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Exhibit 10.30
SECURITY AGREEMENT
Dated as of January ___, 1997
by
NU-TECH BIO-MED, INC.
in favor of
THE ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 12/18/80 TRUST
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") dated as of January ___, 1997
is made by Nu-Tech Bio-Med, Inc., a Delaware corporation (the "Company") in
favor of The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 12/18/80 Trust (the "Secured Party").
The Secured Promissory Note dated as of January ____, 1997 in the amount
of Two Million Dollars ($2,000,000) (the "Note") executed by the Company in
favor of the Lender provides, subject to its terms and conditions, for a
concurrent loan to the Company. It is a condition to the concurrent loan under
the Note by the Secured Party that the Company shall have executed and
delivered, and granted the Lien provided for in, this Agreement.
To induce the Secured Party to enter into, and to extend credit under, the
Note and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company has agreed to pledge, assign and
grant a security interest in the Collateral as security for the Secured
Obligations. Accordingly, the Company agrees with the Secured Party as follows:
1. Definitions and Interpretation.
1.1 Certain Defined Terms. The following terms shall have the
following meanings under this Agreement:
"BASIC DOCUMENT" shall mean the Note and this Agreement.
"CODE" shall mean the Uniform Commercial Code as in effect in the
State of New York from time to time or, by reason of mandatory application, any
other applicable jurisdiction.
"COLLATERAL" shall mean all right, title and interest of the Company
in: (a) its 16.4447% participation interest in the credit facilities evidenced
by the Credit Agreement, which it purchased pursuant to the Participation
Agreement dated as of November 8, 1996 among, inter alia, the Company and
Oaktree Capital Management, LLC, and various other parties (collectively,
"Oaktree"), a copy of which is attached hereto, (the "Participation Agreement")
and all instruments or chattel paper (each as defined in the Code) evidencing,
representing, arising from or existing in respect of,
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relating to, securing or otherwise supporting the payment of such participation
interest, including all of the right, title and interest of the Company in, to
and under the Participation Agreement and the Agreement dated as of November 8,
1996 among, inter alia, the Company and Oaktree, a copy of which is attached
hereto, (the "Agreement") and all proceeds and products in whatever form of all
or any part of the foregoing (together with all rights to recover and proceed
with respect to the same) and all substitutions for and replacements of all or
any part of the foregoing; and (b) the MSI Stock.
"CREDIT AGREEMENT" shall mean the Credit Agreement dated as of April
1, 1994 between Physician's Clinical Laboratory, Inc., the Agent and the
financial institutions party thereto.
"DEFAULT" shall mean any default described in the Note.
"LIEN" shall mean, with respect to any property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
property or any agreement to give, or notice of, any of the foregoing.
"MSI" shall mean Medical Science Institute, a California
corporation.
"MSI STOCK" shall mean all of the issued and outstanding common
stock of MSI.
"SECURED OBLIGATIONS" shall mean any and all obligations of the
Company for the performance of its agreements, covenants and undertakings under
or in respect of the Note, including the payment of all amounts owed thereunder.
1.2 Interpretation. In this Agreement, unless otherwise indicated,
the singular includes the plural and plural the singular; words importing either
gender include the other gender; references to statutes or regulations are to be
construed as including all statutory or regulatory provisions consolidating,
amending or replacing the statute or regulation referred to; references to
"writing" include printing, typing, lithography and other means of reproducing
words in a tangible visible form; the words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections), exhibits,
annexes or schedules are to this Agreement; references to agreements and other
contractual instruments shall be deemed to include all subsequent amendments,
extensions and other modifications to such instruments (without, however,
limiting any
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prohibition on any such amendments, extensions and other modifications by the
terms of any such document); and references to persons or entities including
their respective permitted successors and assigns.
2. Collateral.
2.1 Grant. As collateral security for the prompt payment in full
when due (whether at stated maturity, by acceleration or otherwise) and
performance of the Secured Obligations, the Company hereby pledges, assigns and
grants to the Secured Party a security interest in all of the Company's right,
title and interest in and to the Collateral.
2.2 Perfection. Concurrently with the execution and delivery of this
Agreement, the Company shall (i) file such financing statements and other
documents in such offices as shall be necessary or as the Secured Party may
request to perfect and establish the Lien granted by this Agreement, (ii)
deliver and pledge to the Secured Party any and all instruments and chattel
paper, endorsed or accompanied by such instruments of assignment and transfer in
such form and substance as the Secured Party may request, including, without
limitation, certificates representing the MSI Stock, and (iii) take all such
other actions as shall be necessary or as the Secured Party may request to
perfect and establish the priority of the Lien granted by this Agreement.
2.3 Preservation and Protection of Security Interests . The Company
shall:
(a) upon the acquisition after the date of this Agreement by
the Company of any instrument or chattel paper evidencing all or any part of the
interests constituting the Collateral, promptly deliver and pledge to the
Secured Party all such instruments or chattel paper, endorsed or accompanied by
such instruments of assignment and transfer in such form and substance as the
Secured Party may request; and
(b) give, execute, deliver, file or record any and all
financing statements, notices, contracts, agreements or other instruments,
obtain any and all governmental approvals and take any and all steps that may be
necessary or as the Secured Party may request to create, perfect, establish the
priority of, or to preserve the validity, perfection or priority of, the Lien
granted by this Agreement or to enable the Secured Party to exercise and enforce
its rights, remedies, powers and privileges under this Agreement with respect to
such Lien.
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2.4 Attorney-in-Fact.
(a) The Secured Party is hereby appointed the attorney-in-fact
of the Company for the purpose of carrying out the provisions of this Agreement
and taking any action and executing any instruments which the Secured Party may
deem necessary or advisable to accomplish the purposes of this Agreement, to
preserve the validity, perfection and priority of the Lien granted by this
Agreement (including, without limitation, the filing or recording of such
financing statements as Secured Party may deem appropriate or necessary) and,
following any Default, to exercise its rights, remedies, powers and privileges
under this Agreement. This appointment as attorney-in-fact is irrevocable and
coupled with an interest. Without limiting the generality of the foregoing, the
Secured Party shall be entitled under this Agreement upon the occurrence and
continuation of any Default (i) to ask, demand, collect, ▇▇▇ for, recover,
receive and give receipt and discharge for amounts due and to become due under
and in respect of all or any part of the Collateral; (ii) to receive, endorse
and collect any instruments or other drafts, instruments, documents and chattel
paper in connection with clause (i) above (including any draft or check
representing the proceeds of insurance or the return of unearned premiums);
(iii) to file any claims or take any action or proceeding that the Secured Party
may deem necessary or advisable for the collection of all or any part of the
Collateral, including the collection of any compensation due and to become due
under any contract or agreement with respect to all or any part of the
Collateral; and (iv) to execute, in connection with any sale or disposition of
the Collateral under Section 4, any endorsements, assignments, bills of sale or
other instruments of conveyance or transfer with respect to all or any part of
the Collateral.
(b) So long as no Default shall have occurred and be
continuing, the Company shall have the right to exercise all voting, consensual
and other powers of ownership pertaining to the Collateral for all purposes not
inconsistent with the terms of this Agreement.
(c) If any Default shall have occurred and be continuing, and
whether or not the Secured Party exercises any available right to declare any
Secured Obligation due and payable or seeks or pursues any other right, remedy,
power or privilege available to it under applicable law, this Agreement or any
other Basic Document, all payments and other distributions on the Collateral
shall be paid directly to the Secured Party or its designee, retained by it and
applied as set forth in Section 4.04.
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2.5 Rights and Obligations.
(a) The Company shall remain liable to perform its duties and
obligations under the contracts and agreements included in the Collateral in
accordance with their respective terms to the same extent as if this Agreement
had not been executed and delivered. The exercise by the Secured Party of any
right, remedy, power or privilege in respect of this Agreement shall not release
the Company from any of its duties and obligations under such contracts and
agreements. The Secured Party shall have no duty, obligation or liability under
such contracts and agreements by reason of this Agreement or any other Basic
Document, nor shall the Secured Party be obligated to perform any of the duties
or obligations of the Company under any such contract or agreement or to take
any action to collect or enforce any claim under any such contract or agreement.
(b) No Lien granted by this Agreement in the Company's right,
title and interest in any contract or agreement shall be deemed to be a consent
by the Secured Party to any such contract or agreement.
(c) No reference in this Agreement to proceeds or to the sale
or other disposition of Collateral shall authorize the Company to sell or
otherwise dispose of any Collateral.
(d) The Secured Party shall not be required to take steps
necessary to preserve any rights against prior parties to any part of the
Collateral.
3. Representations, Warranties and Covenants. As of the date of this
Agreement, the Company represents, warrants and covenants to the Secured Party
as follows:
3.1 Title. The Company is the sole beneficial owner of the
Collateral in which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ pursuant to this Agreement, and
such Collateral is free and clear of all Liens. The Lien granted by this
Agreement in favor of the Secured Party has attached and constitutes a perfected
security interest in all of such Collateral prior to all other Liens.
3.2 Sales and Other Liens. The Company shall not dispose of any
Collateral, create, incur, assume or suffer to exist any Lien upon any
Collateral or file or suffer to be on file or authorize to be filed, in any
jurisdiction, any financing
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statement or like instrument with respect to all or any part of the Collateral
in which the Secured Party is not named as the sole secured party.
3.3 Principal Place of Business. The Company's chief executive
office and principal place of business is located at the address set forth
below.
3.4 Original Documents Evidencing Underlying Credit Facility. The
Company represents and warrants that the original Credit Agreement and all other
documents, instruments or chattel paper evidencing the credit facility arising
out of the Credit Agreement are held by Oaktree Capital Management, LLC, or an
affiliate thereof, and that the Company does not have in its possession any such
original agreements, documents, instruments or chattel paper.
3.5 Restrictions On Issuing MSI Stock. The Company hereby represents
and warrants that the MSI Stock represents all of the issued and outstanding
common stock of MSI and further covenants not to issue any additional stock of
MSI (whether preferred, common or otherwise) until the Note has been paid in
full.
3.6 Further Assurances. The Company agrees that, from time to time
upon the written request of the Secured Party, the Company will execute and
deliver such further documents and do such other acts and things as the Secured
Party may reasonably request in order fully to effect the purposes of this
Agreement.
4. Remedies.
4.1 Events of Default, Etc. If any Default shall have occurred and
be continuing:
(a) The Secured Party in its discretion may make any
reasonable compromise or settlement it deems desirable with respect to any of
the Collateral and may extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, all or any part of the
Collateral;
(b) The Secured Party in its discretion may, in its name or in
the name of the Company or otherwise, demand, ▇▇▇ for, collect or receive any
money or property at any time payable or receivable on account of or in exchange
for all or any part of the Collateral, but shall be under no obligation to do
so;
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(c) The Secured Party in its discretion may, upon ten business
days' prior written notice to the Company of the time and place, with respect to
all or any part of the Collateral which shall then be or shall thereafter come
into the possession, custody or control of the Secured Party or any of its
agents, sell, lease or otherwise dispose of all or any part of such Collateral,
at such place or places as the Secured Party deems best, for cash, for credit or
for future delivery (without thereby assuming any credit risk) and at public or
private sale, without demand of performance or notice of intention to effect any
such disposition or of time or place of any such sale (except such notice as is
required above or by applicable statute and cannot be waived), and the Secured
Party or any other person or entity may be the purchaser, lessee or recipient of
any or all of the Collateral so disposed of at any public sale (or, to the
extent permitted by law, at any private sale) and thereafter hold the same
absolutely, free from any claim or right of whatsoever kind, including any right
or equity of redemption (statutory or otherwise), of the Company, any such
demand, notice and right or equity being hereby expressly waived and released.
The Secured Party may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the sale may be so adjourned; and
(d) The Secured Party shall have, and in its discretion may
exercise, all of the rights, remedies, powers and privileges with respect to the
Collateral of a secured party under the Code (whether or not the Code is in
effect in the jurisdiction where such rights, remedies, powers and privileges
are asserted) and such additional rights, remedies, powers and privileges to
which a secured party is entitled under the laws in effect in any jurisdiction
where any rights, remedies, powers and privileges in respect of this Agreement
or the Collateral may be asserted, including the right, to the maximum extent
permitted by law, to exercise all voting, consensual and other powers of
ownership pertaining to the Collateral as if the Secured Party were the sole and
absolute owner of the Collateral (and the Company agrees to take all such action
as may be appropriate to give effect to such right).
The proceeds of, and other realization upon, the Collateral by virtue of the
exercise of remedies under this Section 4.01 shall be applied in accordance with
Section 4.4.
4.2 Deficiency. If the proceeds of, or other realization upon, the
Collateral by virtue of the exercise of remedies under Section 4.01 are
insufficient to cover the costs and expenses of such exercise and the payment in
full of the other Secured Obligations, the Company shall remain liable for any
deficiency.
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4.3 Private Sale.
(a) The Secured Party shall incur no liability as a result of
the sale, lease or other disposition of all or any part of the Collateral at any
private sale pursuant to Section 4.01 conducted in a commercially reasonable
manner. The Company hereby waives any claims against the Secured Party arising
by reason of the fact that the price at which the Collateral may have been sold
at such a private sale was less than the price which might have been obtained at
a public sale or was less than the aggregate amount of the Secured Obligations,
even if the Secured Party accepts the first offer received and does not offer
the Collateral to more than one offeree.
(b) The Company recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933 and applicable state
securities laws, the Secured Party may be compelled, with respect to any sale of
all or any part of the Collateral, to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own account, for
investment and not with a view to distribution or resale. The Company
acknowledges that any such private sales may be at prices and on terms less
favorable to the Secured Party than those obtainable through a public sale
without such restrictions, and, notwithstanding such circumstances, agree that
any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Secured Party shall have no obligation to engage
in public sales and no obligation to delay the sale of any Collateral for the
period of time necessary to permit the respective Issuer of such Collateral to
register it for public sale.
4.4 Application of Proceeds. Except as otherwise expressly provided
in this Agreement and except as provided below in this Section 4.04, the
proceeds of, or other realization upon, all or any part of the Collateral by
virtue of the exercise of remedies under Section 4.01 and any other cash at the
time held by the Secured Party under this Agreement, shall be applied by the
Secured Party:
First, to the payment of the costs and expenses of such
exercise of remedies, including reasonable out-of-pocket costs and expenses of
the Secured Party, the fees and expenses of its agents and counsel and all other
expenses incurred and advances made by the Secured Party in that connection;
Next, to the payment in full of the remaining Secured
Obligations in such manner as the Secured Party may determine; and
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Finally, to the payment to the Company, or its respective
successors or assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining.
As used in this Section 4, "proceeds" of Collateral shall mean cash,
securities and other property realized in respect of, and distributions in kind
of, Collateral, including any property received under any bankruptcy,
reorganization or other similar proceeding as to the Company or any issuer of,
or account debtor or other obligor on, any of the Collateral.
5. Miscellaneous.
5.1 Waiver. No failure on the part of the Secured Party to exercise
and no delay in exercising, and no course of dealing with respect to, any right,
remedy, power or privilege under this Agreement shall operate as a waiver of
such right, remedy, power or privilege, nor shall any single or partial exercise
of any right, remedy, power or privilege under this Agreement preclude any other
or further exercise of any such right, remedy, power or privilege or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges provided in this Agreement are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
5.2 Notices. All notices and communications to be given under this
Agreement shall be given or made in writing to the intended recipient at the
address specified below or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telex or telecopier, delivered to the telegraph
or cable office or personally delivered or, in the case of a mailed notice, upon
receipt, in each case, given or addressed as provided in this Section 5.02:
To the Company: NU-TECH BIO-MED, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
To the Secured Party: The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
12/18/80 Trust
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1801 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
5.3 Expenses, Etc. The Company agrees to pay or to reimburse the
Secured Party for all costs and expenses (including reasonable attorney's fees
and expenses) that may be incurred by the Secured Party in any effort to enforce
any of the provisions of Section 4 or any of the obligations of the Company in
respect of the Collateral or in connection with (a) the preservation of the Lien
of, or the rights of the Secured Party under this Agreement or (b) any actual or
attempted sale, lease, disposition, exchange, collection, compromise, settlement
or other realization in respect of, or care of, the Collateral, including all
such costs and expenses (and reasonable attorney's fees and expenses) incurred
in any bankruptcy, reorganization, workout or other similar proceeding relating
to the Company.
5.4 Amendments, Etc. Any provision of this Agreement may be
modified, supplemented or waived only by an instrument in writing duly executed
by the Company and the Secured Party. Any such modification, supplement or
waiver shall be for such period and subject to such conditions as shall be
specified in the instrument effecting the same and shall be binding upon the
Secured Party, each holder of any of the Secured Obligations and the Company,
and any such waiver shall be effective only in the specific instance and for the
purposes for which given.
5.5 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company, the Secured Party and each holder of any of
the Secured Obligations and their respective successors and permitted assigns.
The Company shall not assign or transfer its rights under this Agreement without
the prior written consent of the Secured Party.
5.6 Survival. All representations and warranties made in this
Agreement or in any certificate or other document delivered pursuant to or in
connection with this Agreement shall survive the execution and delivery of this
Agreement or such certificate or other document (as the case may be) or any
deemed repetition of any such representation or warranty.
5.7 Agreements Superseded. This Agreement supersedes all prior
agreements and understandings, written or oral, among the parties with respect
to the subject matter of this Agreement.
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5.8 Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
5.9 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK. THE COMPANY HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK
STATE COURT SITTING IN NEW YORK, NEW YORK FOR THE PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
5.10 WAIVER OF JURY TRIAL. THE COMPANY AND THE SECURED PARTY HEREBY
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
NU-TECH BIO-MED, INC.,
a Delaware corporation
By__________________________________
J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Its President
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