EXHIBIT 10.2
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
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LIFESTREAM TECHNOLOGIES, INC.
LIFESTREAM DIAGNOSTICS, INC.
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▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
This Amended and Restated Loan and Security Agreement dated as of
November 12, 2004 (as the same may be further amended, restated, supplemented or
otherwise modified from time to time, this "Agreement"), is by and among
LIFESTREAM TECHNOLOGIES, INC., a Nevada corporation ("LTI"), LIFESTREAM
DIAGNOSTICS, INC., a Nevada corporation ("LDI"; LTI and LDI sometimes
hereinafter are referred to individually as a "Borrower" and collectively as the
"Borrowers"), and RAB SPECIAL SITUATIONS LP, a Delaware limited partnership (the
"Lender"), as successor in interest via assignment from Capital South Financial
Services, Inc., a Georgia corporation ("Capital South").
R E C I T A L S:
A. LTI and Capital South entered into, among other things, (i) that
certain Loan and Security Agreement dated as of June 18, 2002 (the "Original LTI
Loan Agreement") and (ii) that certain Loan and Security Agreement dated as of
May 1, 2003, which amended the Original LTI Loan Agreement (the "Existing LTI
Loan Agreement"), pursuant to which, among other things, Capital South made
financial accommodations available to LTI, subject to the terms and conditions
set forth therein.
B. LDI and Capital South entered into, among other things, (i) that
certain Loan and Security Agreement dated as of June 18, 2002 (the "Original LDI
Loan Agreement") and (ii) that certain Loan and Security Agreement dated as of
May 1, 2003, which amended the Original LDI Loan Agreement (the "Existing LDI
Loan Agreement"), pursuant to which, among other things, Capital South made
financial accommodations available to LDI, subject to the terms and conditions
set forth therein.
C. The Lender and Capital South entered into that certain Master
Assignment and Assumption Agreement dated as of November 8, 2004 (the
"Assignment Agreement"), pursuant to which, among other things, Capital South
sold and assigned to the Lender of all Capital South's right, title and interest
in, to and under the Original LTI Loan Agreement, the Existing LTI Loan
Agreement, the Original LDI Loan Agreement, the Existing LDI Loan Agreement and
all other agreements, promissory notes, instruments, financial statements and
documents executed in connection with any of the foregoing (collectively, the
"Existing Loan Documents").
D. LTI and LDI have requested that the Lender amend and restate in
their entirety each of the Original LTI Loan Agreement, the Existing LTI Loan
Agreement, the Original LDI Loan Agreement and the Existing LDI Loan Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and to induce the Lender to accept
this Agreement and to make the loans and advances described herein, LTI, LDI and
the Lender hereby agree to amend and restate in their entirety each of the
Original LTI Loan Agreement, the Existing LTI Loan Agreement, the Original LDI
Loan Agreement and the Existing LDI Loan Agreement as follows:
1. The Loan. The Borrowers have requested, and the Lender has agreed to
make, subject to the terms and conditions set forth in this Agreement, a loan to
the Borrowers up to the maximum amount of $2,869,740.00 (hereinafter referred to
as the "Loan"). Capital South agreed to make loans to the Borrowers up to the
amount of $3,000,000 under the Existing Loan Documents, of which amount
$920,323.16 remains outstanding on the date hereof and is hereby deemed to be
outstanding as a portion of the Loan under this Agreement and the Note (as
hereinafter defined) as of the effective date of this Agreement (the "Closing
Date"). On the Closing Date, the Lender shall advance to the Borrowers a portion
of the Loan in the amount of $974,708 (the "Initial Advance"), of which amount
$750,000 shall be paid in cash to the Borrowers and $224,708 shall constitute
original issue discount ("OID"). On the Second Advance Closing Date (as defined
in Section 3 hereof), upon satisfaction of the conditions precedent to the
Second Advance (as hereinafter defined), the Lender shall advance to the
Borrowers a portion of the Loan in the amount of $974,707 (the "Second
Advance"), of which amount $750,000 shall be paid in cash to the Borrowers and
$224,707 shall constitute OID. The Loan made by the Lender hereunder shall be
evidenced by a Secured Promissory Note (the "Note") executed by the Borrowers,
on a joint and several basis, and shall contain such terms as the Lender shall
require. Service charges, if any, on the Loan shall be charged by the Lender and
paid by the Borrowers at such rates and at such times as agreed upon by the
parties in the Note. As used in this Agreement, the term "Loan Documents" shall
mean, collectively, this Agreement, the Note, the Existing Loan Documents and
all other agreements, promissory notes, instruments, financial statements and
documents executed in connection with any of the foregoing.
