Exhibit 99.4
LOAN MODIFICATION, FORBEARANCE AND SECURITY AGREEMENT
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THIS LOAN MODIFICATION, FORBEARANCE AND SECURITY AGREEMENT (the
"Agreement") is made this 19th day of March, 2004, by and between BIOMERICA,
INC., a Delaware corporation ("Borrower"), XXXXX XXXXX, as Trustee of the XXXXX
XXXXX TRUST DATED AUGUST 21, 1998 ("Lender"), and XXXXX XXXXX, an individual
("Xxxxx").
RECITALS
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A. Borrower and Lender entered into a loan agreement on September 12,
2000, pursuant to which Lender extended a line of credit to Borrower in an
amount not to exceed $500,000 (the "Loan"). Borrower granted to Lender a
security interest in Borrower's accounts receivable and inventory in order to
secure the Loan on September 12, 2000.
B. The Loan matured on September 12, 2003; however, Pledgor failed to
repay the Loan upon maturity. Pledgor and Secured Party have participated in
ongoing negotiations concerning the repayment of the Loan since the original
maturity date, during which time Secured Party agreed to temporarily refrain
from exercising its rights and remedies in connection with the Loan in order to
give Pledgor time to repay all sums due Secured Party under the Loan. Secured
Party's agreement to temporarily refrain from exercising its rights and remedies
expires on the date hereof.
C. In order to induce Lender to forbear from exercising its rights and
remedies for an additional period of time and to induce Xxxxx to continue
deferring certain accrued salary payable to Xxxxx and to defer certain future
salary to be payable to Xxxxx, Borrower has agreed to modify certain terms of
the Loan and grant a security interest in additional assets of Borrower to
Lender as security for the Loan. Lender has conditioned such forbearance, and
Xxxxx has conditioned such deferral of accrued and future salary, on the
execution and delivery of this Agreement and the other documents contemplated
hereby.
AGREEMENTS
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NOW, THEREFORE, in consideration of the premises, the mutual agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and the Lender hereby
agree as follows:
1. RECITALS. Borrower and Lender agree that the Recitals above are a part of
this Agreement.
2. EXISTING INDEBTEDNESS. As of the date hereof, the outstanding principal
balance of the Loan is Three Hundred Thirteen Thousand Three Hundred Eighteen
Dollars ($313,318), which is evidenced by that certain Amended and Restated
Promissory Note of even date herewith made by Borrower payable to the order of
Lender (as amended, restated or otherwise modified, the "Note").
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3. EXISTING COLLATERAL. Borrower hereby ratifies, affirms and restates the
security interests previously granted by Borrower to Lender as collateral for
the Loan as follows: Borrower grants to Lender a security interest in all of
Borrower's now owned or hereafter acquired accounts, inventory and the proceeds
thereof, and Borrower acknowledges and agrees that such security interests are
and shall continue as valid and binding security interests securing the payment
and performance of Borrower's obligations under and in connection with the Loan
and the Note. Borrower acknowledges and agrees that such continuing security
interests granted to Lender include all of Borrower's now owned or hereafter
acquired accounts, chattel paper, instruments and documents (collectively,
"Accounts"), inventory, and all proceeds (cash and non-cash) and products
thereof, and all returned, rejected or repossessed goods, the sale or lease of
which shall have given or shall give rise to an Account and all cash and
non-cash proceeds and products of all such goods.
4. ADDITIONAL COLLATERAL. In order to induce Lender to enter into this
Agreement, Borrower hereby grants a security interest to Lender, to secure the
payment and performance of Borrower's obligations under and in connection with
the Loan and the Note, in all of Borrower's right, title and interest in and to
all assets of Borrower, including, without limitation, all of Borrower's
Equipment, General Intangibles, Investment Property, Letter of Credit Rights,
Documents, Instruments, Inventory, Chattel Paper, Accounts, Deposit Accounts,
Software, patents, patent applications, trademarks and software, wherever
located, whether any of the foregoing is owned now or acquired later, all
accessions, additions, replacements, and substitutions relating to any of the
foregoing, all records of any kind relating to any of the foregoing, all
proceeds relating to any of the foregoing (including insurance, General
Intangibles and other Accounts proceeds); PROVIDED, that, notwithstanding any
provision herein to the contrary, Borrower is not granting to Lender, and Lender
shall have no security interest in, the Excluded Assets as described in Section
5 below. The Borrower's assets which are subject to the security interest of
Lender under this Section and Section 3 are hereinafter referred to as the
"Collateral."
5. EXCLUDED ASSETS. Notwithstanding any provision to the contrary set forth in
this Agreement, Borrower is not granting to Lender, and Lender shall have no
security or other interest in, any capital stock owned or held by Borrower as of
the date of this Agreement in Lancer Orthodontics, Inc., a California
corporation ("Lancer"), or any rights of any kind or nature arising from or
incidental to ownership of said capital stock, including, without limitation,
any rights to cash, stock and other property dividends and any voting rights or
proceeds thereof (the "Excluded Assets"). Furthermore, without limiting the
generality of the foregoing, in the event of the dissolution, liquidation,
bankruptcy, insolvency, default under this or any other agreement by Borrower,
or any other event, Lender agrees not to assert or have, with respect to or on
account of the obligations or indebtedness under or with respect to the Loan or
the Note, any lien on or claim to the Excluded Assets, or the proceeds from any
sale thereof, until after all other creditors of Borrower have been paid,
PROVIDED that, to the extent permitted by applicable law, Lender and Xxxxx may
receive payments or proceeds with respect to the Excluded Assets on account of
indebtedness or obligations owed to Lender or Xxxxx other than on account of or
with respect to the Loan or the Note, including payments on account of accrued
compensation, wages or other rights of Xxxxx as an employee of Borrower.
6. ADDITIONAL WARRANTS. In order to induce the Lender to enter into this
Agreement, in addition to any warrants already granted by Borrower in favor of
Lender, Borrower has agreed to issue to Lender or its designee on the date
hereof, a Warrant, in form and substance satisfactory to Lender, pursuant to
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which Lender will have the right to purchase up to 40,000 shares of Borrower's
common stock at a price of No Dollars and Fifty-one Cents ($0.51) per share, to
be exercisable at any time within five (5) years after the date hereof. Borrower
and Lender acknowledge and agree that, as of the date hereof, such additional
warrants are of nominal value.
7. DEFERRAL OF SALARY. Subject to the terms set forth herein, Xxxxx hereby
agrees to continue the deferral of the accrued salary payable to Xxxxx by
Borrower on the date hereof during the Forbearance Period (as hereinafter
defined), and to defer future salary to be payable to Xxxxx by Borrower during
the Forbearance Period for the duration of the Forbearance Period.
8. FORBEARANCE PERIOD. "FORBEARANCE PERIOD" means the period from the date
hereof until the earlier of (a) September 1, 2004, or (b) the occurrence of an
Event of Default hereunder. During the Forbearance Period, Lender agrees that it
will not take any further action against Borrower or exercise or enforce any
right or remedy available to Lender in connection with the Loan, whether at law
or in equity (including taking any action against any property in which Borrower
has any interest), provided that nothing provided for herein shall prevent
Lender from taking such action and enforcing such remedies as provided for
hereunder, upon the expiration of the applicable Forbearance Period.
9. UNCONDITIONAL OBLIGATIONS. The payment and performance by Borrower of
Borrower's obligations under and in connection with the Loan, including without
limitation, Borrower's obligations under this Agreement and the Note, shall be
absolute and unconditional, irrespective of any defense or any rights of
set-off, recoupment or counterclaim it might otherwise have against Lender and
Borrower shall repay the Loan, free of any deductions and without abatement,
diminution or set-off. Until the Loan is fully and finally repaid, Borrower: (a)
will not suspend or discontinue any payments provided for in the Note and (b)
will perform and observe all of its other agreements contained in this
Agreement.
10. AFFIRMATIVE COVENANTS. Until payment in full of the Loan, subject to the
provisions of Section 14 hereof, Borrower shall:
(a) CORPORATE EXISTENCE. Maintain its corporate existence in the
jurisdiction in which it is incorporated.
(b) COMPLIANCE WITH LAWS. Comply with all applicable federal, state and
local laws, rules and regulations to which it is subject and the violation of
which would have a material adverse effect on the conduct of its business.
(c) INSURANCE GENERALLY. Maintain insurance with responsible insurance
companies on such of its properties, in such amounts, and against such risks as
was maintained immediately prior to the date of this Agreement.
(d) MAINTENANCE OF THE COLLATERAL. Not permit anything to be done to
the Collateral which may materially impair the value thereof, other than actions
taken in the ordinary course of Borrower's business, including, but not limited
to, the sale of inventory or disposition of used equipment.
