EXHIBIT 10.19
COLLATERAL ASSIGNMENT OF PATENT RIGHTS
THIS COLLATERAL ASSIGNMENT OF PATENT RIGHTS (this "Assignment") is made
the 20th day of February, 2001 by and between NOCOPI TECHNOLOGIES, INC., a
Maryland corporation ("Assignor"), and WESTVACO BRAND SECURITY, INC., a Delaware
corporation ("Assignee").
Background
Assignor and Assignee have entered into a License Agreement dated as of
September 1, 2000 and an Amendment thereto dated December 19, 2000 (such
agreement, as so amended and as it may hereafter further be amended, is
hereinafter referred to as the "License Agreement") pursuant to which, among
other things, Assignor granted to Assignee rights to market, promote, sell and
manufacture certain products which incorporate "Nocopi Technology" (as such term
is defined in the License Agreement.) Certain elements of the Nocopi Technology
are the subject of one or more of the United States patents (such patents,
together with all related patent applications and submittals and all extensions
and modifications thereof, are hereinafter referred to as the "Patents").
Assignor and Assignee desire to enter into this Agreement in order to
secure the performance by Assignor of its obligations under the License
Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, receipt of which the parties hereby acknowledge, the
parties hereto, intending to be legally bound hereby, agree as follows:
1. Assignment to Secure Obligations. To secure the full and timely
performance by Assignor of its obligations under the License Agreement and,
without limiting the generality of the foregoing, the prompt payment of any
damages owed by Assignor to Assignee by reason of Assignor's breach or wrongful
termination of the License Agreement, together with any interest accrued thereon
at the legal rate (collectively, the "Obligations"), Assignor hereby pledges,
assigns, hypothecates, delivers and sets over to Assignee and grants to Assignee
a first lien on, and first security interest in all of Assignor's right, title
and interest in and to all of the Patents heretofore or hereafter issued which
are related to any elements of the Nocopi Technology and all of Assignor's
rights thereunder and interests therein, together with all Proceeds of any of
the foregoing (collectively, the "Patent Rights").
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2. Certain Rights of Assignee After Event of Default.
2.1 Sale of Patent Rights. If an Event of Default, as
hereinafter defined, shall occur and be continuing, Assignee shall have the
right, without demand of performance or other demand, advertisement or further
notice of any kind (except the notice specified in Section 2.4 of the time and
place of public or private sale) to or upon the Assignor or any other person
(all and each of which demands, advertisements, and/or notices are, to the
extent permitted by law, hereby expressly waived), forthwith to collect,
receive, appropriate and realize upon the Patent Rights, or any part thereof,
and forthwith to sell, assign, give option or options to purchase, contract to
sell or otherwise dispose of and deliver the Patent Rights, or any part thereof,
in one or more public or private sale or sales, at any exchange, board, auction
or at the Assignee's offices or elsewhere, at such prices and on such terms as
the Assignee may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. At any such sale or sales Assignee or its nominee
may purchase any or all of the Patent Rights upon such terms as he may deem
best. Any sale shall be conducted in a commercially reasonable manner.
2.2 Effect of Sale. Upon any such sale or sales, the Patent
Rights so sold shall be held by the purchasers thereof absolutely free from any
right or equity of redemption in Assignor, or any similar rights, claims or
equities, all of which are hereby expressly waived and released by Assignor.
2.3 Application of Proceeds Upon Disposition of the
Collateral. The proceeds of any sale or sales of the Patent Rights shall be
received and applied, after deduction for any expenses of sale including
reasonable attorneys' fees and disbursements, to the payment of the Obligations
in any manner or order which Assignee, in its sole discretion, may elect,
without further notice to or consent of Assignor and without regard to any
equitable principles of marshaling or other like equitable doctrines, and any
excess shall be returned to Assignor. Assignor hereby acknowledges and agrees
that Assignee is not required to exercise all remedies and rights available to
him equally with respect to all of the Patent Rights and Assignee may select
less than all of the Patent Rights with respect to which the remedies as
determined by Assignee may be exercised.
2.4 Reasonable Notice of Proposed Sale. Assignee agrees to
give ten (10) days advance notice to the Assignor of the time and place of any
public or private sale or sales of the Patent Rights and the Assignor agrees
that such notice shall constitute reasonable notification.
2.5 Remedies Cumulative. Assignor agrees that the rights,
powers and remedies given to Assignee by this Agreement are cumulative and not
exclusive of any thereof or of any other powers, rights or remedies available to
Assignee.
3. Representations and Warranties. Assignor hereby covenants,
represents and warrants as follows:
3.1 The Patent Rights are owned by Assignor free and clear of
any pledge, mortgage, hypothecation, lien, charge, encumbrance, or security
interest therein or any other adverse claim with respect thereto.
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3.2 This Assignment creates a valid first lien on and
perfected security interest in the Patent Rights, subject to no prior security
interest, lien, charge, or encumbrance or agreement granting or purporting to
grant to any third party a security interest or other lien in the Patent Rights.
3.3 As long as any part of the Obligations is outstanding or
not paid in full, Assignor will not sell, assign, convey, or otherwise dispose
of any of the Patent Rights, nor create, incur, or permit to exist any pledge,
mortgage, lien, charge, encumbrance, or any security interest whatsoever with
respect to the Patent Rights.
3.4 Assignor shall not change its name or commence to do
business under any other name without having first (a) given to Assignee at
least thirty (30) days' prior written notice of such change and (b) executed,
delivered and filed (and paid filing fees and taxes) all such documents as may
be necessary or advisable in the opinion of Assignee to continue to perfect and
protect the liens created hereby.
3.5 Assignor has full right, power and authority to enter into
this Assignment. The execution and delivery of this Assignment by Assignor has
been duly authorized by the board of directors of Assignor, and such action by
the Assignor's board of directors constitutes all necessary corporate action on
the part of Assignor in connection with such execution and delivery.
For the purposes of this Section 3, it is understood and agreed that the
interests of other licensees of the Nocopi Technology or elements thereof will
be deemed not to be an encumbrance upon any of the Patent Rights.
4. Further Assurances. Assignor agrees that at any time or times,
promptly upon written request by the Assignee, Assignor will execute and deliver
such further documents and do such further acts as may, in the reasonable
opinion of Assignee, be necessary to assure that the Patent Rights are subject
to a valid, perfected first security interest and/or first lien hereunder, and
at Assignor's expense, cause all such documents to be filed or recorded in the
manner required by law to secure the effectiveness and the continuation and
perfection of the security interests hereby created.
5. Additional Security. Assignee may take or release other security,
may grant extensions, renewals or indulgences with respect to the Obligations,
and may apply any other security therefor held by Assignor to the satisfaction
of the Obligations without prejudice to any of its rights hereunder.
6. Satisfaction of Obligations. Upon the full satisfaction of the
Obligations, this Assignment shall become void and of no further effect, and, in
such event, upon the reasonable request of Assignor, Assignee shall execute,
deliver and file such documents as Assignor may reasonably determine are
necessary or appropriate to confirm that the Obligations have been satisfied
and/or that the security interest granted herein is terminated.
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7. Event of Default. An Event of Default shall exist hereunder at such
time as (i) Assignor shall have committed a material breach of the License
Agreement, and (ii) the amount of Assignee's claim against Assignor arising from
such breach shall have been liquidated by agreement of the parties, by entry of
a final non-appealable judgment by a court having jurisdiction, or by allowance
of such claim in connection with bankruptcy proceedings of Assignor.
8. Assignment. Assignee may assign all (but not less than all) of its
right, title and interest in and to this Assignment, but only in connection with
the permitted assignment of its interest under the License Agreement and only to
the permitted assignee of such interest.
9. Severability. Any provision of this Agreement prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions in any
other jurisdiction.
10. Survival of Terms. All agreements, covenants, representations and
warranties in this Assignment shall survive the execution and delivery of this
Assignment.
11. Expenses. Assignor will reimburse Assignee for all reasonable costs
of collection or enforcement (including without limitation reasonable attorneys'
fees and expenses) incurred in enforcing the obligations Assignor under this
Assignment.
12. Notices. All notices required hereunder or given in connection with
this Assignment shall be given in the manner permitted or required in the
License Agreement.
13. Miscellaneous. This Assignment shall be construed and enforced in
accordance with and governed by the laws of the Commonwealth of Pennsylvania,
and it shall be binding upon Assignor and Assignee and their respective
successors and assigns, and may not be terminated or modified orally but only in
writing making specific reference hereto and signed by all the parties hereto.
Headings in this Assignment are for reference purposes only and shall not limit
or otherwise affect the meaning hereof. This Assignment may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one Assignment.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Assignment to be duly executed as of the date first above written.
NOCOPI TECHNOLOGIES, INC. WESTVACO BRAND SECURITY, INC.
By:___________________________ By:_____________________________
Xxxxxxx X. Xxxxxxxxx, M.D., Xxxxxxx Xxxx, President
Chairman
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Exhibit A
[List of Patents Pledged]
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