SECURITY AGREEMENT
SECURITY AGREEMENT (as amended, supplemented or otherwise modified from
time to time, the "Agreement"), dated as of April 4, 2005, among Calypte
Biomedical Corporation, a Delaware corporation (the "Company"), and the lenders
signatory hereto (each lender including their respective successors, endorsees,
transferees and assigns, a "Secured Party", and collectively, the "Secured
Parties").
W I T N E S S E T H:
WHEREAS, the Company has requested that each Secured Party severally make
certain loans (collectively, "Loans") to the Company in exchange for the
Company's Secured 8% Convertible Promissory Notes in the aggregate initial
principal amount of $8,000,000 (collectively, the "Notes") and warrants to
acquire Common Stock (collectively, "Warrants"). The Notes and the Warrants each
provide the holders thereof, including the Secured Parties, the right to obtain
shares of the Company's Common Stock. The Notes and Warrants will be issued
pursuant to a Purchase Agreement, dated the date of this Agreement among the
Company and the Secured Parties (the "Purchase Agreement") and the Transaction
Documents entered into in connection therewith (as such term is defined in the
Purchase Agreement).
WHEREAS, to induce the Secured Parties to make the Loans, the Company has
agreed to grant to the Secured Parties a security interest and lien in
Collateral of the Company, and to enter into and grant the lien contemplated in
this Agreement.
NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1. Certain Definitions.
(a) As used in this Agreement, the following terms have the meanings
specified below:
"Agent" means SF Capital Partners Ltd., as agent for each of
the Secured Parties pursuant to this Agreement, or such other Person as
shall have been subsequently appointed as a successor agent pursuant to
this Agreement.
"Collateral" means all of the Company's right, title and
interest in, to and under all of the following (a) Accounts, (b)
Chattel Paper, (c) Documents, (d) Equipment, (e) equity interests owned
or held by or on behalf of the Company in any of its Subsidiaries
(including all certificates, instruments and other documents, if any,
representing or evidencing such equity interests), (f) General
Intangibles, (g) Goods, (h) Instruments, (i) insurance relating to the
Collateral, (j) intellectual property (including all inventions,
designs, patents, copyrights and trademarks), (k) intercompany debt,
(l) Inventory, (m) Letter of Credit Rights, (n) other goods and other
personal property of such Grantor, whether tangible or intangible, (o)
Records, and (p) Proceeds, products, substitutions, accessions, rents
and profits of or in respect of any of the foregoing, in each case
whether now owned or hereafter created or acquired and wherever
located, provided that "Collateral" shall not include any Excluded
Assets.
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"Excluded Assets" means assets purchased with the proceeds of
the Vencore Purchase Money Financing and any financing described in
clause (d) of the definition in the Purchase Agreement of "Permitted
Indebtedness," only for so long as such Debt remains outstanding under
the Vencore Purchase Money Financing or any such financing described in
such clause (d).
"Obligations" means (i) the due and punctual payment of (a)
principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed
or allowable in such proceeding) on the Notes, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, and (b) all other monetary obligations, including without
limitation in respect of fees, commissions, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or
otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such
proceeding), of the Company to the Secured Parties, in each case under
the Transaction Documents, and (ii) the due and punctual performance of
all covenants, agreements, obligations and liabilities of the Company
or any other party (other than the Agent and the Secured Parties) under
or pursuant to the Transaction Documents (including the requirement to
timely deliver shares of Common Stock upon a conversion of Notes and
exercise of Warrants).
"Permitted Transfer" means:
(i) any sale, lease, transfer or other disposition by the
Company or any Subsidiary of any inventory, used, obsolete or surplus
equipment or other property, in the ordinary course of business;
(ii) licenses and similar arrangements for the use of the
property of the Company in the ordinary course of business which would
not impair rights of the Secured Parties under this Agreement to
foreclose and sell Collateral following a Default;
(iii) any sale of any Collateral for fair market value,
provided that, without the prior written consent of the Secured Parties
comprising Majority-in-Interest, the aggregate value of all Collateral
sold after the date hereof pursuant to this clause (iii) shall not
exceed $500,000; or
(iv) and any transaction expressly permitted by Section 5.10
of the Purchase Agreement.
"UCC" means the Uniform Commercial as in effect from time to time in the
State of New York or, when the context implies, the Uniform Commercial Code as
in effect from time to time in any other applicable jurisdiction.
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(b) Terms used in this Agreement but not otherwise defined in this
Agreement that are defined in the Purchase Agreement shall have the respective
meanings given such terms in the Purchase Agreement.
(c) When used in this Agreement, the following capitalized terms
shall have the respective meanings ascribed thereto in Article 9 of the UCC:
Accounts, Chattel Paper, Documents, Equipment, General Intangibles, Goods,
Instruments, Inventory, Records and Proceeds.
2. Grant of Security Interest. As an inducement for the Secured Parties to
enter into the transactions contemplated by the Transaction Documents and to
secure the complete and timely payment, performance and discharge in full, as
the case may be, of all of the Obligations, the Company hereby, unconditionally
and irrevocably, grants to the Agent for the benefit of Secured Parties a
security interest in and lien on (the "Security Interest") the Collateral.
3. Representations, Warranties, Covenants and Agreements of the Company.
The Company represents and warrants to, and covenants and agrees with, each of
the Secured Parties as follows:
(a) The Company has the requisite corporate power and authority to
enter into this Agreement and to otherwise carry out its obligations thereunder.
The execution, delivery and performance by the Company of this Agreement and the
filings contemplated therein have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company.
This Agreement has been (or upon delivery will have been) duly executed by the
Company and, when delivered in accordance with the terms hereof, will constitute
the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.
(b) Except for Permitted Liens, the Company is the sole owner of its
rights in the Collateral, free and clear of any Liens and is fully authorized to
grant the Security Interest in and to pledge the Collateral. There is not on
file in any governmental or regulatory authority, agency or recording office an
effective financing statement, security agreement or transfer or any notice of
any of the foregoing (other than those that have been filed in favor of the
Secured Parties pursuant to this Agreement or in connection with Permitted
Liens) covering or affecting any of the Collateral. So long as this Agreement
shall be in effect, the Company shall not execute and shall not authorize the
filing of in any such office or agency any such financing statement or other
document or instrument (except to the extent filed or recorded in favor of the
Secured Parties pursuant to the terms of this Agreement or in connection with
Permitted Liens) without the prior written consent of the Secured Parties.
(c) The Company represents and warrants that it has no place of
business or offices where its respective books of account and records are kept
(other than temporarily at the offices of its attorneys or accountants) or
places where Collateral is stored or located, except as set forth on Schedule B
attached hereto.
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(d) The Company has no knowledge of any claim that any of the
Collateral or the Company's use of any Collateral violates the rights of any
third party. There has been no adverse decision of which the Company is aware as
to the Company's exclusive (or nonexclusive, as the case may be) rights to use
the Collateral in any jurisdiction, and, to the knowledge of the Company there
is no proceeding involving said rights pending or threatened before any court,
judicial body, administrative or regulatory agency, arbitrator or other
governmental authority.
(e) The Company shall at all times maintain its books of account and
records relating to the Collateral at its principal place of business and may
not relocate such books of account and records unless it delivers to each of the
Secured Parties at least 30 days prior to such relocation (i) written notice of
such relocation and the new location thereof (which must be within the United
States) and (ii) evidence that appropriate financing statements and other
necessary documents have been filed and recorded and other steps have been taken
to perfect the Security Interest to create in favor of each of the Secured
Parties a valid, perfected and continuing first priority lien in the Collateral,
subject only to Permitted Liens.
(f) This Agreement creates in favor of each of the Secured Parties a
valid security interest in the Collateral, securing the payment and satisfaction
of the Obligations, and, upon making all applicable filings, a perfected first
priority security interest in the Collateral subject only to Permitted Liens. No
authorization or approval of or filing (other than the filings referred to in
the immediately preceding sentence) with or notice to any governmental authority
or regulatory body is required either: (i) for the grant by the Company of, or
the effectiveness of, the Security Interest granted hereby or for the execution,
delivery and performance of this Agreement by the Company or (ii) for the
perfection of or exercise by the Secured Parties of their rights and remedies
hereunder.
(g) On the date of execution of this Agreement, the Company
authorizes each Secured Party to file one or more financing statements under the
UCC with respect to the Security Interest for filing with the jurisdictions
indicated on Schedule B, attached hereto and in such other jurisdictions as the
Secured Parties deem necessary.
(h) The execution, delivery and performance of this Agreement does
not conflict with or cause a breach or default, or an event that with or without
the passage of time or notice, shall constitute a breach or default, under any
agreement to which the Company is a party or by which the Company is bound. No
consent (including, without limitation, from stock holders or creditors of the
Company) is required for the Company to enter into and perform its obligations
hereunder, other than consents already obtained by the Company.
(i) The Company shall at all times maintain the Security Interest
provided for hereunder as a valid and perfected first priority security interest
in the Collateral (subject only to Permitted Liens) in favor of each of the
Secured Parties and insure that such Security Interest remains senior to all
existing and hereafter created security interests and Liens, other than
Permitted Liens. The Company shall safeguard and protect all Collateral. The
Company hereby agrees to defend the same against any and all persons. At the
request of the Agent and/or Secured Parties, the Company will sign and deliver
to the Secured Parties at any time or from time to time one or more financing
statements pursuant to the UCC in form reasonably satisfactory to the Secured
Parties and will pay the cost of filing the same in all public offices wherever
filing is, or is deemed by the Secured Parties to be, necessary to effect the
rights and obligations provided for herein. Without limiting the generality of
the foregoing, the Company shall pay all fees, taxes and other amounts necessary
to maintain the Security Interest hereunder, and the Company shall obtain and
furnish to the Secured Parties from time to time, upon demand, such releases
and/or subordinations of claims and liens which may be required to maintain the
priority of the Security Interest hereunder.
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(j) Other than Permitted Transfers, the Company will not sell,
transfer, lease or otherwise dispose of any of the Collateral without the prior
written consent of the Secured Parties.
(k) The Company shall keep and preserve the tangible Collateral in
good condition, repair and order, and shall not knowingly operate or locate any
such Collateral (or cause to be operated or located) in any area excluded from
insurance coverage unless, in each case, where the failure to comply with the
foregoing provisions does not result in an adverse effect on the value of the
Collateral or on the Secured Parties' security interest therein.
(l) The Company shall, within ten (10) days of obtaining knowledge
thereof, advise the Agent, in sufficient detail, of any substantial change in
all or any material portion of the Collateral, and of the occurrence of any
event which would have a material adverse effect on the value of the Collateral
or on the Secured Parties' security interest therein.
(m) The Company shall promptly execute and deliver to the Secured
Parties such further deeds, mortgages, assignments, security agreements,
financing statements or other instruments, documents, certificates and
assurances and take such further action as necessary to perfect, protect or
enforce their security interest in the Collateral. The Company represents that
on the date hereof all equity interests owned by or on behalf of the Company in
any of its Subsidiaries are not certificated. If, after the date hereof, any
such equity interests are certificated, the Company shall promptly deliver to
the Agent any and all share certificates evidencing equity interests owned or
held by or on behalf of the Company in any of its Subsidiaries, together with
appropriate stock powers, endorsed in blank, with respect to such certificated
securities, such certificates to be held in custody by the Agent until such time
as this Security Agreement and the Security Interest shall terminate in
accordance with Section 16 hereof.
(n) The Company shall permit the Secured Parties and their
representatives and agents upon prior written consent to inspect the Collateral
at any time during normal business hours, and to make copies of records
pertaining to any material item of Collateral as may be reasonably requested by
the Secured Parties from time to time.
(o) The Company shall promptly notify the Agent in sufficient detail
upon becoming aware of any attachment, garnishment, execution or other legal
process levied against any Collateral and of any other information received by
the Company that reasonably would be expected to have an adverse affect on the
value of the Collateral, the Security Interest or the rights and remedies of the
Secured Parties hereunder.
(p) The Company shall not use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering the
Collateral where violation is reasonably likely to have a material adverse
effect on the Secured Parties' rights in the Collateral or Secured Parties'
ability to foreclose on the Collateral.
(q) Other than Permitted Liens, the Company shall not grant to any
person or entity any rights or interest in or to any of the Collateral.
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(r) The Company shall notify the Agent of any change in the
Company's name, identity, chief place of business, chief executive office or
residence within 30 days of such change.
4. Defaults. Each of the following events shall be an "Event of Default":
(a) the occurrence of an Event of Default under and as defined in
any Note;
(b) any representation or warranty of the Company in this Agreement
or in any other Transaction Document shall prove to have been incorrect in any
material respect when made or deemed made; and
(c) the failure by the Company to observe or perform any of its
obligations hereunder for ten (10) Business Days after receipt by the Company of
written notice of such failure from any Secured Party.
5. Duty To Hold In Trust. Upon the occurrence and during the continuation
of any Event of Default, the Company shall, upon receipt by it of any revenue,
income or other sums subject to the Security Interest, or of any check, draft,
note, trade acceptance or other instrument evidencing an obligation to pay any
such sum, hold the same in trust for the Secured Parties and shall upon request
by the Secured Parties forthwith endorse and transfer any such sums or
instruments, or both, to the Secured Parties for application to the satisfaction
of the Obligations.
6. Rights and Remedies Upon Default. Upon the occurrence and during the
continuation of any Event of Default, the Agent (on behalf of, and for the
benefit of itself and each Secured Party) shall have the right to exercise all
of the remedies conferred hereunder, under the Notes, and the Agent and the
Secured Parties shall have all the rights and remedies of a secured party under
the UCC. Without limitation, the Secured Parties shall have the following rights
and powers upon and during the continuance of an Event of Default:
(a) The Agent shall have the right to take possession of all
tangible manifestations or embodiments of the Collateral and, for that purpose,
without breaching the peace enter, with the aid and assistance of any person
previously identified to, and approved in writing by, the Company, any premises
where the Collateral, or any part thereof, is placed and remove the same, and
the Company shall assemble the Collateral and make it available to the Agent at
the Company's premises.
(b) The Agent shall have the right to assign, sell, or otherwise
dispose of and deliver all or any part of the Collateral, at public or private
sale or otherwise, either with or without special conditions or stipulations,
for cash or on credit (for United States Dollars or such other currency as it
may choose) or for future delivery, in such parcel or parcels and at such time
or times and at such place or places, and upon such terms and conditions as the
Agent may deem commercially reasonable, all without (except as shall be required
by applicable statute and cannot be waived) advertisement or demand upon or
notice to the Company or right of redemption of the Company, which are hereby
expressly waived. Upon each such sale, assignment or other transfer of
Collateral, the Agent may, unless prohibited by applicable law which cannot be
waived, purchase all or any part of the Collateral being sold, free from and
discharged of all trusts, claims, right of redemption and equities of the
Company, which are hereby waived and released.
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(c) The Agent may sublicense, to the same extent the Company is
permitted by law and contract to do so, whether on an exclusive or non-exclusive
basis, any of the Collateral throughout the world for such period, on such
conditions and in such manner as the Agent shall, in its reasonable discretion,
determine.
(d) The Agent may (without assuming any obligations or liabilities
thereunder), at any time, enforce (and shall have the exclusive right to
enforce) against licensee or sublicensee all rights and remedies of the Company
in, to and under any license agreement with respect to such Collateral, and take
or refrain from taking any action thereunder.
(e) The Agent may, in order to implement the assignment, license,
sale or other disposition of any of the Collateral pursuant to this Section,
pursuant to the authority provided for in Section 12, execute and deliver on
behalf of the Company one or more instruments of assignment of the Collateral in
form suitable for filing, recording or registration in any jurisdictions as the
Secured Parties may determine advisable.
