SECURITY AGREEMENT
EXHIBIT
99.5
This
SECURITY AGREEMENT (this “Agreement”)
is
made as of August 29, 2006, by Teragenix Corporation, a Florida corporation
(the
"Debtor"),
to
and in favor of Xxxxxx Xxxxx (the “Secured
Party”).
Recitals:
A. In
connection with the transactions contemplated by the Stock Purchase Agreement,
dated as of August 29, 2006 (the “Stock
Purchase Agreement”),
by
and among the Debtor, Xxxxxxxx Xxxx and HemaCare Corporation (the “Parent”),
pursuant to which the Parent agreed to purchase all of the issued and
outstanding shares of capital stock of the Debtor, the Secured Party received
a
promissory note in the principal amount of $153,800, of even date herewith,
executed by the Parent in favor of the Secured Party (the “Note”).
B. To
induce
the Secured Party to provide the credit to the Parent evidenced by the Note,
and
in consideration therefor, the Debtor has agreed to grant to the Secured Party
the security interest in the Collateral (as defined below) set forth in
this
Agreement in order to secure: (i) the Parent’s
full
and timely payment and performance of all of its obligations under the Note
and
(ii)
the due and punctual performance of all covenants, agreements, obligations
and
liabilities of the Debtor under or pursuant to this Agreement (collectively,
the
“Secured
Obligations”).
Agreement:
NOW,
THEREFORE, in
consideration of the mutual agreements and covenants herein contained and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereby agree as follows:
1. Definitions.
(a) “Accounts”
means the
right
of the Debtor to payment for services rendered which is not evidenced by an
instrument or chattel paper, whether or not earned by performance.
(b) “Collateral”
means
all personal property of the Debtor, whether now owned or hereafter acquired
and
wherever located, including all of the Debtor’s direct or indirect right, title
and interest in and to any and all of the following:
(i) all
“accounts” (as such term is defined in UCC), including all Accounts, contract
rights and general intangibles (including all tax refunds and claims therefor),
receivables and claims whether now or hereafter arising, all guaranties and
security therefor and all of the Debtor’s right title and interest in the goods
purchased and represented thereby, if any, including all of the Debtor’s rights
in and to returned goods and rights of stoppage in transit, replevin and
reclamation as unpaid vendor;
(ii) all
chattel paper (including both electronic chattel paper and tangible chattel
paper);
(iii) all
documents and instruments;
(iv) all
letters of credit and letter-of-credit rights;
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(v) all
supporting obligations;
(vi) all
deposit accounts;
(vii) all
investment property and financial assets;
(viii) all
Inventory and all accessions thereto and products thereof and documents
therefor;
(ix) all
furniture, fixtures, equipment and machinery, wherever located and whether
now
or hereafter existing, and all parts thereof, accessions thereto, and
replacements therefor and all documents and general intangibles covering or
relating thereto;
(x) all
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and any other
designs or sources of business identifiers, indicia of origin or similar
devices, all registrations with respect thereto, all applications with respect
to the foregoing, and all extensions and renewals with respect to any of the
foregoing, together with all of the goodwill associated therewith, in each
case
whether now or hereafter existing, and all rights and interest associated with
the foregoing;
(xi) all
copyrights, and all copyrights of works based on, incorporated in, derived
from
or relating to works covered by such copyrights, and all right, title and
interest to make and exploit all derivative works based on or adopted from
works
covered by such copyrights, all registrations with respect thereto, all
applications with respect to the foregoing, and all extensions and renewals
with
respect to any of the foregoing, together with all rights and interests
associated with the foregoing;
(xii) all
patents, patent applications, and patentable inventions, all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing, the right to xxx
for
past, present, and future infringements of any of the foregoing, all income,
royalties, profits, damages, awards, and payments relating to or payable under
any of the foregoing, and all other rights and benefits relating to any of
the
foregoing throughout the world;
(xiii) all
general intangibles (including all payment intangibles);
(xiv) all
software including computer programs and supporting information provided in
connection with a transaction relating to the program, and computer programs
embedded in goods and any supporting information provided in connection with
a
transaction relating to the program whether or not the program is associated
with the goods in such a manner that it customarily is considered part of the
goods, and whether or not, by becoming owner of the goods, a person acquires
a
right to use the program in connection with the goods, and whether or not the
program is embedded in goods that consist solely of the medium in which the
program is embedded;
(xv) all
health care insurance receivables;
(xvi) all
commercial tort claims;
(xvii) all
books
and records pertaining to all of the foregoing property, including computer
programs, data, certificates, records, circulation lists, subscriber lists,
advertiser lists, supplier lists, customer lists, customer and supplier
contracts, sales orders, and purchasing records; and
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(xviii) all
products and proceeds of the foregoing, including proceeds of insurance
policies.
Anything
contained in this Section
1(b)
to the
contrary notwithstanding, the term “Collateral” shall not include, and the
Secured Party shall not have a security interest or lien in, (x) any rights
or interests in any contract, permit, license, franchise, charter or license
agreement (each, a “Restricted
Agreement”)
covering personal property that are now or hereafter held by the Debtor; (y)
any
rights or property to the extent that any valid and enforceable law or
regulation applicable thereto prohibits the creation of a security interest
therein; or (z) any rights or property that is now or hereafter will be held
by
the Debtor as a lessee, licensee or debtor under purchase money secured
financing, in each case to the extent that: (i) as a result of the grant of
a
security interest therein, the Debtor’s rights in or with respect to such assets
would be forfeited or the Debtor would be deemed to have breached or defaulted
under the applicable Restricted Agreement, law, regulation or purchase money
secured financing agreement that governs such assets pursuant to restrictions
contained in the applicable Restricted Agreement, law, regulation or purchase
money secured financing agreement; and (ii) any such restriction is effective
and enforceable under applicable law (including Section 9-406, 9-407, 9-408
or
9-409 of the UCC); provided,
however,
that in
no event shall the foregoing be construed to exclude from the security interest
created by this Agreement: (1) any and all proceeds of such assets, or
(2) such assets at any time that the consent of the other party to the
Restricted Agreement is obtained to the grant of a security interest in and
to
such assets in favor of the Secured Party, which consent the Debtor agrees that
it will use its best efforts to obtain upon the Secured Party’s request.
Immediately upon the ineffectiveness, lapse or termination of any of the
foregoing restrictions, the term “Collateral” shall include, and the
Debtor shall be deemed to have granted a security interest in, all such
rights, interests or other assets, as the case may be, as if such provision
had
never been in effect.
(c) “Inventory”
means
all goods, now owned or hereafter acquired by the Debtor, wherever located,
that
are held for sale or lease or are to be furnished under any contract of service
(including raw materials, work in process, finished goods and materials used
or
consumed in the manufacture or production thereof, goods in which the Debtor
has
an interest in mass or a joint or other interest or rights of any kind, and
goods which have been returned to or repossessed or stopped in transit by the
Debtor).
(d) “Secured
Obligations”
has
the
meaning set forth in Recital
B
above.
UCC
Terms.
Any
term used in the Uniform Commercial Code in effect in the State of California
(the “UCC”)
and
not defined in this Agreement has the meaning given to the term in the
UCC.
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3. Covenants
and Rights Concerning the Collateral.
3.1 Filing
of Financing Statements.
The
Debtor agrees to comply with all appropriate laws and to take all actions
necessary or desirable in the Secured Party’s reasonable judgment to perfect the
Secured Party’s security interest in and to the Collateral, to execute and
authorize any financing statement or additional documents that the Secured
Party
may request and to deliver to the Secured Party a list of all locations of
its
equipment and Inventory, upon reasonable request by the Secured Party. If any
item of Collateral or the proceeds thereof is or becomes evidenced by a note,
chattel paper, or instrument, the Debtor shall deliver possession thereof to
the
Secured Party within ten (10) Business Days thereafter, duly endorsed to the
Secured Party, to be held by the Secured Party as Collateral
hereunder.
3.2 Additional
Covenants and Agreements.
The
Debtor acknowledges and agrees that:
(a) the
Secured Party may at any time and from time to time, pursuant to the provisions
of Section
3.1
or
applicable law, file financing statements, continuation statements and
amendments thereto that describe the Collateral as all assets of the Debtor
of
the kind pledged hereunder and which contain any other information required
by
Part 5 of Article 9 of the UCC or any other federal, state or other statute
for
the sufficiency of filing office acceptance of any financing statement,
continuation statement or amendment, including whether the Debtor is an
organization, the type of organization and any organizational identification
number issued to the Debtor. The Debtor agrees to furnish any such information
to the Secured Party promptly upon request.
(b) the
Debtor shall at any time and from time to time, take such steps as the Secured
Party may reasonably request for the Secured Party to protect or perfect its
security interest in the Collateral, including: (i) use commercially reasonable
efforts to obtain an acknowledgment, in form and substance reasonably
satisfactory to the Secured Party, of any bailee having possession of any of
the
Collateral that the bailee holds such Collateral for the Secured Party; (ii)
obtain “control” of any Collateral consisting of investment property, deposit
accounts, letter-of-credit rights or electronic chattel paper (as such terms
are
defined in the UCC), with any agreements establishing control to be in form
and
substance satisfactory to the Secured Party; and (iii) otherwise to insure
the
continued perfection of the Secured Party’s security interest in any of the
Collateral and of the preservation of its rights therein.
(c) Nothing
contained in this Section
3.2
shall be
construed to narrow the scope of the Secured Party’s security interest in any of
the Collateral or the perfection thereof or to impair or otherwise limit any
of
the rights, powers, privileges or remedies of the Secured Party
hereunder.
3.3 Limitations
on Obligations Concerning Maintenance of Collateral.
(i) Risk
of Loss.
The
Debtor has the risk of loss of the Collateral.
(ii) No
Collection Obligation.
The
Secured Party shall have no duty to collect any income accruing on the
Collateral or to preserve any rights relating to the Collateral.
4. The
Debtor’s Representations and Warranties.
The
Debtor represents and warrants to the Secured Party as follows.
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4.1 Ownership
of Collateral.
The
Debtor is the sole beneficial owner of the Collateral. The security interest
created pursuant this Agreement constitutes a valid security interest in the
Collateral.
4.2 Chief
Executive Office; Name.
The
Debtor’s chief executive office is located in Florida; its state of
incorporation is Florida; and its exact legal name is as set forth in the
preamble to this Agreement.
5. Remedies
Upon Default.
Upon
any default or event of default under the Note, the Debtor agrees and
acknowledges that the Secured Party may pursue any remedy available at law
or in
equity to collect, enforce, satisfy or collect any or all of the Secured
Obligations then owing, whether by acceleration or otherwise, and the Secured
Party shall have, in addition to all other rights and remedies, the rights
and
remedies of a secured party under the UCC and any additional rights and remedies
which may be provided to a secured party in any jurisdiction in which the
Collateral is located, including, without limitation, the right to take
possession of the Collateral, and for that purpose the Secured Party may, so
far
as the Debtor can give authority therefor, enter upon any premises on which
the
Collateral may be situated and remove the same therefrom. The Secured Party
may
in its discretion require the Debtor to assemble all or any part of the
Collateral at such location or locations within the jurisdiction of the Debtor's
principal office or at such other locations as the Secured Party may reasonably
designate. The Debtor waives any and all rights that it may have to a judicial
hearing in advance of the enforcement of any of the Secured Party's rights
and
remedies hereunder, including, without limitation, its right following an Event
of Default to take immediate possession of the Collateral and to exercise its
rights and remedies with respect thereto.
6. Foreclosure
Procedures.
6.1 Notices.
The
Secured Party shall only be required to give the Debtor such notice of any
private or public sale of the Collateral as may be required by the UCC. The
Debtor agrees that notice given ten (10) days prior to a public sale or the
commencement of efforts for a private sale of the Collateral is commercially
reasonable.
6.2 Compliance
With Other Laws.
The
Secured Party will comply with any applicable state or federal law requirements
in connection with a disposition of the Collateral and compliance will not
be
considered adversely to affect the commercial reasonableness of any sale of
the
Collateral.
6.3 Purchases
by Secured Party.
In the
event the Secured Party purchases any of the Collateral being sold, the Secured
Party may pay for the Collateral by crediting some or all of the Secured
Obligations.
7. Miscellaneous.
7.1 Governing
Law.
Other
than matters to which the UCC applies, all
questions concerning the construction, validity and interpretation of this
Agreement will be governed by and construed in accordance with the internal
laws
of the State of California, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of California or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California.
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7.2 Waiver;
Amendment.
Any
waiver by the Debtor or the Secured Party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of the Debtor or the Secured Party to insist upon strict
adherence to any term of this Agreement on one or more occasions shall not
be
considered a waiver or deprive that party of the right thereafter to insist
upon
strict adherence to that term or any other term of this Agreement. This
Agreement may be amended only upon the written consent of the Debtor and the
Secured Party. Any term of this Agreement may be waived by the Debtor or the
Secured Party upon the written consent of the Debtor or the Secured Party (as
applicable) that states that it constitutes a waiver to this Agreement and
specifies the term(s) of this Agreement being waived.
7.3 Assignment
of Rights.
This
Agreement and the rights and obligations of the parties hereunder shall inure
to
the benefit of, and be binding upon, their respective successors, assigns and
legal representatives.
7.4 Entire
Agreement.
This
Agreement and any other documents expressly referred to herein constitute the
entire agreement between the parties hereto relative to the subject matter
hereof and supersede all prior agreements (whether written or oral) among the
parties hereto concerning the subject matter hereof
7.5 Notices.
Except
as otherwise expressly set forth herein or in the UCC, all notices required
or
permitted hereunder shall be in writing and shall be deemed effectively given:
(i) upon personal delivery to the party to be notified; (ii) five (5) days
after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (iii) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All such notices shall be sent to the party
to
be notified at the address as set forth on the signature pages hereto or at
such
other address as any party may designate by ten (10) days advance written notice
to the other party.
7.6 Severability.
Whenever possible, each provision of this Agreement will be interpreted in
such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision of this
Agreement or the validity, legality or enforceability of this Agreement in
any
other jurisdiction. In such event, this Agreement will be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.
7.7 Counterparts;
Facsimile Transmission.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the
same
instrument. Copies of executed signature pages to this Agreement delivered
by
facsimile transmission shall be considered duly delivered and valid and
effective for all purposes.
7.8 Further
Assurances.
Each
party agrees to execute such additional documents or instruments as may be
reasonably necessary or desirable in order to carry out the provisions of this
Agreement.
7.9 Construction.
This
Agreement is the result of the joint efforts of the Debtor and the Secured
Party, and the provisions hereof have been subject to the mutual consultation,
negotiation and agreement of the parties, and no rule of construction shall
be
applied against any party based on any presumption of that party’s involvement
in the drafting of this Agreement. As used herein, the word “including” shall
mean “including without limitation”. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way
the
meaning or interpretation of this Agreement.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first written above.
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THE
DEBTOR:
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TERAGENIX
CORPORATION
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By:
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/s/
Xxxx Xxxxxx
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Name:
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Xxxx
Xxxxxx
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Title:
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CEO
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ADDRESS:
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Atten: __________________
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| THE SECURED PARTY: | |||
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/s/
Xxxxxx Xxxxx
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Name:
Xxxxxx Xxxxx
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| ADDRESS: | 00000 Xxxxxx Xxxx Xxxx | ||
| Xxxx Xxxxx, XX 00000 | |||
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