EXHIBIT 10.2
PATENT AND TRADEMARK SECURITY AGREEMENT
Date: December 12, 2007
DEBTOR: Reclamation Consulting and Applications, Inc.
SECURED PARTY: Pala Investments Holdings Limited
RECITALS
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A. The Debtor and the Secured Party are parties to a Secured
Convertible Debenture of even date herewith (as the same may be amended,
modified, extended or cancelled from time to time, the "DEBENTURE") pursuant to
which the Secured Party has agreed to extend to the Debtor certain credit
accommodations.
B. It is a condition precedent to the obligation of the Secured Party
to extend credit accommodations pursuant to the terms of the Debenture that this
Patent and Trademark Security Agreement (this "AGREEMENT") be executed and
delivered by the Debtor.
NOW, THEREFORE, in consideration of the credit accommodations which
have been or may be extended to the Debtor and for other good and valuable
consideration, the Debtor hereby covenants and agrees with the Secured Party as
follows:
1. DEFINED TERMS. All terms defined in the Recitals hereto or in the
Debenture that are not otherwise defined herein shall have the meanings given
them therein. In addition, the following terms have the meanings set forth
below:
"AFFILIATE" has the meaning assigned in Subsection 3(d).
"PATENTS" means all of the Debtor's right, title and interest
in and to patents and patent applications, including, without
limitation, the inventions and improvements described and claimed
therein, all patentable inventions and those patents and patent
applications listed on Exhibit A attached hereto and made a part hereof
and all patents and the reissues, divisions, continuations, renewals,
extensions and continuations-in-part of any of the foregoing, and all
income, royalties, damages and payments now or hereafter due and/or
payable under or with respect to any of the foregoing, including,
without limitation, damages and payments for past, present and future
infringements of any of the foregoing and the right to xxx for past,
present and future infringements of any of the foregoing, all as
presently existing or hereafter arising or acquired.
"SECURITY INTEREST" has the meaning given in Section 2.
"TRADEMARKS" means all of the Debtor's right, title and
interest in and to: (i) trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, collective membership marks, logos, other business
identifiers, prints and labels on which any of the foregoing have
appeared or may appear, all registrations and recordings thereof, and
all applications (other than "intent to use" applications until a
verified statement of use is filed with respect to such applications)
filed in connection therewith, including, without limitation, the
trademarks and applications listed on Exhibit B attached hereto and
made a part hereof; (ii) licenses, fees or royalties with respect to
the foregoing; (iii) the right to xxx for past, present and future
infringement, dilution and damages therefore; and (iv) licenses
thereunder; all as presently existing or hereafter arising or acquired;
and all rights corresponding to any of the foregoing throughout the
world and the goodwill of the Debtor's business connected with the use
of, and symbolized by, the foregoing.
2. SECURITY INTEREST. To secure the complete and timely payment and
satisfaction of the Indebtedness, the Debtor hereby irrevocably pledges and
assigns to, and grants the Secured Party a security interest (the "SECURITY
INTEREST") with power of sale to the extent permitted by law, in the Patents and
in the Trademarks. As set forth in the Debenture, the Security Interest is
coupled with a security interest in the Collateral. This Agreement grants only
the Security Interest herein described, is not intended to and does not affect
any present transfer of title of any trademark registration or application and
makes no assignment and grants no right to assign or perform any other action
with respect to any intent to use trademark application, unless such action is
permitted under 15 U.S.C. ss. 1060.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The Debtor represents,
warrants and agrees as follows:
(a) EXISTENCE; AUTHORITY. The Debtor is a valid and subsisting
corporation duly incorporated and in good standing under the laws of
the State of Colorado, and the Debtor has no subsidiaries. This
Agreement has been duly authorized by all necessary corporate action on
the part of the Debtor and constitutes a valid obligation of the Debtor
legally binding upon it and enforceable in accordance with its terms.
