EXHIBIT 10.10
GENERAL SECURITY AGREEMENT
THIS GENERAL SECURITY AGREEMENT dated April 20, 2007 is entered
into by and between SURGILIGHT, INC., a corporation incorporated under the
laws of the State of Florida, with offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Grantor"), and GEM SurgiLight Investors, LLC, a
limited liability company organized under the laws of New York, with offices
at ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ 10022(the "Assignee") under the Loan
Agreement (as such term is hereinafter defined).
W I T N E S S E T H T H A T:
WHEREAS:
(A) By a Secured Line of Credit Loan Agreement dated the date
hereof (the "Loan Agreement") made among the Grantor and the Assignee (also
referred to as the "Lender"), the Assignee, subject to the terms thereof, has
agreed to make available to the Grantor a line of credit facility not to
exceed at any one time outstanding the principal amount of ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars (US$2,500,000) (the "Line of Credit
Facility"). The amounts owing under the Line of Credit Facility are
repayable and bear interest as provided in the Loan Agreement; and
(B) Pursuant to the Loan Agreement it is a condition precedent
to the establishment of the Line of Credit Facility that the Grantor execute
and deliver to the Assignee this Agreement and grant the security interests
contemplated hereby in order to create in favor of the Assignee a valid and
perfected security interest, as that term is defined in the Uniform
Commercial Code of New York (the "Code"), in the Collateral (as such term is
hereinafter defined), as security for the payment and performance of all of
the obligations of the Grantor under or in connection with the Loan
Agreement, the Note and the Security Documents to which the Grantor is a
party, now or hereafter existing, whether for principal, interest, fees,
expenses or otherwise, and all secured obligations of the Grantor now or
hereafter existing under this Agreement (all such obligations of the Grantor
are hereinafter collectively referred to as the "Secured Obligations").
NOW, THEREFORE, in consideration of the premises, the parties
hereby agree as follows:
Section 1. Definitions. All capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Loan
Agreement.
Section 2. Grant of Security. The Grantor, as legal and
beneficial owner, as security for the Secured Obligations, hereby assigns,
pledges, transfers and sets over unto the Assignee and its successors and
assigns, and hereby grants to the Assignee a security interest in, all of the
Grantor's right, title and interest in and to the following property
(hereinafter collectively referred to as the "Collateral"):
(a) Any and all investment property and equipment (as defined
in the Code) of the Grantor, or in which it has rights, whether now owned or
hereafter acquired, including, without limitation, all machinery, tools,
office equipment, furniture, shipping containers, furnishings, fixtures,
rolling stock, dies and tools used or useful in Grantor's business,
structures, leasehold improvements, installations, equipment and
appurtenances hereafter constructed, drilled or placed and any and all goods,
equipment and tangible property held or used by the Grantor, supplies and
materials on hand, and all personal property of every kind, nature and
description, whether affixed to land or imbedded therein or otherwise, of the
Grantor, together with all present and future improvements or products of,
accessions, attachments and other additions to and substitutes and
replacements for, all or any part of the foregoing (all of the foregoing
types or items of property and interests described in this paragraph are
hereinafter collectively referred to in this Agreement as the "Personal
Property").
(b) Any and all general intangibles (as defined in the Code) of
the Grantor, whether now existing or hereafter acquired or arising,
including, without limitation, all contractual rights (including any rights,
including rights to distributions, under any partnership agreements),
partnership interests, copyrights, royalties, licenses, sublicenses,
trademarks, trade names, service marks, patent and proprietary rights,
blueprints, drawings, designs, trade secrets, plans, diagrams, schematics,
assembly and display materials relating thereto and all customer lists,
including, without limitation, all present and future rights, titles,
interests and estates now owned or hereafter acquired by the Grantor
(including, without limitation, all rights to receive payments) under or by
virtue of all agreements, or under or by virtue of all contracts (all of the
foregoing rights, titles, interests and estates referred to or described in
this paragraph are hereinafter collectively referred to in this Agreement as
the "Intangibles Collateral").
