SECURITY AGREEMENT
E-314
THIS
SECURITY AGREEMENT is made as of April 17, 2002 by and between ALTAREX CORP.,
an
Alberta corporation (“Debtor”), and UNITED THERAPEUTICS CORPORATION, a Delaware
corporation (“Secured Party”).
RECITALS
A. Secured
Party and Debtor have entered into (i) a convertible debenture of even date
herewith (the “First Convertible Debenture”), pursuant to, and subject to the
terms and conditions of which, Secured Party will make a loan to Debtor in
an
amount equal to US$50,000, and (ii) a subscription and debenture purchase
agreement of even date herewith pursuant to which the Debtor has granted
to the
Secured Party the right to subscribe for a convertible debenture (the “Second
Convertible Debenture” and together with the First Convertible Debenture, the
“Convertible Debenture”) pursuant to, and subject to the terms and conditions of
which, Secured Party will make a loan to Debtor in an amount equal to
US$875,000.
B. Debtor
has executed this Agreement to induce Secured Party to enter into the
Convertible Debenture.
NOW,
THEREFORE, for valuable consideration received, the receipt and sufficiency
of
which are hereby acknowledged, Debtor and Secured Party hereby agree as
follows:
1. DEFINITIONS
1.1 Definitions.
“Collateral”
means all of Debtor’s right, title and interest in, to and under any and all of
its intellectual property, including but not limited to, all worldwide patents,
patent rights, patent applications, trademarks, trademark rights, trademark
applications, service marks, service xxxx rights, service xxxx applications,
trade names, domain names, copyrights, copyright applications, software rights,
database rights, moral rights, inventions, know-how, trade secrets, procedures,
techniques, test results, documentation and other similar intangible personal
property whether presently existing or hereafter acquired, including without
limitation the intellectual property listed on the attached Schedule 1, and
all
proceeds of the foregoing.
“Secured
Obligations” means all of the indebtedness and obligations of Debtor to the
Secured Party under the First Convertible Debenture and the Second Convertible
Debenture, including without limitation the obligation of Debtor to pay
principal and interest under the Convertible Debenture.
“PPSA”
means the Personal
Property Security Act
(Alberta), as amended from time to time and any Act substituted therefore
and
all amendments thereto;
1.2 PPSA
Terms.
Unless
otherwise defined herein, or unless the context otherwise requires, all terms
used herein which are defined in the PPSA shall have the meanings given in
the
PPSA.
1.3 Attachment.
The
Secured Party and the Debtor have not agreed to postpone the time for attachment
of the security interest granted hereby.
2. SECURITY
INTEREST
2.1 Grant
of Security Interest.
In
order to secure the full and punctual payment and performance of the Secured
Obligations, Debtor hereby grants to Secured Party a security interest in
the
Collateral.
2.2 No
Obligations Undertaken.
Nothing
contained in this Agreement shall relieve Debtor of, or impose on Secured
Party,
any obligation or liability for, under or in respect of the
Collateral.
3. REPRESENTATIONS
AND WARRANTIES OF DEBTOR
Debtor
hereby represents and warrants to Secured Party as follows:
3.1 Organization
and Powers of Debtor.
Debtor
is a corporation duly organized, validly existing and in good standing under
the
laws of the Province of Alberta, and has all requisite power and authority
to
conduct its business and own and operate its properties, and to enter into
and
execute the Convertible Debenture and this Agreement and to grant the security
interests provided for herein.
3.2 Corporate
Action of Debtor.
Debtor
has taken all appropriate and necessary corporate action to authorize the
execution, delivery and performance of the Convertible Debenture and this
Agreement, the representatives of Debtor executing the Convertible Debenture
and
this Agreement are fully authorized to do so, and the Convertible Debenture
and
this Agreement have been duly executed and delivered by the Debtor to the
Secured Party.
3.3 Enforceability.
The
Convertible Debenture and this Agreement are the legal, valid and binding
obligations of Debtor, enforceable in accordance with their respective
terms.
3.4 No
Conflict.
The
execution, delivery and performance of the Convertible Debenture and this
Agreement are not in contravention of or in conflict with the Certificate
of
Incorporation or Bylaws of Debtor, or any agreement, indenture or undertaking
to
which Debtor is a party or by which Debtor or any of its property may be
bound
or affected, and will not cause any security interest, lien or other encumbrance
to be created or imposed upon any such property by reason thereof, except
for
the security interest created in favor of Secured Party pursuant to this
Agreement.
3.5 Consents
and Approvals.
No
consent, approval, permit, license, authorization, filing, registration or
other
action of with, or by any governmental authority or other person or entity
is
required in connection with the execution, delivery and performance of the
Convertible Debenture and this Agreement, except for the filing of a financing
statement and the recording of appropriate documents in the United States
Patent
and Trademark Office and the Canadian Intellectual Property Office as applicable
relating to the grant of the security interest.
3.6 Perfection.
Upon
the filing of a financing statement at the Alberta Personal Property Registry
and the recording of appropriate security documents in the United States
Patent
and Trademark Office and the Canadian Intellectual Property Office the Secured
Party will have a valid and perfected security interest in all of the
Collateral.
2
3.7 No
Other Liens.
The
Collateral is owned by or licensed to the Debtor free of all security interests,
mortgages, liens, claims, charges and other encumbrances.
4. COVENANTS
OF DEBTOR
Debtor
hereby covenants and agrees to and with Secured Party as follows:
4.1 Existence.
Debtor
shall do or cause to be done all things necessary to preserve and maintain
its
existence as a corporation under the laws of the Province of Alberta and
all
rights and franchises material to its business and operations.
4.2 Notice
of Litigation.
Debtor
shall give or cause to be given prompt written notice to the Secured Party
of
any action, suit or proceeding instituted against Debtor or claim asserted
relating to any of the Collateral which could have a material adverse effect
upon the business, assets, value or condition (financial or otherwise) of
Debtor,
4.3 Disposition
of Collateral.
Except
as contemplated in the license agreement to be entered into between the parties,
the Debtor shall not dispose of any Collateral without the prior written
consent
of Secured Party and shall not, without the prior written consent of the
Secured
Party, create or permit to exist any security interest, mortgage, lien, claim,
charge and other encumbrance against any of the Collateral.
4.4 Maintenance
of Security Interests.
Debtor
hereby authorizes Secured Party to file financing statements and continuation
statements with respect to the Collateral to the fullest extent permitted
by
law. In addition, Debtor shall from time to time execute and deliver to Secured
Party such financing statements, continuation statements or other filings
or
documents as Secured Party may reasonably require to further assure to Secured
Party its rights under this Agreement.
4.5 Defend
Collateral.
Debtor
shall use commercially reasonable efforts to protect and preserve the
Collateral, and shall defend the Collateral for the benefit of the Secured
Party
against the claims and demands of all other persons.
4.6 Expenses.
Debtor
shall forthwith pay all costs, charges, expenses and legal fees and
disbursements (on a solicitor and his own client basis) which may be incurred
by
the Secured Party in:
|
(a)
|
taking,
recovering, keeping possession of and insuring the
Collateral;
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(b)
|
connection
with any disclosure requirements under the PPSA;
and
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(c)
|
all
other actions and proceedings taken in connection with the preservation
of
the Collateral and the confirmation, perfection and enforcement
of this
Security Agreement and of any other security held by the Secured
Party as
security for the Obligations.
|
3
5. REMEDIES
5.1 Remedies.
Upon
the occurrence of an Event of Default (as defined in the Convertible
Debenture):
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(a)
|
Secured
Party shall have, in addition to any other rights or remedies Secured
Party may have at law or in equity or otherwise, the right to accelerate
all indebtedness outstanding under the Convertible Debenture and
to
declare such indebtedness to be immediately due and payable, with
or
without notice to Debtor; and
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(b)
|
the
security hereby constituted will immediately become
enforceable.
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5.2 Enforcement.
To
enforce and realize on the security constituted by this Security Agreement,
the
Secured Party may take any action permitted by law or in equity, as it may
deem
expedient, and in particular, without limiting the generality of the foregoing,
the Secured Party may do any one or more of the following:
|
(a)
|
appoint
by instrument a receiver, receiver and manager or receiver-manager
(the
person so appointed is herein called the “Receiver”) of the Collateral,
with or without bond as the Secured Party may determine, and from
time to
time in its sole discretion remove such Receiver and appoint another
in
its stead;
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(b)
|
preserve,
protect and maintain the Collateral as the Secured Party may deem
advisable;
|
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(c)
|
sell,
lease or otherwise dispose of or concur in selling, leasing or
otherwise
disposing of all or any part of the Collateral, whether by public
or
private sale or lease or otherwise, in such manner, at such price
as can
be reasonably obtained therefor and on such terms as to credit
and with
such conditions of sale and stipulations as to title or conveyance
or
evidence of title or otherwise as to the Secured Party may seem
reasonable, provided that the Debtor will not be entitled to be
credited
with the proceeds of any such sale, lease or other disposition
until the
monies therefor are actually received;
and
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(d)
|
exercise
all of the rights and remedies of a secured party under the
PPSA.
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5.3 Proceeds.
Subject
to applicable law, all amounts realized from the disposition of the Collateral
pursuant to this Security Agreement will be applied as the Secured Party,
in its
sole discretion, may direct as follows:
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Firstly:
|
in
or toward payment of all costs, charges and expenses (including
legal fees
and disbursements on a solicitor and his own client basis) incurred
by the
Secured Party in connection with or incidental
to:
|
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(1)
|
the
exercise by the Secured Party of all or any of the powers granted
to it
pursuant to this Security Agreement;
and
|
|
(2)
|
the
appointment of the Receiver and the exercise by the Receiver of
all or any
of the powers granted to the Receiver pursuant to this Security
Agreement,
including the Receiver’s reasonable remuneration and all outgoings
properly payable by the Receiver;
|
4
|
Secondly:
|
in
or toward payment to the Secured Party of all principal and other
monies
(except interest) due in respect of the Secured
Obligations;
|
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Thirdly:
|
in
or toward payment to the Secured Party of all interest remaining
unpaid in
respect of the Secured Obligations;
|
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Fourthly:
|
any
surplus will be paid to the Debtor.
|
5.4 Waivers.
Secured
Party may exercise any of its rights and remedies without demand, advertisement
or notice other than as may be required by law. To the fullest extent permitted
by law, Debtor waives demand, notice, protest, notice of acceptance of this
Agreement or other action taken in reliance hereon and all other demands
and
notices of any description.
5.5 Deficiency.
If the
amounts realized from the disposition of the Collateral are not sufficient
to
pay the Secured Obligations in full to the Secured Party, the Debtor will
immediately pay to the Secured Party the amount of such deficiency.
5.6 Rights
Cumulative.
All
rights and remedies of the Secured Party set out in this Security Agreement
are
cumulative and no right or remedy contained herein is intended to be exclusive
but each will be in addition to every other right or remedy contained herein
or
in any existing or future security agreement or now or hereafter existing
at law
or in equity or pursuant to any other agreement between the Debtor and the
Secured Party that may be in effect from time to time.
6. LIABILITY
OF SECURED PARTY
6.1 Obligations
and Covenants of Debtor.
The
Secured Party shall not be bound to do, observe or perform or to see to the
observance or performance by the Debtor of any obligations or covenants imposed
upon the Debtor nor shall the Secured Party be obliged to keep any of the
Collateral identifiable.
6.2 Duty
to Inquire.
The
Secured Party shall not be obliged to inquire into the right of any person
purporting to be entitled under the PPSA to information and materials from
the
Secured Party by making a demand upon the Secured Party for such information
and
materials and the Secured Party shall be entitled to comply with such demand
and
shall not be liable for having complied with such demand notwithstanding
that
such person may in fact not be entitled to make such demand.
6.3 Waiver.
The
Debtor hereby waives any applicable provision of law permitted to be waived
by
it which imposes higher or greater obligations upon the Secured Party than
provided in this Security Agreement.
7. MISCELLANEOUS
7.1 Performance
of Obligations.
If the
Debtor fails to perform any of its Obligations hereunder, the Secured Party
may,
but shall not be obliged to, perform any or all of such Obligations without
prejudice to any other rights and remedies of the Secured Party hereunder,
and
any payments made and any costs, charges, expenses and legal fees and
disbursements (on a solicitor and his own client basis) incurred in connection
therewith shall be payable by the Debtor to the Secured Party forthwith with
interest until paid at the highest rate borne by any of the Secured Obligations
and such amounts shall form part of the Secured Obligations and constitute
a
charge upon the Collateral in favour of the Secured Party prior to all claims
subsequent to this Security Agreement.
5
7.2 Notices.
Any
notice, request, demand, statement, authorization, approval or consent required
or permitted under this Agreement shall be in writing and shall be made by,
and
deemed duly given upon, (a) deposit in the United States mail, postage prepaid,
registered or certified, return receipt requested, such mailing to be effective
upon receipt, (b) personal delivery, (c) 24 hours after delivery to a courier
of
recognized reputation (such as FedEx) or (d) transmission by facsimile with
a
copy sent separately by mail, as follows or to such other address and/or
such
additional parties as either party may specify by notice given in accordance
with this Section 7.2:
Debtor:
AltaRex
Corp.
000
Xxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxxxxxxx 00000
XXX
Attention:
Xxxxxx Xxxxxxxxxx
Telephone:
(000) 000-0000
Telecopier:
(000) 000-0000
Secured
Party: United
Therapeutics Corporation
1
000
Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Attention:
Xxxx X. Xxxxx, General Counsel
Telephone:(000)
000-0000
Telecopier:(000)
000-0000
7.3 Waiver,
Amendment or Modification.
No
waiver, amendment or modification of any provision hereof or of any right
or
remedy hereunder shall be effective unless in writing and signed by the party
against whom such waiver, amendment or modification is sought to be enforced.
No
failure by Secured Party to exercise, and no delay by Secured Party in
exercising, any right, power or remedy granted hereunder shall operate as
a
waiver of any such right, power or remedy. A waiver of any right or remedy
by
Secured Party on any one occasion shall not be construed as a bar to or waiver
of any right or remedy on any future occasion.
7.4 Assignment.
Secured
Party may assign any of its rights or delegate any of its duties under this
Agreement without the prior written consent of Debtor. Debtor may not assign
any
of its rights or delegate any of its duties under this Agreement without
the
prior written consent of Secured Party.
7.5 Governing
Law.
This
Agreement is governed by and shall be construed in accordance with the laws
of
the Province of Alberta.
6
7.6 Severability.
If any
term, covenant or provision of this Agreement shall be held to be invalid,
illegal or unenforceable in any respect, this Agreement shall be construed
without such term, covenant or provision.
7.7 Construction
of Agreement.
The
titles and headings of the sections of this Agreement have been inserted
for
convenience of reference only and are not intended to summarize or otherwise
describe the subject matter of such paragraphs and shall not be given any
consideration in the construction of this Agreement.
7.8 No
Merger.
This
Security Agreement shall not operate so as to create any merger or discharge
of
any Secured Obligations, or any assignment, transfer, guarantee, lien, contract,
promissory note, xxxx of exchange or security in any form held or which may
hereafter be held by the Secured Party from the Debtor or from any other
person
whomsoever. The taking of a judgment with respect to any of the Secured
Obligations will not operate as a merger of any of the terms, conditions,
covenants, agreements or provisos contained in this Security
Agreement.
7.9 Further
Assurances.
At the
Secured Party's request at any time and from time to time, the Debtor shall
execute and deliver such further and other security, documents and instruments
to further mortgage, charge and grant an assignment to the Secured Party
in and
to the Collateral, whether in any other jurisdiction or otherwise, and do
all
other acts and things as the Secured Party reasonably requires in order to
give
effect to this Security Agreement or such other mortgage, charge or assignment
against the Collateral or to confirm and perfect, and maintain perfection
of,
the security constituted by this Security Agreement or such other mortgage,
charge or assignment in favour of the Secured Party.
7.10 Financing
Statement.
The
Debtor hereby:
|
(a)
|
acknowledges
receiving a copy of this Security Agreement;
and
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(b)
|
waives
all rights to receive from the Secured Party a copy of any financing
statement, financing change statement or verification statement
filed at
any time or from time to time respect of this Security
Agreement.
|
7
7.11 Additional
Security.
This
Security Agreement and the security constituted hereby are in addition to
and
not in substitution for any other security which the Secured Party may now
or
from time to time hold or take from the Debtor or from any other person
whomsoever.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
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ALTAREX
CORP.
(“Debtor”)
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| By: | ||
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Its:
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UNITED
THERAPEUTICS CORPORATION
(“Secured
Party”)
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| By: | ||
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Its:
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8
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SCHEDULE
1
PATENTS
AND PATENT APPLICATIONS
|
||||
|
Country
|
File
Date
|
Serial
Number
|
Patent
Number
|
Issue
Date:
|
|
Therapeutic
compositions that produce an immune response
Altered
Immunogenicity
|
||||
|
South
Africa
|
11/10/98
|
9810275
|
98/10275
|
8/30/00
|
|
USA
|
9/2/98
|
98/152,698
|
||
|
Australia
|
6/15/99
|
41593/99
|
||
|
Canada
|
11/4/98
|
2,253,058
|
||
|
Canada
|
6/15/99
|
2,333,221
|
||
|
Europe
|
6/15/99
|
99925215.8
|
||
|
Israel
|
6/15/99
|
000000
|
||
|
Xxxxx
|
6/15/00
|
0000-000000
|
||
|
PCT
|
6/15/99
|
PCT/IB99/01114
|
||
|
USA
|
8/18/99
|
09/376,604
|
||
|
PCT
|
3/21/01
|
Pending
5
|
||
|
Therapeutic
Binding Agents against MUC-1 antigen and methods of their use
BrevaRex
|
||||
|
Israel
|
8/18/99
|
148165
|
||
|
Australia
|
8/18/99
|
Pending
|
||
|
Canada
|
8/18/99
|
Pending
Serial N. Designation of PCT
Application
PCT/US00/22890
|
||
|
Japan
|
8/18/99
|
Pending
|
||
|
Europe
|
8/18/99
|
Pending
|
||
|
PCT
|
8/18/00
|
PCT/US00/22890
|
||
|
USA
|
8/18/00
|
09/641,833
|
||
|
USA
|
11/26/01
|
09/994,466
|
||
|
Cancer
Therapeutics
Cancer
Therapeutics
|
||||
|
USA
|
1/17/02
|
Pending
3
|
||
|
SCHEDULE
1
PATENTS
AND PATENT APPLICATIONS
|
||||
|
Country
|
File
Date
|
Serial
Number
|
Patent
Number
|
Issue
Date:
|
|
Combination
Therapy for Treating Disease
Combination
Therapy
|
||||
|
USA
|
10/26/01
|
Pending
|
||
|
Therapeutic
method utilizing antigen-antibody complexation and presentation
by
dendritic cells
Dendritic
Cells
|
||||
|
PCT
(in vivo)
|
5/11/01
|
PCT/IB01/01331
|
||
|
USA
(in vivo)
|
5/11/01
|
09/853,300
|
||
|
PCT
(ex vivo)
|
5/11/01
|
XXX/XX00/00000
|
||
|
XXX
(ex vivo)
|
5/11/01
|
09/853,268
|
||
|
Method
for diagnosing efficacy of xenotypic antibody therapy
HAMA
|
||||
|
PCT
|
2/8/01
|
PCT/IB01/00423
|
||
|
USA
|
2/8/01
|
09/779,439
|
||
|
Method
and Composition for Reconforming Multi-epitopic antigens to initiate
an
immune response
Multi-epitopic
|
||||
|
Australia
|
5/15/96
|
56,580/96
|
711,270
|
1/20/00
|
|
Brazil
|
5/15/96
|
PI
9612619-1
|
||
|
Canada
|
5/15/96
|
2,253,602
|
||
|
China
|
5/15/96
|
96180297.9
|
||
|
Europe
|
5/15/96
|
96913660.5
|
||
|
Hong
Kong
|
5/15/96
|
99104783.5
|
||
|
Hungary
|
5/15/96
|
41,408/98
|
||
|
Israel
|
5/15/96
|
126803
|
||
{E5064844.DOC;1}
|
SCHEDULE
1
PATENTS
AND PATENT APPLICATIONS
|
||||
|
Country
|
File
Date
|
Serial
Number
|
Patent
Number
|
Issue
Date:
|
|
Method
and Composition for Reconforming Multi-epitopic antigens to initiate
an
immune response
Multi-epitopic
|
||||
|
Japan
|
5/15/96
|
540,681/1997
|
||
|
Japan
|
7/3/00
|
200,702/2000
|
||
|
South
Korea
|
5/15/96
|
709153/98
|
||
|
South
Korea
|
5/15/96
|
10-2001-7015189
|
||
|
Mexico
|
5/15/96
|
98
0000
|
||
|
Xxxxxx
|
5/15/96
|
985,304
|
||
|
New
Zealand
|
5/15/96
|
332588
|
332588
|
0/0/00
|
|
Xxx
Xxxxxxx
|
0/00/00
|
000000
|
||
|
Xxx
Xxxxxxx
|
5/15/96
|
503032
|
||
|
New
Zealand
|
5/15/96
|
516264
|
||
|
PCT
|
5/15/96
|
PCT/IB96/00461
|
||
|
USA
|
5/15/96
|
08/913,290
|
6,241,985
|
6/5/01
|
|
USA
|
5/31/01
|
09/871,339
|
||
|
Therapeutic
composition and method of treatment
Photoactivation
|
||||
|
Australia
|
6/16/98
|
81439/98
|
732,505
|
8/9/01
|
|
Canada
|
6/16/98
|
2292912
|
||
|
Europe
|
6/16/98
|
00000000.2
|
||
|
Japan
|
6/16/98
|
504632/1999
|
||
|
PCT
|
6/16/98
|
XXX/XX00/00000
|
||
|
XXX
|
6/17/97
|
08/877,511
|
6,086,873
|
7/11/00
|
|
USA
|
7/10/00
|
09/613163
|
||
|
SCHEDULE
1
PATENTS
AND PATENT APPLICATIONS
|
||||
|
Country
|
File
Date
|
Serial
Number
|
Patent
Number
|
Issue
Date:
|
|
Immunotherapeutic
Composition and Method for the treatment of Prostate
ProstaRex
|
||||
|
Australia
|
6/15/99
|
41594/99
|
||
|
Canada
|
6/15/99
|
2,328,504
|
||
|
Europe
|
6/15/99
|
99925216.6
|
||
|
Israel
|
6/15/99
|
000000
|
||
|
Xxxxx
|
6/15/00
|
0000-000000
|
||
|
PCT
|
6/15/99
|
PCT/IB99/01115
|
||
|
USA
|
6/15/99
|
09/332,866
|
||
|
Therapeutic
Adjuvant
Therapeutic
Adjuvant
|
||||
|
USA
|
8/16/01
|
60/312,887
|
||
|
Therapeutic
Immune Condition Compositions and Methods
Anti-Inflammation
and Metastasis
|
||||
|
Australia
|
8/25/00
|
Pending
|
||
|
Israel
|
8/25/00
|
Pending
|
||
|
Europe
|
8/25/00
|
Pending
|
||
|
Japan
|
8/25/00
|
Pending
|
||
|
Canada
|
8/25/00
|
Pending
|
||
|
PCT
|
8/25/00
|
PCT/IB00/02077
|
||
|
USA
|
8/25/00
|
09/648,663
|
||
|
Binding
Agents And their Use In Targeting Tumor Cells
Tumor
Cell Targeting
|
||||
|
USA
(Provisional)
|
4/11/02
|
Pending
|
||
EXHIBIT
D
Form
of
Registration Rights Agreement
