EXHIBIT 4.08
INTELLECTUAL PROPERTY SECURITY AGREEMENT
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INTELLECTUAL PROPERTY SECURITY AGREEMENT, dated as of March 26, 2002,
between XxXxxxx Energy Systems of America, Inc., a Utah corporation (and
collectively with all of the subsidiaries of XxXxxxx Energy Systems of America,
Inc listed on the attached Schedule A, the "Company"), and the secured parties
---------- signatory hereto, and their respective endorsees, transferees and
assigns (Collectively, the "Secured Party").
W I T N E S S E T H:
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WHEREAS, pursuant to a Secured Convertible Debenture Purchase
Agreement, dated the date hereof between the Company and the Secured Party (the
"Purchase Agreement"), the Company has agreed to issue to the Secured Party and
the Secured Party has agreed to purchase from the Company an aggregate principal
amount of $1,000,000 of the Company's 10% Secured Convertible Debentures, due
March 25, 2003 (the "Debentures"), which are convertible into shares of the
Company `s Common Stock, $.001 par value (the "Common Stock"); and
WHEREAS, in order to induce the Secured Party to purchase the
Debentures, the Company has agreed to execute and deliver to the Secured Party
this Agreement for the benefit of the Secured Party and to grant to it a first
priority security interest (which is pari passu to the security interest granted
by the Company to AJW Partners, LLC and New Millennium Capital Partners II, LLC
pursuant to an Intellectual Property Security Agreement between the Company, AJW
Partners, LLC and New Millennium Capital Partners II, LLC, dated September 26,
2000 ("Initial Security Agreement"), in certain general intangible property of
the Company to secure the prompt payment, performance and discharge in full of
all of the Company's obligations under the Debentures.
NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1. Certain Definitions. As used in this Agreement, the following
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terms shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as "general intangibles" and "proceeds") shall have the respective
meanings given such terms in Article 9 of the UCC.
(a) "Business Day" means any day except Saturday, Sunday and
any day which shall be a legal holiday or a day on which banking institutions in
the State of New York or Utah generally are authorized or required by law or
other government actions to close.
(b) "Collateral" means all of the Company's right, title and
interest in and to all of Trademarks, Patents, Copyrights, and other general
intangible property of the Company, all trade secrets, intellectual property
rights in computer software and computer software products, design rights which
may be available to the Company, rights to proceeds arising from any and all
claims for damages by way of past, present and future infringement of any
Collateral with the right but not the obligation to xxx on behalf of and collect
such damages for said use or infringement, licenses to use any of the
Copyrights, Patents or Trademarks, and all license fees and royalties arising
from such use to the extent permitted by such license or rights. The term
"Collateral" shall include all of the foregoing items, whether presently owned
or existing or hereafter acquired or coming into existence, all additions and
accessions thereto, all substitutions and replacements thereof, and all
proceeds, products and accounts thereof, including without limitation all
proceeds from the licensing or sale or other transfer of Collateral and of
insurance covering the same and of any tort claims in connection therewith.
(c) "Copyrights" means any and all copyrights, copyright
applications, copyright registration and like protections in each work or
authorship and derivative work thereof that is created by the Company, whether
published or unpublished and whether or not the same also constitutes a trade
secret, now or hereafter existing, created, acquired or held, including, without
limitation, those set forth on Exhibit A attached hereto.
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(d) "Obligations" means all of the Company's obligations under
this Agreement and the Debentures, in each case, whether now or hereafter
existing, voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and whether
or not from time to time decreased or extinguished and later decreased, created
or incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from the Secured Party as a preference, fraudulent
transfer or otherwise as such obligations may be amended, supplemented,
converted, extended or modified from time to time.
(e) "Patents" means all of the Company's patents, patent
applications, letters patent and like protections of the United States or any
other country, including, without limitation, improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the
same, and including, without limitation, those set forth on Exhibit B attached
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hereto.
(f) "Trademarks" means any trademark, service xxxx right,
whether or not registered, applications to register and registrations of the
same and like protections, and the entire goodwill of the business of the
Company connected with or symbolized by such trademarks, including, without
limitation, those set forth on Exhibit C attached hereto.
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(g) "UCC" means the Uniform Commercial Code, as currently in
effect in the State of Utah.
2. Grant of Security Interest. As an inducement for the Secured
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Party to purchase the Debentures and to secure the complete and timely payment,
performance and discharge in full, as the case may be, of all of the
Obligations, the Company hereby, unconditionally and irrevocably, pledges,
grants and hypothecates to the Secured Party, a continuing security interest in,
a lien upon and a right of set-off against all of the Company's right, title and
interest of whatsoever kind and nature in and to the Collateral (the "Security
Interest") senior to all liens and encumbrances of the Company and pari passu
with the security interest granted by the Company pursuant to the Initial
Security Agreement (the "Initial Priority Interest").
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3. Representations, Warranties, Covenants and Agreements of the
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Company. The Company represents and warrants to, and covenants and agrees with,
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the Secured Party as follows:
(a) The Company has the requisite corporate power and
authority to enter into this Agreement and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by the Company
of this Agreement and the filings contemplated therein have been duly authorized
by all necessary action on the part of the Company and no further action is
required by the Company.
(b) The Company is the sole owner of the Collateral (except
for non-exclusive licenses granted by the Company in the ordinary course of
business), free and clear of any liens, security interests, encumbrances, rights
or claims other than the Initial Priority Interest (which is pari passu with the
Security Interest created hereunder), and is fully authorized to grant the
Security Interest in and to pledge the Collateral. There is not on file in any
governmental or regulatory authority, agency or recording office an effective
financing statement, security agreement, license or transfer or any notice of
any of the foregoing (other than those that have been filed in favor of the
Secured Party pursuant to this Agreement or with respect to the Initial Priority
Interest) covering or affecting any of the Collateral. So long as this Agreement
shall be in effect, the Company shall not execute and shall not knowingly permit
to be on file in any such office or agency any such financing statement or other
document or instrument (except to the extent filed or recorded in favor of the
Secured Party pursuant to the terms of this Agreement or with respect to the
Initial Priority Interest).
(c) Exhibit A sets forth a true and complete list of all
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Copyrights in existence as of the date of this Agreement. Exhibit B sets forth a
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true and complete list of all Patents that have been filed as of the date of
this Agreement. Exhibit C sets forth a true and complete list of all Trademarks
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filed as of the date of this Agreement. The Company shall, within ten (10) days
of obtaining knowledge thereof, advise the Secured Party in writing of any
change in the composition of the Collateral, including, without limitation, any
subsequent ownership rights of the Company in or to any Copyright, Patent or
Trademark.
(d) Each of the Patents, Trademarks and Copyrights is valid
and enforceable, and no part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any of the Patents,
Trademarks or Copyrights or the Company's use of any Collateral violates the
rights of any third party. There has been no adverse decision to the Company's
claim of ownership rights in or exclusive rights to use the Collateral in any
jurisdiction or to the Company's right to keep and maintain such Collateral in
full force and effect, and there is no proceeding involving said rights pending
or, to the best knowledge of the Company, threatened before any court, judicial
body, administrative or regulatory agency, arbitrator or other governmental
authority.
(e) The Company shall at all times maintain its books of
account and records relating to the Collateral at its principal place of
business and may not relocate such books of account and records unless it
delivers to the Secured Party at least 30 days prior to such relocation (i)
written notice of such relocation and the new location thereof (which must be
within the United States) and (ii) evidence that appropriate financing
statements and other necessary documents have been filed and recorded and other
steps have been taken to perfect the Security Interest to create in favor of the
Secured Party valid, perfected and continuing first priority liens in the
Collateral pari passu with the Initial Priority Interrest. The principal place
of business of the Company is located at the address set forth in the
introduction to this Agreement.
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(f) This Agreement creates in favor of the Secured Party a
valid security interest in the Collateral, including the Collateral listed on
the Exhibits hereto, securing the payment and performance of the Obligations,
and, upon making the filings described in the immediately following sentence, a
perfected first priority security interest in such Collateral pari passu with
the Initial priority Interest. Except for (x) the filing of this Agreement with
the United States Patent and Trademark Office with respect to the Patents and
Trademarks and the filing of this Agreement with the Register of Copyrights with
respect to the Copyrights, and (y) the filing of financing statements on Form-1
under the UCC with the jurisdictions indicated in Schedule B, attached hereto,
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no authorization or approval of or filing with or notice to any governmental
authority or regulatory body is required either (i) for the grant by the Company
of, or the effectiveness of, the Security Interest granted hereby or for the
execution, delivery and performance of this Agreement by the Company or (ii) for
the perfection of or exercise by the Secured Party of its rights and remedies
hereunder. The Company acknowledges and agrees that a copy of this Agreement (or
instruments executed and delivered pursuant hereto) will be filed and recorded
with each of the United States Patent and Trademark Office and the Register of
Copyrights with respect to the Patents, Trademarks and Copyrights that are now
or hereafter in existence.
(g) On the date of execution of this Agreement, the Company
will deliver to the Secured Party (i) one or more executed UCC financing
statements on Form-1 with respect to the Security Interest for filing with the
jurisdictions indicated on Schedule B, attached hereto and in such other
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jurisdictions as may be requested by the Secured Party and (ii) one or more
executed recordation sheets relating to the filing and recording of this
Agreement with each of the United States Patent and Trademark Office and the
Register of Copyrights with respect to the Patents, Trademarks and Copyrights
that are now in existence.
(h) The execution, delivery and performance of this Agreement
does not conflict with or cause a breach or default, or an event that with or
without the passage of time or notice, shall constitute a breach or default,
under any agreement to which the Company is a party or by the Company is bound.
No consent (including, without limitation, from stock holders or creditors of
the Company) is required for the Company to enter into and perform its
obligations hereunder.
(i) The Company shall at all times maintain the liens and
Security Interest provided for hereunder as valid and perfected first priority
liens and security interests in the Collateral in favor of the Secured Party
pari passu with the Initial Priority Interest until this Agreement and the
Security Interest hereunder shall terminated pursuant to Section 10. The Company
hereby agrees to defend the same against any and all persons. The Company shall
safeguard and protect all Collateral for the account of the Secured Party. At
the request of the Secured Party, the Company will sign and deliver to the
Secured Party at any time or from time to time one or more financing statements
pursuant to the UCC (or any other applicable statute) in form reasonably
satisfactory to the Secured Party and will pay the cost of filing the same in
all public offices wherever filing is, or is deemed by the Secured Party to be,
necessary or desirable to effect the rights and obligations provided for herein.
Without limiting the generality of the foregoing, the Company shall pay all
fees, taxes and other amounts necessary to maintain the Collateral and the
Security Interest hereunder, and the Company shall obtain and furnish to the
Secured Party from time to time, upon demand, such releases and/or
subordinations of claims and liens which may be required to maintain the
priority of the Security Interest hereunder.
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(j) The Company will not allow any Collateral to be abandoned,
forfeited or dedicated to the public without the prior written consent of the
Secured Party. The Company will not transfer, pledge, hypothecate, encumber,
license (except for non-exclusive licenses granted by the Company in the
ordinary course of business), sell or otherwise dispose of any of the Collateral
in the ordinary course of business without the prior written consent of the
Secured Party.
(k) The Company shall, within ten (10) days of obtaining
knowledge thereof, advise the Secured Party promptly, in sufficient detail, of
any substantial change in the Collateral, and of the occurrence of any event
which would have a material adverse effect on the value of the Collateral or on
the Secured Party's security interest therein.
(l) The Company shall permit the Secured Party and its
representatives and agents to inspect the Collateral at any time, and to make
copies of records pertaining to the Collateral as may be requested by the
Secured Party from time to time.
(m) The Company will take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.
(n) The Company shall promptly notify the Secured Party in
sufficient detail upon becoming aware of any attachment, garnishment, execution
or other legal process levied against any Collateral and of any other
information received by the Company that may materially affect the value of the
Collateral, the Security Interest or the rights and remedies of the Secured
Party hereunder.
(o) All information heretofore, herein or hereafter supplied
to the Secured Party by or on behalf of the Company with respect to the
Collateral is accurate and complete in all material respects as of the date
furnished.
(p) Schedule A, attached hereto contains a list of all of the
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subsidiaries of the Company.
4. Defaults. The following events shall be "Events of Default":
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(a) The occurrence of an Event of Default (as defined in the
Debentures) under the Debentures;
(b) Any representation or warranty of the Company in this
Agreement or in the Security Agreement, dated the date hereof between the
Company and the Secured Party, shall prove to have been incorrect in any
material respect when made; and
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(c) The failure by the Company to observe or perform any of
its obligations hereunder or in the Security Agreement, dated the date hereof
between the Company and the Secured Party, for ten (10) days after receipt by
the Company of notice of such failure from the Secured Party.
5. Duty To Hold In Trust. Upon the occurrence of any Event of
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Default and at any time thereafter, the Company shall, upon receipt by it of any
revenue, income or other sums subject to the Security Interest, whether payable
pursuant to the Debentures or otherwise, or of any check, draft, note, trade
acceptance or other instrument evidencing an obligation to pay any such sum,
hold the same in trust for the Secured Party and shall forthwith endorse and
transfer any such sums or instruments, or both, to the Secured Party for
application to the satisfaction of the Obligations.
6. Rights and Remedies Upon Default. Upon occurrence of any Event
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of Default and at any time thereafter, the Secured Party shall have the right to
exercise all of the remedies conferred hereunder and under the Debentures, and
the Secured Party shall have all the rights and remedies of a secured party
under the UCC and/or any other applicable law (including the Uniform Commercial
Code of any jurisdiction in which any Collateral is then located). Without
limitation, the Secured Party shall have the following rights and powers:
(a) The Secured Party shall have the right to take possession
of all tangible manifestations or embodiments of the Collateral and, for that
purpose, enter, with the aid and assistance of any person, any premises where
the Collateral, or any part thereof, is or may be placed and remove the same,
and the Company shall assemble the Collateral and make it available to the
Secured Party at places which the Secured Party shall reasonably select, whether
at the Company's premises or elsewhere.
(b) The Secured Party shall have the right to operate the
business of the Company using the Collateral and shall have the right to assign,
sell, or otherwise dispose of and deliver all or any part of the Collateral, at
public or private sale or otherwise, either with or without special conditions
or stipulations, for cash or on credit or for future delivery, in such parcel or
parcels and at such time or times and at such place or places, and upon such
terms and conditions as the Secured Party may deem commercially reasonable, all
without (except as shall be required by applicable statute and cannot be waived)
advertisement or demand upon or notice to the Company or right of redemption of
the Company, which are hereby expressly waived. Upon each such sale, assignment
or other transfer of Collateral, the Secured Party may, unless prohibited by
applicable law which cannot be waived, purchase all or any part of the
Collateral being sold, free from and discharged of all trusts, claims, right of
redemption and equities of the Company, which are hereby waived and released.
(c) The Secured Party may license or, to the same extent the
Company is permitted by law and contract to do so, sublicense, whether or an
exclusive or non-exclusive basis, any of the Collateral throughout the world for
such term, on such conditions and in such manner as the Secured Party shall, in
its sole discretion, determine.
(d) The Secured Party may (without assuming any obligations or
liabilities thereunder), at any time, enforce (and shall have the exclusive
right to enforce) against licensee or sublicensee all rights and remedies of the
Company in, to and under any license agreement with respect to such Collateral,
and take or refrain from taking any action thereunder.
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(e) The Secured Party may, in order to implement the
assignment, license, sale or other disposition of any of the Collateral pursuant
to this Section, pursuant to the authority provided for in Section 11, execute
and deliver on behalf of the Company one or more instruments of assignment of
the Collateral in form suitable for filing, recording or registration in any
jurisdictions as the Secured Party may determine advisable.
7. Applications of Proceeds; Expenses. (a) The proceeds of any such
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sale, lease, license or other disposition of the Collateral hereunder shall be
applied first, to the expenses of retaking, holding, storing, processing and
preparing for sale, selling, and the like (including, without limitation, any
taxes, fees and other costs incurred in connection therewith) of the Collateral,
to the reasonable attorneys' fees and expenses incurred by the Secured Party in
enforcing its rights hereunder and in connection with collecting, storing and
disposing of the Collateral, and then to satisfaction of the Obligations, and to
the payment of any other amounts required by applicable law, after which the
Secured Party shall pay to the Company any surplus proceeds. If, upon the sale,
license or other disposition of the Collateral, the proceeds thereof are
insufficient to pay all amounts to which the Secured Party is legally entitled,
the Company will be liable for the deficiency, together with interest thereon,
at the rate of 12.5% per annum (the "Default Rate"), and the reasonable fees of
any attorneys employed by the Secured Party to collect such deficiency. To the
extent permitted by applicable law, the Company waives all claims, damages and
demands against the Secured Party arising out of the repossession, removal,
retention or sale of the Collateral, unless due to the gross negligence or
willful misconduct of the Secured Party.
(b) The Company agrees to pay all out-of-pocket fees, costs
and expenses incurred in connection with any filing required hereunder,
including, without limitation, any financing statements, continuation
statements, partial releases and/or termination statements related thereto or
any expenses of any searches reasonably required by the Secured Party. The
Company shall also pay all other claims and charges which in the reasonable
opinion of the Secured Party might prejudice, imperil or otherwise affect the
Collateral or the Security Interest therein. The Company will also, upon demand,
pay to the Secured Party the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Secured Party may incur in connection with (i) the enforcement
of this Agreement, (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral, or (iii) the
exercise or enforcement of any of the rights of the Secured Party under the
Debentures. Until so paid, any fees payable hereunder shall be added to the
principal amount of the Debentures and shall bear interest at the Default Rate.
8. Responsibility for Collateral. The Company assumes all
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liabilities and responsibility in connection with all Collateral, and the
obligations of the Company hereunder or under the Debentures shall in no way be
affected or diminished by reason of the loss, destruction, damage or theft of
any of the Collateral or its unavailability for any reason.
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9. Security Interest Absolute. All rights of the Secured Party and
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all Obligations of the Company hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Debentures or any agreement entered into in connection with the foregoing,
or any portion hereof or thereof; (b) any change in the time, manner or place of
payment or performance of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Debentures or any other agreement entered into in connection with the
foregoing; (c) any exchange, release or nonperfection of any of the Collateral,
or any release or amendment or waiver of or consent to departure from any other
collateral for, or any guaranty, or any other security, for all or any of the
Obligations; (d) any action by the Secured Party to obtain, adjust, settle and
cancel in its sole discretion any insurance claims or matters made or arising in
connection with the Collateral; or (e) any other circumstance which might
otherwise constitute any legal or equitable defense available to the Company, or
a discharge of all or any part of the Security Interest granted hereby. Until
the Obligations shall have been paid and performed in full, the rights of the
Secured Party shall continue even if the Obligations are barred for any reason,
including, without limitation, the running of the statute of limitations or
bankruptcy. The Company expressly waives presentment, protest, notice of
protest, demand, notice of nonpayment and demand for performance. In the event
that at any time any transfer of any Collateral or any payment received by the
Secured Party hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable preference or fraudulent conveyance under
the bankruptcy or insolvency laws of the United States, or shall be deemed to be
otherwise due to any party other than the Secured Party, then, in any such
event, the Company's obligations hereunder shall survive cancellation of this
Agreement, and shall not be discharged or satisfied by any prior payment thereof
and/or cancellation of this Agreement, but shall remain a valid and binding
obligation enforceable in accordance with the terms and provisions hereof. The
Company waives all right to require the Secured Party to proceed against any
other person or to apply any Collateral which the Secured Party may hold at any
time, or to marshal assets, or to pursue any other remedy. The Company waives
any defense arising by reason of the application of the statute of limitations
to any obligation secured hereby.
10. Term of Agreement. This Agreement and the Security Interest
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shall terminate on the date on which all payments under the Debentures have been
made in full and all other Obligations have been paid or discharged. Upon such
termination, the Secured Party, at the request and at the expense of the
Company, will join in executing any termination statement with respect to any
financing statement executed and filed pursuant to this Agreement.
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11. Power of Attorney; Further Assurances. (a) The Company
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authorizes the Secured Party, and does hereby make, constitute and appoint it,
and its respective officers, agents, successors or assigns with full power of
substitution, as the Company's true and lawful attorney-in-fact, with power, in
its own name or in the name of the Company, to, after the occurrence and during
the continuance of an Event of Default, (i) endorse any notes, checks, drafts,
money orders, or other instruments of payment (including payments payable under
or in respect of any policy of insurance) in respect of the Collateral that may
come into possession of the Secured Party; (ii) to sign and endorse any UCC
financing statement or any invoice, freight or express xxxx, xxxx of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other documents
relating to the Collateral; (iii) to pay or discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on or threatened
against the Collateral; (iv) to demand, collect, receipt for, compromise, settle
and xxx for monies due in respect of the Collateral; and (v) generally, to do,
at the option of the Secured Party, and at the Company's expense, at any time,
or from time to time, all acts and things which the Secured Party deems
necessary to protect, preserve and realize upon the Collateral and the Security
Interest granted therein in order to effect the intent of this Agreement and the
Debentures, all as fully and effectually as the Company might or could do; and
the Company hereby ratifies all that said attorney shall lawfully do or cause to
be done by virtue hereof. This power of attorney is coupled with an interest and
shall be irrevocable for the term of this Agreement and thereafter as long as
any of the Obligations shall be outstanding.
(b) On a continuing basis, the Company will make, execute,
acknowledge, deliver, file and record, as the case may be, in the proper filing
and recording places in any jurisdiction, including, without limitation, the
jurisdictions indicated on Schedule B, attached hereto, all such instruments,
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including appropriate financing and continuation statements and collateral
agreements and filings with the United States Patent and Trademark Office and
the Register of Copyrights, and take all such action as may reasonably be deemed
necessary or advisable, or as reasonably requested by the Secured Party, to
perfect the Security Interest granted hereunder and otherwise to carry out the
intent and purposes of this Agreement, or for assuring and confirming to the
Secured Party the grant or perfection of a security interest in all the
Collateral.
(c) The Company hereby irrevocably appoints the Secured Party
as the Company's attorney-in-fact, with full authority in the place and stead of
the Company and in the name of the Company, from time to time in the Secured
Party's discretion, to take any action and to execute any instrument which the
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including:
(i) To modify, in its sole discretion, this Agreement
without first obtaining the Company's approval of or signature to such
modification by amending Exhibit A, Exhibit B and Exhibit C, hereof, as
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appropriate, to include reference to any right, title or interest in any
Copyrights, Patents or Trademarks acquired by the Company after the execution
hereof or to delete any reference to any right, title or interest in any
Copyrights, Patents or Trademarks in which the Company no longer has or claims
any right, title or interest; and
(ii) To file, in its sole discretion, one or more
financing or continuation statements and amendments thereto, relative to any of
the Collateral without the signature of the Company where permitted by law.
12. Notices. Any and all notices or other communications or
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deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Business Day, (b) the next Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Business Day
or later than 6:30 p.m. (New York City time) on any Business Day, (c) the
Business following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (d) upon actual receipt by the party to whom such
notice is required to be given. The addresses for such notices and
communications are those set forth on the signature pages hereof, or such other
address as may be designated in writing hereafter, in the same manner, by such
Person.
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13. Other Security. To the extent that the Obligations are now or
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hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Party shall have the right, in its sole discretion, to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured Party's rights and
remedies hereunder.
14. Miscellaneous.
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(a) No course of dealing between the Company and the Secured
Party, nor any failure to exercise, nor any delay in exercising, on the part of
the Secured Party, any right, power or privilege hereunder or under the
Debentures 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.
(b) All of the rights and remedies of the Secured Party with
respect to the Collateral, whether established hereby or by the Debentures or by
any other agreements, instruments or documents or by law shall be cumulative and
may be exercised singly or concurrently.
(c) This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and is intended to supersede
all prior negotiations, understandings and agreements with respect thereto.
Except as specifically set forth in this Agreement, no provision of this
Agreement may be modified or amended except by a written agreement specifically
referring to this Agreement and signed by the parties hereto.
(d) In the event that any provision of this Agreement is held
to be invalid, prohibited or unenforceable in any jurisdiction for any reason,
unless such provision is narrowed by judicial construction, this Agreement
shall, as to such jurisdiction, be construed as if such invalid, prohibited or
unenforceable provision had been more narrowly drawn so as not to be invalid,
prohibited or unenforceable. If, notwithstanding the foregoing, any provision of
this Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.
(e) No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the party
giving such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default or right, whether of the same or similar nature or
otherwise.
(f) This Agreement shall be binding upon and inure to the
benefit of each party hereto and its successors and assigns.
10
(g) Each party shall take such further action and execute and
deliver such further documents as may be necessary or appropriate in order to
carry out the provisions and purposes of this Agreement.
(h) This Agreement shall be construed in accordance with the
laws of the State of New York, except to the extent the validity, perfection or
enforcement of a security interest hereunder in respect of any particular
Collateral which are governed by a jurisdiction other than the State of New York
in which case such law shall govern. Each of the parties hereto irrevocably
submit to the exclusive jurisdiction of any New York State or United States
Federal court sitting in Manhattan county over any action or proceeding arising
out of or relating to this Agreement, and the parties hereto hereby irrevocably
agree that all claims in respect of such action or proceeding may be heard and
determined in such New York State or Federal court. The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. The parties hereto further waive any objection to venue
in the State of New York and any objection to an action or proceeding in the
State of New York on the basis of forum non convenient.
(i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING
OF ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR
EACH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY
RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL
CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY
FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO
A JURY TRIAL FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING
THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE
EVENT OF A LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
(j) This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.
* * * * * * * * * * *
11
IN WITNESS WHEREOF, the parties hereto have caused this Intellectual
Property Security Agreement to be duly executed on the day and year first above
written.
XXXXXXX ENERGY SYSTEMS OF AMERICA, INC.
By: /S/ Xxxxxx X. XxXxxxx
------------------------
Name: Xxxxxx X. XxXxxxx
Title: President/Chief Operating Officer
Address for Notice:
XxXxxxx Energy Systems of America, Inc.
00000 Xxx 000, XXX 000-X
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Chief Executive Officer
With a Copy to:
Xxxxx Xxxxxxx & Xxxx LLP
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
12
IN WITNESS WHEREOF, the parties hereto have caused this Intellectual
Property Security Agreement to be duly executed on the day and year first above
written.
AJW PARTNERS, LLC
By: SMS Group, LLC
By: /S/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Manager
Address for Notice:
AJW Partners, LLC
000 Xxxxx Xxxxxx
Xxxxx X
Xxxxxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
With copies to:
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 and (000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
13
IN WITNESS WHEREOF, the parties hereto have caused this Intellectual
Property Security Agreement to be duly executed on the day and year first above
written.
NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By: First Street Manager II, LLC
By: /S/ Xxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxxx
Title:
Address for Notice:
New Millennium Capital Partners II, LLC
000 Xxxxx Xxxxxx
Xxxxx X
Xxxxxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
With copies to:
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 and (000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
14
IN WITNESS WHEREOF, the parties hereto have caused this Intellectual
Property Security Agreement to be duly executed on the day and year first above
written.
PEGASUS CAPITAL PARTNERS, LLC
By: /S/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Manager
Address for Notice:
Pegasus Capital Partners, LLC
000 Xxxxx Xxxxxx
Xxxxx X
Xxxxxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx Xxxxxxxx
With copies to:
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx &
Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 or (000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
15
IN WITNESS WHEREOF, the parties hereto have caused this Intellectual
Property Security Agreement to be duly executed on the day and year first above
written.
AJW/NEW MILLENNIUM OFFSHORE LTD.
By: /S/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Manager
Address for Notice:
AJW/New Millennium Offshore Ltd.
000 Xxxxx Xxxxxx
Xxxxx X
Xxxxxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx Xxxxxxxx
With copies to:
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx &
Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 or (000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
16
EXHIBIT A
---------
Copyrights
Description Registration Registration
Number Date
-----------------------------------------------------------------------------
17
EXHIBIT B
---------
Patents
Description Registration Registration
Number Date
-----------------------------------------------------------------------------
18
EXHIBIT C
---------
Trademarks
Description Registration Registration
Number Date
-----------------------------------------------------------------------------
19
SCHEDULE A
----------
List of subsidiaries of the Company:
-----------------------------------
20
SCHEDULE B
----------
Jurisdictions:
-------------
21
