exv10w5



 






Exhibit 10.5




THIRD AMENDMENT




TO

LOAN AND SECURITY AGREEMENT




     This Third Amendment to Loan and Security Agreement is entered into as of June 20, 2005 (the
“Amendment”), by and between COMERICA BANK (“Bank”) and LAUREATE PHARMA, INC. (“Borrower”).



RECITALS




     Borrower and Bank are parties to that certain Loan and Security Agreement dated as of December
1, 2004, as amended, including without limitation by that certain First Amendment to Loan and
Security Agreement dated as of January 31, 2005 and that certain Second Amendment to Loan and
Security Agreement dated as of May 6, 2005 (collectively, the “Agreement”). The parties desire to
amend the Agreement in accordance with the terms of this Amendment.



     NOW, THEREFORE, the parties agree as follows:



     1. Section 4 of the Agreement is hereby amended and restated in its entirety to read as
follows:




     “4. CREATION OF SECURITY INTEREST.




          4.1 Grant of Security Interest. Borrower grants and pledges to Bank a
continuing security interest in all presently existing and hereafter acquired or
arising Collateral in order to secure prompt repayment of any and all Obligations
and in order to secure prompt performance by Borrower of each of its covenants and
duties under the Loan Documents. Except as set forth in the Schedule, such security
interest constitutes a valid, first priority security interest in the presently
existing Collateral, and will constitute a valid, first priority security interest
in later-acquired Collateral. Notwithstanding any termination, Bank’s Lien on the
Collateral shall remain in effect for so long as any Obligations are outstanding.




          4.2 Perfection of Security Interest. Borrower authorizes Bank to file
at any time financing statements, continuation statements, and amendments thereto
that (i) either specifically describe the Collateral or describe the Collateral as
all assets of Borrower of the kind pledged hereunder, and (ii) contain any other
information required by the Code for the sufficiency of filing office acceptance of
any financing statement, continuation statement, or amendment, including whether
Borrower is an organization, the type of organization and any organizational
identification number issued to Borrower, if applicable. Any such financing
statements may be signed by Bank on behalf of Borrower, as provided in the Code, and
may be filed at any time in any jurisdiction whether or not Revised Article 9 of the
Code is then in effect in that jurisdiction. Borrower shall from time to time
endorse and deliver to Bank, at the request of Bank, all Negotiable Collateral and
other documents that Bank may reasonably request, in form satisfactory to Bank, to
perfect and continue perfected Bank’s security interests in the Collateral and in
order to fully consummate all of the transactions contemplated under the Loan
Documents. Borrower shall have possession of the Collateral, except where expressly
otherwise provided in this Agreement or where Bank chooses to perfect its security
interest by possession in addition to the filing of a financing statement. Where
Collateral is in possession of a third party bailee, Borrower shall take such steps
as Bank reasonably requests for Bank to (i) obtain an acknowledgment, in form and
substance satisfactory to Bank, of the bailee that the bailee holds such Collateral
for the benefit of Bank, (ii) obtain “control” of any Collateral consisting of
investment property, deposit accounts, letter-of-credit rights or electronic chattel
paper (as such items and the term “control” are defined in Revised Article 9 of the
Code) by causing the securities intermediary or depositary institution or issuing
bank to execute a control agreement in form and substance satisfactory to Bank.
Borrower will not create any chattel paper without placing a legend on the chattel
paper acceptable to Bank indicating that Bank has a security interest in the chattel
paper. Borrower from



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time to time may deposit with Bank specific cash collateral to secure specific
Obligations; Borrower authorizes Bank to hold such specific balances in pledge and
to decline to honor any drafts thereon or any request by Borrower or any other
Person to pay or otherwise transfer any part of such balances for so long as the
specific Obligations are outstanding.




          4.3 Right to Inspect. Bank (through any of its officers, employees, or
agents) shall have the right, upon reasonable prior notice, from time to time during
Borrower’s usual business hours but no more than twice a year (unless an Event of
Default has occurred and is continuing), to inspect Borrower’s Books and to make
copies thereof and to check, test, and appraise the Collateral in order to verify
Borrower’s financial condition or the amount, condition of, or any other matter
relating to, the Collateral.”



     2. Exhibit A to the Agreement is hereby replaced with the attached Exhibit A.



     3. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as
defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and
effect in accordance with its respective terms and hereby is ratified and confirmed in all
respects. Except as expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of
Bank under the Agreement, as in effect prior to the date hereof. Borrower ratifies and reaffirms
the continuing effectiveness of all promissory notes, guaranties, security agreements, mortgages,
deeds of trust, environmental agreements, and all other instruments, documents and agreements
entered into in connection with the Agreement.



     4. Borrower represents and warrants that the representations and warranties contained in the
Agreement are true and correct as of the date of this Amendment, and that no Event of Default has
occurred and is continuing.



     5. This Amendment may be executed in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one instrument.



     6. As a condition to the effectiveness of this Amendment, Bank shall have received, in form
and substance satisfactory to Bank, the following:



          (a) this Amendment, duly executed by Borrower;



          (b) Corporation Resolutions to Borrow and Incumbency Certification, duly executed by Borrower;



          (c) An Affirmation of Guaranty, duly executed by Safeguard Delaware, Inc. and Safeguard
Scientifics (Delaware), Inc.;



          (d) A legal fee from the Borrower in the amount of $350;



          (e) an amount equal to all Bank Expenses incurred through the date of this Amendment; and



          (f) such other documents, and completion of such other matters, as Bank may reasonably deem
necessary or appropriate.



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     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above
written.



	 	 	 	 	 
	 	LAUREATE PHARMA, INC.

 	 
	 	By:  	/s/ Christopher J. Davis
 	 
	 	Title: Vice President 	 






	 	 	 	 	 
	 	COMERICA BANK

 	 
	 	By:  	/s/ Peter Gibson
 	 
	 	Title: Vice President 	 
	 	 	 	 
	 




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EXHIBIT A





     All personal property of Debtor whether presently existing or hereafter created or acquired, and
wherever located, including, but not limited to:



     (a) all accounts (including health-care-insurance receivables), chattel paper (including
tangible and electronic chattel paper), deposit accounts, documents (including negotiable
documents), equipment (including all accessions and additions thereto), general intangibles
(including payment intangibles and software), goods (including fixtures), instruments (including
promissory notes), inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment property (including
securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books
and records with respect to any of the foregoing, and the computers and equipment containing said
books and records;



     (b) all common law and statutory copyrights and copyright registrations, applications for
registration, now existing or hereafter arising, in the United States of America or in any foreign
jurisdiction, obtained or to be obtained on or in connection with any of the forgoing, or any parts
thereof or any underlying or component elements of any of the forgoing, together with the right to
copyright and all rights to renew or extend such copyrights and the right (but not the obligation)
of Secured Party to sue in its own name and/or in the name of the Debtor for past, present and
future infringements of copyright;



     (c) all trademarks, service marks, trade names and service names and the goodwill associated
therewith, together with the right to trademark and all rights to renew or extend such trademarks
and the right (but not the obligation) of Secured Party to sue in its own name and/or in the name
of the Debtor for past, present and future infringements of trademark;



     (d) all (i) patents and patent applications filed in the United States Patent and Trademark
Office or any similar office of any foreign jurisdiction, and interests under patent license
agreements, including, without limitation, the inventions and improvements described and claimed
therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii)
income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or
payable under and with respect thereto, including, without limitation, damages and payments for
past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the
name of Debtor and/or in the name of Secured Party for past, present and future infringements
thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such
patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals,
extensions and continuations-in-part with respect to any of the foregoing; and



     (e) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including,
without limitation, insurance proceeds, and all supporting obligations and the security therefor or
for any right to payment. All terms above have the meanings given to them in the California
Uniform Commercial Code, as amended or supplemented from time to time.


Notwithstanding any of the foregoing, “Collateral” shall not include (i) intellectual property
owned by a client of Borrower; or (ii) any rights of Borrower’s clients in and to Borrower’s
intellectual property under Borrower’s agreements with such clients, provided, however, that the
Collateral shall include all accounts and general intangibles that consist of rights to payment and
proceeds from the sale, licensing or disposition of all or any part, or rights in, the foregoing.
Any Lien Bank may have in intellectual property sold or otherwise transferred to a client of
Borrower in the ordinary course of business shall be automatically released (provided that such
release shall not extend to accounts and general intangibles that consist of rights to payment and
proceeds from such sale or transfer received by Borrower).



Notwithstanding the foregoing, the term “Collateral” shall not include any Equipment not financed
by Bank (or, if financed by Bank, with respect to which Bank has been repaid) to the extent the
granting of security interest therein is prohibited by or would constitute a default under any
agreement or document governing such property, including without limitation an agreement pursuant
to which a third party agrees to finance or refinance such Equipment; provided that upon the
termination or lapsing of any such prohibition, such property shall automatically be part of the
Collateral; and provided further that the provisions of this paragraph shall in no case exclude
from the definition of “Collateral” any Accounts, proceeds of the disposition of any property, or
general intangibles consisting of rights to payment, all of which shall at all times constitute
“Collateral”.