[EXHIBIT 10.8]
SECURITY AGREEMENT
SECURITY AGREEMENT (this "Agreement"), dated as of March 30,
2005, by and among Med Gen, Inc., a Nevada corporation
("Company"), and the secured parties signatory hereto and their
respective endorsees, transferees and assigns (collectively, the
"Secured Party").
W I T N E S S E T H:
WHEREAS, pursuant to a Securities Purchase Agreement, dated
the date hereof, between Company and the Secured Party (the
"Purchase Agreement"), Company has agreed to issue to the Secured
Party and the Secured Party has agreed to purchase from Company
certain of Company's 8% Callable Secured Convertible Notes, due
three years from the date of issue (the "Notes"), which are
convertible into shares of Company's Common Stock, par value
$.001 per share (the "Common Stock"). In connection therewith,
Company shall issue the Secured Party certain Common Stock
purchase warrants (the "Warrants"); and
WHEREAS, in order to induce the Secured Party to purchase
the Notes, Company has agreed to execute and deliver to the
Secured Party this Agreement for the benefit of the Secured Party
and to grant to it a first priority security interest in certain
property of Company to secure the prompt payment, performance and
discharge in full of all of Company's obligations under the Notes
and exercise and discharge in full of Company's obligations under
the Warrants.
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. As used in this Agreement, the
following terms shall have the meanings set forth in this Section
1. Terms used but not otherwise defined in this Agreement that
are defined in Article 9 of the UCC (such as "general
intangibles" and "proceeds") shall have the respective meanings
given such terms in Article 9 of the UCC.
(a) "Collateral" means the collateral in which the Secured
Party is granted a security interest by this Agreement and which shall
include the following, whether presently owned or existing or
hereafter acquired or coming into existence, and all additions
and accessions thereto and all substitutions and replacements
thereof, and all proceeds, products and accounts thereof,
including, without limitation, all proceeds from the sale or
transfer of the Collateral and of insurance covering the same and
of any tort claims in connection therewith:
(i) All Goods of the Company, including, without limitations,
all machinery, equipment, computers, motor vehicles, trucks,
tanks, boats, ships, appliances, furniture, special and general
tools, fixtures, test and quality control devices and other
equipment of every kind and nature and wherever situated,
together with all documents of title and documents representing
the same, all additions and accessions thereto, replacements
therefor, all parts therefor, and all substitutes for any of the
foregoing and all other items used and useful in connection with
the Company's businesses and all improvements thereto
(collectively, the "Equipment"); and
(ii) All Inventory of the Company; and
(iii) All of the Company's contract rights and general
intangibles, including, without limitation, all partnership
interests, stock or other securities, licenses, distribution and
other agreements, computer software development rights, leases,
franchises, customer lists, quality control procedures, grants
and rights, goodwill, trademarks, service marks, trade styles,
trade names, patents, patent applications, copyrights, deposit
accounts, and income tax refunds (collectively, the "General
Intangibles"); and
(iv) All Receivables of the Company including all insurance
proceeds, and rights to refunds or indemnification whatsoever
owing, together with all instruments, all documents of title
representing any of the foregoing, all rights in any
merchandising, goods, equipment, motor vehicles and trucks which
any of the same may represent, and all right, title, security and
guaranties with respect to each Receivable, including any right
of stoppage in transit; and
(v) All of the Company's documents, instruments and chattel
paper, files, records, books of account, business papers,
computer programs and the products and proceeds of all of the
foregoing Collateral set forth in clauses (i)-(iv) above.
(b) "Company" shall mean, collectively, Company and all of the
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subsidiaries of Company, a list of which is contained in Schedule
A, attached hereto.
(c) "Obligations" means all of the Company's obligations under
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this Agreement and the Notes, in each case, whether now or
hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or
not jointly owed with others, and whether or not from time to
time decreased or extinguished and later decreased, created or
incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such
payment is avoided or recovered directly or indirectly from the
Secured Party as a preference, fraudulent transfer or otherwise
as such obligations may be amended, supplemented, converted,
extended or modified from time to time.
(d) "UCC" means the Uniform Commercial Code, as currently in
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effect in the State of New York.
2. Grant of Security Interest. As an inducement for the
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Secured Party to purchase the Notes 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, pledges, grants and hypothecates
to the Secured Party, a continuing security interest in, a
continuing first lien upon, an unqualified right to possession
and disposition of and a right of set-off against, in each case
to the fullest extent permitted by law, all of the Company's
right, title and interest of whatsoever kind and nature in and to
the Collateral (the "Security Interest").
3. Representations, Warranties, Covenants and Agreements of the
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Company. The Company represents and warrants to, and covenants
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and agrees with, the Secured Party as follows:
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(a) The Company has the requisite corporate power and
authority to enter into this Agreement and otherwise to 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 constitutes a legal, valid and binding
obligation of the Company enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditor's rights generally.
