to comply with any
limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any
violation of applicable law (including compliance with such
procedures as may restrict the number of prospective bidders and
the Lender, require that such prospective bidders and the Lender
have certain qualifications and restrict such prospective bidders
and the Lender to Persons who will represent and agree that they
are purchasing for their own account for investment and not with
a view to the distribution or resale of such Collateral), and
Grantor further agrees that such compliance shall not result in
such sale being considered or deemed not to have been made in a
commercially reasonable manner, nor shall the Lender be liable or
accountable to Grantor for any discount allowed by reason of the
fact that such Collateral is sold in compliance with any such
limitation or restriction.
ii. Grantor authorizes the Lender, on the terms set forth
herein, to enter the premises where the Collateral (or any part
of it) is located, to take possession of the Collateral (or any
part of it), and to pay, purchase, contract, or compromise any
encumbrance, charge or lien which, in the opinion of the Lender,
appears to be prior or superior to its security interest.
Grantor further agrees, at the Lender's request, to assemble the
Collateral and make it available to the Lender at places which
the Lender shall reasonably select. To the maximum extent
permitted by applicable law, Grantor hereby waives all claims,
damages, and demands against the Lender arising out of the
repossession, retention or sale of the Collateral.
iii. The Lender may sell Collateral without giving warranties as
to such Collateral. The Lender may specifically disclaim any
warranties of title or the like. The foregoing will not be
considered adversely to affect the commercial reasonableness of
any sale of Collateral.
iv. If the Lender sells any of the Collateral upon credit,
Grantor will be credited only with, and at the time of, payments
actually made by the purchaser in such sale received by the
purchaser and applied to the indebtedness of such purchaser. In
the event the purchaser in such sale fails to pay for the
Collateral, the Lender may resell the Collateral and Grantor
shall be credited with the proceeds of the resale in accordance
with the preceding sentence. In the event the Lender purchase
any of the Collateral being sold, the Lender may pay for the
Collateral by crediting some or all of the amounts described in
clauses first, second, third and fourth of Section 12(b)(vi)
hereof.
v. Any cash held by the Lender as Collateral and all cash
proceeds received by the Lender in respect of any sale of,
collection from, or other realization upon, all or any part of
the Collateral or the exercise of any other remedies consequent
upon an Event of Default shall be applied in whole or in part by
the Lender against all or any part of the Obligations in the
following order:
First, to the Lender in an amount sufficient to
pay in full the Obligations, including all
reasonable fees, costs, expenses, liabilities and
advances incurred or made by the Lender in
connection with the sale, disposition or other
realization of the Collateral, including without
limitation, reasonable attorneys' fees;
Second, upon payment in full of all the
Obligations, to Grantor or to whomsoever may be
lawfully entitled to receive such surplus.
vi. Grantor shall remain liable for any deficiency if the
proceeds of any sale or disposition of the Collateral are
insufficient to fully pay the Obligations, and Grantor also shall
be liable for the reasonable costs and expenses (including
reasonable attorneys' fees and expenses) incurred by Lender to
collect such deficiency.
vii. Grantor hereby waives presentment, demand, protest or any
notice (to the maximum extent permitted by applicable law) of any
kind in connection with this Agreement or any Collateral.
13. Expenses. Grantor shall upon demand pay to the Lender the
amount of any and all reasonable expenses, including the
reasonable and necessary fees and expenses the Lender's counsel
and of any experts and agents, which the Lender may incur in
connection with (a) the administration of this Agreement, (b) the
custody or preservation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (c) the exercise
or enforcement of any of the rights of the Lender hereunder, or
(d) the failure by Grantor to perform or observe any of the
provisions hereof or of under the Note.
14. Reinstatement. This Agreement shall remain in full force
and effect and continue to be effective should any petition be
filed by or against Grantor for liquidation or reorganization,
should Grantor become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed
for all or any significant part of Grantor's property and assets,
and shall continue to be effective or be reinstated, as the case
may be, if at any time payment and performance of the
Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Obligations, whether as a
"voidable preference," "fraudulent conveyance," or otherwise, all
as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
15. Amendments, Etc. No amendment or waiver of any provision of
this Agreement, nor consent to any departure by Grantor herefrom,
shall in any event be effective unless the same shall be in
writing and signed by the parties necessary to amend the Note,
and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
16. Cumulative Remedies. The rights and remedies hereunder
provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights and remedies
provided by law. The Lender shall not by any act, delay,
omission or otherwise be deemed to have waived any of their
respective rights or remedies hereunder, nor shall any single or
partial exercise of any right or remedy hereunder on any one
occasion preclude the further exercise thereof or the exercise of
any other right or remedy.
17. Lender May Perform; Reimbursement; Power of Attorney.
a. If Grantor fails to perform any obligation of Grantor under
this Agreement, the Lender may, but shall not have the obligation
to, without prior notice to or obtaining the consent of Grantor,
perform that obligation on behalf of Grantor, including, without
limitation, obtaining insurance coverage for the Collateral and
satisfying tax obligations or liens on the Collateral. Grantor
shall reimburse the Lender on demand for all reasonable expenses
and reasonable attorneys' fees incurred by the Lender in
performing any such obligation, including interest at the
interest rate specified in the Note.
b. Grantor hereby absolutely and irrevocably constitutes and
appoints the Lender as Grantor's true and lawful agent and
attorney-in-fact, with full power of substitution, in the name of
Grantor: (a) to take any and all such action as the Lender or
any of its agents, nominees or attorneys may, in its or their
sole and absolute discretion, reasonably determine as necessary
or advisable for the purpose of maintaining, preserving or
protecting the security constituted by this Agreement or any of
the rights, remedies, powers or privileges of the Lender under
this Agreement; and (b) generally, in the name of Grantor to
exercise all or any of the powers, authorities and discretions,
conferred on or reserved to the Lender by or pursuant to this
Agreement, and (without prejudice to the generality of any of the
foregoing) to seal and deliver or otherwise perfect any deed,
assurance, agreement, instrument or act as the Lender may deem
proper in or for the purpose of exercising any of such powers,
authorities or discretions, in each case. Grantor hereby
ratifies and confirms, and hereby agrees to ratify and confirm,
whatever lawful acts the Lender or any of its agents, nominees or
attorneys shall do or purport to do in the exercise of the power
of attorney granted to the Lender pursuant to this Section 17(b),
which power of attorney, being given for security, is
irrevocable. Notwithstanding anything to the contrary in this
Section 17(b), no such action as Grantor's true and lawful agent
and attorney-in-fact may be taken by Lender except upon the
occurrence of any Event of Default.
18. Addresses for Notices. All notices and other communications
to any party provided for hereunder shall be in writing and
mailed by registered or certified mail, return receipt requested,
to the addresses for the Grantor and the Lender set forth on the
signature pages hereto, or, as to any party, to such other
address as shall be designated by such party in a written notice
to each other party complying as to delivery with the terms of
this Section 18: All such notices and other communications
shall be effective (i) upon personal delivery to the party to be
notified; (ii) on the date of first attempted delivery after
having been sent by registered or certified mail, return receipt
requested, postage prepaid; (iii) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt.
19. Forbearance; Delay. Any forbearance, failure or delay by
the Lender in exercising any right, power or remedy hereunder
shall not preclude the exercise thereof. Every right, power or
remedy of the Lender shall continue in full force and effect
until such right, power or remedy is specifically waived by an
instrument in writing executed by the Lender.
20. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
21. Successors and Assigns. This Agreement is for the benefit
of the Lender and its successors and assigns, and in the event of
an assignment of all or any of the Obligations, the rights
hereunder, to the extent applicable to the indebtedness so
assigned, may be transferred with such indebtedness. This
Agreement shall be binding on the Grantor and its respective
successors and assigns.
22. Consent To Jurisdiction And Service Of Process. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF GRANTOR AND LENDER
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-
EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE GRANTOR AND
LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF GRANTOR AND
LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW
YORK LAW.
23. Waiver Of Jury Trial. EACH OF GRANTOR AND LENDER WAIVES ITS
RIGHT TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY PARTY AGAINST ANY
OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. EACH OF GRANTOR AND LENDER AGREES THAT ANY
SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH OF GRANTOR
AND LENDER FURTHER AGREES THAT ITS RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS
AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT.
24. Advice of Counsel; Construction. Each of Grantor and Lender
represents and warrants that it has discussed this Agreement,
including, without limitation, Section 22 and Section 23 hereof,
with its counsel. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event
an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any
provisions of the Agreement.
25. Headings. The various headings in this Agreement are
inserted for convenience only and shall not affect the meanings
or interpretation of this Agreement or any provision hereof.
26. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of
New York determined without reference to principles of conflicts
of law, except to the extent that the validity or perfection of
any security interest created hereunder, or remedies hereunder,
in respect of any item of the Collateral is governed by the laws
of a jurisdiction other than the State of New York.
27. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed and delivered as of the date first above
written.
NEURO BIOSCIENCE, INC.
By:
Name:
Title:
Address: 0000 Xxxxxx xx xxx
Xxxxxxxx
Xxx Xxxx, XX, 00000
Federal Taxpayer Identification No.:
Organizational No.:
State of Incorporation: Delaware
JANO HOLDINGS LIMITED
By:
Name:
Title:
Address: Xxxxx X0, Xxxxxxxxxxxxx
Xxxxxxxxxx Xxxxxx, Xxxxxxxxx
SCHEDULE A
