PATENT, TRADEMARK AND COPYRIGHT SECURITY AGREEMENT
Exhibit 10.9
PATENT, TRADEMARK
AND COPYRIGHT SECURITY AGREEMENT
THIS PATENT, TRADEMARK AND COPYRIGHT SECURITY AGREEMENT (this “Agreement”) is entered into as
of this 26th day of December 2007, by and among NEOPROBE CORPORATION, a Delaware corporation (the
“Company”), CARDIOSONIX LTD., a corporation organized under the laws of the State of Israel
(“Cardiosonix”), and XXXX BIOSCIENCES INC., a Delaware corporation (“Xxxx” and jointly and
severally with the Company and Cardiosonix, the “Pledgor”), each with its principle address at 000
Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxx 00000-0000, and Platinum-Montaur Life Sciences, LLC (the
“Lender”).
WHEREAS, the Company and the Lender are parties to a certain Securities Purchase Agreement,
dated as of December 26, 2007 (the “Purchase Agreement”), and a Security Agreement, dated as of
December 26, 2007 (the “Security Agreement”), which provide for, among other things: (i) the
Company to issue to the Lender the Notes identified in the Purchase Agreement; and (ii) the grant
by the Company to the Lender of a security interest in the Company’s assets.
WHEREAS, to induce the Lender to purchase the Notes pursuant to the Purchase Agreement, the
Company has agreed to pledge, and to cause its subsidiaries to pledge, as collateral security for
the Company’s obligations under the Notes, the assets described herein.
WHEREAS, the extension of credit pursuant to the Notes benefits Cardiosonix and Xxxx, as
subsidiaries of the Company.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and
agreements contained, and for other good and valuable consideration (the receipt and sufficiency of
which are hereby acknowledged), the Pledgor and the Lender agree as follows:
1. Security Interest in Patents, Trademarks and Copyrights. To secure the complete and
timely satisfaction of all of Company’s “Obligations” (as that term is defined in the Security
Agreement) to the Lender, the Pledgor hereby grants and conveys to the Lender a security interest
(having priority over all other security interests except as set forth herein) with power of sale,
to the extent permitted by law, in all of its now owned or existing, and hereafter acquired or
arising:
| (a) | patents, patent applications, including, without limitation, any invention and improvement to a patent or patent application, including without limitation those patents and patent applications listed on Schedule A (being sometimes referred to individually and/or collectively, the “Patents”); | ||
| (b) | trademarks, registered trademarks and trademark applications, trade names, trade styles, service marks, registered service marks and service |
1
| xxxx applications including, without limitation, the registered trademarks, trademark applications, registered service marks and service xxxx applications listed on Schedule B and (i) all renewals thereof, (ii) all accounts receivable, income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including, without limitation, payments under all licenses entered into in connection therewith and damages and payments for past, present or future infringements and dilutions thereof, and (iii) the right to xxx for past, present and future infringements and dilutions thereof, and (iv) all of the Pledgor’s rights corresponding thereto throughout the world (all of the foregoing registered trademarks, trademark applications, trade names, trade styles, registered service marks and service xxxx applications, together with the items described in clauses (i)-(iv) in this Section 1(b), being sometimes hereinafter individually and/or collectively referred to as the “Trademarks”); | |||
| (c) | the goodwill of Pledgor’s business connected with and symbolized by the Trademarks; and | ||
| (d) | copyrights, and copyright applications, including without limitation, those copyrights listed in Schedule C (being sometimes referred to individually and/or collectively as the “Copyrights”); |
together with all additions, accessions, accessories, amendments, attachments, modifications,
substitutions, and replacements, proceeds and products of the foregoing.
2. Recording of Patents and Trademarks. Pledgor represents and warrants that (1) the
patents and patent applications listed in Schedule A, and (2) the trademark and trademark
applications described in Schedule B, have each been duly recorded in the U.S. Patent and Trademark
Office (the “PTO”); and that no other patents, patent applications, trademarks, or trademark
applications have been filed or recorded with the PTO in which the Pledgor has an interest.
