EXHIBIT 10.11
PATENT AND TRADEMARK MORTGAGE
This PATENT, TRADEMARK AND LICENSE MORTGAGE (the "Mortgage") made
as of this 18th day of August, 1998, by SEPRAGEN CORPORATION a
California corporation having an address at 00000 Xxxxxxxx Xxxxxx,
Xxxxxxx, XX 00000 ("Mortgagor"), in favor of K. XXXXXXX XXXXX
("Mortgagee"):
WITNESSETH:
WHEREAS, Mortgagor and Mortgagee are parties to a certain
Subscription Agreement (the "Subscription Agreement") and other related
documents of even date herewith (collectively, with the Subscription
Agreement, the "Loan Documents"), which Loan Documents provide (i) for
Mortgagee to extend credit to or for the account of Mortgagor and (ii)
for the grant by Mortgagor to Mortgagee of a security interest in
certain of Mortgagor's assets, including, without limitation, its
patents, patent applications, trademarks, trademark applications, trade
names, service marks, service xxxx applications and goodwill;
NOW, THEREFORE, in consideration of the premises set forth herein
and for other good and valuable consideration, the receipt, sufficiency
and adequacy of which are hereby acknowledged, Mortgagor agrees as
follows:
1. Capitalized Terms. All terms capitalized but not otherwise
defined herein shall have the same meanings herein as in the Loan
Documents.
2. Mortgage of Patents, Trademarks and Licenses. To secure the
complete and timely satisfaction of all of Mortgagor's Obligations,
Mortgagor hereby grants, bargains, assigns, mortgages, pledges, sells,
creates a security interest in, transfers, and conveys to Mortgagee, 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 of an Event of Default, all of
Mortgagor's right, title and interest in and to all of its now existing:
(i) patents and patent applications, including, without
limitation, the inventions and improvements described
and claimed therein, and those patents listed on Exhibit
A attached hereto and hereby made a part hereof, and (a)
the reissues, divisions, continuations, renewals,
extensions and continuations in-part thereof, (b) all
income, damages and payments now and hereafter due or
payable under or with respect thereto, including,
without limitation, damages and payments for past or
future infringements thereof, (c) the right to xxx for
past, present and future infringements thereof, and (d)
all rights corresponding thereto throughout the world
(all of the foregoing patents and applications, together
with the items described in clauses (a)-(d) of this
subsection 2(i), are sometimes hereinafter referred to
individually as a "Patent" and, collectively, as the
"Patents");
(ii) trademarks, trademark registrations, trademark
applications, trade names and tradestyles, service
marks, service xxxx registrations and service xxxx
applications, including, without limitation, the
trademarks, trade names, service marks and applications
and registrations thereof listed on Exhibit B attached
hereto and hereby made a part hereof, and (a) renewals
or extensions thereof, (b) all income, damages and
payments now and hereafter due or payable with respect
thereto, including, without limitation, damages and
payments for past or future infringements thereof, (c)
the right to xxx for past, present and future
infringements thereof, and (d) all rights corresponding
thereto throughout the world (all of the foregoing
trademarks, trade names and tradestyles, service marks
and applications and registrations thereof, together
with the items described in clauses (a)-(d) of this
subsection 2(u), are sometimes hereinafter referred
individually as a "Trademark", and, collectively, as the
"Trademarks"); and
(iii) the goodwill of Mortgagor's business connected with and
symbolized by the Trademarks.
3. Warranties and Representations. Mortgagor warrants and
represents to Mortgagee that:
(i) The Patents and Trademarks have not been adjudged
invalid or unenforceable and have not been canceled, in
whole or in part and are presently subsisting;
(ii) To the best of Mortgagor's knowledge, each of the
Patents and Trademarks is valid and enforceable;
(iii) Mortgagor is the sole and exclusive owner of the entire
and unencumbered right, title and interest in and to
each of the Patents and Trademarks, free and clear of
any liens, charges and encumbrances, including, without
limitation, licenses, shop rights and covenants by
Mortgagor not to xxx third persons;
(iv) Mortgagor has adopted all of the Trademarks;
(v) Mortgagor has no notice of any suits or actions
commenced or threatened with reference to the Patents or
Trademarks; and
(vi) Mortgagor has the right to execute and deliver its
Mortgage and perform its terms and has entered into or
will enter into written agreements with each of its
present and future employees, agents and consultants
which will enable it to comply with the covenants
contained herein.