(b) 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 A attached hereto;
(c) The Company is the sole owner of the Collateral
(except for non-exclusive licenses granted by the Company in the
ordinary course of business), free and clear of any liens, security
interests, encumbrances, rights or claims, and is fully
authorized to grant the Security Interest in and to pledge the
Collateral, except as set forth on Schedule C. There is not on
file in any governmental or regulatory authority, agency or
recording office an effective financing statement, security
agreement, license or transfer or any notice of any of the
foregoing (other than those that have been filed in favor of the
Secured Party pursuant to this Agreement) covering or affecting
any of the Collateral, except as set forth on Schedule C. So
long as this Agreement shall be in effect, the Company shall not
execute and shall not knowingly permit to be on file 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 Party pursuant to the terms of this Agreement),
except as set forth on Schedule C.
(d) No part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any
Collateral or the Company's use of any Collateral violates the
rights of any third party. There has been no adverse decision to
the Company's claim of ownership rights in or exclusive rights to
use the Collateral in any jurisdiction or to the Company's right
to keep and maintain such Collateral in full force and effect,
and there is no proceeding involving said rights pending or, to
the best knowledge of the Company, 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 its Collateral at the locations set forth on
Schedule A attached hereto and may not relocate such books of
account and records or tangible Collateral unless it delivers to
the Secured Party 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 the Secured
Party valid, perfected and continuing first priority liens in the
Collateral.
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(f) This Agreement creates in favor of the Secured Party a
valid security interest in the Collateral securing the payment and
performance of the Obligations and, upon making the filings
described in the immediately following sentence, a perfected
first priority security interest in such Collateral. Except for
the filing of financing statements on Form-1 under the UCC with
the jurisdictions indicated on Schedule B, attached hereto, no
authorization or approval of or filing 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 Party of its rights and
remedies hereunder.
(g) On the date of execution of this Agreement, the Company
will deliver to the Secured Party one or more executed UCC financing
statements on Form-1 with respect to the Security Interest for
filing with the jurisdictions indicated on Schedule B, attached
hereto and in such other jurisdictions as may be requested by the
Secured Party.
(h) Except as set forth on Schedule C, 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.
(i) The Company shall at all times maintain the liens and
Security Interest provided for hereunder as valid and perfected
first priority liens and security interests in the Collateral in
favor of the Secured Party until this Agreement and the Security
Interest hereunder shall terminate pursuant to Section 11. The
Company hereby agrees to defend the same against any and all
persons. The Company shall safeguard and protect all Collateral
for the account of the Secured Party. At the request of the
Secured Party, the Company will sign and deliver to the Secured
Party at any time or from time to time one or more financing
statements pursuant to the UCC (or any other applicable statute)
in form reasonably satisfactory to the Secured Party and will pay
the cost of filing the same in all public offices wherever filing
is, or is deemed by the Secured Party to be, necessary or
desirable 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 Collateral and the Security Interest hereunder, and
the Company shall obtain and furnish to the Secured Party 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.
(j) The Company will not transfer, pledge, hypothecate,
encumber, license (except for non-exclusive licenses granted by
the Company in the ordinary course of business), sell or
otherwise dispose of any of the Collateral without the prior
written consent of the Secured Party.
(k) The Company shall keep and preserve its Equipment, Inventory
and other tangible Collateral in good condition, repair and order
and shall not operate or locate any such Collateral (or cause to
be operated or located) in any area excluded from insurance
coverage.
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(l) The Company shall, within ten (10) days of obtaining
knowledge thereof, advise the Secured Party promptly, in
sufficient detail, of any substantial change in 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
Party's security interest therein.
(m) The Company shall promptly execute and deliver to the
Secured Party such further deeds, mortgages, assignments,
security agreements, financing statements or other instruments,
documents, certificates and assurances and take such further
action as the Secured Party may from time to time request and may
in its sole discretion deem necessary to perfect, protect or
enforce its security interest in the Collateral including,
without limitation, the execution and delivery of a separate
security agreement with respect to the Company's intellectual
property ("Intellectual Property Security Agreement") in which
the Secured Party has been granted a security interest hereunder,
substantially in a form acceptable to the Secured Party, which
Intellectual Property Security Agreement, other than as stated
therein, shall be subject to all of the terms and conditions
hereof.
(n) The Company shall permit the Secured Party and its
representatives and agents to inspect the Collateral at any time,
and to make copies of records pertaining to the Collateral as may
be requested by the Secured Party from time to time.
(o) The Company will take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any
rights, claims, causes of action and accounts receivable in
respect of the Collateral.
(p) The Company shall promptly notify the Secured Party 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 may materially affect the value of the Collateral, the
Security Interest or the rights and remedies of the Secured Party
hereunder.
