SECURITY AGREEMENT (Patent)
Exhibit
10.95
(Patent)
THIS
SECURITY AGREEMENT (PATENT) (“Agreement”), is entered into and
made effective as of April 27, 2007, by and between SMARTIRE SYSTEMS
INC., a British Columbia corporation with its principal place of
business located at Suite #150 - 13151 Vanier Place, Richmond, BC V6V 2J1,
British Columbia, Canada (the “Debtor”) in favor of the parties listed on
Schedule I attached hereto (each a “Secured
Party” and, collectively, the “Secured
Parties”).
WITNESETH:
WHEREAS,
the Debtor has issued to the Secured Parties the convertible debentures
listed on Schedule I attached hereto (collectively, the “Convertible
Debentures”), which are convertible into shares (the “Conversion
Shares”) of the Debtor’s common stock, no par value, in the respective
original principal amounts set forth opposite each Secured Party’s name on
Schedule I;
WHEREAS,
the Debtor has provided the Secured Party a general security interest in Pledged
Property (as this term is defined in the Security Agreement by and between
the
Debtor and the Secured Party, dated January 23, 2007 and which, together with
all amendments, supplements, restatements and other modifications, if any,
from
time to time made thereto, will hereinafter be referred to as the “Security
Agreement”);
WHEREAS,
the parties desire to enter into this Agreement to specify the
particular Patent Collateral (as defined below) which is included as part of
the
Pledged Property and to perfect the Secured Parties’ security interest in the
Patent Collateral granted pursuant to the Security Agreement and this
Agreement.
NOW
THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, the Company agrees as follows:
SECTION
1. Definitions. Unless
otherwise defined herein, terms used in this Agreement, including its preamble
and recitals, have the meanings provided in the Security Agreement.
SECTION
2. Grant
of Security Interest. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and in order to secure
the payment and performance of all of the Obligations, the Debtor does hereby
mortgage, pledge and hypothecate to the Secured Party and grant to the Secured
Party a security interest in all of the following property (the “Patent
Collateral”), now owned and existing:
(a) all
letters patent and applications for letters patent throughout the world,
including all patent applications in preparation for filing anywhere in the
world and including each patent and patent application referred to in
Schedule A hereto;
(b) all
reissues, divisions, continuations, continuations-in-part, extensions, renewals
and reexaminations of any of the items described in clause (a);
(c) all
patent licenses and other agreements providing the Company with the right to
use
any of the items of the type referred to in clauses (a) and (b), including
each
patent license referred to in Schedule A hereto;
(d) the
right
to xxx third parties for past, present or future infringements of any Patent
Collateral described in clauses (a) and (b) and, to the extent applicable,
clause (c); and
(e) all
proceeds of, and rights associated with, the foregoing, (including license
royalties and proceeds of infringement suits), and all rights corresponding
thereto throughout the world.
SECTION
3. Security
Agreement. This Agreement has been executed and delivered by the
Debtor for the purpose of recording the security interest of the Secured Party
in the Patent Collateral relating to patents referred to in Schedule A
with the United States Patent and Trade Marks Office, to the extent it may
be so
registered therein. The security interest granted hereby has been
granted as a supplement to, and not in limitation of, the security interest
granted to the Secured Party under the Security Agreement. The
Security Agreement (and all rights and remedies of the Secured Party thereunder)
shall remain in full force and effect in accordance with its terms.
SECTION
4. Release
of Security Interest. Upon payment in full of all Obligations the
Secured Party shall, at the Debtor’s expense, execute and deliver to the Debtor
all instruments and other documents as may be necessary or proper to release
the
lien on any security interest in the Patent Collateral which has been granted
hereunder.
SECTION
5. Acknowledgement. The
Debtor does hereby further acknowledge and affirm that the rights and remedies
of the Secured Party with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which (including the remedies provided for therein)
are incorporated by references herein as if fully set forth herein.
SECTION
6. Security
Agreement. Notwithstanding any other term or provision hereof, in
the event that any provisions hereof contradict and are incapable of being
construed in conjunction with the provisions of the Security Agreement, the
provisions of the Security Agreement shall take precedence over those contained
herein and, in particular, if any act of the Debtor is expressly permitted
under
the Security Agreement but is prohibited hereunder, any such act shall be
permitted hereunder and any encumbrance expressly permitted under the Security
Agreement to exist or to remain outstanding shall be permitted hereunder and
thereunder.
SECTION
7. Counterparts. This
Agreement may be executed by the parties hereto in several counterparts, each
of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Security
Agreement (Patent) as of the date first above written.
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By:
/s/ Xxxx Xxxxxxxxxxx
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Name: Xxxx
Xxxxxxxxxxx
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Title:
Chief Financial Officer
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PROVINCE
OF BRITISH COLUMBIA)
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SS:
CITY
OF VANCOUVER)
BEFORE
ME, a Notary Public in and for said City and Province, personally
appeared the above-named Xxxxxxx Xxxxxxxxxxx who acknowledged that he/she
did sign the foregoing agreement and that the same is his/her free act and
deed.
IN
TESTIMONY WHEREOF, I have hereunto set my hand an official seal at
Vancouver, British Columbia, this 26 day of April,
2007.
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/s/
Xxxxxxx Xxxxx
Xxxxxxx
Xxxxx
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Notary
Public
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Signatures
continued on following page: IN WITNESS WHEREOF, the parties
hereto have executed this Security Agreement (Patent) as of the date first
above
written.
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SECURED
PARTY:
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CORNELL
CAPITAL PARTNERS, L.P.
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By: Yorkville
Advisors, LLC
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Its: Investment
Manager
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By: /s/
Xxxx
Xxxxxx
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Name:
Xxxx Xxxxxx
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Title:
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SECURED
PARTY:
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XENTENIAL
HOLDINGS LIMITED
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By:
/s/ Xxxx Xxxxxx
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Name:
Xxxx Xxxxxx
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Title:
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SECURED
PARTY:
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STAROME
INVESTMENTS LIMITED
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By:
/s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx
Xxxxx
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Title:
Director
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SECURED
PARTY:
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STARAIM
ENTERPRISES LIMITED
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By:
/s/ Xxxx Xxxxxx
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Name:
Xxxx Xxxxxx
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Title:
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CW1174657.1
SCHEDULE
I
NAME
OF SECURED PARTIES AND
CONVERTIBLE
DEBENTURES ISSUED TO EACH SECURED PARTY
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SECURED
PARTY
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CONVERTIBLE
DEBENTURE
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Cornell
Capital Partners, LP
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5%
convertible debenture issued on May 20, 2005 in the original principal
amount of $1,500,000, as amended.
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Starome
Investments Limited
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10%
convertible debenture issued on December 30, 2005 in the original
principal amount of $20 Million.
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Xentenial
Holdings Limited
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10%
convertible debenture issued on December 30, 2005 in the original
principal amount of $8 Million.
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10%
convertible debenture issued on January 23, 2007 in the original
principal
amount of $684,000.
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10%
convertible debenture issued on February 9, 2007 in the original
principal
amount of $334,000.
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10%
convertible debenture issued on March 2, 2007 in the original principal
amount of $782,000.
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10%
convertible debenture issued on April 24, 2007 in the original principal
amount of $1,150,000.
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Staraim
Enterprises Limited
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10%
convertible debenture issued on December 30, 2005 in the original
principal amount of $2.0 Million.
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CW1174657.1
SCHEDULE
A
US
and CANADIAN PATENTS AND APPLICATIONS
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TITLE
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FILING
DATE
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SERIAL
NUMBER
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DATE
ISSUED
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PATENT
NUMBER
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US
Patents
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Fluid
pressure sensing method and apparatus
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10/13/2006
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11/580,693
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Pending
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N/A
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Apparatus
and method for mounting a tire condition sensor capsule to a wheel
rim
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10/25/2004
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6805000
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Wheel
component with cavity for mounting a housing for measurement
apparatus
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03/19/2002
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6357833
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Data
logging tire monitor with condition predictive capabilities and integrity
checking
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09/24/1996
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5559484
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Data
logging tire monitor with condition predictive capabilities and integrity
checking
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08/07/1996
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5945908
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Tire
monitoring apparatus and method
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08/09/1994
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5335540
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Abnormal
tire condition warning system
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02/08/1994
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5285189
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Tire
monitoring apparatus and method
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08/03/1993
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5231872
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TRW
Patents Licensed to SmarTire by TRW per License Agreement dated effective
August 31, 2001
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Apparatus
and method for controlling a tire condition module of a vehicle
tire
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05/15/2001
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6232875
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Tire
pressure sensor wheel attachment apparatus
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05/02/2000
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6055855
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Apparatus
and method for sensing a condition of a vehicle tire
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06/20/2002
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2002075144
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Canadian
Patents
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Tire
monitoring apparatus and method
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05/28/2002
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2221174
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Tire
monitoring apparatus and method
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02/20/1992
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2104696
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CW1174657.1
