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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
Collater
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