3. Recording of Copyrights. Pledgor represents and warrants that the copyright and
copyright applications described in Schedule C have been duly recorded in the U.S. Copyright
Office, and that no other copyright, and copyright applications have been recorded in the U.S.
Copyright Office, in which the Pledgor has an interest.
4. Restrictions on Future Agreements. Pledgor will not, without the Lender’s prior
written consent, after the date hereof, enter into any agreement, including, without limitation,
any license agreement, that is inconsistent with this Agreement, and Pledgor further agrees that it
will not take any action, and will use reasonable efforts not to knowingly permit any action to be
taken by others subject to its control, including licensees, or knowingly fail to take any action,
which would affect the validity or enforcement of the rights transferred to the Lender, under this
Agreement or the rights associated with those Patents, Trademarks and/or Copyrights which are
2
in Pledgor’s reasonable business judgment, necessary or desirable in the operation of
Pledgor’s business.
5. New Patents, Trademarks and Copyrights. Pledgor represents and warrants that the
Patents, Trademarks, and Copyrights listed on Schedules A, B, and C, include all of the patents,
patent applications, trademark registrations, trademark applications, service marks registrations,
service xxxx applications, registered copyrights and copyright applications, now owned or held by
Pledgor. If, prior to the termination of this Agreement, Pledgor shall (i) create or obtain rights
to any new patents, trademarks, trademark registrations, trademark applications, trade names, trade
styles, service marks, service marks registrations, or service xxxx applications, or (ii) become
entitled to the benefit of any patent, trademark, trademark registration, trademark application,
trade name, trade style, service xxxx, service xxxx registration, service xxxx application, the
provisions of Section 1 above shall automatically apply thereto and Pledgor shall give the Lender
prompt written notice thereof. Pledgor hereby authorizes the Lender to modify this Agreement by
(a) amending Schedules A, B, and/or C, as the case may be, to include any future patents, trademark
registrations, trademark applications, service xxxx registrations, service xxxx applications,
registered copyrights and copyright applications that are Patents, Trademarks or Copyrights under
Section 1 above, or under this Section 5 (whether or not any such notice from Pledgor has been sent
or received), and (b) filing, in addition to and not in substitution for this Agreement, a
supplement or addendum to this Agreement containing on Schedule B therein, as the case may be, such
registered trademarks, trademark applications, service marks, registered service marks and service
xxxx applications that are Trademarks under Section 1 above or this Section 5 and to take any
action the Lender otherwise deems appropriate to perfect or maintain the rights and interest of the
Lender, under this Agreement with respect to such Patents, Trademarks and Copyrights.
6. Nature and Continuation of Security Interest; Notice to Third Parties. This
Agreement has the effect of giving third parties notice of the Lender’s Security Interest in
Company’s Patents, Trademarks and Copyrights. This Agreement is made for collateral security
purposes only. This Agreement shall create a continuing security interest in the Patents,
Trademarks and Copyrights and shall remain in full force and effect until the liabilities and
Obligations of the Company to the Lenders have been paid in full. Notwithstanding anything to the
contrary contained herein, it is understood and agreed that the Lender’s security interest in the
Patents, Trademarks and Copyrights set forth on Schedule D shall be subject to the license
granted by the Pledgor to Ethicon Endo-Surgery, Inc. (“Ethicon”) pursuant to the Distribution
Agreement, dated as of September 28, 1999, between the Company and Ethicon, as amended to date. So
long as Ethicon is performing its obligations and not otherwise in default under said Distribution
Agreement, such license shall continue in accordance with its terms, notwithstanding any action of
Lender taken hereunder upon and after an Event of Default; provided, that, it is understood and
agreed that the Lender, upon and after an Event of Default, shall be entitled to all payments made
by Ethicon or its assigns in respect of such Patents, Trademarks and Copyrights. Pledgor hereby
authorizes the Secured Party to register and record the security interest granted hereby at the PTO
and to file any necessary financing statements with the Secretary of State of the State of Delaware
to evidence the security interest granted hereby.
