Exhibit 10.32
PATENTS, TRADEMARKS
AND COPYRIGHTS SECURITY AGREEMENT
THIS PATENTS, TRADEMARKS AND COPYRIGHTS SECURITY AGREEMENT is
made on the 20th day of November, 2002 between XXXX DERMTOLOGICS, INC., a
corporation of the State of New York (the "Borrower"), having its principal
office at 000 Xxxxx 00 Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, and WACHOVIA BANK,
NATIONAL ASSOCIATION, having an office at 000 Xxxxxx Xxxx, Xxxx Xxxxxxx,
Xxx Xxxxxx 00000 (the "Bank").
W I T N E S S E T H:
-------------------
WHEREAS, Borrower has executed a Loan and Security Agreement dated the date
hereof (as same may be amended, modified or supplemented from time to time, the
"Loan Agreement") and other loan documents executed in connection therewith (all
of which are collectively referred to as the "Other Documents") to Bank to
secure loans by Bank to Borrower; and WHEREAS, the Borrower owns the United
States copyrights which have been registered with the United States Copyright
Office and has made applications for a United States copyright registration with
the United States Copyright office with respect to applications listed on
Schedule A hereto ("Copyrights"), owns the United States patents and the
applications for a United States patents listed on Schedule B ("Patents"), and
owns the United States trademark applications and trademarks listed in Schedule
C hereto, along with the good-will of the Borrower to which such trademark
applications and trademarks relate ("Trademarks"); and
WHEREAS, pursuant to the Loan Agreement, the Borrower is required to and
has conveyed and granted to Bank a security interest in, among other things, all
right, title and interest of the Borrower in, to and under all of the
Borrower's Copyrights, Patents and Trademarks, whether presently existing or
hereafter arising or acquired, and all products, substitutions, replacements and
proceeds thereof to secure all Indebtedness of the Borrower to Bank; and
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the Borrower does hereby absolutely grant and convey to
Bank, to secure all Indebtedness of the Borrower to the Bank, a security
interest in, all of the Borrower's right, title and interest in, to and under
the following, whether presently existing or hereafter arising or acquired:
(a) Each of the Copyrights which are presently, or in the future may be,
owned by the Borrower, in whole or in part, as well as any application for
a United States copyright registration now or hereafter made with the
United States Copyright Office by the Borrower, as the same may be updated
hereafter from time to time;
(b) Each of the Patents, which are presently, or in the future may be owned
by the Borrower, in whole or in part, as well as all applications for
United States patents now or hereafter owned by the Borrower, as the same
may be updated hereafter from time to time; and
(c) Each of the Trademarks, which are presently, or in the future may be
owned by the Borrower, in whole or in part, together with the good-will
associated with each Trademark, as well as all applications for
Trademarks now or hereafter owned by the Borrower, as the same may be
updated hereafter from time to time.
Notwithstanding anything contained herein, this Agreement shall not
constitute an assignment or transfer of any rights of Borrower in any
applications for trademarks which are based on an intent to use, but shall
constitute a security interest only in such applications.
Said security interest includes, without limitation, all proceeds thereof,
the right to xxx for past, present, and future infringements thereof, all rights
corresponding thereto throughout the world, and all reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof.
