EXECUTION VERSION
EXHIBIT 99.1
------------
PATENT SECURITY AGREEMENT
-------------------------
This PATENT SECURITY AGREEMENT, dated as of October 25, 2004 (as
may be amended, restated, supplemented or otherwise modified from time to time,
this "AGREEMENT"), is made by INNAPHARMA, INC., a Delaware corporation and
TETRAGENEX PHARMACEUTICALS, INC. (collectively, the "GRANTORS" and each
individually, a "GRANTOR") in favor of KBC BANK N.V., as administrative agent
(in such capacity, the "ADMINISTRATIVE AGENT") for the Secured Parties (as
defined below).
RECITALS
WHEREAS, the Grantors have entered into a secured promissory
note, dated as of the date hereof (as amended, restated, supplemented, or
otherwise modified from time to time, the "NOTE"), in favor of the Lenders party
thereto and KBC Bank N.V. as the administrative agent;
WHEREAS, it is a condition precedent to the obligations of the
Lenders to extend credit under the Note that the Grantors shall have executed
and delivered this Agreement; and
WHEREAS, this Agreement is supplemental to the provisions
contained in the Note and, in the event of an inconsistency among them, the Note
shall control over this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Grantors agree as follows:
AGREEMENT
---------
Section 1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1 TERMS DEFINED IN THE NOTE. All capitalized terms used in
this Agreement and not otherwise defined herein shall have the meanings assigned
to them in the Note.
1.2 CERTAIN DEFINED TERMS. Unless the context otherwise
requires, the following capitalized terms when used in this Agreement shall have
the following meanings:
"AGREEMENT" has the meaning set forth in the preamble hereto.
"ASSIGNEE" means the assignee designated under the Assignment of
Patents.
"ASSIGNMENT OF PATENTS" has the meaning set forth in SECTION 2.2
herein.
"COLLATERAL" has the meaning set forth in SECTION 2.1 herein.
"GOVERNMENTAL RULE" means any law, rule, regulation, ordinance,
order, code interpretation, treaty, judgment, decree, directive, guideline,
policy or similar form of decision of any Governmental Authority.
"GRANTOR" has the meaning set forth in the preamble hereto.
"ISSUED PATENTS" means all present or, to the extent pertaining
to any compound or other technology developed by either Grantor on or prior to
the date hereof, future letters patent of the United States or any other country
or group of countries or any political subdivision of any of the foregoing, all
reissues and extensions thereof and all divisions, continuations and
continuations-in-part thereof, including any of the foregoing referred to in
SCHEDULE A.
"NOTE" has the meaning provided in the recitals hereto.
"PATENT APPLICATIONS" means all present or, to the extent
pertaining to any compound or other technology developed by either Grantor on or
prior to the date hereof, future applications for letters patent of the United
States or any other country or group of countries or any political subdivision
of any of the foregoing, including any of the foregoing referred to in SCHEDULE
A.
"PATENT LICENSES" means all agreements, (whether or not in
writing), providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by any Issued
Patent, Patent Application or Patent Right.
"PATENT RIGHTS" means any and all past, present or future rights
in, to and associated with the Issued Patents, Patent Applications and, to the
extent pertaining to any compound or other technology developed by either
Grantor on or prior to the date hereof, other rights of inventions throughout
the world, whether arising under federal law, state law, common law, foreign law
or otherwise, including the following: (a) all rights issuing from any
provisional, divisional, renewal, substitute, continuation, reexamination and
reissue applications based in whole or in part on the Issued Patents and Patent
Applications; (b) all Patent Licenses and all income and royalties with respect
thereto; (c) the right (but not the obligation) to register claims under any
state, federal or foreign patent law or regulation; (d) the right (but not the
obligation) to sue and defend in the name of either Grantor or the
Administrative Agent for any and all past, present and future infringements of
or any other damages or injury to Issued Patents or rights under Patent
Licenses, and the rights to damages or profits due or accrued arising out of or
in connection with any such past, present or future infringement, damage or
injury; (e) the right (but not the obligation) to apply for and prosecute Patent
Applications in the name of any Grantor or the Administrative Agent and to take
any and all actions necessary or appropriate to maintain such applications in
effect, and (f) all proceeds of the foregoing.
"PROCEEDS" has the meaning provided in Section 9-102 of the UCC
2
"PTO" means the United States Patent and Trademark Office.
"SECURED PARTIES" means the Lenders and the Administrative
Agent. "Secured Party" means any of the Secured Parties.
1.3 RULES OF INTERPRETATION. Unless otherwise provided
herein, the rules of interpretation set forth in SECTION 1 of the Note shall be
applicable to this Agreement.
Section 2. GRANT OF SECURITY INTEREST.
2.1 SECURITY INTEREST. Each Grantor hereby grants to the
Administrative Agent, for the benefit of the Secured Parties, a first priority
security interest in all of the following property now owned or at any time
hereafter acquired by such Grantor, or in which such Grantor now has or at any
time in the future may acquire any right, title or interest (collectively, the
"COLLATERAL"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor's obligations under the Note and other Loan
Documents:
(a) all Issued Patents;
(b) all Patent Applications;
(c) all Patent Rights;
(d) all Patent Licenses; and
(e) to the extent not otherwise included, all
Proceeds of any and all of the foregoing (including license royalties,
rights to payment, accounts and proceeds of infringement suits) and, to
the extent not otherwise included, all payments under insurance (whether
or not a Secured Party is the loss payee thereof) or any indemnity,
warranty or guaranty payable by reason of loss or damage to or otherwise
with respect to the foregoing;
PROVIDED, HOWEVER, that notwithstanding any of the other provisions set forth in
this SECTION 2.1, this Agreement shall not constitute a grant of a security
interest in any property to the extent that such grant of a security interest in
such particular property is prohibited by any Governmental Rule, except to the
extent that such Governmental Rule providing for such prohibition is ineffective
under applicable law to prevent the attachment of the security interest granted
hereunder; PROVIDED, HOWEVER, that such security interest shall attach
immediately at such time as such Governmental Rule shall no longer cause such
prohibition and, to the extent such Governmental Rule is severable, the security
interest granted hereby shall attach immediately to any portion of any
contractual obligation or other property that is not prohibited under such
Governmental Rule, including with respect to any proceeds of such property.
3
2.2 AUTHORIZATION TO FILE; POWER OF ATTORNEY.
(a) Each Grantor hereby authorizes and ratifies the filing
of any financing statements, continuation statements, assignments, certificates,
and other documents and instruments with respect to the Collateral (including
any such filing made prior to the date of this agreement) pursuant to the UCC
and otherwise as may be necessary or reasonably requested by Administrative
Agent to perfect or from time to time to publish notice of, or continue or renew
the security interests granted hereby or under the Note (including, such
financing statements, continuation statements, certificates, and other documents
as may be necessary or desirable to perfect a security interest in any
additional property or rights hereafter acquired by such Grantor or in any
replacements, products or proceeds thereof), in each case in form and substance
satisfactory to Administrative Agent. Each Grantor shall execute any of the
foregoing financing statements and other documents upon the request of
Administrative Agent. Such financing statements and other documents may describe
the Collateral in the same manner as described herein or may contain an
indication or description of collateral that describes such property in any
other manner as Administrative Agent may determine is necessary, advisable or
prudent to ensure the perfection of the security interest in the Collateral
granted to Administrative Agent herein or under the Note.
(b) Each Grantor hereby grants to the Administrative Agent a
power of attorney for the purpose of allowing the Administrative Agent to
execute on such Grantor's behalf such further documentation as the
Administrative Agent may deem necessary or desirable to effectuate the first
priority security interest granted hereunder. Each Grantor shall execute any
additional documentation necessary to provide such power of attorney to the
Administrative Agent in connection herewith, including any such similar actions
as may be required under any Governmental Rule in any jurisdiction.
Section 3. NO TRANSFER OR INCONSISTENT AGREEMENTS.
Except with the Administrative Agent's prior written consent, no
Grantor will (a) mortgage, pledge, assign, encumber, grant a security interest
(other than a security interest that is expressly subordinated and junior to the
security interest created hereunder) in, transfer, license or alienate any of
the Collateral, or (b) enter into any agreement (whether within or outside the
ordinary course of such Grantor's business) that is inconsistent with the
Grantors' obligations under this Agreement or the Note.
Section 4. AFTER-ACQUIRED PATENTS, ETC.
4.1 AFTER-ACQUIRED PATENTS. If, prior to the termination of
his Agreement in accordance with SECTION 9, any Grantor shall obtain an
ownership interest in any Patent Application or Issued Patent, including without
limitation any reissue, division, or continuation of any Issued Patent, then the
provisions of this Agreement shall automatically apply thereto and same shall be
deemed to be Grantor's Patent Applications and Grantor's Issued Patents,
respectively, and such Grantor shall promptly provide to the Administrative
Agent notice thereof in writing and execute and deliver to the Administrative
Agent such documents or instruments as the Administrative Agent
4
may reasonably request further to implement, preserve or evidence the
Administrative Agent's interest therein.
4.2 AMENDMENT TO SCHEDULE. Each Grantor authorizes the
Administrative Agent to modify this Agreement and the Assignments of Patents,
without the necessity of such Grantor's further approval or signature but
subject to the Administrative Agent having sent notice to the Grantors of any
such modification, by amending SCHEDULE A hereto and the ANNEX to each
Assignment of Patents to include any future or other Grantor's Patent
Applications or Grantor's Issued Patents that become part of the Collateral
under SECTION 2 or SECTION 4.1. Notwithstanding the foregoing, no failure to so
modify SCHEDULE A hereto or the Annex to each Assignment of Patents or to
provide such notice to the Grantors shall in any way affect, invalidate or
detract from the Secured Parties' continuing security interest in all
Collateral, whether or not listed on SCHEDULE A.
Section 5. PATENT PROSECUTION.