(f) In the event that any Secured Party shall recover from the
Company or the Collateral more than its pro rata share of the Obligations owed
to all Secured Parties hereunder, whether by agreement, understanding or
arrangement with the Company or any other Person, set off or other means, such
Secured Party shall immediately deliver or pay over to the other Secured Parties
their pro rata portion of any such recovery in the form received.
7. Applications of Proceeds; Expenses. (a) The proceeds of any such sale,
sublicense or other disposition of the Collateral hereunder shall be applied
first, to the expenses of retaking, holding, storing, processing and preparing
for sale, selling, and the like (including, without limitation, any taxes, fees
and other costs incurred in connection therewith) of the Collateral, to the
reasonable attorneys' fees and expenses incurred by the Agent and/or Secured
Parties in enforcing its rights hereunder and in connection with collecting,
storing and disposing of the Collateral, and then to satisfaction of the
Obligations, and to the payment of any other amounts required by applicable law,
after which the Secured Parties shall pay to the Company any surplus proceeds.
If, upon the sale, license or other disposition of the Collateral, the proceeds
thereof are insufficient to pay all amounts to which the Secured Parties are
legally entitled, the Company will be liable for the deficiency. To the extent
permitted by applicable law, the Company waives all claims, damages and demands
against the Secured Parties arising out of the repossession, removal, retention
or sale of the Collateral, unless due to the gross negligence or willful
misconduct of the Agent and/or Secured Parties.
(b) The Company agrees to pay all out-of-pocket fees, costs and
expenses reasonably incurred in connection with any filing required hereunder,
including, without limitation, any financing statements, continuation
statements, partial releases and/or termination statements related thereto or
any expenses of any searches reasonably required by the Agent. The Company shall
also pay all other claims and charges which in the reasonable opinion of the
Agent and/or Secured Parties would reasonably be expected to prejudice, imperil
or otherwise affect the Collateral or the Security Interest therein. The Company
will also, upon demand, pay to the Agent and/or Secured Parties the amount of
any and all reasonable expenses, including the reasonable fees and expenses of
its counsel and of any experts and agents, which the Agent and/or Secured
Parties may incur in connection with the custody or preservation of, or the sale
of, collection from, or other realization upon, any of the Collateral.
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8. Responsibility for Collateral. The Company assumes all liabilities and
responsibility in connection with all Collateral, and the obligations of the
Company hereunder or under the Notes shall in no way be affected or diminished
by reason of the loss, destruction, damage or theft of any of the Collateral or
its unenforceability or unavailability for any reason.
9. Security Interest Absolute. In the event that at any time any transfer
of any Collateral or any payment received by the Secured Parties hereunder shall
be deemed by final order of a court of competent jurisdiction to have been a
voidable preference or fraudulent conveyance under the bankruptcy or insolvency
laws of the United States, or shall be deemed to be otherwise due to any party
other than the Secured Parties, then, in any such event, the Company's
obligations hereunder shall survive, and shall not be discharged or satisfied by
any prior payment thereof, but shall remain a valid and binding obligation
enforceable in accordance with the terms and provisions hereof. The Company
waives all right to require the Secured Parties to proceed against any other
person or to apply any Collateral which the Secured Parties may hold at any
time, or to marshal assets, or to pursue any other remedy. To the extent
permitted by applicable law, the Company waives any defense arising by reason of
the application of the statute of limitations to any obligation secured hereby.
10. Term of Agreement. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Notes have been made in
full or the Notes have been converted pursuant to the terms thereof and all
other Obligations have been paid or discharged in full. Upon such termination,
the Secured Parties, at the request and at the expense of the Company, will join
in executing any termination statement and other filings with respect to any
financing statement executed and filed pursuant to this Agreement or required
for evidencing termination of the Security Interest or this Agreement.
11. Power of Attorney; Further Assurances. (a) The Company authorizes the
Agent, and does hereby make, constitute and appoint it, and its respective
officers, agents, successors or assigns with full power of substitution, as the
Company's true and lawful attorney-in-fact, with power, in its own name or in
the name of the Company, to, after the occurrence and during the continuance of
an Event of Default, (i) endorse any notes, checks, drafts, money orders, or
other instruments of payment (including payments payable under or in respect of
any policy of insurance) in respect of the Collateral that may come into
possession of the Secured Parties; (ii) to sign and endorse any UCC financing
statement or any invoice, freight or express xxxx, xxxx of lading, storage or
warehouse receipts, drafts against Company, assignments, verifications and
notices in connection with accounts, and other documents relating to the
Collateral; (iii) to pay or discharge taxes, liens, security interests or other
encumbrances at any time levied or placed on or threatened against the
Collateral; (iv) to demand, collect, receipt for, compromise, settle and xxx for
monies due in respect of the Collateral; and (v) generally, to do, at the option
of the Secured Parties, and at the Company's expense, at any time, or from time
to time, all acts and things which the Secured Parties deem necessary to
protect, preserve and realize upon the Collateral and the Security Interest
granted therein, in order to effect the intent of this Agreement and the Notes,
all as fully and effectually as the Company might or could do; and the Company
hereby ratifies all that said attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney is coupled with an interest and shall be
irrevocable for the term of this Agreement.
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(b) On a continuing basis, the Company will make, execute,
acknowledge, deliver, file and record, as the case may be, with the proper
filing and recording places in any jurisdiction, including, without limitation,
the jurisdictions indicated on Schedule B, attached hereto, all such
instruments, and take all such action as necessary to perfect the Security
Interest granted hereunder and otherwise to carry out the intent and purposes of
this Agreement, or for assuring and confirming to the Secured Parties the grant
or perfection of a first priority security interest in all the Collateral,
subject to Permitted Liens.
(c) The Company hereby irrevocably appoints the Agent as the
Company's attorney-in-fact, with full authority in the place and stead of the
Company and in the name of the Company, from time to time in the Agent's
discretion, to file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the
Collateral.
12. Agent.
(a) Actions. The Agent shall at all times act upon and in accordance
with written instructions received from a Majority-in-Interest (as defined in
Section 15) from time to time. The Agent shall be deemed to be authorized on
behalf of each Secured Party to act on behalf of such Secured Party under this
Agreement and, in the absence of written instructions from a
Majority-in-Interest (with respect to which the Agent agrees that it will,
subject to the last two sentences of this Section, comply, except as otherwise
advised by counsel), to exercise such powers hereunder and thereunder as are
specifically delegated to or required of the Agent by the terms hereof and
thereof, together with such powers as may be reasonably incidental thereto. The
Agent shall have no duty to ascertain or inquire as to the performance or
observance of any of the terms of this Agreement by the Company. By accepting
their Notes each Secured Party shall be deemed to have agreed to indemnify the
Agent (which agreement shall survive any termination of such Secured Party'
percentage), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement and the Notes, including the reimbursement of the Agent for all
out-of-pocket expenses (including attorneys' fees) incurred by the Agent
hereunder or in connection herewith or in enforcing the Obligations of the
Company under this Agreement or the Notes, in all cases as to which the Agent is
not reimbursed by the Company; provided, that no Secured Party shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
determined by a court of competent jurisdiction in a final proceeding to have
resulted solely from the Agent's gross negligence or willful misconduct. The
Agent shall not be required to take any action hereunder or under the Notes, or
to prosecute or defend any suit in respect of this Agreement or under the Notes,
unless the Agent is indemnified to its reasonable satisfaction by the Secured
Parties against loss, costs, liability and expense. If any indemnity in favor of
the Agent shall become impaired, it may call for additional indemnity and cease
to do the acts indemnified against until such additional indemnity is given.
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(b) Exculpation. Neither the Agent nor any of its directors,
officers, partners, members, shareholders, employees or agents shall be liable
to any Secured Party for any action taken or omitted to be taken by it under
this Agreement or the Notes, or in connection herewith or therewith, except for
its own willful misconduct or gross negligence or be responsible for the
consequences of any error in judgment. Neither the Agent nor any of its
directors, officers, partners, members, shareholders, employees or agents has
any fiduciary relationship with any Secured Party by virtue of this Agreement.
The Agent shall not be responsible to any Secured Party for any recitals,
statements, representations or warranties herein or in any certificate or other
document delivered in connection herewith or for the authorization, execution,
effectiveness, genuineness, validity, enforceability, perfection,
collectibility, or sufficiency of this Agreement or the Notes, the financial
condition of the Company or the condition or value of any of the Collateral, or
be required to make any inquiry concerning either the performance or observance
of any of the terms, provisions or conditions of this Agreement or the Notes,
the financial condition of the Company or the existence or possible existence of
any default or event of default. The Agent shall be entitled to rely upon advice
of counsel concerning legal matters and upon any notice, consent, certificate,
statement or writing which it believes to be genuine and to have presented by a
proper person.
(c) Obligations Held by the Agent. The Agent shall have the same
rights and powers with respect to any Notes held by it or any of its affiliates,
as any Secured Party and may exercise the same as if it were not the Agent. Each
of the Company and each Secured Party hereby waives, and each successor to any
Secured Party shall be deemed to waive, any right to disqualify any Secured
Party from serving as the Agent or any claim against that Secured Party for
serving as Agent.
(d) Copies, etc. The Agent shall give prompt notice to each Secured
Party of each notice or request required or permitted to be given to the Agent
by the Company pursuant to the terms of this Agreement. The Agent will
distribute to each Secured Party each instrument and other agreement received
for its account and copies of all other communications received by the Agent
from the Company for distribution to each Secured Party by the Agent in
accordance with the terms of this Agreement. Notwithstanding anything herein
contained to the contrary, all notices to and communications with the Company
under this Agreement shall be effected by each Secured Party through the Agent.
(e) Resignation of Agent. The Agent may resign as such at any time
upon at least thirty (30) days' prior notice to the Company and all the Secured
Parties, such resignation not to be effective until a successor Agent is in
place. The Agent shall be obliged to resign should it cease to hold any Notes.
If the Agent at any time shall resign, a Majority-in-Interest may jointly
appoint another Secured Party as a successor Agent which shall thereupon become
the Agent hereunder. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall be entitled to receive from the
retiring Agent such documents of transfer and assignment as such successor Agent
may reasonably request, and shall thereupon succeed to and become vested with
all rights, powers, privileges, and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement.
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(f) Replacement of Agent. A Majority-in-Interest may at any time and
for any reason replace the Agent with a successor Agent jointly selected by
them, upon at least five (5) days written notice to the Company and the other
Secured Parties. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall be entitled to receive from the
terminated Agent such documents of transfer and assignment as such successor
Agent may reasonably request, and shall thereupon succeed to and become vested
with all rights, powers, privileges, and duties of the retiring Agent, and the
terminated Agent shall be discharged from its duties and obligations under this
Agreement.
13. Notices. All notices, requests, demands and other communications
hereunder shall be in writing, with copies to all the other parties hereto, and
shall be deemed to have been duly given when (i) if delivered by hand, upon
receipt, (ii) if sent by facsimile, upon receipt of proof of sending thereof,
(iii) if sent by nationally recognized overnight delivery service (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, four days after
posting in the U.S. mails, in each case if delivered to the following addresses:
If to the Company:
Calypte Biomedical Corporation
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Chief Financial Officer
With a copy to: Coudert Brothers LLP
000 X. Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx St. Clair, Esq.
If to the Agent: SF Capital Partners Ltd.
c/x Xxxxx Offshore Management LLC
0000 X. Xxxx Xxxxx
Xx. Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx Xxxxxxxx
If to Secured Parties: To the address set forth under such Secured Parties'
name on the signature pages hereto.
14. Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Parties shall have the right, in their sole discretion, to
pursue, relinquish, subordinate, modify or take any other action with respect
thereto, without in any way modifying or affecting any of the Secured Parties'
rights and remedies hereunder.
15. Actions by Secured Parties. Any action required or permitted hereunder
to be taken by or on behalf of the Secured Parties shall, for such action to be
valid, require the approval of the Majority-in-Interest prior to the taking of
such action. If the consent, approval or disapproval of the Secured Parties is
required or permitted pursuant to this Agreement, such consent, approval or
disapproval shall only be valid if given by the Majority-in-Interest.
"Majority-in-Interest" means the Secured Party or Secured Parties (as the case
may be) holding in excess of 50% of the outstanding aggregate principal amount
under the Notes, determined on a cumulative basis.
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16. Termination and Release. This Security Agreement and the Security
Interest shall terminate when all Obligations have been finally and indefeasibly
paid in full. Upon the effectiveness of any written consent to the release of
the Security Interest in any Collateral pursuant to Section 6.4 of the Purchase
Agreement, the Security Interest in such Collateral shall be automatically
released. Upon any sale, transfer or other disposition of Collateral permitted
by the Loan Documents and Section 3(j) hereof, the Security Interest in such
Collateral shall be automatically released (other than to the extent any such
sale, transfer or other disposition of such Collateral would, immediately after
giving effect thereto, result in the receipt by the Company of any other
property (whether in the form of Proceeds or otherwise) that would, but for the
release of the Security Interest therein pursuant to this clause, constitute
Collateral, in which event the Lien created hereunder shall continue in such
property). In connection with any termination or release pursuant to this
Section, the Agent shall execute and deliver to the Company, at the Company's
own cost and expense, all UCC termination statements and similar documents that
the Company may reasonably request to evidence such termination or release. Any
execution and delivery of documents pursuant to this Section shall be without
recourse to or warranty by the Agent or any other Secured Party.
17. Miscellaneous. (a) No course of dealing between the Company and the
Secured Parties, nor any failure to exercise, nor any delay in exercising, on
the part of the Secured Parties, any right, power or privilege hereunder, under
the Notes or under this Agreement shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
(b) All of the rights and remedies of the Secured Parties with
respect to the Collateral, whether established hereby, by the Notes or by any
other agreements, instruments or documents or by law shall be cumulative and may
be exercised singly or concurrently.
(c) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto. Except as
specifically set forth in this Agreement, no provision of this Agreement may be
modified or amended except by a written agreement signed by the Company and
Secured Parties comprising Majority-in-Interest.
(d) In the event that any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any reason, unless
such provision is narrowed by judicial construction, this Agreement shall, as to
such jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.
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(e) No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the Company
and Secured Parties comprising Majority-in-Interest, and no such waiver shall be
deemed a waiver of any subsequent breach or default or right, whether of the
same or similar nature or otherwise.
(f) This Agreement shall be binding upon and inure to the benefit of
each party hereto and its successors and assigns.
(g) Each party shall take such further action and execute and
deliver such further documents as may be necessary or appropriate in order to
carry out the provisions and purposes of this Agreement.
(h) This Agreement shall be construed in accordance with the laws of
the State of New York. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of any New York State or United States Federal court
sitting in New York county over any action or proceeding arising out of or
relating to this Agreement, and the parties hereto hereby irrevocably agree that
all claims in respect of such action or proceeding may be heard and determined
in such New York State or Federal court. The parties hereto agree that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. The parties hereto further waive any objection to venue in the
State of New York and any objection to an action or proceeding in the State of
New York on the basis of forum non conveniens.
(i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF
ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR
EACH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY
RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL
CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY
FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A
JURY TRIAL FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING
THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE
EVENT OF A LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
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(j) This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and, all of
which taken together shall constitute one and the same Agreement. In the event
that any signature is delivered by facsimile transmission, such signature shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed on the day and year first above written.
CALYPTE BIOMEDICAL CORPORATION
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: EVP and CFO
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed on the day and year first above written.
By:
-------------------------------------
Name:
Title:
Address for Notice:
With a copy to:
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