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(e) OTHER LIENS, SECURITY INTERESTS, ETC. Keep the Collateral free from
all liens, security interests and claims of every kind and nature, other the
security interest granted to Lender, operating and capital leases on equipment
and fixed assets, or liens, security interests and claims which are junior to
the security interest granted to Lender.
(f) DEFENSE OF TITLE AND FURTHER ASSURANCES. At its expense defend the
title to the Collateral (or any part thereof), and promptly upon request
execute, acknowledge and deliver any financing statement, renewal, affidavit,
deed, assignment, continuation statement, security agreement, certificate or
other document Lender may require in order to perfect, preserve, maintain,
protect, continue and/or extend the lien or security interest granted to Lender
and its priority. All taxes, costs and expenses incurred by Lender in connection
with the preparation, execution, recording and filing of any such document or
instrument shall be added to the principal balance of the Loan.
(g) ASSIGNMENTS OF ACCOUNTS. Promptly, upon request, during the
existence of an Event of Default (as defined below) hereunder, execute and
deliver to Lender written assignments, in form and content acceptable to Lender,
of specific Accounts or groups of Accounts; provided, however, the lien and/or
security interest granted to Lender shall not be limited in any way to or by the
inclusion or exclusion of Accounts within such assignments.
(h) NOTICE TO ACCOUNT DEBTORS. In the event an Event of Default exists
hereunder, promptly upon the request of Lender in such form and at such times as
specified by Lender, give notice of Lender's lien on the Accounts to the account
debtors requiring the account debtors to make payments thereon directly to
Lender.
(i) PLACE OF BUSINESS AND LOCATION OF COLLATERAL. Immediately advise
the Lender in writing of the opening of any new place of business or the closing
of any of its existing places of business, and of any change in the location of
the places where the Collateral, or any part thereof, or the books and records
concerning such Collateral, or any part thereof, are kept.
11. NEGATIVE COVENANTS OF BORROWER. Until payment in full and the performance of
all of Borrower's obligations under and in connection with the Loan, subject to
the provisions of Section 14 hereof, without the prior written consent of Lender
or Xxxxx, the Borrower will not directly or indirectly:
(a) TRANSFER OF COLLATERAL. Except in the ordinary course of business,
transfer, or permit the transfer, to another location of any material portion of
the Collateral or the books and records related to any of the Collateral.
(b) INDEBTEDNESS. Create, incur, assume or suffer to exist any
indebtedness for borrowed money, except:
(i) the obligations under the Loan and the Note;
(ii) accounts payable and accrued expenses arising in the
ordinary course and operating or capital leases for equipment or other fixed
assets; and
(iii) indebtedness of Borrower existing on the date hereof and
reflected on Borrower's most recently issued financial statements.
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(c) LOANS AND OTHER TRANSACTIONS. Except as otherwise provided in this
Agreement, (i) guaranty or otherwise become contingently liable for the
indebtedness or obligations of any person or entity, or (iii) make any loans or
advances, or otherwise extend credit to any person, except:
(i) any advance to an officer or employee of Borrower for
travel or other business expenses in the ordinary course of business, provided
that the aggregate amount of all such advances by Borrower outstanding at any
time shall not exceed Ten Thousand Dollars ($10,000);
(ii) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(iii) trade credit extended to customers in the ordinary
course of business.
(d) LIENS. Create, incur, assume or suffer to exist any lien or
encumbrance upon any of its properties or assets, whether now owned or hereafter
acquired, except for liens in favor of Lender securing the Loan, liens or
encumbrances existing on the date hereof, operating or capital leases for
equipment and fixed assets, or liens or encumbrances which are junior in
priority to the liens in favor of Lender securing this Loan.
(e) COMPENSATION OF XXXXXXX XXXXX. Pay any salary or cash (excluding
for this purpose advances or reimbursement of expenses incurred as an employee
or officer of Borrower), whether direct or indirect, to Xxxxxxx Xxxxx, unless
such salary or cash are paid to Xxxxx on a pro rata basis. Borrower acknowledges
that any such payments to Xxxxx shall not be applied to the Loan.
(f) CAPITAL EXPENDITURES. Directly or indirectly (by way of the
acquisition of the securities of any entity or otherwise), make any expenditure
for fixed or capital assets (including without limitation, in connection with
any capital lease) in the aggregate in any fiscal year exceeding Ten Thousand
Dollars ($10,000.00).
