PATENT SECURITY AGREEMENT
Exhibit
10.5
Execution
Version
THIS
SECURITY AGREEMENT (this “Patent Security
Agreement”) dated as of September 16, 2009, is made by and among
CAPRIUS, INC., a Delaware corporation (“Caprius”), M.C.M.
ENVIRONMENTAL TECHNOLOGIES, INC., a Delaware corporation (“M.C.M.”), M.C.M.
ENVIRONMENTAL TECHNOLOGIES LTD., an Israeli corporation (“M.C.M. Israel”), the
Additional Obligors (as defined in Section 14(k))
(together with Caprius, M.C.M. and M.C.M. Israel, collectively, the “Obligors” and each
(including Caprius, M.C.M., M.C.M. UK and M.C.M. Israel) individually, an
“Obligor”),
VINTAGE CAPITAL GROUP, LLC, a Delaware limited liability company (together with
its successors and assigns, collectively, the “Secured Party”), as
an inducement to the Secured Party to enter into that certain Securities
Purchase and Sale Agreement of even date herewith (as may be amended, restated,
supplemented or otherwise modified from time to time, the “Purchase Agreement”)
and the transactions contemplated thereby. All Capitalized terms used
and not defined herein shall have the respective meanings assigned to them in
the Purchase Agreement.
A
G R E E M E N T
NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Obligors and the Secured Party hereby agree as
follows:
1. DEFINITIONS. Except
as otherwise provided herein, terms defined in the Purchase Agreement or the UCC
shall have the same meanings when used herein. As used herein, the
term:
“Collateral” shall
have the meaning set forth in Section 2.
“Liquidation Costs”
means the reasonable costs and out of pocket expenses incurred by the Secured
Party in obtaining possession of any Collateral, in storage and preparation for
sale, lease or other disposition of any Collateral, in the sale, lease, or other
disposition of any or all of the Collateral, and/or otherwise incurred in
foreclosing on any of the Collateral, including, without limitation,
(a) reasonable attorneys’ fees and legal expenses, (b) transportation
and storage costs, (c) advertising costs, (d) sale commissions, (e) sales
tax and license fees, (f) costs for improving or repairing any of the
Collateral, and (g) costs for preservation and protection of any of the
Collateral.
“Obligations” shall
have the meaning set forth in Section 3.
“Permitted
Encumbrances” means liens for taxes and assessments not yet due and
payable or, if due and payable, those being contested in good faith by
appropriate proceedings and for which appropriate reserves are maintained,
security interests and liens created by the Investment Documents, Permitted
Liens, and security interests and liens permitted pursuant to Section 10.5
of the Purchase Agreement.
“UCC” means the
Uniform Commercial Code as in effect in the State of New York on the date of
this Patent Security Agreement.
2. GRANT OF SECURITY
INTEREST. Each Obligor hereby grants to the Secured Party a
lien and security interest in the following (the “Collateral”):
(a) United
States Patent 6,494,391, entitled “Apparatus For Treating Waste,
Particularly Medical Waste, to Facilitate Its Disposition”, issued on
December 17, 2002 (the “‘391 Patent”);
and
(b) Any
Contract Rights in, to or under the ‘391 Patent;
together
with all Proceeds, products, offspring, rents, issues, profits and returns of
and from any of the foregoing.
3. DEBTS
SECURED. The security interest granted by this Patent Security
Agreement shall secure the prompt payment and performance of all of the
Obligors’ present and future debts, obligations, and liabilities of whatever
nature to the Secured Party, including, without limitation, (a) the Note
and any PIK Notes (as defined in the Note) issued or deemed to be issued
pursuant to the Note, (b) all obligations of each Obligor arising from or
relating to the Investment Documents, including, without limitation, this Patent
Security Agreement, and (c) transactions in which the documents evidencing
the indebtedness refer to this grant of security interest as providing security
therefor (collectively, the “Obligations”).
Each of
the Obligors and the Secured Party expressly acknowledge their mutual intent
that the security interest created by this Patent Security Agreement secure the
prompt and indefeasible payment and performance of payment and performance of
any and all Obligations without any limitation whatsoever.
4. LOCATION OF THE OBLIGORS AND
COLLATERAL. Each Obligor jointly and severally represents and
warrants that:
(a) Annex 1 attached
hereto correctly and completely sets forth its full and correct legal name, type
of organization, jurisdiction of organization, organizational ID number (if
applicable), chief executive office and mailing address as of the date of this
Patent Security Agreement.
(b) Each
Obligor agrees that it will not change its state of organization or any of the
above referenced locations or create any new locations for such items or matters
without giving the Secured Party at least thirty (30) days’ prior written notice
thereof. In addition, each Obligor agrees that it will not
(i) change its name, federal employer identification number, organizational
identification number, corporate structure or identity, or (ii) create or
operate under any new fictitious name without giving the Secured Party at least
thirty (30) days’ prior written notice thereof.
5. REPRESENTATIONS AND
WARRANTIES CONCERNING COLLATERAL. Each Obligor jointly and
severally represents and warrants that:
(a) One
or more of the Obligors is the sole owner of the Collateral.
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(b) The
Collateral is not subject to any security interest, lien, prior assignment, or
other encumbrance of any nature whatsoever except Permitted
Encumbrances.
6. COVENANTS CONCERNING
COLLATERAL. Each Obligor jointly and severally covenants
that:
(a) The
Obligors will keep the Collateral free and clear of any and all security
interests, liens, assignments or other encumbrances, except Permitted
Encumbrances and no Obligor shall enter into any licenses with respect to the
Collateral, except as granted prior to the effective date herein.
(b) The
Obligors shall pay the 8th-year Maintenance Fee for the ‘391 Patent by no later
than June 17, 2010.
(c) Each
Obligor does hereby make, constitute, and appoint the Secured Party and its
designees as such Obligor’s true and lawful attorney in fact, with full power of
substitution, such power to be exercised following and during the continuance of
an uncured default under this Patent Security Agreement to do any and all things
necessary or proper to carry out the intent of this Patent Security Agreement
and to perfect and protect the liens and rights of the Secured Party created
under this Patent Security Agreement.
(d) The
Obligors further agree to execute and deliver to the Secured Party all other
written notices and similar documents requested by the Secured Party following
an uncured default under this Patent Security Agreement, specifically including
an assignment of the entire right, title and interest in and to the ‘391 Patent
to the Secured Party.
(e) The
Obligors shall execute all such collateral assignments with respect to the ‘391
Patent as the Secured Party reasonably requests in order to perfect the security
interests in such Collateral. The Obligors shall promptly execute for
subsequent filing with the United States Patent and Trademark Office, such
collateral assignments with respect to the ‘391 Patent as the Secured Party
reasonably requests.
7. RIGHT TO PERFORM FOR THE
OBLIGORS. The Secured Party may, in its sole discretion and
without any duty to do so, elect to discharge maintenance fee, taxes, tax liens,
security interests, or any other encumbrance upon the Collateral, perform any
duty or obligation of the Obligors, pay filing, recording, insurance and other
charges payable by the Obligors, or provide insurance as provided herein if the
Obligors fails to do so. Any such payments advanced by the Secured
Party shall be repaid by the Obligors upon demand, together with interest
thereon from the date of the advance until repaid, both before and after
judgment. The Obligors hereby authorize the Secured Party to file one
or more financing statements or continuation statements in respect thereof, and
amendments thereto, relating to all or any part of the Collateral without the
signature of an Obligor where permitted by law. A photocopy or other
reproduction of this Patent Security Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law.
8. DEFAULT. Time
is of the essence of this Patent Security Agreement. The occurrence
of any of the following events, and if required, the giving of any notice and
passage of the prescribed time period without cure, shall constitute a default
under this Patent Security Agreement:
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(a) Any
representation or warranty made by any Obligor in this Patent Security Agreement
is materially false or materially misleading when made;
(b) An
Obligor fails in the payment or performance of any obligation, covenant,
agreement or liability created by or arising from or related to this Patent
Security Agreement; or
(c) An
Event of Default occurs under the Purchase Agreement.
Any
default under this Patent Security Agreement (other than a default or Event of
Default under any of the Investment Documents other than this Patent Security
Agreement, which shall be subject to the notice and cure periods set forth
therein) shall be subject to the Secured Party first giving the Obligors written
notice of such default and the Obligors shall have thirty (30) days from the
date of giving such notice to cure such default. If the default is
cured within said thirty (30) day period then the Secured Party may not exercise
any rights or remedies based upon that default.
No course
of dealing or any delay or failure to assert any default shall constitute a
waiver of that default or of any prior or subsequent default.
9. REMEDIES. Upon
the occurrence and during continuance of any uncured default under this Patent
Security Agreement, the Secured Party shall have the following rights and
remedies, in addition to all other rights and remedies existing at law, in
equity, or by statute or provided in the Investment Documents which may be
exercised without notice to, or consent by, the Obligors, except as such notice
or consent is expressly provided for hereunder:
(a) The
Secured Party shall have all the rights and remedies available under the
UCC.
(b) The
Obligor shall execute and deliver on the date hereof to the Secured Party a
patent assignment in the form attached hereto as Exhibit B
pursuant to which all right, title and interest in and to the ‘391 Patent shall
be assigned permanently to the Secured Party, which executed assignment shall be
held by the Secured Party in escrow unless and until the occurrence of a default
under this Patent Security Agreement. From and after the occurrence
of a default under this Patent Security Agreement, if any, the Secured Party,
may, in its sole and absolute discretion, and without notice to the Obligor,
record such assignment with the United States Patent and Trademark
Office.
(c) The
Secured Party is hereby granted an exclusive license of the right to exclude
under the ‘391 Patent, effective upon the occurrence and during the continuance
of any uncured default under this Patent Security Agreement, and the right to
practice or to sub-license, without charge, under the ‘391 Patent.
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The
rights and remedies herein conferred are cumulative and not exclusive of any
other rights and remedies and shall be in addition to every other right, power
and remedy herein specifically granted or hereafter existing at law, in equity,
or by statute which the Secured Party might otherwise have, and any and all such
rights and remedies may be exercised from time to time and as often and in such
order as the Secured Party may deem expedient. No delay or omission
in the exercise of any such right, power or remedy or in the pursuance of any
remedy shall impair any such right, power or remedy or be construed to be a
waiver thereof or of any default or to be an acquiescence therein.
In the
event of an uncured default pursuant to Section 8 of
this Agreement, the Obligors jointly and severally agree to pay all reasonable
costs and expenses, including reasonable attorneys’ fees and legal expenses,
incurred by the Secured Party in enforcing, or exercising any remedies under,
this Patent Security Agreement, and any other rights and
remedies. The Obligors additionally jointly and severally agree to
pay all Liquidation Costs. Any and all such Liquidation costs and
out-of-pocket expenses shall be payable by the Obligors upon demand, together
with interest thereon from the date of the advance until repaid, both before and
after judgment, at the Default Rate (as defined in the
Note). Regardless of any breach or default, the Obligors agree to pay
all reasonable expenses, including reasonable attorneys’ fees and legal
expenses, incurred by the Secured Party in any bankruptcy proceedings of any
type involving any Obligor, the Collateral, or this Patent Security Agreement,
including, without limitation, expenses incurred in modifying or lifting the
automatic stay, determining adequate protection, use of cash collateral, or
relating to any plan of reorganization.
10. NOTICES. All
notices or demands by any party hereto shall be in writing and shall be sent as
provided in the Purchase Agreement.
11. INDEMNIFICATION. Each
Obligor jointly and severally agrees to indemnify the Secured Party for any and
all claims, costs, losses and liabilities, and for any damages or costs which
may be awarded against or incurred by the Secured Party, and for all reasonable
attorney fees, legal expenses, and other out-of-pocket expenses incurred by the
Secured Party in defending such claims, arising from or related in any manner to
the negotiation, execution, or performance by the Secured Party of this Patent
Security Agreement, but excluding any claims and liabilities based solely upon
the material breach or default by the Secured Party under this Patent Security
Agreement or gross negligence or willful misconduct of the Secured
Party.
12. TERMINATION. Upon
the full and final payment in cash of the Obligations (excluding any inchoate
expense reimbursements or indemnification obligations) to the Secured Party and
the termination of all commitments of the Secured Party to extend credit to the
Obligors, the Secured Party shall promptly terminate and release the security
interest of the Secured Party in the Collateral, execute and deliver any
necessary financing statement terminations or releases, and return to the
Obligors any Collateral that was in the possession of the Secured Party,
provided that, with respect to any loss or damage that the Secured Party may
incur as a result of dishonored checks or other items of payment received by the
Secured Party and applied to the Obligations for the benefit of the Secured
Party, the Secured Party, shall, (as determined by the consent of the Requisite
Holders as specified under Section 14.2 of the Purchase Agreement),
(a) have received a written agreement, executed by the Obligors (as
required by the Secured Party, acting at the direction of the Requisite Holders
as specified under Section 14.2 of the Purchase Agreement) and by any
person whose loans or other advances to the Obligors are used in whole or in
part to satisfy the Obligations to the Secured Party, indemnifying the Secured
Party from any such loss or damage; or (b) have retained such monetary
reserves or Liens on the Collateral for such period of time as the Secured Party
(acting at the direction of the Requisite Holders as specified under
Section 14.2 of the Purchase Agreement) may deem necessary to protect the
Secured Party from any such loss or damage. All reasonable expenses
incurred by the Secured Party in connection with the termination of the security
interests granted to the Secured Party in connection with this Patent Security
Agreement shall be the sole expense of the Obligors.
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13. REINSTATEMENT. Notwithstanding
anything to the contrary herein contained, this Patent Security Agreement and
the security interest provided for herein shall continue to be effective or be
reinstated, as the case may be, if at any time any payment, or any part thereof,
of any or all of the Obligations is rescinded, invalidated, declared to be
fraudulent or preferential or otherwise required to be restored or returned by
the Secured Party in connection with any bankruptcy, reorganization or similar
proceeding involving any Obligor, any other party liable with respect to the
Obligations or otherwise, if the proceeds of any Collateral are required to be
returned by the Secured Party under any such circumstances, or if the Secured
Party elects to return any such payment or proceeds or any part thereof, all as
though such payment had not been made or such proceeds not been
received.
14. MISCELLANEOUS.
(a) Any
failure or delay by the Secured Party to require strict performance by the
Obligors of any of the provisions, warranties, terms and conditions contained
herein or in any other agreement, document, or instrument, shall not affect the
right of the Secured Party to demand strict compliance and performance
therewith, and any waiver of any Event of Default shall not waive or affect any
other Event of Default, whether prior or subsequent thereto, and whether of the
same or of a different type.
(b) Neither
the Secured Party nor its officers, directors, affiliates, partners, principals,
employees, representatives, agents, or attorneys, shall be liable to any Obligor
for any incidental or consequential damages arising from or relating to any
breach of contract, tort, or other wrong in connection with or relating to this
Patent Security Agreement or the Collateral.
(c) In
the event any term or provision of this Agreement conflicts with any term or
provision of the Purchase Agreement, the term or provision of the Purchase
Agreement shall control.
(d) IN
ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE (WITHOUT REGARD TO THE CHOICE OF LAW
OR CONFLICTS OF LAW PROVISIONS THEREOF) AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.
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(e) TO
THE EXTENT PERMITTED AND ENFORCEABLE UNDER APPLICABLE LAW, EACH OBLIGOR AND THE
SECURED PARTY HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS SECURITY AGREEMENT OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS. THE OBLIGORS AND THE SECURED PARTY REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS TO THE EXTENT PERMITTED AND ENFORCEABLE UNDER APPLICABLE LAW FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, AND
SUBJECT TO THE ENFORCEABILITY OF THE FOREGOING WAIVER, A COPY OF THIS SECURITY
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
(f) Any
provision of this Patent Security Agreement which is prohibited or unenforceable
in any jurisdiction shall be severable and, as to such jurisdiction only, 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.
(g) All
references in this Patent Security Agreement to the singular shall be deemed to
include the plural if the context so requires and vice
versa. References in the collective or conjunctive shall also include
the disjunctive unless the context otherwise clearly requires a different
interpretation.
(h) Two
or more duplicate originals of this Patent Security Agreement may be signed by
the parties, each duplicate of which shall be an original but all of which shall
constitute one and the same instrument. Facsimile or PDF signatures
delivered hereunder shall be deemed original signatures.
(i) All
agreements, representations, warranties and covenants made by the Obligors shall
survive the execution and delivery of this Patent Security Agreement, the filing
and consummation of any bankruptcy proceedings, and shall continue in effect so
long as any obligation to the Secured Party contemplated by this Patent Security
Agreement is outstanding and unpaid, notwithstanding any termination of this
Patent Security Agreement. All agreements, representations,
warranties and covenants in this Patent Security Agreement shall bind the party
making the same and its heirs, successors and permitted assigns, and shall be to
the benefit of and be enforceable by each party for whom made and their
respective heirs, successors and permitted assigns.
(j) This
Patent Security Agreement, together with the Investment Documents, constitutes
the entire agreement between the Obligors and the Secured Party with respect to
the subject matter hereof and all other prior and contemporaneous agreements,
arrangements, and understandings between the parties hereto as to the subject
matter hereof are, except as otherwise expressly provided herein,
rescinded. Except as contemplated by Section 14(k),
no provision of the Patent Security Agreement may be waived, modified or
supplemented except by an instrument in writing signed by each of the Obligors
and the Secured Party. Any modification, supplement or waiver shall
be for such period and subject to such conditions as shall be specified in the
written instrument effecting the same and shall be binding upon each Obligor and
the Secured Party, and any such waiver shall be effective only in the specific
instance and for the purpose for which given.
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(k) Upon
the execution and delivery by any Person of an assumption agreement in
substantially the form of Exhibit A hereto
as contemplated by Section 9.7 of the Purchase Agreement (each, an “Assumption
Agreement”), (i) such Person shall be referred to as an “Additional Obligor”
and shall become and be an Obligor hereunder, and each reference in this Patent
Security Agreement to an “Obligor” shall also
mean and be a reference to such Additional Obligor and (ii) each reference
herein to “this Patent Security Agreement”, “hereunder”, “hereof” or words of
like import referring to this Patent Security Agreement, and each reference in
any other Investment Document to the “Patent Security Agreement” and
“thereunder” or “thereof” to the extent referring to this Patent Security
Agreement, shall mean and be a reference to this Patent Security Agreement as
modified by such Assumption Agreement.
(l) AS
PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT
OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF THE OBLIGORS OR THE SECURED
PARTY, EACH OF THE OBLIGORS HEREBY CONSENTS AND AGREES THAT THE STATE COURTS OF
CALIFORNIA, OR, AT THE OPTION OF THE SECURED PARTY, THE UNITED STATES DISTRICT
COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, SHALL HAVE EXCLUSIVE JURISDICTION
TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE OBLIGORS AND THE
SECURED PARTY PERTAINING TO THIS SECURITY AGREEMENT OR TO ANY MATTER ARISING OUT
OF OR RELATED TO THIS SECURITY AGREEMENT. THE OBLIGORS
EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND THE OBLIGORS HEREBY WAIVE ANY OBJECTION
WHICH THE OBLIGORS MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENT TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. THE
OBLIGORS HEREBY WAIVE PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO THE OBLIGORS PURSUANT TO SECTION 10 HEREOF AND THAT SERVICE SO MADE
SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE OBLIGORS’ ACTUAL RECEIPT
THEREOF OR THE NEXT BUSINESS DAY IF SENT BY A NATIONALLY RECOGNIZED COURIER FOR
NEXT BUSINESS DAY DELIVERY. NOTHING IN THIS SECURITY AGREEMENT SHALL
BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF THE SECURED PARTY TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY
THE SECURED PARTY OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING
OF ANY ACTION UNDER THIS SECURITY AGREEMENT TO ENFORCE SAME IN ANY OTHER
APPROPRIATE FORUM OR JURISDICTION.
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(m) IN
THE EVENT THE WAIVER PROVIDED IN SECTION 14(e) IS DEEMED INEFFECTIVE, TO GIVE
EFFECT TO THE PARTIES’ DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE OR
RETIRED JUDGE APPLYING THE APPLICABLE LAW, THE PARTIES AGREE TO REFER, FOR A
COMPLETE AND FINAL ADJUDICATION, ANY AND ALL ISSUES OF FACT OR LAW INVOLVED IN
ANY LITIGATION OR PROCEEDING (INCLUDING, WITHOUT LIMITATION, ALL DISCOVERY AND
LAW AND MOTION MATTERS, PRETRIAL MOTIONS, TRIAL MATTERS AND POST-TRIAL MOTIONS
(E.G. MOTIONS FOR RECONSIDERATION, NEW TRIAL AND TO TAX COSTS, ATTORNEY FEES AND
PREJUDGMENT INTEREST)) UP TO AND INCLUDING FINAL JUDGMENT, BROUGHT TO RESOLVE
ANY DISPUTE (WHETHER SOUNDING IN CONTRACT, TORT, UNDER ANY STATUTE OR OTHERWISE)
BETWEEN AND AMONG ANY OF THE PARTIES HERETO, TO A JUDICIAL REFEREE WHO SHALL BE
APPOINTED UNDER A GENERAL REFERENCE PURSUANT TO CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 638. THE REFEREE’S DECISION WOULD STAND AS THE
DECISION OF THE COURT, WITH JUDGMENT TO BE ENTERED ON HIS/HER STATEMENT OF
DECISION IN THE SAME MANNER AS IF THE ACTION HAD BEEN TRIED BY THE
COURT. THE PARTIES HERETO SHALL SELECT A SINGLE NEUTRAL REFEREE, WHO
SHALL BE A RETIRED STATE OR FEDERAL JUDGE WITH AT LEAST FIVE YEARS OF JUDICIAL
EXPERIENCE IN CIVIL MATTERS. IN THE EVENT THAT THE PARTIES HERETO
CANNOT AGREE UPON A REFEREE, THE REFEREE SHALL BE APPOINTED BY THE
COURT. WITHOUT LIMITING OR AFFECTING ANY INDEMNITIES AVAILABLE TO THE
SECURED PARTY, THE SECURED PARTY, ON THE ONE HAND, AND THE OBLIGORS, ON THE
OTHER HAND, SHALL EQUALLY BEAR THE FEES AND EXPENSES OF THE REFEREE (50% BY THE
SECURED PARTY AND 50% BY THE OBLIGORS) UNLESS THE REFEREE OTHERWISE PROVIDES IN
THE STATEMENT OF DECISION.
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IN
WITNESS WHEREOF, the Obligors and the Secured Party have executed this Patent
Security Agreement as of the date first written above.
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OBLIGORS:
CAPRIUS,
INC.
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By:
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/s/Xxxxxx
Xxxxxx
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Name:
Xxxxxx Xxxxxx
Title:
Chief Executive
Officer
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M.C.M.
ENVIRONMENTAL TECHNOLOGIES, INC.
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By:
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/s/Xxxxxx Xxxxxx
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Name:
Xxxxxx Xxxxxx
Title:
Chief Executive
Officer
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M.C.M.
ENVIRONMENTAL TECHNOLOGIES LTD.
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By:
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/s/Xxxxxx
Xxxxx
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Name:
Xxxxxx Xxxxx
Title:
Chairman
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[SIGNATURE
PAGE TO PATENT SECURITY AGREEMENT]
PAGE
1|
SECURED
PARTY:
VINTAGE
CAPITAL GROUP, LLC
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By:
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/s/Xxxx X.
Xxxxx
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Name:
Xxxx X. Xxxxx
Title:
Chairman
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[SIGNATURE
PAGE TO PATENT SECURITY AGREEMENT]
PAGE
2ANNEX 1
Locations of the Obligors
and Collateral
EXHIBIT
A
Form of Assumption
Agreement
_________
__, ____
Vintage
Capital Group, LLC, as Secured Party
00000 Xxx
Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx
Xxxxxxx, XX 00000
Attention: Xxxxxx
Xxxxxxx
Ladies
and Gentlemen:
Reference
is made to (i) the Securities Purchase and Sale Agreement dated
September 16, 2009 (as may be amended, restated, supplemented or otherwise
modified from time to time, the “Purchase Agreement”)
by and between Caprius, Inc., M.C.M. Environmental Technologies, Inc., M.C.M.
Environmental Technologies Ltd., and Vintage Capital Group, LLC, and
(ii) the Patent Security Agreement referred to therein (as in effect on the
date hereof and as it may hereafter be amended, restated, supplemented or
otherwise modified from time to time, together with this Assumption Agreement,
being the “Patent
Security Agreement”). The capitalized terms defined in the
Patent Security Agreement or in the Purchase Agreement and not otherwise defined
herein are used herein as therein defined.
Section 14(k)
of the Patent Security Agreement provides for additional Persons from time to
time to become additional “Obligors” under the Patent Security Agreement and
[Name of Additional Obligor], a [insert type of entity] (the “Additional Obligor”)
desires to become such an additional “Obligor”. Pursuant to
Section 14(k) of the Patent Security Agreement, the Additional Obligor
hereby agrees to become an “Obligor” for all purposes of the Patent Security
Agreement and hereby supplements Annexes 1 and 2 to the Patent Security
Agreement as specified in the attached Appendix A.
Without
limiting the generality of the foregoing, as collateral security for the prompt
payment in full when due (whether at stated maturity, upon acceleration, on any
optional or mandatory prepayment date or otherwise) and performance of the
Obligations, the Additional Obligor hereby pledges and grants to the Secured
Party a security interest in all of the Additional Obligor’s right, title and
interest in and to the Collateral in the same manner and to the same extent as
is provided in the Patent Security Agreement.
In
addition, the Additional Obligor hereby agrees to perform the covenants and
undertakings of an Obligor under the Patent Security Agreement and hereby makes
the representations and warranties set forth in the Patent Security Agreement,
with respect to itself and its obligations under the Patent Security
Agreement.
Delivery
of an executed counterpart of a facsimile or PDF signature page to this
Assumption Agreement shall be effective as delivery of an original executed
counterpart of this Assumption Agreement. All notices to the
Additional Obligor with respect to this Assumption Agreement, the Patent
Security Agreement or the transactions contemplated by the foregoing shall be in
accordance with Section 10 of the Patent Security Agreement and addressed
to the Additional Obligor at the address specified below its name on its
signature page attached hereto.
This
Assumption Agreement shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of New York applicable to
contracts made and performed in that state (without regard to the choice of law
or conflicts of law provisions thereof) and any applicable laws of the United
States of America.
The
undersigned hereby consents and agrees that the state courts of California, or
at the option of the Secured Party, the United States District Court for the
Central District of California, shall have exclusive jurisdiction to hear and
determine any claims or disputes between the Secured Party and the Additional
Obligor pertaining to this Assumption Agreement or the Patent Security Agreement
or to any matter arising out of or related to this Assumption Agreement or the
Patent Security Agreement. The undersigned expressly submits and
consents in advance to such jurisdiction in any action or suit commenced in any
such court, and the undersigned hereby waives any objection which it may have
based upon lack of personal jurisdiction, improper venue or forum non conveniens
and hereby consents to the granting of such legal or equitable relief as is
deemed appropriate by such court. The undersigned hereby waives
personal service of the summons, complaint and other process issued in any such
action or suit and agrees that service of such summons, complaint and other
process may be made by registered or certified mail addressed to the undersigned
at the address specified under its name on its signature page attached hereto
and that service so made shall be deemed completed upon the earlier of the
undersigned’s actual receipt thereof or the next Business Day if sent by a
nationally recognized courier for next Business Day delivery. Nothing
in this Assumption Agreement shall be deemed or operate to affect the right of
the Secured Party to serve legal process in any other manner permitted by law,
or to preclude the enforcement by the Secured Party of any judgment or order
obtained in such forum or the taking of any action under this Assumption
Agreement or the Patent Security Agreement to enforce same in any other
appropriate forum or jurisdiction.
TO THE
EXTENT PERMITTED AND ENFORCEABLE UNDER APPLICABLE LAW, THE UNDERSIGNED HEREBY
WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS ASSUMPTION AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. THE UNDERSIGNED REPRESENTS THAT
IT HAS REVIEWED THIS WAIVER AND KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS TO THE EXTENT PERMITTED AND ENFORCEABLE UNDER APPLICABLE LAW, FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, AND
SUBJECT TO THE ENFORCEABILITY OF THE FOREGOING WAIVER, A COPY OF THIS ASSUMPTION
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
EXHIBIT A
— PAGE 2
IN THE
EVENT THE WAIVER PROVIDED IN THE PRECEDING PARAGRAPH IS DEEMED INEFFECTIVE, TO
GIVE EFFECT TO THE PARTIES’ DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE OR
RETIRED JUDGE APPLYING THE APPLICABLE LAW, THE PARTIES AGREE TO REFER, FOR A
COMPLETE AND FINAL ADJUDICATION, ANY AND ALL ISSUES OF FACT OR LAW INVOLVED IN
ANY LITIGATION OR PROCEEDING (INCLUDING, WITHOUT LIMITATION, ALL DISCOVERY AND
LAW AND MOTION MATTERS, PRETRIAL MOTIONS, TRIAL MATTERS AND POST-TRIAL MOTIONS
(E.G. MOTIONS FOR RECONSIDERATION, NEW TRIAL AND TO TAX COSTS, ATTORNEY FEES AND
PREJUDGMENT INTEREST)) UP TO AND INCLUDING FINAL JUDGMENT, BROUGHT TO RESOLVE
ANY DISPUTE (WHETHER SOUNDING IN CONTRACT, TORT, UNDER ANY STATUTE OR OTHERWISE)
BETWEEN AND AMONG ANY OF THE PARTIES HERETO, TO A JUDICIAL REFEREE WHO SHALL BE
APPOINTED UNDER A GENERAL REFERENCE PURSUANT TO CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 638. THE REFEREE’S DECISION WOULD STAND AS THE
DECISION OF THE COURT, WITH JUDGMENT TO BE ENTERED ON HIS/HER STATEMENT OF
DECISION IN THE SAME MANNER AS IF THE ACTION HAD BEEN TRIED BY THE
COURT. THE PARTIES HERETO SHALL SELECT A SINGLE NEUTRAL REFEREE, WHO
SHALL BE A RETIRED STATE OR FEDERAL JUDGE WITH AT LEAST FIVE YEARS OF JUDICIAL
EXPERIENCE IN CIVIL MATTERS. IN THE EVENT THAT THE PARTIES HERETO
CANNOT AGREE UPON A REFEREE, THE REFEREE SHALL BE APPOINTED BY THE
COURT. WITHOUT LIMITING OR AFFECTING ANY INDEMNITIES AVAILABLE TO THE
SECURED PARTY, THE SECURED PARTY, ON THE ONE HAND, AND THE OBLIGORS, ON THE
OTHER HAND, SHALL EQUALLY BEAR THE FEES AND EXPENSES OF THE REFEREE (50% BY THE
SECURED PARTY AND 50% BY THE OBLIGORS) UNLESS THE REFEREE OTHERWISE PROVIDES IN
THE STATEMENT OF DECISION.
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Very
truly yours,
[NAME
OF ADDITIONAL OBLIGOR]
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Name:
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Title:
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Address
for Notices:
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[
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EXHIBIT A
— PAGE 3
APPENDIX A
Supplement to Annex 1 to the
Patent Security Agreement
EXHIBIT
B
‘391 Patent
Assignment
[Attached
hereto.]
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Atty.
Docket 24367-7
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ASSIGNMENT
WHEREAS,
M.C.M. ENVIRONMENTAL TECHNOLOGIES LTD., an Israeli corporation, having a place
of business at, Moledet, Doar Na Gillboa, Israel 19 13, (hereinafter referred to
as ASSIGNOR), has acquired by assignment from inventors Xxxxxxxx Xxxxxxxx, Xxxx
Xxxxxxxx and Xxx Xxxx, which assignment has been recorded on April 4, 2001, at
the United States Patent and Trademark Office, Reel/Frame 011695/0903, the
entire right, title and interest in and to a certain invention entitled “Apparatus For Treating Waste,
Particularly Medical Waste, to Facilitate Its Disposition” for which
Letters Patent of the United States 6,494,391 issued on December 17,
2002.
WHEREAS,
Caprius, Inc., a Delaware corporation having a place of business at Xxx Xxxxxx
Xxxxx, Xxxx Xxx, Xxx Xxxxxx 00000, (hereinafter referred to as ASSIGNEE), is
desirous of acquiring the entire right, title and interest in, to and under said
invention and in, to and under Letters Patent or similar legal protection to be
obtained therefor in the United States and in any and all foreign
countries.
NOW,
THEREFORE, TO ALL WHOM IT MAY CONCERN: Be it known that in consideration of the
payment by ASSIGNEE to ASSIGNOR of the sum of One Dollar ($1.00), the receipt of
which is hereby acknowledged, and for other good and valuable consideration,
ASSIGNOR hereby sells, assigns and transfers to ASSIGNEE the ASSIGNOR’S entire
right, title and interest to said invention in the United States and its
territorial possessions and in all foreign countries, and to all Letters Patent
or similar legal protection in the United States and its territorial equivalent
thereof in a foreign country for the full term or terms for which the same may
be granted.
ASSIGNOR
also hereby sells, assigns and transfers to ASSIGNEE his right to collect
damages for any infringement of the above-identified patent that took place
prior to the execution of this assignment.
ASSIGNOR
hereby covenants that no assignment, sale, agreement or encumbrance has been
made or will be made or entered into which would conflict with this assignment
and sale.
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Atty.
Docket 24367-7
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ASSIGNOR
further covenants that ASSIGNEE will, upon its request, be provided promptly
with all pertinent facts and documents relating to said invention and said
Letters Patent and legal equivalents in foreign countries as may be known and
accessible to ASSIGNOR, and will testify as to the same in any interference or
litigation related thereto and will promptly execute and deliver to ASSIGNEE or
its legal representative any and all papers, instruments or affidavits required
to apply for, obtain, maintain, issue and enforce said application, said
invention, and said Letters Patent, and said equivalents thereof in any foreign
country which may be necessary or desirable to carry out the purposes
thereof.
IN
WITNESS WHEREOF, I hereunder set my hand this ________ day of September,
2009.
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By:
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Printed
Name:
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Title:
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