2. Security Interest. To secure the performance by the Borrowers of all
of their obligations hereunder, as well as all of the rights of the Lender
hereunder, and to secure all amounts due under the Note, including any renewal,
substitution, consolidation, or extension thereof, as well as payment of any and
all indebtedness which may now or hereafter in the future be owing by the
Borrowers to the Lender, its successors and assigns, however and whenever
incurred, arising or evidenced, whether alone or together with another or
others, whether direct, indirect, or by way of assignment, whether joint or
several, absolute or contingent, due or to become due, and whether as principal
maker, endorser, surety, guarantor, mortgagee or otherwise, or which the Lender
may now or hereafter have, own or hold (all of said debts, obligations and
liabilities are herein collectively called the "Liabilities") and whether such
Liabilities are from time to time reduced and thereafter increased or entirely
extinguished and thereafter re-incurred, each Borrower hereby grant to the
Lender a present and continuing lien upon, security title to and a security
interest in: all the assets of such Borrower including, without limitation: (a)
all of such Borrower's accounts, contract rights, chattel paper, instruments,
drafts and general intangibles, whether now existing or hereafter arising or
acquired (herein referred to as the "Receivables"), together with any returned,
repossessed, or unshipped goods relating to the Receivables, and all dividends
and distributions on or rights in connection with any such property and all
rights of such Borrower earned or to be earned under contracts to sell goods or
render services; (b) any balances, credits, accounts, items and monies of, such
Borrower now or hereafter with the Lender; (c) all inventory of such Borrower
including, without limitation, all raw materials, finished goods, work in
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process, and all returns, wherever located; (d) all of such Borrower's interests
in leaseholds documents, documents of title, tax refunds, causes of action
against any person or entity; (e) all of such Borrower's machinery, equipment,
furniture, fixtures, attachments; (f) all of such Borrower's books, records,
customer lists, trade secrets, formulae and other recorded information, whether
in the form of a writing, photograph, microfilm, microfiche, electronic medium,
or otherwise, together with all of such Borrower's right, title and interest in
and to all computer software in object code and source code, used to create,
maintain, or process any such records or data; (g) all of such Borrower's U.S.
Patents and U.S. Patent Applications; U.S. Copyrights and U.S. Trademarks; (h)
any other property of any nature whatsoever of such Borrower now or hereafter in
the possession of, assigned to or hypothecated to the Lender for any purpose;
and (i) all products and proceeds of any of the property described above (all of
such property and the Receivables are hereafter collectively referred to as the
"Collateral").
Concurrently with the effective date of the contract evidencing the
LifeNexus Transaction (as hereinafter defined), the Lender will release its
security interest in the intellectual property owned by Secured Interactive,
Inc. ("Interactive"). As used herein, the term "LifeNexus Transaction" shall
mean the sale by Interactive of certain of its intellectual property to
LifeNexus in exchange for shares of equity in LifeNexus.
3. Second Advance. The obligation of the Lender to make the Second
Advance is subject to the fulfillment, in a manner satisfactory to the Lender,
of each of the following conditions:
(a) No Default. No event of default under this Agreement or
any of the other Loan Documents shall have occurred and be continuing.
(b) Representations and Warranties. The representations and
warranties of the Borrowers contained in this Agreement and each of the other
Loan Documents shall be true and correct in all material respects as of the
Second Advance Closing Date, with the same effect as though made on such date.
(c) Other Loan Documents. The Borrowers shall have executed
and delivered to the Lender such other Loan Documents as the Lender may request
in connection with the transactions contemplated by this Agreement or in
connection with the Loan.
(d) Investigations, Audits, etc.. All investigations, audits
and due diligence reviews of the Borrowers conducted by the Lender in connection
with the Loan shall be satisfactory to the Lender in its sole discretion.
The date on which the foregoing conditions have been satisfied, as
determined by the Lender in good faith in its sole discretion, is hereinafter
known as the "Second Advance Closing Date." If the Second Advance Closing Date
does not occur by December 31, 2004, the Lender's obligation to make the Second
Advance shall automatically terminate.
4. Warranties of the Borrowers. Each Borrower hereby represents,
warrants, and covenants to and with the Lender that: (i) the Collateral is and
will be free and clear of any and all liens, security interests and
encumbrances, other than liens, security interests and encumbrances granted to
the Lender (the "Lender's Liens"); (ii) such Borrower has and will have the
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right to convey the Collateral as security for the Liabilities, free and clear
of any and all liens, security interests and encumbrances, other than the
Lender's Liens; (iii) such Borrower will keep the Collateral free from any
liens, encumbrances or security interests whatsoever, other than the Lender's
Liens; (iv) such Borrower will promptly pay or discharge all taxes assessed
against the Collateral and all liens which may attach thereto, other than the
Lender's Liens (which shall be paid and discharged pursuant to the terms of this
Agreement and the Note); (v) any and all information set forth in any writing
heretofore or hereafter delivered to the Lender by either Borrower pertaining to
the Collateral or the Liabilities is and will be true and correct in all
material respects as of the date thereof; (vi) the Receivables will be, at the
time of their creation, bona fide and existing obligations of a Borrower's
customers arising out of the sale of goods and/or rendition of services by such
Borrower and are owned by and owed to such Borrower without defense, offset, or
counterclaim; (vii) the Borrowers are solvent on a consolidated basis; (viii)
with regard to each Receivable as it arises, a Borrower will have made delivery
of the goods or will have rendered the services ordered, and each Receivable
shall be free of any claims or liens, other than the Lender's Liens; (ix) such
Borrower will have preserved and will continue to preserve any liens and any
rights to liens available by virtue of sales; (x) such Borrower's inventory is
not subject to any security interest, lien or encumbrance, other than the
Lender's Liens (or except as may have been disclosed to, and accepted by, the
Lender in writing); (xi) such Borrower is duly organized and existing under the
laws of the State of its incorporation, and is duly qualified and in good
standing in every other State in which it is doing business as a corporation;
(xii) the execution, delivery and performance of this Agreement and the other
Loan Documents are within such Borrower's corporate powers, have been duly
authorized, are not in contravention of law or the terms of such Borrower's
charter, bylaws or other incorporation papers, or of any indenture, agreement or
undertaking to which such Borrower is a party or by which it is bound; (xiii)
without prior written notice to the Lender, such Borrower will not obtain any
loans, advances or other financial accommodations or arrangements from any party
other than the Lender which would encumber any of either Borrower's assets;
(xiv) without prior written consent of the Lender, such Borrower will not
voluntarily reorganize, merge or consolidate or redeem any of its common stock,
or voluntarily consent to the transfer by the present shareholders of such
Borrower to any other person or entity of all or substantially all of the common
stock of such Borrower outstanding in one transaction or in treasury as of the
date hereof; (xv) in the event of any transfer of any of its stock or assets by
operation of law, such Borrower shall immediately notify the Lender; (xvi) there
is no pending order, notice, claim, litigation, proceeding or investigation
against or affecting such Borrower, whether or not covered by insurance, that
would materially and adversely affect such Borrower's operations, financial
condition, property or business; (xvii) such Borrower will not sell, transfer,
lease or otherwise dispose of all or (except in the ordinary course of business)
any material part of its assets (LTI is permitted to cause Interactive to sell
certain of Interactive's intellectual property to LifeNexus in the LifeNexus
Transaction); (xviii) no account arises out of a contract with, or order from,
an account debtor that, by its terms, forbids or makes the assignment of that
account to the Lender void or unenforceable; (xviii) the representations and
warranties made hereunder by such Borrower are true on the date hereof and will
be true on the date of each advance of a portion of the Loan by the Lender
hereunder; (xix) such Borrower's address as shown above is the location of such
Borrower's principal place of business and chief executive office, that such
place of business is such Borrower's only place of business, and that such
Borrower has not maintained any other place of business or principal place of
business or corporate or tradename during the four (4) years immediately
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preceding the date of the execution of this Agreement, unless having notified
the Lender in writing of all previous addresses and names; (xx) such Borrower
maintains its corporate office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ and maintains a production/shipping facility at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇. ▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and has no other office in
any location; and (xxi) such Borrower is a corporation duly organized under the
laws of the State of Nevada, and such Borrower shall not change its State of
incorporation.
5. Duties and Further Assurance of the Borrowers. Each Borrower
covenants and agrees that, so long as any of the Liabilities remain outstanding
and unpaid, such Borrower shall:
(a) Financing Statements. Execute upon request of the Lender
such financing statements and other security documents and pay the cost
of filing or recording the same, and do such other acts and things as
the Lender may from time to time request to establish and maintain a
valid security interest of the Lender in the Collateral;
(b) Inspection and Information. Permit the Lender, its agents
and employees, from time to time, to inspect, audit and make copies of,
and extract from, all records and other papers in the possession of
such Borrower, including but not limited to those pertaining to the
Collateral and such Borrower's debtors, including copies of customer
invoices and evidence of shipment and such other documents and proof of
delivery/rendition as the Lender may at any time require; periodic
inventory audits and relations with vendors and suppliers, and furnish
such further information and documents concerning such Borrower, the
Collateral and such Borrower's debtors as the Lender may from time to
time request;
(c) Financial Statements. Furnish to the Lender on or before
the 30th day after the end of each month, financial statements or
similar type reports in form and substance reasonably satisfactory to
the Lender and certified by an appropriate officer of the Borrowers,
and furnish to the Lender annually on or before the 105th day after the
end of the Borrowers' fiscal year, a financial statement in form and
substance satisfactory to the Lender and prepared by a certified public
accountant acceptable to the Lender; notwithstanding the level of CPA
certification checked in the preceding clause or anything else to the
contrary contained herein, such Borrower shall, if requested by the
Lender, provide to the Lender a financial statement of such Borrower or
any guarantor of such Borrower, in form and substance satisfactory to
the Lender, and prepared by a certified public accountant acceptable to
the Lender;
(d) Records Retention. Keep at its address shown herein its
records concerning the Collateral, which records shall be of such
character as will enable the Lender to determine at any time the status
of the Collateral;
(e) Insurance and Taxes. Keep any tangible Collateral fully
insured against fire, theft, and other casualty with loss payable
clause in favor of the Lender, and shall pay all premiums promptly when
the same become due and shall pay all taxes and other charges against
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the Collateral promptly when the same become due; should the Borrowers
fail to pay any of said premiums or taxes or other charges, or should
the Collateral become encumbered, the Lender may pay the sums and add
the amount of such payment to the Liabilities hereby secured; the
Lender is authorized to receive the proceeds of any insurance loss, and
at the option of the Lender, shall apply such proceeds toward either
the repair or replacement of the Collateral or the payment of the
Liabilities. The Borrowers shall furnish the Lender evidence of being
an additional named insured on a fire and hazard policy against loss of
inventory, furniture, fixtures, and equipment, as well as business
interruption and as loss payee on liability insurance.
(f) Costs. Pay all costs of closing the Loan and of all
advances of any portion of the Loan, and will reimburse the Lender
during the period of financing for all out-of-pocket or advanced
expenses including but not limited to filing fees, long distance phone
calls, travel expenses, audit expenses of $1,000.00 per audit with a
minimum of 4 audits per year, wire transfer and returned-check charges
and expenses.
(g) LifeNexus Stock Pledge. Upon the sale of any assets of
Interactive to LifeNexus and receipt by such Borrower or an affiliate
of such Borrower of equity interests in LifeNexus, pledge to the Lender
as additional security for the Liabilities all such equity interests in
LifeNexus, as such equity interests may be reduced in accordance with
the terms of the LifeNexus Transaction.
6. Act of Default. If any of the following shall occur, the Borrowers
shall be in default under this Agreement:
(a) the Borrowers fail to pay when due any amount payable
under any of the Liabilities;
(b) the Borrowers or any guarantor of the Borrowers'
obligations hereunder fails to perform or breaches any undertaking
herein or material agreement or is in default under any writing
relating to any of the Liabilities, the Collateral or any other
material agreement between the Lender and the Borrowers;
(c) any guarantor of the Liabilities terminates or attempts to
terminate such guaranty;
(d) the Collateral declines in value or for any reason becomes
insufficient in the Lender's sole and exclusive judgment to secure the
Liabilities and the Borrowers, after demand, fail or refuses to
substitute and/or make additions to the Collateral reasonably
satisfactory to the Lender;
(e) any statement, representation or warranty made or
furnished to the Lender by or in behalf of the Borrowers with respect
to the Liabilities or the Collateral shall be untrue or incomplete in
any material respect as of the date made;
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(f) the Borrowers or either Borrower becomes insolvent or
makes an assignment for the benefit of creditors, or if any proceeding
be instituted by or against the Borrowers or either Borrower alleging
that it is insolvent or unable to pay its debts as they mature, or if
any receiver is appointed for the Borrowers or either Borrower;
(g) any litigation is instituted against the Borrowers or
either Borrower that might materially and adversely affect its
operations, financial condition, property or business;
(h) a creditor of the Borrowers or either Borrower shall
obtain or attempt to obtain possession of the Collateral by any means;
or
(i) any other circumstance or event occurs which shall
reasonably cause the Lender to deem itself insecure.
7. Rights of Lender on Default. In the event of a default hereunder, at
the option of the Lender, this Agreement shall terminate without prejudice to
the Lender's rights hereunder, and without notice to the Borrowers of any kind,
and any or all of the Liabilities may, at the option of the Lender and without
demand or notice of any kind, be declared by tender, and the same shall become,
immediately due and payable, and the Lender shall have, in addition to all other
rights and remedies which the Lender may have under law, the following rights
and remedies all of which may be exercised with or without further notice to the
Borrowers: (a) to foreclose the liens and security interests created under this
Agreement or under any other agreements relating to the Collateral by any
available judicial or non-judicial procedure; (b) to enter any premises where
any Collateral may be located for the purpose of taking possession of or
removing the same; or (c) to sell, assign, lease or otherwise dispose of the
Collateral, or any part thereof, either at public or private sale or at any
broker's board, in lots or in bulk for cash, on credit, or otherwise, with or
without representations or warranties, and upon such terms as shall be
acceptable to the Lender, all at the Lender's sole option and as the Lender in
its sole discretion may deem advisable, and the Lender may bid upon or become
purchaser at any such sale if public, free from any right of redemption, which
is hereby expressly waived by the Borrowers, and the Lender shall have the right
at its option to apply or be credited with the amount of all or any part of the
Liabilities owing to the Lender against the purchase price bid by the Lender at
any such sale. The Borrowers and Lender expressly acknowledge and agree that
five (5) days' prior written notice from the Lender to the Borrowers of any such
sale of Collateral shall satisfy the notice requirements of O.C.G.A. Section
11-9-504 or any applicable successor provision. The net cash proceeds resulting
from the collection, liquidation, sale, lease or other disposition of the
Collateral shall be applied first to the expenses (including all attorney's
fees) of retaking, holding, storing, processing and preparing for sale, selling,
collecting, liquidating and the like, and then to the satisfaction of all
Liabilities, with application as to particular Liabilities or against principal
or interest to be in the Lender's sole and absolute discretion. The Borrowers
shall be liable to the Lender and shall pay to the Lender on demand any
deficiency which may remain after such sale, disposition, collection or
liquidation of the Collateral, and the Lender in turn agrees to remit to the
Borrowers any surplus remaining after all Liabilities have been paid in full. If
any of the Collateral shall require repairing, maintenance, preparation, or the
like, or is in process or other unfinished state, the Lender shall have the
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right, but shall not be obligated, to do such repairing, maintenance,
preparation, processing or completion of manufacturing for the purpose of
putting the same in such saleable form as the Lender shall deem appropriate, but
the Lender shall have the right to sell or dispose of such Collateral without
such processing. The Borrowers will, at Lender's request, assemble all the
Collateral and make it available to the Lender at places which the Lender may
select, whether at the Borrowers' premises or elsewhere, and will make available
to the Lender all premises and facilities of the Borrowers for the purpose of
the Lender's taking possession of the Collateral or of removing or putting the
Collateral in saleable form. In addition, upon an event of default and at the
request of the Lender, the Borrowers will, at their own expense, notify any
parties obligated on any of the Receivables to make payment to the Lender of any
amounts due or to become due thereunder. In furtherance of the foregoing, the
Borrowers hereby (i) authorize the Lender to receive, open, and dispose of all
mail addressed to the Borrowers pertaining to any of the Collateral, (ii) agree
to notify the postal authorities to change the address and delivery of mail
addressed to either Borrower to such address as the Lender may designate, (iii)
authorize the Lender to endorse either Borrower's name upon any notes,
acceptances, checks, drafts, money orders and other evidences of payment that
may come into the Lender's possession and to deposit or otherwise collect the
same, (iv) authorize the Lender to sign either Borrower's name on any ▇▇▇▇ of
lading relating to any Collateral, on drafts against customers, listings of
Receivables, and notices to customers, (v) authorize the Lender to prepare and
mail invoices to either Borrower's customers, (vi) authorize the Lender to send
verification of accounts to customers, (vii) authorize the Lender to execute in
either Borrower's name any affidavits and notices with regard to any and all
lien rights, and (viii) authorize the Lender to do all other acts and things
necessary to carry out this Agreement, any of the other Loan Documents or to
deal with the Collateral or proceeds thereof in its own name or in the name of a
Borrower. To facilitate the exercise by the Lender of the rights and remedies
set forth in this paragraph, each Borrower hereby constitutes the Lender, or its
agents, or any other person whom the Lender may designate, as attorney-in-fact
for such Borrower, at such Borrower's own cost and expense, to exercise all or
any of the following powers, which, being coupled with an interest, shall be
irrevocable and shall continue until all Liabilities have been paid in full and
shall be in addition to any other rights and remedies that the Lender may have:
(i) to remove from any premises where the same may be located any and all
documents, instruments, files, and records, and any receptacles and cabinets
containing the same, relating to the Collateral, and the Lender may, at the
Borrowers' cost and expense, use as much of the personnel, supplies and space of
the Borrowers at its place of business as may be necessary to properly
administer and control the Collateral or the handling of collections and
realizations thereon; and (ii) to take or bring in the Lender's name or in the
name of the Borrowers or either Borrower, such steps, actions, suits or
proceedings deemed by the Lender necessary or desirable to effect collection of
or to realize upon the Collateral. No delay or failure on the part of the Lender
in the exercise of any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by the Lender of any right or remedy shall preclude
other or further exercise thereof, or the exercise of any other right or remedy.
The Lender shall be under no duty to exercise any or all of the rights and
remedies given by this Agreement and no party to this Agreement shall be
discharged from his or its obligations or undertakings hereunder (x) should the
Lender release or agree not to ▇▇▇ any person against whom the party has, to the
knowledge of the Lender, a right of recourse, or (y) should the Lender agree to
suspend the right to enforce the Note or the Lender's interest in the Collateral
against such person or otherwise discharge such persons.
8. Business Use. Each Borrower represents and warrants that the Loan
will be used for business, non-consumer purposes and not for personal, family or
household purposes, and that the loan proceeds shall be used to pay accrued
royalties, reduce payables, continue marketing, and for other normal business
use.
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9. Governing Law. Notwithstanding anything to the contrary contained in
the Existing Loan Documents, the laws of the State of New York shall govern the
construction of this Agreement and each of the other Loan Documents without
regard to conflict of laws principles, and any litigation regarding this
transaction shall be conducted in any of the federal or state courts located in
the city of New York, borough of Manhattan. Venue and Jurisdiction in any of the
foregoing courts are stipulated and expressly agreed. Each Borrower expressly
waives the right to trial by jury.
10. Binding Effect, Assignment and Entire Agreement. This Agreement
shall inure to the benefit of, and shall be binding upon, the parties hereto and
their respective heirs, legal representatives, successors and permitted assigns.
The Borrowers have no right to assign any of their rights or obligations
hereunder without the prior written consent of the Lender. This Agreement, and
the documents executed and delivered pursuant hereto, constitute the entire
agreement between the parties, and may be amended only by a writing signed on
behalf of the party sought to be charged.
11. Severability. If any provision of this Agreement shall be held
invalid under any applicable law, such invalidity shall not affect any other
provision of this Agreement that can be given effect without the invalid
provision, and to that end, the provisions hereof are severable.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument.
13. Headings. The section or paragraph headings used in this Agreement
are for convenience of reference only and in no way define, describe or limit
the scope or intent of this Agreement.
14. Further Assurances. Each Borrower covenants and agrees that it will
at any time and from time to time do, execute, acknowledge and deliver, or will
cause to be done, executed, acknowledged and delivered, all such further acts,
documents and instruments as may be required by the Lender in order to
effectuate fully the intent of this Agreement.
15. Joint and Several Liability of the Borrowers; certain Waivers.
(a) Each Borrower shall be jointly and severally liable
hereunder and under each of the other Loan Documents with respect to
all the Liabilities, regardless of which of the Borrowers actually
receives the proceeds of the Loan or the benefit of any of the
financial accommodations hereunder, or the manner in which the
Borrowers or the Lender account therefor in their respective books and
records.
(b) Each Borrower expressly waives all rights it may have now
or in the future under any statute, at common law, or at law or in
equity, or otherwise, to compel the Lender to marshal assets or to
proceed in respect of any of the Liabilities of the respective
Borrowers hereunder against any specific Borrower or any other person,
or against any Collateral before proceeding against, or as a condition
to proceeding against, such Borrower.
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(c) Each Borrower hereby expressly and irrevocably waives any
and all rights at law or in equity to subrogation, reimbursement,
exoneration, contribution, indemnification or set off and any and all
defenses available to a co-obligor. Each Borrower acknowledges and
agrees that this waiver is intended to benefit the Lender and shall not
limit or otherwise affect in any way such Borrower's liability
hereunder or the enforceability of this Section 15 or Section 16 of
this Agreement, and that the Lender and its successors and assigns are
intended third party beneficiaries of the waivers and agreements set
forth in this Agreement.
(d) Notwithstanding any provision herein contained to the
contrary, each Borrower's liability with respect to the Liabilities of
the other Borrower shall be limited to an amount not to exceed, as of
any date of determination, the amount that could be claimed by the
Lender from such Borrower without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law after taking
into account, among other things, such Borrower's right of contribution
and indemnification from the other Borrower under Section 16 of this
Agreement.
16. Contribution.
(a) To the extent that a Borrower shall make a payment of all
or any of the Liabilities (a "Payment") that, taking into account all
other Payments then previously or concurrently made by the other
Borrower, exceeds the amount that such Borrower would otherwise have
paid if each Borrower had paid the aggregate Liabilities satisfied by
such Payment in the same proportion that such Borrower's Allocable
Amount (as such term is defined in clause (b) below), as determined
immediately prior to such Payment, bore to the aggregate Allocable
Amounts of the Borrowers, as determined immediately prior to the making
of such Payment, then, following indefeasible payment in full in cash
of all the Liabilities and the termination of this Agreement pursuant
to the respective terms and provisions hereof, such Borrower shall be
entitled to receive contribution and indemnification payments from, and
be reimbursed by, the other Borrower for the amount of such excess, pro
rata based upon their respective Allocable Amounts in effect
immediately prior to such Payment.
(b) As of any date of determination, the "Allocable Amount" of
a Borrower shall be equal to the maximum amount of the claim that could
then be recovered from such Borrower without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act,
Uniform Fraudulent Conveyance Act or similar statute or common law.
(c) This Section 16 is intended only to define the relative
rights of Borrowers and nothing set forth in this Section 16 is
intended or shall be deemed or construed to impair the Liabilities or
obligations of the Borrowers, jointly and severally, to pay any amounts
as and when the same shall become due and payable in accordance with
the terms of this Agreement, the Note or the other Loan Documents.
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Nothing contained in this Section 16 shall limit the liability of
either Borrower to repay the Loan, together with all fees, expenses or
other charges with respect thereto.
(d) Each Borrower acknowledges that the rights of contribution
and indemnification owing to such Borrower under this Section 16
constitute assets of such Borrower.
(e) The rights of a Borrower against the other Borrower under
this Section 16 shall be exercisable only upon the full and
indefeasible payment in cash of all the Liabilities and the termination
of this Agreement pursuant to the respective terms and provisions
hereof.
17. No Novation. Notwithstanding anything to the contrary contained
herein, this Agreement is not intended to and does not serve to effect a
novation of the Liabilities under any of the Existing Loan Documents. Instead,
it is the express intention of the parties hereto to reaffirm the indebtedness
created under the Existing Loan Documents which is evidenced by the notes
provided for therein and secured by the Collateral. The Borrowers acknowledge
and confirm that the liens and security interests granted pursuant to the
Existing Loan Documents secure the indebtedness, liabilities and obligations of
the Borrowers to the Lenders under each of the LTI Original Loan Agreement, the
LTI Existing Loan Agreement, the LDI Original Loan Agreement and the LDI
Existing Loan Agreement, as each is amended and restated in its entirety hereby,
and that the term "Liabilities" as used in the Loan Documents (or any other term
used therein to describe or refer to the indebtedness, liabilities and
obligations of the Borrowers to the Lender) includes, without limitation, the
indebtedness, liabilities and obligations of the Borrowers under the Note to be
delivered under this Agreement and under any of the Existing Loan Documents, as
amended and restated hereby, as the same may be further amended, restated,
supplemented or otherwise modified from time to time. The Existing Loan
Documents and all agreements, instruments and documents executed or delivered in
connection with any of the foregoing shall each be deemed to be amended to the
extent necessary to give effect to the provisions of this Agreement. Without
limiting the foregoing, each Borrower stipulates and affirms that the following
financing statements are, and shall continue to be, in full force and effect:
(a) UCC-1 financing statement naming LTI, as debtor, filed
with the Nevada Secretary of State on July 16, 2002, as document number
2002018790-9;
(b) UCC-1 financing statement naming LDI, as debtor, filed
with the Nevada Secretary of State on July 16, 2002, as document number
2002018791-1; and
(c) UCC-1 financing statements naming Interactive, as debtor,
filed with (i) the Nevada Secretary of State on July 16, 2002, as
document number 2002018789-6 and (ii) the Idaho Secretary of State on
June 25, 2002, as document number B200209265261.
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IN WITNESS WHEREOF, this Agreement has been executed by a duly
authorized officer of each of the undersigned as of the date first set forth
above.
BORROWERS: LENDER:
LIFESTREAM TECHNOLOGIES, INC., RAB SPECIAL SITUATIONS LP,
a Nevada corporation a Delaware limited partnership
By: By: RAB Partners Ltd., its General Partner
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Name:
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Title: By:
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Name:
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Title:
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LIFESTREAM DIAGNOSTICS, INC.,
a Nevada corporation
By:
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Name:
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Title:
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