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GRANT OF SECURITY INTEREST IN
PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
THIS GRANT OF SECURITY INTEREST IN PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
(herein the "Agreement") made as of this 29th day of March, 2001, by TWIN
LABORATORIES INC., a Utah corporation with a principal place of business at 000
Xxxxx Xxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (herein "TLI"), ADVANCED RESEARCH
PRESS, INC., a New York corporation with a principal place of business at 000
Xxxxx Xxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (herein "ARP"), CHANGES INTERNATIONAL,
INC., a Florida corporation with a principal place of business at 000 Xxxxx
Xxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (herein "CII"), PR NUTRITION, INC., a
California corporation with a principal place of business at 0000 Xxxxxxx Xxxxx,
Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000 (herein "PR Nutrition"), HEALTH FACTORS
INTERNATIONAL, INC., a Delaware corporation with a principal place of business
at 000 Xxxxx Xxxxxx Xxxx, Xxxxx, Xxxxxxx 00000 (herein "HFI") and XXXXXXX
LABORATORIES, INC., a Delaware corporation with a principal place of business at
000 Xxxxx Xxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (herein "Xxxxxxx", and individually
a "Company" and collectively with TLI, ARP, CII, PR Nutrition and HFI, the
"Companies"), and The CIT Group/Business Credit, Inc., a New York corporation,
with offices at 000 X. Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxx, XX 00000 (herein
"Agent").
W I T N E S E T H:
WHEREAS, the Companies, the Lenders which are party thereto, and Agent, on
behalf of the Lenders, are parties to a certain Financing Agreement of even date
herewith, as the same may be amended from time to time (herein the "Financing
Agreement"), which Financing Agreement provides (i) for Lenders to make certain
loans, advances and extensions of credit, all to or for the account of the
Companies and (ii) for the grant by each Company to Agent of a security interest
in certain of such Company's assets, including, without limitation, its patents,
patent applications and/or registrations, trademarks, trademark applications
and/or registrations, tradenames, goodwill, copyrights, copyright applications
and/or registrations, and licenses, all as more fully set forth therein;
NOW THEREFORE, in consideration of the premises set forth herein and for other
good and valuable consideration, receipt and sufficiency of which is hereby
acknowledged, the Companies agree as follows:
1. Definitions. Capitalized terms used herein and defined in the Financing
Agreement shall have the meanings set forth therein unless otherwise
specifically defined herein.
2. Grant of Security Interest. To secure the payment of the "Obligations" (as
defined in the Financing Agreement), each Company hereby grants to Agent,
for the benefit of Lenders, a security interest, effective immediately, in
all of such Company's right, title and interest in
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and to all of the following described property, whether now owned or
hereafter acquired (collectively herein the "Intellectual Property
Collateral"):
(i) Patents and patent applications and/or registrations together with the
inventions and improvements described and claimed therein including,
without limitation, the United States registered patents and
applications, if any, listed on Schedule A, attached hereto and made a
part hereof, and any and all reissues and renewals thereof and all
income, royalties, damages and payments now and hereafter due and/or
payable in connection therewith including, without limitation, damages
and payments for past or future infringements thereof (all of the
foregoing are sometimes hereinafter individually and/or collectively
referred to as the "Patent Collateral");
(ii) Trademarks, trademark registrations and/or applications and tradenames
including, without limitation, the United States registered trademarks
and applications, if any, listed on Schedule B attached hereto and
made a part hereof, and any and all reissues and/or renewals thereof,
and all income, royalties, damages and payments now and hereafter due
and/or payable in connection therewith including, without limitation,
damages and payments for past or future infringements thereof (all of
the foregoing are sometimes hereinafter individually and/or
collectively referred to as the "Trademark Collateral");
(iii) Copyrights, copyright registrations and/or applications including,
without limitation, the United States registered copyrights and
applications, if any, listed on Schedule C attached hereto and made a
part hereof, and any and all reissues and/or renewals thereof, and all
income, royalties, damages and payments now and hereafter due and/or
payable in connection therewith including, without limitation, damages
and payments for past or future infringements thereof (all of the
foregoing are sometimes hereinafter individually and/or collectively
referred to as the "Copyright Collateral");
(iv) Any license agreement in which such Company is or becomes licensed to
use any patents, copyrights and/or trademarks owned by a third party
(all of the foregoing are sometimes referred to herein individually
and/or collectively as the "License Collateral");
(v) The goodwill of such Company's business connected with and symbolized
by such Company's Intellectual Property Collateral; and
(vi) All cash and non-cash proceeds of the foregoing.
Anything in this Agreement to the contrary notwithstanding, the Intellectual
Property Collateral shall not include, and no security interest, lien or pledge
granted hereunder shall extend or attach to, any Company's rights (other than
rights to payment) under any license agreements existing as of the date hereof
that prohibit the grant of a security interest or lien therein or pledge to the
extent, and only to the extent, that the terms prohibiting the grant of such
security interest or lien or pledge have not been waived or consented to in
writing by the licensor, lessor or other necessary person or entity
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under such agreement.
