Exhibit 10.2
AMENDED AND RESTATED SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (the "Agreement") is
entered into this 13th day of July, 1999 by and among UNIGENE LABORATORIES,
INC., a Delaware corporation, having its principal place of business at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), ▇▇▇ ▇▇▇▇, a
resident of New Jersey, ▇▇▇▇▇▇ ▇. ▇▇▇▇, a resident of New Jersey, and ▇▇▇▇▇▇ ▇.
▇▇▇▇, a resident of New Jersey. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇ are
sometimes individually referred to as a "Secured Party" and collectively
referred to as "Secured Parties."
WITNESSETH:
WHEREAS, on March 2, 1995, the Secured Parties loaned the Company
$500,000, as evidenced by that certain promissory note, dated as of March 2,
1995, (the "March 2 Note"); and
WHEREAS, in order to secure the payment by the Company of the March 2
Note, on March 2, 1995, the Company and the Secured Parties entered into that
certain Security Agreement pursuant to which the Company granted the Secured
Parties a security interest in its equipment located at its premises at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ (the "Fairfield Equipment"), which
agreement was amended by that certain Amendment to Loan Agreement and Security
Agreement, dated March 20, 1995, pursuant to which the Company granted the
Secured Parties a security interest in its equipment located at its premises at
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ (the "Boonton Equipment"); and
WHEREAS, the security interest in the Fairfield Equipment granted by
the Company to the Secured Parties was perfected by the filing of a financing
statement with respect thereto in Essex County, New Jersey on February 27, 1995;
and
WHEREAS, on June 29, 1995, the Secured Parties loaned the Company
$700,000, as evidenced by that certain promissory note, dated as of June 29,
1995, (the "June 29, 1995 Note"); and
WHEREAS, the Company and the Secured Parties further amended the
Security Agreement pursuant to that certain Amendment to Loan Agreement and
Security Agreement, dated March 20, 1995, in order to secure the payment by the
Company of the June 29, 1995 Note; and
WHEREAS, on June 25, 1999, ▇▇▇ ▇▇▇▇ loaned the Company $200,000, as
evidenced by that certain promissory note, dated as of June 25, 1999, (the "June
25 Note"); and
WHEREAS, the Company and the Secured Parties further amended the
Security Agreement pursuant to that certain Amendment to Loan Agreement and
Security Agreement, dated June 25, 1999, in order to secure the payment by the
Company of the June 25 Note; and
WHEREAS, on June 29, 1999, ▇▇▇ ▇▇▇▇ loaned the Company $350,000, as
evidenced by that certain promissory note, dated as of June 29, 1999, (the "June
29, 1999 Note"); and
WHEREAS, the Company and the Secured Parties further amended the
Security Agreement pursuant to that certain Amendment to Loan Agreement and
Security Agreement, dated June 29, 1999, in order to secure the payment by the
Company of the June 29, 1999 Note; and
WHEREAS, on June 30, 1999, ▇▇▇ ▇▇▇▇ loaned the Company $350,000, as
evidenced by that certain promissory note, dated as of June 30, 1999, (the "June
30 Note"); and
WHEREAS, the Company and the Secured Parties further amended the
Security Agreement pursuant to that certain Amendment to Loan Agreement and
Security Agreement, dated June 30, 1999, in order to secure the payment by the
Company of the June 30 Note; and
WHEREAS, ▇▇▇ ▇▇▇▇ has made the following additional loans to the
Company: (i) a loan in the amount of $200,000 on May 5, 1999, (ii) a loan in the
amount of $200,000 on May 24, 1999, and (iii) a loan in the amount of $200,000
on June 7, 1999 (collectively, the "Prior Loans"); and
WHEREAS, ▇▇▇ ▇▇▇▇ has agreed to loan the Company $100,000
contemporaneously with the execution and delivery hereof (the "New Loan"); and
WHEREAS, in order to induce ▇▇▇ ▇▇▇▇ to make the Prior Loans and the
New Loan, the Company has agreed to grant him a security interest in the
Collateral (as defined below) to secure payment of the New Loan and the Prior
Loans and a mortgage on certain real property owned by the Company at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇; and
WHEREAS, in order to document the New Loan and the Prior Loans and to
amend and restate the June 25 Note, the June 29, 1999 Note and the June 30 Note,
the Company contemporaneously with the execution and delivery hereof will issue
and deliver to ▇▇▇ ▇▇▇▇ that certain Amended and Restated Secured Promissory
Note in the principal amount of $1,600,000 (the "Restated Note") and ▇▇▇ ▇▇▇▇
will in exchange for the Restated Note surrender the June 25 Note, the June 29,
1999 Note and the June 30 Note; and
WHEREAS, the parties desire to document the security interest granted
to ▇▇▇ ▇▇▇▇ to secure payment of the New Loan and the Prior Loans, and to amend
and restate the Security Agreement, as heretofore amended, in its entirety, all
on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual promises made herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. Definitions. The following terms when used herein shall have the
following definitions:
1.1 "Collateral" shall mean (a) all laboratory equipment,
manufacturing equipment, office machinery, tools, materials, storage and
handling equipment, computer equipment and hardware, including central
processing units, terminals, drives, memory units, printers, keyboards, screens,
peripherals and input or output devices, and other equipment of every kind and
nature, wherever situated, now or hereafter owned by the Company, (b) all
additions, accessions, replacements, accessories and parts in respect of the
foregoing, all manuals, blueprints, warranties and records in connection
therewith, all rights against suppliers, warrantors, manufacturers, sellers or
others in connection therewith, and all substitutions for any of the foregoing,
(c) all books and records, in whatever form, owned by the Company related to the
foregoing, and (d) all proceeds of any of the foregoing.
1.2 "Event of Default" shall mean:
(a) an "Event of Default" as defined in the Restated Note;
(b) any occurrence specified in Section 3 of the March 2 Note;
(c) any occurrence specified in Section 3 of the June 29, 1995
Note; or
(d) any material breach of representation made by the Company
in Section 5 hereof.
1.3 "Obligations" shall mean all indebtedness, obligations and
liabilities of every kind and nature of the Company now or hereafter existing
under or arising out of or in connection with the Restated Note, the March 2
Note, the June 29, 1995 Note and this Agreement and all extensions, amendments
or renewals hereof or thereof, whether for principal, premium, interest, or
fees, and all or any portion of such indebtedness, obligations or liabilities
that are paid to the extent all or any part of such payment is avoided or
recovered directly or indirectly from a Secured Party as a preference,
fraudulent transfer or otherwise.
2. Grant of Security. As security for the due and punctual performance of the
Obligations, the Company hereby (a) grants to the Secured Parties, for the
ratable benefit of the Secured Parties, a security interest in the Collateral
and (b) reaffirms all prior grants to the Secured Parties of security interests
in the Collateral.
3. Release and Satisfaction.
3.1. Upon the termination of this Agreement, the Secured Parties shall
promptly deliver to the Company upon request therefor and at the Company's
expense, releases and satisfactions of all financing statements and other
registrations of security.
3.2. The Company from time to time may sell all or any portion of the
Collateral; provided that such sale is an arm's length transaction with a party
that is not an affiliate of the Company and that the Collateral is sold for fair
value; provided further that the proceeds from such sale shall be applied
ratably to the payment of the Obligations to the extent thereof.
4. Location of Collateral. The Collateral is located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ or ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇. So long as any
Obligations shall be outstanding, the Company shall not move any of the
Collateral having an aggregate book or market value in excess of $5,000 to any
location other than ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ or ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, unless the Company shall have given the Secured
Parties ten (10) day's prior written notice of its intention to do so,
identifying the new location.
5. Representations and Warranties. The Company hereby represents and warrants to
the Secured Parties that, as of the date hereof:
5.1. The Company owns all of the Collateral free and clear of any lien,
encumbrance, mortgage, security agreement, pledge or charge other than (i) a
security interest in the Collateral granted to ▇▇▇▇ ▇▇▇▇ to secure a loan in the
principal amount of $650,000 and (ii) security interests heretofore granted to
the Secured Parties.