4. Restrictions on Future Agreements. Mortgagor agrees that until
Mortgagor's Obligations shall have been satisfied in full and the Loan
Documents shall have been terminated, Mortgagor shall not sell or assign
its interest in, or grant any license to substantially all of
Mortgagor's rights under, the Patents or Trademarks, or enter into any
other agreement with respect to the Patents or Trademarks which is
inconsistent with Mortgagor's Obligations under this Mortgage, without
the prior written consent of Mortgagee except in the ordinary course of
business, and Mortgagor further agrees that it shall not take any
action, or permit any action to be taken by others subject to its
control, including, without limitation, licensees, or fail to take any
action (solely with respect to the Patents and the Tradenames), which
would affect the validity or enforcement of the rights transferred to
Mortgagee under this Mortgage. Mortgagee shall cooperate with Mortgagor
to facilitate third party licenses in the Patents.
5. Post-Default Non-exclusive License. If Mortgagor Defaults on
the Convertible Secured Promissory Note, Mortgagee shall negotiate,, in
good faith, an arms length transaction pursuant to which Mortgagee may
grant Mortgagor a non-exclusive license to use the Patents and
Trademarks listed on Exhibits A and B.
6. Royalties; Terms. The term of the mortgages granted herein
shall extend until the earlier of(i) the expiration of each of the
respective Patents and Trademarks assigned hereunder, and (ii)
Mortgagor's Obligations have been paid in full and the Loan Documents
have been terminated. Upon the occurrence of an Event of Default or
Default, Mortgagor agrees that the use by Mortgagee of all Patents and
Trademarks shall be worldwide and without any liability for royalties or
other related charges from Mortgagee to the Mortgagor.
7. Mortgagee's Right to Inspect. Mortgagee shall have the right
upon prior written notice, after executing a reasonable confidentiality
agreement and at any time and from time to time during normal business
hours and prior to payment in full of Mortgagor's Obligations and
termination of the Loan Documents, to inspect Mortgagor's premises and
to examine Mortgagor's books, records and operations, including, without
limitation, Mortgagor's quality control processes.
8. Release of Mortgage. This Mortgage is made for collateral
purposes only. Upon payment in full of Mortgagor's Obligations and
termination of the Loan Documents, Mortgagee shall execute and deliver
to Mortgagor all deeds, assignments and other instruments, and shall
take such other actions, as may be necessary or proper to revest in
Mortgagor full title to the Patents and Trademarks, subject to any
disposition thereof which may have been made by Mortgagee pursuant
hereto or pursuant to the Loan Documents.
9. Expenses. All expenses incurred in connection with the
performance of any of the agreements set forth herein shall be borne by
Mortgagor. All fees, costs and expenses, of whatever kind or nature,
including, without limitation, reasonable attorneys and paralegals
fees and legal expenses, incurred by Mortgagee in connection with the
filing or recording of any documents (including, without limitation, all
taxes in connection therewith) in public offices, the payment or
discharge of any taxes, counsel fees, maintenance fees, encumbrances or
otherwise in protecting, maintaining or preserving the Patents and
Trademarks, or in defending or prosecuting any actions or proceedings
arising out of or related to the Patents and Trademarks, shall be borne
by and paid by Mortgagor on demand by Mortgagee and until so paid shall
be added to the principal amount of Mortgagor's Obligations and shall
bear interest at the highest rate provided for in the Note.
10. Duties of Mortgagor. Mortgagor shall have the duty (i) to
preserve and maintain all rights in the Patents and Trademarks, and (ii)
to ensure that the Patents and Trademarks are and remain enforceable.
Any expenses incurred in connection with Mortgagor's obligations under
this Section 10 shall be borne by Mortgagor. Mortgagor shall not abandon
any right to file a patent, trademark or service xxxx application, or
abandon any pending patent application, or any other Patent or Trademark
without the consent of Mortgagee.
11. Mortgagee's Right to Xxx. After the occurrence of an Event of
Default or Default, Mortgagee shall have the right, but shall in no way
be obligated, to bring suit in its own name to enforce the Patents and
Trademarks, and, if Mortgagee shall commence any such suit, Mortgagor
shall, at the request of Mortgagee, do any and all lawful acts and
execute any and all proper documents required by Mortgagee in aid of
such enforcement and Mortgagor shall promptly, upon demand, reimburse
and indemnify Mortgagee for all reasonable costs and expenses incurred
by Mortgagee in the exercise of its rights under this Section 11.
12. Waivers. No course of dealing between Mortgagor and Mortgagee,
nor any failure to exercise, nor any delay in exercising, on the part of
Mortgagee, any right, power or privilege hereunder or under the Loan
Documents 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.
13. Severability. The provisions of this Mortgage 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 Mortgage in any jurisdiction.
14. Modification. This Mortgage cannot be altered, amended or
modified in any way, except by a writing signed by the parties hereto.
15. Cumulative Remedies; Power of Attorney; Effect on Subscription
Agreement. All of Mortgagee's rights and remedies with respect to the
Patents, Trademarks and Licenses, whether established hereby or by the
Loan Documents, or by any other agreements or by law shall be cumulative
and may be exercised singularly or concurrently. Upon the occurrence of
an Event of Default or Default, Mortgagor hereby authorizes Mortgagee to
make, constitute and appoint any officer or agent of Mortgagee as
Mortgagee may select, in its sole discretion, as Mortgagor's true and
lawful attorney-in-fact, with power to (i) endorse Mortgagor's name on
all applications, documents, papers and instruments necessary or
desirable for Mortgagee in the use of the Patents and Trademarks, or
(ii) take any other actions with respect to the Patents and Trademarks
as Mortgagee deems to be in the best interest of Mortgagee, or (iii)
grant or issue any exclusive or non-exclusive license under the Patents
or Trademarks to anyone, or (iv) assign, pledge, convey or otherwise
transfer title in or dispose of the Patents or Trademarks to anyone.
Mortgagee 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 Mortgagor's Obligations shall have been paid in full
and the Security Agreement, including any amendments thereto, has been
terminated. Mortgagor acknowledges and agrees that this Mortgage is not
intended to limit or restrict in any way the rights and remedies of
Mortgagee under the Loan Documents but rather is intended to facilitate
the exercise of such rights and remedies. Mortgagee shall have, in
addition to all other rights and remedies given it by the terms of this
Mortgage and the Loan Documents, 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 Patents or
Trademarks may be located.
16. Acknowledgment of Mortgagor's Licensing Needs. Mortgagee
acknowledges that Mortgagor is in the business of licensing the
Intellectual Property covered by the Patent and Trademark Mortgage. It
is not the intent of the parties to restrict Mortgagor's ability to
license the Intellectual Property. Mortgagee will cooperate with
Mortgagor and not take any action to hinder the execution of licenses
for the Intellectual Property in Mortgagor's ordinary course of
business.
17. Binding Effect; Benefits. This Mortgage shall be binding upon
the Mortgagor and its respective successors and assigns, and shall inure
to the benefit of Mortgagee, its successors, nominees and assigns.
18. Governing Law. This Mortgage shall be governed by and construed
in accordance with the internal laws of the State of California.
19. Headings. Paragraph headings used herein are for convenience
only and shall not modify the provisions which they precede.
20. Further Assurances. Mortgagor agrees to execute and deliver
such further agreements, instruments and documents, and to perform such
further acts, as Mortgagee shall reasonably request from time to time in
order to carry out the purpose of this Mortgage and agreements set forth
herein.
21. Survival of Representations. All representations and warranties
of Mortgagor contained in this Mortgage shall survive the execution and
delivery of this Mortgage.
IN WITNESS WHEREOF, Mortgagor has duly executed this Mortgage in
favor of Mortgagee as of the date first written above.
SEPRAGEN CORPORATION
By: /s/ Xxxxx Xxxxxx
Its: President
/s/ K. Xxxxxxx Xxxxx
K. XXXXXXX XXXXX
STATE OF CALIFORNIA )
) ss
COUNTY OF SAN MATEO )
The foregoing Patent and Trademark Mortgage was executed and
acknowledged before me this 18 th day of August, 1998, by Xxxxx Xxxxxx
and n/a, personally known to me to be the person and n/a, of Sepragen
Corporation, a California corporation, on behalf of such corporation.
Notary Public
San Mateo County,
My Commission expires: 0-0-0000
XXXXXXXXXXXXXX
XXXXX XX XXXXXXXXXX )
)SS
COUNTY OF SANTA XXXXX )
I, Xxxxxxxxx X. Xxxxxx, Notary Public in and for and residing in said
County and State, DO HEREBY CERTIFY that K. Xxxxxxx Xxxxx personally
known to me to be the same person whose names is subscribed to the
foregoing instrument, appeared before me this day in person and
acknowledged that he signed and delivered said instruments as his own
free and voluntary act and as the free and voluntary act of said bank
for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 16 day of August, 1998.
/s/Xxxxxxxxx X. Xxxxxx
Notary Public
My Commission Expires: 1-16-02
THIS INSTRUMENT PREPARED BY AND
AFTER FILING RETURN TO:
Xxxx Xxxx, Esq.
Xxxxxx Xxxxxx White & XxXxxxxxx
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
EXHIBIT A
PATENTS AND PATENT APPLICATIONS
U.S. PATENTS ISSUED
1. Patent Number 4,627,918, issued December 9, 1986, "Chromatography
Column Using Horizontal Flow", issued to Xxxxx Xxxxxx and assigned
to Sepragen Corporation.
Sepragen Corporation - File 1723
2. Patent Number 4,676,898, issued June 30, 1987, "Electrophoresis -
Mass Spectrometry Probe", issued to Xxxxx Xxxxxx and assigned to
Sepragen Corporation.
Sepragen Corporation - File 1724
3. Patent Number 4,705,616, issued November 10, 1987, "Chromatography
Column -Electrophoresis System", issued to Xxxxx X. Xxxxxxxx and
Xxxxx Xxxxxx and assigned to Sepragen Corporation.
Sepragen Corporation - File 1731
4. Patent Number 4,708,782, issued November 24, 1987, "Chromatography
Column -Electrophoresis System", issued to Xxxxx X. Xxxxxxxx and
Xxxxx Xxxxxx and assigned to Sepragen Corporation.
Sepragen Corporation - File 1725
5. Patent Number 4,740,298, issued April 26, 1988, "Chromatography
Column! Moving Belt Interface", issued to Xxxxx X. Xxxxxxxx and
Xxxxx Xxxxxx and assigned to Sepragen Corporation.
Sepragen Corporation - File 1726
6. Patent Number 4,833,083, issued May 23, 1989, "Packed Bed
Bioreactor", issued to Xxxxx Xxxxxx and assigned to Sepragen
Corporation.
Sepragen Corporation - File 1727
7. Patent Number 4,840,730, issued June 20, 1989, "Chromatography
System Using Horizontal Flow Columns", issued to Xxxxx Xxxxxx and
assigned to Sepragen Corporation.
Sepragen Corporation - File 1728
8. Patent Number 4,865,729, issued September 12, 1989, "Radial Thin
Layer Chromatography", issued to Xxxxx Xxxxxx and Xxxxx X. Xxxxxxxx
and assigned to Sepragen Corporation.
Sepragen Corporation - File 1729
9. Patent Number 4,865,947, issued September 19, 1989, "Interface for
Liquid Chromatography - Mass Spectrometer", issued to Xxxxx X.
Xxxxxxxx and Xxxx X. Fought and assigned to Sepragen Corporation.
Sepragen Corporation - File 1932
10. Patent Number 5,462,659, issued October 31, 1995, "An Improved
Chromatography Column", issued to Venit Saxena and Xxxx Xxxxx and
assigned to Sepragen Corporation.
Sepragen Corporation - File 1933
11. Euro Patent Number 0530258, issued September 1995, "Absorbent
Medium", issued to Xxxx Xxxxxxxxx, X. Xxxx, Xxxx Xxxx and Xxxx
Xxxxxx, and assigned to Sepragen Corporation.
Sepragen Corporation - File 1981
12. Patent Number 5,492,723, issued February 20, 1996, "Absorbent
Medium", issued to Xxxx Xxxxxxxxx, X. Xxxx, Xxxx Xxxx, and Xxxx
Xxxxxx, and assigned to Sepragen Corporation.
Sepragen Corporation - File 1740
13. Patent Number 5,597,489, issued January 28, 1997, "Method For
Removing Contaminants From Water", issued to H. Xxxxxxx Xxxxxxxxx,
Xxxxxx Xxxxx, Xxxxxxx Xxxxxxxx, and Xxx Xxxxxx and assigned to
Sepragen Corporation.
Sepragen Corporation - File 1739
14. Patent Number 5,690,996, issued November 25, 1997, "Cross-Linked
Cellulose Sponge", issued to Xxxx Xxxxxxxxx, Xxx Xxxx, Xxxx Xxxx,
and Xxxx Xxxxxx and assigned to Sepragen Corporation.
Sepragen Corporation - File 1910
15. Patent Number 5,756,680, issued May 26, 1998, "Sequential
Separation of Whey Proteins and Formulation Thereof , issued to
Xxxxx X. Xxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxxxx, and Xxxxxxxx X.
Xxxxxxx and assigned to Sepragen Corporation.
Sepragen Corporation - File 2338
U.S. PATENT APPLICATION EXAMINED AND ALLOWED FOR ISSUANCE
1. Patent Application, pending for "High Throughput Debittering", has
been accepted for issuance to Xxxxx Xxxxxxxx, Xxxxxxxx Xxxxxxx, and
Xxxxx Xxxxxx and assignment to Sepragen Corporation.
Sepragen Corporation - File 2397
2. Patent Application, pending for "Sequential Separation of Whey",
has been filed on May 4, 1998, for issuance to Xxxxx X. Xxxxx,
Xxxxx Xxxxxx, Xxxxx Xxxxxxxx, and Xxxxxxxx X. Xxxxxxx and
assignment to Sepragen Corporation.
Sepragen Corporation - File 2181
FOREIGN PATENTS ISSUED
1. U.S. Patent #5,756,680, "Sequential Separation of Whey Proteins and
Formulations Thereof , has been filed on September 22, 1997 for
(PCT) foreign patent, in Australia and New Zealand; and (EPC) in
Switzerland, Ireland and The Netherlands, as of September 22, 1997.
Sepragen Corporation - File 2338
U.S. TRADEMARKS REGISTERED AND PENDING
1. Trademark Principal Register, Registration Number 1,419,016,
registered on December 2, 1986, "SUPERFLO" to Sepragen Corporation.
Sepragen Corporation - File 1982
2. Trademark Principal Register, Registration Number 1,574,587,
Registered on January 2, 1990, "QUANTASEP", to Sepragen
Corporation.
Sepragen Corporation - File 1983
3. Trademark Principal Register, Registration Number 1,803,149,
registered on November 9, 1993, "S" Trademark, to Sepragen Corporation.
Sepragen Corporation - File 1984
4. Trademark applied for "S" and Design. File 01743
5. Trademark applied for "Sepragen". File 01742
6. Trademark applied for "SepraLac". File 02251
7. Trademark applied for "SepraSorb". File 02092
FOREIGN TRADEMARKS REGISTERED AND PENDING
1. "Sepralac" Trademark:
a. New Zealand -- International Class 9, Trademark Application #26803
5, Registration #268035, October 8, 1996.
b. Australia -- International Class 9, Registration #03128/1997, July
25, 1997.
c. Denmark -- International Class 9, Registration #03128/1997, July
25, 1997.
d. Switzerland -- International Class 9, Registration #441337, October
7, 1996.
e. Benelux -- International Class 9, Registration #598445, October 4,
1996.
EXHIBIT B
TRADEMARKS
The Company's name, helix logo. Superflo and QuantaSep trademarks
are registered on the Principal Register of Trademarks maintained by the
U.S. Patent and Trademark Office, and applications to register the xxxx
SepraSorb, Sepragen, "S" and Design and Sepralac are pending.