1) Borrower covenants and warrants that:
(a) to the best of its knowledge, it is the true and lawful exclusive
owner of all the Copyrights listed on Schedule A and that said Copyrights
constitute all the United States Copyrights registered in the United
States Copyright Office and applications for United States Copyrights
that the Borrower now owns;
(b) to the best of its knowledge, it is the true and lawful exclusive
owner and/or intended assignee of all the Patents listed on Schedule B and
that said Patents constitute all the United States Patents registered in
the United States Patent and Trademark Office and applications for United
States Patents that the Borrower now owns;
(c) to the best of its knowledge, it is the true and lawful exclusive
owner of all the Trademarks listed on Schedule C and that said Trademarks
constitute all the United States Trademarks registered in the United States
Patent and Trademark Office and applications for Trademarks that the
Borrower now owns;
(d) The Borrower agrees on a quarterly basis to notify the Bank of any
new Patent, Trademark and/or Copyright and to execute such additional
agreements with respect to any new Patent, Trademark and/or Copyright in
which the Borrower hereinafter obtains rights. The Borrower further
warrants that it is not aware of any third party claim that any of the
aspects of the Borrower's present or contemplated business operations
infringe or will infringe on any Patent, Trademark or Copyright. The
Borrower grants to Bank an absolute power of attorney to sign any document
which will be required by the United States Copyright Office or the United
States Patent and Trademark Office in order to record the security
interest in the Patents, Trademarks and Copyrights;
(e) except as disclosed in the schedules attached hereto, the Patents,
Trademarks and Copyrights are subsisting and have not been adjudged invalid
or unenforceable;
(f) Each of the Patents, Trademarks and Copyrights is valid and
enforceable;
(g) to the best of its knowledge, Borrower is the sole and exclusive
owner of the entire and unencumbered right, title and interest in and to
each of the Patents, Trademarks and Copyrights, free and clear of any
liens, charges and encumbrances, including without limitation pledges,
assignments, licenses, registered user agreements, and covenants by
Borrower not to xxx third persons, other than the assignment to Bank
pursuant to this Agreement, and those licenses and other agreements set
forth as Exhibit 1 hereto;
(h) Borrower has the right to enter into this Agreement and perform
its terms;
(i) Borrower believes it has used, and will use it's best efforts to
continue to use for the duration of this Agreement, proper statutory notice
in connection with its use of the Patents, Trademarks and Copyrights;
(j) Borrower believes it has used, and will continue to use for the
duration of this Agreement, consistent standards of quality in its
manufacture or use of products sold under the Trademarks;
(k) At its own expense, the Borrower shall make timely payment of all
post-issuance fees required pursuant to 35 U.S.C. Sec. 41 to maintain in
force rights under each Patent, to the extent that Borrower, in the
exercise of its reasonable business judgment, deems advisable;
(l) The Borrower hereby agrees not to divest itself of any right under
any Copyright, Trademark and/or Patent, which divestiture could have a
material adverse effect on Borrower's business, its properties, or its
ability to perform its obligations under the Loan Agreement; and
(m) The Borrower agrees to promptly, upon learning thereof, furnish
Bank in writing all pertinent information available to the Borrower with
respect to any infringement or other violation of the Borrower's rights in
any Copyright, Trademark and/or Patent, which infringement or violation
could have a material adverse effect on the Borrower, its properties or
its ability to perform its obligations under the Loan Agreement and other
Loan Documents (as defined in the Loan Agreement). To the extent that the
Borrower in the exercise of its reasonable business judgment deems
advisable, the Borrower further agrees to prosecute any Persons infringing
upon any Copyright, Trademark and/or Patent to the extent such infringement
could have a material adverse affect on the Borrower, its properties or
its ability to perform its obligations under the Loan Agreement or other
Loan Documents.
2) Subject to the provisions of the Loan Agreement, Borrower hereby grants to
Bank and its employees and agents the right to visit Borrower's facilities
(during normal business hours and upon reasonable notice) which maintain or
store products sold under any of the Patents, Trademarks, or Copyrights,
and to inspect the products and quality control records relating thereto.
Borrower shall do any and all acts reasonably required by Bank to ensure
Borrower's compliance herewith.
3) Borrower agrees that, until all of the Indebtedness shall have been satisfied
in full, it will not enter into any agreement which is inconsistent with
Borrower's obligations under this Agreement, without Bank' prior written
consent, such consent not to be unreasonably withheld.
4) If, before the Indebtedness has been satisfied in full, Borrower shall obtain
rights to any new Trademark, any new Copyright, or become entitled to the
benefit of any patent application or patent for reissue, division,
continuation, renewal, extension, or continuation-in-part of any Patent or
any improvement on any Patent, the provisions hereof shall automatically
apply thereto and Borrower shall give to Bank prompt notice thereof in
writing.
5) Borrower authorizes Bank to modify this Agreement by amending Schedules A, B,
and C to include any future Patents, Trademarks, or Copyrights covered
hereby.
6) Upon and during the occurrence of any Event of Default:
a) Bank shall have, in addition to all other rights and remedies given to it
by this Agreement, the Loan Agreement, and the Loan Documents,
those 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 Patents, Trademarks, or Copyrights may be
located; and
b) Bank may, in addition to any other remedies which may be available to
Bank, without being deemed to have made an election of remedies,
immediately, without demand of performance and without other notice
(except as may be set forth below) or demand whatsoever to Borrower, all
of which are hereby expressly waived, and without advertisement, sell at
public or private sale (or, to the extent required by law, otherwise
realize upon in a commercially reasonable manner), all or from time to
time, any of the Patents, Trademarks, or Copyrights, or any interest which
the Borrower may have therein, and after deducting from the proceeds of
sale or other disposition of the Patents, Trademarks, or Copyrights all
reasonable expenses (including all reasonable expenses for broker's fees
and legal services), may apply the residue of such proceeds to the
payment of the Indebtedness. Any remainder of the proceeds after payment
in full of the Indebtedness shall be paid over to the Borrower. Notice
of any sale or other disposition of the Patents, Trademarks, or
Copyrights shall be given to Borrower at least ten (10) business days
before the time of any intended public or private sale or other
disposition of the Patents, Trademarks, or Copyrights is to be made,
which notice Borrower hereby agrees shall be reasonable notice of such
sale or other disposition. At any such sale or other disposition, Bank
may, to the extent permissible under applicable law, purchase the whole
or any part of the Patents, Trademarks, or Copyrights sold, free from any
right or equity of redemption on the part of Borrower, which right and
equity of redemption are hereby waived and released.
7) At such time as Borrower shall completely satisfy all of the Indebtedness,
this Agreement shall terminate and Bank shall execute and deliver to Borrower
at Borrower's expense all releases and other instruments as may be necessary
or proper to release the security interest in and to the Patents, Trademarks,
or Copyrights, subject to any disposition thereof which may have been made by
Bank pursuant hereto and in accordance with the terms hereof.
8) Any and all reasonable fees, costs and expenses, of whatever kind or nature,
including reasonable attorney fees and legal expenses incurred by Bank in
connection with the preparation of this Agreement and all other documents
relating hereto and the consummation of this transaction, the filing or
recording of any documents (including all taxes in connection therewith) in
public offices, the payment or discharge of any taxes, counsel fees,
maintenance fees, encumbrances or otherwise protecting, maintaining or
preserving the Patents, Trademarks, or Copyrights, in defending or
prosecuting any actions or proceedings arising out of or related to the
Patents, Trademarks, or Copyrights, or in the enforcement by Bank of any of
its rights or remedies under this Agreement, the Loan Agreement or any
Loan Document shall be borne and paid by Borrower on demand by Bank and
until so paid shall be added to the principal amount of the Indebtedness and
shall bear interest at the rate of interest chargeable pursuant to the Loan
Agreement upon an Event of Default.
9) To the extent that Borrower in the exercise of its reasonable business
judgment deems it advisable, Borrower shall have the duty, through counsel
reasonably acceptable to Bank, to prosecute diligently any actions for or
of the Patents, Trademarks, or Copyrights pending as of the date of this
Agreement or thereafter until the Indebtedness shall have been paid in full,
to make federal application on registrable but unregistered Trademarks, to
file and prosecute opposition and cancellation proceedings and to do any and
all acts which are reasonably necessary or desirable to preserve and
maintain all rights in the Patents, Trademarks, or Copyrights. Any expenses
incurred in connection with the Patents, Trademarks, and Copyrights shall be
borne by Borrower. The Borrower shall not abandon any Patents, Trademarks,
or Copyrights other than in the ordinary course of business without the
consent of Bank, which consent shall not be unreasonably withheld.
10) Borrower shall have the right to bring any opposition proceedings,
cancellation proceedings or lawsuit in its own name to enforce or protect
the Patents, Trademarks, or Copyrights, in which event Bank may, if
necessary, be joined as a nominal party to such suit if Bank shall have been
satisfied that it is not incurring any risk of liability because of such
joinder. Borrower shall promptly, upon demand, reimburse and indemnify
Bank for all damages, costs and expenses, including attorney fees, incurred
by Bank in the fulfillment of the provisions of this paragraph. The
obligations of the Borrower under this paragraph shall survive the
termination of this Agreement.
11) In the event of the occurrence and continuance of a Default or an Event of
Default, Borrower hereby authorizes and empowers Bank to make, constitute
and appoint any officer or agent of Bank as Bank may select, in its sole
discretion, as Borrower's true and lawful attorney-in-fact, with the power
to endorse Borrower's name on all applications, documents, papers and
instruments necessary for Bank to use the Patents, Trademarks, or
Copyrights, or to grant or issue any exclusive or nonexclusive license
under the Patents, Trademarks, or Copyrights to anyone else, or necessary
for Bank to assign, pledge, convey or otherwise transfer title in or dispose
of the Patents, Trademarks, or Copyrights to anyone else. Borrower hereby
ratifies all that such attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney shall be irrevocable for the life of
this Agreement.
12) If Borrower fails to comply with any of its obligations hereunder, Bank may,
on 10 days notice to Borrower, do so in Borrower's name or in Bank's name,
but at Borrower's expense, and Borrower hereby agrees to reimburse Bank in
full for all reasonable expenses, including reasonable attorney's fees,
incurred by Bank in protecting, defending and maintaining the Patents,
Trademarks, or Copyrights.
13) No course of dealing between Borrower and Bank, nor any failure to exercise,
nor any delay in exercising, on the part of Bank, any right, power or
privilege hereunder or under the Loan Agreement, or under any Loan
Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude
any other or further exercise thereof or the exercise of any other right,
power or privilege.
14) All of Bank's rights and remedies with respect to the Patents, Trademarks,
or Copyrights, whether established hereby or by the Loan Agreement, or by
any other agreement(s) or by law, shall be cumulative and may be exercised
singly or concurrently.
15) The provisions of this Agreement are severable, and if any clause or
provision shall be held invalid and 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 Agreement in any
jurisdiction.
16) This Agreement is subject to modification only by a writing signed by the
parties, except as provided elsewhere herein.
17) The benefits and burdens of this Agreement shall inure to the benefit of and
be binding upon the respective successors and permitted assigns of the
parties.
18) The validity and interpretation of this Agreement and the rights and
obligations of the parties shall be governed by the laws of the State of
New Jersey.
19) THE PARTIES HERETO AGREE TO THE JURISDICTION OF THE FEDERAL AND STATE
COURTS LOCATED IN NEW JERSEY IN CONNECTION WITH ANY MATTER ARISING
HEREUNDER, INCLUDING THE COLLECTION AND ENFORCEMENT HEREOF. THE
BORROWER AND BANK EACH HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE ACTIONS OF BANK. THIS WAIVER
IS MADE KNOWINGLY AND IN CONSIDERATION OF THE ADVANCES MADE UNDER THE LOAN
AGREEMENT.
20) This Agreement, the Loan Agreement and the Loan Documents embody the entire
agreement and understanding between the Borrower and Bank and supersedes all
prior agreements and understandings relating to the subject matter hereof
and thereof.
21) All capitalized terms not otherwise defined herein shall have the same
meanings ascribed to said terms in the Loan Agreement.
WITNESS the execution hereof as of the day and year first above written.
ATTEST: XXXX DERMOTOLOGICS, INC.
____________________________________ BY:_____________________________________
NAME: R. XXXXX XXXXXXXXX NAME: XXXXXX XXXXXXXX
TITLE: Vice President of Finance TITLE: President
WACHOVIA BANK, NATIONAL ASSOCIATION
By:_____________________________________
NAME: XXXXXXX XXXXXXXX
TITLE: Vice President
STATE OF NEW JERSEY :
:SS:
COUNTY OF MIDDLESEX :
I CERTIFY that on November 20, 2002, XXXXXX XXXXXXXX personally came
before me and stated under oath to my satisfaction that:
(a) this person is the President of XXXX DERMATOLOGICS, INC., the
corporation named in this Instrument;
(b) this Instrument was signed and delivered by the corporations as
their voluntary act duly authorized by a proper resolution of their
respective Board of Directors;
(c) this person knows the proper seal of each corporation, both which
are affixed to this Instrument;
(d) this person signed this acknowledgement to attest to the truth of
these facts.
Signed and sworn to before me on
November 20, 2002
_______________________________________
STATE OF NEW JERSEY :
:SS:
COUNTY OF MIDDLESEX :
I CERTIFY that on November 20, 2002, XXXXXXX XXXXXXXX personally came
before me and stated under oath to my satisfaction that:
(a) this person is the Vice President of WACHOVIA BANK, NATIONAL
ASSOCIATION the corporation named in this Instrument;
(b) this Instrument was signed and delivered by the corporation as its
voluntary act duly authorized by a proper resolution of its Board of
Directors;
(c) this person knows the proper seal of the corporation which was
affixed to this Instrument;
(d) this person signed this acknowledgement to attest to the truth of
these facts.
Signed and sworn to before me on
November 20, 2002
________________________________________
