Contract
EXHIBIT
10.2
This
Third Amended and Restated Security Agreement (the “Agreement”) is made as of
March 31, 2008 by BioTime, Inc., as the “Debtor,” in favor and for the benefit
of each “Secured Party,” and amends and restates that certain Security Agreement
dated April 12, 2006 as amended by that certain First Amended and Restated
Security Agreement, dated October 17, 2007, and by that certain Second Amended
and Restated Security Agreement, dated February 15, 2008. Each person
who has executed, as a “Lender,” the Third Amended and Restated Revolving Line
of Credit Agreement, of even date, with Debtor, is referred to herein
individually and collectively as the “Secured Party.”
PREMISES
A. Debtor
and Secured Party have entered into that certain Third Amended and Restated
Revolving Line of Credit Agreement of even date (the “Credit Agreement”),
pursuant to which Debtor may borrow funds from Secured Party;
B.
Debtor has delivered to certain Secured Parties certain
“Notes,” as defined in the Credit Agreement, evidencing Debtor’s obligation to
pay funds advanced by Secured Party under the Credit Agreement;
C.
Debtor is entering into this Agreement to secure its
obligations under the Credit Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, Debtor
hereby agrees as follows:
1.
Creation of Security
Interest. Debtor hereby conveys, assigns, transfers, and
grants to Secured Party a first priority perfected security interest in all of
Debtor’s present and hereafter acquired right, title, and interest in and to the
Collateral (as defined in Section 3 below). Secured Party may record a UCC-1
Financing Statement concerning the Collateral.
2.
Secured
Obligations. This Agreement and the security interests granted
and created under this Agreement secure the prompt payment in full in cash and
the full performance of each and all of the following obligations (collectively,
the “Secured Obligations”):
2.1 each
and every obligation, covenant, and agreement of Debtor contained in, arising
under, in connection with, or evidenced by each of the Notes;
2.2 the
obligations, covenants and agreements of Debtor under the Credit Agreement;
and
2.3 each
and every obligation, covenant, and agreement of Debtor contained in, arising
under, or in connection with, or evidenced by this Agreement.
3.
Collateral. As
used in this Agreement, the term Collateral means (a) all of Debtor’s right,
title, and interest in and to all royalties, license fees, and other amounts
payable by Hospira, Inc. or any successor under that certain Exclusive License
Agreement, dated April 23, 1997, between Debtor and Xxxxxx Laboratories, Inc.
(as the predecessor in interest to Hospira, Inc.), as modified by a letter
agreement and as amended by that certain Amendment to BioTime License Agreement,
dated January 9, 2006 (the “Hospira License”), and (b) all accounts, accounts
receivable, notes, and instruments evidencing any obligation of payment by
Hospira, Inc. under the Hospira License ; and (c) all proceeds of the Collateral
described in clauses (a) and (b) of this Section 3, including but not limited
to, money, accounts, general intangibles, securities, deposit accounts,
investment property, documents, chattel paper, instruments, and insurance
proceeds and interests therein. Debtor represents and warrants to and
for the benefit of Secured Party that Debtor’s title to the Collateral described
in clause (a) of the preceding sentence is free and clear of all liens, pledges,
encumbrances, equities, and claims of any kind whatsoever except for the
security interest created by this Agreement.
4.
Further
Assurances. Debtor hereby further agrees to procure, execute,
and deliver on demand and Debtor hereby irrevocably appoints Secured Party as
Debtor’s attorney in fact to execute, acknowledge, deliver, and, if appropriate,
file and record such endorsements, assignments, consents, security agreements,
financing statements, control agreements, or other instruments, documents, or
writings as Secured Party may request or require in order to perfect or continue
the perfection and the priority of the security interests created or agreed to
be created by this Agreement.
5.
Transfers and
Other Liens. Without the prior written consent of Secured
Party, Debtor shall not (a) sell, contract to sell, pledge, encumber, assign,
hypothecate, alienate, convey, dispose, or otherwise transfer the Collateral, or
any interest therein, whether voluntarily, involuntarily, or by operation of
law, except for sales of inventory in the ordinary course of business, (b)
consent or agree to any alteration, modification, or amendment to the Hospira
License that would reduce the royalties payable by Hospira , (c) waive any right
of payment, or grant any grace period or extension of time for the payment, of
any royalties by Hospira under the Hospira License, (d) create or permit to
exist any lien, encumbrance, mortgage, pledge, security interest or charge of
any kind upon or concerning any of the Collateral, except for the security
interest created by this Agreement, or (e) take any action concerning the
Collateral that is inconsistent with the provisions and purposes of this
Agreement. Any sale, contract to sell, pledge, conveyance,
hypothecation, alienation, encumbrance, disposition, assignment, or other
transfer of any of the Collateral or any alteration, modification, or amendment
of any of the Collateral in a manner that would delay or reduce royalty
payments, or the grant of any grace period or extension of time for the
performance of any obligation due for the benefit of Debtor or Secured Party
under or concerning any of the Collateral made, permitted, or suffered without
Secured Party’s prior written consent shall constitute an Event of Default under
this Agreement.
6.
Additional
Covenants of Debtor. In addition to all other covenants
and agreements of Debtor set forth in this Agreement, Debtor agrees to (a) give
Secured Party thirty (30) days prior written notice of any change in Debtor’s
name, state of incorporation or organization, or place of business, or, if
Debtor has more than one place of business, its head office or office in which
Debtor’s records relating to the Collateral are kept; (b) to appear in and
defend any action or proceeding which may affect Debtor’s title to or Secured
Party’s interest in any Collateral; and (c) to keep separate, accurate, and
complete records of the Collateral, and to provide Secured Party with such
records and such other reports and information relating to Collateral as Secured
Party may request from time to time.
7.
Certain
Notifications and Distributions With Respect To
Collateral. Upon the occurrence and continuance of an Event of
Default, Secured Party shall have the rights set forth in this
Section. Secured Party may at any time, and from time to time, notify
Hospira or any successor account debtor that (a) an account or instrument
constituting Collateral has been assigned to Secured Party, and (b) all
distributions and payments and the performance of all obligations in any way
related to the Collateral are to be made directly to Secured
Party. If Debtor receives any payments of money, securities, or any
tangible or intangible property on account of or with respect to any of the
Collateral at any time during which an Event of Default shall have occurred and
be continuing, such payments will be received by Debtor in trust for, and
immediately paid over to Secured Party. Any collections received by
Secured Party or received by Debtor and delivered to Secured Party shall be
applied to the Secured Obligations, first to the expenses of collection, second
to the payment of accrued interest, and third to the payment of principal;
provided, that any amounts remaining after payment in full of all expenses,
interest, and principal shall be returned to Debtor. Secured Party
shall have the right to receive, receipt for, endorse, assign, deposit, and
deliver, in Secured Party’s name or in the name of Debtor, any and all checks,
notes, drafts, and other instruments for the payment of money constituting
proceeds of or otherwise relating to the Collateral. Debtor hereby
authorizes Secured Party to affix, by facsimile signature or otherwise, the
general or special endorsement of Debtor, in such manner as Secured Party shall
deem advisable, to any such instrument in the event the same has been delivered
to Secured Party without appropriate endorsement, and Secured Party and any
collecting bank are hereby authorized to consider such an endorsement as being
by Debtor to the same extent as though it were manually executed by Debtor,
regardless of by whom or under what circumstances or by what authority such
facsimile signature or other endorsement is actually affixed, without duty of
inquiry or responsibility as to such matters, and Debtor hereby waives demand,
presentment, protest, and notice of protest or dishonor and all other notices of
every kind and nature with respect to any such instrument.
8.
Rights Upon Event of
Default.
8,1
Upon the occurrence of an Event of Default under this Agreement, Secured Party
shall have, in addition to all other rights and remedies that Secured Party may
have at law or in equity, under Section 7 of this Agreement, or under any other
agreement executed by Debtor in favor of Secured Party, all rights and remedies
of a secured party under the California Commercial Code, which rights and
remedies of Secured Party shall be cumulative and non-exclusive. In
addition, upon the occurrence of an Event of Default, Secured Party shall have
the following rights and remedies, all of which may be exercised with or without
further notice to Debtor: (i) to directly receive any and all
payments and distributions of money, securities or any tangible or intangible
property on or in any way related to the Collateral; (ii) to settle, compromise,
or release, on terms acceptable to Secured Party, in whole or in part, any
amounts owing on the Collateral; (iii) to enforce payment and to prosecute any
action or proceeding with respect to any and all of the Collateral; (iv) to
foreclose the liens and security interests created under this Agreement or under
any other agreement relating to the Collateral by any available procedure, with
or without judicial process; (v) to sell, assign, or otherwise dispose of the
Collateral or any part thereof, either at public or private sale for cash, on
credit, or otherwise, with or without representations or warranties, and upon
such terms as shall be acceptable to Secured Party; all at Secured Party’s sole
option and as Secured Party in their sole discretion may deem
advisable.
8,2 Debtor
shall be given reasonable notice of the time and place of any public sale of the
Collateral, or of the time on or after which any private sale or other intended
disposition is to be made. If required under applicable law, Secured
Party may be the purchaser at any public sale. Ten days notice of any
public or private sale or other disposition shall be considered to be reasonable
notice.
9.
Disposition of
Proceeds. After satisfaction in full of the Secured
Obligations, the balance of the proceeds of sale then remaining shall be paid
first to satisfy obligations secured by any other subordinate security interests
or subordinate liens (including but not limited to attachment liens and
execution liens) in the Collateral as provided in the California Commercial
Code, and then any remaining balance of the proceeds shall be paid to the
Debtor.
