Exhibit 10.3
AMENDED AND RESTATED SECURITY
AGREEMENT
1.
Identification
.
This Amended and Restated Security
Agreement (the “Agreement”), dated as of December 5,
2006, is entered into by and between Ceragenix Pharmaceuticals,
Inc., a Delaware corporation (“Parent”), Ceragenix
Corporation, a Colorado corporation (“Guarantor” and
together with Parent, each a “Debtor” and collectively
the “Debtors”), and Barbara R. Mittman, as collateral
agent acting in the manner and to the extent described in the
Collateral Agent Agreement defined below (the “Collateral
Agent”), for the benefit of the parties identified on
Schedule A hereto (collectively, the
“Lenders”).
2.
Recitals .
2.1
The Lenders have made, are making
and will be making loans to Parent (the “Loans”).
It is beneficial to each Debtor that the Loans were made and are
being made.
2.2
The Loans are and will be evidenced
by certain convertible promissory notes (each a “Convertible
Note”) issued by Parent on or about November 28, 2005 and by
convertible debentures issued on or about the date hereof (the
“Convertible Debentures”, and together with the
Convertible Notes, the “Notes”) pursuant to
subscription agreements and/or securities purchase agreements (each
a “Subscription Agreement”) to which Parent and Lenders
are parties. The Notes are further identified on Schedule A
hereto and were and will be executed by Parent as
“Borrower” or “Debtor” for the benefit of
each Lender as the “Holder” or “Lender”
thereof. Schedule A hereto may be amended to include such
other Lenders who become parties hereto and sign this Agreement,
the Collateral Agent Agreement and any other agreement reasonably
requested by the Collateral Agent, who will have purchased Notes
pursuant to a Subscription Agreement.
2.3
In consideration of the Loans made
and to be made by Lenders to Parent and for other good and valuable
consideration, and as security for the performance by Parent of its
obligations under the Notes and as security for the repayment of
the Loans and all other sums due from Debtors to Lenders arising
under the Transaction Documents (as defined in the Subscription
Agreement), and any other agreement between or among them
(collectively, the “Obligations”), each Debtor, for
good and valuable consideration, receipt of which is acknowledged,
has agreed to grant to the Collateral Agent, for the benefit of the
Lenders, a security interest in the Collateral (as such term is
hereinafter defined), on the terms and conditions hereinafter set
forth. Obligations include all future advances by Lenders to
Debtor made pursuant to a Subscription Agreement.
2.4
The Lenders have appointed Barbara
R. Mittman as Collateral Agent pursuant to that certain Amended and
Restated Collateral Agent Agreement dated at or about December 5,
2006 (“Collateral Agent Agreement”), among the Lenders
and Collateral Agent.
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2.5
The following defined terms which
are defined in the Uniform Commercial Code in effect in the State
of New York on the date hereof are used herein as so defined:
Accounts, Chattel Paper, Documents, Equipment, General Intangibles,
Instruments, Inventory and Proceeds.
2.6
This Agreement supersedes and
replaces that certain other Security Agreement, dated November 28,
2005, by and among the Parent, Ceragenix Corporation, Longview
Fund, L.P., Longview Equity Fund, L.P., Alpha Capital
Aktiengesellschaft and Iroquois Capital.
3.
Grant of General Security
Interest in Collateral .
3.1
As security for the Obligations of
Debtors, each Debtor hereby grants the Collateral Agent, for the
benefit of the Lenders, a security interest in the
Collateral.
3.2
“Collateral” shall mean
all of the following property of Debtors:
(A)
All now owned and hereafter acquired
right, title and interest of Debtors in, to and in respect of all
Accounts, Goods, real or personal property, all present and future
books and records relating to the foregoing and all products and
Proceeds of the foregoing, and as set forth below:
(i)
All now owned and hereafter acquired
right, title and interest of Debtors in, to and in respect of all:
Accounts, interests in goods represented by Accounts, returned,
reclaimed or repossessed goods with respect thereto and rights as
an unpaid vendor; contract rights; Chattel Paper; investment
property; General Intangibles (including but not limited to, tax
and duty claims and refunds, registered and unregistered patents,
trademarks, service marks, certificates, copyrights trade names,
applications for the foregoing, trade secrets, goodwill, processes,
drawings, blueprints, customer lists, licenses, whether as licensor
or licensee, chooses in action and other claims, and existing and
future leasehold interests in equipment, real estate and fixtures);
Documents; Instruments; letters of credit, bankers’
acceptances or guaranties; cash moneys, deposits; securities, bank
accounts, deposit accounts, credits and other property now or
hereafter owned or held in any capacity by Debtors, as well as
agreements or property securing or relating to any of the items
referred to above;
(ii)
Goods: All now owned and hereafter acquired
right, title and interest of Debtors in, to and in respect of
goods, including, but not limited to:
(a)
All Inventory, wherever located,
whether now owned or hereafter acquired, of whatever kind, nature
or description, including all raw materials, work-in-process,
finished goods, and materials to be used or consumed in
Debtors’ business; finished goods, timber cut or to be cut,
oil, gas, hydrocarbons, and minerals extracted or to be extracted,
and all names or marks affixed to or to be affixed thereto for
purposes of selling same by the seller, manufacturer, lessor or
licensor thereof and all Inventory which may be returned to any
Debtor by its customers or repossessed by any Debtor and all of
Debtors’ right, title and interest in and to the foregoing
(including all of a Debtor’s rights as a seller of
goods);
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(b)
All Equipment and fixtures, wherever
located, whether now owned or hereafter acquired, including,
without limitation, all machinery, furniture and fixtures, and any
and all additions, substitutions, replacements (including spare
parts), and accessions thereof and thereto (including, but not
limited to Debtors’ rights to acquire any of the foregoing,
whether by exercise of a purchase option or otherwise);
(iii)
Property: All now owned and hereafter acquired
right, title and interests of Debtors in, to and in respect of any
other personal property in or upon which a Debtor has or may
hereafter have a security interest, lien or right of
setoff;
(iv)
Books and Records: All present and future books and
records relating to any of the above including, without limitation,
all computer programs, printed output and computer readable data in
the possession or control of the Debtors, any computer service
bureau or other third party; and
(v)
Products and Proceeds: All products and Proceeds of
the foregoing in whatever form and wherever located, including,
without limitation, all insurance proceeds and all claims against
third parties for loss or destruction of or damage to any of the
foregoing.
(B)
All now owned and hereafter acquired
right, title and interest of Debtors in, to and in respect of the
following:
(i)
the shares of stock, partnership
interests, member interests or other equity interests at any time
and from time to time acquired by Debtors of any and all entities
now or hereafter existing, (such entities, being hereinafter
referred to collectively as the “Pledged Issuers” and
individually as a “Pledged Issuer”), the certificates
representing such shares, partnership interests, member interests
or other interests all options and other rights, contractual or
otherwise, in respect thereof and all dividends, distributions,
cash, instruments, investment property and other property from time
to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such shares, partnership
interests, member interests or other interests; provided, however,
that the Collateral shall exclude the interest of the Debtor in the
securities of its wholly-owned subsidiary Global Alaska Industries,
Inc. and its wholly-owned subsidiary Alaska Bingo Supply, Inc.
unless Global Alaska Industries, Inc. and Alaska Bingo Supply, Inc.
are direct or indirect Subsidiaries of the Debtors at any time
after February 1, 2006;
(ii)
all additional shares of stock,
partnership interests, member interests or other equity interests
from time to time acquired by Debtors, of any Pledged Issuer, the
certificates representing such additional shares, all options and
other rights, contractual or otherwise, in respect thereof and all
dividends, distributions, cash, instruments, investment property
and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all
of such additional shares, interests or equity; and
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(iii)
all security entitlements of Debtors
in, and all Proceeds of any and all of the foregoing in each case,
whether now owned or hereafter acquired by a Debtor and howsoever
its interest therein may arise or appear (whether by ownership,
security interest, lien, claim or otherwise).
Notwithstanding anything to the
contrary contained herein or any Transaction Document, Collateral
shall not include any personal property which is, or at the time of
a Debtor’s acquisition thereof shall be subject to a purchase
money mortgage or other purchase money lien or security interest
(including capital leases).
3.3
The Collateral Agent is hereby
specifically authorized, after the Maturity Date (defined in the
Notes) accelerated or otherwise, or after an Event of Default (as
defined herein) and the expiration of any applicable cure period,
to transfer any Collateral into the name of the Collateral Agent
and to take any and all action deemed advisable to the Collateral
Agent to remove any transfer restrictions affecting the
Collateral.
4.
Perfection of Security
Interest .
4.1
Each Debtor shall prepare, execute
and deliver to the Collateral Agent UCC-1 Financing
Statements. The Collateral Agent is instructed to prepare and
file at each Debtor’s cost and expense, financing statements
in such jurisdictions deemed advisable to the Collateral Agent,
including but not limited to the States of Delaware and
Colorado. The Financing Statements are deemed to have been
filed for the benefit of the Collateral Agent and Lenders
identified on Schedule A hereto.
4.2
The Parent shall deliver to
Collateral Agent promptly stock certificates representing all of
the shares of outstanding capital stock of the Guarantor (the
“Securities”). All such certificates shall be
held by or on behalf of Collateral Agent pursuant hereto and shall
be delivered in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment
or undated stock powers executed in blank, all in form and
substance satisfactory to Collateral Agent.
4.3
All other certificates and
instruments constituting Collateral from time to time required to
be pledged to Collateral Agent pursuant to the terms hereof (the
“Additional Collateral”) shall be delivered to
Collateral Agent promptly upon receipt thereof by or on behalf of
Debtors. All such certificates and instruments shall be held
by or on behalf of Collateral Agent pursuant hereto and shall be
delivered in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment
or undated stock powers executed in blank, all in form and
substance satisfactory to Collateral Agent. If any Collateral
consists of uncertificated securities, unless the immediately
following sentence is applicable thereto, Debtors shall cause
Collateral Agent (or its custodian, nominee or other designee) to
become the registered holder thereof, or cause each issuer of such
securities to agree that it will comply with instructions
originated by Collateral Agent with respect to such securities
without further consent by Debtors. If any Collateral
consists of security entitlements, Debtors shall transfer such
security entitlements to
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Collateral Agent (or its custodian,
nominee or other designee) or cause the applicable securities
intermediary to agree that it will comply with entitlement orders
by Collateral Agent without further consent by Debtors.
4.4
Within five (5) days after the
receipt by a Debtor of any Additional Collateral, a Pledge
Amendment, duly executed by such Debtor, in substantially the form
of Annex I hereto (a “Pledge Amendment”), shall be
delivered to Collateral Agent in respect of the Additional
Collateral to be pledged pursuant to this Agreement. Each Debtor
hereby authorizes Collateral Agent to attach each Pledge Amendment
to this Agreement and agrees that all certificates or instruments
listed on any Pledge Amendment delivered to Collateral Agent shall
for all purposes hereunder constitute Collateral.
4.5
If Debtor shall receive, by virtue
of Debtor being or having been an owner of any Collateral, any (i)
stock certificate (including, without limitation, any certificate
representing a stock dividend or distribution in connection with
any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares, stock split,
spin-off or split-off), promissory note or other instrument,
(ii) option or right, whether as an addition to, substitution
for, or in exchange for, any Collateral, or otherwise, (iii)
dividends payable in cash (except such dividends permitted to be
retained by Debtor pursuant to Section 5.2 hereof) or in securities
or other property or (iv) dividends or other distributions in
connection with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or paid-in
surplus, Debtor shall receive such stock certificate, promissory
note, instrument, option, right, payment or distribution in trust
for the benefit of Collateral Agent, shall segregate it from
Debtor’s other property and shall deliver it forthwith to
Collateral Agent, in the exact form received, with any necessary
endorsement and/or appropriate stock powers duly executed in blank,
to be held by Collateral Agent as Collateral and as further
collateral security for the Obligations.
5.
Distribution
.
5.1
So long as no Event of Default
exists, Debtors shall be entitled to exercise all voting power
pertaining to any of the Collateral, provided such exercise is not
contrary to the interests of the Lenders and does not impair the
Collateral.
5.2.
At any time an Event of Default
exists or has occurred, all rights of Debtors, upon notice given by
Collateral Agent, to exercise the voting power and receive
payments, which it would otherwise be entitled to pursuant to
Section 5.1, shall cease and all such rights shall thereupon become
vested in Collateral Agent, which shall thereupon have the sole
right to exercise such voting power and receive such
payments.
5.3
All dividends, distributions,
interest and other payments which are received by Debtors contrary
to the provisions of Section 5.2 shall be received in trust for the
benefit of Collateral Agent as security and Collateral for payment
of the Obligations shall be segregated from other funds of Debtors,
and shall be forthwith paid over to Collateral Agent as Collateral
in the exact form received with any necessary endorsement and/or
appropriate stock powers duly executed in
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blank, to be held by Collateral
Agent as Collateral and as further collateral security for the
Obligations.
6.
Further Action By Debtors;
Covenants and Warranties .
6.1
Collateral Agent at all times shall
have a perfected security interest in (a) the Collateral to the
extent a security interest can be perfected by the filing of a
financial statement under the Uniform Commercial Code of the
relevant jurisdiction (b) the Securities and (c) Additional
Collateral (the “Perfected Collateral”). Each
Debtor has and will continue to have full title to the Collateral
free from any liens, leases, encumbrances, judgments or other
claims. Collateral Agent’s security interest in the
Collateral constitutes and will continue to constitute a first,
prior and indefeasible security interest in favor of Collateral
Agent. Each Debtor will do all acts and things, and will
execute and file all instruments (including, but not limited to,
security agreements, financing statements, continuation statements,
etc.) reasonably requested by Collateral Agent to establish,
maintain and continue the perfected security interest of Collateral
Agent in the Perfected Collateral, and will promptly on demand, pay
all costs and expenses of filing and recording, including the costs
of any searches reasonably deemed necessary by Collateral Agent
from time to time to establish and determine the validity and the
continuing priority of the security interest of Collateral Agent,
and also pay all other claims and charges that, in the opinion of
Collateral Agent, exercised in good faith, are reasonably likely to
materially prejudice, imperil or otherwise affect the Collateral or
Collateral Agent’s or Lenders’ security interests
therein.
6.2
Other than in the ordinary course of
business, and except for Collateral which is substituted by assets
of identical or greater value or which has become obsolete or is of
inconsequential in value, each Debtor will not sell, transfer,
assign or pledge those items of Collateral (or allow any such items
to be sold, transferred, assigned or pledged), without the prior
written consent of Collateral Agent other than a transfer of the
Collateral to a wholly-owned subsidiary or to another Debtor on
prior notice to Collateral Agent, and provided the Collateral
remains subject to the security interest herein described.
Although Proceeds of Collateral are covered by this Agreement, this
shall not be construed to mean that Collateral Agent consents to
any sale of the Collateral, except as provided herein. Sales
of Collateral in the ordinary course of business shall be free of
the security interest of Lenders and Collateral Agent and Lenders
and Collateral Agent shall promptly execute such documents
(including without limitation releases and termination statements)
as may be required by Debtors to evidence or effectuate the
same.
6.3
Each Debtor will, at all reasonable
times during regular business hours and upon reasonable notice,
allow Collateral Agent or its representatives free and complete
access to the Collateral and all of such Debtor’s records
which in any way relate