(c) Any and all present and future accounts (as defined in the
Code) (including, but not limited to, all open accounts, accounts receivable
and rights to payment of money, freights, hire due or to become due and
passage moneys arising under or pursuant to the Intangibles Collateral or to
any other agreements, documents or instruments relating to any property
whether or not owned or leased by the Grantor or its affiliates, chattel
paper, documents, instruments, cash and noncash proceeds, all returned or
repossessed goods and all books, records, computer tapes, programs and ledger
books arising therefrom or relating thereto and other rights arising from or
by virtue of, or from the voluntary or involuntary sale or other disposition
of, or collections with respect to, or insurance proceeds payable with
respect to, or proceeds payable by virtue of warranty or other claims and
causes of action (i) for money, loss or damages or (ii) against manufacturers
of or claims against any other person or entity with respect to property
whether or not owned or leased by the Grantor or its affiliates (all of the
foregoing types and items of property and interests described in this
paragraph are hereinafter collectively referred to in this Agreement as the
"Accounts").
(d) Any and all inventory (as defined in the Code) of the
Grantor, or in which it has rights, whether now owned or hereafter acquired,
wherever located, including, without limitation, all goods (as defined in the
Code) of the Grantor held for sale or lease or furnished or to be furnished
under contracts of service, all goods held for display or demonstration,
goods on lease or consignment, recess, finished goods and supplies used or
consumed in the Grantor's business, together with all documents, documents of
title, warehouse receipts, bills of lading or orders for the delivery of all,
or any portion, of the foregoing (all of the foregoing types and items of
property and interests described in this paragraph are hereinafter
collectively referred to in this Agreement as the "Inventory Collateral").
(e) Any and all other interests of every kind and character
which the Grantor now has or at any time hereafter acquires in and to any
property whether or not owned or leased by the Grantor or its affiliates, any
interest of the Grantor in the goods or inventory produced therefrom or
stored thereon, the Personal Property, the Intangibles Collateral, the
Accounts and the Inventory Collateral and all property, real, personal or
mixed, tangible or intangible, which is used or useful in connection with any
property whether or not owned or leased by the Grantor or its affiliates, any
interest of the Grantor in the goods or inventory produced therefrom or
stored thereon, the Personal Property, the Intangibles Collateral, the
Accounts and the Inventory Collateral and the proceeds and products of all of
the foregoing and all monies of any kind whatsoever arising from or in
connection with the Grantor's ownership, sale or lease of the interest of the
Grantor in the goods or inventory produced therefrom or stored thereon, the
Personal Property, the Intangibles Collateral, the Accounts and the Inventory
Collateral, including, without limitation, any and all moneys and claims for
moneys due and to become due to the Grantor, and any indemnity, warranty or
guaranty otherwise payable by reason of loss or damage to, or otherwise with
respect to, any interest of the Grantor in the goods or inventory produced
therefrom or stored thereon, the Personal Property, the Intangibles
Collateral, the Accounts and the Inventory Collateral, whether now owned or
hereafter acquired.
(f) Any and all proceeds of, and all other profits, rentals or
receipts, in whatever form, arising from the collection, sale, lease,
exchange, assignment, licensing or other disposition of, or realization upon,
the Personal Property, the Intangibles Collateral, the Accounts and the
Inventory Collateral, including, without limitation (i) all claims of the
Grantor against third parties for loss of, damage to or destruction of, or of
proceeds payable under, or unearned premiums with respect to policies of
insurance in respect of, any of the Personal Property, the Intangibles
Collateral, the Accounts or the Inventory Collateral; (ii) any condemnation
or requisition payments with respect to any of the Personal Property, the
Intangibles Collateral, the Accounts or the Inventory Collateral, in each
case whether now existing or hereafter arising; and (iii) any and all other
amounts from time to time paid or payable under or in connection with any of
the Personal Property, the Intangibles Collateral, the Accounts or the
Inventory Collateral, including, without limitation, all other rights, claims
and benefits of the Grantor against any person arising out of, relating to or
in connection with, any of the Personal Property, the Intangibles Collateral,
the Accounts or the Inventory Collateral.
The security interest of the Assignee contained herein shall
cover, and shall include a continuing general assignment in favor of the
Assignee in, any and all documents, contracts, liens and security
instruments, guarantees, books and records evidencing, securing or relating
to the Collateral.
Section 3. Security for Secured Obligations. This Agreement
secures the payment and performance of all of the Secured Obligations.
Section 4. Representations and Warranties. The Grantor
represents and warrants as follows:
(a) The Grantor's chief executive office and principal place of
business is located at: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) The Grantor owns the Collateral free and clear of any lien,
security interest, charge or other encumbrance, except as otherwise permitted
by the Loan Agreement or any of the Security Documents (the "Permitted
Liens"). Except for financing statements in favor of, or for the benefit of,
among others, the Assignee, arrangements having been made for the termination
thereof concurrently with the execution of this Agreement, no effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any recording office.
(c) All filings and other actions necessary or advisable to
perfect and protect the security interest granted herein have been duly made
or taken or arrangements therefor, satisfactory to the Assignee, have been
made. Appropriate financing statements and mortgages have been or are
concurrently herewith being filed at all governmental offices in each
jurisdiction where such filing is necessary to perfect the security interest
intended to be covered hereby and such security interest shall, upon such
filing, constitute a perfected first security interest in the Collateral in
favor of the Assignee (to the extent that such security interest can be
perfected in the Collateral by filing a financing statement or mortgage under
the Code or applicable state or foreign law), which are prior to all other
liens, encumbrances or security interests in the Collateral created by the
Grantor and in existence on the date hereof (other than for certain of the
Permitted Liens), which are enforceable as such against all creditors of and
purchasers from the Grantor (other than purchasers who take free of such
liens, encumbrances or security interests under the Code) and against any
owner or purchaser of the real property where any of the equipment is located
and any present or future creditor obtaining any lien, encumbrance or
security interest on such real property.
(d) No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
(other than as contemplated by sub-clause (c) immediately preceding this sub-
clause or in connection with the Trademark, Patent and Copyright Security
Agreement executed by the Grantor in favor of the Assignee) is required
either (i) for the grant by the Grantor of the security interest granted
hereby or for the execution, delivery of performance of this Agreement by the
Grantor or (ii) for the perfection of or the exercise by the Assignee of its
right and remedies hereunder.
(e) The Grantor (i) is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Florida, (ii)
is duly qualified to transact business as a foreign corporation in each
jurisdiction where the nature and extent of its business and properties
require the same, (iii) possesses all requisite authority, power, licenses,
permits and franchises to conduct its business and to execute, deliver and
perform and comply with the terms of this Agreement and those Security
Documents to which it is a party and, in particular, to mortgage, grant,
bargain, sell, pledge, assign, convey, transfer and set over the Collateral;
and to grant and create the lien granted hereunder, all of the foregoing
having been duly authorized and approved by all necessary corporate action on
behalf of the Grantor and for which all required approvals or consents of any
person, entity or tribunal have been obtained, (iv) has not used or
transacted business under any other corporate, assumed or trade name or
changed its identity or corporate structure in the five-year period preceding
the date hereof other than as contemplated by the Loan Agreement and (v) is
not (and the execution, delivery and performance of and compliance with the
terms of this Agreement, or other agreement or instrument delivered by the
Grantor pursuant to the Loan Agreement is not) in violation of the By-laws or
Articles of Incorporation of the Grantor.
(f) All material agreements and rights constituting the
Collateral (including, but not limited to, the Intangibles Collateral) are
valid and subsisting and are in full force and effect; and all rentals,
royalties and other amounts due and payable by the Grantor in respect thereof
(and, to the best of the Grantor's knowledge, all rentals, royalties and
other amounts due and payable by third parties in respect thereof) have been
paid or provision for such payment satisfactory to the Assignee has been
made; all of Grantor's obligations in respect thereof have been timely met;
and all leases, agreements and all other obligations to lessors and others
attendant to the ownership of the Collateral have been timely met and duly
performed. Except to the extent incurred in the ordinary course of business,
the Accounts are free from any claim for credit, deduction or allowance of
any party obligated in respect thereof and free from any defense, dispute,
setoff or counterclaim and there is no extension or indulgence with respect
thereto.
Section 5. Further Assurances.
(a) The Grantor agrees that from time to time, at the
expense of the Grantor, the Grantor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or advisable, or that the Assignee may reasonably request, in order
to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Assignee to exercise and enforce its rights
and remedies hereunder with respect to the Collateral. Without limiting the
generality of the foregoing, the Grantor shall execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or advisable, or as the Assignee
may reasonably request, whether in a jurisdiction where the Code has been
adopted or any other jurisdiction, in order to perfect and preserve the
security interests granted or purported to be granted hereby.
(b) The Grantor hereby authorizes the Assignee to file one or
more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of the Grantor
where permitted by law. The Grantor will furnish to the Assignee from time
to time statements and schedules further identifying and describing the
Collateral and such other reports in connection therewith as the Assignee may
reasonably request, all in reasonable detail.
(c) Upon reasonable notice without materially interfering with
the ordinary course or conduct of the Grantor's business, the Assignee shall
at all times have full and free access during normal business hours to all
the books, correspondence and records of the Grantor, and the Assignee or its
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and the Grantor agrees to render to the Assignee, at the
Grantor's cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. The Assignee and its
representatives shall at all times, upon reasonable notice, without
materially interfering with the ordinary course or conduct of the Grantor's
business, also have the right to enter into and upon any premises where any
of the Collateral is located for the purpose of inspecting the same,
observing its use or otherwise protecting its interests therein.
(d) The Grantor will comply with all requirements of law
applicable to the Collateral or any part thereof other than those
requirements with which the failure to comply would not have a material
adverse effect on the existence, condition or value of the Collateral or the
security interests granted hereunder; provided, however, that the Grantor may
contest any requirement of law in any reasonable manner which shall not, in
the reasonable opinion of the Assignee, materially adversely affect the
Assignee's rights or the priority of their security interests in the
Collateral.
(e) The Grantor shall (i) notify the Assignee no later than
thirty days prior to such time as the Grantor shall relocate any of the
Collateral from the county in which the Collateral is presently located and
(ii) furnish to the Assignee from time to time, as the Assignee may
reasonably request, reports identifying the locations where the Collateral is
located.
(f) The Grantor shall not change its corporate name, identity
or corporate structure, nor carry on business under any name other than its
corporate name, unless (i) it has given to the Assignee not less than thirty
days prior written notice of its intention to do so, specifying such new
corporate name, identity or corporate structure, and providing such other
information in connection therewith as the Assignee may reasonably request,
and (ii) with respect to such new corporate name, identity or corporate
structure, it shall have taken all action, requested by the Assignee in its
sole discretion, to maintain the security interest of the Assignee in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
(g) The Grantor shall pay promptly, or cause to be paid
promptly, when due all property and other taxes, assessments and governmental
charges or levies imposed upon, and all claims (including claims for labor,
materials and supplies) against, the Collateral, except to the extent the
validity thereof is being contested in good faith and adequate reserves have
been maintained therefor.
(h) The Grantor will maintain all Collateral useful or
necessary in the Grantor's business as it is now conducted in good operating
condition, ordinary wear and tear and immaterial impairments of value and
damage by the elements excepted, and will provide maintenance, service and
repairs necessary for such purpose.
(i) The Grantor shall, within ten days of acquiring any
Collateral having a value in excess of Twenty-Five Thousand Dollars ($25,000)
on which a security interest under the Code can only be perfected by
appropriate notations on the certificate of title relating to such
Collateral, deliver to the Assignee any and all certificates of title,
applications for title or similar evidence of ownership of such Collateral
and shall cause the Assignee to be named as lienholder on any such
certificate of title or other evidence of ownership. The Grantor shall
promptly inform the Assignee of any additions to or deletions from the
Collateral, the value of which exceeds Twenty-Five Thousand Dollars
($25,000), and shall not permit any such items to become a fixture to real
estate or an accession to other personal property unless such item shall
remain Collateral hereunder.
(j) The Grantor will, promptly upon request, provide to the
Assignee all information and evidence it may reasonably request concerning
the Collateral, and in particular the Accounts, to enable the Assignee to
enforce the provisions of this Agreement.
Section 6. Assignee Appointed Attorney-in-Fact.
The Grantor hereby irrevocably appoints the Assignee as the Grantor's
attorney-in-fact, with full authority in the name, place and stead of
the Grantor, the Assignee or otherwise, from time to time in the
Assignee's discretion, should an Event of Default have occurred and be
continuing to take any action and to execute any document which the
Assignee may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation:
(i) to ask, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the
Collateral,
(ii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper in connection with
clause (i) above, and
(iii) to file any claims or take any action or institute any
proceedings which the Assignee may deem necessary or
advisable for the recovery of any of the Collateral or
otherwise to enforce the rights of the Assignee with
respect thereto created by this Agreement.
Section 7. Concerning Account Debtors.
(a) If the Assignee so directs at any time after the
occurrence and during the continuation of an Event of Default, the Grantor
agrees (i) to cause all payments on account of the Accounts to be made
directly to the Assignee and (ii) that the Assignee may, at its option,
directly notify the obligors with respect to any of the Accounts to make such
payments. The Grantor agrees to be bound by any collection, compromise,
forgiveness, extension or other action taken by the Assignee with respect to
the Accounts. Without notice to or assent by the Grantor, the Assignee shall
apply any or all amounts then or thereafter deposited with it in the manner
provided in Section 11 of this Agreement. The costs and expenses (including
reasonable attorneys' fees) of collection, whether incurred by the Grantor or
the Assignee, shall be borne by the Grantor.
(b) The Grantor shall endeavor to cause to be collected from
the account debtor named in each of its Accounts, as and when due (including,
without limitation, amounts which are delinquent, such amounts to be
collected in accordance with generally accepted collection procedures in
accordance with all applicable laws), any and all amounts owing under or on
account of such Account, and apply forthwith upon receipt thereof of all such
amounts as are so collected to the outstanding balance of such Account,
except that, unless an Event of Default shall have occurred and be
continuing, the Grantor may allow in the ordinary course of business as
adjustments to amounts owing under its Accounts (i) an extension or renewal
of the time or times of payment or settlement for less than the total unpaid
balance in the ordinary course of business, consistent with the Grantor's
existing policies with respect thereto and which the Grantor finds
appropriate at the time in accordance with sound business judgment, and
(ii) a refund or credit due as a result of returned or damaged merchandise or
improperly performed services. The costs and expenses (including, without
limitation, reasonable attorneys' fees) of collection, whether incurred by
the Grantor or the Assignee, shall be borne by the Grantor.
Section 8. Instruments. If any of the Accounts become
evidenced by an instrument, chattel paper or letter of credit (each defined
in the Code), the Grantor, upon notice from the Assignee and provided an
Event of Default has occurred and is continuing, shall promptly, and in any
event within ten days, notify the Assignee thereof, and upon request by the
Assignee promptly deliver such instrument, chattel paper or letter of credit
as further security under this Agreement.
Section 9. Assignee May Perform. If the Grantor fails to
perform any agreement contained herein, the Assignee may itself perform, or
cause to be performed, such agreement, and the expenses of the Assignee
incurred in connection therewith shall be payable by the Grantor under
Section 13(b) of this Agreement.
Section 10. The Assignee's Duties. The powers conferred on
the Assignee hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon the Assignee to exercise any such powers.
Except for the safe custody of any of the Collateral which, from time to
time, may come into its possession and the accounting for moneys actually
received by it hereunder, the Assignee shall have no duty as to the
Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to the Collateral.
Section 11. Remedies. The security constituted by this
Agreement shall be enforceable if an Event of Default shall have occurred and
be continuing:
(a) The Assignee may exercise, in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Code (whether or not the Code shall be applied by the court in the
jurisdiction in which enforcement of the security interest contained herein
is sought) and also may (i) require the Grantor to, and the Grantor hereby
agrees that it will at its expense and upon request of the Assignee
forthwith, assemble all or any part of the Collateral as directed by the
Assignee and make it available to the Assignee, at a place to be designated
by the Assignee which is reasonably convenient to both parties (it being
agreed that ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ is deemed to a
location reasonably convenient to both parties) and (ii) without notice,
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of the Assignee's offices or
elsewhere, for cash, and at such price or prices and upon such other terms as
the Assignee may deem commercially reasonable. The Assignee shall give the
Grantor at least ten days' notice of the time and place of any public sale.
The Grantor agrees that ten days' notice of any such sale is commercially
reasonable notification. The Assignee shall not be obligated to make any
sale of the Collateral regardless of notice of sale having been given. The
Assignee may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Assignee in respect of
any sale of, or other realization upon, all or any part of the Collateral
shall be applied (after payment of any amounts payable to the Assignee
pursuant to Section 13 of this Agreement) in whole or in part by the Assignee
as provided in Clause 11 of the Loan Agreement.
Section 12. Non-Interference with Remedies; Specific Performance.
(a) The Grantor agrees that following the occurrence and
during the continuance of an Event of Default it will not at any time pledge,
claim or take the benefit of any appraisal, valuation, stay, extension,
moratorium or redemption law now or hereafter in force in order to prevent or
delay the enforcement of this Agreement, or the absolute sale of the whole or
any part of the Collateral or the possession thereof by any purchaser at any
sale hereunder, and the Grantor waives the benefit of all such laws to the
extent it lawfully may do so. The Grantor agrees that it will not interfere
with any right, power or remedy of the Assignee provided for in this
Agreement now or hereafter existing at law or in equity or by statute or
otherwise, or with the exercise or beginning of the exercise by the Assignee
of any one or more of such rights, powers or remedies.
(b) The Grantor agrees that a breach of any of the agreements
or covenants contained in this Agreement will cause irreparable injury to the
Assignee, that the Assignee has no adequate remedy at law in respect of such
breach and, as a consequence, agrees that each and every agreement and
covenant contained in this Agreement shall be specifically enforceable
against the Grantor, and the Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such agreements or
covenants except for a defense that the Secured Obligations are not then due
and payable in accordance with the agreements and instruments governing and
evidencing such Secured Obligations.
Section 13. Indemnity, Expenses and Interest.
(a) The Grantor agrees to indemnify the Assignee, its officers,
directors, employees and agents from and against any and all claims, losses
and liabilities arising out of or in connection with this Agreement
(including, without limitation, enforcement of this Agreement), except
claims, losses or liabilities resulting from the Assignee's gross negligence
or willful misconduct.
(b) The Grantor shall on demand of the Assignee pay to the
Assignee (on a full indemnity basis) all costs, charges, losses, liabilities
and expenses expended, paid or incurred by the Assignee (whether before or
after this Agreement becomes enforceable), including any tax thereon and
reasonable professional fees including attorneys' fees, in connection with
any breach of the covenants or undertakings herein or the exercise of any
rights exercisable under it or the recovery of any of the Secured Obligations
by the Assignee, including, without limitation, any remuneration and other
sums at any time payable to the Assignee and all costs, charges, losses,
liabilities and expenses connected with the protection, realization,
enforcement or release of any provision of this Agreement.
(c) The Grantor shall on demand of the Assignee pay to the
Assignee interest at the rate per annum in excess of the Loan Rate equal to
(i) one percent (1%) or (ii) if an Event of Default has occurred and is
continuing, five percent (5%) on all of the costs, charges, losses,
liabilities and expenses referred to this clause. So long as no Event of
Default has occurred and is continuing, such interest shall accrue and be
payable from the date falling thirty days after the date whereon such cost,
charge, loss, liability or expense was incurred by the Assignee, otherwise,
such interest shall accrue and be payable from the date such cost, charge,
loss, liability or expense was incurred by the Assignee.
Section 14. Security Interest Absolute. All rights of the
Assignee and the security interest granted hereunder, and all Secured
Obligations, shall be absolute and unconditional, irrespective of:
(i) any lack of validity or enforceability of the Loan
Agreement, the Note or any Security Document, or any other
agreement or instrument relating thereto between the
Grantor and the Assignee;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the obligations of the
Grantor or any other person under or in connection with the
Loan Agreement or any other amendment or waiver of or any
consent to any departure from the Loan Agreement, the Note,
or any Security Document between the Grantor and the
Assignee or the terms of any thereof; or
(iii) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, the Grantor in
respect of the Secured Obligations or this Agreement.
Section 15. Amendments. No amendment or waiver of any
provision of this Agreement, nor consent to any departure therefrom by the
Grantor, shall be effective unless the same shall be in writing and signed by
the parties hereto, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 16. Successors and Assigns. Whenever in this
Agreement reference is made to any person, such reference shall be deemed to
include the successors and assigns of such person.
Section 17. Novations, etc. This Agreement shall remain in
full force and effect after, and shall continue to secure the Secured
Obligations after and resulting from, any assignment in accordance with
Clause 12 of the Loan Agreement.
Section 18. Notices.
(A) Every notice or demand under this
Agreement shall be in writing and may be delivered in person or if sent by
certified mail, postage prepaid, return receipt requested, by overnight
express mail or telefax (followed by delivery of a copy by certified or
express mail)
(B) Every notice or demand shall be sent as follows:
If to the Grantor:
SurgiLight, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No. ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
If to the Assignee:
GEM SurgiLight Investors, LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No: ▇▇▇ ▇▇▇ ▇▇▇▇
or to such other address as either party shall from time to time specify in
writing to the other.
(C) Every notice or demand shall, except so far as otherwise
expressly provided by this Agreement, be deemed to have been received
(provided it is received prior to 2:00 p.m. New York time; otherwise it shall
be deemed to have been received on the next following Banking Day), in the
case of a telecopy, at the time of dispatch thereof (provided further that if
the date of dispatch is not a Banking Day in the locality of the party to
whom such notice or demand is sent it shall be deemed to have been received
on the next following Banking Day in such locality) and, in the case of a
letter, at the time of receipt thereof.
Section 19. Continuing Security Interest. This Agreement
shall create a continuing security interest in the Collateral and shall
(i) remain in full force and effect until payment in full of the Secured
Obligations, (ii) be binding upon the Grantor, its successors and assigns,
and (iii) inure to the benefit of the Assignee and its successors,
transferees and assigns, provided that the Assignee may only (and shall)
transfer its rights and Secured Obligations hereunder as provided in the Loan
Agreement. Upon the payment in full of the Secured Obligations, the security
interest granted hereby shall terminate and all rights in and to the
Collateral shall revert to the Grantor. Upon any such termination, the
Assignee will, at the Grantor's expense, execute and deliver to the Grantor
such documents as the Grantor shall reasonably request to evidence such
termination.
Section 20. Headings. In this Agreement, clause headings are
inserted for convenience of reference only and shall be ignored in the
interpretation of this Agreement.
Section 21. WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY
AND BETWEEN THE PARTIES HERETO THAT EACH OF THEM HEREBY WAIVES TRAIL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO
AGAINST THE OTHER PARTY HERETO ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN
ANY WAY CONNECTED WITH THIS AGREEMENT AND ANY SECURITY DOCUMENT TO WHICH THE
GRANTOR OR THE ASSIGNEE MAY BE A PARTY OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
Section 22. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS
APPLIED TO AGREEMENTS EXECUTED IN THE STATE OF NEW YORK.
Section 23. Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be deemed to be duplicate
originals and which shall constitute one and the same instrument.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed on the day and year first above written.
SURGILIGHT, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
----------------
GEM SURGILIGHT INVESTORS, LLC
by GEM SURGILIGHT MANAGEMENT, LLC,
its MANAGING MEMBER
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------
