EXHIBIT C
TO
NOTE AND WARRANT PURCHASE AGREEMENT
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is executed as of
March 7, 2005, by MIRAVANT MEDICAL TECHNOLOGIES, a Delaware corporation (the
"Company"), with headquarters located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in favor of ST. CLOUD INVESTMENTS, LTD., a British Virgin
Islands company (the "Secured Party").
RECITALS
A. The Company and the Secured Party have entered into a Note and
Warrant Purchase Agreement, dated as of the date hereof (the "Purchase
Agreement"), pursuant to which the Company has agreed to issue to the Secured
Party, and the Secured Party has agreed to purchase from the Company, on the
terms and conditions set forth therein, Secured Convertible Promissory Notes
(each a "Note" and collectively, the "Notes").
B. In order to induce the Secured Party to extend the credit evidenced
by the Notes, Company has agreed to enter into this Security Agreement and to
grant to the Secured Party, the security interest in the Collateral described
below.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company hereby agrees with the Secured Party as follows:
1. Definitions and Interpretation. When used in this Security Agreement, the
following terms have the following respective meanings:
"Collateral" has the meaning given to that term in Section 2
hereof.
"Obligations" means the Notes, including, all interest, fees,
charges, expenses, attorneys' fees and costs and accountants' fees and costs
chargeable to and payable by the Company hereunder and thereunder, in each case,
whether direct or indirect, absolute or contingent, due or to become due, and
whether or not arising after the commencement of a proceeding under Title 11 of
the United States Code (11 U.S.C. Section 101 et seq.), as amended from time to
time (including post-petition interest) and whether or not allowed or allowable
as a claim in any such proceeding.
"Permitted Liens" means (a) Liens for taxes not yet delinquent
or Liens for taxes being contested in good faith and by appropriate proceedings
for which adequate reserves have been established; (b) Liens in respect of
property or assets imposed by law which were incurred in the ordinary course of
business, such as carriers', warehousemen's, materialmen's and mechanics' Liens
and other similar Liens arising in the ordinary course of business which are not
delinquent or remain payable without penalty or which are being contested in
good faith and by appropriate proceedings; (c) Liens incurred or deposits made
in the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, and mechanic's Liens,
carrier's Liens and other Liens to secure the performance of tenders, statutory
obligations, contract bids, government contracts, performance and return of
money bonds and other similar obligations, incurred in the ordinary course of
business, whether pursuant to statutory requirements, common law or consenual
arrangements; (d) Liens in favor of the Secured Party; (e) Liens upon any
equipment acquired or held by the Company or any of its Subsidiaries to secure
the purchase price of such equipment or indebtedness incurred solely for the
purpose of financing the acquisition of such equipment, so long as such Lien
extends only to the equipment financed, and any accessions, replacements,
substitutions and proceeds (including insurance proceeds) thereof or thereto;
(f) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payments of customs duties in connection with the importation of
goods, (g) Liens which constitute rights of setoff of a customary nature or
banker's liens, whether arising by law or by contract; (h) Liens on insurance
proceeds in favor of insurance companies granted solely as security for financed
premiums; and (i) leases or subleases and licenses or sublicenses granted in the
ordinary course of the Company's business.
"UCC" means the Uniform Commercial Code as in effect in the State of
California from time to time.
All capitalized terms not otherwise defined herein shall have the
respective meanings given in the Notes. Unless otherwise defined herein, all
terms defined in the UCC have the respective meanings given to those terms in
the UCC.
2. Grant of Security Interest. As security for the Obligations, the Company
hereby pledges to the Secured Party and grants to the Secured Party a security
interest of first priority in all right, title and interests of the Company in
and to the property described in Attachment 1 hereto, whether now existing or
hereafter from time to time acquired (collectively, the "Collateral").
Notwithstanding the foregoing, the security interest granted herein shall not
extend to and the term "Collateral" shall not include any equipment or other
property financed by a third party, provided that such third party's Liens are
Liens of the type described in subsection (e) of the definition of Permitted
Liens 3. General Representations and Warranties. The Company represents and
warrants to the Secured Party that (a) the Company is the owner of the
Collateral (or, in the case of after-acquired Collateral, at the time the
Company acquires rights in the Collateral, will be the owner thereof) and that
no other Person has (or, in the case of after-acquired Collateral, at the time
the Company acquires rights therein, will have) any right, title, claim or
interest (by way of Lien or otherwise) in, against or to the Collateral, other
than Permitted Liens; (b) upon the filing of UCC-1 financing statements in the
appropriate filing offices and patent assignments with the U.S. Patent and
Trademark Office, the Secured Party has (or in the case of after-acquired
Collateral, at the time the Company acquires rights therein, will have) a first
priority perfected security interest in the Collateral to the extent that a
security interest in the Collateral can be perfected by such filing, except for
Permitted Liens; (c) all accounts receivable and payment intangibles are genuine
and enforceable against the party obligated to pay the same; (d) the originals
of all documents evidencing all accounts receivable and payment intangibles of
the Company and the only original books of account and records of the Company
relating thereto are, and will continue to be, kept at the address of the
Company set forth in Section 7 of this Security Agreement.
