1
EXHIBIT *(10.46)
PATENT SECURITY AGREEMENT
(United States Patents)
This Patent Security Agreement ("Agreement") is made this 29th day of October,
1999, by BLOOD CELLS, INC., a Delaware corporation having a mailing address at
Wheat Road and Lincoln Avenue, Buena, NJ 08310 ("Grantor") and delivered to
AMERICAN CAPITAL STRATEGIES, LTD., a Delaware corporation having a mailing
address at 2 Bethesda Metro Center, 14th Floor, Bethesda, Maryland 20814
("Lender").
BACKGROUND
A. Grantor has entered into that certain Note and Equity Purchase Agreement
dated as of even date herewith among Grantor, IGI, Inc., IGEN, Inc., and
ImmunoGenetics, Inc. (collectively, "Borrowers") and Lender (as it may hereafter
be supplemented, restated, amended, superseded or replaced from time to time,
the "Purchase Agreement"). Capitalized terms not defined herein shall have the
meanings given to such terms in the Purchase Agreement.
B. This Agreement is being executed contemporaneously with that certain Security
Agreement of even date herewith among Borrowers and Lender (as it may hereafter
be supplemented, restated, amended, superseded or replaced from time to time,
the "Security Agreement"), under which, inter alia, Grantor is granting Lender a
lien on and security interest in certain assets of Grantor associated with or
relating to products leased or sold or services provided under Grantor's patents
and the goodwill associated therewith as security for the payment and
performance of all the Obligations (as defined in the Security Agreement) of all
the Borrowers, and under which Lender is entitled to foreclose or otherwise deal
with such assets and patents under the terms and conditions set forth therein.
C. Pursuant to the Security Agreement, Lender is acquiring a lien on, and
security interest in, and license to use (which license is conditioned upon the
occurrence and continuance of an Event of Default), among other things, (i) the
United States Letters Patent and the inventions described and claimed therein
set forth on Schedule A hereto and (ii) the applications for Letters Patent and
the inventions described and claimed therein set forth on Schedule A hereto and
any United States Letters Patent which may be issued upon any of said
applications, together with all the goodwill of Grantor associated therewith and
represented thereby, as security for all of the Obligations, and desires to have
its security interest in such letters patent and applications confirmed by a
document identifying same and in such form that it may be recorded in the United
States Patent and Trademark Office.
NOW THEREFORE, with the foregoing Background hereinafter deemed incorporated by
reference and made a part hereof, and in consideration of the premises and
mutual promises herein contained, the parties hereto, intending to be legally
bound hereby, covenant and agree as follows:
2
1. In consideration of and pursuant to the terms of the Purchase
Agreement, and for other good, valuable and sufficient consideration,
the receipt of which is hereby acknowledged, and to secure the payment
and performance of all the Obligations of all Borrowers under the
Purchase Documents, Grantor grants to Lender a lien on and security
interest in all patents and patent applications, including, without
limitation, the inventions and improvements described and claimed
therein, and those patents and patent applications listed on Schedule
"A" attached hereto and made a part hereof, and the reissues,
divisions, continuations, renewals, extensions and
continuations-in-part thereof (collectively, the "Schedule A Patents"),
all of Grantor's rights and obligations pursuant to any license
agreements between Grantor and any other Person or Persons, whether
Grantor is a licensor or licensee under any such license agreements,
including, without limitation, the licenses listed on Schedule "C"
attached hereto and made a part hereof with respect to the patents and
patent applications listed on Schedule "B" attached hereto and made a
part hereof (collectively the "Schedule B Patents" and, together with
the Schedule A Patents, the "Patents"), and, subject to the terms of
such licenses, the right to prepare for sale, sell and advertise for
sale, all Inventory now or hereafter owned by such Assignor and now or
hereafter covered by such licenses (collectively, the "Licenses", and
together with the Patents, the "Patent Rights") and all proceeds
thereof and all Grantor's right, title, interest, claims and demands
that Grantor has or may have in profits and damages for past and future
infringements of the Patent Rights (such rights, interest, claims and
demand being herein called the "Claims") (the Patent Rights and Claims
are collectively referred to as the "Patent Collateral").
2. Grantor hereby covenants and agrees to maintain the Patent Collateral in
full force and effect until all of the Obligations are satisfied in full.
3. Grantor represents, warrants and covenants to Lender that:
(a) The Patent Collateral is subsisting and has not been adjudged
invalid or unenforceable;
(b) All of the Patent Rights subsisting, and, to the best of Grantor's
knowledge, valid and enforceable;
(c) Grantor is the sole and exclusive owner of the entire and unencumbered
right, title and interest in and to the Patent Collateral (excepting the
Schedule B Patents, but including the Grantor's rights under the Licenses).
Except for Liens permitted under Section 7.2(b) of the Purchase Agreement, all
of the Patent Collateral (other than the Schedule B Patents, but including
Grantor's right under the Licenses) is free and clear of any liens, charges and
encumbrances including, without limitation, pledges, assignments, options and
covenants by Grantor not to sue third persons;
(d) Except for Liens permitted under Section 7.2(b) of the Purchase
Agreement, the Grantor's rights under the Licenses are free and clear of any
liens, claims,
2
3
charges and encumbrances, including, without limitation, pledges, assignments,
options, and covenants by Grantor not to sue third persons;
(e) Grantor has no notice of any suits or actions commenced or threatened
against it, or notice of claims asserted or threatened against it, with
reference to the Patent Collateral;
(f) Grantor has the unqualified right, power and authority to enter into
this Agreement and perform its terms; and
(g) Grantor has complied with, and will continue for the duration of this
Agreement to comply with the requirements set forth in 15 U.S.C.
Section 1051-1127 and any other applicable statutes, rules and regulations in
connection with its use of the Patent Collateral except where failure to comply
would not have a material adverse effect on Grantor or its Property.
4. Grantor further covenants that:
(a) Until all of the Obligations have been satisfied in full, Grantor will
not enter into any agreement which is inconsistent with Grantor's obligations
under this Agreement, Grantor's obligations under the Purchase Agreement or
which may restrict or impair Lender's rights or priorities hereunder.
(b) If Grantor acquires rights to any new owned Patent Collateral, the
provisions of this Agreement shall automatically apply thereto and such Patent
Collateral shall be deemed part of the Patent Collateral. Grantor shall give
Lender prompt written notice thereof along with an amended Schedule "A."
Furthermore, if Grantor acquires rights as a licensee to any new patents, the
provisions of this Agreement shall automatically apply thereto and such patent
shall be deemed part of the Schedule B Patents, and any license agreement
pursuant to which Grantor acquires such rights shall be deemed to be included in
the definition of "Licenses." Grantor shall give Lender written notice promptly
upon its first use thereof along with an amended Schedule "B."
5. So long as this Agreement is in effect and so long as Grantor has not
received notice from Lender that an Event of Default has occurred and
is continuing under the Notes and the Purchase Agreement and that
Lender has elected to exercise its rights hereunder (i) Grantor shall
continue to have the exclusive right to use the Patent Collateral; and
(ii) Lender shall have no right to use the Patent Collateral or issue
any exclusive or non-exclusive license with respect thereto, or assign,
pledge or otherwise transfer title in the Patent Collateral to anyone
else.
6. Grantor agrees not to sell, license, grant any option, assign or
further encumber its rights and interest in the Patent Collateral to
any entity or person other than Grantor without the prior written
consent of Lender or as may be expressly permitted under the Purchase
Agreement. Notwithstanding the foregoing, and providing that no
Default or Event of Default has occurred and is outstanding, Grantor
shall be entitled to license any Patents in exchange for fair market
consideration in the exercise of its reasonable business judgment.
3
4
7. Anything herein contained to the contrary notwithstanding, if and while
Grantor shall be in default hereunder or an Event of Default exists
under the Notes or the Purchase Agreement, Grantor hereby covenants and
agrees that Lender as the holder of a security interest under the
Uniform Commercial Code, as now or hereafter in effect in the State
whose law governs the interpretation of the Purchase Documents, may
take such action permitted under the Purchase Documents, hereunder or
under any law, in its exclusive discretion, to foreclose upon the
Patent Collateral covered hereby. For such purposes, Grantor hereby
authorizes and empowers Lender, its successors and assigns to make,
constitute and appoint any officer or agent of Lender as Lender may
select, in its exclusive discretion, as Grantor's true and lawful
attorney-in-fact, with the power to endorse Grantor's name on all
applications, documents, papers and instruments necessary for Lender to
use the Patent Collateral or to grant or issue any exclusive or
non-exclusive license under the Patent Collateral to anyone else, or
necessary for Lender to assign, pledge, convey or otherwise transfer
title in or dispose of the Patent Collateral to anyone else including,
without limitation, the power to execute a Patent Collateral assignment
in the form attached hereto as Exhibit 1. Grantor hereby ratifies all
that such attorney shall lawfully do or cause to be done by virtue
hereof, except for the gross negligence or willful misconduct of such
attorney. This power of attorney shall be irrevocable for the life of
this Agreement, the Purchase Documents, and until all of the
Obligations of all of the Borrowers are indefeasibly paid and satisfied
in full.
8. This Agreement shall be subject to the terms, provisions, and conditions
set forth in the Purchase Agreement and may not be modified without the
written consent of the party against whom enforcement is being sought.
9. All rights and remedies herein granted to Lender shall be in addition to
any rights and remedies granted to Lender under the Purchase Documents. In
the event of an inconsistency between this Agreement and Purchase
Agreement, the language of this Agreement shall control.
10. Upon Borrowers' performance of all of the Obligations under the Purchase
Documents and full and unconditional satisfaction of all of the Borrowers'
Obligations, Lender shall execute and deliver to Grantor all documents
reasonably necessary to terminate Lender's security interest in the Patent
Collateral.
11. Any and all reasonable fees, costs and expenses, of whatever kind or
nature, including the reasonable attorneys' fees and legal expenses
incurred by Lender in connection with the preparation of this Agreement
and all other documents relating hereto and the consummation of this
transaction, the filing or recording of any documents (including all
taxes in connection therewith) in public offices, the payment or
discharge of any taxes, reasonable counsel fees, maintenance fees,
encumbrances or costs otherwise incurred in protecting, maintaining,
preserving the Patent Collateral, or in defending or prosecuting any
actions or proceedings arising out of or related to the Patent
Collateral, in each case in accordance with the terms of this
Agreement, shall be borne and paid by Grantor on demand by
4
5
Lender and until so paid shall be added to the principal amount of the
Obligations to Lender and shall bear interest at the rate of interest
determined in accordance with Section 8.2(c) of the Purchase Agreement.
12. Subject to the terms of the Purchase Agreement and the Notes, Grantor
shall have the duty to prosecute diligently any application with
respect to the Patent Collateral (other than the Schedule B Patents or
any applications or inventions relating thereto) pending as of the date
of this Agreement or thereafter, until Borrowers' Obligations shall
have been satisfied in full, to preserve and maintain all rights in the
Patent Collateral (other than the Schedule B Patents or any application
or inventions relating thereto), and upon reasonable request of Lender,
Grantor shall make federal application on registrable but unregistered
Patent Collateral (other than the Schedule B Patents or any
applications, or inventions relating thereto) belonging to Grantor and
licensed to Grantor. To the extent that Grantor has the duty or right
to make any patent applications under any License, Grantor shall have
the same duties with respect to the Schedule B Patents as stated in the
previous sentence. Grantor shall not abandon any Patent Collateral
without the prior written consent of the Lender, which consent shall
not be unreasonably withheld.
13. Grantor shall have the right to bring suit in its own name to enforce
the Patent Collateral, in which event Lender may, if Grantor reasonably
deems it necessary, be joined as a nominal party to such suit if Lender
shall have been satisfied, in its sole discretion, that it is not
thereby incurring any risk of liability because of such joinder.
Grantor shall promptly, upon demand, reimburse and indemnify Lender for
all damages, costs and expenses, including attorneys' fees and costs,
incurred by Lender in the fulfillment of the provisions of this
paragraph.
14. Upon the occurrence of an Event of Default under the Purchase Agreement or
hereunder, Lender may, without any obligation to do so, complete any
obligation of Grantor hereunder, in Grantor's name or in Lender's name,
but at the expense of Grantor, and Grantor hereby agrees to reimburse
Lender in full for all expenses, including, without limitation, all
attorneys' fees incurred by Lender in protecting, defending and
maintaining the Patent Collateral.
15. No course of dealing between Grantor and Lender, nor any failure to
exercise, nor any delay in exercising, on the part of Agent, any right,
power or privilege hereunder, shall operate as a waiver thereof, and all
of Lender's rights and remedies with respect to the Patent Collateral,
whether established hereby or by the Purchase Documents, or by any other
future agreements between Grantor and Lender or by law, shall be
cumulative and may be exercised singularly or concurrently.
16. The provisions of this Agreement are severable and the invalidity or
unenforceability of any provision herein shall not affect the remaining
provisions which shall continue unimpaired and in full force and effect.
5
6
17. This Agreement shall inure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties.
18. This Agreement shall be governed by and construed in conformity with the
laws of the State of Maryland, without regard to its otherwise applicable
principles of conflicts of laws.
19. GRANTOR AND LENDER EACH WAIVES ANY AND ALL RIGHTS EITHER MAY HAVE TO A
JURY TRIAL ARISING IN CONNECTION WITH ANY PROCEEDING OR CONTROVERSY
RELATING TO THIS AGREEMENT OR ANY OTHER AGREEMENT BETWEEN GRANTOR AND
LENDER.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
6
7
20. GRANTOR AND LENDER EACH WAIVES ANY AND ALL RIGHTS EITHER MAY HAVE TO A JURY
TRIAL ARISING IN CONNECTION WITH ANY PROCEEDING OR CONTROVERSY RELATING TO THIS
AGREEMENT OR ANY OTHER AGREEMENT BETWEEN GRANTOR AND LENDER.
21. THE OBLIGATIONS SECURED HEREBY AND THE SECURITY INTERESTS GRANTED HEREUNDER
ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
SUBORDINATION AGREEMENT (THE "SUBORDINATION AGREEMENT") DATED AS OF OCTOBER 29,
1999, AMONG FLEET CAPITAL CORPORATION, AS AGENT FOR THE SENIOR LENDERS, AMERICAN
CAPITAL STRATEGIES, LTD., AND ASSIGNORS TO THE INDEBTEDNESS AND OTHER
LIABILITIES OWED BY ASSIGNORS UNDER AND PURSUANT TO THE LOAN AND SECURITY
AGREEMENT DATED AS OF OCTOBER 29, 1999, AND EACH RELATED "LOAN DOCUMENT" (AS
DEFINED THEREIN), AND EACH ASSIGNEE HEREUNDER, BY ITS ACCEPTANCE HEREOF,
ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION
AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Patent Security
Agreement, under seal, the day and year first above written.
BLOOD CELLS, INC.
By: /S/ MANFRED HANUSCHEK
____________________________________
Name: MANFRED HANUSCHEK
____________________________________
Title: CFO
___________________________________
7
8
CORPORATE ACKNOWLEDGMENT
UNITED STATES OF AMERICA :
STATE OF :SS
COUNTY OF :
On this 29th of October, 1999, before me personally appeared to me known
and being duly sworn, deposes and says that s/he is
of BLOOD CELLS, INC.; that s/he signed the Agreement thereto as such officer
pursuant to the authority vested in him by law; that the within Agreement is the
voluntary act of such corporation; and s/he desires the same to be recorded as
such.
_______________________________________
Notary Public
My Commission Expires:
8
9
SCHEDULE A
Patent Registration No. Country Filing Date
- ------ ---------------- ------- -----------
9
10
EXHIBIT I
PATENT ASSIGNMENT
WHEREAS, BLOOD CELLS, INC., a Delaware corporation ("Grantor") is the registered
owner of: (i) the United States Letters Patent and the inventions described and
claimed therein set forth on Schedule A hereto (hereinafter referred to
collectively as the "Patents"); (ii) the applications for Letters Parent and the
inventions described and claimed therein set forth on Schedule A hereto and any
United States Letters Patent which may be issued upon any of said applications
(hereinafter referred to collectively as the "Applications"), which are
registered with the United States Patent and Trademark Office.
WHEREAS, in conjunction with the Patents and Applications, Grantor may use or
adopt any reissues, extensions, divisions or continuations of the Patents or
Applications (such reissues, extension, divisions and continuations being herein
referred to collectively as the "Reissued Patents"); may be entitled to all
future royalties or other fees paid or payments made to Grantor in respect of
the Patents (hereinafter referred to collectively as the "Royalties"), (the
Patents, Applications and the Reissued Patents and the Royalties being herein
referred to collectively as the "Patent Rights") and may be entitled to profits
and damages for past and future infringements of the Patent Rights (such rights,
interest, claims and demand being herein called the "Claims') (the Patent Rights
and Claims are collectively referred to as the "Patent Collateral").
WHEREAS, , ("Grantee") having a place of business at
is desirous of acquiring said Patent Collateral;
NOW THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, and intending to be legally bound hereby, Grantor, its successors
and assigns, does hereby transfer, assign and set over unto Grantee, its
successors, transferees and assigns, all of its present and future right, title
and interest in and to the Patent Collateral and all proceeds thereof and all
goodwill associated therewith. No rights or duties of any kind are intended to
be granted or conferred upon Grantee unless and until this Patent Assignment is
recorded with the United States Patent and Trademark Office.
IN WITNESS WHEREOF, the undersigned has caused this Patent Assignment to be
executed as of the 29th day of October, 1999.
BLOOD CELLS, INC.
By: _________________________________
As Attorney-in-fact
10
11
STATE OF :
: S.S.
COUNTY OF :
On this 29th day of October, 1999, before me, a Notary Public for the
said County and State, personally appeared known to me or satisfactorily proven
to me to be attorney-in-fact on behalf of BLOOD CELLS, INC. ("Grantor") and s/he
acknowledged to me that s/he executed the foregoing Patent Assignment on behalf
of Grantor, and as the act and deed of Grantor for the purposes therein
contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
__________________________________
Notary Public
My Commission Expires:
_______________________________
11
12
POWER OF ATTORNEY
BLOOD CELLS., INC., a Delaware corporation, ("Grantor"), hereby authorizes
AMERICAN CAPITAL STRATEGIES, LTD., its successors and assigns, and any officer
or agent thereof (collectively, "Lender") as Grantor's true and lawful
attorney-in-fact, with the power to endorse Grantor's name on all applications,
assignments, documents, papers and instruments necessary for Lender to enforce
and effectuate its rights under a certain Patent Security Agreement (United
States Patents) between Grantor and Lender dated the date hereof (as it may
hereafter be supplemented, restated, superseded, amended or replaced, the
"Patent Agreement"), including, without limitation, the power to use the Patent
Collateral (as defined in the Patent Agreement), to grant or issue any exclusive
or nonexclusive license under the Patent Collateral to anyone else, or to
assign, pledge, convey or otherwise transfer title in or dispose of the Patent
Collateral.
This Power of Attorney is given and any action taken pursuant hereto is intended
to be so given or taken pursuant to a certain Loan and Security agreement
bearing even date herewith between Grantor and Lender as it may be hereinafter
supplemented, restated, superseded, amended or replaced.
Grantor hereby unconditionally ratifies all that such attorney shall law fully
do or cause to be done by virtue hereof.
This Power of Attorney shall be irrevocable for the life of the Patent
Agreement.
IN WITNESS WHEREOF, the Grantor has executed this Power of Attorney, under seal,
this 29th day of October, 1999.
BLOOD CELLS, INC.
By: /s/ MANFRED HANUSCHEK
-------------------------------
Name: MANFRED HANUSCHEK
Title: CFO
12
13
CORPORATE ACKNOWLEDGMENT
UNITED STATES OF AMERICA :
STATE OF :SS
COUNTY OF :
On this 29th of October, 1999 personally appeared, to me known and being duly
sworn, deposes and says that s/he is ____________ of BLOOD CELLS, INC., the
Grantor corporation described in the foregoing Power of Attorney; that s/he
signed the Power of Attorney as such officer pursuant to the authority vested in
her/him by law; that the within Power of Attorney is the voluntary act of such
corporation; and s/he desires the same to be recorded as such.
___________________________________
Notary Public
My Commission Expires:
13