SECURITY AGREEMENT
Exhibit 10.11
THIS SECURITY AGREEMENT (this “Agreement”) is made and entered into as of July 15, 2010 by APDN (B.V.I.) INC., a company organized under the laws of the British Virgin Islands (the “Debtor”) for the benefit of the individuals or entities listed on Schedule I hereto (the “Lenders”).
RECITALS:
A. Applied DNA Sciences, Inc., a Delaware corporation (“Parent”), is indebted to the Lenders as evidenced by certain secured convertible promissory notes issued to the Lenders on January 29, 2009, February 27, 2009, March 30, 2009, June 22, 2009, June 30, 2009, August 21, 2009, September 30, 2009, October 14, 2009, January 7, 2010 and June 4, 2010 (the “Promissory Notes”).
B. In order to secure its obligations under the Promissory Notes, the Parent has granted a security interest in all of the assets of the Parent to the Lenders.
C. The Parent agreed that, in connection with the issuance of any debt in addition to the Promissory Notes, the Parent would grant a pari passu security interest to the Lenders in any collateral provided as security for such additional debt.
D. In order to secure the obligations of the Parent under the Promissory Notes, the Debtor, a wholly-owned subsidiary of the Parent, agreed to grant to the Lenders a security interest in the Collateral (as hereinafter defined).
NOW, THEREFORE, for and in consideration of the recitals made above and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the Debtor agrees as follows:
1. Definitions
1.1 All terms used in this Agreement and the recitals hereto which are defined in Articles 8 or 9 of the Uniform Commercial Code as in effect from time to time in the State of New York (the “Code”), and which are not otherwise defined herein shall have the same meanings herein as set forth therein.
1.2 As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:
“Copyright Licenses” means all licenses, contracts or other agreements, whether written or oral, naming the Debtor as licensee or licensor and providing for the grant of any right to use or sell any works covered by any copyright (including, without limitation, all Copyright Licenses set forth in Schedule II hereto).
“Copyrights” means all domestic and foreign copyrights, whether registered or not, including, without limitation, all copyright rights throughout the universe (whether now or hereafter arising) in any and all media (whether now or hereafter developed), in and to all original works of authorship fixed in any tangible medium of expression, acquired or used by the Debtor (including, without limitation, all copyrights described in Schedule II hereto), all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Copyright Office or in any similar office or agency of the United States or any other country or any political subdivision thereof), and all reissues, divisions, continuations, continuations in part and extensions or renewals thereof.
“Intellectual Property” means the Copyrights, Trademarks and Patents.
“Licenses” means the Copyright Licenses, the Trademark Licenses and the Patent Licenses.
“Lien” means any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights).
“Patent Licenses” means all licenses, contracts or other agreements, whether written or oral, naming the Debtor as licensee or licensor and providing for the grant of any right to manufacture, use or sell any invention covered by any Patent (including, without limitation, all Patent Licenses set forth in Schedule II hereto).
“Patents” means all domestic and foreign letters patent, design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques, processes, proprietary information, technology, know-how, formulae, rights of publicity and other general intangibles of like nature, now existing or hereafter acquired (including, without limitation, all domestic and foreign letters patent, design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques, processes, proprietary information, technology, know-how and formulae described in Schedule II hereto), all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Patent and Trademark Office, or in any similar office or agency of the United States or any other country or any political subdivision thereof), and all reissues, divisions, continuations, continuations in part and extensions or renewals thereof.
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.
“Trademark Licenses” means all licenses, contracts or other agreements, whether written or oral, naming the Debtor as licensor or licensee and providing for the grant of any right concerning any Trademark, together with any goodwill connected with and symbolized by any such trademark licenses, contracts or agreements and the right to prepare for sale or lease and sell or lease any and all Inventory now or hereafter owned by the Debtor and now or hereafter covered by such licenses (including, without limitation, all Trademark Licenses described in Schedule II hereto).
-2-
“Trademarks” means all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s, Internet domain names, trade styles, designs, logos and other source or business identifiers and all general intangibles of like nature, now or hereafter owned, adopted, acquired or used by the Debtor (including, without limitation, all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s, Internet domain names, trade styles, designs, logos and other source or business identifiers described in Schedule II hereto), all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof), and all reissues, extensions or renewals thereof, together with all goodwill of the business symbolized by such marks and all customer lists, formulae and other Records of the Debtor relating to the distribution of products and services in connection with which any of such marks are used.
