EXHIBIT 10.15
(Collateral Patent Assignment)
COLLATERAL PATENT ASSIGNMENT
THIS COLLATERAL PATENT ASSIGNMENT (this "Assignment"), made as of the
2nd day of July 2001, by and between SPECIALIZED HEALTH PRODUCTS, INC.
("Assignor"), a Utah corporation and subsidiary of SPECIALIZED HEALTH PRODUCTS
INTERNATIONAL, INC., a Delaware corporation ("SHPI"), in favor of AXIS CAPITAL
PARTNERS, LC("Assignee"), a Utah limited liability company. Assignee is acting
as agent for holders of the Assignor's 12% Secured Convertible Promissory Notes
(the "Holders").
WITNESSETH:
WHEREAS, SHPI and Holders are parties to a certain Loan Agreement and
Assignor, SHPI and Holders are parties to a Master Security Agreement, both of
which are dated July 2, 2001 (together with any and all amendments now or
hereafter made thereto, hereinafter individually and collectively called the
"Loan Agreement"), which provides for (1) Holders from time to time to extend
credit to or for the account of Assignor and (2) the grant by Assignor to
Assignee, for the benefit of Holders, of a security interest in certain of
Assignor's assets, including, without limitation, a U.S. patent; and
WHEREAS, Holders have required, as a condition to advancing loans to
SHPI under the Loan Agreement, that Assignor execute and deliver to Assignee
this Assignment;
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Assignor agrees as follows:
1. Incorporation of Loan Agreement. The Loan Agreement and the terms
and provisions thereof are hereby incorporated herein in their entirety by this
reference. Terms used herein that are not defined in this Agreement shall have
the meanings ascribed to them in the Loan Agreement.
2. Collateral Assignment of Patents. To secure the complete and timely
satisfaction of all of the indebtedness (as defined in the Master Security
Agreement and hereinafter called the "Indebtedness"), Assignor hereby grants,
conveys, and assigns to Assignee, as and by way of a first mortgage and security
interest having priority over all other security interests, with power of sale,
to the extent permitted by law, upon the occurrence and during the continuation
of an Event of Default (as defined in the Loan Agreement and hereinafter called
an "Event of Default") all of Assignor's right, title, and interest in and to
all of its now owned or existing and filed and hereafter acquired or arising and
filed:
A. The patent application entitled, SAFETY SHIELD FOR MEDICAL NEEDLES,
designated as SHP026 within SHPI's reference system, including, without
limitation, the inventions and improvements described and claims therein
(hereinafter called "Patent Application");
B. The reissues, divisions, continuations, renewals, extensions,
continuations-in-part, and improvements thereof;
C. All income, royalties, damages, and payments now and hereafter due
and/or payable under and with respect thereto, including (without limitation)
damages and payments for past or future infringements thereof;
D. The right to xxx and recover for past, present, and future
infringements thereof;
E. All rights corresponding thereto and throughout the world; and
F. All other proceeds and products of the foregoing, including (without
limitation) any rights pursuant to its agreements with any other party relating
thereto.
The items referred to in items 1 through 6 are hereinafter called the "Patent
Rights."
3. Restrictions on Future Agreements. Assignor agrees that, until the
Indebtedness is satisfied in full and the Loan Agreement is terminated, and
except as may otherwise be provided in the Loan Agreement or agreed to in
writing by the Assignor and the Assignee, Assignor shall not, without Assignee's
prior written consent:
A. Enter into any agreement (for example, a license agreement) that is
inconsistent with Assignor's obligations under this Assignment; or
B. Take any action, or permit any action to be taken by others subject
to its control, including licensees, or fail to take any action (excluding
nonpayment of U.S. maintenance fees on patents which are not necessary or useful
in the operation of Assignor's business or operations) if doing so or not doing
so would impair the validity or enforcement of the Patent Rights; or
C. Enter into any agreement granting rights to the Patent Application
that are not on commercially reasonable terms. Commercially reasonable terms
shall be determined by Assignor's Board of Directors acting in good faith.
Assignee agrees to execute all necessary documents that may be required for
Assignor to grant intellectual property rights relating to the Patent
Application.
4. Covenants and Warranties. Assignor represents, warrants, and
covenants that:
A. The Patent Application is subsisting, has not been adjudged invalid
or unenforceable in whole or in part, and is not currently being challenged in
any way;
B. The Patent Application has not lapsed or expired;
C. Assignor owns the entire right, title, and interest in the Patent
Application free and clear of any liens and encumbrances of every kind and
nature, except for the rights granted by Assignor pursuant to this Agreement;
and
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D. Assignor shall continue to use, until the obligations shall have
been satisfied in full and the Loan Agreement shall have been terminated, proper
statutory notice in connection with its exercise of the Patents.
5. New Patents and Licenses. If, before the Indebtedness is satisfied
in full, Assignor obtains rights to any reissue, division, continuation,
renewal, extension, or continuation-in-part of the Patent Application or any
improvement on the Patent Application, the provisions of Section 2 above shall
automatically apply thereto and Assignor shall give to Assignee written notice
thereof. Assignor hereby authorizes Assignee to modify this Assignment by
amending Schedule A to include such rights.
6. Royalties; Terms. Assignor hereby agrees that the use by Assignee of
the Patent Rights shall be worldwide and without any liability for royalties or
other related charges from Assignee to Assignor. The term of the assignments
granted herein shall extend until the earlier of (1) the expiration of all
Patent Rights or (2) payment in full of the Indebtedness and termination of the
Loan Agreement.
7. Assignee's Right to Inspect. Subject to existing agreements with
respect to the confidentiality of certain aspects of the Patent Rights, Assignee
shall have the right, at any reasonable time and from time to time, to inspect
Assignor's premises and to examine Assignor's books, records, and operations.
8. Termination of Assignee's Security Interest. This Assignment is made
for collateral purposes only. Upon payment in full of the Indebtedness and
termination of the Loan Agreement, all remaining right, title, and interest in
and to the Patent Rights shall automatically revert to Assignor. In such event,
Assignee shall execute and deliver to Assignor all termination statements and
other instruments as may be necessary or proper to terminate Assignee's security
interest in and to revest in Assignor all right, title, and interest in and to
the Patent Rights, subject to any prior disposition thereof that may have been
made by Assignee pursuant hereto or pursuant to the Loan Agreement.
9. Duties of Assignor. Until the Indebtedness is satisfied in full and
the Loan Agreement is terminated, Assignor shall
A. Prosecute diligently any patent application included in the Patent
Rights pending as of the date hereof or hereafter filed; and
B. Preserve, maintain, and enforce against infringement all Patent
Rights (other than nonpayment of maintenance fees on patents which are not
necessary or useful in the conduct of Assignor's business or operations).
Any expenses incurred in connection with such applications shall be borne by
Assignor. Assignor shall not abandon any pending patent application or patent
without the written consent of Assignee, which consent shall not be unreasonably
withheld.
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10. Assignee's Right to Xxx. After the occurrence of an Event of
Default and so long as such Event of Default has not been waived, and after the
provision by Assignee of written notice to Assignor of Assignee's intention to
enforce its rights and claims in the Patent Rights, Assignee shall have the
right, but shall in no way be obligated, to bring suit and take other action in
its own name to enforce or otherwise protect, preserve, or realize upon the
Patent Rights. If Assignee shall commence any such suit or take any such action,
Assignor shall, at the request of Assignee, do any and all lawful acts and
execute any and all proper documents required by Assignee in aid of such action.
Assignor shall, upon demand, reimburse and indemnify Assignee for all costs and
expenses incurred by Assignee in the exercise of its rights under this Section
10.
11. Waivers. No course of dealing between Assignor and Assignee, nor
any failure to exercise or delay in exercising, on the part of the Assignee, any
right, power, or privilege hereunder or under the Loan Agreement shall operate
as a waiver thereof. No single or partial exercise of any right, power, or
privilege hereunder or under the Loan Agreement shall preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege.
12. Severability. The provisions of this Assignment are severable, and
if any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Assignment.
13. Modification. This Assignment cannot be altered, amended, or
modified in any way, except as specifically provided with respect to the
additions referred to in Section 5 hereof or by a writing signed by the parties
hereto.
14. Cumulative Remedies. All of Assignee's rights and remedies with
respect to the Patent Rights, whether established hereby or by the Loan
Agreement, or by any other agreements or by law, shall be cumulative and may be
exercised individually or concurrently. Assignee shall have, in addition to all
other rights and remedies given it by the terms of this Assignment, all rights
and remedies allowed by law and the rights and remedies of a secured party under
the Uniform Commercial Code as enacted in any jurisdiction in which the Patent
Rights may be enforced.
15. Power of Attorney. Assignor hereby authorizes Assignee to:
A. Make, constitute, and appoint any representative of Assignee as
Assignee may select, in its sole discretion, as Assignor's true and lawful
attorney-in-fact, with power to endorse Assignor's name on all applications,
documents, papers, and instruments necessary or desirable for Assignee to give
effect to the provisions of this Assignment and the intent of the parties
hereto;
B. Take any other actions with respect to the Patent Rights, consistent
with this Assignment, as Assignee deems in the best interest of Assignee;
C. Following the occurrence of an Event of Default, grant or issue any
exclusive or nonexclusive license under the Patent Rights to anyone; or
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D. Following the occurrence of an Event of Default, subject to the
terms of any existing license agreement, assign, pledge, convey, or otherwise
transfer title in or dispose of the Patent Rights to anyone.
Assignee hereby ratifies all that such attorney shall lawfully do or cause to be
done by virtue hereof. This power of attorney shall be irrevocable until the
Indebtedness are satisfied in full and the Loan Agreement is terminated.
16. Effect on Loan Agreement. Assignor acknowledges and agrees that
this Assignment is not intended to limit or restrict in any way the rights and
remedies of Assignee under the Loan Agreement but rather is intended to
facilitate the exercise of such rights and remedies.
17. Binding Effect; Benefits. This Assignment shall be binding upon
Assignor and its respective successors and assigns and shall inure to the
benefit of Assignee, its nominees, successors, and assigns.
18. Governing Law. This Assignment shall be deemed to have been
executed and delivered in Utah, and shall be governed by and construed in
accordance with the internal laws (as opposed to conflicts of law provisions) of
Utah.
WITNESS the due execution hereof as of the date first above written.
"ASSIGNEE"
AXIS FUNDING, LC, on behalf of the
"HOLDERS"
By _______________________________
Its:
"ASSIGNOR"
SPECIALIZED HEALTH PRODUCTS, INC.
a Utah corporation
By________________________________
Its ______________________________
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STATE OF UTAH )
) ss:
COUNTY OF XXXXX )
On this 2nd day of July, 2001, before me appeared Xxxx Xxxxx and Xxxx
Xxxxxxxx, to me personally known, who being duly sworn did say that he/she is
the Vice President of Specialized Health Products, Inc., the within named
corporation, and that the instrument was signed in behalf of said corporation
and acknowledged the instrument to be the free act and deed of the corporation.
______________________________
NOTARY PUBLIC
My Commission Expires: Residing at: _________________________
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