Without limiting the Administrative Agent's rights or remedies
under, and subject to each Grantor's obligations under, the Note and other Loan
Documents, each Grantor shall have and maintain full and complete responsibility
for the prosecution, defense, enforcement or any other commercially reasonable
actions in connection with the Collateral and have the right to take, and shall
take, all necessary steps to prosecute, defend, enforce, maintain and pursue
such Grantor's Issued Patents and Grantor's Patent Applications.
Section 6. REMEDIES.
6.1 GENERALLY.
(a) Upon the occurrence and during the continuation of an
Event of Default, the Administrative Agent shall have all of the remedies set
forth in the Note and the other Loan documents or otherwise available to it at
law or in equity. In addition to the foregoing, upon the occurrence and during
the continuation of an Event of Default, the Administrative Agent may pursue any
of the following remedies separately, successively or simultaneously:
(i) the Administrative Agent may exercise in
respect of the Collateral, all the rights and remedies of the
Administrative Agent on default under the UCC (whether or not
the UCC applies to the affected Collateral) to collect, enforce
or satisfy any obligation under the Note or any other Loan
Document of either Borrower then owing, whether by acceleration
or otherwise;
(ii) the Administrative Agent may require
either Grantor to (and each Grantor hereby agrees that it shall
at its expense and promptly upon request of the Administrative
Agent forthwith) grant, assign, convey or otherwise transfer to
the Administrative Agent or Administrative Agent's designee all
of such Grantor's right, title and
5
interest in and to the Collateral and shall execute and deliver
to the Administrative Agent such agreements, documents and other
instruments as are necessary or appropriate to carry out the
intent and purposes of this agreement;
(iii) the Administrative Agent may, without
notice except as specified below or under the UCC, sell, assign,
lease, license (on an exclusive or nonexclusive basis) or
otherwise dispose of the Collateral or any part thereof in one
or more parcels at public or private sale, at any of the
Administrative Agent's offices or elsewhere, for cash, on credit
or for future delivery, at such time or times and at such price
or prices and upon such other terms as the Administrative Agent
may deem commercially reasonable; and
(iv) the Administrative Agent shall have the
right (but not the obligation) to bring suit or otherwise
commence any action or proceeding in the name of either Grantor,
the Administrative Agent or otherwise, in the Administrative
Agent's sole discretion, to enforce any Patent Right, in which
event such Grantor shall, at the request of the Administrative
Agent, do any and all lawful acts and execute any and all
documents required by the Administrative Agent in aid of such
enforcement and such Grantor shall promptly, upon demand,
reimburse and indemnify the Administrative Agent as provided in
SECTION 10, and, to the extent that the Administrative Agent
shall elect not to bring suit to enforce any Patent Right as
provided in this Section, each Grantor agrees to use all
reasonable measures, whether by action, suit, proceeding or
otherwise, to prevent the infringement of any of the Patent
Rights by others and for that purpose agrees to diligently
maintain any action, suit or proceeding against any Person so
infringing as shall be necessary to prevent such infringement;
(b) The Administrative Agent or any other Secured Party may
be the purchaser of any or all of the Collateral at any public sale in
accordance with the UCC and if the Administrative Agent acts as such purchaser,
it shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Collateral sold at
any such sale made in accordance with the UCC, to use and apply any of the
amounts owed by the Borrower hereunder or under the Note as a credit on account
of the purchase price for any Collateral payable by the Administrative Agent at
such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of either Grantor, and each
Grantor hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Each Grantor agrees that, to the extent notice of sale shall be required by law,
at least 10 days notice to such Grantor of the time and place of any public sale
is to be made or at least 20 days notice to such Grantor of the time after which
a private sale is to be made shall constitute reasonable notification. Upon
receipt of such notice and prior to the date specified in such notice, either
Grantor
6
shall be permitted to redeem the Note by making payment in full in cash of all
remaining obligations of the Grantors under the Note and this Agreement. Such
right may be assigned by Grantors. The Administrative Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Administrative Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Each Grantor hereby waives any claims against the Administrative
Agent arising by reason of the fact that the price at which any Collateral may
have been sold at such a private sale was less than the price which might have
been obtained at a public sale, even if the Administrative Agent accepts the
first offer received and does not offer such Collateral to more than one
offeree. Each Grantor further agrees that a breach of any of the covenants
contained in this SECTION 6 will cause irreparable injury to the Administrative
Agent, that the Administrative Agent has no adequate remedy at law in respect of
such breach and, as a consequence, that each and every covenant contained in
this SECTION 6 shall be specifically enforceable against such Grantor, and such
Grantor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no default
has occurred giving rise to the obligations under the Note becoming due and
payable prior to their stated maturities. Nothing in this SECTION 6 shall in any
way alter the rights of the Administrative Agent hereunder.
(c) The Administrative Agent may sell the Collateral without
giving any warranties as to the Collateral. The Administrative Agent may
specifically disclaim or modify any warranties of title or the like. This
procedure will not be considered to adversely effect the commercial
reasonableness of any sale of the Collateral.
(d) The Administrative Agent shall have no obligation to
marshall any of the Collateral.
(e) the Administrative Agent shall have the right to notify,
or require each Grantor to notify, any obligors with respect to amounts due or
to become due to such Grantor in respect of the Collateral, of the existence of
the security interest created herein, to direct such obligors to make payment of
all such amounts directly to the Administrative Agent, and, upon such
notification and at the expense of such Grantor, to enforce collection of any
such amounts and to adjust, settle or compromise the amount or payment thereof,
in the same manner and to the same extent as such Grantor might have done;
(i) all amounts and proceeds (including
checks and other instruments) received by either Grantor in
respect of amounts due to such Grantor in respect of the
Collateral or any portion thereof shall be received in trust for
the benefit of the Administrative Agent hereunder, shall be
segregated from other funds of such Grantor and shall be
forthwith paid over or delivered to the Administrative Agent in
the same form as so received (with any necessary endorsement) to
be applied as provided by SECTION 6.2; and
7
(ii) Grantors shall not adjust, settle or
compromise the amount or payment of any such amount or release
wholly or partly any obligor with respect thereto or allow any
credit or discount thereon.
(f) Solely for the purpose of enabling the Administrative
Agent to exercise rights and remedies under this SECTION 6 and at such time as
the Administrative Agent shall be lawfully entitled to exercise such rights and
remedies, each Grantor hereby grants to the Administrative Agent, to the extent
it has the right to do so, an irrevocable, nonexclusive worldwide license
(exercisable without payment of royalty or other compensation to such Grantor)
to use, operate under, license, or sublicense any Patent Right now or hereafter
owned by or licensed to such Grantor.
6.2 APPLICATION OF PROCEEDS. Except as expressly provided
elsewhere in this Agreement, all proceeds received by the Administrative Agent
in respect of any sale, any collection from, or other realization upon all or
any part of the Collateral shall be applied in full or in part by the
Administrative Agent against, the obligations of the Borrowers hereunder and
under the Note in the following order of priority: first, to the payment of all
costs and expenses of such sale, collection or other realization, including
reasonable compensation to the Administrative Agent and its agents and counsel,
and all other expenses, liabilities and advances made or incurred by the
Administrative Agent in connection therewith, and all amounts for which the
Administrative Agent is entitled to indemnification hereunder (in its capacity
as the Administrative Agent) and all advances made by the Administrative Agent
hereunder for the account of the applicable Grantor, and to the payment of all
costs and expenses paid or incurred by the Administrative Agent in connection
with the exercise of any right or remedy hereunder or under any Loan Document,
all in accordance with the terms hereof or thereof; second, to the extent of any
excess of such proceeds, to the payment of all other obligations of the
Borrowers hereunder and under the Note for the ratable benefit of each Secured
Party; and third, to the extent of any excess of such proceeds, to the payment
to or upon the order of such Grantor or to whosoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.
6.3 SALES ON CREDIT. If Administrative Agent sells any of
the Collateral upon credit, Grantor will be credited only with payments actually
made by purchaser and received by Administrative Agent and applied to
indebtedness of the purchaser. In the event the purchaser fails to pay for the
Collateral, Administrative Agent may resell the Collateral and the Grantors
shall be credited with proceeds of the sale.
6.4 ASSIGNMENT OF PATENTS. Each Grantor acknowledges that
the Administrative Agent has the right, upon the occurrence and during the
continuance of an Event of Default, pursuant to the power of attorney granted
the Administrative Agent hereunder, to complete, execute and record with the PTO
or other Governmental Authority one or more assignments of patents on behalf of
such Grantor for the sole purpose of effecting the Administrative Agent's
exercise of its remedies under this SECTION 6 or SECTION 6 of the Note. In
furtherance of the foregoing, each Grantor shall execute and deliver to the
Administrative Agent (simultaneously with the delivery of this Agreement to the
Administrative Agent) five or more originals of an assignment of
8
Collateral ("ASSIGNMENT OF PATENTS") substantially in the form attached as
EXHIBIT A, for the sole purpose of effecting the Administrative Agent's exercise
of its remedies under this SECTION 6 or SECTION 6 of the Note. Upon the
occurrence and during the continuation of any Event of Default (but subject to
the last sentence of SECTION 6 of the Note), the Administrative Agent may (a)
insert the name of the Assignee under the Assignment of Patents (which Assignee
may be the Administrative Agent or any other Person identified by the
Administrative Agent), (b) have the Assignee execute the Assignment of Patents
and (c) record (or cause to be recorded) the Assignment of Patents with the PTO
or other Governmental Authority. In connection with any action taken in pursuant
to the preceding sentence, the Administrative Agent (or any Assignee) may attach
a copy of SCHEDULE A to this Agreement (with any changes necessary to conform
such schedule to the Assignment of Patents and as may be necessary to allow
partial sales of the Collateral) to the Assignment of Patents as ANNEX A
thereto. The Grantors shall promptly execute and deliver to the Administrative
Agent any other assignment or transfer documentation requested by the
Administrative Agent in order to effect any sale of any of the Collateral made
pursuant to the terms of this Agreement.
6.5 INTENTIONALLY OMITTED.
Section 7. ADMINISTRATIVE AGENT MAY PERFORM.
If either Grantor fails to perform any of its obligations under
the Note, this Agreement or any other Loan Document, the Administrative Agent
may itself perform, or cause performance of, such agreement, and, with respect
to any such action taken when an Event of Default exists, the expenses of the
Administrative Agent incurred in connection therewith (including any attorneys
fees) shall be payable by the Grantors. Such expenses shall be payable solely by
the Grantors and shall not reduce the amount due hereunder or the amount of any
Cash Payment.
Section 8. FURTHER ASSURANCES.
Each Grantor shall, at any time and from time to time, and at
its expense (except that such Grantor shall not be responsible for filing fees),
make, execute, acknowledge and deliver, and file and record as necessary or
appropriate with Governmental Authorities, such agreements, assignments,
documents and instruments, and do such other and further acts and things
(including, without limitation, obtaining consents of third parties), as the
Administrative Agent may request and as may be necessary or desirable in order
to implement and effect fully the intentions, purposes and provisions of this
Agreement, or to assure and confirm to the Administrative Agent the grant,
perfection and priority of the Administrative Agent's security interests in the
Collateral.
Section 9. TERMINATION.
Upon the indefeasible payment in full in cash of all amounts
owed by the Grantors under the Note, this Agreement and any other Loan Document,
this Agreement shall terminate and the Administrative Agent shall, upon the
written request and at the
9
expense of the respective Grantors, execute and deliver to such Grantors all
releases, deeds, assignments and other instruments as may be necessary or proper
to release the security interest granted herein and to reassign and reconvey to
and re-vest in the Grantors the entire right, title and interest to the
Collateral previously granted, assigned, transferred and conveyed to the
Administrative Agent by the Grantors pursuant to this Agreement, as fully as if
this Agreement had not been made, subject to any disposition of all or any part
thereof that may have been made by the Administrative Agent pursuant to the
Note, this Agreement or any other Loan Document.
Section 10. EXPENSES.
Upon the occurrence and during the continuation of an Event of
Default, any and all fees, costs and expenses of whatever kind or nature,
including attorneys' fees and expenses, incurred by the Administrative Agent in
connection with the enforcement of the Administrative Agent's or any Lender's
rights under the Note, this Agreement or any other Loan Document (including the
Administrative Agent's rights under SECTION 7 hereof) shall be borne and paid by
the Grantors. All other fees, costs and expenses of the Administrative Agent
shall be reimbursed by the Grantors in accordance with SECTION 10 of the Note.
Section 11. OVERDUE AMOUNTS.
Until paid, all amounts due and payable by the Grantors
hereunder shall be a debt secured by the Collateral and shall bear, whether
before or after judgment, at the rate of interest set forth in the Note.
Section 12. NO ASSUMPTION OF LIABILITY; INDEMNIFICATION.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN,
NEITHER THE ADMINISTRATIVE AGENT NOR ANY OTHER SECURED PARTY ASSUMES ANY
LIABILITIES OF ANY GRANTOR WITH RESPECT TO ANY CLAIM OR CLAIMS REGARDING SUCH
GRANTOR'S OWNERSHIP OR PURPORTED OWNERSHIP OF, OR RIGHTS OR PURPORTED RIGHTS
ARISING FROM, ANY OF THE COLLATERAL OR ANY USE, LICENSE OR SUBLICENSE THEREOF,
WHETHER ARISING OUT OF ANY PAST, CURRENT OR FUTURE EVENT, CIRCUMSTANCE, ACT OR
OMISSION OR OTHERWISE. ALL OF SUCH LIABILITIES SHALL BE EXCLUSIVELY THE
RESPONSIBILITY OF SUCH GRANTOR, AND SUCH GRANTOR SHALL INDEMNIFY THE
ADMINISTRATIVE AGENT AND THE OTHER SECURED PARTIES FOR ANY AND ALL COSTS,
EXPENSES, DAMAGES AND CLAIMS, INCLUDING LEGAL FEES, INCURRED BY THE
ADMINISTRATIVE AGENT OR ANY OTHER SECURED PARTY WITH RESPECT TO SUCH
LIABILITIES; PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL LIMIT ANY DUTY THAT
THE ADMINISTRATIVE AGENT OR ANY OTHER SECURED PARTY MAY HAVE UNDER APPLICABLE
LAW TO ACT IN A COMMERCIALLY REASONABLE MANNER.
10
Section 13. MISCELLANEOUS
13.1 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This
Agreement shall be binding upon and inure to the benefit of the Administrative
Agent and each Grantor and, in each case, the respective successors and assigns
of such party. Notwithstanding the foregoing, no Grantor may assign this
Agreement in whole or in part without the prior written consent of the
Administrative Agent and each Lender. Each of the Lenders (including the
successors and assigns thereof) shall be a third party beneficiary to this
Agreement and there shall be no other third party beneficiaries to this
Agreement.
13.2 GOVERNING LAW; CONSENT TO JURISDICTION. This agreement
shall be governed by, and construed in accordance with, the law of the state of
New York, without regard to conflicts of laws provisions (other than section
5-1401 of the New York General Obligations Law).
13.3 AMENDMENT AND WAIVER. This Agreement is subject to
modification only by a writing signed by the Administrative Agent and otherwise
in accordance with the Note. No party hereto shall be deemed to have waived any
right hereunder unless such waiver shall be in writing and signed by the waiving
party. A waiver on any one occasion shall not be construed as a bar to or waiver
of any right on any future occasion. No failure or delay on the part of the
Administrative Agent or any Lender in exercising any power, right or privilege
under this Agreement shall preclude any further exercise thereof or the exercise
of any other power, right or privilege.
13.4 WAIVER OF JURY TRIAL. THE PARTIES HERETO HERBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE PARTIES HERETO. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS TO ACCEPT THE NOTE IN PARTIAL
SATISFACTION OF THE OBLIGATIONS OWED BY THE GRANTORS TO THE LENDERS.
13.5 HEADINGS. The section headings and subheadings used in
this Agreement are used convenience only and are not to be considered in
construing or interpreting this Note.
13.6 NOTICES. All notices and other communications called for
hereunder shall be made or given in the manner set forth in clause (e) of
SECTION 13 of the Note.
13.7 NO WAIVER. No failure or delay on the part of the
Administrative Agent in exercising any power, right or privilege under this
Agreement shall operate as a waiver thereof, and no single or partial exercise
of any such power, right or privilege
11
shall preclude any further exercise thereof or the exercise of any other power,
right or privilege.
13.8 SEVERABILITY. If any term of this Agreement shall be
held to be invalid, illegal or unenforceable, the validity of all other terms
hereof shall in no way be affected thereby, and this Agreement shall be
construed and be enforceable as if such invalid, illegal or unenforceable term
had not been included herein.
13.9 RECEIPT BY GRANTORS. Each Grantor acknowledges receipt
of a copy of this Agreement.
13.10 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts (including by facsimile), 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.
[SIGNATURES BEGIN ON NEXT PAGE]
12
IN WITNESS WHEREOF, this Patent Security Agreement has been
executed as of the day and year first above written.
INNAPHARMA, INC., as Grantor
By:
-----------------------------------
Name:
Title:
S-1
[Patent Collateral Security and Pledge Agreement]
IN WITNESS WHEREOF, this Patent Security Agreement has been
executed as of the day and year first above written.
TETRAGENEX PHARMACEUTICALS,
INC., as Grantor
By:
------------------------------------
Name:
Title:
S-2
[Patent Collateral Security and Pledge Agreement]
IN WITNESS WHEREOF, this Patent Security Agreement has been
executed as of the day and year first above written.
KBC BANK N.V., as Administrative Agent
By:
------------------------------------
Name:
Title:
S-3
[Patent Collateral Security and Pledge Agreement]
SCHEDULE A
TO THE PATENT SECURITY AGREEMENT
SERIAL NO. PATENT NO.
COUNTRY TITLE FILING DATE ISSUE DATE CURRENT STATUS
============================================================================================================================
United States Tri-, Tetra-, Penta-, and Polypeptides and 08/238,089 5,589,460 Granted. Maintenance fee due
their Use as an Anti-Depressant Agent 05/04/94 12/31/96 June 30, 2004.
United States Method for Treatment of Pain 08/424,866 5,721,207 Issued
04/18/95 02/24/98
United States Tri-, Tetra-, Penta-, and Polypeptides and 08/432,651 5,767,083 Granted. Maintenance fee due
their Use as an Anti-Depressant Agent 05/02/95 06/16/98 December 16, 2005.
United States Peptides Inhibiting the Oncogenic Action of 08/531,525 5,840,683 Issued
P21 RAS 09/21/95 11/24/98
United States Peptidomimetics Inhibiting the Oncogenic 08/718,270 5,910,478 Issued
Action of P21 Ras 09/20/96 06/08/99
United States Peptidomimetics for the Treatment of HIV 08/807,473 5,990,172 Issued
Infection 02/27/97 11/23/99
United States Tri-, Tetra-, Penta-, and Polypeptides and 08/962,962 6,093,797 Granted. Maintenance fee due
their Use as an Anti-Depressant Agent 11/04/97 07/25/00 January 25, 2004.
United States Tetracycline Derivatives for Testing an 60/327,502 Pending. Utility appln. And
Provisional Antibiotic/Antibacterial Agents and MMP 10/05/01 foreign appln. instructions due
Inhibitors no later than October 5, 2002.
United States Tri-Tetra penta and polypeptides and their 10/122,246 6,767,897 Granted.
use as anti-depressant agents 04/11/02 07/27/04
Australia Tri-, Tetra-, Penta-, and Polypeptides and 28139/95 685292 Granted.
their Use as an Anti-Depressant Agent 05/02/95 08/06/98
Austria Tri-, Tetra-, Penta-, and Polypeptides and AT258061T Granted.
their Use as an Anti-Depressant Agent
Canada Tri-, Tetra-, Penta-, and Polypeptides and 2,189,145 Pending.
their Use as an Anti-Depressant Agent 05/02/95
Canada Peptides and Peptidomimetrics Inhibiting the 2,232,750 Pending
Oncogenic Action of P21 RAS 09/20/96
China Tri-, Tetra-, Penta-, and Polypeptides and 95193885.1 Pending.
their Use as an Anti-Depressant Agent 05/02/95
Denmark --- DK759772T Granted.
European Patent Tri-, Tetra-, Penta-, and Polypeptides and 95 92 3659.7 EP0759772 Granted.
Convention their Use as an Anti-Depressant Agent 05/02/95 01/21/04
European Patent New Therapeutic Uses of Tri-, Tetra-, 03724013.2 Pending.
Convention Penta-, and Polypeptides 04/10/03
Finland Tri-, Tetra-, Penta-, and Polypeptides and FI Pending.
their Use as an Anti-Depressant Agent 964363
05/02/95
France Tri-, Tetra-, Penta-, and Polypeptides and 95 92 3659.7 EP0759772 Granted.
their Use as an Anti-Depressant Agent 05/02/95 01/21/04
Schedule A
to the Patent Security Agreement
SERIAL NO. PATENT NO.
COUNTRY TITLE FILING DATE ISSUE DATE CURRENT STATUS
============================================================================================================================
Germany Tri-, Tetra-, Penta-, and Polypeptides and DE69532470.5 Granted.
their Use as an Anti-Depressant Agent
India Tri-, Tetra-, Penta-, and Polypeptides and 786CAL96 Granted
their Use as an Anti-Depressant Agent 05/01/96
August 28, 2001.
India A Method of Making Substituted Pentapeptide 199CAL2001 Pending. Awaiting current
Divisional Appln. with Antidepressant Activity 04/04/01 status.
India A Method of Making Substituted Pentapeptide 198CAL2001 Pending. Awaiting current
Divisional Appln. with Antidepressant Activity 04/04/01 status.
India Tri-, Tetra-, Penta-, and Polypeptides and 237CAL20 Pending. Awaiting current
Divisional Appln. their Use as an Anti-Depressant Agent 04/20/01 status.
India Tri-, Tetra-, Penta-, and Polypeptides and Unknown Pending. Awaiting current
Divisional Appln. their Use as an Anti-Depressant Agent 09/06/01 status.
Indonesia Tri-, Tetra-, Penta-, and Polypeptides and P-952622 Pending.
their Use as an Anti-Depressant Agent 12/08/95
Intl. Elcatonin Sustained Release Compositions 95/17059 Complete
12/29/95
Intl. Peptidomimetics for the Treatment of HIV 97/03072 Complete
Infection 02/27/97
Intl. Peptide and Peptidomimetic Inhibitors of 96/15098 Complete
Oncogenic P21 RAS 09/20/96
Intl. Method for Treatment of Pain 96/05372 Complete
04/18/96
Japan Tri-, Tetra-, Penta-, and Polypeptides and 529076/1995 Pending. Awaiting results of
their Use as an Anti-Depressant Agent 05/02/95 examination request.
Malaysia Tri-, Tetra-, Penta-, and Polypeptides and PI 95003240 Allowed
their Use as an Anti-Depressant Agent 05/02/95
February 11, 2002.
Norway Tri-, Tetra-, Penta-, and Polypeptides and PI 996 4561 Pending.
their Use as an Anti-Depressant Agent 05/02/95
Russian Federation Tri-, Tetra-, Penta-, and Polypeptides and 96 123 269 2,182,910 Granted.
their Use as an Anti-Depressant Agent 12/04/96 08/28/01
Taiwan Tri-, Tetra-, Penta-, and Polypeptides and 84111543 Allowed October 11, 2002.
their Use as an Anti-Depressant Agent 11/01/95 Awaiting updated status.
United Kingdom Tri-, Tetra-, Penta-, and Polypeptides and 95 92 3659.7 EP0759772 Granted.
their Use as an Anti-Depressant Agent 05/02/95 01/21/04
===============================================================================================================================
ii
EXHIBIT A
---------
ASSIGNMENT OF PATENTS
---------------------
WHEREAS, INNAPHARMA, INC., a corporation organized and existing
under the laws of the State of Delaware, having a place of business at 1 Maynard
Drive, Suite 205, Park Ridge, New Jersey 07656, and TETRAGENEX PHARMACEUTICALS,
INC., a corporation organized and existing under the laws of the State of
Delaware, having a place of business at 1 Maynard Drive, Suite 205, Park Ridge,
New Jersey 07656 (together the "ASSIGNORS"), are the owners of the patents
identified on ANNEX A hereto (the "PATENTS"); and
WHEREAS, _____________________________________, having a place
of business at _______________________________________________________ (the
"ASSIGNEE"), is desirous of acquiring the Patents;
WHEREAS, the Assignors and KBC Bank N.V., as administrative
agent for the Secured Parties (as defined therein) have entered into that
certain Patent Security Agreement, dated as of October 25, 2004 (as may be
amended, the "SECURITY AGREEMENT");
NOW, THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, the Assignors do hereby agree as follows:
1. DEFINITIONS.
(a) TERMS DEFINED IN THE SECURITY AGREEMENT AND THE NOTE.
All capitalized terms used in this Agreement and not otherwise defined herein
shall have the meanings assigned to them in the Security Agreement and, if not
therein defined in the Note.
(b) CERTAIN DEFINED TERMS. As used in this Assignment of
Patents, the following terms shall have the following meanings:
"ISSUED PATENTS" means all present or, to the extent pertaining
to any compound or other technology developed by either Assignor on or prior to
October 25, 2004, future letters patent of the United States or any other
country or group of countries or any political subdivision of any of the
foregoing, all reissues and extensions thereof and all divisions, continuations
and continuations-in-part thereof, including any of the foregoing referred to in
ANNEX A.
"PATENT APPLICATIONS" means all present or, to the extent
pertaining to any compound or other technology developed by either Assignor on
or prior to October 25, 2004, future applications for letters patent of the
United States or any other country or group of countries or any political
subdivision of any of the foregoing, including any of the foregoing referred to
in ANNEX A.
A-1
"PATENT LICENSES" means all agreements, (whether or not in
writing), providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by any Issued
Patent, Patent Application or Patent Right.
"PATENT RIGHTS" means any and all past, present or future rights
in, to and associated with the Issued Patents, Patent Applications and, to the
extent pertaining to any compound or other technology developed by either
Assignor on or prior to October 25, 2004, other rights of inventions throughout
the world, whether arising under federal law, state law, common law, foreign law
or otherwise, including the following: (a) all rights issuing from any
provisional, divisional, renewal, substitute, continuation, reexamination and
reissue applications based in whole or in part on the Issued Patents and Patent
Applications; (b) all Patent Licenses and all income and royalties with respect
thereto; (c) the right (but not the obligation) to register claims under any
state, federal or foreign patent law or regulation; (d) the right (but not the
obligation) to sue in the name of any Grantor or the Administrative Agent for
any and all past, present and future infringements of or any other damages or
injury to Issued Patents or rights under Patent Licenses, and the rights to
damages or profits due or accrued arising out of or in connection with any such
past, present or future infringement, damage or injury; (e) the right (but not
the obligation) to apply for and prosecute Patent Applications in the name of
any Grantor or the Administrative Agent and to take any and all actions
necessary or appropriate to maintain such applications in effect, and (f) all
proceeds of the foregoing.
2. ASSIGNMENT.
(a) Each Grantor grants, assigns, transfers, conveys and
sets over to the Assignee such Grantor's entire right, title and interest in and
to the Patents, together with (i) the issued patents and patent applications
identified on ANNEX A attached hereto and incorporated herein by reference
(including any provisional, divisional, renewal, substitute, continuation,
reexamination and reissue applications based in whole or in part on any said
patent or patent applications) and (ii) the right to sue and recover for, and
the right to profits or damages due or accrued arising out of or in connection
with, any and all past, present or future infringements of or damage or injury
to the Patents or such associated goodwill.
(b) This Assignment of Patents is intended to and shall take
effect at such time as the Assignee shall complete this instrument by signing
its acceptance of this Assignment of Patents below.
[SIGNATURES BEGIN ON NEXT PAGE]
A-2
IN WITNESS WHEREOF, Assignor, by its duly authorized officer,
has executed this assignment, on this ___ day of October, 2004.
INNAPHARMA, INC., as Assignor
By:
------------------------------------
Name:
Title:
State of ____________ )
) ss.:
County of ____________ )
On the __ day of ____________, in the year 2004 before me, the
undersigned, personally appeared _________________, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
such individual, and the entity upon behalf of which the individual acted,
executed the instrument.
- -----------------------------
Notary Public
Commission Expires ____ day of ____, 20__.
S-1
[Assignment of Patents]
IN WITNESS WHEREOF, Assignor, by its duly authorized officer,
has executed this assignment, on this ___ day of October, 2004.
TETRAGENEX PHARMACEUTICALS,
INC., as Assignor
By:
------------------------------------
Name:
Title:
State of ____________ )
) ss.:
County of ____________ )
On the __ day of ____________, in the year 2004 before me, the
undersigned, personally appeared _________________, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
such individual, and the entity upon behalf of which the individual acted,
executed the instrument.
- -----------------------------
Notary Public
Commission Expires ____ day of ____, 20__.
S-2
[Assignment of Patents]
The foregoing assignment of the Patents by the Assignor to the Assignee
is hereby accepted as of the ___ day of ________, 20__.
_____________, as Assignee
By:
------------------------------------
Name:
Title:
State of ____________ )
) ss.:
County of ____________ )
On the __ day of ____________, in the year 20__ before me, the
undersigned, personally appeared _________________, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
such individual, and the entity upon behalf of which the individual acted,
executed the instrument.
- -----------------------------
Notary Public
Commission Expires ____ day of ____, 20__.
S-3
[Assignment of Patents]