The execution, delivery and performance of this Agreement by the Debtor
have been duly authorized by all necessary corporate action and do not
and will not violate the provisions of, or constitute a default under,
any presently applicable law or its Articles of Incorporation, Bylaws,
any other organizational document or any agreement or instrument to
which the Debtor is a party. The authorization, execution, delivery and
performance of this Agreement do not require notification to,
registration with, or consent or approval by, any federal, state or
local regulatory body or administrative agency.
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(b) PATENTS. Exhibit A accurately lists all Patents owned or
controlled by the Debtor as of the date hereof, or to which the Debtor
has a right as of the date hereof to have assigned to it, and
accurately reflects the existence and status of applications and
letters patent pertaining to the Patents as of the date hereof. If
after the date hereof, the Debtor owns, controls or has a right to have
assigned to it any Patents not listed on Exhibit A, or if Exhibit A
ceases to accurately reflect the existence and status of applications
and letters patent pertaining to the Patents, then the Debtor shall
within 60 days provide written notice to the Secured Party with a
replacement Exhibit A, which upon acceptance by the Secured Party shall
become part of this Agreement. No Patent has been adjudged invalid or
unenforceable by a court of competent jurisdiction nor has any such
Patent been cancelled, in whole or in part and each such Patent is
presently subsisting. The Debtor is the sole and exclusive owner of the
entire and unencumbered right, title and interest in and to each
Patent, free and clear of any liens, charges and encumbrances other
than Permitted Liens, including without limitation, shop rights and
covenants by the Debtor not to xxx third persons. The Debtor has no
notice of any suits or actions commenced or threatened with reference
to any Patent.
(c) TRADEMARKS. Exhibit B accurately lists all Trademarks
owned or controlled by the Debtor as of the date hereof and accurately
reflects the existence and status of Trademarks and all applications
and registrations pertaining thereto as of the date hereof; provided,
however, that Exhibit B need not list common law marks (i.e.,
Trademarks for which there are no applications or registrations) which
are not material to the Debtor's business(es). If after the date
hereof, the Debtor owns or controls any Trademarks not listed on
Exhibit B (other than common law marks which are not material to the
Debtor's business(es)), or if Exhibit B ceases to accurately reflect
the existence and status of applications and registrations pertaining
to the Trademarks, then the Debtor shall promptly provide written
notice to the Secured Party with a replacement Exhibit B, which upon
acceptance by the Secured Party shall become part of this Agreement. No
Trademark has been adjudged invalid or unenforceable by a court of
competent jurisdiction nor has any such Trademark been cancelled, in
whole or in part and each such Trademark is presently subsisting. The
Debtor is the sole and exclusive owner of the entire and unencumbered
right, title and interest in and to each Trademark, free and clear of
any liens, charges and encumbrances other than Permitted Liens,
including without limitation, shop rights and covenants by the Debtor
not to xxx third persons. The Debtor has no notice of any suits or
actions commenced or threatened with reference to any Trademark.
(d) AFFILIATES. As of the date hereof, no affiliate of the
Debtor (each, an "Affiliate") owns, controls, or has a right to have
assigned to it any items that would, if such item were owned by the
Debtor, constitute Patents or Trademarks. If after the date hereof any
Affiliate owns, controls, or has a right to have assigned to it any
such items, then the Debtor shall promptly either: (i) cause such
Affiliate to assign all of its rights in such item(s) to the Debtor; or
(ii) notify the Secured Party of such item(s) and cause such Affiliate
to execute and deliver to the Secured Party a patent and trademark
security agreement substantially in the form of this Agreement.
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(e) TITLE. The Debtor (i) will have, at the time the Debtor
acquires any rights in Patents or Trademarks hereafter arising,
absolute title to each such Patent or Trademark free and clear of all
liens and encumbrances, and (ii) will keep all Patents and Trademarks
free and clear of all liens and encumbrances.
(f) NO SALE. Except as permitted in the Debenture, the Debtor
will not assign, transfer, encumber or otherwise dispose of the Patents
or Trademarks, or any interest therein, without the Secured Party's
prior written consent.
(g) DEFENSE. The Debtor will at its own expense and using
commercially reasonable efforts, protect and defend the Patents and
Trademarks against all claims or demands of all persons and entities.
(h) MAINTENANCE. The Debtor agrees to maintain the quality of
any and all products in connection with which the Patents and
Trademarks are used, consistent with commercially reasonable business
practices. Upon the occurrence of an Event of Default, the Debtor
agrees that the Secured Party, or a conservator appointed by the
Secured Party, shall have the right to establish such additional
product quality controls as the Secured Party, or said conservator, in
its reasonable judgment, may deem necessary to assure maintenance of
the quality of products sold by the Debtor in connection with the
Patents and Trademarks. The Debtor will at its own expense maintain the
Patents and the Trademarks to the extent reasonably advisable in its
business including, but not limited to, filing all applications to
obtain letters patent or trademark registrations and all affidavits,
maintenance fees, annuities, and renewals possible with respect to
letters patent, trademark registrations and applications therefor. The
Debtor covenants that it will not abandon nor fail to pay any
maintenance fee or annuity due and payable on any Patent or Trademark,
nor fail to file any required affidavit or renewal in support thereof,
without first providing the Secured Party: (i) sufficient written
notice, of at least 30 days, to allow the Secured Party to timely pay
any such maintenance fees or annuities which may become due on any
Patents or Trademarks, or to file any affidavit or renewal with respect
thereto, and (ii) a separate written power of attorney or other
authorization to pay such maintenance fees or annuities, or to file
such affidavit or renewal, should such be necessary or desirable.
(i) SECURED PARTY'S RIGHT TO TAKE ACTION. If the Debtor fails
to perform or observe any of its covenants or agreements set forth in
this Section 3, and if such failure continues for a period of ten (10)
calendar days after the Secured Party gives the Debtor written notice
thereof (or, in the case of the agreements contained in subsection (h),
immediately upon the occurrence of such failure, without notice or
lapse of time), or if the Debtor notifies the Secured Party that it
intends to abandon a Patent or Trademark, the Secured Party may (but
need not) perform or observe such covenant or agreement or take steps
to prevent such intended abandonment on behalf and in the name, place
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and stead of the Debtor (or, at the Secured Party's option, in the
Secured Party's own name) and may (but need not) take any and all other
actions which the Secured Party may reasonably deem necessary to cure
or correct such failure or prevent such intended abandonment.
(j) COSTS AND EXPENSES. Except to the extent that the effect
of such payment would be to render any loan or forbearance of money
usurious or otherwise illegal under any applicable law, the Debtor
shall pay the Secured Party on demand the amount of all moneys expended
and all costs and expenses (including reasonable attorneys' fees and
disbursements) incurred by the Secured Party in connection with or as a
result of the Secured Party's taking action under subsection (i) or
exercising its rights under Section 6, together with interest thereon
from the date expended or incurred by the Secured Party at the penalty
rate described in subsection 7.2.3 of the Debenture.
(k) POWER OF ATTORNEY. To facilitate the Secured Party's
taking action under subsection (i) and exercising its rights under
Section 6, the Debtor hereby irrevocably appoints (which appointment is
coupled with an interest) the Secured Party, or its delegate, as the
attorney-in-fact of the Debtor with the right (but not the duty) from
time to time to create, prepare, complete, execute, deliver, endorse or
file, in the name and on behalf of the Debtor, any and all instruments,
documents, applications, financing statements, and other agreements and
writings required to be obtained, executed, delivered or endorsed by
the Debtor under this Section 3, or, necessary for the Secured Party,
after an Event of Default, to enforce or use the Patents or Trademarks
or to grant or issue any exclusive or non-exclusive license under the
Patents or Trademarks to any third party, or to sell, assign, transfer,
pledge, encumber or otherwise transfer title in or dispose of the
Patents or Trademarks to any third party. The Debtor hereby ratifies
all that such attorney shall lawfully do or cause to be done by virtue
hereof. The power of attorney granted herein shall terminate upon the
termination of the Debenture as provided therein and the payment and
performance of the Indebtedness.
4. DEBTOR'S USE OF THE PATENTS AND TRADEMARKS. The Debtor shall be
permitted to control and manage the Patents and Trademarks, including the right
to exclude others from making, using or selling items covered by the Patents and
Trademarks and any licenses thereunder, in the same manner and with the same
effect as if this Agreement had not been entered into, so long as no Event of
Default occurs and remains uncured.
5. EVENTS OF DEFAULT. Each of the following occurrences shall
constitute an event of default under this Agreement (herein called "EVENT OF
DEFAULT"): (a) an Event of Default, as defined in the Debenture, shall occur; or
(b) the Debtor shall fail promptly to observe or perform any covenant or
agreement herein binding on it; or (c) any of the representations or warranties
contained in Section 3 shall prove to have been incorrect in any material
respect when made.
6. REMEDIES. Upon the occurrence of an Event of Default, the Secured
Party may, at its option and from time to time, exercise any one or more of the
following rights or remedies:
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(a) The Secured Party may exercise any or all remedies
available under the Debenture.
(b) The Secured Party may sell, assign, transfer, pledge,
encumber or otherwise dispose of the Patents and Trademarks.
(c) The Secured Party may enforce the Patents and Trademarks
and any licenses thereunder, and if the Secured Party shall commence
any suit for such enforcement, the Debtor shall, at the request of the
Secured Party, do any and all lawful acts and execute any and all
proper documents required by the Secured Party in aid of such
enforcement.
7. NOTICES. All notices, requests, demands and other communications to
be given hereunder shall be in writing and shall be deemed to have been duly
given on the date of personal service or transmission by fax if such
transmission is received during the normal business hours of the addressee, or
on the first business day after sending the same by overnight courier service or
by telegram, or on the third business day after mailing the same by first class
mail, or on the day of receipt if sent by certified or registered mail,
addressed as set forth below, or at such other address as any party may
hereafter indicate by notice delivered as set forth in this Section 7:
If to the Debtor: Reclamation Consulting and
Applications, Inc.
000 Xxxxx Xxxxxxxx, Xxxxx X
Xxx Xxxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxx
President
With a copy (which shall
not constitute notice) to: August Law Group, P.C.
00000 Xxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. August, Esquire
President
If to the Secured Party: Pala Investments Holdings Limited
00 Xxxxxx Xxxxxx
Xx. Xxxxxx
Xxxxxx
XX0 0XX
Channel Islands
Attn: Xx. Xxxxx Xxxxxx
Director
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With a copy (which shall
not constitute notice) to: Pala Investments AG
Xxxxxxxxxxx 00
0000 Xxx
Xxxxxxxxxxx
Attn: Xx. Xxx Xxxxxx,
Managing Director
8. NO DUTIES OWED BY SECURED PARTY. The Debtor acknowledges and agrees
that the Secured Party shall not be obligated to preserve any rights the Debtor
may have against prior parties, to realize on the Patents and Trademarks at all
or in any particular manner or order, or to apply any cash proceeds of Patents
and Trademarks in any particular order of application. The Secured Party has not
made any representations or warranties with respect to this Agreement.
9. GENERAL.
(a) WAIVER OR MODIFICATION. No failure on the part of the
Secured Party in exercising any power or right hereunder will operate
as a waiver of the power or right nor will any single or partial
exercise of such right or power preclude exercise of any other right or
power hereunder. No amendment, modification or waiver of any condition
of this Agreement or consent to any departure by the Debtor therefrom
will be effective unless it is in writing signed by the Secured Party.
No notice to or demand on the Debtor will entitle the Debtor to any
other further notice or demand in similar or other circumstances unless
specifically provided for in this Agreement.
(b) TIME. Time is of the essence in the performance of this
Agreement.
(c) FURTHER ASSURANCES. The parties to this Agreement will do,
execute and deliver or will cause to be done, executed and delivered
all such further acts, documents and things as may be reasonably
required for the purpose of giving effect to this Agreement.
(d) ASSIGNMENT. The Debtor may not assign this Agreement or
its interest herein or any part hereof except with the prior written
consent of the Secured Party. The Secured Party may assign the Loan or
this Agreement, or its interest in the Loan or this Agreement or any
part thereof upon ten (10) days' written notice to the Debtor and
provided that (i) the assignee is an affiliated or associated company
of the Debtor, or a successor company to the Debtor following any
re-domestication, asset sale, merger, consolidation or other
reorganization, and (ii) agrees to be bound by the terms of this
Agreement to the extent of such assignment.
(e) SURVIVAL. All representations and warranties contained in
this Agreement or in any other agreement between the Debtor and the
Secured Party shall survive the execution, delivery and performance of
this Agreement and the creation and payment of the Indebtedness.
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(f) CUMULATIVE REMEDIES. All rights and remedies of the
Secured Party shall be cumulative and may be exercised singularly or
concurrently, at the Secured Party's option, and the exercise or
enforcement of any one such right or remedy shall neither be a
condition to nor bar the exercise or enforcement of any other.
(g) GOVERNING LAW AND VENUE. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of
California applicable to the performance and enforcement of contracts
made within such state, without giving effect to the law of conflicts
of laws applied thereby. In the event that any dispute shall occur
between the parties arising out of or resulting from the construction,
interpretation, enforcement or any other aspect of this Agreement, the
parties hereby agree to accept the exclusive jurisdiction of the Courts
of the State of California sitting in and for the County of Orange.
(h) SEVERABILITY. If any one or more of the provisions
contained in this Agreement is found to be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability
of the remaining provisions contained herein will not in any way be
affected or impaired thereby.
(i) PARTIES IN INTEREST. This Agreement inures to the benefit
of and is binding on the parties hereto and their respective successors
and permitted assigns and shall take effect when signed by the Debtor
and delivered to the Secured Party, and the Debtor waives notice of the
Secured Party's acceptance hereof. The Secured Party may execute this
Agreement if appropriate for the purpose of filing, but the failure of
the Secured Party to execute this Agreement shall not affect or impair
the validity or effectiveness of this Agreement.
(j) HEADINGS AND MARGINAL REFERENCES. The division of this
Agreement into sections, subsections, paragraphs and subparagraphs and
the insertion of headings are for convenience of reference only and do
not affect the construction or interpretation of this Agreement.
(k) AMENDMENTS. This Agreement may be amended, waived,
discharged or terminated only with the agreement of the party against
whom enforcement of the amendment, waiver, discharge or termination is
sought and only in writing signed by both parties to this agreement and
subject to the same governing law and venue as stated in Section 9(e)
hereof. The Security Interest can be released only explicitly in a
writing signed by the Secured Party.
(l) COUNTERPART AND FAX EXECUTION. This Agreement may be
executed in two or more counterparts and by fax transmission, each of
which will be deemed to be an original and all of which will constitute
one agreement, effective as of the date given above.
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(m) ENTIRE AGREEMENT. This Agreement, together with the
Exhibits referred to herein which are incorporated herein by this
reference, and the agreements referred to herein, supersedes all prior
agreements and understandings and shall constitute the entire agreement
between the parties hereto with respect to the transactions
contemplated hereby.
IN WITNESS WHEREOF, the parties have executed this Patent and
Trademark Security Agreement as of the date written above.
DEBTOR: SECURED PARTY:
RECLAMATION CONSULTING AND PALA INVESTMENTS HOLDINGS LIMITED
APPLICATIONS, INC.
By: /s/ XXXXXXX XXXXXX By: /s/ Xxxxx Xxxxxx
---------------------------- ------------------------------
Name: XXXXXXX X. XXXXXX Name: Xxxxx Xxxxxx
Its: Chief Executive Officer Its: Executive Director
STATE OF California )
) ss.
COUNTY OF Orange )
The foregoing instrument was acknowledged before me this 12 day of
December, 2007, by Xxxxxxx X. Xxxxxx, the Chief Executive Officer of RECLAMATION
CONSULTING AND APPLICATIONS, INC., a Colorado corporation, on behalf of the
corporation.
[NOTARY PUBLIC SEAL] /S/ X. XXXXXXXXX
-------------------------
Notary Public
ST. HELIER
JERSEY Thursday, December 13, 2007
BRITISH CHANNEL ISLANDS
I, XXXXXX XXXXXX, Notary Public in and for the island of Jersey
HEREBY CERTIFY that the annexed document has been signed
for the uses and purposes mentioned in the instrument by
XXXXX XXXXXX XXXXXX who is known by me to be a director of
Pala Investments Holdings Limited and with whose usual signature I am well
familiar.
GIVEN at St. Helier, on the day and year above-written under my hand and
offical seal.
December, 2007
PALA INVESTMENTS HOLDINGS LIMITED
/s/ Xxxxxx Xxxxxx [NOTARY PUBLIC SEAL]
------------------------
Notary Public
0xx Xxxxx, Xxxxxxx Xxxxx, Xx rue des Mielles, St. Helier, Jersey JE2 3QD,
Challel Islands
My faculty endures for life 07/005000
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EXHIBIT A
PATENTS AND PATENT APPLICATIONS
-------------------------------
PROPERTY
OFFICIAL NO. TITLE CASE STATUS COUNTRY TYPE
------------------------ ------------------------------------------ ----------------------- ---------------------------- -----------
1525270 Release Agent Formulas And Methods Abandoned by client European Patent Office Patent
2896/DELNP/2004 Release Agent Formulas And Methods Application filed India Patent
PA/a/2006/007233 Release Agent Formulas And Methods Application filed Mexico Patent
PCT/US04/05953 Release Agent Formulas And Methods Application filed Patent Cooperation Treaty Patent
6902606 Release Agent Formulas And Methods Issued United States of America Patent
To Be Filed Release Agent Formulas And Methods In Process United States of America Patent
A-1
EXHIBIT B
TRADEMARKS, SERVICE MARKS
AND COLLECTIVE MEMBERSHIP MARKS
PROPERTY
OFFICIAL NO. TITLE CASE STATUS COUNTRY TYPE
------------------------ ------------------------------------------ ----------------------- ---------------------------- -----------
10/25053 ALDEROX KR7 Registered Australia Trademark
003775822 ALDEROX KR7 Registered European Community Trademark
1315205 ALDEROX KR7 Application filed India Trademark
719884 ALDEROX KR7 Registered New Zealand Trademark
3022028 ALDEROX KR7 Registered United States of America Trademark
1025054 ALDEROX TSR Registered Australia Trademark
003778156 ALDEROX TSR Registered European Community Trademark
1315206 ALDEROX TSR Application filed India Trademark
719883 ALDEROX TSR Registered Xxx Xxxxxxx Xxxxxxxxx
0000000 XXXXXXX Xxxxxxxxxx Xxxxxx Xxxxxx of America Trademark
2905208 ASA 12 Registered United States of America Trademark
3109303 B20-POWER Registered United States of America Trademark
COLLECTIVE MEMBERSHIP MARKS
---------------------------
NONE
UNREGISTERED MARKS (FOR WHICH NO APPLICATIONS HAVE BEEN FILED)
--------------------------------------------------------------
NONE
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