(g) MERGER, SALE OF ASSETS; ISSUANCE OF STOCK. (i) Merge or consolidate
with or into any person or entity in a manner effecting a change of control of
Borrower; (ii) sell, convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially all of
Borrower's assets (whether now owned or hereafter acquired); or (iii) sell,
convey or otherwise transfer outstanding capital stock of Borrower (including
pursuant to a tender offer) which results in or effects a change of control of
Borrower.
(h) COMPENSATION. Fail to pay (i) any bonuses, commissions, salaries,
or other cash compensation, whether direct or indirect, to any employee of
Borrower other than Xxxxxxx Xxxxx and Xxxxx as and when due, or pay (ii) any and
all payroll or other taxes payable by Borrower in connection therewith as and
when due, including without limitation any and all unemployment, Medicare and/or
Social Security taxes, which failure to pay in the case of clause (i) and (ii)
involves outstanding sums at any one time determined on an aggregate basis of
more than Ten Thousand Dollars ($10,000.00).
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(i) INVENTORY. Store any of Borrower's inventory with a bailee,
warehouseman or similar person without the prior written consent or Xxxxx or
Lender.
(j) SALE OF ACCOUNTS. Sell, discount, transfer, assign or otherwise
dispose of any of its Accounts, notes receivable, installment or conditional
sales agreements or any other rights to receive income, revenues or moneys,
however evidenced.
12. EVENTS OF DEFAULT. Subject to the provisions of Section 14 hereof, the
occurrence of one or more of the following events (which continues uncured
beyond any applicable grace period set forth below) shall be "Events of Default"
under this Agreement, and the terms "Event of Default" or "default" shall mean,
whenever they are used in this Agreement, any one or more of the following
events:
(a) FAILURE TO PAY. Borrower shall fail to make any payment of
principal or interest on the Note as and when the same shall become due and
payable.
(b) BREACH OF REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made herein or in any report, certificate, financial statement or other
instrument furnished in connection with the Loan or with the execution and
delivery of any document or agreement relating to the Loan, shall prove to have
been false or misleading when made in any material respect.
(c) FAILURE TO COMPLY WITH CERTAIN AFFIRMATIVE COVENANTS. Borrower
shall fail to duly and promptly perform, comply with or observe the terms,
covenants, conditions and agreements set forth in Sections 10(c) and 10(e).
(d) FAILURE TO COMPLY WITH CERTAIN NEGATIVE COVENANTS. Borrower shall
fail to duly observance any covenant, condition or agreement contained in
Sections 11 (a), (d), (g), (i), and (j) hereof.
(e) OTHER DEFAULTS. Borrower shall fail to observe or perform any other
term, covenant or agreement herein contained, which failure shall remain
unremedied for thirty (30) days after written notice thereof to Borrower by
Lender.
(f) DEFAULT UNDER OTHER DOCUMENTS. An event of default shall occur
under the Note and such event of default is not cured within any applicable
grace period provided therein.
(g) RECEIVER; BANKRUPTCY. Borrower shall (i) apply for or consent to
the appointment of a receiver, trustee or liquidator of itself or any of its
property, (ii) make a general assignment for the benefit of creditors, (iii) be
adjudicated a bankrupt or insolvent, (iv) file a voluntary petition in
bankruptcy or a petition or an answer seeking reorganization or an arrangement
with creditors or to take advantage of any bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or liquidation law or statute, or
an answer admitting the material allegations of a petition filed against it in
any proceeding under any such law or if corporate action shall be taken by the
Borrower for the purposes of effecting any of the foregoing, or (v) by any act
indicate its consent to, approval of or acquiescence in any such proceeding or
the appointment of any receiver of or trustee for any of its property, or suffer
any such receivership, trusteeship or proceeding to continue undischarged for a
period of sixty (60) days.
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(h) JUDGMENT. Unless adequately insured in the opinion of Lender, the
entry of a final judgment for the payment of money involving more than Ten
Thousand Dollars ($10,000) against Borrower and the failure by Borrower to
discharge the same, or cause it to be discharged, within thirty (30) days from
the date of the order, decree or process under which or pursuant to which such
judgment was entered, or to secure a stay of execution pending appeal of such
judgment.
(i) EXECUTION; ATTACHMENT. Any execution or attachment shall be levied
against the Collateral, or any part thereof, and such execution or attachment
shall not be set aside, discharged or stayed within thirty (30) days after the
same shall have been levied.