3
7. Right to Inspect; Assignments and Security Interests. The Lender shall have the
right, at any reasonable time upon prior written request and from time to time, to inspect
Pledgor’s premises and to examine Pledgor’s books, records and operations relating to the Patents
and the Trademarks, including, without limitation, Pledgor’s quality control processes; provided,
that in conducting such inspections and examinations, the Lender shall use reasonable efforts not
to disturb unnecessarily the conduct of Plegor’s ordinary business operations. From and after the
occurrence of an event of default under the Notes (an “Event of Default”), Pledgor agrees that the
Lender, or a conservator appointed by the Lender, shall have the right to take any action to renew
or to apply for registration of any Trademarks as the Lender or said conservator, on its sole
judgment, may deem necessary or desirable in connection with the enforcement of the Lender’s rights
hereunder. Pledgor agrees not to sell or assign its respective interests in the Patents,
Trademarks and/or Copyrights without the prior written consent of the Lender.
8. Duties of Pledgor. Pledgor shall have the duty to (i) prosecute diligently any
patent application, or trademark application or service xxxx application that is part of the
Trademarks pending as of the date hereof or thereafter until the termination of this Agreement, and
(ii) preserve and maintain all of Pledgor’s rights in the patents, patent applications, trademark
applications, service xxxx applications and trademark and service xxxx registrations that are part
of the Patents and Trademarks. Any expenses incurred in connection with the foregoing shall be
borne by Pledgor. Pledgor shall not, without thirty (30) days prior written notice to the Lender,
abandon any trademark or service xxxx that is the subject of a registered trademark, service xxxx
or application therefor and which, is or shall be necessary or economically desirable in the
operation of the Pledgor’s business. The Lender shall not have any duty with respect to the
Patents, Trademarks and/or Copyrights. Without limiting the generality of the foregoing, the
Lender shall not be under any obligation to take any steps necessary to preserve rights in the
Patents, Trademarks and/or Copyrights against any other parties, but may do so at its option during
the continuance of an Event of Default, and all expenses incurred in connection therewith shall be
for the sole account of Company and added to the Obligations and liabilities secured hereby and by
the Security Agreement. Pledgor covenants and agrees to take all necessary steps (at Pledgor’s
sole cost and expense) to perfect the Lender’s security interest in the Patents, Trademarks and
Copyrights in any foreign jurisdiction (other than the State of Israel) within 90 days of the date
hereof, and to provide evidence of the same to the Lender.
9. Lender’s Right to Xxx. Upon the occurrence and during the continuance of any Event
of Default, the Lender shall have the right, for the benefit of the Lenders, to exercise all rights
and remedies available at law or in equity. From and after the occurrence and during the
continuance of an Event of Default, the Lender shall have the right, but shall not be obligated, to
bring suit or take any other action to enforce the Patents, Trademarks and Copyrights and, if the
Lender shall commence any such suit or take any such action, Pledgor shall, at the request of the
Lender, do any and all reasonable lawful acts and execute any and all proper documents reasonably
required by the Lender in aid of such enforcement. Pledgor shall, upon demand, promptly reimburse
and indemnify the Lender for all reasonable out-of-pocket costs and expenses incurred by the Lender
in the exercise of its rights under this Section 9 (including, without limitation, all attorneys’
fees). If, for any reason whatsoever, the Lender is not reimbursed with respect to the costs and expenses referred to in the preceding sentence, such
4
costs
and expenses shall be added to the Obligations secured hereby and by the Security Agreement.
10. Waivers. The Pledgor waives to the extent permitted by applicable law
presentment, demand, notice, protest, notice of acceptance of this Agreement, notice of any loans
made, credit or other extensions granted, collateral received or delivered or any other action
taken in reliance hereon and all other demands and notices of any description, except for such
demands and notices as are expressly required to be provided to the Pledgor under this Agreement or
any other document evidencing the Obligations or the liabilities under the Notes. With respect to
both the Obligations and any collateral securing the Notes (the “Collateral”), the Pledgor assents
to any extension or postponement of the time of payment or any other forgiveness or indulgence, to
any substitution, exchange or release of Collateral, to the addition or release of any party or
person primarily or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromise or adjustment of any thereof, all in such manner and at such time or times
as the Lender may deem advisable. The Lender may exercise its rights with respect to the
Collateral without resorting, or regard, to other collateral or sources of reimbursement for
Obligations. The Lender shall not be deemed to have waived any of its rights with respect to the
Obligations or the Collateral unless such waiver is in writing and signed by the Lender. No delay
or omission on the part of the Lender in exercising any right shall operate as a waiver of such
right or any other right. A waiver on any one occasion shall not bar or waive the exercise of any
right on any future occasion. All rights and remedies of the Lender in the Obligations or the
Collateral, whether evidenced hereby or by any other instrument or papers, are cumulative and not
exclusive of any remedies provided by law or any other agreement, and may be exercised separately
or concurrently.
11. Successors and Assigns. This Agreement shall be binding upon the Pledgor, its
respective successors and permitted assigns, and shall inure to the benefit of and be enforceable
by the Lender and its successors and assigns. Without limiting the generality of the foregoing
sentence, the Lender may assign or otherwise transfer any agreement or any note held by it
evidencing, securing or otherwise executed in connection with the Obligations, or sell
participations in any interest therein, to any other person or entity.
12. General; Term.
(a) This Agreement may not be amended or modified except by a writing signed by the Pledgor
and the Lender, nor may the Pledgor assign any of its rights hereunder. This Agreement and the
terms, covenants and conditions hereof shall be construed in accordance with, and governed by, the
laws of the State of New York (without giving effect to any conflicts of law provisions contained
therein). In the event that any Collateral stands in the name of the Pledgor and another or others
jointly, as between the Lender and the Pledgor, the Lender may deal with the same for all purposes
as if it belonged to or stood in the name of the Pledgor alone.
(b) This Agreement and the security interests granted herein shall terminate on the date on
which all payments under the Notes have been indefeasibly paid or satisfied in full
(including as a result of the conversion in full of the Notes) and all other obligations have
been paid or discharged (other than contingent indemnification obligations).
5
13. Waiver of Jury Trial; Venue. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. The Pledgor agrees that all proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement, the other Transaction
Documents (as defined in the Purchase Agreement) and the Notes (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, partners, members,
employees or agents) may be brought in the Courts of New York County, New York or of the United
States of America for the Southern District of New York and hereby expressly submits to the
personal jurisdiction and venue of such courts for the purposes thereof and expressly waives any
claim of improper venue and any claim that such courts are an inconvenient forum. Each of the
Pledgor and the Lender hereby irrevocably consents to the service of process of any of the
aforementioned courts in any such suit, action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, at the address in effect for notices to it under the
Purchase Agreement, such service to become effective 10 days after such mailing. Nothing in this
Section shall affect or limit any right to serve process in any other manner permitted by law. Each
of the Pledgor and the Lender hereby agree that the prevailing party in any suit, action or
proceeding arising out of or relating to this Agreement shall be entitled to reimbursement for
reasonable legal fees from the non-prevailing party. The Pledgor and the Lender hereby waive all
rights to trial by jury.
[Signature Page Follows]
6
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.
| PLEDGOR: | ||||||
| In the Presence of: | NEOPROBE CORPORATION | |||||
/s/ Xxxxxxx X. Xxxxx, Xx.
|
By: | /s/ Xxxxx X. Xxxx
|
||||
| Title: President & CEO | ||||||
| In the Presence of: | CARDIOSONIX LTD | |||||
/s/ Xxxxxxx X. Xxxxx, Xx.
|
By: | /s/ Xxxxx X. Xxxx
|
||||
| Title: Chairman | ||||||
| In the Presence of: | XXXX BIOSCIENCES INC. | |||||
/s/ Xxxxxxx X. Xxxxx, Xx.
|
By: | /s/ Xxxxx X. Xxxx
|
||||
| Title: Chairman | ||||||
| LENDER: | ||||||
| In the Presence of: | PLATINUM-MONTAUR LIFE SCIENCES, LLC | |||||
| /s/ Xxxxxx Xxxxxxx |
By: | /s/ Xxxxxxx Xxxxxxxx
|
||||
| Title: Portfolio Manager | ||||||
7
