DEBENTURE IMAGENT AND OXYGENT
PATENT AND TRADEMARK SECURITY AGREEMENT
DEBENTURE IMAGENT AND OXYGENT PATENT AND TRADEMARK SECURITY AGREEMENT
dated as of October 4, 2002, made by Alliance Pharmaceutical Corp., a New York
corporation (the "Grantor"), to the parties signatory hereto (collectively, the
"Secured Parties").
WITNESSETH
WHEREAS, the Grantor and certain investors (the "Investors") are
entering into a Convertible Secured Note Purchase Agreement, dated as of the
date hereof (the "Convertible Secured Note Purchase Agreement"), with the
initial closing taking place on the date hereof and subsequent closings taking
place at a later date;
WHEREAS, pursuant to the Convertible Secured Note Purchase Agreement,
the Investors may purchase up to $3,000,000 in aggregate principal amount of the
Grantor's 8% Convertible Secured Promissory Notes (the "Notes");
WHEREAS, the Secured Parties hold an aggregate principal amount of
$11,000,000 of the Grantor's 5% Convertible Debentures Due 2004 (the
"Debentures") issued pursuant to those certain Securities Purchase Agreements
dated as of February 11, 2002 and August 22, 2000 among the Grantor and the
Secured Parties (the "Securities Purchase Agreements");
WHEREAS, in exchange for certain waivers of provisions under the
Debentures in connection with the Convertible Secured Note Purchase Agreement
and the purchase of the Notes, the Grantor has agreed to grant the Secured
Parties a security interest in certain of the Grantor's property and assets,
junior in priority only to the Prior Liens to secure, among other things, the
performance of the obligations of the Grantor under the Securities Purchase
Agreements and the Debentures; and
WHEREAS, the Grantor is contemporaneously entering into a Debenture
Imagent Security Agreement with the Secured Parties and a Debenture General
Collateral Security Agreement with the Secured Parties.
NOW, THEREFORE, in consideration of the premises set forth above the
Grantor hereby agrees with the Secured Parties as follows:
TERMS
1. DEFINED TERMS. The terms set forth below have the following
meanings:
"CODE" means the Uniform Commercial Code as from time to time in
effect in the State of New York.
"COLLATERAL" shall have the meaning assigned to it in Section 2 of
this Patent and Trademark Security Agreement.
"EVENT OF DEFAULT" means:
(1) the failure by the Grantor to perform in any material respect any
obligation of the Grantor under this Patent and Trademark Security Agreement as
and when required by this Patent and Trademark Security Agreement; or
(2) any representation or warranty made by the Grantor pursuant to
this Patent and Trademark Security Agreement is untrue in any material respect
when made; or
(3) the failure by the Grantor to perform in any material respect any
obligation of the Grantor under the Imagent Security Agreement as and when
required by the Imagent Security Agreement; or
(4) any representation or warranty made by the Grantor pursuant to the
Imagent Security Agreement is untrue in any material respect when made; or
(5) the failure by the Grantor to perform in any material respect any
obligation of the Grantor under the General Collateral Security Agreement as and
when required by the General Collateral Security Agreement; or
(6) any representation or warranty made by the Grantor pursuant to the
General Collateral Security Agreement is untrue in any material respect when
made; or
(7) any Event of Default (as defined in the Debentures) specified in
Section 3.1 of the Debentures occurs and is continuing, and has not been waived
in accordance with the terms thereof; or
(8) the security interests granted herein and pursuant to the Imagent
Security Agreement and the General Collateral Security Agreement do not
constitute for any reason a perfected security interest in the Collateral
covered thereby (other than as a result of a failure to make the filings
specified in Exhibit E, F and G of this Patent and Trademark Security Agreement
and other than as a result of a failure to make the filings specified in
SCHEDULE I of the General Collateral Security Agreement and SCHEDULE II of the
Imagent Security Agreement), junior only to the Prior Liens; or
(9) the Grantor shall file a petition under bankruptcy, insolvency or
debtor's relief law or make an assignment for the benefit of its creditors; or
(10) proceedings shall be instituted against the Grantor before a
court of competent jurisdiction under any federal or state bankruptcy law that
(X) is for relief against the Grantor in an involuntary case brought with
respect to the Grantor in such court, (Y) seeks to appoint a custodian, receiver
or other similar official for all or substantially all the Grantor's property or
(Z) seeks to liquidate the Grantor, and such proceedings remain unstayed and in
effect for 60 days; or
(11) the loss or suspension of the Food and Drug Administration
approval relating to the Products; or
(12) failure of the Grantor to pay any Obligation when due; or
(13) the Grantor shall fail to pay when due any principal of, premium
or interest on or any amount payable in respect of any borrowed money
indebtedness.
"GENERAL COLLATERAL SECURITY AGREEMENT" means that certain General
Collateral Security Agreement, dated as of the date hereof, between the Grantor
and the Secured Parties as amended, supplemented or otherwise modified from time
to time.
"GENERAL INTANGIBLES" shall have the meaning ascribed such term under
the Code.
"IMAGENT SECURITY AGREEMENT" means that certain Debenture Imagent
Security Agreement, dated as of the date hereof, between the Grantor and the
Secured Parties as amended, supplemented or otherwise modified from time to
time.
"LICENSE RIGHTS" shall mean any Grantor rights that were obtained
through the grant, by the Grantor, of rights to a third party under the Product
Patents or Product Trademarks.
"LIEN" shall mean any lien, mortgage, security interest, chattel
mortgage, pledge or other encumbrance (statutory or otherwise) of any kind
securing satisfaction or performance of an obligation, including any agreement
to give any of the foregoing, any conditional sales or other title retention
agreement, any lease in the nature thereof, and the filing of or the agreement
to give any financing statement under the Code of any jurisdiction or similar
evidence of any encumbrance, whether within or outside the United States.
"OBLIGATIONS" shall mean:
(1) all obligations and liabilities to the Secured Parties, whether
now existing or hereafter arising, under the Securities Purchase Agreements, the
Debentures, the Imagent Security Agreement, the General Collateral Security
Agreement, this Patent and Trademark Security Agreement and/or any document or
agreement related to any of the foregoing and the due performance and compliance
with the terms of the Securities Purchase Agreements, the Debentures, the
Imagent Security Agreement, the General Collateral Security Agreement, this
Patent and Trademark Security Agreement and/or any document or agreement related
to any of the foregoing;
(2) any and all sums advanced by the Secured Parties in order to
preserve the Collateral or to preserve the Secured Parties' security interest in
the Collateral; and
(3) in the event of any proceeding for the collection or enforcement
of any obligations or liabilities of the Grantor referred to in the immediately
preceding clauses (1) through (2) in accordance with the terms of the Securities
Purchase Agreements, the Debentures, the Imagent Security Agreement, the General
Collateral Security Agreement, this Patent and Trademark Security Agreement,
and/or any document or agreement related to the foregoing, the expenses of
re-taking, holding, preparing for sale, selling or otherwise disposing of or
realizing on the Collateral, or of any other exercise by the Secured Parties of
their rights hereunder, together with reasonable attorneys' fees and court
costs.
"PATENT AND TRADEMARK SECURITY AGREEMENT" means this Debenture Imagent
and Oxygent Patent and Trademark Security Agreement, including all amendments,
supplements or modifications that are agreed to in writing by the parties.
"PRIOR LIENHOLDERS" means the holders of the Prior Liens.
"PRIOR LIENS" means the Liens of the Prior Lienholders created under
the Prior Lienholders Security Agreements.
"PRIOR LIENHOLDERS SECURITY AGREEMENTs" means the (i) Security
Agreement, dated July 23, 2002, made by the Grantor in favor of Xmark Fund, L.P.
and Xmark Fund, Ltd., (ii) Patent and Trademark Security Agreement, dated July
23, 2002 made by the Grantor in favor of Xmark Fund, L.P. and Xmark Fund, Ltd.,
(iii) Imagent Security Agreement, dated October 4, 2002, made by the Grantor in
favor of SDS Merchant Fund, L.P. as Collateral Agent for the benefit of the
holders of the notes issued pursuant to the Convertible Secured Note Purchase
Agreement, (iv) General Collateral Security Agreement, dated October 4, 2002,
made by the Grantor in favor of SDS Merchant Fund, L.P., as Collateral Agent for
the benefit of the holders of the notes issued pursuant to the Convertible
Secured Note Purchase Agreement and, (v) Imagent and Oxygent Patent and
Trademark Security Agreement, dated October 4, 2002, made by the Grantor in
favor of SDS Merchant Fund, L.P., as Collateral Agent for the benefit of the
holders of the notes issued pursuant to the Convertible Secured Note Purchase
Agreement, and (vi) Alliance/PFC Security Agreement, dated as of May 19, 2000,
by and between Alliance and PFC Therapeutics, LLC.
"PROCEEDS" shall have the meaning assigned to such term under the
Code.
"PRODUCTS" means (i) IMAGENT(R), a sterile, non-pyrogenic white powder
with a diluted perflexane headspace that, after reconstitution into a suspension
of microspheres, is used for contrast enhancement during the indicated
ultrasound imaging procedures and is indicated for use in patients with
suboptimal echocardiograms to opacify the left ventricular chamber and to
improve the delineation of the left ventricular endocardial border, and (ii)
OXYGENTTM (perflubron emulsion), an intravascular oxygen carrier to temporarily
augment oxygen delivery in patients at risk of acute tissue oxygen deficit due
to surgical blood loss, transient anemia, or ischemia (inadequate oxygenation
resulting from blood flow abnormalities).
"PRODUCT PATENT(S)" means all letters patent of the United States,
including any and all extensions, reissues, and renewals thereof, that are now
owned by the Grantor or are acquired by the Grantor during the term of this
Patent and Trademark Security Agreement, and are necessary for the use,
development, manufacture, marketing, sale or distribution of the Products in the
United States, its territories or possessions (the "Territory"), and all letters
patent of the United States that issue from Product Patent Applications,
including, but not limited to:
(1) all letters patent of the United States listed in EXHIBIT A hereto
or added thereto by written agreement of the parties during the term of this
Patent and Trademark Security Agreement; and
(2) all letters patent of the United States that claim know-how that
is now owned by the Grantor or that is acquired by the Grantor during the term
of this Patent and Trademark Security Agreement ("Grantor Know-How") and are
necessary for the use, development, manufacture, marketing, sale or distribution
of the Products in the Territory.
"PRODUCT PATENT APPLICATION(S)" means all applications for letters
patent of the United States, including any and all provisionals, continuations,
continuations-in-part and divisionals that claim inventions, discoveries or
technology that is now owned by the Grantor or is acquired by the Grantor during
the term of this Patent and Trademark Service Agreement, and are necessary for
the use, development, manufacture, marketing, sale or distribution of the
Products in the Territory, including, but not limited to:
(1) all applications for United States letters patent listed in
EXHIBIT B hereto or added thereto by written agreement of the parties during the
term of this Patent and Trademark Agreement; and
(2) all applications for United States letters patent that claim
Grantor Know-How and are necessary for the use, development, manufacture,
marketing, sale or distribution of the Products in the Territory.
"PRODUCT TRADEMARK APPLICATIONS" means all applications for
registration of all United States trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers of the Grantor that are
now owned by the Grantor or are acquired by the Grantor during the term of this
Patent and Trademark Security Agreement, whether currently in use or not and
which will, upon registration thereof, be adopted solely for use in conjunction
with the sale of the Products in the Territory, including, without limitation,
those listed on EXHIBIT D.
"PRODUCT TRADEMARKS" means all United States trademarks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers of the
Grantor that are now owned by the Grantor or are acquired by the Grantor during
the term of this Patent and Trademark Security Agreement, whether currently in
use or not, and are adopted solely for use in conjunction with the sale of the
Products in the Territory, including, without limitation, those listed on
EXHIBIT C and the goodwill associated therewith, all registrations and
recordings thereof.
"SECURITY INTEREST" shall have the meaning assigned to such term in
Section 4(f).
2. GRANT OF SECURITY INTEREST. As collateral security for the prompt
and complete payment and performance when due of the Obligations, the Grantor
hereby pledges, hypothecates, delivers and assigns to the Secured Parties, and
grants to the Secured Parties a continuing security interest junior in priority
only to the Prior Liens in and to, all of the Grantor's right, title and
interest in and to all of the following property now owned or at any time
hereafter acquired by the Grantor or in which the Grantor now has or at any time
in the future may acquire at any time during the term of this Patent and
Trademark Security Agreement, an unrestricted right, title or interest: all
Product Patents and Product Patent Applications; all Product Trademarks together
with any good will of the business associated with the use of such Product
Trademarks; all Product Trademark Applications, all License Rights and all
Accounts (as defined in the Code), contract rights and General Intangibles
arising under or relating to said License Rights and to the extent not otherwise
included, all products and proceeds of any and all of the foregoing
(collectively, the "Collateral").
3. REPRESENTATIONS AND WARRANTIES. The Grantor hereby represents and
warrants that:
(a) TITLE; NO OTHER LIENS. Except for the Prior Liens and for the Lien
granted to the Secured Parties pursuant to this Patent and Trademark Security
Agreement, the Lien granted to the Secured Parties pursuant to the terms of the
Imagent Security Agreement and the Lien granted to the Secured Parties pursuant
to the terms of the General Collateral Security Agreement, the Grantor solely
owns each item of the Collateral free and clear of any and all Liens or claims
of others. No security agreement, financing statement or other public notice
with respect to all or any part of the Collateral is on file or of record in any
public office, except in respect of the Prior Liens and such as may have been
filed in favor of the Secured Parties pursuant to this Patent and Trademark
Security Agreement, the Imagent Security Agreement or the General Collateral
Security Agreement.
(b) PERFECTED JUNIOR PRIORITY LIENS. The Liens granted pursuant to
this Patent and Trademark Security Agreement will constitute upon the completion
of all the filings or notices listed in EXHIBIT E hereto, which Exhibit includes
all UCC-1 financing statements to be filed pursuant to the terms of the Security
Agreement, and all requisite filings to be made with the U.S. Patent and
Trademark Office in the form substantially similar to that of EXHIBIT F and
EXHIBIT G, perfected Liens on all Collateral, which are in priority to all other
Liens on such Collateral, except the Prior Liens, and which are enforceable as
such against all creditors of the Grantor.
(c) CONSENTS. No consent (other than consents that have been obtained
and those set forth in items 7, 8, and 9 on Schedule 2(e) of the Convertible
Secured Note Purchase Agreement) of any party (other than the Grantor) to any
contract that constitutes part of the Collateral is required, or purports to be
required, in connection with the execution, delivery and performance of this
Patent and Trademark Security Agreement.
(d) CHIEF EXECUTIVE OFFICE. The Grantor's chief executive office and
chief place of business is located at 0000 Xxxx Xxxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx
00000.
(e) POWER AND AUTHORITY; DUE AUTHORIZATION. The Grantor has full
power, authority and legal right to enter into this Patent and Trademark
Security Agreement and to grant the Secured Parties the Lien on the Collateral
pursuant to this Patent and Trademark Security Agreement and has taken all
necessary corporate and other action to authorize the execution, delivery and
performance of this Patent and Trademark Security Agreement.
(f) BINDING OBLIGATION. This Patent and Trademark Security Agreement
has been duly executed and delivered by the Grantor and constitutes a legal,
valid and binding obligation of the Grantor enforceable in accordance with its
terms.
(g) NO VIOLATION. The execution, delivery and performance of this
Patent and Trademark Security Agreement will not violate any provision of the
Grantor's Certificate of Incorporation or Bylaws, or of any applicable law or
regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, or of any securities
issued by the Grantor, or of any mortgage, indenture, lease, contract or other
agreement (upon receipt of the consents set forth in items 7, 8 and 9 on
Schedule 2(e) of the Convertible Secured Note Purchase Agreement), instrument or
undertaking to which the Grantor is a party or which purports to be binding upon
the Grantor or upon any of its assets and will not result in the creation or
imposition of any Lien on any of the assets of the Grantor except as
contemplated by this Patent and Trademark Security Agreement, the Security
Agreement and the General Collateral Security Agreement.
(h) NO CONSENT OR APPROVAL. No consent, filing, approval,
registration, recording, or other action is required (x) for the grant by the
Grantor of the Lien on the Collateral pursuant to this Patent and Trademark
Security Agreement or for the execution, delivery or performance of this Patent
and Trademark Security Agreement by the Grantor, or (y) to perfect the Lien
purported to be created by this Patent and Trademark Security Agreement, in each
case other than the consents already obtained and except as set forth in items
7, 8, and 9 on Schedule 2(e) of the Convertible Secured Note Purchase Agreement,
with respect to consents to be obtained after the date hereof and as
contemplated by Section 3(b) above.
(i) VALIDITY OF COLLATERAL. To the knowledge of the Grantor, all of
the Collateral is subsisting and is valid.
(j) ORGANIZATION. The Grantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York and duly
qualified and in good standing in every other state or jurisdiction in which the
nature of the Grantor's business or the ownership of its assets requires such
qualification. The Grantor's state organizational identification number and
federal employer identification number are as set forth on EXHIBIT H hereof.
(k) NAMES USED BY GRANTOR. (i) The actual corporate name of the
Grantor is the name set forth in the preamble above; (ii) the Grantor has no
trade names; (iii) the Grantor has not used any name other than that stated in
the preamble hereto for the preceding five years; and (iv) no entity has merged
into the Grantor or been acquired by the Grantor within the past five years.
(l) EXHIBITS. Set forth on EXHIBITS A, B, C and D are all of the
Product Patents, Product Patent Applications, Product Trademarks and Product
Trademark Applications necessary for the conduct of the Grantor's business with
respect to the Products.
4. COVENANTS. The Grantor covenants and agrees with the Secured
Parties that from and after the date of this Patent and Trademark Security
Agreement until the payment and performance in full by the Grantor of all of its
Obligations:
(a) FURTHER DOCUMENTATION. At any time and from time to time, upon the
written request of the Secured Parties, and at the sole expense of the Grantor,
the Grantor will promptly and duly execute and deliver such further instruments
and documents and take such further action as the Secured Parties may request
for the purpose of obtaining or preserving the full benefits of this Patent and
Trademark Security Agreement and of the rights and powers herein granted,
including, without limitation, (i) the filing of any financing or continuation
statements, or amendments thereto, under the Code in effect in any such
jurisdiction with respect to the Liens created hereby, and (ii) the filing of
all requisite filings to be filed with the U.S. Patent and Trademark office with
respect to the Liens created hereby. The Grantor also hereby authorizes the
Secured Parties to file any such financing or continuation statement, or
amendment thereto, without the signature of the Grantor to the extent permitted
by applicable law. A carbon, photographic or other reproduction of this Patent
and Trademark Security Agreement shall be sufficient as a financing statement
for filing in any jurisdiction.
(b) INDEMNIFICATION. The Grantor agrees to pay, and to save the
Secured Parties harmless from, any and all liabilities, costs and expenses
(including, without limitation, legal fees and expenses) (i) with respect to, or
resulting from, any delay in paying, any and all excise, sales or other taxes
which may be payable or determined to be payable with respect to any of the
Collateral, (ii) with respect to, or resulting from, any delay by the Grantor in
complying with any law or regulation applicable to any of the Collateral, (iii)
in connection with any action taken by the Secured Parties in exercising their
rights under this Patent and Trademark Security Agreement and (iv) in connection
with the preparation and enforcement of this Patent and Trademark Security
Agreement. The obligations under this section 4(b) shall survive termination of
this Patent and Trademark Security Agreement.
(c) MAINTENANCE OF RECORDS. The Grantor will keep and maintain at its
own cost and expense satisfactory and complete records of the Collateral. The
Grantor hereby grants to the Secured Parties access to all of the Grantor's
books and records pertaining to the Collateral, and the Grantor shall turn over
any such books and records for inspection at the office of the Grantor to the
Secured Parties or to their representatives during normal business hours at the
request of the Secured Parties.
(d) LIMITATION ON LIENS ON COLLATERAL. Except as provided in paragraph
(f) below, the Grantor will not create, incur or permit to exist, will defend at
its own expense the Collateral against, and will take such other action as is
necessary to remove, any Lien or claim on or to the Collateral, other than the
Prior Liens, and will defend the right, title and interest of the Secured
Parties in and to any of the Collateral against the claims and demands of all
persons whomsoever, other than the Prior Lienholders.
(e) LIMITATIONS ON DISPOSITIONS OF COLLATERAL. The Grantor will not
sell, transfer, or assign any of the Collateral, or attempt, offer or contract
to do so without express, written agreement by the Secured Parties.
(f) LIMITATIONS ON LICENSING OF THE COLLATERAL. Grantor may execute
non-exclusive, revocable licenses to Product Patents and Product Trademarks, and
may disclose the contents of Products Patent Applications under fully executed
confidentiality agreements, only upon prior written notice to Secured Parties
and only when the execution of such license is reasonably unlikely to (i)
diminish the value of the Collateral, (ii) have a material impact on the rights
of the Secured Parties and (iii) otherwise reasonably be considered to have a
material adverse effect on the security interest granted to the Secured Parties
in the Collateral in Section 2 of this Patent and Trademark Security Agreement
(the "Security Interest"). Any and all such licenses shall contain provisions
that enable the Secured Parties, at their discretion, to revoke such Product
Patent and/or Product Trademark licenses when the Secured Parties have a
reasonable belief that their rights are being adversely effected. The Secured
Parties will not exercise their rights under any such provisions until such time
as the Prior Liens have been terminated.
(g) FURTHER IDENTIFICATION OF COLLATERAL. The Grantor will furnish to
the Secured Parties from time to time, upon the request of the Secured Parties,
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Secured Parties may
reasonably request, all in reasonable detail.
(h) NOTICES. The Grantor will advise the Secured Parties promptly, in
reasonable detail, at its address set forth in accordance with Section 13
hereof, (i) of any Lien (other than Liens permitted hereunder) on, or claim
asserted against, any of the Collateral and (ii) of the occurrence of any other
event which could reasonably be expected to have a material adverse effect on
the value of any material portion of the Collateral or on the Liens created
hereunder.
(i) PATENTS.
(i) The Grantor will, at Grantor's expense, take commercially
reasonable steps to monitor and manage its portfolio of Product
Patents and Product Patent Applications, and will notify the Secured
Parties immediately if it knows that any application relating to any
Product Patent or Product Patent Application may become abandoned or
of any adverse determination or development (including, without
limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office or any court or tribunal in any country) regarding
the patentability of any Product Patent Application, the
enforceability of any Product Patent or Grantor's ownership of any
Product Patent or Product Patent Application.
(ii) The Grantor will, at Grantor's expense, with respect to any
Product Patent that the Grantor obtains after the date hereof,
promptly (i) take all actions necessary so that the Secured Parties
shall obtain a perfected Security Interest in such Product Patent and
(ii) provide to the Secured Parties updated versions of EXHIBIT A,
listing all Product Patents and all License Rights in which Grantor
has an interest. With respect to this paragraph 4(i)(ii), an Event of
Default is "continuing" if, after a period of 30 days following
issuance of any Product Patent, the Grantor has not provided notice
thereof to the Secured Parties.
(iii) The Grantor will, at Grantor's expense, with respect to any
Product Patent Application that the Grantor obtains after the date
hereof, promptly (i) take all actions necessary so that the Secured
Parties shall obtain a perfected Security Interest in such Product
Patent Application and (ii) provide to the Secured Parties updated
versions of EXHIBIT B listing all such Product Patent Applications.
With respect to this paragraph 4(i)(iii), an Event of Default is
continuing if after a period of 30 days following receipt of a filing
receipt that identifies the serial number thereof, Grantor has not
provided notice thereof to the Secured Parties.
(iv) Upon request of the Secured Parties, the Grantor shall
execute and deliver any and all agreements, instruments, documents,
and papers as the Secured Parties may request to evidence the Secured
Parties' Security Interest in any or all Product Patents or Product
Patent Applications.
(v) The Grantor will, at its own expense, take all commercially
reasonable steps, including, without limitation, those required in any
proceeding before the United States Patent and Trademark Office, to
reasonably maintain and pursue each Product Patent and Product Patent
Application including, without limitation, payment of maintenance and
other fees.
(vi) In the event that the Grantor believes that any Product
Patent included in the Collateral has been infringed by a third party,
the Grantor shall, within 20 days of forming a belief that the
Collateral is being infringed by a third party, obtain a legal opinion
from outside counsel and notify the Secured Parties of such
infringement and shall, if appropriate in the Grantor's sole
discretion, at its own expense, xxx for infringement, seeking
injunctive relief where appropriate and to recover any and all damages
for such infringement, or take such other actions as the Grantor shall
reasonably deem appropriate under the circumstances to protect such
Patent.
(j) TRADEMARKS.
(i) The Grantor will, with respect to each Product Trademark
identified in EXHIBIT C hereto as it may be amended, supplemented or
otherwise modified from time to time, take reasonable steps to monitor
its portfolio of trademarks, and for each Product Trademark set forth
on EXHIBIT C, the Grantor will (i) continue to use or have used such
Product Trademark to the extent necessary to maintain such Product
Trademark in full force free from any claim of abandonment for
non-use, (ii) maintain as in the past the quality of products and
services offered under such Product Trademark to the extent
appropriate, (iii) employ such Product Trademark with the appropriate
notice of registration, (iv) not adopt or use any xxxx which is
confusingly similar or a colorable imitation of such Product Trademark
unless the Secured Parties shall obtain a perfected Security Interest
in the Company's interest in such xxxx pursuant to this Patent and
Trademark Security Agreement, junior only in priority to the Prior
Liens, and (v) not do any act or knowingly omit to do any act whereby
any such Product Trademark may become invalidated, abandoned, rendered
unenforceable or otherwise diminish Grantor's rights therein.
(ii) The Grantor will promptly notify the Secured Parties if any
application or registration relating to any Product Trademark may
become opposed, abandoned, canceled or dedicated to the public, or of
any adverse determination or development (including, without
limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office or any court or tribunal in any country) regarding
the validity, enforceability or Grantor's ownership interest in such
Product Trademark; or its right to register the same or to keep and
maintain the same.
(iii) The Grantor will, at Grantor's expense, with respect to any
Product Trademark or Product Trademark Application that is registered
or for which an application for registration is filed after the date
hereof, promptly (i) take all actions necessary so that the Secured
Parties shall obtain a perfected Security Interest in such Product
Trademark or Product Trademark Application and (ii) provide to the
Secured Parties an updated version of EXHIBIT C and/or EXHIBIT D
listing all registered Product Trademarks and Product Trademark
Applications in which the Grantor has an interest. With respect to
this paragraph 4(j)(iii), an Event of Default is continuing if after a
period of 30 days following the mailing of the Certificate of
Registration or 30 days following receipt of a filing receipt that
identifies the serial number thereof, Grantor has not provided notice
thereof to the Secured Parties.
(iv) Upon request of the Secured Parties, the Grantor shall
execute and deliver any and all agreements, instruments, documents,
and papers as the Secured Parties may request to evidence the Secured
Parties' Security Interest in any Product Trademark set forth on
EXHIBIT C and the goodwill and general intangibles of the Grantor
relating thereto or represented thereby, and the Grantor hereby
constitutes the Secured Parties their attorney-in-fact to execute and
file all such writings for the foregoing purposes, all acts of such
attorney being hereby ratified and confirmed; such power being coupled
with an interest is irrevocable until the Grantor shall have paid and
performed in full all of the Obligations.
(v) The Grantor will, at Grantor's expense, take all reasonable
and necessary steps, including, without limitation, in any proceeding
before the United States Patent and Trademark Office to maintain and
pursue each Product Trademark Application (and to obtain the relevant
registration) and to maintain the registration of the Product
Trademarks, including, without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability.
(vi) In the event that Grantor believes that any Product
Trademark included in the Collateral has been infringed,
misappropriated or diluted by a third party, the Grant shall, within
10 days of forming such belief, send a written notice to such third
party demanding that they cease such infringement, misappropriation or
dilution, and the Grantor shall notify the Secured Parties and, if
appropriate in Grantor's sole discretion, at its own expense, xxx for
infringement, misappropriation or dilution, seeking injunctive relief
where appropriate and to recover any and all damages for such
infringement, misappropriation or dilution, or take such other action
as the Grantor reasonably, in its sole discretion, deems appropriate
under the circumstances to protect such Trademark. With respect to
this paragraph, an Event of Default is continuing if a copy of any
written notice of infringement, misappropriation or dilution is not
been provided to the Secured Parties within 20 days following the date
such communication was supposed to have been provided to the
infringing party.
(k) CHANGE OF NAME; LOCATION OF COLLATERAL; RECORDS; PLACE OF
BUSINESS. The Grantor shall not make any change (a) in its name, (b) in the
location of its chief executive office, its principal place of business, any
office in which it maintains books or records relating to Collateral owned by it
or any office facility at which Collateral owned by it is located (including the
establishment of any such new office or facility) from the locations set forth
in section 3(d) hereof, (c) in its identity or type of organization or corporate
structure, (d) in its Federal Taxpayer Identification Number or organizational
identification number or (e) in its jurisdiction of organization unless (i) the
Grantor provides the Secured Parties at least 30 days prior written notice of
such change and (ii) all filings have been made under the Code or otherwise that
are required in order for the Secured Parties to continue at all times following
such change to have a valid, legal and perfected security interest in all the
Collateral, junior in priority only to the Prior Liens.
(l) SUBSIDIARIES. This Patent and Trademark Security Agreement is
entered into on behalf of and for the benefit of the Grantor and its
subsidiaries and other entities controlled by the Grantor which have rights in
the Collateral. The security interest granted by the Grantor hereunder is
intended to include all rights of the Grantor in and to the Collateral,
including any rights of its subsidiaries and such other entities in and to such
Collateral, and the Grantor will not permit such subsidiaries and entities to
exercise any of their rights with respect to the Collateral.
5. PERFORMANCE BY SECURED PARTIES OF GRANTOR'S OBLIGATIONS. If the
Grantor fails to perform or comply with any of its agreements contained herein
and the Secured Parties, as provided for by the terms of this Patent and
Trademark Security Agreement, shall itself perform or comply, or otherwise cause
performance or compliance, with such agreements, the expenses of the Secured
Parties incurred in connection with such performance or compliance shall be
payable by the Grantor to the Secured Parties on demand and shall constitute
Obligations secured hereby.
6. SECURED PARTIES' APPOINTMENT AS ATTORNEY-IN-FACT.
(a) The Grantor hereby irrevocably constitutes and appoints, subject
to the rights of the Prior Lienholders, the Secured Parties and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Grantor and in the name of the Grantor or in its own name, from
time to time in the Secured Parties' discretion, for the purpose of carrying out
the terms of this Patent and Trademark Security Agreement, to take any and all
appropriate action and to execute and deliver any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Patent and Trademark Security Agreement and, without limiting the
generality of the foregoing, hereby gives the Secured Parties the power and
right, on behalf of the Grantor, upon the occurrence and continuance of an Event
of Default, to do the following:
(i) to ask, demand, collect, receive and give acquittances and
receipts for any and all moneys due and to become due under any License Rights
and, in the name of the Grantor or its own name or otherwise, to take possession
of and endorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any License Rights and to file
any claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Secured Parties for the purpose of
collecting any and all such moneys due under any License Rights whenever
payable;
(ii) to pay or discharge taxes, liens, security interests or
other encumbrances levied or placed on or threatened against the Collateral, to
effect any repairs or any insurance called for by the terms of this Patent and
Trademark Security Agreement and to pay all or any part of the premiums therefor
and the costs thereof; and
(iii) to direct any party liable for any payment under any of the
License Rights to make payment of any and all moneys due and to become due
thereunder directly to the Secured Parties or as the Secured Parties shall
direct;
(iv) to receive payment of and receipt for any and all moneys,
claims and other amounts due and to become due at any time in respect of or
arising out of any Collateral;
(v) to commence and prosecute any suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect the
Collateral or any part thereof and to enforce any other right in respect of any
Collateral;
(vi) to defend any suit, action or proceeding brought against the
Grantor with respect to any Collateral;
(vii) to settle, compromise, or adjust any suit, action or
proceeding described above and, in connection therewith, to give such discharges
or releases as the Secured Parties may deem appropriate; and
(viii) generally to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though the Secured Parties were the absolute owner thereof for all
purposes, and to do, at the Secured Parties' option all acts and things which
the Secured Parties deem necessary to protect, preserve or realize upon the
Collateral and the Secured Parties' Security Interest therein, in order to
effect the intent of this Patent and Trademark Security Agreement, all as fully
and effectively as the Grantor might do.
(b) This power of attorney is a power coupled with an interest and
shall be irrevocable. Notwithstanding the foregoing, the Grantor further agrees
to execute any additional documents which the Secured Parties may require in
order to confirm this power of attorney, or which the Secured Parties may deem
necessary to enforce any of its rights contained in this Patent and Trademark
Security Agreement.
(c) The powers conferred on the Secured Parties hereunder are solely
to protect their interests in the Collateral and shall not impose any duty upon
it to exercise any such powers. The Secured Parties shall be accountable only
for amounts that it actually receives as a result of the exercise of such powers
and neither it nor any of its officers, directors, employees or agents shall be
responsible to the Grantor for any act or failure to act, except for their own
gross (not mere) negligence or willful misconduct.
(d) The Grantor also authorizes the Secured Parties to execute, in
connection with the sale provided for in this Section 6, any endorsements,
assignments or other instruments of conveyance or transfer with respect to the
Collateral.
7. REMEDIES.
(a) If an Event of Default (i) has occurred and has continued for a
period of 30 consecutive days without cure by the Grantor with respect to items
1, 2, and 3 set forth in the definition of Event of Default, or (ii) has
occurred and is continuing with respect all other items set forth in the
definition of Event of Default, the Secured Parties may exercise, in addition to
all other rights and remedies granted to them in this Patent and Trademark
Security Agreement and in any other instrument or agreement securing, evidencing
or relating to the Obligations, all rights and remedies of a secured party under
the Code. Without limiting the generality of the foregoing, the Secured Parties,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below or expressly provided for) to or upon the Grantor or any other person
(all and each of which demands, defenses, advertisements and notices are, to the
extent permitted by applicable law, hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, license, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), at public or private sale or
sales, at any exchange, broker's board or office of the Secured Parties or
elsewhere upon such terms and conditions as they may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Secured Parties shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in the Grantor, which right or
equity is hereby waived, to the extent permitted by applicable law, or released.
(b) The Grantor further agrees that, if an Event of Default has
occurred and is continuing, at the Secured Parties' request, to assemble the
Collateral and make it available to the Secured Parties at places which the
Secured Parties shall reasonably select, whether at the Grantor's premises or
elsewhere. The Secured Parties shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Secured Parties hereunder,
including, without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Obligations, in such order as the Secured
Parties may elect, and only after such application and after the payment by the
Secured Parties of any other amount required by any provision of law, must the
Secured Parties account for the surplus, if any, to the Grantor. To the extent
permitted by applicable law, the Grantor waives all claims, damages and demands
it may acquire against the Secured Parties arising out of the exercise by it of
any rights hereunder, provided, that nothing contained in this section 7 shall
relieve the Secured Parties from liability arising solely from its gross
negligence or willful misconduct. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition. The Grantor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay the
Obligations and the fees and disbursements of any attorneys employed by the
Secured Parties to collect such deficiency.
(c) For the purpose of enabling the Secured Parties to exercise rights
and remedies under this Section 7 at such time as the Secured Parties shall be
lawfully entitled to exercise such rights and remedies, the Grantor hereby
grants to the Secured Parties an irrevocable, non-exclusive license (exercisable
without payment of royalty or other compensation to the Grantor) to use, license
or sublicense any of the Collateral consisting of Intellectual Property (as
defined in the Convertible Secured Note Purchase Agreement) now owned or
hereafter acquired by the Grantor or as to which the Grantor has the right to
use, and wherever the same may be located, and including in such license
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Secured Parties
shall be exercised, at the option of the Secured Parties, upon the occurrence
and during the continuation of an Event of Default; provided that any license,
sublicense or other transaction entered into by the Secured Parties in
accordance herewith shall be binding upon the Grantor notwithstanding any
subsequent cure of an Event of Default.
(d) All rights, powers and remedies provided to the Secured Parties in
this Agreement are subject to the rights, powers and remedies of the Prior
Lienholders set forth under the Prior Lienholders Security Agreements and to the
terms and provisions of those certain Intercreditor Agreements, dated as of even
date herewith, among the Grantor, the Prior Lienholders signatory thereto and
the Secured Parties.
8. SEVERABILITY. Any provision of this Patent and Trademark Security
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
9. PARAGRAPH HEADINGS. The paragraph headings used in this Patent and
Trademark Security Agreement are for convenience of reference only and are not
to affect the construction hereof or be taken into consideration in the
interpretation hereof.
10. CUMULATIVE REMEDIES. The rights and remedies provided herein, in
the Imagent Security Agreement, in the General Collateral Security Agreement, in
the Securities Purchase Agreements and in the Debentures are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or remedies
provided by law or in equity or by statute.
11. WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS. None of the terms
or provisions of this Patent and Trademark Security Agreement may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by the Grantor and the holders of a majority of the outstanding
aggregate principal amount of the Notes; provided, however, that Section 7(d)
hereof may not be waived, amended, supplemented or otherwise modified, nor may a
provision inconsistent with Section 7(d) hereof be added, unless such written
instrument is also executed by the Prior Lienholders. No course of dealing
between the Grantor and the Secured Parties nor any delay in exercising or
failure to exercise any rights, power or privilege under this Patent and
Trademark Security Agreement shall operate as a waiver. This Patent and
Trademark Security Agreement shall be binding upon the successors and assigns of
the Grantor and shall inure to the benefit of the Secured Parties and their
successors and assigns. The Grantor may not assign its rights or obligations
under this Patent and Trademark Security Agreement without the prior written
consent of the Secured Parties.
12. TERMINATION OF SECURITY INTEREST; RELEASE OF COLLATERAL. Upon the
payment and performance in full by the Grantor of its Obligations, the Security
Interest shall terminate and all rights to the Collateral shall revert to the
Grantor.
13. NOTICES. Any notices required or permitted to be given under the
terms of this Agreement shall be in writing and shall be sent by mail, personal
delivery, telephone line facsimile transmission or courier and shall be
effective five days after being placed in the mail, if mailed, or upon receipt,
if delivered personally, by telephone line facsimile transmission or by courier,
in each case addressed to a party at such party's address (or telephone line
facsimile transmission number) shown below or such other address (or telephone
line facsimile transmission number) as a party shall have provided by notice to
the other party in accordance with this provision. In the case of any notice to
the Grantor, such notice shall be addressed to the Grantor at 0000 Xxxx
Xxxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention: President (telephone line
facsimile number (000) 000-0000), and a copy shall also be given to: Stroock &
Stroock & Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx Xxxxxxx, Esq. (telephone line facsimile transmission number (212)
806-6006), and in the case of any notice to the Secured Parties, such notice
shall be addressed.
14. INTEGRATION. This Patent and Trademark Security Agreement
represents the agreement of the Grantor and the Secured Parties with respect to
the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Secured Parties relative to subject matter
hereof not expressly set forth or referred to herein.
15. GOVERNING LAW. This Patent and Trademark Security Agreement and
the rights and obligations of the Grantor and the Secured Parties under this
Patent and Trademark Security Agreement shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York, except to the
extent that under the New York Uniform Commercial Code the laws of another
jurisdiction govern matters of perfection and the effect of perfection or
non-perfection of any Security Interest granted hereunder, and except to the
further extent that the United States patent and trademark laws are applicable.
16. COUNTERPARTS. This Patent and Trademark Security Agreement may be
executed in counterparts and by the parties hereto on separate counterparts,
each of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument. A telephone line facsimile transmission
of this Patent and Trademark Security Agreement bearing a signature on behalf of
a party hereto shall be legal and binding on such party.
17. WAIVER OF JURY TRIAL. To the extent permitted by applicable law,
each of the Grantor and the Secured Parties waives any right to have a jury
participate in resolving any dispute, whether sounding in contract, tort, or
otherwise between the parties hereto arising out of, connected with, related to,
or incidental to the relationship between any of them in connection with this
Patent and Trademark Security Agreement or the transactions contemplated hereby.
Instead, any such dispute resolved in court will be resolved in a bench trial
without a jury, submitted to jurisdiction in the Southern District of New York
and New York State Courts located in the County of New York.
IN WITNESS WHEREOF, the Grantor has caused this Patent and Trademark
Security Agreement to be duly executed and delivered as of the date first above
written.
GRANTOR:
ALLIANCE PHARMACEUTICAL CORP.
By:
----------------------------------
Name: Xxxxxxxx X. Xxxx
Title: President and Chief Operating
Officer
ACKNOWLEDGED AND AGREED BY SECURED PARTIES:
