Exhibit 10.48
SECURITY
AGREEMENT
THIS SECURITY
AGREEMENT (the “ Agreement ”), is
entered into and made effective as of September 21, 2007, by and
between SENESCO TECHNOLOGIES, INC., a Delaware corporation
with its principal place of business located at 303 George Street,
Suite 420, New Brunswick, NJ 08901 (the “ Parent
”), and the each subsidiary of the Parent listed on Schedule
I attached hereto (each a “ Subsidiary ,” and
collectively and together with the Parent, the “
Company ”), in favor of the BUYER(S) (the
“ Secured Party ”) listed on Schedule I attached
to the Securities Purchase Agreement (the “ Securities
Purchase Agreement ”) dated the date hereof between the
Company and the Secured Party.
WHEREAS, the Parent
shall issue and sell to the Secured Party, as provided in the
Securities Purchase Agreement, and the Secured Party shall purchase
secured convertible debentures (the “ Convertible
Debentures ”), which shall be convertible into shares of
the Parent’s common stock;
WHEREAS, to induce
the Secured Party to enter into the transaction contemplated by the
Securities Purchase Agreement, the Convertible Debentures, the
Registration Rights Agreement of even date herewith between the
Parent and the Secured Party (the “ Registration Rights
Agreement ”), and the Irrevocable Transfer Agent
Instructions among the Parent, the Secured Party, the
Parent’s transfer agent, and David Gonzalez, Esq. (the
“ Transfer Agent Instructions ”) (collectively
referred to as the “ Transaction Documents ”),
each Company hereby grants to the Secured Party a security interest
in and to the pledged property of each Company identified on
Exhibit A hereto (collectively referred to as the “
Pledged Property ”) to secure all of the Obligations
(as defined below);
WHEREAS , the
Company is entering into a Security Agreement with Stanford Venture
Capital Holdings, Inc. (“ Stanford ”) (the
“ Stanford Security Agreement ”), which grants
Stanford a second position security interest in and to the Pledged
Property behind the grant of the security interest in and to the
Pledged Property to the Secured Party hereunder; and
WHEREAS , the
Secured Party and Stanford are entering into an intercreditor
agreement (the “ Intercreditor Agreement ”)
describing the nature of the senior security interests granted by
the Company to the Secured Party hereunder and the junior security
interest granted to Stanford under the Stanford Security
Agreement.
NOW, THEREFORE, in
consideration of the promises and the mutual covenants herein
contained, and for other good and valuable consideration, the
adequacy and receipt of which are hereby acknowledged, the parties
hereto hereby agree as follows:
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ARTICLE 1.
DEFINITIONS AND
INTERPRETATIONS
Section 1.1.
Recitals .
The above recitals
are true and correct and are incorporated herein, in their
entirety, by this reference.
Section 1.2.
Interpretations .
Nothing herein
expressed or implied is intended or shall be construed to confer
upon any person other than the Secured Party any right, remedy or
claim under or by reason hereof.
Section 1.3.
Obligations Secured .
The
security interest created hereby in the Pledged Property
constitutes continuing collateral security for all of the
obligations of the Parent now existing or hereinafter incurred to
the Buyers under the Transaction Documents and whether arising
before, on or after the date hereof including, without limitation
following obligations (collectively, the “ Obligations
”):
(a) for so long as the Convertible
Debentures are outstanding, the payment by the Parent, as and when
due and payable (by scheduled maturity, acceleration, demand or
otherwise), of all amounts from time to time owing by it in respect
of the Securities Purchase Agreement, the Convertible Debentures
and the other Transaction Documents; and
(b) for so long as the Convertible
Debentures are outstanding, the due performance and observance by
the Parent of all of its other obligations from time to time
existing in respect of any of the Transaction Documents, including
without limitation, the Parent’s obligations with respect to
any conversion or redemption rights of the Secured Party under the
Convertible Debentures.
ARTICLE 2.
PLEDGED PROPERTY; EVENT OF
DEFAULT
Section 2.1.
Pledged Property .
(a)
As collateral security for all of the Obligations, the Company
hereby pledges to the Secured Party, and creates in the Secured
Party for its benefit, a continuing security interest in and to all
of the Pledged Property whether now owned or hereafter
acquired.
(b)
Without limiting the generality of the foregoing, as additional
security for the payment and performance of the Obligations, each
Company hereby grants to the Secured Party a continuing security
interest in, and hereby collaterally assigns to the Secured Party,
all of such Company’s right, title and interest in and to
each
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Deposit Account (as defined below) and in and
to any deposits or other sums at any time credited to each such
Deposit Account. In connection with the foregoing, each
Company hereby authorizes and directs each bank or other depository
institution which maintains any Deposit Account to pay or deliver
to the Secured Party upon the Secured Party’s written demand
thereof made at any time after the occurrence of an Event of
Default has occurred all balances in each Deposit Account with such
depository for application to the Obligations then
outstanding.
(c)
Simultaneously with the execution and delivery of this Agreement,
the Company shall make, execute, acknowledge, file, record and
deliver to the Secured Party any documents reasonably requested by
the Secured Party to perfect its security interest in the Pledged
Property. Simultaneously with the execution and delivery of
this Agreement, the Company shall make, execute, acknowledge and
deliver to the Secured Party such documents and instruments,
including, without limitation, financing statements, certificates,
affidavits and forms as may, in the Secured Party’s
reasonable judgment, be necessary to effectuate, complete or
perfect, or to continue and preserve, the security interest of the
Secured Party in the Pledged Property, and the Secured Party shall
hold such documents and instruments as secured party, subject to
the terms and conditions contained herein.
Section 2.2.
Event of Default
An
“ Event of Default ” shall be deemed to have
occurred under this Agreement upon an Event of Default under and as
defined in the Convertible Debentures.
Section 2.3
Grant of Security Interest to Stanford.
The
Company is granting a security interest in and to the Pledged
Property to Stanford under the Stanford Security Agreement.
The security interests granted by the Company to the Secured Party
hereunder shall be senior to the security interest granted by the
Company to Stanford under the Stanford Security Agreement
irrespective of priority, regardless of the date, manner, or order
of perfection of the respective security interests, liens and
encumbrances granted or to be granted by the Company to or for the
benefit of the Secured Party hereunder or Stanford under the
Stanford Security Agreement. So long as this Agreement shall
remain in effect, the security interests, liens, and
encumbrances granted to the Secured Party shall be senior to the
security interests, liens and encumbrances of granted to
Stanford. The Secured Party and Stanford are entering into
the Intercreditor Agreement further describing the ranking of the
security interests granted by the Company to the Secured Party
hereunder and to Stanford under the Stanford Security
Agreement.
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ARTICLE 3.
ATTORNEY-IN-FACT;
PERFORMANCE
Section 3.1.
Secured Party Appointed Attorney-In-Fact .
Upon the
occurrence and during the continuance of an Event of Default: (a)
the Company hereby appoints the Secured Party as its
attorney-in-fact, with full authority in the place and stead of the
Company and in the name of the Company or otherwise, from time to
time in the Secured Party’s discretion to take any action and
to execute any instrument which the Secured Party may reasonably
deem necessary to accomplish the purposes of this Agreement,
including, without limitation, to receive and collect all
instruments made payable to the Company representing any payments
in respect of the Pledged Property or any part thereof and to give
full discharge for the same; (b) the Secured Party may demand,
collect, receipt for, settle, compromise, adjust, sue for,
foreclose, or realize on the Pledged Property as and when the
Secured Party may determine, and (c) to facilitate collection, the
Secured Party may notify account debtors and obligors on any
Pledged Property to make payments directly to the Secured
Party.
Section 3.2.
Secured Party May Perform .
If the Company
fails to perform any agreement contained herein, the Secured Party,
at its option, may itself perform, or cause performance of, such
agreement, and the expenses of the Secured Party incurred in
connection therewith shall be included in the Obligations secured
hereby and payable by the Company under
Section 8.3.
ARTICLE 4.
REPRESENTATIONS AND
WARRANTIES
Section 4.1.
Authorization; Enforceability .
Each of the
parties hereto represents and warrants that it has taken all action
necessary to authorize the execution, delivery and performance of
this Agreement and the transactions contemplated hereby; and upon
execution and delivery, this Agreement shall constitute a valid and
binding obligation of the respective party, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors’ rights or by the principles governing
the availability of equitable remedies.
Section 4.2.
Ownership of Pledged Property .
The Company
represents and warrants that it is the legal and beneficial owner
of the Pledged Property free and clear of any lien, security
interest, option or other charge or encumbrance (each, a “
Lien ”) except for the security interest created by
this Agreement and other Permitted Liens. For purposes of
this Agreement, “ Permitted Liens ” means: (1)
the security interest created by this Agreement and the Stanford
Security Agreement, (2) existing Liens disclosed by the Company to
the Secured Party; (3) inchoate Liens for taxes, assessments or
governmental charges or levies not yet due, as to which the grace
period, if any, related thereto has not yet expired, or being
contested in good faith and by
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appropriate
proceedings for which adequate reserves have been established in
accordance with GAAP; (4) Liens of carriers, materialmen,
warehousemen, mechanics and landlords and other similar Liens which
secure amounts which are not yet overdue by more than 60 days or
which are being contested in good faith by appropriate proceedings;
(5) licenses, sublicenses, leases or subleases granted to other
Persons not materially interfering with the conduct of the business
of the Company; (6) Liens securing capitalized lease obligations
and purchase money indebtedness incurred solely for the purpose of
financing an acquisition or lease; (7) easements, rights-of-way,
restrictions, encroachments, municipal zoning ordinances and other
similar charges or encumbrances, and minor title deficiencies, in
each case not securing debt and not materially interfering with the
conduct of the business of the Company and not materially
detracting from the value of the property subject thereto; (8)
Liens arising out of the existence of judgments or awards which
judgments or awards do not constitute an Event of Default; (9)
Liens incurred in the ordinary course of business in connection
with workers compensation claims, unemployment insurance, pension
liabilities and social security benefits and Liens securing the
performance of bids, tenders, leases and contracts in the ordinary
course of business, statutory obligations, surety bonds,
performance bonds and other obligations of a like nature (other
than appeal bonds) incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed
money); (10) Liens in favor of a banking institution arising by
operation of law encumbering deposits (including the right of
set-off) and contractual set-off rights held by such banking
institution and which are within the general parameters customary
in the banking industry and only burdening deposit accounts or
other funds maintained with a creditor depository institution; (11)
usual and customary set-off rights in leases and other contracts;
and (12) escrows in connection with acquisitions and
dispositions.
