Irrevocable Collateral Assignment of Stock & Loan Agreement (2000)Full Document 

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           IRREVOCABLE COLLATERAL ASSIGNMENT OF STOCK & LOAN AGREEMENT



Effective Date: Sept. 22, 2000
Place:          Palm Springs, CA
Collateral Shares:   Company Name: BioShield Technologies/Electronic Medical
                                   Distribution, Inc.
                     Symbol: BSTI
                     Stock Certificate No.#: 0424, 0425, 0426, and 0427
                     Date Cut: August 25, 2000


AS SECURITY for payment of and on that certain Promissory Note (the "Note")
of even date herewith, an original copy of which is attached hereto
incorporated herein by this reference, in the aggregate gross principal sum of:
$14,000,000.00 (fourteen million US Dollars). To be paid in 1-3 (one to three)
traunches: 1) $2,000,000.00 within 24 hours of execution of this agreement and
receipt of the collateral described herein; 2) $6,000,000.00 72 hours from
first traunch; 3) $6,000,000.00 45-business day after second traunch.

Made by the undersigned: Name: Electronic Medical Distribution, Inc.,
Address: 5655 Peachtree Parkway, Norcross, GA., 30092

Whether made by one or more payable to the order of: COREY-CHANNING TRUST (the
"Lender") at 611 South Palm Canyon Drive, Suite 7-158, Palm Springs, CA 92264,
with ANTHONY CIOCCHETTI, JR., TRUSTEE/POA, whether one or more, the Borrower
hereby assigns as Collateral: 3,000,000 (three million) shares (the "Collateral
Shares") 144 stock of (the "Borrower"), held on the books and records of such
company, represented by certificates for such Collateral Shares which Borrower
has currently herewith delivered to the Lender, together with an assignment of
such Collateral Shares endorsed in blank. The Borrower herewith irrevocably
appoints the Lender as attorney in fact for the Borrower to arrange for
transfer of the Collateral Shares, to the Custodial Safekeeping Account solely
for the purposes as indicated herein. The Borrower warrants that the Collateral
Shares referred to herein are valid and authentic and are not subject to any
further pledge, restriction or encumbrance when they are delivered into the
Custodial Safekeeping Account, as defined in Section #14, of the attached.

The assignment of such stock is also made upon the following terms:

1)   During the term of this Agreement, all dividends and other amounts received
     by the Borrower as a result of the Borrowers record of ownership of the
     Collateral Shares shall be applied by the Borrower or Borrowers and applied
     to the payment of the Note or be deemed assigned to the Lender.

2)   Default Provision: During the term of this Agreement, The Borrower shall be
     assigned and retain the right to vote the Collateral Shares or to take
     action required by the share holders of the subject stock in order to
     continue the viability of the stock.

3)   Default Provision: During the term of this Agreement, it is expressly
     understood and agreed by the Borrower that the Lender shall retain the
     right in the event of said default to further assign all the Collateral
     Shares or to offer for sale, transfer, or pledge Collateral Shares in order
     to regain the funds Lender loaned to the Borrower. This includes all
     interest and expenses incurred during the default to liquidate the
     Collateral Shares.


        IRREVOCABLE COLLATERAL ASSIGNMENT.  LENDER'S INITIALS: ______ BORROWER'S
                                                  INITIALS: /S/_____ PAGE 1 OF 5
   2
4)   If, during the term of this Collateral Assignment, any shares, dividends,
     re-classification, re-adjustment or other change is declared or made in
     the capital Structure of the corporation(s), whose stock in hereby
     collaterally assigned, all new, Substituted and additional shares or other
     securities, issued by reason of any change, shall be held by the Lender
     under the terms of this Collateral Assignment Agreement in the same manner
     the shares originally assigned hereunder.

5)   If, during the term of this Collateral Assignment subscription warrants or
     any other right or options shall be issued in connection with the
     Collateral Shares, such warrants, rights and options, shall be immediately
     collaterally assigned by the Borrower to the Lender, the Payee of the above
     referenced Note.

6)   Upon payment, in full, at maturity of the above referenced Note, the Lender
     shall re-deliver immediately the Collateral Shares and Assignments thereof
     to the Borrower. In the event of "Default" that such shares must be offered
     for sale, transfer or pledged by the Lender such that, ultimately, all the
     Collateral shares mush be liquidated, the Lender's only duty shall be to
     notify the Borrower, in writing, that loan is in default and that the
     Lender shall deliver written notice to Borrower of said Default after which
     Borrower shall have ten (10) days to cure said default in full. If Borrower
     does not cure said default with that time, then the loan will be in default
     and Collateral Shares are being set into either a sale, transfer or pledge
     account to be disposed for the repayment of loan. It is further understood
     and agreed to by the Lender and Borrower that Lender will not be held
     responsible for any financial risks to him in the event that the Collateral
     Shares must be liquidated. Lender agrees to not hold Borrower responsible
     for any other financial responsibility of the liquidation of same.

7)   In the event that the Borrower should "Default" with respect to the Note,
     over the Lender or the then-payee of such Note shall have all rights and
     remedies provided by the Uniform Commercial Code of the State of
     California. Lender retains the right to sell, or bid on, or buy the all
     Collateral shares in the account in such a manner and for such a price as
     to cure the "Default" of Note and the liquidated damages thereto.

8)   In the event of any dispute between Lender and Borrower, the assigned
     escrow agent (The "CUSTODIAN") shall not deliver the stock nor the
     assignments thereof absent a written mutual agreement to such effect from
     the Lender and from the Borrower. Absent a settlement of any such
     controversy by a final judgement of a court of competent jurisdiction,
     Borrower and Lender shall pay any and all attorneys' fees, court costs and
     damages as they may be agreed upon, or as the court may apportion between
     the Borrower and Lender. Borrower agrees to hold harmless Lender and escrow
     agent from any expense(s) arising out of acting as "Custodian".

9)   The parties hereby acknowledge that the Collateral shares have no liens,
     encumbrances or other loan pledges placed against the Collateral Shares.
     All 144-restricted shares accepted by Lender shall be accompanied with the
     STOCK MEDALLION SIGNATURE, MERRILL LYNCH, PIERCE, FENNER & SMITH FORM 116,
     LEGAL LETTER OF OPINION AND ASSIGNMENT LETTER AUTHORIZED BY AUTHORITY
     SIGNATORY FOR BORROWER NOTARIZED, PLEDGED TO THE COREY-CHANNING TRUST, AND
     ANY OTHER SUPERFICIAL FORMS THAT MAY COME INTO PLAY. The shares represented
     by the assigned certificate(s) have been registered under the Securities
     Act of 1933 (the "Act") and are not treasury stocks of the company that
     have no pledge value.


                   IRREVOCABLE COLLATERAL ASSIGNMENT. LENDER'S INITIALS: _______
                                     BORROWER'S INITIALS: /S/_______ PAGE 2 OF 5
   3

10)  Borrower hereby certifies that he/she is an "ACCREDITED INVESTOR" within
     the meaning of Rule 501(a) promulgated under the US Securities Act of 1933,
     as amended. The Lender and the Borrower hereby agree that the Collateral
     Shares acknowledged are to be held as security for the express purposes
     stated, as security to the promissory note attached hereto and made part of
     this agreement. COLLATERAL SHARES ARE NOT TO BE BORROWED FURTHER AGAINST,
     SOLD, NOR TO BE MARGINED, NOR SOLD SHORT. The Collateral Shares are being
     held for the sole purpose of collateral for the loan as per Promissory
     Note, attached hereto as Exhibit A. Lender has only the right to place for
     sale, transfer or pledge Collateral Shares under the conditions of the
     "Default Provisions" as outlined in the Agreement. In the event that Lender
     finds inadequacy in the Collateral Shares to complete said loan against
     Collateral Shares; the parties hereby agree to execute any and all
     documents or other instruments deemed reasonably necessary to effectuate
     such rescission to the parties pursuant to their respective interests
     herein.

11)  The gross amount of the loan shall be $14,000,000.00 (fourteen million US
     Dollars). Borrower hereby recognizes and accepts that a five percent (5%)
     Loan Origination fee will be charged. The interest and Origination fee
     shall be deducted from loan amount and Borrower will then receive the net
     amount of proceeds.

12)  The term of the loan shall be for twelve (12) months, with an extension of
     two (2) months at Lender's option and approval.

13)  There shall be no margin call against loan. This shall be a non-recourse
     loan secured by the stock and the Promissory Note of even date, attached
     hereto and made part hereof, as exhibit A.

14)  The Collateral Shares to be pledged shall be placed into an account for the
     benefit of the COREY-CHANNING TRUST. However Collateral Shares can be
     delivered in Certificate form whether free trading or 144-restricted to the
     following Custodial Safekeeping Account, including all formal documents
     accompanying as outlined in #9, of this Agreement. The "Custodial
     Safekeeping Account:

                                 MERRILL LYNCH
                               74-800 HIGHWAY 111
                             INDIAN WELLS, CA 92210

                            ATTN: PERRY ZEIGLER, CFM
                                 1-800-324-5572

                              ACCOUNT # 56J-10805
                                   DTC # 5198
                                  ACAT # 0161
                                  ASSIGNED TO:
                              COREY-CHANNING TRUST

15)  At the time of delivery into the Custodial Safekeeping Account(s), said
     Collateral Shares shall be free and clear of any liens and encumbrances and
     any third party claims, and are to be of non-criminal origin.



        IRREVOCABLE COLLATERAL ASSIGNMENT.  LENDER'S INITIALS: ______ BORROWER'S
                                                  INITIALS: /S/_____ PAGE 3 OF 5
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16)  Loan interest rate shall be set @ ___% (_______ percent). This is a balloon
     loan, with first year interest and origination fees pre-paid. Yearly
     interest and principal all due upon maturity date.

17)  The following additional restrictions shall apply to the Custodial
     Safekeeping Account, and the Collateral Shares during the term of the loan
     and any extensions thereof: Including but not limited the "Default
     Provisions" as described in the Agreement:

         18.1)  The Collateral Shares shall remain in the Custodial Safekeeping
                Account or Accounts.

         18.2)  The Custodial Shares shall not be moved into another account or
                removed from the Custodial Account unless under Default
                Provision.

         18.3)  The Collateral Shares and the account shall not be
                re-hypothecated, re-assigned, or encumbered for more than
                $16,000,000.00 (sixteen million US Dollars) in principal amount
                plus interest, and late fees or loan fees and money reserve
                account.

         18.4)  The Collateral Shares and holding account shall not be used for
                hedging, margining, selling, buying, or trading in any option,
                derivatives or speculative financial instruments.

         18.5)  Lender hereby agrees to immediately return Collateral Shares
                balance held in the Custodial Account to Borrower upon repayment
                in full of the loan, at anytime within three (3) business days
                from the date of payoff. Lender further agrees to return all the
                Collateral Shares to the borrower if for any reason(s)
                whatsoever, the contemplated loan transaction does not close in
                a timely fashion, without any recourse to anyone, without any
                deductions and offsets.

         18.6)  Upon Custodian Account receiving Collateral Shares via DTC or by
                Certificate form, having time to verify, authenticate and place
                into the Custodial Safekeeping Account, Borrower will receive
                from Lender Principal amount of loan with 72 hours. Monies to
                Borrower can be wire transferred or a Cashier's Check.
                (Borrower's Option.)

18)  This is a private and confidential transaction, under the rule of
     non-circumvention and non-disclosure of Confidential Information in a
     business like manner, for a mutual benefit, with Confidential Information
     being defined as Lender's Banking, Lender's Stock Accounts, as have been
     disclosed in this agreement.

19)  This agreement shall be construed under the laws of the United States of
     America and the State of California.

20)  The Borrowers and Lender have placed their Signature upon this document
     agreeing to the terms and conditions as they have been numbered and spelled
     out in this agreement. These terms and conditions apply and shall further
     extend to their heirs, representatives, succession, and assigns of the
     Borrower and Lender.


        IRREVOCABLE COLLATERAL ASSIGNMENT.  LENDER'S INITIALS: ______ BORROWER'S
                                                  INITIALS: /S/_____ PAGE 4 OF 5
   5

           ACCEPTED AND AGREED TO AS REPRESENTED BY SIGNATURES BELOW



                                                  
BY: /s/                                              Date:     9-21-00
   -------------------------------------------             ---------------------------------------------

Name:  Scott Parliament                              Title: Chief Financial Officer
     -----------------------------------------             ---------------------------------------------

Address:  5655 Peachtree Pkwy                        City:  Norcross
        --------------------------------------             ---------------------------------------------

State: GA  Zip 30092  Phone 770-246-2000             Fax:   770-246-2196
      ---      -----        ------------                    --------------------------------------------


BY:                                                  Date:
   -------------------------------------------              --------------------------------------------
   COREY-CHANNING TRUST/ANTHONY GIOCCHETTI JR.
   TRUSTEE/POWER OF ATTORNEY
   611 SOUTH CANYON DRIVE, SUITE 7-15B
   PALM SPRINGS, CA 92264

Date Signed Is              , 2000
              --------------                                 -------------------------------------------
                                                                               Witness
                                                                       Please print name below

                                                             -------------------------------------------

  --------------------------------------------               -------------------------------------------
              Accommodator                                                     Witness
Date Signed Is              , 2000                                     Please print name below
              --------------

                                                             -------------------------------------------
  /s/                                                        /s/
  --------------------------------------------               -------------------------------------------
                Borrower                                                       Witness
Date Signed Is     9-21     , 2000                                     Please print name below
              --------------
                                                             /s/
                                                             -------------------------------------------


             Irrevocable Collateral Assignment. Lender's Initials: ______

                             Borrower's Initials: /s/______  Page 5 of 5 _____

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                                   EXHIBIT A

                                PROMISSORY NOTE

PRINCIPAL AMOUNT: $14,000,000.00                  ISSUE DATE: SEPTEMBER 22, 2000
MATURITY DATE:    ONE YEAR AND ONE DAY            LOAN NO.:

For Value received, Electronic Medical Distribution, Inc., a Delaware
corporation with an address at 5655 Peachtree Parkway, Norcross, GA., 30092,
(the "Maker") promises to pay Corey-Channing Trust, (together with all
subsequent holders in due course) at 611 South Palm Canyon Drive, Suite 7-158,
Palm Springs, CA 92264 (the "Holder"), the principal sum of $14,000,000.00
(fourteen million US Dollars and No/cents) lawful money of the United States of
America, with Interest from the date hereof at the rate of ___% (________
percent) simple interest per annum on the terms hereinafter set forth.

This Promissory Note (the "Note") is issued under the terms of an Irrevocable
Collateral Assignment of Stock & Loan Agreement (the "Agreement"), and all
other exhibits to same are made part of the note, dated as of September 18,
2000 between Maker and Holder.

1.   PAYMENT TERMS

     Principal. If the Loan Period, i.e., the time between the date of this Note
     and the Maturity Date, is one year, and one month then no Principal Amount
     must be repaid until the Maturity Date. However, if the Loan Period is more
     than one year and one day, then 20% of the Principal Amount must be repaid
     on each anniversary of this Note prior to the Maturity Date. All remaining
     unpaid Principal Amount is due on the Maturity Date.

     Interest. Interest is due each quarter in arrears. Interest is calculated
     on a "simple" basis, i.e. one-fourth of the Interest Rate is due at the end
     of each quarter.

     All amounts are stated and payable in US Dollars.

2.   NO DEDUCTION OR SET-OFF

     The principal and interest shall be payable without set-off or deduction,
     unless specifically added by addendum to the Note, at the address of the
     Holder set forth in the heading hereof, or at such other place as Holder
     may designate in writing.

3.   PREPAYMENT; PREPAYMENT LIMITATION

     The Maker may prepay any and all principal at any time after the first
     ninety (90) days. If only a portion of the Principal Amount is repaid, no
     interest needs to be concurrently repaid (unless due). However, if the
     entire principal amount is repaid, or that portion of principal which
     extinguishes the balance of the principal, then all accrued interest must
     also be paid to effect cancellation of the entire obligation.


EXHIBIT A                       PROMISSORY NOTE                      PAGE 1 OF 4
   7

4.   DEFAULT INTEREST

     Any principal or Interest not paid when due, in addition to being an Event
     of Default, shall bear interest thereafter at the aforesaid rate plus 15%
     (fifteen percent) per annum simple Interest.

5.   EVENTS OF DEFAULT

     The occurrence of any one or more of the following events shall constitute
     an "Event of Default" hereunder:

         (a)  Maker shall have made an assignment for the benefit of creditors
              of composition with creditors: or is unable or admits in writing
              its inability to pay its debts as they mature; or any proceeding
              relating to Maker under any bankruptcy, bankruptcy reorganization,
              arrangement, readjustment of debt, receivership, dissolution
              liquidation law or statute of any jurisdiction, whether now or

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