EXHIBIT 10.7
SECURITY AGREEMENT
Date: April 25, 2002
Debtor: Bepariko Biocom, a Nevada corporation
Debtor's Mailing Address: One Belmont Ave, GSB Building, Suite 417 Bala Cynwyd,
PA 19004
Secured Party: Gemini Growth Fund, L.P.
Secured Party's Mailing Address: 700 Gemini, Houston, TX 77058
Classification of Collateral: Accounts, contract rights, property, equipment,
inventory, general intangibles, instruments, deposit accounts, chattel paper,
leases, mineral right and all other assets.
Collateral (including all accessions): Accounts, contract rights, property,
equipment, inventory, general intangibles, instruments, deposit accounts,
chattel paper, leases, mineral rights and all other assets.
All attachments, accessions accessories, tools, parts supplies,
increases, and additions to and all replacements of and substitutions
for any property escribed above.
All products and produce of any of the property described in
this Collateral section.
All accounts, contracts rights, general intangibles, intellectual
property, instruments, rents, monies, payments, and all other rights,
arising out of a sale, lease, or other disposition of any of the
property described in this Collateral section.
All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other deposition of any of the property
described in this Collateral section.
Obligation: Convertible Note and any, and all other indebtedness, liabilities
and obligations of the Debtor to the Secured Party now owing or hereinafter
incurred.
Date: April __, 2002
Amount: $1,500,000
Maker: As provided therein
Payee: As provided therein
Final Maturity Date: As provided therein
Terms of Payment (optional): As provided therein
Debtor grants to Secured Party a security interest in the Collateral and all its
proceeds to secure payment and performance of Debtor's obligation and all
renewals and extensions of any of the obligation.
Debtor's Warranties:
1. Ownership. Debtor owns the collateral and has the authority to grant
this security interest.
2. Fixtures and Accessions. None of the collateral is affixed to real estate,
is an accession to any goods, is commingled with other goods, or will
become a fixture, accession, or part of a product or mass with other goods
except as expressly provided in this agreement.
3. Financial Statements. All information about Debtor's financial condition
provided to Secured Party was accurate when submitted, as will be any
information subsequently provided.
Debtor's Covenants:
1. Protection of Collateral. Debtor will defend the collateral against all
claims and demands adverse to Secured Party's interest in it and will keep
it free from all liens except those for taxes not yet due and from all
security interests except this one. The collateral will remain in Debtor's
possession or control at all times, except as otherwise provided in this
agreement. Debtor will maintain the collateral in good condition and
protect it against misuse, abuse, waste and deterioration except for
ordinary wear and tear resulting from its intended use.
4. Secured Party's Costs. Debtor will pay all expenses incurred by Secured
Party in obtaining, preserving, perfecting, defending and enforcing this
security interest or the collateral and in collecting or enforcing the
Obligation. Expenses for which Debtor is liable include, but are not
limited to, taxes, assessments, reasonable attorney's fees, and other legal
expenses. These expenses will bear interest from the dates of payments at
the highest rate stated in notes that are part of the obligation, and
Debtor will pay Secured Party this interest on demand at a time and place
reasonably specified by Secured Party. These expenses and interest will be
part of the obligation and will be recovered as such in all respects.
5. Additional Documents. Debtor will sign any papers that Secured Party
considers necessary to obtain, maintain, and perfect this security interest
or to comply with any relevant law.
6. Notice of Changes. Debtor will immediately notify Secured Party of any
material change in the collateral other than in the ordinary course of
business; change in Debtor's name, address, or location; change in any
matter warranted or represented in this agreement; change that may affect
this security interest; and any event of default.
7. Use and Removal of Collateral. Debtor will use the collateral primarily
according to the stated classification unless Secured Party consents
otherwise in writing. Debtor will not permit the collateral to be affixed
to any real estate, to become an accession to any goods, to be commingled
with other goods, or to become a fixture, accession, or part of a product
or mass with other goods except as expressly provided in this agreement or
in the ordinary course of business.
8. Sale. Debtor will not sell, transfer, or encumber any of the collateral
without the prior written consent of Secured Party other than in the
ordinary course of business.
9. If requested by Secured Party, debtor will receive and use reasonable
diligence to collect all accounts, accounts receivable, chattel paper,
instruments, documents and general intangibles, deposit accounts, in trust,
and to be held as property of the Secured Party, and to immediately endorse
as appropriate and deliver such rights to payment and proceeds to Secured
Party daily in the exact form in which they are received together with a
collection report in a form satisfactory to Secured Party.
