EXHIBIT 10.45
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement (this "IP Agreement") is
made as of the 26th day of June, 2003 by and between PHARMCHEM, INC.
("Grantor"), and Silicon Valley Bank, a California banking corporation ("Bank").
RECITALS
A. Bank will make credit extensions to PharmChem, Inc. as
described in the Loan and Security Agreement (the "Loan Agreement") dated of
even date herewith, but only if Grantor grants Bank a security interest in its
Copyrights, Trademarks, Patents, and Mask Works. Defined terms used but not
defined herein shall have the same meanings as in the Loan Agreement.
B. Pursuant to the terms of the Loan Agreement, Grantor has
granted to Bank a security interest in all of Grantor's right title and
interest, whether presently existing or hereafter acquired in, to and under all
of the Collateral.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged and intending to be legally bound, as collateral security
for the prompt and complete payment when due of Grantor's Indebtedness under the
Loan Agreement, Grantor hereby represents, warrants, covenants and agrees as
follows:
1. Grant of Security Interest. As collateral security for the
prompt and complete payment and performance of all of Grantor's present or
future Indebtedness, obligations and liabilities to Bank, Grantor hereby grants
a security interest in all of Grantor's right, title and interest in, to and
under its Intellectual Property Collateral (all of which shall collectively be
called the "Intellectual Property Collateral"), including, without limitation,
the following:
(a) Any and all copyright rights, copyright applications,
copyright registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether or not the
same also constitutes a trade secret, now or hereafter existing, created,
acquired or held, including without limitation those set forth on Exhibit A
attached hereto (collectively, the "Copyrights");
(b) Any and all trade secrets, and any and all
intellectual property rights in computer software and computer software products
now or hereafter existing, created, acquired or held;
(c) Any and all design rights which may be available to
Grantor now or hereafter existing, created, acquired or held;
(d) All patents, patent applications and like protections
including, without limitation, improvements, divisions, continuations, renewals,
reissues, extensions and continuations-in-part of the same, including without
limitation the patents and patent applications set forth on Exhibit B attached
hereto (collectively, the "Patents");
(e) Any trademark and servicemark rights, whether
registered or not, applications to register and registrations of the same and
like protections, and the entire goodwill of the business of Grantor connected
with and symbolized by such trademarks, including without limitation those set
forth on Exhibit C attached hereto (collectively, the "Trademarks");
(f) All mask works or similar rights available for the
protection of semiconductor chips, now owned or hereafter acquired, including,
without limitation those set forth on Exhibit D attached hereto (collectively,
the "Mask Works");
(g) Any and all claims for damages by way of past,
present and future infringements of any of the rights included above, with the
right, but not the obligation, to xxx for and collect such damages for said use
or infringement of the intellectual property rights identified above;
(h) All licenses or other rights to use any of the
Copyrights, Patents, Trademarks, or Mask Works and all license fees and
royalties arising from such use to the extent permitted by such license or
rights;
(i) All amendments, extensions, renewals and extensions
of any of the Copyrights, Trademarks, Patents, or Mask Works; and
(j) All proceeds and products of the foregoing, including
without limitation all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing.
2. Authorization and Request. Grantor authorizes and requests
that the Register of Copyrights and the Commissioner of Patents and Trademarks
record this IP Agreement.
3. Covenants and Warranties. Grantor represents, warrants,
covenants and agrees as follows:
(a) Grantor is now the sole owner of the Intellectual
Property Collateral, except for non-exclusive licenses granted by Grantor in the
ordinary course of business;
(b) Performance of this IP Agreement does not conflict
with or result in a breach of any IP Agreement to which Grantor is bound, except
to the extent that certain intellectual property agreements prohibit the
assignment of the rights thereunder to a third party without the licensor's or
other party's consent and this IP Agreement constitutes a security interest;
(c) During the term of this IP Agreement, Grantor will
not transfer or otherwise encumber any interest in the Intellectual Property
Collateral, except for non-exclusive licenses granted by Grantor in the ordinary
course of business or as set forth in this IP Agreement;
(d) To its knowledge, each of the Patents is valid and
enforceable, and no part of the Intellectual Property Collateral has been judged
invalid or unenforceable, in whole or in part, and no claim has been made that
any part of the Intellectual Property Collateral violates the rights of any
third party;
(e) Grantor shall promptly advise Bank of any material
adverse change in the composition of the Collateral, including but not limited
to any subsequent ownership right of the Grantor in or to any Trademark, Patent,
Copyright, or Mask Work specified in this IP Agreement;
(f) Grantor shall (i) use commercially reasonable efforts
to protect, defend and maintain the validity and enforceability of the
Trademarks, Patents, Copyrights, and Mask Works, (ii) use commercially
reasonable efforts to detect infringements of the Trademarks, Patents,
Copyrights, and Mask Works and promptly advise Bank in writing of material
infringements detected and (iii) not allow any Trademarks, Patents, Copyrights,
or Mask Works to be abandoned, forfeited or dedicated to the public without the
written consent of Bank, which shall not be unreasonably withheld, unless
Grantor determines that reasonable business practices suggest that abandonment
is appropriate;
(g) Grantor shall promptly register the most recent
version of any of Grantor's Copyrights, if not so already registered, and shall,
from time to time, execute and file such other instruments, and take such
further actions as Bank may reasonably request from time to time to perfect or
continue the perfection of Bank's interest in the Intellectual Property
Collateral;
IP Security Agreement
[PharmChem, Inc.]