(q) All information heretofore, herein or hereafter supplied
to the Secured Party by or on behalf of the Company with respect to
the Collateral is accurate and complete in all material respects
as of the date furnished.
(r) Schedule A attached hereto contains a list of all of the
subsidiaries of Company.
4. Defaults. The following events shall be "Events of
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Default":
(a) The occurrence of an Event of Default (as defined in the
Notes) under the Notes;
(b) Any representation or warranty of the Company in this
Agreement or in the Intellectual Property Security Agreement
shall prove to have been incorrect in any material respect when
made;
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(c) The failure by the Company to observe or perform any of
its obligations hereunder or in the Intellectual Property Security
Agreement for ten (10) days after receipt by the Company of
notice of such failure from the Secured Party; and
(d) Any breach of, or default under, the Warrants.
5. Duty To Hold In Trust. Upon the occurrence of any Event of
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Default and at any time thereafter, the Company shall, upon
receipt by it of any revenue, income or other sums subject to the
Security Interest, whether payable pursuant to the Notes or
otherwise, 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 Party and shall forthwith
endorse and transfer any such sums or instruments, or both, to
the Secured Party for application to the satisfaction of the
Obligations.
6. Rights and Remedies Upon Default. Upon occurrence of any
--------------------------------
Event of Default and at any time thereafter, the Secured Party
shall have the right to exercise all of the remedies conferred
hereunder and under the Notes, and the Secured Party shall have
all the rights and remedies of a secured party under the UCC
and/or any other applicable law (including the Uniform Commercial
Code of any jurisdiction in which any Collateral is then
located). Without limitation, the Secured Party shall have the
following rights and powers:
(a) The Secured Party shall have the right to take
possession of the Collateral and, for that purpose, enter, with the
aid and assistance of any person, any premises where the Collateral,
or any part thereof, is or may be placed and remove the same, and
the Company shall assemble the Collateral and make it available
to the Secured Party at places which the Secured Party shall
reasonably select, whether at the Company's premises or
elsewhere, and make available to the Secured Party, without rent,
all of the Company's respective premises and facilities for the
purpose of the Secured Party taking possession of, removing or
putting the Collateral in saleable or disposable form.
(b) The Secured Party shall have the right to operate the
business of the Company using the Collateral and shall have the
right to assign, sell, lease 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 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
Secured Party 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, lease, assignment or other transfer
of Collateral, the Secured Party 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.
7. Applications of Proceeds. The proceeds of any such sale,
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lease 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
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reasonable attorneys' fees and expenses incurred by the Secured
Party 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 Party
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 Party is legally entitled, the Company will be liable for
the deficiency, together with interest thereon, at the rate of
15% per annum (the "Default Rate"), and the reasonable fees of
any attorneys employed by the Secured Party to collect such
deficiency. To the extent permitted by applicable law, the
Company waives all claims, damages and demands against the
Secured Party arising out of the repossession, removal, retention
or sale of the Collateral, unless due to the gross negligence or
willful misconduct of the Secured Party.
8. Costs and Expenses. The Company agrees to pay all out-of-
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pocket fees, costs and expenses 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 Secured Party. The
Company shall also pay all other claims and charges which in the
reasonable opinion of the Secured Party might prejudice, imperil
or otherwise affect the Collateral or the Security Interest
therein. The Company will also, upon demand, pay to the Secured
Party 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 Secured Party may incur in
connection with (i) the enforcement of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or
other realization upon, any of the Collateral, or (iii) the
exercise or enforcement of any of the rights of the Secured Party
under the Notes. Until so paid, any fees payable hereunder shall
be added to the principal amount of the Notes and shall bear
interest at the Default Rate.
9. Responsibility for Collateral. The Company assumes all
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liabilities and responsibility in connection with all Collateral,
and the obligations of the Company hereunder or under the Notes
and the Warrants shall in no way be affected or diminished by
reason of the loss, destruction, damage or theft of any of the
Collateral or its unavailability for any reason.
10. Security Interest Absolute. All rights of the Secured Party
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and all Obligations of the Company hereunder, shall be absolute
and unconditional, irrespective of: (a) any lack of validity or
enforceability of this Agreement, the Notes, the Warrants or any
agreement entered into in connection with the foregoing, or any
portion hereof or thereof; (b) any change in the time, manner or
place of payment or performance of, or in any other term of, all
or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Notes, the Warrants or any
other agreement entered into in connection with the foregoing;
(c) any exchange, release or nonperfection of any of the
Collateral, or any release or amendment or waiver of or consent
to departure from any other collateral for, or any guaranty, or
any other security, for all or any of the Obligations; (d) any
action by the Secured Party to obtain, adjust, settle and cancel
in its sole discretion any insurance claims or matters made or
arising in connection with the Collateral; or (e) any other
circumstance which might otherwise constitute any legal or
equitable defense available to the Company, or a discharge of all
or any part of the Security Interest granted hereby. Until the
Obligations shall have been paid and performed in full, the
rights of the Secured Party shall continue even if the
Obligations are barred for any reason, including, without
limitation, the running of the statute of limitations or
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bankruptcy. The Company expressly waives presentment, protest,
notice of protest, demand, notice of nonpayment and demand for
performance. In the event that at any time any transfer of any
Collateral or any payment received by the Secured Party 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 Party, then, in any such event, the Company's
obligations hereunder shall survive cancellation of this
Agreement, and shall not be discharged or satisfied by any prior
payment thereof and/or cancellation of this Agreement, 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 Party to proceed against any other
person or to apply any Collateral which the Secured Party may
hold at any time, or to marshal assets, or to pursue any other
remedy. The Company waives any defense arising by reason of the
application of the statute of limitations to any obligation
secured hereby.
11. Term of Agreement. This Agreement and the Security Interest
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shall terminate on the date on which all payments under the Notes
have been made in full and all other Obligations have been paid
or discharged. Upon such termination, the Secured Party, at the
request and at the expense of the Company, will join in executing
any termination statement with respect to any financing statement
executed and filed pursuant to this Agreement.
12. Power of Attorney; Further Assurances.
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(a) The Company authorizes the Secured Party, 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 Party; (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 debtors, 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 Party, and at the Company's expense, at any time, or from
time to time, all acts and things which the Secured Party deems
necessary to protect, preserve and realize upon the Collateral
and the Security Interest granted therein in order to effect the
intent of this Agreement, the Notes and the Warrants, 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 and thereafter as long as any of the Obligations
shall be outstanding.
(b) On a continuing basis, the Company will make, execute,
acknowledge, deliver, file and record, as the case may be, in 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 may reasonably be deemed necessary or advisable,
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or as reasonably requested by the Secured Party, 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 Party the grant or perfection of a
security interest in all the Collateral.
(c) The Company hereby irrevocably appoints the Secured
Party 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 Secured Party's discretion, to take any
action and to execute any instrument which the Secured Party may
deem necessary or advisable to accomplish the purposes of this
Agreement, including the filing, in its sole discretion, of one
or more financing or continuation statements and amendments
thereto, relative to any of the Collateral without the signature
of the Company where permitted by law.
13. Notices. All notices, requests, demands and other
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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: Med Gen, Inc.
0000 X. Xxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
With a copy to: Law Office of Xxxxxxx X. Xxxxxx
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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If to the Secured Party: AJW Partners, LLC
AJW Offshore, Ltd.
AJW Qualified Partners, LLC
New Millennium Capital Partners II, LLC
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: 000-000-0000
With a copy to: Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: 000-000-0000
14. Other Security. To the extent that the Obligations are now
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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 Party shall have
the right, in its 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 Party's rights and remedies hereunder.
15. Miscellaneous.
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(a) No course of dealing between the Company and the
Secured Party, nor any failure to exercise, nor any delay in
exercising, on the part of the Secured Party, any right, power or
privilege hereunder or under the Notes 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 Party
with respect to the Collateral, whether established hereby or 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 specifically
referring to this Agreement and signed by the parties hereto.
(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,
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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.
(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 party giving such waiver, 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, except to the extent the validity,
perfection or enforcement of a security interest hereunder in
respect of any particular Collateral which are governed by a
jurisdiction other than the State of New York in which case such
law shall govern. Each of the parties hereto irrevocably submit
to the exclusive jurisdiction of any New York State or United
States Federal court sitting in Manhattan 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 MATER 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 HAS
KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL
11
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.
(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]
12
IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be duly executed on the day and year first
above written.
MED GEN, INC.
By:
_____________________________________
Xxxx X. Xxxxxxx
Chairman and Chief Executive Officer
AJW PARTNERS, LLC
By: SMS Group, LLC
By:
____________________________________
_
Xxxxx X. Xxxxxxxx
Manager
AJW OFFSHORE, LTD.
By: First Street Manager II, LLC
By:
____________________________________
_
Xxxxx X. Xxxxxxxx
Manager
AJW QUALIFIED PARTNERS, LLC
By: AJW Manager, LLC
By:
____________________________________
_
Xxxxx X. Xxxxxxxx
Manager
NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By: First Street Manager II, LLC
By:
____________________________________
_
Xxxxx X. Xxxxxxxx
Manager
13
SCHEDULE A
----------
Principal Place of Business of the Company:
------------------------------------------
Locations Where Collateral is Located or Stored:
-----------------------------------------------
List of Subsidiaries of the Company:
-----------------------------------
14
SCHEDULE B
----------
Jurisdictions:
-------------
15
