Exhibit 10.2
SECURITY AGREEMENT
THIS SECURITY
AGREEMENT (this
“Agreement”), dated as of February 27, 2009, is
made by and between InnerCool Therapies, Inc., a Delaware
corporation (“InnerCool”), Tissue Repair Company, a
Delaware corporation (“TRC”) and Cardium Therapeutics,
Inc., a Delaware corporation (“Cardium” or the
“Company” and, together with InnerCool and TRC,
individually, a “Grantor,” and collectively, the
“Grantors”) and Dr. Robert Marshall, in his
capacity as collateral agent (the “Collateral Agent”)
for the benefit of the holders of those certain notes described
below in the aggregate principal amount of up to $3,500,000 (each
an “Investor” and collectively, the
“Investors”) to be issued by Grantors from time to time
on and after the date hereof, pursuant to that certain Note and
Warrant Purchase Agreement of even date by and among Grantors and
each of the Investors (the “Purchase
Agreement”).
W I T N E S S E T
H:
WHEREAS, the Grantors have issued an
aggregate principal amount of $6,000,000 of senior secured notes
(the “Senior Notes”) pursuant to a Note and Warrant
Purchase Agreement dated November 5, 2008 (the “Senior
Note Purchase Agreement”);
WHEREAS, from time to time on and
after the date hereof, Grantors may issue up to $3,500,000 of their
senior subordinated secured promissory notes (as each may be at any
time amended, extended, restated, renewed or modified, each a
“Note,” and collectively, the “Notes”) to
the Investors;
WHEREAS, the Notes shall be subject
and subordinate to the Senior Notes as set forth in the Purchase
Agreement and the Notes;
WHEREAS, pursuant to the Purchase
Agreement, each Investor has appointed and authorized the
Collateral Agent to act as collateral agent under this
Agreement;
WHEREAS, it is a condition precedent
to the obligation of each of the Investors to purchase a Note that
Grantors shall have granted to the Collateral Agent a security
interest for the benefit of the Investors in the Collateral (as
hereinafter defined) as contemplated by this Agreement;
and
WHEREAS, Grantors expect to realize
direct and indirect benefits as a result of the sale of the Notes
to the subscribers and desires to grant the Collateral Agent a
security interest for the benefit of the Investors in the
Collateral as contemplated by this Agreement.
NOW, THEREFORE, for good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I –
DEFINITIONS
1.1 This Agreement is the Security
Agreement referred to in the Purchase Agreement and the Notes. As
used in this Agreement, the following terms shall have the meanings
respectively set forth below:
“Accounts” shall mean
all “accounts” as defined in the UCC now owned or
hereafter acquired by Grantors.
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“Agreement” means this
Security Agreement, and any extensions, modifications, renewals,
restatements, supplements or amendments hereof.
“Bankruptcy Code” means
Chapter 11 of Title 11 of the United States Code, as amended from
time to time, and any successor statute and all rules and
regulations promulgated thereunder.
“Collateral” means all
of Grantors’ now owned or hereafter acquired right, title and
interest in and to the General Assets, the Trademarks, the Patents
and the Licenses.
“Equipment” shall mean
all “equipment” as defined in the UCC, now or hereafter
used or acquired for use in the business of Grantors.
“General Assets” shall
have the meaning set forth in Section 2.1 hereof.
“General Intangibles”
shall mean all “general intangibles” as defined in the
UCC now owned or hereafter acquired by Grantors.
“Investment Collateral”
shall have the meaning set forth in Section 7.1
hereof.
“Junior Liens” shall
have the meaning set forth in Section 17.2 hereof.
“Licenses” shall have
the meaning set forth in Section 2.4 hereof.
“Obligations” means any
and all present and future obligations of Grantors arising under or
relating to the Notes, the Purchase Agreement or this Agreement,
whether due or to become due, matured or unmatured, or liquidated
or unliquidated, including interest that accrues after the
commencement of any bankruptcy or insolvency proceeding by or
against the Grantors. For the avoidance of doubt, the Obligations
shall include the obligations of the Grantors to pay the costs and
expenses of the Collateral Agent and to provide indemnity to the
Collateral Agent pursuant to Article XIII hereof.
“Patents” shall have the
meaning set forth in Section 2.3 hereof.
“Permitted Liens” shall
have the meaning set forth in the Purchase Agreement.
“Senior Collateral
Agent” means, at any time the Senior Notes remain
outstanding, the collateral agent under the Senior Note Purchase
Agreement and the Senior Note Documents, and at any time the Senior
Notes are not outstanding, the Collateral Agent
hereunder.
“Senior Note Documents”
shall mean the “Transaction Documents” as defined in
the Senior Note Purchase Agreement.
“Senior Lenders” shall
mean the holders of the Senior Notes.
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“Senior Liens” shall
have the meaning set forth in Section 17.1 hereof.
“Senior Security
Documents” shall have the meaning set forth in
Section 17.1 hereof.
“Trademarks” shall have
the meaning set forth in Section 2.2 hereof.
ARTICLE II – SECURITY
INTERESTS
2.1 Grant of Security Interest in
General Assets . Subject to the rights of the Senior Lenders
and otherwise to secure the complete and timely payment,
performance and satisfaction of all of the Obligations, each
Grantor hereby grants to the Collateral Agent, for the ratable
benefit of the Investors, a continuing security interest in, all of
the Grantor’s right, title and interest in and to the
Grantor’s now owned or otherwise existing and hereafter
acquired or arising:
(a) Accounts, contract rights and
all other forms of obligations owing to the Grantor arising out of
the sale or lease of goods or the rendition of services by the
Grantor, irrespective of whether earned by performance, and any and
all credit insurance, guarantees or security therefor;
(b) books and records, including
ledgers; records indicating, summarizing or evidencing the
Grantor’s properties or assets or liabilities; all
information relating to the Grantor’s business operations or
financial condition; and all other computer programs, disk or tape
files, printouts, runs or other computer prepared
information;
(c) deposit accounts (as that term
is defined from time to time in the Uniform Commercial Code as in
effect in the State of Delaware);
(d) all of the Grantor’s
General Intangibles and other personal property (including contract
rights, rights arising under common law, statutes or regulations,
choses or things in action, commercial tort claims, blueprints,
drawings, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists, computer programs,
information contained in computer disks or tapes, literature,
reports, catalogs, insurance premium rebates, tax refunds and tax
refund claims);
(e) goods (as that term is defined
from time to time in the Uniform Commercial Code as in effect in
the State of Delaware), including (i) all inventory, including
Equipment held for lease, whether raw materials, in process or
finished, all material or Equipment usable in processing the same
and all documents of title covering any inventory, (ii) all
Equipment employed in connection with the Grantor’s business,
together with all present and future additions, attachments and
accessions thereto and all substitutions therefor and replacements
thereof and (iii) all vehicles;
(f) instruments and other investment
property (as such terms are defined from time to time in the
Uniform Commercial Code as in effect in the State of
Delaware);
(g) negotiable collateral, including
all of the Grantor’s right, title and interest with respect
to any letters of credit, letter of credit rights, instruments,
drafts, documents and chattel paper (as each term is defined from
time to time in the Uniform Commercial Code as in effect in the
State of Delaware), and any and all supporting obligations in
respect thereof;
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(h) money or other assets of the
Grantor that now or hereafter come into the possession, custody or
control of the Grantor;
(i) the proceeds and products,
whether tangible or intangible, of any of the foregoing, including
proceeds of insurance covering any or all of the foregoing, and any
and all of the foregoing, or other tangible or intangible property
resulting from the sale, exchange, collection or other disposition
of any of the foregoing, or any portion thereof or interest
therein, and the proceeds thereof; and
(j) all of the Grantor’s
right, title and market in and to any shares of capital stock of
any of its subsidiaries and the certificates representing any such
shares. All of the items described in clauses (a)-(j) in this
Section 2.1 are hereinafter individually and/or collectively
referred to as the “General Assets.”
Notwithstanding anything herein
contained to the contrary, each Grantor shall be free to enter into
agreements which result in the creation of Permitted
Liens.
2.2 Grant of Security Interest in
Trademarks . To secure the complete and timely payment,
performance and satisfaction of all of the Obligations, each
Grantor hereby grants to the Collateral Agent, for the benefit of
the Investors, a continuing security interest, in all of the
Grantor’s right, title and interest in and to the
Grantor’s now owned or otherwise existing and hereafter
acquired or arising: (a) trademarks, trade names, registered
trademarks, trademark applications, service marks, registered
service marks and service mark applications and (b) all
renewals thereof, all income, royalties, damages and payments now
and hereafter due and/or payable under and with respect thereto,
including, without limitation, payments under all licenses entered
into in connection therewith and damages and payments for past or
future infringements or dilutions thereof, the right to sue for
past, present and future infringements and dilutions thereof, the
goodwill of the Grantor’s business symbolized by the
foregoing and connected therewith and all of the Grantor’s
rights corresponding thereto throughout the world (all of the
foregoing items described in the foregoing clauses (a) and
(b) in this Section 2.2, are hereinafter individually
and/or collectively referred to as the “Trademarks”);
and (c) all proceeds of any and all of the foregoing,
including, without limitation, license royalties and proceeds of
the infringement suits.
2.3 Grant of Security Interest in
Patents . To secure the complete and timely payment,
performance and satisfaction of all of the Obligations, each
Grantor hereby grants to the Collateral Agent, for the benefit of
the Investors, a continuing security interest in all of the
Grantor’s right, title and interest in and to the
Grantor’s now owned or otherwise existing and hereafter
acquired or arising: (a) rights under patents and patent
applications, and (b) all renewals thereof, all income,
royalties, damages and payments now and hereafter due and/or
payable under and with respect to any of the foregoing, including,
without limitation, payments under all licenses entered into in
connection therewith and damages and payments for past or future
infringements or dilutions thereof, the right to sue for past,
present and future infringements and dilutions thereof, the
goodwill of the Grantor’s business symbolized by the
foregoing and connected therewith and all of the Grantor’s
rights corresponding thereto throughout the world (all of the
foregoing items described in the foregoing clauses (a) and
(b) in this Section 2.3, are hereinafter individually
and/or collectively referred to as the “Patents”); and
all proceeds of any and all of the foregoing, including license
royalties and proceeds of the infringement suits.
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2.4 Grant of Security Interest in
Trademark and Patent Licenses . To secure the complete and
timely payment, performance and satisfaction of all of the
Obligations, each Grantor hereby grants to the Collateral Agent,
for the benefit of the Investors, a continuing security interest in
all of the Grantor’s right, title and interest in and to the
Grantor’s now owned or otherwise existing and hereafter
acquired or arising: rights under or interests in any license
agreements with any other party, regardless whether the Grantor is
a licensee or licensor under any such license agreement, and the
right to use the foregoing in connection with the enforcement of
the Investors’ rights under the Notes, including the right to
prepare for sale and sell any and all inventory now or hereafter
owned by the Grantor and now or hereafter covered by such licenses
(all of the foregoing are hereinafter referred to collectively as
the “Licenses”).
2.5 Title: Other Liens .
Except with respect to any security interest granted to the Senior
Collateral Agent in connection with the Senior Notes and the
security interest granted to the Collateral Agent pursuant to this
Agreement, the Grantors own each of their respective General
Assets, Trademarks, Patents and Licenses free and clear of any and
all liens, claims, mortgages, encumbrances or security or adverse
interests of any nature whatsoever.
2.6 Interests of Investors .
The interest of any Investor in the Collateral shall be on a parity
with the interests of all other Investors, and the interest of each
Investor in the Collateral shall be ratable in the proportion that
the aggregate indebtedness then outstanding and unpaid under the
Note(s) held by such Investor bears to the aggregate indebtedness
then outstanding and unpaid under the Notes held by all Investors
(except to the extent the Investors agree to any other ratable
interest therein).
ARTICLE III – FURTHER
ASSURANCES
3.1 At any time and from time to
time at the request of the Collateral Agent, the Grantors shall
execute and deliver to the Collateral Agent all such financing
statements and other instruments and documents in form and
substance reasonably satisfactory to the Collateral Agent as shall
be necessary or desirable to fully perfect, when filed and/or
recorded, the security interest granted to the Collateral Agent for
the benefit of the Investors pursuant to Article II of this
Agreement. Each Grantor hereby authorizes the Collateral Agent,
without prior notice to the Grantor, to file any financing
statement and amendments thereof or continuations thereof, naming
the Grantor as debtor and the Collateral Agent as the creditor. At
any time and from time to time, the Collateral Agent shall be
entitled to file and/or record any or all such financing
statements, instruments and documents held by it, and any or all
such further financing statements, documents and instruments, and
to take all such other actions, as the Collateral Agent may deem
appropriate to perfect and to maintain perfected the security
interest granted to it for the benefit of the Investors in
Article II of this Agreement. Before and after the
occurrence of any default under the Notes, at the Collateral
Agent’s request, the Grantor shall execute all such further
financing statements, instruments and documents, and shall do all
such further acts and things, as may be deemed necessary or
desirable by the Collateral Agent to create and perfect, and to
continue and preserve, the security interest in the Collateral in
favor of the Collateral Agent for the benefit of the Investors or
the priority thereof, including causing any such financing
statements to be filed and/or recorded in the applicable
jurisdiction.
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ARTICLE IV – SECURITY AGREEMENT
4.1 This Agreement secures the
payment of all of the Obligations of the Grantors now or hereafter
existing under the Notes, whether for principal, interest, fees,
expenses or otherwise, and all of the Obligations of the Grantors
now or hereafter existing under this Agreement and provides for the
application of proceeds from the Collateral, upon the occurrence of
an Event of Default, to satisfy the Obligations, including the
irrevocable right of the Senior Collateral Agent to apply proceeds
from Collateral to the payment of any and all amounts owing to the
Senior Collateral Agent pursuant to any of the provisions of
Article X or Article XIII of this Agreement prior to
making any payment to any or all of the Investors.
ARTICLE V – EVENTS OF
DEFAULT
5.1 There shall be an Event of
Default (as defined in the Notes) hereunder upon the occurrence and
during the continuance of an Event of Default under any of the
Notes. The Grantors shall promptly notify the Collateral Agent in
writing of any occurrence of an Event of Default.
ARTICLE VI – RIGHTS UPON EVENT
OF DEFAULT
6.1 Subject to the rights of the
Senior Lenders, including but not limited to as set forth in
Section 17.1 below, upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent shall
have, in any jurisdiction where enforcement hereof is sought, in
addition to all other rights and remedies that the Collateral Agent
may have under applicable law or in equity or under this Agreement,
all rights and remedies of a secured party under the Uniform
Commercial Code as enacted in any such jurisdiction. Without
limiting the foregoing, the Collateral Agent, on behalf of the
Investors, without demand of performance or other demand,
presentment, protest, advertisemen
