TRADEMARK AND PATENT
SECURITY AGREEMENT
THIS TRADEMARK AND PATENT SECURITY AGREEMENT ("Agreement") is
dated as of the 7th day of May, 1997, by and between AMERICAN CONSOLIDATED
LABORATORIES, INC., a Florida corporation ("Grantor"), and SIRROM INVESTMENTS,
INC. ("Sirrom"), a Tennessee corporation, as agent pursuant to that certain
Intercreditor Agreement of even date herewith by and between TULLIS-DICKERSON
CAPITAL FOCUS, L.P. ("TDCF"), Sirrom and Grantor (the "Intercreditor Agreement")
("Sirrom" and "TDCF" are collectively referred to hereinafter as "Lenders").
WITNESSETH:
WHEREAS, Grantor is liable either as borrower or as guarantor on each
of the obligations evidenced by (1) that certain Loan Agreement and Secured
Promissory Note dated December 18, 1996, executed by NovaVision, Inc.
("NovaVision"), payable to the order of Sirrom in the original principal amount
of $520,000; and (2) that certain Loan Agreement and Amended and Restated
Promissory Note of even date herewith, executed by Grantor payable to the order
of TDCF in the original principal amount of $550,000; and (3) a loan to be made
by Sirrom (the "Sirrom Loan") to Grantor in the original principal amount of
$1,575,000 pursuant to that certain Loan Agreement and Secured Promissory Note
of even date herewith (all of the foregoing loan agreements, notes and all other
documents executed in connection with said transactions are collectively
referred to as the "Loan Documents", all of the obligations evidenced thereby
are collectively referred to as the "Loans", and "Grantor" and "NovaVision" are
collectively referred to as "Borrowers"); and
WHEREAS, Grantor owns certain Trademarks and Patents listed on Schedule
A hereto; and
WHEREAS, Lenders desire to obtain from Grantor, and Grantor desires to
mortgage, pledge and grant to, Sirrom, as agent pursuant to the Intercreditor
Agreement, for the benefit of Lenders, a security interest in all of its right,
title and interest in, to and under the Collateral, including the property
listed on the attached Schedule A, together with any renewal or extension
thereof, and all Proceeds thereof, to secure the payment of the Obligations;
WHEREAS, it is a condition precedent to Sirrom making the Sirrom Loan
to Grantor, that Grantor execute this Agreement;
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and to induce Sirrom
to enter into and make the Sirrom Loan to Grantor, Grantor hereby agrees with
Lenders, as follows:
1. Defined Terms. Unless otherwise defined herein, terms which are
defined in the Loan Documents and used herein are so used as so defined, and the
following terms shall have the following meanings:
"Collateral" has the meaning assigned to it in Section 2 of this
Security Agreement.
"Obligations" means obligations secured hereby and shall include (a)
the Loans, and any renewals or extensions thereof, (b) the full and prompt
payment and performance of any and all other indebtednesses and other
obligations of Borrowers to Lenders, direct or contingent (including but not
limited to obligations incurred as indorser, guarantor or surety), however
evidenced or denominated, and however and whenever incurred, including but not
limited to indebtednesses incurred pursuant to any present or future commitment
of Lenders to Borrowers, and (c) all future advances made by Lenders for taxes,
levies, insurance and preservation of the Collateral and all attorney's fees,
court costs and expenses of whatever kind incident to the collection of any of
said indebtedness or other obligations and the enforcement and protection of the
security interest created hereby.
"Patents" means all types of exclusionary or protective rights granted
(or applications therefor) for inventions in any country of the world
(including, without limitation, letters patent, plant patents, utility models,
breeders' right certificates, inventor's certificates and the like), and all
reissues and extensions thereof and all divisions, continuations and
continuations-in-part thereof, including, without limitation, all such rights
referred to in Schedule A hereto.
"Patent License" means all agreements material to the operation of
Grantor's businesses, whether written or oral, providing for the grant by or to
the Grantor of any right to manufacture, use or sell any invention covered by a
Patent, including, without limitation, any thereof referred to in Schedule A
hereto.