(j) EXISTENCE. Borrower dissolves, liquidates or otherwise terminates
its existence.
(k) XXXXX AS DIRECTOR AND EMPLOYEE. Borrower causes, directly or
indirectly, or supports the removal of Xxxxx from Borrower's Board of Directors,
or terminates Xxxxx'x status as an employee of Borrower or materially alters
Xxxxx'x duties as an employee of Borrower (in each case excluding the voluntary
termination or resignation by Xxxxx from such position or status).
13. RIGHTS AND REMEDIES UPON DEFAULT.
(a) DEMAND; ACCELERATION. Upon the occurrence and during the
continuance of an Event of Default, and in every such event and at any time
thereafter, Lender may declare the Loan due and payable, without presentment,
demand, protest, or any notice of any kind, all of which are hereby expressly
waived, anything contained herein or in any of the other document or agreement
relating to the Loan to the contrary notwithstanding.
(b) SPECIFIC RIGHTS WITH REGARD TO COLLATERAL. In addition to all other
rights and remedies provided hereunder or as shall exist at law or in equity
from time to time, Lender may, without notice to Borrower:
(i) request any account debtor obligated on any of the
Accounts to make payments thereon directly to Lender, with Lender taking control
of the cash and non-cash proceeds thereof;
(ii) compromise, extend or renew any of the Collateral or deal
with the same as it may deem advisable;
(iii) make exchanges, substitutions or surrenders of all or
any part of the Collateral;
(iv) inspect at Borrower's place of business, and make copies
of, all books, records, ledger sheets, correspondence, invoices and documents,
relating to or evidencing any of the Collateral or without cost or expense to
Lender, make such use of Borrower's place(s) of business as may be reasonably
necessary to administer, control and collect the Collateral;
(v) repair, alter or supply goods if necessary to fulfill in
whole or in part the purchase order of any account debtor;
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(vi) demand, collect, receipt for and give renewals,
extensions, discharges and releases of any of the Collateral;
(vii) institute and prosecute legal and equitable proceedings
to enforce collection of, or realize upon, any of the Collateral;
(viii) settle, renew, extend, compromise, compound, exchange
or adjust claims in respect of any of the Collateral or any legal proceedings
brought in respect thereof;
(ix) endorse the name of Borrower upon any items of payment
relating to the Collateral or on any Proof of Claim in bankruptcy against an
account debtor; and
(x) notify the United States postal authorities to change the
address for the delivery of mail to Borrower to such address or post office box
as Lender may designate and receive and open all mail addressed to Borrower.
(c) PERFORMANCE BY LENDER. If Borrower shall fail to repay the
principal of or interest on the Loan as and when due or otherwise fail to
perform, observe or comply with any of the conditions, covenants, terms,
stipulations or agreements contained in this Agreement or any other document or
agreement relating to the Loan, Lender without notice to or demand upon Borrower
and without waiving or releasing any of the obligations of Borrower in
connection with the Loan or any Event of Default, may (but shall be under no
obligation to) at any time thereafter make such payment or perform such act for
the account and at the expense of Borrower, and may enter upon the premises of
Borrower for such purpose and take all such action thereon as Lender may
consider necessary or appropriate to protect Lender's interest in the
Collateral. All sums so paid or advanced by Lender and all costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
incurred in connection therewith (the "Expense Payments") together with interest
thereon from the date of payment, advance or incurring until paid in full at the
Default Rate described in the Note shall be paid by Borrower to Lender on demand
and shall constitute and become a part of the obligations of Borrower in
connection with the Loan and shall be secured by the Collateral.
(d) UNIFORM COMMERCIAL CODE AND OTHER REMEDIES. Upon the occurrence of
an Event of Default (and in addition to all of its rights, powers and remedies
under this Agreement), Lender shall have all of the rights and remedies of a
secured party under the California Uniform Commercial Code and other applicable
laws, and Lender is authorized to offset and apply to all or any part of the
principal of or interest on the Loan all moneys, credits and other property of
any nature whatsoever of Borrower now or at any time hereafter in the possession
of, in transit to or from, under the control or custody of, or on deposit with,
Lender. Upon demand by Lender, Borrower shall assemble the Collateral and make
it available to Lender, at a place designated by Lender. Lender or its agents
may enter upon Borrower's premises to take possession of the Collateral, to
remove it, to render it unusable, or to sell or otherwise dispose of it.