3. Agent's Rights. Upon the occurrence of any Event of Default hereunder,
Agent shall have all the rights and remedies of a secured party under the
Uniform Commercial Code and any other applicable state or federal laws.
Agent will give the Companies reasonable notice of the time and place of
any public sale of the Intellectual Property Collateral or the time after
which any private sale of the Intellectual Property Collateral or any other
intended disposition thereof is to be made. Unless otherwise provided by
law, the requirement of reasonable notice shall be met by providing such
notice as may be required pursuant to the Financing Agreement. A formal
irrevocable power of attorney (in the form annexed hereto) is being
executed and delivered by each Company to Agent concurrently with this
Agreement to facilitate the exercise of such rights.
4. Fees. The Companies will pay all filing fees with respect to the
recordation, filing and perfection of the security interest created hereby
which Agent may deem necessary or advisable in order to perfect and
maintain the perfection of its security interest in the Intellectual
Property Collateral.
5. Representations and Warranties. Each Company represents and warrants: that
such Company lawfully possesses and owns such Company's Intellectual
Property Collateral and that except for the security interest granted
hereby and Permitted Encumbrances (as defined in the Financing Agreement),
such Company's Intellectual Property Collateral will be kept free from all
liens, security interests, claims and encumbrances whatsoever; that such
Company has not made or given any prior assignment, transfer or security
interest in such Company's Intellectual Property Collateral or any of the
proceeds thereof; that such Company's Intellectual Property Collateral is
and will continue to be, in all respects, in full force and effect; and
that there are no known infringements of such Company's Intellectual
Property Collateral.
6. Defense of Claims. The Companies will, to the extent reasonably requested
by Agent, defend at their own cost and expense any action, claim or
proceeding affecting the Intellectual Property Collateral or the interest
of Agent therein. The Companies agree to reimburse Agent for all reasonable
costs and expenses incurred by Agent in defending any such action, claim or
proceeding.
7. Rights Cumulative. This Agreement shall be in addition to the Financing
Agreement and shall not be deemed to affect, modify or limit the Financing
Agreement or any rights that Agent and the Lenders have under the Financing
Agreement. Each Company agrees to execute and deliver to Agent (at the
Company's expense) any further documentation or papers Agent reasonably
deems necessary to carry out the intent or purpose of this Agreement
including, but not limited to, financing statements under the Uniform
Commercial Code. The rights and remedies of Agent and the Lenders arising
under this Agreement, the Irrevocable Power of Attorney delivered by each
Company in connection herewith, and the Financing Agreement are all subject
to provisions of this Agreement and the Financing Agreement and the
limitations of applicable law, including those relating to
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the exercise of the rights of a secured party upon default under the
Uniform Commercial Code. Nothing in this Agreement or in the Irrevocable
Power of Attorney delivered by each Company in connection herewith shall be
deemed to be a waiver by any Company of its rights under applicable law,
including the Uniform Commercial Code.
8. Construction and Invalidity. Any provisions hereof contrary to, prohibited
by or invalid under any laws or regulations shall be inapplicable and
deemed omitted herefrom, but shall not invalidate the remaining provisions
hereof.
9. CHOICE OF LAW. EACH COMPANY AGREES THAT THE VALIDITY, INTERPRETATION AND
ENFORCEMENT OF THIS AGREEMENT AND ALL RIGHTS HEREUNDER SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF CALIFORNIA. THIS AGREEMENT TOGETHER WITH THE
FINANCING AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT OF EACH COMPANY AND
AGENT AND THE LENDERS WITH RESPECT TO THE INTELLECTUAL PROPERTY COLLATERAL,
CAN ONLY BE CHANGED OR MODIFIED IN WRITING AND SHALL BIND AND BENEFIT SUCH
COMPANY, AGENT, THE LENDERS AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.
EACH COMPANY AND AGENT EACH HEREBY EXPRESSLY WAIVES ANY RIGHT OF TRIAL BY
JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING HEREUNDER.
10. Events of Default. Any of the following constitutes an Event of Default
under this Agreement:
(i) Any warranty or representation made by a Company in this Agreement
shall be or becomes false or misleading in any material respect; or
(ii) The occurrence of any Event of Default under the Financing Agreement,
which is not waived in writing by Agent or the Required Lenders.
11. Notices. Each Company covenants and agrees that, with respect to such
Company's Intellectual Property Collateral, it will give Agent written
notice in the manner provided in the Financing Agreement of:
(i) any claim by a third party that such Company has infringed on the
rights of a third party;
(ii) any material infringement by a third party (known to an executive
officer of the Company) on the rights of such Company; or
(iii) any United States registered Patents, Trademarks, tradenames, service
marks, Copyrights, brand names, trade names, logos and other trade
designations acquired or applied for by such Company after the date
hereof.