ARTICLE 5.
DEFAULT; REMEDIES;
SUBSTITUTE COLLATERAL
Section 5.1
Method of Realizing Upon the Pledged Property: Other
Remedies .
If any Event of
Default shall have occurred and be continuing:
(a)
The Secured Party may exercise in respect of the Pledged Property,
in addition to any other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a
secured party upon default under the Uniform Commercial Code
(whether or not the Uniform Commercial Code applies to the affected
Pledged Property), and also may (i) take absolute control of the
Pledged Property, including, without limitation, transfer into the
Secured Party’s name or into the name of its nominee or
nominees (to the extent the Secured Party has not theretofore done
so) and thereafter receive, for the benefit of the Secured Party,
all payments made thereon, give all consents, waivers and
ratifications in respect thereof and otherwise act with respect
thereto as though it were the outright owner thereof,
(ii) require the Company to assemble all or part of the
Pledged Property as directed by the Secured Party and make it
available to the Secured Party at a place or places to be
designated by the Secured Party that is reasonably convenient to
both parties, and the Secured Party may enter into and occupy any
premises owned or leased by the Company where the Pledged Property
or any part
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thereof is located
or assembled for a reasonable period in order to effectuate the
Secured Party’s rights and remedies hereunder or under law,
without obligation to the Company in respect of such occupation,
and (iii) without notice except as specified below and without
any obligation to prepare or process the Pledged Property for sale,
(A) sell the Pledged Property or any part thereof in one or
more parcels at public or private sale, at any of the Secured
Party’s offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other
terms as the Secured Party may deem commercially reasonable and/or
(B) lease, license or dispose of the Pledged Property or any
part thereof upon such terms as the Secured Party may deem
commercially reasonable. The Company agrees that, to the
extent notice of sale or any other disposition of the Pledged
Property shall be required by law, at least ten (10) days’
notice to the Company of the time and place of any public sale or
the time after which any private sale or other disposition of the
Pledged Property is to be made shall constitute reasonable
notification. The Secured Party shall not be obligated to
make any sale or other disposition of any Pledged Property
regardless of notice of sale having been given. The Secured
Party 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. The Company hereby waives any claims
against the Secured Party arising by reason of the fact that the
price at which the Pledged Property may have been sold at 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
Obligations, even if the Secured Party accepts the first offer
received and does not offer such Pledged Property to more than one
offeree, and waives all rights that the Company may have to require
that all or any part of such Pledged Property be marshaled upon any
sale (public or private) thereof. The Company hereby
acknowledges that (i) any such sale of the Pledged Property by
the Secured Party may be made without warranty, (ii) the
Secured Party may specifically disclaim any warranties of title,
possession, quiet enjoyment or the like, and (iii) such
actions set forth in clauses (i) and (ii) above shall not
adversely affect the commercial reasonableness of any such sale of
Pledged Property.
(b)
Any cash held by the Secured Party as Pledged Property and all cash
proceeds received by the Secured Party in respect of any sale of or
collection from, or other realization upon, all or any part of the
Pledged Property shall be applied (after payment of any amounts
payable to the Secured Party pursuant to Section 8.3 hereof) by the
Secured Party against, all or any part of the Obligations in such
order as the Secured Party shall elect, consistent with the
provisions of the Securities Purchase Agreement. Any surplus
of such cash or cash proceeds held by the Secured Party and
remaining after the indefeasible payment in full in cash of all of
the Obligations shall be paid over to whomsoever shall be lawfully
entitled to receive the same or as a court of competent
jurisdiction shall direct.
(c)
In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which the
Secured Party is legally entitled, the Company shall be liable for
the deficiency, together with interest thereon at the rate
specified in the Convertible Debentures for interest on overdue
principal thereof or such other rate as shall be fixed by
applicable law, together with the costs of collection and the
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reasonable fees,
costs, expenses and other client charges of any attorneys employed
by the Secured Party to collect such deficiency.
(d)
The Company hereby acknowledges that if the Secured Party complies
with any applicable state, provincial, or federal law requirements
in connection with a disposition of the Pledged Property, such
compliance will not adversely affect the commercial reasonableness
of any sale or other disposition of the Pledged Property.
(e)
The Secured Party shall not be required to marshal any present or
future colla