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(h) This IP Agreement creates, and in the case of after
acquired Intellectual Property Collateral, this IP Agreement will create at the
time Grantor first has rights in such after acquired Intellectual Property
Collateral, in favor of Bank a valid and perfected first priority security
interest in the Intellectual Property Collateral in the United States securing
the payment and performance of the obligations evidenced by the Loan Agreement
upon making the filings referred to in clause (i) below;
(i) To its knowledge (except for, and upon, the filing
with the United States Patent and Trademark office with respect to the Patents
and Trademarks and the Register of Copyrights with respect to the Copyrights and
Mask Works necessary to perfect the security interests created hereunder, except
as has been already made or obtained) no authorization, approval or other action
by, and no notice to or filing with, any U.S. governmental authority of U.S.
regulatory body is required either (i) for the grant by Grantor of the security
interest granted hereby or for the execution, delivery or performance of this IP
Agreement by Grantor in the U.S. or (ii) for the perfection in the United States
or the exercise by Bank of its rights and remedies thereunder;
(j) All information heretofore, herein or hereafter
supplied to Bank by or on behalf of Grantor with respect to the Intellectual
Property Collateral is accurate and complete in all material respects;
(k) Grantor shall not enter into any agreement that would
materially impair or conflict with Grantor's obligations hereunder without
Bank's prior written consent, which consent shall not be unreasonably withheld.
Grantor shall not permit the inclusion in any material contract to which it
becomes a party of any provisions that could or might in any way prevent the
creation of a security interest in Grantor's rights and interest in any property
included within the definition of the Intellectual property Collateral acquired
under such contracts, except that certain contracts may contain anti-assignment
provisions that could in effect prohibit the creation of a security interest in
such contracts;
(l) Upon any executive officer of Grantor obtaining
actual knowledge thereof, Grantor will promptly notify Bank in writing of any
event that materially adversely affects the value of any material Intellectual
Property Collateral, the ability of Grantor to dispose of any material
Intellectual Property Collateral or the rights and remedies of Bank in relation
thereto, including the levy of any legal process against any of the Intellectual
Property Collateral.
4. Bank's Rights. Bank shall have the right, but not the
obligation, to take, at Grantor's sole expense, any actions that Grantor is
required under this IP Agreement to take but which Grantor fails to take.
Grantor shall reimburse and indemnify Bank for all reasonable costs and
reasonable expenses incurred in the reasonable exercise of its rights under this
section 4.
5. Inspection Rights. Grantor hereby grants to Bank and its
employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable notice to Grantor, and any of Grantor's plants and
facilities that manufacture, install or store products (or that have done so
during the prior six-month period) that are sold utilizing any of the
Intellectual Property Collateral, and to inspect the products and quality
control records relating thereto upon reasonable written notice to Grantor and
as often as may be reasonably requested, but not more than one (1) in every six
(6) months; provided, however, nothing herein shall entitle Bank access to
Grantor's trade secrets and other proprietary information.
6. Further Assurances; Attorney in Fact.
(a) On a continuing basis, as requested by Bank, Grantor
will, subject to any prior licenses, encumbrances and restrictions and
prospective licenses, make, execute, acknowledge and deliver, and file and
record in the proper filing and recording places in the United States, all such
instruments, including appropriate financing and continuation statements and
collateral agreements and filings with the United States Patent and Trademarks
Office and the Register of Copyrights, and take all such action as may
reasonably be deemed necessary or advisable, or as requested by Bank, to perfect
Bank's security interest in all Copyrights, Patents, Trademarks, and Mask Works
and otherwise to carry out the intent and purposes of
IP Security Agreement
[PharmChem, Inc.]
3
this IP Agreement, or for assuring and confirming to Bank the grant or
perfection of a security interest in all Intellectual Property Collateral.
(b) Grantor hereby irrevocably appoints Bank as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Bank or otherwise, from time to time in Bank's discretion,
upon Grantor's failure or inability to do so, to take any action and to execute
any instrument which Bank may deem necessary or advisable to accomplish the
purposes of this IP Agreement, including:
(i) To modify, in its sole discretion, this IP
Agreement without first obtaining Grantor's approval of or signature to such
modification by amending Exhibit A, Exhibit B, Exhibit C, and Exhibit D hereof,
as appropriate, to include reference to any right, title or interest in any
Copyrights, Patents, Trademarks or Mask Works acquired by Grantor after the
execution hereof or to delete any reference to any right, title or interest in
any Copyrights, Patents, Trademarks, or Mask Works in which Grantor no longer
has or claims any right, title or interest; and
(ii) To file, in its sole discretion, one or more
financing or continuation statements and amendments thereto, relative to any of
the Intellectual Property Collateral without the signature of Grantor where
permitted by law.
7. Events of Default. The occurrence of any of the following
shall constitute an Event of Default under this IP Agreement:
(a) An Event of Default occurs under the Loan Agreement;
or
(b) Grantor breaches any warranty or agreement made by
Grantor in this IP Agreement.
8. Remedies. Upon the occurrence and continuance of an Event of
Default, Bank shall have the right to exercise all the remedies of a secured
party under the California Uniform Commercial Code, including without limitation
the right to require Grantor to assemble the Intellectual Property Collateral
and any tangible property in which Bank has a security interest and to make it
available to Bank at Grantor' principal place of business. Bank shall have a
nonexclusive, royalty free license to use the Copyrights, Patents, Trademarks,
and Mask Works to the extent reasonably necessary to permit Bank to exercise its
rights and remedies upon the occurrence of an Event of Default. Grantor will pay
any reasonable expenses (including reasonable attorney's fees) incurred by Bank
in connection with the exercise of any of Bank's rights hereunder, including
without limitation any expense incurred in disposing of the Intellectual
Property Collateral. All of Bank's rights and remedies with respect to the
Intellectual Property Collateral shall be cumulative.
9. Indemnity. Grantor agrees to defend, indemnify and hold
harmless Bank and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by this IP Agreement, and
(b) all losses or expenses in any way suffered, incurred, or paid by Bank as a
result of or in any way arising out of, following or consequential to
transactions between Bank and Grantor, whether under this IP Agreement or
otherwise (including without limitation, reasonable attorneys fees and
reasonable expenses), except for losses arising from or out of Bank's gross
negligence or willful misconduct.
10. Reassignment. At such time as Grantor shall completely satisfy
all of the obligations secured hereunder, Bank shall execute and deliver to
Grantor all deed, assignments, and other instruments as may be necessary or
proper to reinvest in Grantor full title to the property assigned hereunder,
subject to any disposition thereof which may have been made by Bank pursuant
hereto.
11. Course of Dealing. No course of dealing, nor any failure to
exercise, nor any delay in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.
IP Security Agreement
[PharmChem, Inc.]
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12. Attorneys' Fees. If any action relating to this IP Agreement
is brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys fees, costs and disbursements.
13. Amendments. This IP Agreement may be amended only by a written
instrument signed by both parties hereto.
14. Counterparts. This IP Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
15. Law and Jurisdiction. This IP Agreement shall be governed by
and construed in accordance with the laws of the State of California, without
regard for choice of law provisions.
16. Confidentiality. In handling any confidential information,
Bank shall exercise the same degree of care that it exercises with respect to
its own proprietary information of the same types to maintain the
confidentiality of any non-public information thereby received or received
pursuant to this IP Agreement except that the disclosure of this information may
be made (i) to the affiliates of the Bank, (ii) to prospective transferees or
purchasers of an interest in the obligations secured hereby, provided that they
have entered into a comparable confidentiality agreement in favor of Grantor and
have delivered a copy to Grantor, (iii) as required by law, regulation, rule or
order, subpoena, judicial order or similar order and (iv) as may be required in
connection with the examination, audit or similar investigation of Bank.
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IP Security Agreement
[PharmChem, Inc.]
5
IN WITNESS WHEREOF, the parties hereto have executed this IP Agreement
on the day and year first above written.
ADDRESS OF GRANTOR: GRANTOR:
0000 X. Xxxxx Xxxxxx PHARMCHEM, INC.
Xxxxxx Xxxx, Xxxxx 00000
By: /s/Xxxxx X. Xxxxxxxxx
----------------------
Xxxxx X. Xxxxxxxxx
Vice President & CFO
IP Security Agreement
[PharmChem, Inc.]
Exhibit "A" attached to that certain Intellectual Property Security Agreement
dated June 26, 2003.
EXHIBIT "A"
COPYRIGHTS
SCHEDULE A - ISSUED COPYRIGHTS
NONE.
IP Security Agreement
[PharmChem, Inc.]
SCHEDULE B - PENDING COPYRIGHT APPLICATIONS
FIRST DATE
COPYRIGHT APPLICATION DATE OF OF PUBLIC
DESCRIPTION NUMBER FILING CREATION DISTRIBUTION
----------- ----------- ------- -------- ------------
NONE.
IP Security Agreement
[PharmChem, Inc.]
SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)
DATE AND
RECORDATION
NUMBER OF
IP AGREEMENT TO
ORIGINAL OWNER OF
AUTHOR OR ORIGINAL AUTHOR
OWNER OF OR OWNER OF
FIRST DATE COPYRIGHT COPYRIGHT IS
COPYRIGHT DATE OF OF (IF DIFFERENT DIFFERENT FROM
DESCRIPTION CREATION DISTRIBUTION FROM GRANTOR GRANTOR
----------- -------- ------------ ------------- ---------------
NONE.
IP Security Agreement
[PharmChem, Inc.]
Exhibit "B" attached to that certain Intellectual Property Security Agreement
dated June 26, 2003.
EXHIBIT "B"
PATENTS
PATENT
DESCRIPTION DOCKET NO. COUNTRY SERIAL NO. FILING DATE STATUS
----------- ---------- ------- ---------- ----------- ------
NONE.
IP Security Agreement
[PharmChem, Inc.]
Exhibit "C" attached to that certain Intellectual Property Security Agreement
dated June 26, 2003.
EXHIBIT "C"
FEDERAL TRADEMARKS
MONDAY, MAY 12, 2003 PHARMCHEM, INC.'S TRADEMARK STATUS REPORT
COUNTRY EUROPEAN COMMUNITY
TRADEMARK NAME APPLN./REG APPLN./REG
CLASS GOODS STATUS NUMBER DATE NEXT
ACTION(S) DUE DATE OWNER NAME
PHARMSCREEN Int. Classes 5 and Int. Class 5-Screen test for drugs of abouse Registered 391649 10/11/1996 Renewal
Due 11-Oct-2006 (including medicines) and Pharmchem,
42 their metabolites in urine
Int. Class 42- Forensic screening and
confirmation laboratory services for drugs
of abuse (including medicines) and their
metabolities.
MONDAY, MAY 12, 2003 PHARMCHEM, INC.'S TRADEMARK STATUS REPORT
COUNTRY UNITED STATES OF AMERICA
TRADEMARK NAME APPLN./REG APPLN./REG
CLASS GOODS STATUS NUMBER DATE NEXT
ACTION(S) DUE DATE OWNER NAME
FAST (FEDERAL Int. Class 42 Providing temporary use of non-downloadable Registered 2609312 8/20/2002 8/15 Due
AGENCIES computer software for tracking, monitoring
SPECIMEN and reporting on the transit and status of
TRACKING) (R) drug testing specimens; providing an on-line
computer database in the field of drug
testing for tracking, monitoring and reporting
on the transit and status of drug testing
specimens.
PCM (R) Int. Class 42 Forensic screening and confirmation laboratory Registered 2404736 11/14/2000 8/15 Due
services for drugs of abuse and their
metabolites, and related specimen tracking,
regulatory compliance and litigation support
services.
PHARMCHEK (R) Int. Class 10 Patches used to collect body fluids for Registered 2077799 7/8/1997 8/15 Due
analysis.
PHARMSCREEN (R) Int. Class 5 5-screen test for drugs of abuse and their Registered 2155538 5/5/1998 8/15 Due
metabolites in urine.
PHARMTRACK (R) Int. Class 42 Providing temporary use of non-downloadable Registered 2609311 8/20/2002 8/15 Due
computer software for tracking, monitoring
and reporting on the transit and status of
drug testing specimens; providing an on-line
computer database in the field of drug testing
for tracking, monitoring and reporting on the
transit and status of drug testing specimens.
PHARMVIEW (TM) Int. Class 5 Screening kits for detecting drugs of abuse Published 78/148757 7/30/2002 Status
Check-Reg. Cert 01-Sep-2003 and their metabolites in Pharmchem,
urine, comprised of a reagent test strip and
collection cup.
PREMIUM Int. Class 42 Forensic screening and confirmation laboratory Abandoned 75/589121 11/16/1998
COMPREHENSIVE services for drugs of abuse and their
MANAGEMENT metabolites and related specimen tracking,
regulatory compliance and litigation support
services.
IP Security Agreement
[PharmChem, Inc.]
STATE TRADEMARKS
NONE.
IP Security Agreement
[PharmChem, Inc.]
Exhibit "D" attached to that certain Intellectual Property Security Agreement
dated June 26, 2003.
EXHIBIT "D"
MASK WORKS
NONE.
IP Security Agreement
[PharmChem, Inc.]