"Proceeds" means "proceeds," as such term is defined in Section
9-306(1) of the UCC and, to the extent not included in such definition, shall
include, without limitation, (a) any and all proceeds of any insurance,
indemnity, warranty, guaranty or letter of credit payable to the Grantor, from
time to time with respect to any of the Collateral, (b) all payments (in any
form whatsoever) paid or payable to the Grantor from time to time in connection
with any taking of all or any part of the Collateral by any governmental
authority or any Person acting under
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color of governmental authority), (c) all judgments in favor of the Grantor in
respect of the Collateral and (d) all other amounts from time to time paid or
payable or received or receivable under or in connection with any of the
Collateral.
"Security Agreement" means this Trademark and Patent Security
Agreement, as amended, supplemented or otherwise modified from time to time.
"Trademarks" means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source of business identifiers used in any country in the
world, whether registered or unregistered, and the goodwill associated
therewith, now existing and material to the businesses of the Grantor or
hereafter acquired, and (b) all registrations, recordings and renewals thereof,
and all applications in connection therewith, issued by or filed in a national,
state or local governmental authority of any country, including, without
limitation, all such rights referred to in Schedule A hereto.
"Trademark License" means any agreement, material to the businesses of
the Grantor, written or oral, providing for the grant by or to the Grantor of
any right to use any Trademark, including, without limitation, any thereof
referred to in Schedule A hereto.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the State of Tennessee.
2. Grant of Security Interest. As collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations, Grantor hereby assigns and
grants to Sirrom, as agent for the benefit of Lenders, a security interest in
all of Grantor's right, title and interest in and to the following property now
owned or at any time hereafter acquired by Grantor or in which Grantor now has,
or at any time in the future may acquire, any right, title or interest
(collectively, the "Collateral"):
(i) all Trademarks;
(ii) all Trademark Licenses;
(iii) all Patents;
(iv) all Patent Licenses; and
(v) to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing;
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that are material to the business of Grantor, and whether or not included in
Schedule A.
3. Representations and Warranties Concerning Trademarks. Grantor
represents and warrants that Schedule A hereto includes all of Grantor's
registered Trademarks and Trademark Licenses and all of the Patents and Patent
Licenses owned by Grantor in its own name or as to which Grantor has any
colorable claim of ownership that are material to the businesses of Grantor as
of the date hereof. To the best of Grantor's knowledge, each Trademark and
Patent is valid, subsisting, unexpired, enforceable and has not been abandoned.
Except as set forth in Schedule A, none of the Trademarks or Patents is the
subject of any licensing or franchise agreement. All licenses of the Trademarks
and Patents are in force and, to the best knowledge of the Grantor, not in
default. No holding, decision or judgment has been rendered by any governmental
authority which would limit, cancel or question the validity of any material
Trademark or Patent. No action or proceeding is pending (i) seeking to limit,
cancel or question the validity of any Trademark or Patent or the Grantor's
ownership thereof or (ii) which, if adversely determined, would reasonably be
likely to have a material adverse effect on the value of any Trademark or
Patent.
4. Covenants. Grantor covenants and agrees with Lenders that, from and
after the date of this Security Agreement until the Obligations are paid in
full:
(a) Further Documentation. From time to time, upon the written
request of Sirrom, and at the sole expense of Grantor, the Grantor will
promptly and duly execute and deliver such further instruments and
documents and take such further action as Sirrom may reasonably request
for the purpose of obtaining or preserving the full benefits of this
Security Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or
continuation statements under the UCC in effect in any jurisdiction
with respect to the liens created hereby. Grantor also hereby
authorizes Sirrom to file any such financing or continuation statement
without the signature of Grantor to the extent permitted by applicable
law. A carbon, photographic or other reproduction of this Security
Agreement shall be sufficient as a financing statement for filing in
any jurisdiction.
(b) Limitation on Lien on Collateral. Grantor will not create,
incur or permit to exist, will take all commercially reasonable actions
to defend the Collateral against, and will take such other commercially
reasonable action as is necessary to remove, any lien or claim on or to
the Collateral, other than the liens created hereby, and other than as
permitted pursuant to the Loan Documents, and will take all
commercially reasonable actions to defend the right, title and interest
of Lenders in and to any of the Collateral against the claims and
demands of all persons whomsoever.
(c) Limitations on Dispositions of Collateral. Grantor will
not sell, transfer or otherwise dispose of any of the Collateral, or
attempt, offer or contract to do so
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except as permitted in the Loan Documents.
(d) Notices. Grantor will advise Lenders promptly, in
reasonable detail, at their addresses set forth in the Loan Documents,
(i) of any lien (other than liens created hereby or permitted under the
Loan Documents) on, or claim asserted against, Trademarks or Patents
and (ii) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of
the Collateral or on the liens created hereunder.
(e) Patents and Trademarks..
(i) Grantor (either itself or through licensees)
will, except with respect to any Trademark that the Grantor
shall reasonably determine is of immaterial economic value to
it or otherwise reasonably determines not to do so, (A)
continue to use each Trademark on each and every trademark
class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists in order to
maintain such Trademark in full force free from any claim of
abandonment for non-use, (B) maintain as in the past the
quality of products and services offered under such Trademark,
(C) use reasonable efforts to employ such Trademark with the
appropriate notice of registration, (D) not adopt or use any
mark which is confusingly similar or a colorable imitation of
such Trademark unless within 30 days after such use or
adoption Sirrom for the benefit of Lenders, shall obtain a
perfected security interest in such mark pursuant to this
Security Agreement, and (E) not (and not permit any licensee
or sublicensee thereof to) do any act or knowingly omit to do
any act whereby any Trademark may become invalidated.
(ii) Grantor will not, except with respect to any
Patent that Grantor shall reasonably determine is of
immaterial economic value to it or otherwise reasonably
determine so to do, do any act, or omit to do any act, whereby
any Patent may become abandoned or dedicated.
(iii) Grantor will promptly notify Lenders if it
knows, or has reason to know, that any application relating to
any Patent or any Trademark may become abandoned or dedicated,
or of any adverse determination or material development
(including, without limitation, the institution of, or any
such determination or development in, any proceeding in the
United States Patent and Trademark office or any court or
tribunal in any country) regarding the Grantor's ownership of
any Patent or Trademark or its right to register the same or
to keep and maintain the same.
(iv) Whenever a Grantor, either by itself or through
any agent,
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employee, licensee or designee, shall file an application for
any Patent or for the registration of any Trademark with the
United States Patent and Trademark Office or any similar
office or agency in any other country or any political
subdivision thereof, the Grantor shall report such filing to
Lenders within five business days after the last day of the
fiscal quarter in which such filing occurs. Upon request of
Sirrom, the Grantor shall execute and deliver any and all
reasonably necessary agreements, instruments, documents, and
papers as Sirrom may request to evidence Lenders' security
interest in any newly filed Patent or Trademark and the
goodwill and general intangibles of the Grantor relating
thereto or represented thereby, and Grantor hereby constitutes
Sirrom 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 are paid
in full.
(v) Grantor, except with respect to any Patent or
Trademark the Grantor shall reasonably determine is of
immaterial economic value to it or it otherwise reasonably
determines not to so do, will take all reasonable and
necessary steps, including, without limitation, in any
proceedings before any tribunal, office or agency in any other
country or any political subdivision thereof, to maintain and
pursue each application (and to obtain the relevant
registration or Patent) and to maintain each Patent and each
registration of Trademarks, including, without limitation,
filing of applications for renewal, affidavits of use and
affidavits of incontestability when appropriate.
(vi) In the event Grantor knows or has reason to know
that any Patent or Trademark included in the Collateral is
infringed, misappropriated or diluted by a third party, the
Grantor shall promptly notify Lenders after it learns thereof
and shall, unless the Grantor shall reasonably determine that
such Patent or Trademark is of immaterial economic value to
the Grantor which determination the Grantor shall promptly
report to Lenders, promptly sue for infringement,
misappropriation or dilution, or take such other actions as
the Grantor shall reasonably deem appropriate under the
circumstances to protect such Patent or Trademark.
5. Appointment as Attorney-in-Fact.
(a) Powers. Grantor hereby irrevocably constitutes and
appoints Sirrom and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Grantor
and in the name of the Grantor or in its own name, from time to time
after the occurrence, and during the continuation of, an Event of
Default in Lenders' discretion, for the purpose of carrying out the
terms of this Security Agreement, to take any and all appropriate
action and to execute any and
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all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Security Agreement, and, without
limiting the generality of the foregoing, the Grantor hereby gives
Sirrom the power and right, on behalf of the Grantor without notice to
or assent by the Grantor, to do the following:
(i) at any time when any Event of Default shall have
occurred and is continuing, in the name of the Grantor or its
own name, or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under, or with
respect to, any Collateral and to file any claim or to take
any other action or proceeding in any court of law or equity
or otherwise deemed appropriate by Lenders for the purpose of
collecting any and all such moneys due with respect to such
Collateral whenever payable;
(ii) to pay or discharge taxes and liens levied or
placed on or threatened against the Collateral, to effect any
repairs or any insurance called for by the terms of this
Security Agreement and to pay all or part of the premiums
therefor and the costs thereof; and
(iii) (a) to direct any party liable for any payment
under any of the Collateral to make payment of any and all
monies due or to become due thereunder directly to Sirrom or
as Sirrom shall direct, (b) to ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims
and other amounts due or to become due at any time in respect
of or arising out of any Collateral, (c) to sign and endorse
any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in
connection with any of the Collateral, (d) to commence and
prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other
right in respect of any Collateral, (e) to defend any suit,
action or proceeding brought against the Grantor with respect
to any Collateral, (f) to settle, compromise or adjust any
suit, action or proceeding described in the preceding clause
and, in connection therewith, to give such discharges or
releases as Sirrom may deem appropriate, (g) to assign any
Trademark (along with goodwill of the business to which such
Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as Lenders
shall in their sole discretion determine, and (h) generally,
to sell, transfer, pledge and make any agreement with respect
to or otherwise deal with any of the Collateral as fully and
completely as though Lenders were the absolute owner thereof
for all purposes, and to do, at Lenders' option and the
Grantor's expense, at any time, or from time to time, all acts
and things which Lenders deem necessary to protect, preserve
or realize upon the
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Collateral and the liens of Lenders thereon and to effect the
intent of this Security Agreement, all as fully and
effectively as the Grantor might do.
Grantor hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof. This power of
attorney is a power coupled with an interest and shall be
irrevocable.
(b) Other Powers. Grantor also authorizes sirrom, at any time
and from time to time, to execute, in connection with the sale provided for in
Section 8 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
(c) No Duty on the Part of Lenders. The powers conferred on
Sirrom hereunder are solely to protect the interests of Lenders in the
Collateral and shall not impose any duty upon Sirrom to exercise any such
powers. Sirrom shall be accountable only for amounts that it actually receives
as a result of the exercise of such powers, and neither it nor any of its
partners, officers, directors, employees or agents shall be responsible to the
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct or failure to comply with mandatory provisions
of applicable law.
6. Performance by Lenders of Grantor's Obligations. If Grantor fails to
perform or comply with any of its agreements contained herein and Lenders, as
provided for by the terms of this Security Agreement, shall themselves perform
or comply, or otherwise cause performance or compliance, with such agreement,
the expenses of Lenders incurred in connection with such performance or
compliance, together with interest thereon at the highest default rate provided
in the Loan Documents, shall be payable by the Grantor to Lenders on demand and
shall constitute Obligations secured hereby.
7. Proceeds. It is agreed that if an Event of Default shall occur and
be continuing (a) all Proceeds received by Grantor consisting of cash, checks
and other cash equivalents shall be held by the Grantor in trust for Lenders,
segregated from other funds of the Grantor, and shall, forthwith upon receipt by
the Grantor, be turned over to Sirrom in the exact form received by Grantor
(duly endorsed by Grantor to Sirrom, if required), and (b) any and all such
Proceeds received by Sirrom (whether from Grantor or otherwise) shall promptly
be applied by Sirrom against, the Obligations (whether matured or unmatured),
such application to be in such order as Sirrom shall elect. Any balance of such
Proceeds remaining after the Obligations shall have been paid in full shall be
paid over to Grantor or to whomsoever may be lawfully entitled to receive the
same.
8. Remedies. If an Event of Default shall occur and be continuing,
Lenders, may exercise, in addition to all other rights and remedies granted to
it in this Security Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all
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rights and remedies of a secured party under the UCC. Without limiting the
generality of the foregoing, Lenders without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon Grantor or any other person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or, contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
office of either Lender or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on credit or
on future delivery without assumption of any credit risk. Lenders shall have the
right upon any such public sale or sales, and, to the extent permitted by law,
to purchase the whole or any part of the Collateral so sold, free of any right
or equity of redemption in the Grantor, which right or equity is hereby waived
or released. Grantor further agrees, at Lenders' request, to assemble the
Collateral and make it available to Lenders at places which Lenders shall
reasonably select, whether at the Grantor's premises or elsewhere. Lenders shall
apply the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as Lenders may elect, and only after such application and after the
payment by Lenders of any other amount required by any provision of law,
including, without limitation, Section 9-504(l)(c) of the UCC, need Lenders
account for the surplus, if any, to the Grantor. To the extent permitted by
applicable law, Grantor waives all claims, damages and demands it may acquire
against Lenders arising out of the exercise by them of any rights hereunder. If
any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition. Grantor shall remain liable
for any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Obligations and the fees and
disbursements of any attorneys employed by Lenders to collect such deficiency.
9. Limitation on Duties Regarding Preservation of Collateral. Sirroms's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the UCC or otherwise,
shall be to deal with it in the same manner as Sirrom would deal with similar
property for its own account. Neither Lenders nor any of their partners,
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Grantor or otherwise.
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10. Powers Coupled with an Interest. All authorizations and agencies
herein Contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
11. Severability. Any provision of this Security Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. Paragraph Headings. The paragraph headings used in this Security
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
13. No Waiver; Cumulative Remedies. Lenders shall not by any act
(except by a written instrument pursuant to Section 14 hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any default or Event of Default or in any
breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of Lenders, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by Lenders of any right or remedy hereunder on any occasion shall not be
construed as a bar to any right or remedy which Lenders would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
14. Waivers and Amendments; Successors and Assigns. None of the terms
or provisions of this Security Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Grantor and
Sirrom, as agent for Lenders, provided that any provision of this Security
Agreement may be waived by in a written letter or agreement executed by Sirrom
as agent for Lenders or by telex or facsimile transmission from Sirrom as agent
for Lenders. This Security Agreement shall be binding upon the successors and
assigns of the Grantor and shall inure to the benefit of Lenders and their
successors and assigns.
15. Notices. All notices, requests and demands to or upon the Grantor
or Lenders to be effective shall be in writing or by telecopy or telex and
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or, in the case of mail, three days after
deposit in the postal system, first class postage prepaid, or, in the case of
telecopy notice, confirmation of receipt received, or, in the case of telex
notice, when sent, answerback received, addressed to a party at the address
provided for such party in the Loan Documents.
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16. Governing Law. This Security Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the State of Tennessee
applicable to contracts to be wholly performed in such State.
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the date first above written.
GRANTOR:
AMERICAN CONSOLIDATED LABORATORIES, INC.,
a Florida corporation
By: Joseph A. Arena
Title: CEO
AGENT:
SIRROM INVESTMENTS, INC.,
a Tennessee corporation
By: /s/ Donald F. Barrickman
Title: Vice President
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SCHEDULE A
LIST OF PATENTS
NONE
LIST OF TRADEMARKS
ALLVUE
BiVue
ConstaVu
Sof-form
Accuform
Comfort Control
The Tailors of Contact Lenses
LIST OF LICENSE AGREEMENTS
David A Volk - The Company has a license agreement to manufacture the ALLVUE
soft contact lens and an aspheric RGP lens under the Comfort Control trade name.
Kontur Kontact Lens Co., Inc.- The Company has a license agreement to (1) the
process/formula to produce methifilcon A; (2) the design for a soft toric lens,
and (3) the design for the Sof-form 55 spherical lens.
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