5.2. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to carry on its business and own its
properties as now conducted and owned. The Company is duly qualified to do
business as a foreign corporation and in good standing in the State of New
Jersey.
5.3. The Company has full corporate power and authority to execute,
deliver and perform this Agreement and has taken all requisite corporate action
necessary for (i) the authorization, execution and delivery of this Agreement
and (ii) the performance of all obligations of the Company hereunder. This
Agreement constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms except as such
enforcement may be limited by (a) applicable bankruptcy, insolvency,
reorganization, voidable preference, fraudulent conveyance and other similar
laws affecting the rights or remedies of creditors generally and (b) the
exercise of judicial discretion in accordance with general principles of equity
(whether applied by a court of law or equity).
6. Further Actions. The Company agrees that from time to time, at the expense of
the Company, the Company will promptly execute and deliver all further
instruments and documents and take all further action that any Secured Party
reasonably may request in order to perfect the security interest granted hereby,
including the execution, recording and filing of such financing or continuation
statements, or amendments thereto, and such other instruments, documents or
notices, as a Secured Party reasonably may request.
7. Covenants. During the term hereof, the Company shall:
(a) not use or permit any Collateral to be used unlawfully or in violation
of any provision of this Agreement or any applicable statute, regulation or
ordinance or any policy of insurance covering the Collateral;
(b) maintain the Collateral in good working condition;
(c) maintain insurance reasonably believed by Company to be adequate on all
Collateral of a type customarily insured by companies similarly situated to the
Company, covering property damage and loss of income by fire or other casualty;
(d) pay 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;
(e) not sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except (i) as permitted by this Agreement and
(ii) that the Company may dispose of Collateral that has become obsolete; and
(f) keep reasonable records respecting the Collateral and at all times keep
at least one complete set of its records concerning all of the Collateral at its
chief executive office or principal place of business.
7. Inspection. Any Secured Party may examine and inspect the Collateral upon
reasonable prior notice during the Company's normal business hours.
8. Secured Parties May Perform. If the Company fails to perform any agreement
contained herein, each Secured Party may itself perform, or cause performance
of, such agreement, and the expenses of such Secured Party incurred in
connection therewith shall be reimbursed by the Company promptly.
9. Enforcement. Upon the occurrence of any Event of Default, each Secured Party
shall have, in addition to all of its other rights under this Agreement, all of
the rights and remedies of a secured party under the Uniform Commercial Code.
10. Termination. This Agreement shall terminate at such time as all of the
Obligations shall have been indefeasibly fully paid and satisfied and, until
such time, the Secured Parties shall retain all security in the Collateral held
by them hereunder.
11. Binding Effect. This Agreement shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of the Secured Parties and
their respective heirs, executors, administrators, successors and assigns.
12. Notices. Unless otherwise provided, any notice required or permitted under
this Agreement shall be given in writing and shall be deemed effectively given
(i) on the same day if given by personal delivery, (ii) on the following
business day if given by telecopier with confirmation of receipt, or (iii) on
the following business day if given by nationally recognized overnight air
courier, in each case addressed to the party to be notified at:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇,
Attention: [Name of Party]
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
or at such other address as such party may designate by ten days' advance
written notice given hereunder to any other party.
13. Waiver. No delay or failure on the part of any Secured Party in exercising
any right, privilege, remedy or option hereunder shall operate as a waiver of
such or any other right, privilege, remedy or option, and no waiver shall be
valid unless in writing and signed by each Secured Party and then only to the
extent therein set forth.
14. Modifications and Amendments. This Agreement constitutes the complete
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements with respect thereto. This Agreement may not be
changed, modified or amended orally, but only by a writing signed by all parties
hereto.
15. Applicable Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New Jersey without giving effect
to conflicts of laws principles.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original and all of which shall
constitute the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.
UNIGENE LABORATORIES, INC.
By:
Name:
Title:
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