10. Events of
Default. The occurrence of any of the following shall
constitute an Event of Default under this Agreement:
10.1 Secured
Party shall fail or cease to have a first priority perfected security interest
in the Collateral or any part of the Collateral unless caused by any action
taken by Secured Party;
10.2 Debtor
defaults in the performance of any covenant or agreement contained in this
Agreement;
10.3 Debtor
defaults in the payment or performance of any Secured Obligation;
10.4 An
Event of Default as defined in the Notes has occurred with respect to any of the
Notes; and
10.5 The
occurrence of any other event under this Agreement that is specifically
described elsewhere within this Agreement as an Event of Default.
11. Amendments. This
Agreement may not be altered or amended except with the written consent of
Debtor and the Secured Party.
12. Binding on Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of Debtor and Secured Party and their respective heirs, executors,
personal representatives, successors and assigns.
13. Notices. All
notices and other communications required or permitted to be given pursuant to
this Agreement shall be in writing and shall be deemed given four (4) days after
being deposited in the United States mail, certified postage prepaid, return
receipt requested, or when delivered by hand, by messenger or express air
freight service to the address for notice shown in the Credit
Agreement. Any party may change its address for notice by giving
notice to the other party in the same manner as provided in this
section.
14. Governing
Law. This Agreement shall be governed by and construed under
the laws of the State of California without regard to conflicts of
law. Where applicable and except as otherwise defined in this
Agreement, the terms used in this Agreement shall have the meanings given them
in the California Commercial Code.
15. Attorneys Fees and Costs of
Enforcement. Debtor agrees to pay all reasonable
attorneys’ fees incurred by Secured Party in connection with enforcement of any
of Secured Party’s rights and remedies under this Agreement, whether or not any
proceeding is commenced to enforce or protect such rights and
remedies. All advances, charges, costs, and expenses, including
without limitation, reasonable attorneys’ fees, incurred or paid by Secured
Party in exercising any right, power, or remedy conferred by this Agreement, or
in the enforcement thereof, shall be added to and shall become a part of the
Secured Obligations, payable by Debtor on demand with interest thereon at a rate
of interest equal to the lesser of: (i) the rate provided in the Note for
interest payable after an Event of Default, or (ii) the maximum rate of interest
permitted by law.
16. Waivers by
Debtor. Debtor expressly waives any right to require Secured
Party to (a) proceed against any person, (b) marshal assets or proceed against
or exhaust Collateral or any part thereof, or (c) pursue any other remedy in
Secured Party’s power; and Debtor waives any defense arising by reason of any
disability or other defense of any other person or entity, or by reason of the
cessation from any cause whatsoever of the liability of Debtor or any other
person or entity. Debtor consents and agrees that Secured Party may,
at any time and from time to time, without notice or demand, and without
affecting the enforceability or continuing effectiveness of this
Agreement: (i) accept new or additional instruments, documents, or
agreements in exchange for or relative to any or all of the Secured Obligations;
(ii) accept partial payments on or partial performance of any or all of the
Secured Obligations; (iii) receive and hold additional security or guaranties
for any or all of the Secured Obligations or any part thereof;
(iv) release, reconvey, terminate, waive, abandon, fail to perfect,
subordinate, exchange, substitute, transfer, and enforce any security or
guaranties; (v) apply any Collateral or other security and direct the order or
manner of sale thereof as Secured Party may determine;(vi) consent to the
transfer of any Collateral or other security for any or all of the Secured
Obligations; and (vii) bid and purchase at any sale of
Collateral.
17. Cumulative Rights of Secured
Party. The rights, powers, and remedies given to Secured Party
by this Agreement shall be in addition to all rights, powers, and remedies given
to Secured Party by virtue of any statute, rule of law, or any other agreement
between Debtor and Secured Party. Any forbearance or failure or delay
by Secured Party in exercising any right, power, or remedy under this Agreement
shall not preclude the further exercise thereof; and every right, power, and
remedy of Secured Party shall continue in full force and effect until such
right, power, or remedy is specifically waived by an instrument in writing
signed by Secured Party.
18. Termination. Secured
Party’s security interest in the Collateral shall terminate upon the
satisfaction in full of all Secured Obligations, and at that time Secured Party
shall return to Debtor all Collateral then in Secured Party’s
possession.
19. Power of
Attorney. Debtor hereby irrevocably appoints Secured Party as
attorney-in-fact of Debtor, with full power of substitution, to sign any
document necessary to transfer title to any of the Collateral and to do all acts
necessary or incident to the powers granted under this Agreement to Secured
Party, as fully as Debtor might, including without limitation, the execution and
recordation of any claim of lien on behalf of and in the name of
Debtor.
DEBTOR
BIOTIME,
INC.
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By:
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Chief
Executive Officer
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By:
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Secretary
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