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12. Further Assurances. Each Company will take any such action as Agent may
reasonably require to further confirm or protect Agent's rights under this
Agreement in the Intellectual Property Collateral. In furtherance thereof,
each Company hereby grants to Agent the power of attorney, in the form
attached hereto, coupled with an interest which shall be irrevocable during
the term of this Agreement.
13. Termination. This Agreement shall terminate upon termination of the
Financing Agreement and full, final and indefeasible payment of all
Obligations of the Companies thereunder. Upon the Companies' request, Agent
shall within a reasonable time after any such termination execute and
deliver to the Companies (at the Companies' expense) such documents and
instruments as are reasonably necessary to evidence such termination and
release of the security interest granted herein on any applicable public
record.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the 29th of March, 2001.
TWIN LABORATORIES INC.,
a Utah corporation
By: __________________________
Title:
ADVANCED RESEARCH PRESS, INC.,
a New York corporation
By: __________________________
Title:
CHANGES INTERNATIONAL, INC.,
a Florida corporation
By:_________________________
Title:
PR NUTRITION, INC.,
a California corporation
By:_________________________
Title:
HEALTH FACTORS INTERNATIONAL, INC.,
a Delaware corporation
By:_________________________
Title:
XXXXXXX LABORATORIES, INC.,
a Delaware corporation
By:_________________________
Title:
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Agreed and Accepted this
29th day of March, 2001
THE CIT GROUP/BUSINESS CREDIT, INC.
By:
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Title:
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IRREVOCABLE POWER OF ATTORNEY
Each of the undersigned (hereinafter, each a "Company" and collectively, the
"Companies"), hereby grants to The CIT Group/Business Credit, Inc., a New York
corporation, with offices at 000 X. Xxxxx Xxx., 0xx Xxxxx, Xxx Xxxxxxx, XX 00000
(hereinafter referred to as "Agent"), the exclusive Irrevocable Power of
Attorney to transfer to Agent or to any designee of Agent all of each Company's
Intellectual Property Collateral listed on the Schedules attached to the Grant
of Security Interest in Patents, Trademarks and Licenses (the "Agreement"),
dated as of the date hereof, between the Companies and Agent including, without
limitation, all patents, patent applications and/or registrations, trademarks,
trademark applications and/or registrations, copyrights, copyright applications
and/or registrations, and licenses together with the goodwill of the business
connected with or symbolized by such Intellectual Property Collateral and each
Company's entire inventory of labels and decals bearing any trademarks not
affixed to its products, and the right to operate and control, sell, assign, and
transfer the business under those trademarks under the following terms and
conditions:
1. The Power of Attorney granted hereunder shall be effective as of the
date hereof and shall last for as long as any now existing or hereafter arising
indebtedness, liabilities or obligations of the Company to the Lenders are
outstanding under the Financing Agreement, dated on or about the date hereof,
between the Companies, Agent and the Lenders.
2. The Power of Attorney granted herein shall be irrevocable throughout the
duration of its life as specified in Paragraph 1 hereinabove;
3. The Power of Attorney granted herein shall only be exercisable by Agent
during the continuance of an Event of Default under the Agreement; and
4. Agent shall provide the Company ten (10) days prior written notice of
the exercise of this power.
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IN WITNESS WHEREOF, the Company has caused this Power of Attorney to be executed
as of the 29th of March, 2001.
TWIN LABORATORIES INC.,
a Utah corporation
By: __________________________
Title:
ADVANCED RESEARCH PRESS, INC.,
a New York corporation
By: __________________________
Title:
CHANGES INTERNATIONAL, INC.,
a Florida corporation
By:_________________________
Title:
PR NUTRITION, INC.,
a California corporation
By:_________________________
Title:
HEALTH FACTORS INTERNATIONAL, INC.,
a Delaware corporation
By:_________________________
Title:
XXXXXXX LABORATORIES, INC.,
a Delaware corporation
By:_________________________
Title:
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STATE OF )
)
COUNTY OF )
On , 2001, before me, the undersigned, a notary public in and
for said State, personally appeared known to me to be the
of, the corporation that executed the within instrument, and
acknowledged to me that such corporation executed the within instrument pursuant
to its by-laws and a resolution of its board of directors.
WITNESS my hand and official seal.
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Notary Public
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SCHEDULE A TO GRANT OF SECURITY INTEREST IN PATENTS,
TRADEMARKS, COPYRIGHTS AND LICENSES
U.S. PATENTS
Title Patent No. Issue Date
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SCHEDULE B TO GRANT OF SECURITY INTEREST IN PATENTS,
COPYRIGHTS TRADEMARKS AND LICENSES
U.S. TRADEMARKS
Title or Mark Registration No. Registration Date
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SCHEDULE C TO GRANT OF SECURITY INTEREST IN PATENTS,
TRADEMARKS, COPYRIGHTS AND LICENSES
U.S. COPYRIGHTS
Copyright Registration No. Registration Date
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