Exhibit 10.26.4
AMENDMENT NO. 1 TO SECURITY AGREEMENT
February 27, 2004
Reference is made to that certain Security Agreement dated December 30,
2003 made by INYX, Inc., a Nevada corporation (the "Borrower") in favor LAURUS
MASTER FUND, LTD., c/o Ironshore Corporate Services Ltd., X.X. Xxx 0000 G.T.,
Queensgate House, South Church Street, Grand Cayman, Cayman Islands (the
"Laurus"") (the "Security Agreement") pursuant to which, among other things, the
Borrower issued a secured minimum borrowing note in the original principal
amount of One Million Dollars ($1,000,000) (the " MB Note") and a secured
revolving note in the original principal amount of Two Million Five Hundred
Thousand Dollars ($2,500,000) (the "Revolving Note") to Laurus. Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in the Security Agreement.
WHEREAS, the Borrower and Laurus have agreed to amend the Security
Agreement to change certain terms of the MB Note to increase the original
principal amount thereof to Two Million Dollars ($2,000,000) and to increase the
original principal amount of the Revolving Note to Three Million Five Hundred
Thousand Dollars ($3,500,000) and the Borrower desires to make such changes; and
WHEREAS the Borrower and Laurus agree that on the date hereof $________
is outstanding under the MB Note and $________ is outstanding under the
Revolving Note.
NOW, THEREFORE, in consideration for the execution and delivery by the
Borrower of this amendment, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Section 2 (a)(i) of the Security Agreement is hereby deleted
in its entirety and the following inserted in its stead:
"2. Loans. (a)(i) Subject to the terms and conditions set
forth herein and in the Ancillary Agreements, Laurus may make loans
(the "Loans") to the Company from time to time during the Term which,
in the aggregate at any time outstanding, will not exceed the lesser of
(x) (I) the Capital Availability Amount minus (II) such reserves as
Laurus may reasonably in its good faith judgment deem proper and
necessary from time to time (the "Reserves") or (y) an amount equal to
(I) the Accounts Availability minus (II) the Reserves. The amount
derived at any time from Section 2(a)(i)(y)(I) minus 2(a)(i)(y)(II)
shall be referred to as the "Formula Amount". Company shall execute and
deliver to Laurus on the Closing Date a Minimum Borrowing Note and a
Secured Revolving Note evidencing the Loans funded on the Closing Date.
From time to time thereafter, Company shall execute and deliver to
Laurus immediately prior to the final funding of each additional
USD$2,000,000 tranche of Loans (calculated on a cumulative basis for
each such tranche) an additional Minimum Borrowing Note evidencing such
tranche, in the form of Note delivered by Company to Laurus on the
Closing Date. Notwithstanding anything herein to the contrary, whenever
during the Term the outstanding balance on the Revolving Note should
equal or exceed USD$3,500,000, to the extent that the outstanding
balance on Minimum Borrowing Note shall be less than USD$2,000,000 (the
difference of USD$2,000,000 less the actual balance of the Minimum
Borrowing Note, the "Available Minimum Borrowing"), such portion of the
balance of the Revolving Note as shall equal the Available Minimum
Borrowing shall be deemed to be simultaneously extinguished on the
Revolving Note and transferred to, and evidenced by, the Minimum
Borrowing Note
2. Section 2(c) of the Security Agreement is hereby is deleted in
its entirety and the following inserted in its stead:
"2.2(c) Minimum Borrowing Amount. After a registration
statement registering the Registrable Securities has been
declared effective by the SEC, conversions of the Minimum
Borrowing Amount into the common stock of Company may be
initiated as set forth in the Minimum Borrowing Note. From and
after the date upon which any outstanding principal of the
Minimum Borrowing Amount (as evidenced by the first Minimum
Borrowing Note) is converted into common stock (the "First
Conversion Date"), (i) corresponding amounts of all
outstanding Loans (not attributable to the then outstanding
Minimum Borrowing Amount) existing on or made after the First
Conversion Date will be aggregated until they reach the sum of
$2,000,000, (ii) Company will issue a new (serialized) Minimum
Borrowing Note to Laurus in respect of such $2,000,000
aggregation, and (iii) Company shall prepare and file a
subsequent registration statement with the SEC to register
shares of its' common stock that will be issued in accordance
with such subsequent Minimum Borrowing Note in accordance with
the terms of the Registration Rights Agreement."
3. The definition of "Minimum Borrowing Amount" contained in
Annex A to the Security Agreement is hereby deleted in its
entirety and the following inserted in its stead:
"Minimum Borrowing Amount" means $2,000,000, which
such aggregate amount shall be evidenced by Minimum Borrowing
Notes."
4. The definition of "Revolving Note" contained in Annex A to the
Security Agreement is hereby deleted in its entirety and the
following inserted in its stead:
""Revolving Note" means that secured revolving note
made by the Company in favor of Laurus in the aggregate
principal amount of up to Three Million Five Hundred Thousand
United States Dollars (USD$3,500,000)."
5.
6. The foregoing amendments shall be effective as of the date
hereof.
7. There are no other amendments to the Security Agreement, and
all of the other forms, terms and provisions of the Security
Agreement remain in full force and effect.
8. The Borrower hereby represents and warrants to Laurus that as
of the date hereof all representation, warranties and
covenants made by Borrower in connection with the Security
Agreement are true correct and complete and all of Borrower's
covenants requirements have been met.
IN WITNESS WHEREOF, each of the Borrower and Laurus has caused this
Amendment No. 1 to Security Agreement signed in its name effective as of this
25th day of February, 2004.
INYX, INC.
By:________________________________
Name:
Title:
LAURUS MASTER FUND, LTD.
By:________________________________
Name:
Title:
