SECURITY AGREEMENT
Exhibit
10.4
1. Identification.
This
Security Agreement (the “Agreement”), dated as of March 4, 2009, is entered into
by and between Collexis Holdings, Inc., a Nevada corporation (“Parent”), Biomed
Experts, Inc., a Nevada corporation, Collexis US, Inc., a Delaware corporation,
Collexis, Inc., a Delaware corporation, Lawriter LLC, an Ohio limited liability
company (each a “Guarantor” and together with Parent except for Lawriter LLC,
each a “Debtor” and collectively the “Debtors”), and Alpha Capital Anstalt (the
“Lender”).
2. Recitals.
2.1 At
or about the date hereof, the Lender is making a loan (the “Loan”) to
Parent. Each Guarantor is a direct or indirect Subsidiary (as defined
in Section 6.12) of Parent. It is beneficial to each Debtor that the
Loan is made. Guarantor has or will deliver a “Guaranty” of Parent’s
obligations to Lender.
2.2 The
Loan will be evidenced by a promissory note (“Note”) issued by Parent on or
about the date of this Agreement pursuant to subscription agreement (the
“Subscription Agreement”) to which Parent and Lender are parties. The
Note is in the principal amount of $764,705.88 and was or will be executed by
Parent as “Borrower” or “Debtor” for the benefit of each Lender as the “Holder”
or “Lender” thereof.
2.3 In
consideration of the Loan made and to be made by Lender to Parent and for other
good and valuable consideration, and as security for the performance by Parent
of its obligations under the Note, by Guarantor of its obligations under the
Guaranty, and as security for the repayment of the Loan and all other sums due
from Debtor to Lender 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
Lender 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 and loans by Lender to
Debtor that may be made pursuant to the Subscription Agreement or any other
agreements.
2.4 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. Other capitalized
terms employed herein shall have the meanings attributed to them in the
Subscription Agreement.
3. Grant of General Security
Interest in Collateral.
3.1 As
security for the Obligations of Debtors, each Debtor hereby grants the Lender, 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:
1
(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, choses in action and other claims, and existing and future
leasehold interests and claims in and to 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);
(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 of each Guarantor, which the Debtor represents, equal 100% of
the equity ownership and right to receive equity of each Guarantor, the
certificates representing such shares together with an executed stock power, 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;
2
(ii) all
additional shares of stock, partnership interests, member interests or other
equity interests from time to time acquired by Debtor, in any Subsidiary that is
not a Subsidiary of the Debtor on the date hereof (“Future Subsidiaries”), the
certificates representing such additional shares, 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
(iii) all
security entitlements of Debtor in, and all Proceeds of any and all of the
foregoing in each case, whether now owned or hereafter acquired by Debtor and
howsoever its interest therein may arise or appear (whether by ownership,
security interest, lien, claim or otherwise).
3.3 The
Lender is hereby specifically authorized, after the Maturity Date (defined in
the Note) accelerated or otherwise, and after the occurrence of an Event of
Default (as defined herein) and the expiration of any applicable cure period, to
transfer any Collateral into the name of the Lender and to take any and all
action deemed advisable to the Lender to remove any transfer restrictions
affecting the Collateral.
4. Perfection of Security
Interest.
4.1 Each
Debtor shall prepare, execute and deliver to the Lender UCC-1 Financing
Statements. The Lender is instructed to prepare and file at each
Debtor’s cost and expense, financing statements in such jurisdictions deemed
advisable to Lender, including but not limited to the States of Nevada and
Delaware.
4.2 Upon
the execution of this Agreement, Parent shall deliver to Lender stock
certificates representing all of the shares of outstanding capital stock of each
Guarantor (the “Securities”). All such certificates shall be held by
or on behalf of Lender pursuant hereto and shall be delivered in suitable form
for transfer by delivery, and 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 Lender.
4.3 All
other certificates and instruments constituting Collateral from time to time
required to be pledged to Lender pursuant to the terms hereof (the “Additional
Collateral”) shall be delivered to Lender promptly upon receipt thereof by or on
behalf of Debtors. All such certificates and instruments shall be
held by or on behalf of Lender 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 Lender. If any Collateral
consists of uncertificated securities, unless the immediately following sentence
is applicable thereto, Debtors shall cause Lender (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
Lender with respect to such securities without further consent by
Debtors. If any Collateral consists of security entitlements, Debtors
shall transfer such security entitlements to Lender (or its custodian, nominee
or other designee) or cause the applicable securities intermediary to agree that
it will comply with entitlement orders by Lender without further consent by
Debtors.
4.4 Within
five (5) business 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 Lender
in respect of the Additional Collateral to be pledged pursuant to this
Agreement. Each Debtor hereby authorizes Lender to attach each Pledge Amendment
to this Agreement and agrees that all certificates or instruments listed on any
Pledge Amendment delivered to Lender shall for all purposes hereunder constitute
Collateral.
3
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 Lender, shall segregate it from Debtor’s other property and shall
deliver it forthwith to Lender, in the exact form received, with any necessary
endorsement and/or appropriate stock powers duly executed in blank, to be held
by Lender as Collateral and as further collateral security for the
Obligations.
5. Distribution.
5.1 So
long as an Event of Default does not exist, 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 Lender and does not impair the
Collateral.
5.2. At
any time an Event of Default exists or has occurred and is continuing, all
rights of Debtors, upon notice given by Lender, 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 Lender,
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 Lender as security and Collateral for payment of the Obligations
shall be segregated from other funds of Debtors, and shall be forthwith paid
over to Lender as Collateral in the exact form received with any necessary
endorsement and/or appropriate stock powers duly executed in blank, to be held
by Lender as Collateral and as further collateral security for the
Obligations.
6. Further Action By Debtors;
Covenants and Warranties.
6.1 Lender
at all times shall have a perfected security interest in the
Collateral. Each Debtor represents that, other than the security
interests described on Schedule
6.1, it has and will continue to have full title to the Collateral free
from any liens, leases, encumbrances, judgments or other claims. The
Lender’s security interest in the Collateral constitutes and will continue to
constitute a first, prior and indefeasible security interest in favor of Lender,
subject only to the security interests described on Schedule 6.1. 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 Lender to establish,
maintain and continue the perfected security interest of Lender 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 Lender from time to time to establish and determine the validity and the
continuing priority of the security interest of Lender, and also pay all other
claims and charges that, in the opinion of Lender are reasonably likely to
materially prejudice, imperil or otherwise affect the Collateral or Lender’s
security interests therein.
4
6.2 Except
in connection with sales of Collateral, in the ordinary course of business, for
fair value and in cash, and except for Collateral which is substituted by assets
of identical or greater value (subject to the consent of the Lender) or which is
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 Lender other than a
transfer of the Collateral to a wholly-owned United States formed and located
subsidiary or to another Debtor on prior notice to Lender, 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 Lender consents to any sale
of the Collateral, except as provided herein. Sales of Collateral in
the ordinary course of business as described above shall be free of the security
interest of Lender and Lender 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 Lender or its representatives free and complete access
to the Collateral and all of such Debtor’s records that in any way relate to the
Collateral, for such inspection and examination as Lender reasonably deem
necessary.
6.4 Each
Debtor, at its sole cost and expense, will protect and defend this Security
Agreement, all of the rights of Lender hereunder, and the Collateral against the
claims and demands of all other persons.
6.5 Debtors
will promptly notify Lender of any levy, distraint or other seizure by legal
process or otherwise of any part of the Collateral, and of any threatened or
filed claims or proceedings that are reasonably likely to affect or impair any
of the rights of Lender under this Security Agreement in any material
respect.
6.6 Each
Debtor, at its own expense, will obtain and maintain in force insurance policies
covering losses or damage to those items of Collateral which constitute physical
personal property, which insurance shall be of the types customarily insured
against by companies in the same or similar business, similarly situated, in
such amounts (with such deductible amounts) as is customary for such companies
under the same or similar circumstances, similarly situated. Debtors
shall make the Lender loss payee thereon to the extent of its interest in the
Collateral. Lender are hereby irrevocably (until the Obligations are
indefeasibly paid in full) appointed each Debtor’s attorney-in-fact to endorse
any check or draft that may be payable to such Debtor so that Lender may collect
the proceeds payable for any loss under such insurance. The proceeds
of such insurance, less any costs and expenses incurred or paid by Lender in the
collection thereof, shall be applied either toward the cost of the repair or
replacement of the items damaged or destroyed, or on account of any sums secured
hereby, whether or not then due or payable.
6.7 In
order to protect the Collateral and Lender’s interest therein, Lender may, at
Lender’s option, and without any obligation to do so, pay, perform and discharge
any and all amounts, costs, expenses and liabilities herein agreed to be paid or
performed by Debtor upon Debtor’s failure
to do so. All amounts expended by Lender in so doing shall become
part of the Obligations secured hereby, and shall be immediately due and payable
by Debtor to Lender upon demand and shall bear interest at the lesser of 15% per
annum or the highest legal amount allowed from the dates of such expenditures
until paid.
6.8 Upon
the request of Lender, Debtors will furnish to Lender within five (5) business
days thereafter, or to any proposed assignee of this Security Agreement, a
written statement in form reasonably satisfactory to Lender, duly acknowledged,
certifying the amount of the principal and interest and any other sum then owing
under the Obligations, whether to its knowledge any claims, offsets or defenses
exist against the Obligations or against this Security Agreement, or any of the
terms and provisions of any other agreement of Debtors securing the
Obligations. In connection with any assignment by Lender of this
Security Agreement, each Debtor hereby agrees to cause the insurance policies
required hereby to be carried by such Debtor, if any, to be endorsed in form
satisfactory to Lender or to such assignee, with loss payable clauses in favor
of such assignee, and to cause such endorsements to be delivered to Lender
within ten (10) calendar days after request therefor by Lender.
5
6.9 Each
Debtor will, at its own expense, make, execute, endorse, acknowledge, file
and/or deliver to the Lender from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other reasonable
assurances or instruments and take further steps relating to the Collateral and
other property or rights covered by the security interest hereby granted, as the
Lender may reasonably require to perfect its security interest
hereunder.
6.10 Debtors
represent and warrant that they are the true and lawful exclusive owners of the
Collateral, free and clear of any liens, encumbrances and claims other than
those listed on Schedule 6.1.
6.11 Each
Debtor hereby agrees not to divest itself of any right under the Collateral
except as permitted herein absent prior written approval of the Lender, except
to a subsidiary organized and located in the United States on prior notice to
Lender provided the Collateral remains subject to the security interest herein
described.
6.12 Each
Debtor shall cause each Subsidiary of such Debtor in existence on the date
hereof and each future Subsidiary to execute and deliver to Lender promptly and
in any event within ten (10) days after the formation, acquisition or change in
status thereof (A) a guaranty guaranteeing the Obligations and (B) if requested
by Lender, a security and pledge agreement substantially in the form of this
Agreement together with (x) certificates evidencing all of the capital stock of
each Subsidiary of and any entity owned by such Subsidiary, (y) undated stock
powers executed in blank with signatures guaranteed, and (z) such opinion of
counsel and such approving certificate of such Subsidiary as Lender may
reasonably request in respect of complying with any legend on any such
certificate or any other matter relating to such shares and (C) such other
agreements, instruments, approvals, legal opinions or other documents reasonably
requested by Lender in order to create, perfect, establish the first priority of
or otherwise protect any lien purported to be covered by any such pledge and
security agreement or otherwise to effect the intent that all property and
assets of such Subsidiary shall become Collateral for the
Obligations. For purposes of this Agreement, “Subsidiary” means,
with respect to any entity at any date, any corporation, limited or general
partnership, limited liability company, trust, estate, association, joint
venture or other business entity) of which more than 30% of (A) the
outstanding capital stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors or other managing
body of such entity, (B) in the case of a partnership or limited liability
company, the interest in the capital or profits of such partnership or limited
liability company or (C) in the case of a trust, estate, association, joint
venture or other entity, the beneficial interest in such trust, estate,
association or other entity business is, at the time of determination, owned or
controlled directly or indirectly through one or more intermediaries, by such
entity. Schedule 6.12 annexed hereto contains a list
of all Subsidiaries of the Debtors as of the date of this
Agreement.
6.13 Debtor
will notify Lender within ten days of the occurrence of any change of Debtor’s
name, domicile, address or jurisdiction of incorporation. The timely
giving of this notice is a material obligation of Debtor.
7. Power of
Attorney.
At any
time an Event of Default has occurred, and only after the applicable cure period
as set forth in this Agreement and the other Transaction Documents, and is
continuing, each Debtor hereby irrevocably constitutes and appoints Lender as
the true and lawful attorney of such Debtor, with full power of substitution, in
the place and stead of such Debtor and in the name of such Debtor or otherwise,
at any time or times, in the discretion of the Lender, to take any action
and to execute any instrument or document which the Lender may deem necessary or
advisable to accomplish the purposes of this Agreement. This power of
attorney is coupled with an interest and is irrevocable until the Obligations
are satisfied.
6
8. Performance By The
Lender.
If a
Debtor fails to perform any material covenant, agreement, duty or obligation of
such Debtor under this Agreement, Lender may, after any applicable cure period,
at any time or times in its discretion, take action to effect performance of
such obligation. All reasonable expenses of the Lender incurred in
connection with the foregoing authorization shall be payable by Debtors as
provided in Paragraph 12.1 hereof. No discretionary right, remedy or
power granted to the Lender under any part of this Agreement shall be deemed to
impose any obligation whatsoever on the Lender with respect thereto, such
rights, remedies and powers being solely for the protection of the
Lender.
9. Event of
Default.
An event
of default (“Event of Default”) shall be deemed to have occurred hereunder upon
the occurrence of any event of default as defined and described in this
Agreement, in the Note, the Subscription Agreement, Transaction Documents (as
defined in the Subscription Agreement), and any other agreement to which one or
more Debtors and Lender are parties. Upon and after any Event
of Default, after the applicable cure period, if any, any or all of the
Obligations shall become immediately due and payable at the option of the
Lender, and the Lender may dispose of Collateral as provided below. A
default by Debtor of any of its material obligations pursuant to this Agreement
and any of the Transaction Documents shall be an Event of Default hereunder and
an “Event of Default” as defined in the Note, and Subscription
Agreement.
10. Disposition of
Collateral.
Upon and
after any Event of Default which is then continuing,
10.1 The
Lender may exercise its rights with respect to each and every component of the
Collateral, without regard to the existence of any other security or source of
payment for, in order to satisfy the Obligations. In addition to
other rights and remedies provided for herein or otherwise available to it, the
Lender shall have all of the rights and remedies of a lender on default
under the Uniform Commercial Code then in effect in the State of New
York.
10.2 If
any notice to Debtors of the sale or other disposition of Collateral is required
by then applicable law, five (5) business days prior written notice (which
Debtors agree is reasonable notice within the meaning of Section 9.612(a) of the
Uniform Commercial Code) shall be given to Debtors of the time and place of any
sale of Collateral which Debtors hereby agree may be by private
sale. The rights granted in this Section are in addition to any and
all rights available to Lender under the Uniform Commercial Code.
10.3 The
Lender is authorized, at any such sale, if the Lender deems it advisable to do
so, in order to comply with any applicable securities laws, to restrict the
prospective bidders or purchasers to persons who will represent and agree, among
other things, that they are purchasing the Collateral for their own account for
investment, and not with a view to the distribution or resale thereof, or
otherwise to restrict such sale in such other manner as the Lender deem
advisable to ensure such compliance. Sales made subject to such
restrictions shall be deemed to have been made in a commercially reasonable
manner.
7
10.4 All
proceeds received by the Lender in respect of any sale, collection or other
enforcement or disposition of Collateral, shall be applied (after deduction of
any amounts payable to the Lender pursuant to Paragraph 12.1 hereof) against the
Obligations. Upon payment in full of all Obligations, Debtors shall be
entitled to the return of all Collateral, including cash, which has not been
used or applied toward the payment of Obligations or used or applied to any and
all costs or expenses of the Lender incurred in connection with the liquidation
of the Collateral (unless another person is legally entitled
thereto). Any assignment of Collateral by the Lender to Debtors shall
be without representation or warranty of any nature whatsoever and wholly
without recourse. To the extent allowed by law, Lender may purchase
the Collateral and pay for such purchase by offsetting the purchase price with
sums owed to Lender by Debtors arising under the Obligations or any other
source.
10.5 Rights of Lender to Appoint
Receiver. Without
limiting, and in addition to, any other rights, options and remedies Lender has
under the Transaction Documents, the UCC, at law or in equity, or otherwise,
upon the occurrence and continuation of an Event of Default, Lender shall have
the right to apply for and have a receiver appointed by a court of competent
jurisdiction. Debtors expressly agrees that such a receiver will be
able to manage, protect and preserve the Collateral and continue the operation
of the business of Debtors to the extent necessary to collect all revenues and
profits thereof and to apply the same to the payment of all expenses and other
charges of such receivership, including the compensation of the receiver, until
a sale or other disposition of such Collateral shall be finally made and
consummated. Debtors waive any right to require a bond to be posted
by or on behalf of any such receiver.
11. Waiver of Automatic
Stay. Debtor acknowledges and agrees that should a
proceeding under any bankruptcy or insolvency law be commenced by or against
Debtor, or if any of the Collateral should become the subject of any bankruptcy
or insolvency proceeding, then the Lender should be entitled to, among other
relief to which the Lender may be entitled under the Note, Subscription
Agreement, Transaction Documents, and any other agreement to which the Debtor
and Lender are parties, (collectively “Loan Documents”) and/or applicable law,
an order from the court granting immediate relief from the automatic stay
pursuant to 11 U.S.C. Section 362 to permit the Lender to exercise all of its
rights and remedies pursuant to the Loan Documents and/or applicable
law. DEBTOR EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY
IMPOSED BY 11 U.S.C. SECTION 362. FURTHERMORE, DEBTOR EXPRESSLY
ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION
OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION,
11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN
ANY WAY THE ABILITY OF THE LENDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES
UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW. Debtor
hereby consents to any motion for relief from stay which may be filed by the
Lender in any bankruptcy or insolvency proceeding initiated by or against
Debtor, and further agrees not to file any opposition to any motion for relief
from stay filed by the Lender. Debtor represents, acknowledges and
agrees that this provision is a specific and material aspect of this Agreement,
and that the Lender would not agree to the terms of this Agreement if this
waiver were not a part of this Agreement. Debtor further represents,
acknowledges and agrees that this waiver is knowingly, intelligently and
voluntarily made, that neither the Lender nor any person acting on behalf of the
Lender has made any representations to induce this waiver, that Debtor has been
represented (or has had the opportunity to be represented) in the signing of
this Agreement and in the making of this waiver by independent legal counsel
selected by Debtor and that Debtor has had the opportunity to discuss this
waiver with counsel. Debtor further agrees that any bankruptcy
or insolvency proceeding initiated by Debtor will only be brought in the Federal
Court within the Southern District of New York.
12. Miscellaneous.
12.1 Expenses. Debtors
shall pay to the Lender, on demand, the amount of any and all reasonable
expenses, including, without limitation, attorneys’ fees, legal expenses and
brokers’ fees, which the Lender may incur in connection with (a) sale,
collection or other enforcement or disposition of Collateral; (b) exercise or
enforcement of any the rights, remedies or powers of the Lender hereunder or
with respect to any or all of the Obligations upon breach or threatened breach;
or (c) failure by Debtors to perform and observe any agreements of Debtors
contained herein which are performed by Lender.
8
12.2 Waivers, Amendment and
Remedies. No course of dealing by the Lender and no failure by
the Lender to exercise, or delay by the Lender in exercising, any right, remedy
or power hereunder shall operate as a waiver thereof, and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the
exercise of any other right, remedy or power of the Lender. No
amendment, modification or waiver of any provision of this Agreement and no
consent to any departure by Debtors therefrom shall, in any event, be effective
unless contained in a writing signed by the Lender, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. The rights, remedies and powers of the Lender, not only
hereunder, but also under any instruments and agreements evidencing or securing
the Obligations and under applicable law are cumulative, and may be exercised by
the Lender from time to time in such order as the Lender may elect.
12.3 Notices. All
notices or other communications given or made hereunder shall be in writing and
shall be personally delivered or deemed delivered the first business day after
being faxed (provided that a copy is delivered by first class mail) to the party
to receive the same at its address set forth below or to such other address as
either party shall hereafter give to the other by notice duly made under this
Section:
To
Debtors: Collexis
Holdings, Inc.
0000 Xxxx Xxxxxx,
Xxxxx 000
Xxxxxxxx, XX
00000
Attn: Xxxxxxx X.
Xxxxxxxx, CEO
Fax: (000)
000-0000
With a copy by fax
only to:
Xxxxxx X. Xxxxxxxx, Esq.
0000 Xxxxxxxx,
00xx
Xxxxx
Xxx Xxxx, XX
00000
Fax: (000)
000-0000
To
Lender:
Alpha Capital Anstalt
Pradafant 7
9490 Furstentums
Vaduz, Lichtenstein
Fax: 000-00-00000000
If to
Debtors or Lender,
with a
copy by telecopier only to:
Grushko & Xxxxxxx, P.C.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Fax:
(000) 000-0000
Any party
may change its address by written notice in accordance with this
paragraph.
9
12.4 Term; Binding
Effect. This Agreement shall (a) remain in full force and
effect until payment and satisfaction in full of all of the Obligations; (b) be
binding upon each Debtor, and its successors and permitted assigns; and (c)
inure to the benefit of the Lender and its successors and assigns.
12.5 Captions. The
captions of Paragraphs, Articles and Sections in this Agreement have been
included for convenience of reference only, and shall not define or limit the
provisions of this agreement and have no legal or other significance
whatsoever.
12.6 Governing Law; Venue;
Severability. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
conflicts of laws principles that would result in the application of the substantive
laws of another jurisdiction, except to the extent that the perfection of
the security interest granted hereby in respect of any item of Collateral may be
governed by the law of another jurisdiction. Any legal action or
proceeding against a Debtor with respect to this Agreement must be brought only
in the courts in the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, each
Debtor hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Debtor hereby irrevocably waives any objection which
they may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement
brought in the aforesaid courts and hereby further irrevocably waives and agrees
not to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient
forum. If any provision of this Agreement, or the application thereof
to any person or circumstance, is held invalid, such invalidity shall not affect
any other provisions which can be given effect without the invalid provision or
application, and to this end the provisions hereof shall be severable and the
remaining, valid provisions shall remain of full force and effect.
12.7 Entire
Agreement. This Agreement contains the entire agreement of the
parties and supersedes all other agreements and understandings, oral or written,
with respect to the matters contained herein.
12.8 Counterparts/Execution. This
Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but one
and the same instrument. This Agreement may be executed by facsimile
signature and delivered by electronic transmission.
13. Termination;
Release. When the Obligations have been indefeasibly paid and
performed in full or all outstanding Note have been converted to common stock
pursuant to the terms of the Note and the Subscription Agreements, this
Agreement shall terminated, and the Lender, at the request and sole expense of
the Debtors, will execute and deliver to the Debtors the proper instruments
(including UCC termination statements) acknowledging the termination of the
Security Agreement, and duly assign, transfer and deliver to the Debtors,
without recourse, representation or warranty of any kind whatsoever, such of the
Collateral, including, without limitation, Securities and any Additional
Collateral, as may be in the possession of the Lender.
14. Lender
Powers.
14.1 Lender
Powers. The powers conferred on the Lender hereunder are
solely to protect Lender’s interest in the Collateral and shall not impose any
duty on it to exercise any such powers.
10
14.2 Reasonable
Care. The Lender is required to exercise reasonable care in
the custody and preservation of any Collateral in its possession; provided,
however, that the Lender shall be deemed to have exercised reasonable care in
the custody and preservation of any of the Collateral if it takes such action
for that purposes as any owner thereof reasonably requests in writing at times
other than upon the occurrence and during the continuance of any Event of
Default, but failure of the Lender, to comply with any such request at any time
shall not in itself be deemed a failure to exercise reasonable
care.
[THIS
SPACE INTENTIONALLY LEFT BLANK]
11
IN WITNESS WHEREOF, the
undersigned have executed and delivered this Security Agreement, as of the date
first written above.
|
“DEBTOR”
|
“LENDER”
|
|||
|
ALPHA
CAPITAL ANSTALT
|
||||
|
a
Nevada corporation
|
||||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx
|
By:
|
/s/ Xxxxxx Xxxxxxxxx
|
|
|
Its:
|
CEO
|
Its:
|
Director
|
|
|
“SUBSIDIARY”
|
||||
|
BIOMED
EXPERTS, INC.
|
||||
|
a
Nevada corporation
|
||||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx
|
|||
|
Its:
|
President
|
|||
|
“SUBSIDIARY”
|
“SUBSIDIARY”
|
|||
|
COLLEXIS
US, INC.
|
COLLEXIS,
INC.
|
|||
|
a
Delaware corporation
|
a
Delaware corporation
|
|||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx
|
|
|
Its:
|
President
|
Its:
|
President
|
|
|
“SUBSIDIARY”
|
||||
|
LAWRITER
LLC
|
||||
|
an
Ohio limited liability company
|
||||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx
|
|||
|
Its:
|
President
|
|||
This
Security Agreement may be signed by facsimile signature and
delivered
by confirmed facsimile transmission.
12
SCHEDULE
6.1
Excluded Security
Interests
(1)
All of
the Lawriter equipment and all of the Lawriter accounts receivable arising from
the Consortium
Licenses.
(2)
The
Common Stock of SyynX Solutions GmbH and the assets thereof.
13
SCHEDULE
6.12
TO
SECURITY
AGREEMENT
PLEDGE
AMENDMENT
This
Pledge Amendment, dated March 4, 2009, is delivered pursuant to Section 4.3 of
the Security Agreement referred to below. The undersigned hereby
agrees that this Pledge Amendment may be attached to the Security Agreement,
dated March 4, 2009, as it may heretofore have been or hereafter may be amended,
restated, supplemented or otherwise modified from time to time and that the
shares listed on this Pledge Amendment shall be hereby pledged and assigned to
Lender and become part of the Collateral referred to in such Security Agreement
and shall secure all of the Obligations referred to in such Security
Agreement.
|
Subsidiary
|
Shares Issued
|
% Owned
|
||||||
|
Biomed
Experts, Inc.
|
100 | % | ||||||
|
Collexis
US, Inc.
|
100 | % | ||||||
|
Collexis,
Inc.
|
3,000 | 100 | % | |||||
|
Lawriter
LLC
|
100 | % | ||||||
|
By:
|
/s/
Xxxxxxx X. Xxxxxxxx
|
14
