Exhibit 10.13
SECURITY AGREEMENT
OF
TEAMM PHARMACEUTICALS,
INC.
Dated: December 30, 2005
The undersigned TEAMM
Pharmaceuticals, Inc., a Florida corporation (the
”Debtor”), whose address appears below, and Missouri
State Bank and Trust Company, a Missouri banking corporation
(“Secured Party”), hereby agree as follows:
1. As security for its obligations
under that certain Continuing Contract of Guaranty, dated as of
even date herewith (the “Guaranty”) Debtor hereby
grants to Secured Party a security interest in and lien upon, and
assigns to Secured Party, the Collateral described in Paragraph 2,
to secure the payment, performance and observance of all
obligations and liabilities of the Debtor arising pursuant to the
Guaranty (the “Obligations”).
2. The Collateral is described as
follows and may be supplemented in the future by any separate
schedule at any time furnished by Debtor to Secured Party (all of
which are hereby deemed part of this Security Agreement). Such
Collateral includes all attachments, accessions and equipment now
or hereafter affixed to the Collateral or used in connection
therewith, all substitutions and replacements thereof, and all
items of Collateral now existing and hereafter acquired, created or
arising:
ALL OF DEBTOR’S ACCOUNTS AND
INVENTORY, NOW OWNED OR HEREAFTER ACQUIRED, AND WHEREVER LOCATED,
AND ALL PRODUCTS, PROCEEDS, RENTS AND PROFITS OF THE FOREGOING,
INCLUDING, WITHOUT LIMITATION, PROCEEDS OF INSURANCE POLICIES
INSURING ANY OR ALL OF THE FOREGOING AND ANY INDEMNITY, WARRANTY OR
GUARANTY PAYABLE BY REASON OF LOSS OR DAMAGE TO OR OTHERWISE WITH
RESPECT TO ANY OF THE FOREGOING.
3. The Debtor hereby irrevocably
authorizes the Secured Party at any time and from time to time to
file in any filing office in any Uniform Commercial Code
jurisdiction any initial financing statements and amendments
thereto that (a) indicate the Collateral and (b) provide any other
information required by part 5 of Article 9 of the UCC of the
State, or such other jurisdiction, for the sufficiency or filing
office acceptance of any financing statement or amendment,
including (i) whether the Debtor is an organization, the type of
organization and any organizational identification number issued to
the Debtor and, (ii) in the case of a financing statement filed as
a fixture filing or indicating Collateral as as-extracted
collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. The Debtor agrees to
furnish any such information to the Secured Party promptly upon the
Secured Party’s request.
4. Debtor warrants, represents and
covenants with respect to the Collateral as follows:
(a) the chief place of business of
Debtor, the books and records relating to the Collateral, and the
Collateral, are all located at the address(es) set forth below and
Debtor will not change any of the same or its name or state where
Debtor is located without prior written notice to and consent of
Secured Party;
(b) the Collateral is now and will
at all times hereafter be owned by Debtor free and clear of all
liens, security interests, encumbrances and rights of others except
for the security interest granted hereby;
(c) Debtor will not assign, sell,
mortgage, lease, transfer, pledge, grant a security interest in,
encumber, or otherwise dispose of or abandon any part or all of the
Collateral without prior written consent of the Secured Party, and
the inclusion of “proceeds” of the Collateral under the
security interest granted herein shall not be deemed a consent by
the Secured Party to any sale or other disposition of any part or
all of the Collateral, other than for sales of Inventory in the
ordinary course of business, except that Debtor may replace
obsolete or worn machinery or equipment in the ordinary course of
business;
(d) Secured Party shall at all times
have free access to and right of inspection of the Collateral and
any records pertaining thereto (and the right to make extracts from
and to receive from Debtor originals or true copies of such records
and any papers and instruments relating to any or all of the
Collateral upon request therefor) and Debtor hereby grants to
Secured Party a security interest in all such records, papers and
instruments to secure payment, performance and observance of the
Obligations;
(e) Debtor will use the Collateral
with all reasonable care and caution and in conformity with all
applicable laws, ordinances and regulations;
(f) Debtor will keep the Collateral
in first class order, repair, running and marketable condition at
Debtor’s own cost and expense;
(g) Debtor assumes all
responsibility and liability arising from the use of the
Collateral;
(h) Debtor will, at its expense,
perform all acts and execute all documents in a form reasonably
acceptable to Debtor requested by Secured Party at any time to
evidence, perfect, maintain and enforce Secured Party’s
security interest in the Collateral and upon request of Secured
Party, at any time and from time to time, shall deliver to Secured
Party any instrument, document or chattel paper constituting part
of the Collateral, duly endorsed or assigned, Debtor hereby
authorizes Secured Party and grants Secured Party its power of
attorney to file any financing statements or continuation
statements pursuant to the UCC of the State or such other
jurisdiction as is deemed necessary or appropriate by Second Party
to perfect its security interest hereunder, which power of attorney
shall be deemed to be coupled with an interest and is irrevocable,
and shall execute and deliver any other papers, documents or
instruments requested by Secured Party in connection with this
Security Agreement;
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(i) the Collateral is now and shall
remain personal property, and Debtor will not permit any of the
Collateral to become a part of or affixed to real property without
prior notice to Secured Party and without first making all
arrangements, and delivering, or causing to be delivered, to
Secured Party all instruments and documents, including, without
limitation, waivers and subordination agreements by any landlords
or mortgagees, requested by and satisfactory to Secured Party, to
protect the security interest granted herein against all
persons;
(j) Debtor, at its own expense, will
insure the Collateral in the name of and with loss or damage
payable to Secured Party, against the risks and in the amounts
required by the Agreement, and will notify Secured Party of any
material loss or damage to any of the Collateral, whether or not
insured;
(k) Debtor assumes all
responsibility and liability arising from the use of the
Collateral;
(l) Secured Party may, in its sole
discretion, release any of the Collateral without notice to or
consent by Debtor and without discharging or otherwise affecting
the Obligations or the security interest granted herein;
(m) Secured Party may in its
discretion, for the account and at the expense of Debtor, pay any
amount or do any act required of Debtor hereunder or requested by
Secured Party to preserve, protect, maintain or enforce the
Obligations or the security interest granted herein and which
Debtor fails to do or pay, and any such payment shall be deemed an
advance by Secured Party to Debtor, shall be payable on demand and
shall be secured hereby;
(n) Debtor will promptly pay Secured
Party any and all sums, costs, and expenses which Secured Party may
pay or incur pursuant to the provisions of this Security Agreement
or in defending, protecting or enforcing the security interest
granted herein or in enforcing payment of the Obligations or
otherwise in connection with the provisions hereof, including but
not limited to all court costs, collection charges, travel
expenses, and reasonable attorney’s fees, all of which,
together with interest at a rate equal to the highest rate then
payable on the Obligations, shall be part of the
Obligations;
5. (a) The term “Accounts
Receivable” means and includes all accounts receivable owing
to Debtor and arising from sales of merchandise and/or services by
the Debtor in the ordinary course of business, all proceeds thereof
and all of Debtor’s rights to any merchandise which is
represented thereby, and for purposes of this paragraph 5 shall
include documents, instruments and chattel paper. From time to
time, as required by the Agreement, or on request of Secured Party
after the occurrence of any “Event of Default” (as that
term is defined in the Loan Agreement), which has not been cured
within the applicable cure period, Debtor shall provide Secured
Party with schedules describing all Accounts Receivable and shall
execute and deliver written assignments of such Accounts Receivable
to Secured Party, provided, however, that Debtor’s failure to
execute and deliver such schedules and/or assignments shall not
affect or limit Secured Party’s security interest or other
rights in and to Accounts Receivable. Together with each schedule,
Debtor shall furnish copies of customers’ invoices or the
equivalent, and Debtor hereby warrants the genuineness thereof. On
request of Secured Party, Debtor shall furnish to Secured Party the
original shipping or delivery
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receipts of all merchandise sold. Each of the
Accounts Receivable is enforceable in accordance with its terms, no
payment is past due (or any past due payment is clearly noted as
such), and no partial payment not shown on the account has been
made by anyone.
(b) Debtor shall furnish Secured
Party with an aging of Accounts Receivable in such form and as
often as is required by the Agreement.
(c) Secured Party may, at any time
and from time to time and without notice to Debtor, verify the
validity and amount or any other matter relating to any of the
Accounts Receivable by mail, telephone, telegraph or otherwise, in
the name of Secured Party or Debtor.
(d) Upon the occurrence of an Event
of Default, which has not been cured within the applicable cure
period, Debtor will instruct its account debtors to remit to a lock
box to which Secured Party will have sole access and control. All
deposits to such lock box shall constitute additional Collateral
and shall not be deemed payment of the Obligations.
(e) At any time after the occurrence
of an Event of Default, which has not been cured within the
applicable cure period, Secured Party may, and on Secured
Party’s demand Debtor will, notify customers or account
debtors that the Accounts Receivable have been assigned to Secured
Party or of Secured Party’s security interest therein, and
collect the Accounts Receivable directly and charge the collection
costs and expenses to the Obligations but, unless and until Secured
Party does so notify or gives Debtor other instructions, Debtor
shall make collection of all Accounts Receivable for Secured Party,
receive all payments thereon as Secured Party’s trustee, and
shall immediately deliver them to Secured Party in their original
form. Debtor will deliver to Secured Party, duly endorsed or
assigned, all instruments, chattel paper, guaranties or security
agreements immediately upon receipt by Debtor as evidence of, in
payment of or as security for any of the Collateral. All checks and
other instruments received by Secured Party as proceeds of any of
the Accounts Receivable will be credited (conditional upon final
collection) against the Obligations; provided, however, that for
purposes of calculation of interest, such conditional credit will
be made after allowing five (5) calendar days for
collection.
(f) All sums credited by or due from
Secured Party to Debtor shall at all times constitute additional
security for the Obligations and may be set off against any
Obligation at any time whether or not other security held by
Secured Party is adequate and whether or not such Obligations are
then due.
(g) If any warranty is breached as
to any of the Accounts Receivable, or if any of the Accounts
Receivable is not paid by the customer or account debtor within 90
days from its due date, or the customer or account debtor disputes
liability or makes any claim with respect thereto, or a petition in
bankruptcy or other application for relief under the Bankruptcy
Code or any other insolvency law, is filed with respect to the
customer or account debtor or the customer or account debtor makes
a general assignment for the benefit of creditors, becomes
insolvent, fails, suspends or goes out of business, then Secured
Party may accelerate the principal of the Obligations to the extent
of any or all of the Accounts Receivable owing by that customer or
account debtor. Any merchandise which is returned by a customer or
account debtor or otherwise recovered shall remain part of the
Collateral. Debtor shall notify Secured Party promptly of all
disputes and claims and
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settle or adjust them at no expense to Secured
Party but no discount, credit or allowance shall be granted to any
customer or account debtor without Secured Party’s consent
except in accordance with its announced trade terms. Secured Party
may, after the occurrence of an Event of Default, enforce
collection, settle or adjust disputes and claims directly with
customers or account debtors for amounts and upon terms which
Secured Party considers commercially reasonable, and in all cases
Secured Party will credit Debtor with only the net amounts received
by Secured Party in payment of the Accounts Receivable.
(h) Debtor shall place notations
upon its books of account to disclose the assignment of all of the
Accounts Receivable to Secured Party or Secured Party’s
security interest therein and shall perform all other steps
requested by Secured Party to create and maintain in Secured
Party’s favor a valid first security interest, assignment or
lien in, of, or on all of the Accounts Receivable and all other
security held by or for Secured Party. Secured Party may at all
times have access to, inspect, audit and make extracts from all of
Debtor’s records, files and books of account relating to the
Accounts Receivable. At Secured Party’s request, Debtor will
stamp all invoices and other documents sent to account debtors
representing any Accounts Receivable with the following notice:
“The amount shown to be due has been assigned and should be
paid to Missouri State Bank and Trust Company, 12452 Olive Street
Road, Creve Coeur, Missouri 63141, for credit to TEAMM
Pharmaceuticals, Inc.” Until default, Debtor will,
a