Any written notice of the sale, disposition or other intended action by
Lender with respect to the Collateral which is sent by regular mail, postage
prepaid, to Borrower at Borrower's address set forth in SECTION 15 below, or
such other address of Borrower which may from time to time be shown on Lender's
records, at least ten (10) days prior to such sale, disposition or other action,
shall constitute reasonable notice to Borrower. Borrower shall pay on demand all
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costs and expenses, including, without limitation, attorney's fees and expenses,
incurred by or on behalf of Lender in preparing for sale or other disposition,
selling, managing, collecting or otherwise disposing of, the Collateral. All of
such costs and expenses (the "Liquidation Costs") together with interest thereon
from the date incurred until paid in full at the Default Rate set forth in the
Note shall be paid by Borrower to Lender on demand and shall constitute and
become a part of the Loan and shall be secured hereby. Any proceeds of sale or
other disposition of the Collateral will be applied by Lender to the payment of
the Liquidation Costs and Expense Payments, and any balance of such proceeds
will be applied by Lender to the payment of the balance of the Loan in such
order and manner of application as Lender may from time to time in its sole
discretion determine. After such application of the proceeds, any balance shall
be paid to Borrower or to any other party entitled thereto.
14. LENDER'S ACTIONS. Notwithstanding any provision herein to the contrary, any
action or omission which would otherwise constitute or result in an Event of
Default or breach of any covenant under this Agreement or the Note shall not
constitute an Event of Default or breach of such covenant if such action or
omission was either specifically approved or consented to by Lender or by Xxxxx
in any capacity or if such action was caused by Xxxxx'x negligence or willful
misconduct, PROVIDED that actions or omissions shall not be considered to be
approved or consented to by Lender or Xxxxx to the extent that Xxxxx was
authorized or directed to take or omit to take such actions by Borrower's Board
of Directors or Chief Executive Officer or if such actions or omissions were the
result of the inability of Borrower to take or to omit to take such actions due
to the absence of available funds or for another reason. Any approval, consent,
action or omission by Lender or Xxxxx which results in the absence of an Event
of Default or breach of a covenant (including, without limitation, any agreement
or consent to the delay in payment of amounts due under the Note or this
Agreement or failure to exercise any of Lender's rights under this Agreement or
the Note) shall not be deemed to constitute a waiver of any future Event of
Default or breach of a covenant, or consent or agreement to any continued delay
in payment or forbearance from asserting rights or remedies under this
Agreement, the Note or at law or in equity or shall preclude the exercise by
Lender of all rights and remedies with respect to such future Event of Default
or breach of any covenant.
15. FURTHER ASSURANCES. Borrower agrees that, from time to time at its own
expense, Borrower will promptly execute and deliver all further instruments and
documents, and take all further actions, that may be necessary or desirable, or
that Lender may reasonably request, in order to perfect, preserve and protect
any security interest granted or purported to be granted by Borrower as security
for the Loan or to enable Lender to exercise and enforce its rights and remedies
hereunder with respect to the Collateral. With respect to the foregoing and the
grant of security interests securing the Loan, Borrower hereby authorizes Lender
to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral as Lender may desire,
including, without limitation, an amendment to any financing statement in order
to clarify the description of the Collateral set forth therein.
16. NO WAIVER OF RIGHTS OR REMEDIES. Except to the extent limited by SECTIONS 13
AND 14 above, the parties hereto acknowledge and agree that Lender (a) shall
retain all rights and remedies it may have with respect to the Loan and
Borrowers' failure to honor or otherwise comply with the terms of the Loan, and
(b) shall have the right to exercise and enforce such rights and remedies upon
termination of the Forbearance Period.
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17. MISCELLANEOUS.
(a) NOTICES. All notices, certificates or other communications
hereunder shall be deemed given when delivered by hand or courier, or when
mailed by certified mail, postage prepaid, return receipt requested, addressed
as follows:
if to Lender: c/o Xxxxx Xxxxx
00 Xxxxxxxx Xxxx
Xxxxxx Xxxxxx XX 00000
with a copy to: Xxxxx & Xxxxxx, LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
if to Borrower: Biomerica, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
(b) CONSENTS AND APPROVALS. If any consent, approval, or authorization
of any state, municipal or other governmental department, agency or authority or
of any person, or any person, corporation, partnership or other entity having
any interest therein, should be necessary to effectuate any sale or other
disposition of the Collateral after and during an Event of Default, Borrower
agrees to execute all such applications and other instruments, and to take all
other action, as may be required in connection with securing any such consent,
approval or authorization.
(c) REMEDIES, ETC. CUMULATIVE. Each right, power and remedy of Lender
as provided for in this Agreement or in any other document or agreement relating
to the Loan or now or hereafter existing at law or in equity or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to every
other right, power or remedy provided for in this Agreement or in any other
document or agreement relating to the Loan or now or hereafter existing at law
or in equity, by statute or otherwise, and the exercise or beginning of the
exercise by Lender of any one or more of such rights, powers or remedies shall
not preclude the simultaneous or later exercise by Lender of any or all such
other rights, powers or remedies. In order to entitle Lender to exercise any
remedy reserved to it herein, it shall not be necessary to give any notice,
other than such notice as may be expressly required in this Agreement.
(d) ENTIRE AGREEMENT. This Agreement and the Note shall completely and
fully supersede all other agreements, both written and oral, between Lender and
Borrower relating to the Loan. Neither Lender nor Borrower shall hereafter have
any rights under such prior agreements but shall look solely to this Agreement
and the Note for definition and determination of all of their respective rights,
liabilities and responsibilities relating to the Loan.
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(e) SURVIVAL OF AGREEMENT; SUCCESSORS AND ASSIGNS. All covenants,
agreements, representations and warranties made by Borrower herein and in any
other instruments or documents delivered in connection with the Loan shall
survive the making by Lender of the Loan and the execution and delivery of the
Note, and shall continue in full force and effect so long as any part of the
Loan is outstanding and unpaid. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party; and all covenants, promises and agreements by or on
behalf of Borrower, which are contained in this Agreement shall inure to the
benefit of the successors and assigns of Lender, and all covenants, promises and
agreements by or on behalf of Lender which are contained in this Agreement shall
inure to the benefit of the permitted successors and permitted assigns of
Borrower, but this Agreement may not be assigned by Borrower without the prior
written consent of Lender.
(f) EXPENSES. Lender and Borrower acknowledge that Two Thousand Five
Hundred Dollars ($2,500.00) of Lender's attorneys fees incurred through the date
hereof pursuant to the negotiation and preparation of this Agreement and the
Note are included in the principal balance of the Loan; Lender shall not be
entitled to further reimbursement or payment of Lender's expenses (including
attorney fees and costs) incurred pursuant to the negotiation and preparation of
this Agreement and the Note and the recordation of all financing statements
related thereto. Borrower agrees to pay and reimburse Lender upon demand for all
out-of-pocket expenses (including reasonable attorneys' fees and legal expenses)
incurred by Lender following the occurrence of an Event of Default hereunder in
enforcing and collecting upon any of the obligations or indebtedness of Borrower
under this Agreement, the Note, the Loan or any security therefor, which
agreement shall survive the termination of this Agreement and the repayment of
the Loan.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts all of which together shall constitute a single instrument.
(h) GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with the laws of the State of California.
(i) MODIFICATIONS. No modification or waiver of any provision of this
Agreement, nor consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in writing, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice to or demand on Borrower in any case shall entitle
Borrower to any other or further notice or demand in the same, similar or other
circumstance.
(j) DEFINITIONS. Unless otherwise defined, all terms used herein have
the same meaning as used in the California Commercial Code
(k) ILLEGALITY. If fulfillment of any provision hereof or any
transaction related hereto or to the Note, at the time performance of such
provision shall be due, shall involve transcending the limit of validity
prescribed by law, then IPSO FACTO, the obligation to be fulfilled shall be
reduced to the limit of such validity; and if any clause or provisions herein
contained other than the provisions hereof pertaining to repayment of the Loan
operates or would prospectively operate to invalidate this Agreement in whole or
in part, then such clause or provision only shall be void, as though not herein
contained, and the remainder of this Agreement shall remain operative and in
full force and effect; and if such provision pertains to repayment of the Loan,
then, at the option of Lender, the Loan and all of Borrowers obligations in
connection therewith shall become immediately due and payable.
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IN WITNESS WHEREOF, the parties hereto have signed and sealed this
Agreement on the day and year first above written.
BORROWER:
By:________________________________
Name: _____________________________
Title: ____________________________
LENDER:
-----------------------------------
XXXXX XXXXX, as Trustee of the
XXXXX XXXXX TRUST DATED
XXXXXX 00, 0000
XXXXX:
-----------------------------------
XXXXX XXXXX
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