10. Debtor agrees not to commingle the rights to payment, proceeds or
collections thereunder with other property.
11. Debtor agrees, with regard to the collateral and proceeds, from time to
time when reasonably requested by Secured Party, to prepare and deliver a
schedule of all collateral and proceeds subject to this agreement and to
assign in writing and deliver to secured party all accounts, contracts,
leases and other chattel paper, instruments, documents and other evidences
thereof.
12. Debtor agrees with regard to the collateral and proceeds in the event
secured party elects to receive payments of rights to payment or proceeds
hereunder, to pay all reasonable expenses incurred by secured party in
connection therewith, including reasonable expenses of accounting,
correspondence, collection efforts, reporting to account or contract
debtors, filing, recording, record keeping and expenses incidental thereto.
Rights and Remedies of Secured Party:
1. Generally. Secured Party may exercise the following rights and remedies
after default:
take control of any proceeds of the collateral;
release any collateral in Secured Party's possession to any
debtor, temporarily or otherwise;
c) take control of any funds generated by the collateral, such as refunds
from and proceeds of insurance, and reduce any part of the obligation
accordingly or permit Debtor to use such funds to repair or replace
damaged or destroyed collateral covered by insurance; and
d) demand, collect, convert, redeem, settle, compromise, receipt for,
realize on, adjust, sue for, and foreclose on the collateral either in
Secured Party's Debtor's name, as Secured Party desires.
Events of Default: Each of the following conditions is an Event of Default if
not cured within an applicable cure or grace period under any Loan Document by
and between Secured Party and Debtor:
1. if Debtor defaults in timely payment or performance of any obligation,
covenant, or liability in any written agreement between Debtor and Secured
Party or in any other transaction secured by this agreement;
2. if any warranty, covenant or representation made to Secured Party by or on
behalf of Debtor proves to have been false in any material respect when
made;
3. if a receiver is appointed for Debtor or any of the collateral;
4. if the collateral is assigned for the benefit of creditors or, to the
extent permitted by law, if bankruptcy or insolvency proceedings commence
against or by any of these parties: Debtor; any partnership of which Debtor
is a general partner; and any maker, drawer, acceptor, endorser, guarantor,
surety, accommodation party, or other person liable on or for any part of
the obligation;
5. if any financing statement regarding the collateral but not related to this
security and not favoring Secured Party is filed;
6. if any lien attaches to any of the collateral;
7. if any material amount of the collateral is lost, stolen, damaged, or
destroyed, unless it is promptly replaced with collateral of like quality
or restored to its former condition.
8. Secured party reasonably by and in good faith, believes that any or all of
the collateral and/or proceeds to be danger of misuse, dissipation,
commingling, loss, theft, damage or destruction, or otherwise in jeopardy
or unsatisfactory in character or value.
Remedies of Secured Party on Default:
1. During the existence of any event of default, Secured Party may declare the
unpaid principal and earned interest of the obligation immediately due in
whole or part, enforce the obligation, and exercise any rights and remedies
granted by the Uniform Commercial Code or by this agreement, including the
following:
a. require Debtor to deliver to Secured Party all books and records
relating to the collateral;
b) require Debtor to assemble the collateral and make it available to
Secured Party at a place reasonably convenient to both parties;
c) take possession of any of the collateral and for this purpose enter
any premises where it is located if this can be done without breach of
the peace;
d) sell, lease, or otherwise dispose of any of the collateral in accord
with the rights, remedies, and duties of a secured party under
chapters 2 and 9 of the Texas Uniform Commercial Code after notice as
required by those chapters; unless the collateral threatens to decline
speedily in value, is perishable, or would typically be sold on a
recognized market, Secured Party will give Debtor reasonable notice of
any public sale of the collateral or of a time after which it may be
otherwise disposed of without further notice to Debtor; in this event,
notice will be deemed reasonable if it is mailed, postage prepaid, to
Debtor at the address specified in this agreement at least ten days
before any public sale or ten days before the time when the collateral
may be otherwise disposed of without further notice to Debtor; in this
event, notice will be deemed reasonable if it is mailed, postage
prepaid, to Debtor at the address specified in this agreement at least
ten days before any private sale or ten days before any public sale or
ten days before time when the collateral may be otherwise disposed of
without further notice to Debtor;
e) surrender any insurance policies covering the collateral and receive
the unearned premium;
f) apply any proceeds from disposition of the collateral after default in
the manner specified in chapter 9 of the Uniform Commercial Code,
including payment of Secured Party's reasonable attorney's fees and
court expenses; and
g) if disposition of the collateral leaves the obligation unsatisfied,
collect the deficiency from Debtor.
General Provisions
1. Parties Bound. Secured Party's rights under this agreement shall inure
to the benefit of its successors and assigns. Assignment of any part
of the obligation and delivery by Secured Party of any part of the
collateral will fully discharge Secured Party from responsibility for
that part of the collateral. If Debtor is more than one, all their
representations, warranties, and agreements are joint and several.
Debtor's obligations under this agreement shall bind Debtor's personal
representatives, successors, and assigns.
2. Waiver. Neither delay in exercise nor partial exercise of any Secured
Party's remedies or rights shall waive further exercise of those
remedies or rights. Secured Party's failure to exercise remedies or
rights does not waive subsequent exercise of those remedies or rights.
Secured Party's waiver of any default does not waive further default.
Secured Party's waiver of any right in this agreement or of any
default is binding only if it is in writing. Secured Party may remedy
any default without waiving it.
3. Reimbursement. If Debtor fails to perform any of Debtor's obligations,
Secured Party may perform those obligations and be reimbursed by
Debtor on demand at the place where the note is payable for any sums
so paid, including attorney's fees and other legal expenses, plus
interest on those sums from the dates of payment at the rate stated in
the note for matured, unpaid amounts. The sum to be reimbursed shall
be secured by this security agreement.
4. Interest Rate. Interest included in the obligation shall not exceed
the maximum amount of nonusers interest that may be contracted for,
taken, reserved, charged, or received under law; any interest in
excess of that maximum amount shall be credited to the principal of
the obligation or, if that has been paid, refunded. On any
acceleration or required or permitted prepayment of the obligation,
any such excess shall be canceled automatically as of the acceleration
or prepayment or, if already paid, credited on the principal amount of
the obligation or, if the principal amount has been paid or refunded.
This provision overrides other provisions in this and all other
instruments concerning the obligation.
5. Modifications. No provisions of this agreement shall be modified or
limited except by written agreement.
6. Severability. The unenforceability of any provision of this agreement
will not effect the enforceability or validity of any other
provision.
7. After-Acquired Consumer Goods. This security interest shall attach to
after-acquired consumer goods only to the extent permitted by law.
8. Applicable Law. This agreement will be construed according to Texas
laws.
9. Place of Performance. This agreement is to be performed in the county
of Secured Party's mailing address.
10. Financing Statement. A carbon, photographic, or other reproduction of
this agreement or any financing statement covering the collateral is
sufficient as a financing statement.
11. Presumption of Truth and Validity. If the collateral is sold after
default, recitals in the bill of sale or transfer will be prima facie
evidence of their truth, and all prerequisites to the sale specified
by this agreement and by the Texas Uniform Commercial Code will be
presumed satisfied.
12. Singular and Plural. When the context requires, singular nouns and
pronouns include the plural.
13. Priority of Security Interest. Neither extensions of any of the
obligation nor releases of any of the collateral will affect the
priority of validity of this security interest with reference to any
third person.
14. Cumulative Remedies. Foreclosure of this security interest by suit
does not limit secured Party's remedies, including the right to sell
the collateral under the terms of this agreement. All remedies of
Secured Party may be exercised at the same or different times, and no
remedy shall be a defense to any other. Secured Party's rights and
remedies include all those granted by law or otherwise, in addition to
those specified in this agreement.
15. Agency. Debtor's appointment of Secured Party as Debtor's agent is
coupled with an interest and will survive any disability of Debtor.
16. Attachments Incorporated. The addendum indicated below is attached to
this agreement and incorporated into it for all purposes:
a) ( ) addendum relating to accounts, inventory, documents, chattel
paper, and general intangibles
b) ( ) addendum relating to instrument
Secured Party
__________________________________
By:
Debtor:
BEPARIKO BIOCOM
By:_______________________________
Cecile T. Coady
Title: Sole Officer and Director
Witness:
__________________________________
Name: