EXHIBIT 10.26
INTELLECTUAL PROPERTY SECURITY AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT (this "Agreement"
dated as of May 23, 2005, by and among CalbaTech, Inc., a Nevada
corporation (the "Company"), and the secured parties signatory hereto
and their respective endorsees, transferees and assigns
(collectively, the "Secured Party").
W I T N E S S E T H :
WHEREAS, pursuant to a Securities Purchase Agreement, dated the
date hereof, between Company and the Secured Party (the "Purchase
Agreement"), Company has agreed to issue to the Secured Party and the
Secured Party has agreed to purchase from Company certain of
Company's 10% Callable Secured Convertible Notes, due three years
from the date of issue (the "Notes"), which are convertible into
shares of Company's Common Stock, par value $.001 per share (the
"Common Stock"). In connection therewith, Company shall issue the
Secured Party certain Common Stock purchase warrants (the
"Warrants"); and
WHEREAS, in order to induce the Secured Party to purchase the
Notes, Company has agreed to execute and deliver to the Secured Party
this Agreement for the benefit of the Secured Party and to grant to
it a first priority security interest in certain Intellectual
Property (defined below) of Company to secure the prompt payment,
performance and discharge in full of all of Company's obligations
under the Notes and exercise and discharge in full of Company's
obligations under the Warrants; and
NOW, THEREFORE, in consideration of the agreements herein
contained and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms
which are defined in the Purchase Agreement and used herein are so
used as so defined; and the following terms shall have the following
meanings:
"Software Intellectual Property" shall mean:
(a) all software programs (including all source code,
object code and all related applications and data files), whether now
owned, upgraded, enhanced, licensed or leased or hereafter acquired
by the Company, above;
(b) all computers and electronic data processing
hardware and firmware associated therewith;
(c) all documentation (including flow charts, logic
diagrams, manuals, guides and specifications) with respect to such
software, hardware and firmware described in the preceding clauses
(a) and (b); and
(d) all rights with respect to all of the foregoing,
including, without limitation, any and all upgrades, modifications,
copyrights, licenses, options, warranties, service contracts, program
services, test rights, maintenance rights, support rights,
improvement rights, renewal rights and indemnifications and
substitutions, replacements, additions, or model conversions of any
of the foregoing.
"Copyrights" shall mean (a) all copyrights,
registrations and applications for registration, issued or filed,
including any reissues, extensions or renewals thereof, by or with
the United States Copyright Office or any similar office or agency of
the United States, any state thereof, or any other country or
political subdivision thereof, or otherwise, including, all rights in
and to the material constituting the subject matter thereof,
including, without limitation, any referred to in Schedule B hereto,
and (b) any rights in any material which is copyrightable or which is
protected by common law, United States copyright laws or similar laws
or any law of any State, including, without limitation, any thereof
referred to in Schedule B hereto.
"Copyright License" shall mean any agreement, written
or oral, providing for a grant by the Company of any right in any
Copyright, including, without limitation, any thereof referred to in
Schedule B hereto.
"Intellectual Property" shall means, collectively, the
Software Intellectual Property, Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks, Trademark Licenses and Trade
Secrets.
"Obligations" means all of the Company's obligations
under this Agreement and the Notes, in each case, whether now or
hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time
decreased or extinguished and later decreased, created or incurred,
and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or
recovered directly or indirectly from the Secured Party as a
preference, fraudulent transfer or otherwise as such obligations may
be amended, supplemented, converted, extended or modified from time
to time.
"Patents" shall mean (a) all letters patent of the
United States or any other country or any political subdivision
thereof, and all reissues and extensions thereof, including, without
limitation, any thereof referred to in Schedule B hereto, and (b) all
applications for letters patent of the United States and all
divisions, continuations and continuations-in-part thereof or any
other country or any political subdivision, including, without
limitation, any thereof referred to in Schedule B hereto.
"Patent License" shall mean all agreements, whether
written or oral, providing for the grant by the Company of any right
to manufacture, use or sell any invention covered by a Patent,
including, without limitation, any thereof referred to in Schedule B hereto.
"Security Agreement" shall mean the a Security
Agreement, dated the date hereof between Company and the Secured Party.
"Trademarks" shall mean (a) all trademarks, trade
names, corporate names, company names, business names, fictitious
business names, trade styles, service marks, logos and other source
or business identifiers, and the goodwill associated therewith, now
existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith,
whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any state thereof or
any other country or any political subdivision thereof, or otherwise,
including, without limitation, any thereof referred to in Schedule B
hereto, and (b) all reissues, extensions or renewals thereof.
"Trademark License" shall mean any agreement, written
or oral, providing for the grant by the Company of any right to use
any Trademark, including, without limitation, any thereof referred to
in Schedule B hereto.
"Trade Secrets" shall mean common law and statutory
trade secrets and all other confidential or proprietary or useful
information and all know-how obtained by or used in or contemplated
at any time for use in the business of the Company (all of the
foregoing being collectively called a "Trade Secret"), whether or not
such Trade Secret has been reduced to a writing or other tangible
form, including all documents and things embodying, incorporating or
referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in Schedule B hereto,
and including the right to xxx for and to enjoin and to collect
damages for the actual or threatened misappropriation of any Trade
Secret and for the breach or enforcement of any such Trade Secret license.
2. Grant of Security Interest. In accordance with
Section 3(m) of the Security Agreement, to secure the complete and
timely payment, performance and discharge in full, as the case may
be, of all of the Obligations, the Company hereby, unconditionally
and irrevocably, pledges, grants and hypothecates to the Secured
Party, a continuing security interest in, a continuing first lien
upon, an unqualified right to possession and disposition of and a
right of set-off against, in each case to the fullest extent
permitted by law, all of the Company's right, title and interest of
whatsoever kind and nature in and to the Intellectual Property (the
"Security Interest").
3. Representations and Warranties. The Company hereby
represents and warrants, and covenants and agrees with, the Secured
Party as follows:
(a) The Company has the requisite corporate power and
authority to enter into this Agreement and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by
the Company of this Agreement and the filings contemplated therein
have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company. This
Agreement constitutes a legal, valid and binding obligation of the
Company enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditor's rights generally.
(b) The Company represents and warrants that it has
no place of business or offices where its respective books of account
and records are kept (other than temporarily at the offices of its
attorneys or accountants) or places where the Intellectual Property
is stored or located, except as set forth on Schedule A attached hereto;
(c) The Company is the sole owner of the Intellectual
Property (except for non-exclusive licenses granted by the Company in
the ordinary course of business), free and clear of any liens,
security interests, encumbrances, rights or claims, and is fully
authorized to grant the Security Interest in and to pledge the
Intellectual Property. There is not on file in any governmental or
regulatory authority, agency or recording office an effective
financing statement, security agreement, license or transfer or any
notice of any of the foregoing (other than those that have been filed
in favor of the Secured Party pursuant to this Agreement) covering or
affecting any of the Intellectual Property. So long as this
Agreement shall be in effect, the Company shall not execute and shall
not knowingly permit to be on file in any such office or agency any
such financing statement or other document or instrument (except to
the extent filed or recorded in favor of the Secured Party pursuant
to the terms of this Agreement), except for a financing statement
covering assets acquired by the Company after the date hereof,
provided that the value of the Intellectual Property covered by this
Agreement along with the Collateral (as defined in the Security
Agreement) is equal to at least 150% of the Obligations.
(d) The Company shall at all times maintain its books
of account and records relating to the Intellectual Property at its
principal place of business and its Intellectual Property at the
locations set forth on Schedule A attached hereto and may not
relocate such books of account and records unless it delivers to the
Secured Party at least 30 days prior to such relocation (i) written
notice of such relocation and the new location thereof (which must be
within the United States) and (ii) evidence that the necessary
documents have been filed and recorded and other steps have been
taken to perfect the Security Interest to create in favor of the
Secured Party valid, perfected and continuing first priority liens in
the Intellectual Property to the extent they can be perfected through
such filings.
(e) This Agreement creates in favor of the Secured
Party a valid security interest in the Intellectual Property securing
the payment and performance of the Obligations and, upon making the
filings required hereunder, a perfected first priority security
interest in such Intellectual Property to the extent that it can be
perfected through such filings.
(f) Upon request of the Secured Party, the Company
shall execute and deliver any and all agreements, instruments,
documents, and papers as the Secured Party may request to evidence
the Secured Party's security interest in the Intellectual Property
and the goodwill and general intangibles of the Company relating
thereto or represented thereby, and the Company hereby appoints the
Secured Party its attorney-in-fact to execute and file all such
writings for the foregoing purposes, all acts of such attorney being
hereby ratified and confirmed; such power being coupled with an
interest is irrevocable until the Obligations have been fully
satisfied and are paid in full.
(g) The execution, delivery and performance of this
Agreement does not conflict with or cause a breach or default, or an
event that with or without the passage of time or notice, shall
constitute a breach or default, under any agreement to which the
Company is a party or by which the Company is bound. No consent
(including, without limitation, from stock holders or creditors of
the Company) is required for the Company to enter into and perform
its obligations hereunder.
(h) The Company shall at all times maintain the liens
and Security Interest provided for hereunder as valid and perfected
first priority liens and security interests in the Intellectual
Property to the extent they can be perfected by filing in favor of
the Secured Party until this Agreement and the Security Interest
hereunder shall terminate pursuant to Section 11. The Company hereby
agrees to defend the same against any and all persons. The Company
shall safeguard and protect all Intellectual Property for the account
of the Secured Party. Without limiting the generality of the
foregoing, the Company shall pay all fees, taxes and other amounts
necessary to maintain the Intellectual Property and the Security
Interest hereunder, and the Company shall obtain and furnish to the
Secured Party from time to time, upon demand, such releases and/or
subordinations of claims and liens which may be required to maintain
the priority of the Security Interest hereunder.
(i) The Company will not transfer, pledge,
hypothecate, encumber, license (except for non-exclusive licenses
granted by the Company in the ordinary course of business), sell or
otherwise dispose of any of the Intellectual Property without the
prior written consent of the Secured Party.
(j) The Company shall, within ten (10) days of
obtaining knowledge thereof, advise the Secured Party promptly, in
sufficient detail, of any substantial change in the Intellectual
Property, and of the occurrence of any event which would have a
material adverse effect on the value of the Intellectual Property or
on the Secured Party's security interest therein.
(k) The Company shall permit the Secured Party and
its representatives and agents to inspect the Intellectual Property
at any time, and to make copies of records pertaining to the
Intellectual Property as may be requested by the Secured Party from
time to time.
(l) The Company will take all steps reasonably
necessary to diligently pursue and seek to preserve, enforce and
collect any rights, claims, causes of action and accounts receivable
in respect of the Intellectual Property.
(m) The Company shall promptly notify the Secured
Party in sufficient detail upon becoming aware of any attachment,
garnishment, execution or other legal process levied against any
Intellectual Property and of any other information received by the
Company that may materially affect the value of the Intellectual
Property, the Security Interest or the rights and remedies of the
Secured Party hereunder.
(n) All information heretofore, herein or hereafter
supplied to the Secured Party by or on behalf of the Company with
respect to the Intellectual Property is accurate and complete in all
material respects as of the date furnished.
(o) Schedule A attached hereto contains a list of all
of the subsidiaries of Company.
(p) Schedule B attached hereto includes all Licenses,
and all Patents and Patent Licenses, if any, owned by the Company in
its own name as of the date hereof. Schedule B hereto includes all
Trademarks and Trademark Licenses, if any, owned by the Company in
its own name as of the date hereof. Schedule B hereto includes all
Copyrights and Copyright Licenses, if any, owned by the Company in
its own name as of the date hereof. Schedule B hereto includes all
Trade Secrets and Trade Secret Licenses, if any, owned by the Company
as of the date hereof. To the best of the Company's knowledge, each
License, Patent, Trademark, Copyright and Trade Secret is valid,
subsisting, unexpired, enforceable and has not been abandoned.
Except as set forth in Schedule B, none of such Licenses, Patents,
Trademarks, Copyrights and Trade Secrets is the subject of any
licensing or franchise agreement. To the best of the Company's
knowledge, no holding, decision or judgment has been rendered by any
Governmental Body which would limit, cancel or question the validity
of any License, Patent, Trademark, Copyright and Trade Secrets . No
action or proceeding is pending (i) seeking to limit, cancel or
question the validity of any License, Patent, Trademark, Copyright or
Trade Secret, or (ii) which, if adversely determined, would have a
material adverse effect on the value of any License, Patent,
Trademark, Copyright or Trade Secret. The Company has used and will
continue to use for the duration of this Agreement, proper statutory
notice in connection with its use of the Patents, Trademarks and
Copyrights and consistent standards of quality in products leased or
sold under the Patents, Trademarks and Copyrights.
(q) With respect to any Intellectual Property:
(i) such Intellectual Property is subsisting and
has not been adjudged invalid or
unenforceable, in whole or in part;
(ii) such Intellectual Property is valid and
enforceable;
(iii) the Company has made all necessary
filings and recordations to protect its
interest in such Intellectual Property,
including, without limitation, recordations
of all of its interests in the Patents,
Patent Licenses, Trademarks and Trademark
Licenses in the United States Patent and
Trademark Office and in corresponding
offices throughout the world and its claims
to the Copyrights and Copyright Licenses in
the United States Copyright Office and in
corresponding offices throughout the world;
(iv) other than as set forth in Schedule B, the
Company is the exclusive owner of the entire
and unencumbered right, title and interest
in and to such Intellectual Property and no
claim has been made that the use of such
Intellectual Property infringes on the
asserted rights of any third party; and
(v) the Company has performed and will continue
to perform all acts and has paid all
required fees and taxes to maintain each and
every item of Intellectual Property in full
force and effect throughout the world, as
applicable.
(r) Except with respect to any Trademark or Copyright
that the Company shall reasonably determine is of negligible
economic value to the Company, the Company shall:
(i) maintain each Trademark and Copyright in
full force free from any claim of abandonment for non-use,
maintain as in the past the quality of products and services
offered under such Trademark or Copyright; employ such
Trademark or Copyright with the appropriate notice of
registration; not adopt or use any xxxx which is confusingly
similar or a colorable imitation of such Trademark or Copyright
unless the Secured Party shall obtain a perfected security
interest in such xxxx pursuant to this Agreement; and not (and
not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any Trademark or Copyright
may become invalidated;
(ii) not, except with respect to any Patent that
it shall reasonably determine is of negligible economic value to
it, do any act, or omit to do any act, whereby any Patent may
become abandoned or dedicated; and
(iii) notify the Secured Party immediately if
it knows, or has reason to know, that any application or
registration relating to any Patent, Trademark or Copyright may
become abandoned or dedicated, or of any adverse determination
or development (including, without limitation, the institution
of, or any such determination or development in, any proceeding
in the United States Patent and Trademark Office, United States
Copyright Office or any court or tribunal in any country)
regarding its ownership of any Patent, Trademark or Copyright or
its right to register the same or to keep and maintain the same.
(s) Whenever the Company, either by itself or through
any agent, employee, licensee or designee, shall file an application
for the registration of any Patent, Trademark or Copyright with the
United States Patent and Trademark Office, United States Copyright
Office or any similar office or agency in any other country or any
political subdivision thereof or acquire rights to any new Patent,
Trademark or Copyright whether or not registered, report such filing
to the Secured Party within five business days after the last day of
the fiscal quarter in which such filing occurs.
(t) The Company shall take all reasonable and
necessary steps, including, without limitation, in any proceeding
before the United States Patent and Trademark Office, United States
Copyright Office or any similar office or agency in any other country
or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain
each registration of the Patents, Trademarks and Copyrights,
including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability.
(u) In the event that any Patent, Trademark or
Copyright included in the Intellectual Property is infringed,
misappropriated or diluted by a third party, promptly notify the
Secured Party after it learns thereof and shall, unless it shall
reasonably determine that such Patent, Trademark or Copyright is of
negligible economic value to it, which determination it shall
promptly report to the Secured Party, promptly xxx for infringement,
misappropriation or dilution, to seek injunctive relief where
appropriate and to recover any and all damages for such infringement,
misappropriation or dilution, or take such other actions as it shall
reasonably deem appropriate under the circumstances to protect such
Patent, Trademark or Copyright. If the Company lacks the financial
resources to comply with this Section 3(t), the Company shall so
notify the Secured Party and shall cooperate fully with any
enforcement action undertaken by the Secured Party on behalf of the
Company.
4. Defaults. The following events shall be "Events of Default":
(a) The occurrence of an Event of Default (as defined
in the Notes) under the Notes;
(b) Any representation or warranty of the Company in
this Agreement or in the Security Agreement shall prove to have been
incorrect in any material respect when made;
(c) The failure by the Company to observe or perform
any of its obligations hereunder or in the Security Agreement for ten
(10) days after receipt by the Company of notice of such failure from
the Secured Party; and
(d) Any breach of, or default under, the Warrants.
5. Duty To Hold In Trust. Upon the occurrence of any
Event of Default and at any time thereafter, the Company shall, upon
receipt by it of any revenue, income or other sums subject to the
Security Interest, whether payable pursuant to the Notes or
otherwise, or of any check, draft, note, trade acceptance or other
instrument evidencing an obligation to pay any such sum, hold the
same in trust for the Secured Party and shall forthwith endorse and
transfer any such sums or instruments, or both, to the Secured Party
for application to the satisfaction of the Obligations.
6. Rights and Remedies Upon Default. Upon occurrence of
any Event of Default and at any time thereafter, the Secured Party
shall have the right to exercise all of the remedies conferred
hereunder and under the Notes, and the Secured Party shall have all
the rights and remedies of a secured party under the UCC and/or any
other applicable law (including the Uniform Commercial Code of any
jurisdiction in which any Intellectual Property is then located).
Without limitation, the Secured Party shall have the following rights
and powers:
(a) The Secured Party shall have the right to take
possession of the Intellectual Property and, for that purpose, enter,
with the aid and assistance of any person, any premises where the
Intellectual Property, or any part thereof, is or may be placed and
remove the same, and the Company shall assemble the Intellectual
Property and make it available to the Secured Party at places which
the Secured Party shall reasonably select, whether at the Company's
premises or elsewhere, and make available to the Secured Party,
without rent, all of the Company's respective premises and facilities
for the purpose of the Secured Party taking possession of, removing
or putting the Intellectual Property in saleable or disposable form.
(b) The Secured Party shall have the right to operate
the business of the Company using the Intellectual Property and shall
have the right to assign, sell, lease or otherwise dispose of and
deliver all or any part of the Intellectual Property, at public or
private sale or otherwise, either with or without special conditions
or stipulations, for cash or on credit or for future delivery, in
such parcel or parcels and at such time or times and at such place or
places, and upon such terms and conditions as the Secured Party may
deem commercially reasonable, all without (except as shall be
required by applicable statute and cannot be waived) advertisement or
demand upon or notice to the Company or right of redemption of the
Company, which are hereby expressly waived. Upon each such sale,
lease, assignment or other transfer of Intellectual Property, the
Secured Party may, unless prohibited by applicable law which cannot
be waived, purchase all or any part of the Intellectual Property
being sold, free from and discharged of all trusts, claims, right of
redemption and equities of the Company, which are hereby waived and
released.
7. Applications of Proceeds. The proceeds of any such
sale, lease or other disposition of the Intellectual Property
hereunder shall be applied first, to the expenses of retaking,
holding, storing, processing and preparing for sale, selling, and the
like (including, without limitation, any taxes, fees and other costs
incurred in connection therewith) of the Intellectual Property, to
the reasonable attorneys' fees and expenses incurred by the Secured
Party in enforcing its rights hereunder and in connection with
collecting, storing and disposing of the Intellectual Property, and
then to satisfaction of the Obligations, and to the payment of any
other amounts required by applicable law, after which the Secured
Party shall pay to the Company any surplus proceeds. If, upon the
sale, license or other disposition of the Intellectual Property, the
proceeds thereof are insufficient to pay all amounts to which the
Secured Party is legally entitled, the Company will be liable for the
deficiency, together with interest thereon, at the rate of 15% per
annum (the "Default Rate"), and the reasonable fees of any attorneys
employed by the Secured Party to collect such deficiency. To the
extent permitted by applicable law, the Company waives all claims,
damages and demands against the Secured Party arising out of the
repossession, removal, retention or sale of the Intellectual
Property, unless due to the gross negligence or willful misconduct of
the Secured Party.
8. Costs and Expenses. The Company agrees to pay all out-
of-pocket fees, costs and expenses incurred in connection with any
filing required hereunder, including without limitation, any
financing statements, continuation statements, partial releases
and/or termination statements related thereto or any expenses of any
searches reasonably required by the Secured Party. The Company shall
also pay all other claims and charges which in the reasonable opinion
of the Secured Party might prejudice, imperil or otherwise affect the
Intellectual Property or the Security Interest therein. The Company
will also, upon demand, pay to the Secured Party the amount of any
and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the
Secured Party may incur in connection with (i) the enforcement of
this Agreement, (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Intellectual
Property, or (iii) the exercise or enforcement of any of the rights
of the Secured Party under the Notes. Until so paid, any fees payable
hereunder shall be added to the principal amount of the Notes and
shall bear interest at the Default Rate.
9. Responsibility for Intellectual Property. The Company
assumes all liabilities and responsibility in connection with all
Intellectual Property, and the obligations of the Company hereunder
or under the Notes and the Warrants shall in no way be affected or
diminished by reason of the loss, destruction, damage or theft of any
of the Intellectual Property or its unavailability for any reason.
10. Security Interest Absolute. All rights of the Secured
Party and all Obligations of the Company hereunder, shall be absolute
and unconditional, irrespective of: (a) any lack of validity or
enforceability of this Agreement, the Notes, the Warrants or any
agreement entered into in connection with the foregoing, or any
portion hereof or thereof; (b) any change in the time, manner or
place of payment or performance of, or in any other term of, all or
any of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Notes, the Warrants or any other
agreement entered into in connection with the foregoing; (c) any
exchange, release or nonperfection of any of the Intellectual
Property, or any release or amendment or waiver of or consent to
departure from any other Intellectual Property for, or any guaranty,
or any other security, for all or any of the Obligations; (d) any
action by the Secured Party to obtain, adjust, settle and cancel in
its sole discretion any insurance claims or matters made or arising
in connection with the Intellectual Property; or (e) any other
circumstance which might otherwise constitute any legal or equitable
defense available to the Company, or a discharge of all or any part
of the Security Interest granted hereby. Until the Obligations shall
have been paid and performed in full, the rights of the Secured Party
shall continue even if the Obligations are barred for any reason,
including, without limitation, the running of the statute of
limitations or bankruptcy. The Company expressly waives presentment,
protest, notice of protest, demand, notice of nonpayment and demand
for performance. In the event that at any time any transfer of any
Intellectual Property or any payment received by the Secured Party
hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable preference or fraudulent
conveyance under the bankruptcy or insolvency laws of the United
States, or shall be deemed to be otherwise due to any party other
than the Secured Party, then, in any such event, the Company's
obligations hereunder shall survive cancellation of this Agreement,
and shall not be discharged or satisfied by any prior payment thereof
and/or cancellation of this Agreement, but shall remain a valid and
binding obligation enforceable in accordance with the terms and
provisions hereof. The Company waives all right to require the
Secured Party to proceed against any other person or to apply any
Intellectual Property which the Secured Party may hold at any time,
or to marshal assets, or to pursue any other remedy. The Company
waives any defense arising by reason of the application of the
statute of limitations to any obligation secured hereby.
11. Term of Agreement. This Agreement and the Security
Interest shall terminate on the date on which all payments under the
Notes have been made in full and all other Obligations have been paid
or discharged. Upon such termination, the Secured Party, at the
request and at the expense of the Company, will join in executing any
termination statement with respect to any financing statement
executed and filed pursuant to this Agreement.
12. Power of Attorney; Further Assurances.
(a) The Company authorizes the Secured Party, and
does hereby make, constitute and appoint it, and its respective
officers, agents, successors or assigns with full power of
substitution, as the Company's true and lawful attorney-in-fact, with
power, in its own name or in the name of the Company, to, after the
occurrence and during the continuance of an Event of Default, (i)
endorse any notes, checks, drafts, money orders, or other instruments
of payment (including payments payable under or in respect of any
policy of insurance) in respect of the Intellectual Property that may
come into possession of the Secured Party; (ii) to sign and endorse
any UCC financing statement or any invoice, freight or express xxxx,
xxxx of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with
accounts, and other documents relating to the Intellectual Property;
(iii) to pay or discharge taxes, liens, security interests or other
encumbrances at any time levied or placed on or threatened against
the Intellectual Property; (iv) to demand, collect, receipt for,
compromise, settle and xxx for monies due in respect of the
Intellectual Property; and (v) generally, to do, at the option of the
Secured Party, and at the Company's expense, at any time, or from
time to time, all acts and things which the Secured Party deems
necessary to protect, preserve and realize upon the Intellectual
Property and the Security Interest granted therein in order to effect
the intent of this Agreement, the Notes and the Warrants, all as
fully and effectually as the Company might or could do; and the
Company hereby ratifies all that said attorney shall lawfully do or
cause to be done by virtue hereof. This power of attorney is coupled
with an interest and shall be irrevocable for the term of this
Agreement and thereafter as long as any of the Obligations shall be
outstanding.
(b) On a continuing basis, the Company will make,
execute, acknowledge, deliver, file and record, as the case may be,
in the proper filing and recording places in any jurisdiction,
including, without limitation, the jurisdictions indicated on
Schedule C, attached hereto, all such instruments, and take all such
action as may reasonably be deemed necessary or advisable, or as
reasonably requested by the Secured Party, to perfect the Security
Interest granted hereunder and otherwise to carry out the intent and
purposes of this Agreement, or for assuring and confirming to the
Secured Party the grant or perfection of a security interest in all
the Intellectual Property.
(c) The Company hereby irrevocably appoints the
Secured Party as the Company's attorney-in-fact, with full authority
in the place and stead of the Company and in the name of the Company,
from time to time in the Secured Party's discretion, to take any
action and to execute any instrument which the Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement,
including the filing, in its sole discretion, of one or more
financing or continuation statements and amendments thereto, relative
to any of the Intellectual Property without the signature of the
Company where permitted by law.
13. Notices. All notices, requests, demands and other
communications hereunder shall be in writing, with copies to all the
other parties hereto, and shall be deemed to have been duly given
when (i) if delivered by hand, upon receipt, (ii) if sent by
facsimile, upon receipt of proof of sending thereof, (iii) if sent by
nationally recognized overnight delivery service (receipt requested),
the next business day or (iv) if mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, four days
after posting in the U.S. mails, in each case if delivered to the
following addresses:
If to the Company: Calbatech, Inc.
00000 Xxxxxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, XX 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to: Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Secured Party: AJW Partners, LLC
AJW Offshore, Ltd.
AJW Qualified Partners, LLC
New Millennium Capital Partners II, LLC
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: 000-000-0000
With copies to: Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esquire
Facsimile: 000-000-0000
14. Other Security. To the extent that the Obligations
are now or hereafter secured by property other than the Intellectual
Property or by the guarantee, endorsement or property of any other
person, firm, corporation or other entity, then the Secured Party
shall have the right, in its sole discretion, to pursue, relinquish,
subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured Party's
rights and remedies hereunder.
15. Miscellaneous.
(a) No course of dealing between the Company and the
Secured Party, nor any failure to exercise, nor any delay in
exercising, on the part of the Secured Party, any right, power or
privilege hereunder or under the Notes shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege.
(b) All of the rights and remedies of the Secured
Party with respect to the Intellectual Property, whether established
hereby or by the Notes or by any other agreements, instruments or
documents or by law shall be cumulative and may be exercised singly
or concurrently.
(c) This Agreement and the Security Agreement
constitute the entire agreement of the parties with respect to the
subject matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto.
Except as specifically set forth in this Agreement, no provision of
this Agreement may be modified or amended except by a written
agreement specifically referring to this Agreement and signed by the
parties hereto.
(d) In the event that any provision of this Agreement
is held to be invalid, prohibited or unenforceable in any
jurisdiction for any reason, unless such provision is narrowed by
judicial construction, this Agreement shall, as to such jurisdiction,
be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid,
prohibited or unenforceable. If, notwithstanding the foregoing, any
provision of this Agreement is held to be invalid, prohibited or
unenforceable in any jurisdiction, such provision, as to such
jurisdiction, shall be ineffective to the extent of such invalidity,
prohibition or unenforceability without invalidating the remaining
portion of such provision or the other provisions of this Agreement
and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other
jurisdiction.
(e) No waiver of any breach or default or any right
under this Agreement shall be considered valid unless in writing and
signed by the party giving such waiver, and no such waiver shall be
deemed a waiver of any subsequent breach or default or right, whether
of the same or similar nature or otherwise.
(f) This Agreement shall be binding upon and inure to
the benefit of each party hereto and its successors and assigns.
(g) Each party shall take such further action and
execute and deliver such further documents as may be necessary or
appropriate in order to carry out the provisions and purposes of this
Agreement.
(h) This Agreement shall be construed in accordance
with the laws of the State of New York, except to the extent the
validity, perfection or enforcement of a security interest hereunder
in respect of any particular Intellectual Property which are governed
by a jurisdiction other than the State of New York in which case such
law shall govern. Each of the parties hereto irrevocably submit to
the exclusive jurisdiction of any New York State or United States
Federal court sitting in Manhattan county over any action or
proceeding arising out of or relating to this Agreement, and the
parties hereto hereby irrevocably agree that all claims in respect of
such action or proceeding may be heard and determined in such New
York State or Federal court. The parties hereto agree that a final
judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. The parties hereto further waive any
objection to venue in the State of New York and any objection to an
action or proceeding in the State of New York on the basis of forum
non conveniens.
(i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT FOR EACH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON THIS WAIVER IN
THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS
TO A JURY TRIAL FOLLOWING SUCH CONSULTATION. THIS WAIVER IS
IRREVOCABLE, MEANING THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS AND
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF A
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
(j) This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and
the same Agreement. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature
is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above
written.
CALBATECH, INC.
By:
Xxxxx XxXxxxx
Chief Executive Officer
AJW PARTNERS, LLC
By: SMS Group, LLC
By:
Xxxxx X. Xxxxxxxx
Manager
AJW OFFSHORE, LTD.
By: First Street Manager II, LLC
By:
Xxxxx X. Xxxxxxxx
Manager
AJW QUALIFIED PARTNERS, LLC
By: AJW Manager, LLC
By:
Xxxxx X. Xxxxxxxx
Manager
NEW MILLENNIUM CAPITAL
PARTNERS II, LLC
By: First Street Manager II, LLC
By:
Xxxxx X. Xxxxxxxx
Manager
SCHEDULE A
Principal Place of Business of the Company:
Locations Where Intellectual Property is Located or Stored:
List of Subsidiaries of the Company:
SCHEDULE B
A. Licenses, Patents and Patent Licenses
Registration or
Patent Application or Registration No. Country Filing Date
B. Trademarks and Trademark Licenses
Registration or
Patent Application or Registration No. Country Filing Date
C. Copyrights and Copyright Licenses
Registration or
Patent Application or Registration No. Country Filing Date
D. Trade Secrets and Trade Secret Licenses
Registration or
Patent Application or Registration No. Country Filing Date
SCHEDULE C
Jurisdictions:
