EXHIBIT 10.03
FIRST AMENDMENT
TO
SENIOR SECURED CREDIT AGREEMENT
FIRST AMENDMENT, dated as of November 12, 2001 (this "Amendment") to
the Security Agreement dated as of October 13, 2000 (the "Security Agreement"),
by and among ZymeTx, Inc., a Delaware corporation (the "Grantor"), Palladin
Opportunity Fund, LLC ("POF"), Halifax Fund L.P. ("HF") (POF and HF are
hereinafter collectively referred to as the "Class A Lenders"), and the initial
Class B Lenders (as that term is defined herein)(the Class A Lenders and Class B
Lenders are hereinafter collectively referred to as the Lenders").
WHEREAS, the Grantor and the Class A Lenders have entered into a
Security Agreement, dated as of October 13, 2000, in connection with the
purchase of $2,000,000 of 5% Senior Secured Convertible Debentures
("Debentures") of the Grantor pursuant to which the Class A Lenders were granted
a security interest in certain assets of the Grantor, on the terms and
conditions set forth therein; and
WHEREAS, the Grantor has undertaken an offering whereby it shall sell
up to an aggregate of $1,000,000 principal amount of 12% promissory notes (the
"Offering")(the form of which is annexed hereto as Exhibit A) due on the
earliest of (i) May 31, 2002, (ii) the consummation of the sale or exchange
(including by way of merger) of all or substantially all of the outstanding
shares of common stock of the Company, or (iii) the date of consummation of
certain mergers or consolidations of the Company (the "Notes") to certain
persons (the "Class B Lenders");
WHEREAS, in connection with the sale of the Notes, the Grantor has
agreed to grant the Class B Lenders a security interest in the Grantor's assets
of up to a maximum of $200,000 on a pari passu basis with the security held by
the Class A Lenders, provided that a minimum of $500,000 is raised from the
Class B Lenders; and
WHEREAS, the Grantor and the Class A Lenders desire to amend the
Security Agreement in order to grant such security interests to the Class B
Lenders; and
WHEREAS, in order to effect such amendment to the Security Agreement,
the parties hereby agree to (i) amend the definition of "Indebtedness" in the
Security Agreement to include the Notes; (ii) amend Schedule A of the Security
Agreement in order to include the Class B Lenders; (iii) amend Section 3.2(a) in
order to include the Class B Lenders' right to accelerate the indebtedness; and
(iv) amend Section 3.2(i) to define the Class B Lender's rights to proceeds of
any foreclosure or realization upon the Collateral.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Capitalized Terms. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Security Agreement.
2. In order to effect the amendment of the Security Agreement, the
Security Agreement is hereby amended as follows:
a. Indebtedness. The Security Agreement is hereby amended so
as to add the Notes to the definition of Indebtedness contained in
Section 1.1 thereof.
b. Amendment to Schedule A of the Security Agreement. Schedule
A of the Security Agreement is hereby amended to be and read as
Schedule A annexed hereto so as to add all purchasers of the Notes
under the heading "Class B Lenders." The parties hereby acknowledge and
agree that the Grantor may have multiple closings of the offering of
the Notes, and that Schedule A shall updated from time to time as
Grantor sells and issues the Notes to Class B Lenders, with the names
and addresses of all Class B Lenders being added to Schedule A until
such time that Grantor's offering shall be deemed completed under the
terms of the offering. The Grantor, Class A Lenders and existing Class
B Lenders hereby agree and acknowledge that such additional Class B
Lenders shall be automatically added to Schedule A without further
action required by the Grantor, Class A Lenders or existing Class B
Lenders.
c. Amendment to Section 3.2(a) of the Security Agreement.
Section 3.2(a) shall be amended to read as follows:
(a) Accelerate Indebtedness. (1) Class A Lenders may declare
their share of the Indebtedness immediately due and payable,
upon three business days' notice, if prior notice with respect
to an Event of Default (as that term is defined herein) shall
not have been previously given; (2) Class B Lenders may
declare their share of the Indebtedness immediately due and
payable, without further notice to the Grantor, upon an Event
of Default (as that term is defined herein or in the Notes);
and (3) the occurrence of an Event of Default by Grantor with
respect to either the Class A Lenders or the Class B Lenders,
shall be deemed to be the occurrence of an Event of Default by
Grantor with respect to all classes of Lenders.
Except where this Security Agreement specifies to the
contrary by referring to Class A Lenders or Class B Lenders,
including, without limitation, this Section 3.2(a) of this
Security Agreement, any action that may be taken by the
Lenders under this Security Agreement (including, without
limitation, directions, demands or requests made to the
Grantor, and the granting of consents or waivers of Grantor's
obligations) shall be taken only with the consent and approval
of a majority in interest of the Lenders. For so long as any
obligations remain outstanding on the Notes, majority in
interest shall mean Lenders who hold not less than fifty
percent (50%) of the obligations outstanding on the
Indebtedness. For purposes of the preceding sentence,
Indebtedness owing to the Class B Lenders shall be deemed not
to exceed $200,000.
d. Amendment to Section 3.2(i) of the Security Agreement.
Section 3.2(i) of the Security Agreement is hereby amended to read as
follows:
(i) Application of Proceeds. The proceeds of any foreclosure
or realization upon the Collateral shall be applied to the
Class A Lenders and Class B Lenders on a pari passu basis
until the Class B Lenders have received an aggregate of
$200,000 worth of proceeds from the Collateral, at which time
the Class B Lenders security interests shall be deemed
satisfied and the amount of proceeds in excess of $200,000
shall be applied directly to the Class A Lenders until all
Indebtedness owing to the Class A Lenders have been paid in
full. All such proceeds shall be distributed in the following
manner:
(A) First, to the reasonable costs and expenses of
collection incurred;
(B) Second, to overdue interest and fees;
(C) Third, to the outstanding principal amount of the
Indebtedness;
(D) Fourth, any excess to the Grantor or other party
or parties in accordance with applicable law or court
order.
3. Grantor acknowledges and agrees to perfect both the Class A Lenders
and Class B Lenders security interests as provided for in Section 2.2 of the
Security Agreement.
4. Grantor hereby represents that $500,000 has been raised under the
Offering and, accordingly, the Class B Lenders are being granted the security
interests provided herein.
5. Effectiveness of Amendment. Pursuant to Section 4.1 of the Security
Agreement, this Amendment shall become effective upon the execution and delivery
of this Agreement by the Grantor, Class A Lenders and Class B Lenders.
6. Effect on Security Agreement. The Security Agreement shall continue
in full force and effect as amended by this Amendment. From and after the date
hereof, all references to the Security Agreement shall be deemed to mean the
Security Agreement as amended by this Amendment.
7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR FULE (WHETHER OF THE STATE
OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
8. Counterparts. This Amendment may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
In WITNESS WHEREOF, this Amendment has been duly executed and delivered
by the duly authorized officer of each party hereto as of the date first above
written.
ZYMETX, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
PALLADIN OPPORTUNITY FUND, LLC
By: Palladin Asset Managment, LLC
Managing Member
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
HALIFAX FUND, L.P.
By: The Palladin Group, L.P.
Attorney-in-Fact
By: Palladin Capital Management, LLC
General Partner
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
[Class B Lenders]
By: ______________________________________
SCHEDULE A
Identity and Address of Lenders
-------------------------------
Class A Lenders
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Palladin Opportunity Fund, LLC 000
Xxxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. 00000
Halifax Fund, L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. 00000
Class B Lenders
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