2. Grant of Security Interest. As security for the prompt payment and satisfaction all obligations of the Parent and Debtor at any time owing to the Lenders under the Promissory Notes, the Debtor hereby grants to the Lenders a continuing security interest in all of the personal property of the Debtor, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind and description, tangible or intangible (collectively, the “Collateral”), including, without limitation, the following:
|
a)
|
all Accounts;
|
|
|
b)
|
all Chattel Paper (whether tangible or electronic);
|
|
|
c)
|
the Commercial Tort Claims specified on Schedule III hereto;
|
|
|
d)
|
all Deposit Accounts, all cash and other property from time to time deposited therein and the monies and property in the possession or under the control of the Lenders or any affiliate, representative, agent or correspondent of the Lenders;
|
|
|
e)
|
all Documents;
|
|
|
f)
|
all Equipment;
|
|
|
g)
|
all Fixtures;
|
|
|
h)
|
all General Intangibles (including, without limitation, all Payment Intangibles);
|
|
|
i)
|
all Goods
|
-3-
|
j)
|
all Instruments (including, without limitation, Promissory Notes and each certificated Security);
|
|
|
k)
|
all Inventory;
|
|
|
l)
|
all Investment Property;
|
|
|
m)
|
all Copyrights, Patents and Trademarks, and all Licenses;
|
|
|
n)
|
all Letter-of-Credit Rights;
|
|
|
o)
|
all Supporting Obligations;
|
|
|
p)
|
all other tangible and intangible personal property of the Debtor (whether or not subject to the Code), including, without limitation, all bank and other accounts and all cash and all investments therein, all proceeds, products, offspring, accessions, rents, profits, income, benefits, substitutions and replacements of and to any of the property of the Debtor described in the preceding clauses of this Section 2 (including, without limitation, any proceeds of insurance thereon and all causes of action, claims and warranties now or hereafter held by the Debtor in respect of any of the items listed above), and all books, correspondence, files and other Records, including, without limitation, all tapes, desks, cards, Software, data and computer programs in the possession or under the control of the Debtor or any other Person from time to time acting for the Debtor to the extent of the Debtor’s rights therein, that at any time evidence or contain information relating to any of the property described in the preceding clauses of this Section 2 or are otherwise necessary or helpful in the collection or realization thereof; and
|
|
|
q)
|
all Proceeds, including all cash Proceeds and non-cash Proceeds, and products of any and all of the foregoing Collateral;
|
in each case howsoever the Debtor’s interest therein may arise or appear (whether by ownership, security interest, claim or otherwise).
3. Termination of Security Interest. Upon the automatic conversion (or earlier payment) of the Promissory Notes, all of the Debtor’s obligations will be discharged, including the termination of the Lenders’ security interest in the Collateral.
4. Other Issuances of Debt. The Parent and Debtor may issue debt in addition to the Promissory Notes (including the convertible promissory notes issued pursuant to the Securities Purchase Agreement, dated as of even date herewith, by and among the Parent and the investors listed on the Schedule of Buyers attached thereto) that may be secured by a security interest in the Collateral, which would be pari passu to the security interest granted to the Lenders.
* * *
-4-
[Remainder of page intentionally left blank; signature page follows]
-5-
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Security Agreement as of the day and year first above written.
| APDN (B.V.I.) INC. | |||
|
By:
|
|
||
| Name: Xx. Xxxxx X. Xxxxxxx | |||
| Title: President and Chief Executive Officer | |||
-6-
Schedule I
-7-
Schedule II
The following are owned by the Grantor:
|
PATENTS
|
||||
|
Patents Issued
|
||||
|
Patent Name
|
Patent No
|
Assignee of
Record
|
Date Issued
|
Jurisdiction
|
|
Nucleic Acid as Marker for
Product Anticounterfeiting
and Identification
|
(570982/196181)
89108443
|
APDN (B.V.I.) Inc.
|
1/11/2004 –
3/16/2020
3/17/2000
|
Taiwan
|
|
Method of using ribonucleic
acid as marker for product
anti-counterfeit labeling
|
CN1324955
00107580.2
|
APDN (B.V.I.) Inc.
|
2/2/2005
|
China
|
|
EppenLocker (A Leakage
Prevention Apparatus of
Microcentrifuge)
|
529633
203050
|
APDN Inc.
|
4/21/2003-
3/9/2012
3/10/2000
|
Taiwan
|
|
Multiple Tube Structure for
Multiple PCR in a Closed
Container
|
519130
205554
|
APDN Inc.
|
1/21/2003-
6/19/2012
6/20/2000
|
Taiwan
|
|
A Device for Multiple
Polymerase Chain Reactions
In a Closed Container and a
Method of Using Thereof
|
231311
|
APDN Inc.
|
4/21/2005-
6/12/2020
6/12/2000
|
Taiwan
|
|
A Method of marking solid or
liquid substances with nucleic
acid for anti-counterfeiting
and authentication
|
7115301
(10/748,412)
|
APDN (B.V.I.) Inc.
|
10/3/2006
|
United States
|
|
A novel nucleic acid based
steganography system and
applications thereof
|
MY 135976-A
|
APDN (B.V.I.) Inc.
|
7/31/2008
|
Malaysia
|
|
KR 20050025256
679484
(61387/2004)
|
APDN (B.V.I.) Inc.
|
3/14/2005
8/3/2005
|
Korea
|
|
|
Method for Mixing
Ribonucleic Acid in Water
Insoluble Media and
Application Thereof
|
JP2004159502
3930794
|
Rixflex Holding Limited*
|
6/10/2004
8/31/2002
|
Japan
|
|
Method for Mixing
Ribonucleic Acid in Water
Insoluble Media and
Application Thereof
|
EP1394544
|
APDN (B.V.I.) Inc.
|
3/3/2004
|
EU
|
|
Method of dissolving nucleic
acid in water insoluble
medium and its application
|
CN100349315C
03155949.2
|
APDN (B.V.I.) Inc.
|
11/7/2007
(8/27/2003)
|
China
|
|
A Nucleic Acid Based
Steganography System and
Application thereof
|
EP1568783
|
APDN (B.V.I.) Inc.
|
8/31/2005
|
EU
|
|
A Nucleic Acid Based
Steganography System and
Application Thereof
|
DE 602004007474.8
|
APDN (B.V.I.) Inc
|
4/24/2008
|
Germany
|
|
System and Method for
authenticating multiple
components associated with a
particular product
|
WO2006127558 A2
|
APDN
|
11/30/2006
|
EU
|
-8-
|
Patents Pending
|
||||
|
Patent Name
|
Publication No
|
Filed in Name of
|
Date Published
|
Jurisdiction
|
|
Method for Mixing Nucleic
Acid in Water Insoluble
Media and Application
Thereof
|
20040058374
(10/645,602)
|
Rixflex Holdings Limited*
|
3/25/2004
|
United States
|
|
Novel nucleic acid based
steganography system and
application thereof
|
20050059059
(10/909,431)
|
Rixflex Holdings Limited*
|
3/17/2005
|
United States
|
|
Cryptic method of secret
information carried in DNA
molecule and it deencryption
method
|
200506064
(921221490)
|
APDN (B.V.I.) Inc.
|
8/6/2003
|
Taiwan
|
|
A novel nucleic acid based
steganography system and
applications thereof
|
0-0000-00000
|
APDN (B.V.I.) Inc.
|
8/4/2004
|
Vietnam
|
|
A novel nucleic acid based
steganography system and
applications thereof
|
092819
|
APDN (B.V.I.) Inc. pending
|
8/4/2004
|
Thailand
|
|
A Method for encrypting and
decrypting specific message
by using nucleic acid
molecules
|
JP2005055900
2004-225987
|
Rixflex Holdings Limited*
|
3/3/2005
|
Japan
|
|
P-00200400374
|
APDN (B.V.I.) Inc
|
8/4/2004
|
Indonesia
|
|
|
Methods and Systems for the
Generation of Plurality of
Security Markers and the
Detection Thereof
|
12/690,799
|
APDN (B.V.I.) Inc.
|
None
|
United States
|
|
Published Patent Applications
|
||||
|
Patent Name
|
Patent Appl. No
|
Assignee of
Record
|
Publication Date
|
Jurisdiction
|
|
System and Method for
Marking Textiles with
Nucleic Acids
|
publication # 20050112610
(10/825,968)
|
APDN (B.V.I.) Inc.
|
5/26/2005
|
United States
|
|
System and Method for
Authenticating Multiple
Components Associated
with a Particular Good
|
20070048761
(11/437,265)
|
APDN (B.V.I.) Inc.
|
3/1/2007
|
United States
|
-9-
|
System and Method for
Secure Document Printing
and Detection
|
20090042191
(11/954,044)
|
APDN (B.V.I.) Inc.
|
2/12/2009
|
United States
|
|
System and Method for
Authenticating Tablets
|
20090075261
(11/954,055)
|
APDN (B.V.I.) Inc.
|
3/19/2009
|
United States
|
|
System and Method for
Authenticating Sports
Identification Goods
|
20080293052
(11/954,051)
|
APDN (B.V.I.) Inc.
|
11/27/2008
|
United States
|
|
Optical Reporter
Compositions
|
20080299667
(11/954,030)
|
APDN (B.V.I.) Inc.
|
12/4/2008
|
United States
|
|
Methods for Covalent
Linking of Optical
Reporters
|
20080312427
(11/954,009)
|
APDN (B.V.I.) Inc.
|
12/12/2008
|
United States
|
|
Method for Authenticating
Articles with Optical
Reporters
|
20080299559
(11/954,038)
|
APDN (B.V.I.) Inc.
|
12/4/2008
|
United States
|
|
Methods for Genetic
Analysis of Textiles made
of Gossypium Barbadense
and Gossypium
Hirsutum Cotton
|
Published by WIPO
WO 2010/056642
12/269,737
|
APDN (B.V.I.) Inc.
|
05/20/2010.
|
United States
|
|
Methods for Genetic
Analysis of Textiles made
of Gossypium Barbadense
and Gossypium
Hirsutum Cotton
|
Published by WIPO
WO 2010/056642
PCT/US09/63814
|
APDN (B.V.I.) Inc.
|
05/20/2010
|
WIPO
|
|
Methods for Genotyping
Mature Cotton Fibers and
Textiles
|
Published by WIPO
WO 2010/056645
12/269,757
|
APDN (B.V.I.) Inc.
|
Published by WIPO 05/20/2010.
|
United States
|
|
Methods for Genotyping
Mature Cotton Fibers and
Textiles
|
Published by WIPO
WO 2010/056645
PCT/US09/63818
|
APDN (B.V.I.) Inc.
|
05/20/2010
|
WIPO
|
|
Incorporating Water Soluble
Security Markers into
Cyanoacrylate Solutions
|
20090286250
(12/465,450)
|
APDN (B.V.I.) Inc.
|
11/19/2009
|
United States
|
-10-
The following are used by the Grantor:
|
TRADEMARKS
|
||||
|
Registered
|
TM Reg #
|
Assignee of
Record
|
Registered
|
Jurisdiction
|
|
APPLIED DNA
|
3489209
|
APDN
|
8/19/2008
|
United States
|
|
SIGNATURE
|
3482366
|
APDN
|
8/5/2008
|
United States
|
|
SIGNATURE
|
005419031
|
Apdn
|
10/26/2006
|
EU
|
|
SIGNATURE
|
1143760
|
APDN
|
10/27/2006
|
Australia
|
|
AZSURE
|
3698729
|
APDN
|
10/20/2009
|
United States
|
|
AZSURE
|
1022396
|
APDN
|
1109/2009
|
EU
|
|
Pending
|
TM Reg #
|
Assignee of
Record
|
Filed
|
Jurisdiction
|
|
FIBERTYPING
|
77/488531
|
APDN
|
0/0/0000
|
Xxxxxx Xxxxxx
|
|
XXXXXXXXXX
|
00/000000
|
XXXX
|
0/0/0000
|
Xxxxxx Xxxxxx
|
|
BIOMATERIAL XXXXXXXXXX
|
00/000000
|
XXXX
|
0/00/0000
|
Xxxxxx Xxxxxx
|
|
FIBERTYPING
|
77/728499
|
APDN
|
05/04/2009
|
United States
|
|
PIMATYPING
|
77/728511
|
APDN
|
05/04/2009
|
United States
|
-11-
Schedule III
None.
