Exhibit 10.11.3
GUARANTY AND SECURITY AGREEMENT
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AGREEMENT, dated
as of January 29, 2004, by OPUS DIAGNOSTICS, INC., a
Delaware corporation (the "Guarantor"), in
favor of ELLIOT KOPPEL (the "Agent"),
acting in his capacity as agent for himself
and for the other holders (the
"Holders") of the Secured Promissory Notes,
dated January 29, 2004 (the
"Notes"), issued by CAPRIUS, INC., a
Delaware corporation ("Caprius"), to the
Holders.
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Caprius
has requested the Holders to loan up to $500,000 to
Caprius for which it would issue the Notes
to the Holders;
WHEREAS, the
Guarantor is a wholly-owned subsidiary of Caprius;
WHEREAS, to
induce the Holders to make the loans to Caprius, the Guarantor
offered to guaranty the repayment of the
Notes on a non-recourse basis secured
by the grant of the security interest
provided for herein, and the Holders are
willing to accept such security
interest;
NOW THEREFORE,
in consideration of the mutual conditions and agreements set
forth herein, and for other good and
valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS
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1.1 Defined Terms. In addition to the
other terms defined in this
Agreement, whenever the following
capitalized terms are used they
shall be defined as follows:
"Business Day" shall mean any weekday excluding any legal
holiday
observed pursuant to United States federal
or New Jersey state law or
regulation.
"Collateral" shall have the meaning ascribed to such term in
Section
3.
"Event of Default" shall have the meaning ascribed to such term
under
the Notes.
"Financing Agreements" shall mean, collectively, this Agreement,
the
Notes and all other agreements, documents
and instruments now or at any time
hereafter executed and/or delivered by the
Guarantor, Caprius, the Holders or
the Agent in connection with the Financing
Agreements, as the same now exist or
may hereafter be amended, modified,
supplemented, extended, renewed, restated or
replaced.
"Liens" shall mean mortgages, liens, pledges, charges, security
interest, encumbrances or other third party
interests of any nature whatsoever.
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"Net Sales" shall have the meaning ascribed to such term under
the
Royalty Agreement.
"NJUCC" shall mean the Uniform Commercial Code as in effect in
the
State of New Jersey from time to time.
"Obligations" shall mean any and all obligations of every kind,
nature
and description owing by Caprius to the
Holders, including principal, interest,
costs and expenses, however evidenced, as
arising under the Notes or this
Agreement.
"Person" shall mean an individual, a partnership, a corporation,
an
association, a joint stock company, a
limited liability company, a trust, a
joint venture, an unincorporated
organization, or a governmental entity (or
department, agency or political subdivision
thereof).
"Products" shall have the meaning ascribed to such term under
the
Royalty Agreement.
"Royalties" shall have the meaning ascribed to such term in
Section
3.1.
"Royalty Agreement" shall have the meaning ascribed to such term
in
Section 3.1.
"Successor Agent" shall have the meaning ascribed to such term
in
Section 8.4.
"Year" shall have the meaning ascribed to such term under the
Royalty
Agreement.
1.2 Other Definitional
Provisions, Construction. All terms used
herein and defined in the NJUCC shall have
the same definitions as specified
therein. Unless otherwise specified,
"hereunder," "herein," hereto,"
"this Agreement" words of similar import
refer to this entire document;
"including" is used by way of illustration
and not by way of limitation,
unless the context clearly indicates the
contrary; the singular includes the
plural and conversely.
2. GUARANTY
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2.1 The Guaranty. Subject to the terms
and conditions herein, the
Guarantor hereby irrevocably and
unconditionally guarantees to the Holders the
prompt, punctual, and full payment when due
(whether at stated maturity, by
acceleration or otherwise) of all
obligation from time to time owing by Caprius
to the Holders arising from, under or with
respect to the Notes (collectively,
the "Obligations"), and the prompt and
complete performance by Caprius of any
and all of the terms, conditions, covenants
and agreements agreed to be
performed by Caprius under the Notes or in
any agreement, instrument, note,
document or certificate evidencing or
relating to the Obligations.
2.2 Irrevocable. The obligations of
Guarantor hereunder are
irrevocable, absolute, and unconditional,
irrespective of the value,
genuineness, validity, regularity or
enforceability of the Notes or any term or
provision thereof or of any document
relating to the Obligations or any other
circumstance with might otherwise
constitute a legal or equitable discharge or
defense of a surety or guarantor.
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2.3 Limited Recourse.
Notwithstanding the foregoing, the Holders
understand that upon an Event of Death by
Caprius with respect to the Notes, the
Collateral herein shall represent the
Holders only recourse against the
Guarantor, in respect of this Guaranty,
subject to the terms and conditions set
forth below.
3. GRANT OF SECURITY
INTEREST
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As collateral
security for the punctual payment and performance of the
Obligations by Caprius, the Guarantor
hereby grants to the Holders a continuing
security interest in, and shall assign to
the Holders as security, the following
property and interests in property, whether
presently owned or hereafter
acquired or existing, and wherever located
(collectively, the "Collateral"):
Royalties due to the Guarantor pursuant to
a Royalty Agreement, dated October 9,
2002 (the "Royalty Agreement), for ten (10)
years from this date, by and between
Seradyn, Inc., a Delaware corporation
("Seradyn"), and the Guarantor (the
"Royalties") as follows:
(a) ten percent (10%)
of Net Sales during each Year of the Products
used in conjunction with Zonisamide (Zonegram) pursuant to the
Supply Agreement dated July 4, 2002 between Opus and Dainippon
Pharmaceutical Co., Ltd.
(b) fifteen percent
(15%) of Net Sales during the first five (5)
Years following receipt of the earlier of either (i) Food and
Drug Administration Pre- Market Approval or (ii) regulatory
approval in a non-U.S. market of the Products to be used in
conjunction with RAD (Certican), and ten percent (10%) of the
Net
Sales of such Products for the balance of the ten (10) Year
period, each pursuant to the Antibody License Agreement, dated
October 15, 2000, between Opus and Novartis Pharma AG; and all
proceeds from such Royalties, and
(c) ten percent (10%
of Net Sales during each Year of the Products
used in connection with Lamotrigine (Lamictal) pursuant to the
Material Transfer Agreement dated April 7, 2001 between Seller
and SmithKline Beecham Corporation d/b/a/ Glaxo SmithKline.
4. COLLATERAL COVENANTS
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4.1 Verification. The Agent shall have
the right at any time or times
to verify the validity, amount or any other
matter relating to any Royalties due
or other Collateral or the Royalty
Agreement.
4.2 Notification. The Agent may, at
any time or times that an Event of
Default exists or has occurred and is
continuing on (i) notify Seradyn or any
other party under the Royalty Agreement
that the Royalties have been assigned to
the Agent and that the Holders have a
security interest therein and the Agent,
on behalf of the Holders, may direct any or
all parties under the Royalty
Agreement to make payment of Royalties
directly to the Agent, (ii) demand,
collect or enforce payment of any Royalties
or such other obligations, but
without any duty to do so, and the Agent
shall not be liable for its failure to
collect or enforce the payment thereof nor
for the negligence of its agents or
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attorneys with respect thereto and (iii)
take whatever other action the Holders
may deem necessary or desirable for the
protection of the Holders' interests.
4.3 Power of Attorney. If at any time
an Event of Default exists or
has occurred and is then continuing, at the
request of the Agent, the Guarantor
shall irrevocably designate and appoint the
Agent as Caprius' true and lawful
attorney-in-fact, and authorize the Agent,
in Caprius' or the Agent's name, to
do all acts and things which are necessary,
in the Agent's determination, to
fulfill Caprius' obligations under this
Agreement and the other Financing
Agreements. Caprius hereby releases the
Agent from any liabilities arising from
any act or acts under this power of
attorney and in furtherance thereof, whether
of omission or commission, except as a
result of the Agent's own negligence or
misconduct as determined pursuant to a
final non-appealable order of a court of
competent jurisdiction.
5. REPRESENTATIONS AND
WARRANTIES
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The Guarantor
hereby represents and w