4. Covenants Relating to Collateral. The Company hereby agrees (a) to perform
all acts that may be necessary to maintain, preserve, protect and perfect the
Collateral, the Lien granted to the Secured Party therein and the perfection and
priority of such Lien, except for Permitted Liens; (b) not to use or permit any
Collateral to be used (i) in violation in any material respect of any applicable
law, rule or regulation, or (ii) in violation of any policy of insurance
covering the Collateral; (c) to pay promptly when due all taxes and other
governmental charges, all Liens and all other charges now or hereafter imposed
upon or affecting any Collateral; (d) without 30 days' written notice to the
Secured Party, (i) not to change the Company's name or place of business (or, if
the Company has more than one place of business, its chief executive office), or
the office in which the Company's records relating to accounts receivable and
payment intangibles are kept, and (ii) not to change the Company's state of
incorporation; and (f) to procure, execute and deliver from time to time any
endorsements, assignments, financing statements and other writings reasonably
deemed necessary or appropriate by the Secured Party to perfect, maintain and
protect its Lien hereunder and the priority thereof and to deliver promptly upon
the request of the Secured Party all originals of Collateral consisting of
instruments. 5. Authorized Action by the Secured Party. The Company hereby
irrevocably appoints the Secured Party as its attorney-in-fact (which
appointment is coupled with an interest) and agrees that the Secured Party may
perform (but the Secured Party shall not be obligated to and shall incur no
liability to the Company or any third party for failure so to do) any act which
the Company is obligated by this Security Agreement to perform, and to exercise
such rights and powers as the Company might exercise with respect to the
Collateral, including the right to (a) collect by legal proceedings or otherwise
and endorse, receive and receipt for all dividends, interest, payments, proceeds
and other sums and property now or hereafter payable on or on account of the
Collateral; (b) enter into any extension, reorganization, deposit, merger,
consolidation or other agreement pertaining to, or deposit, surrender, accept,
hold or apply other property in exchange for the Collateral; (c) make any
compromise or settlement, and take any action it deems advisable, with respect
to the Collateral; (d) insure, process and preserve the Collateral; (e) pay any
indebtedness of the Company relating to the Collateral; and (f) file UCC
financing statements in the appropriate jurisdictions and patent assignments
with the U.S. Patent and Trademark Office and execute other documents,
instruments and agreements required hereunder; provided, however, that the
Secured Party shall not exercise any such powers granted pursuant to subsections
(a) through (e) prior to the occurrence of an Event of Default and shall only
exercise such powers during the continuance of an Event of Default.
6. Default and Remedies.
(a) Default. The Company shall be deemed in default under this Security
Agreement upon the occurrence and during the continuance of an Event of Default
(as defined in the Notes). (b) Remedies. Upon the occurrence and during the
continuance of any such Event of Default, the Secured Party shall have the
rights of a secured creditor under the UCC, all rights granted by this Security
Agreement and by law, including the right to: (a) require the Company to
assemble the Collateral and make it available to the Secured Party at a place to
be designated by the Secured Party; and (b) prior to the disposition of the
Collateral, store, process, repair or recondition it or otherwise prepare it for
disposition in any manner and to the extent the Secured Party deems appropriate.
The Company hereby agrees that ten (10) days' notice of any intended sale or
disposition of any Collateral is reasonable. In furtherance of the Secured
Party's rights hereunder, the Company hereby grants to the Secured Party an
irrevocable, non-exclusive license, exercisable without royalty or other payment
by the Secured Party, and only in connection with the exercise of remedies
hereunder, to use, license or sublicense any patent, trademark, trade name,
copyright or other intellectual property in which the Company now or hereafter
has any right, title or interest together with the right of access to all media
in which any of the foregoing may be recorded or stored.
(c) Application of Collateral Proceeds. The proceeds and/or avails of the
Collateral, or any part thereof, and the proceeds and the avails of any remedy
hereunder (as well as any other amounts of any kind held by the Secured Party at
the time of, or received by the Secured Party after, the occurrence of an Event
of Default) shall be paid to and applied as follows:
(i) First, to the payment of reasonable costs and expenses, including all
amounts expended to preserve the value of the Collateral, of foreclosure or
suit, if any, and of such sale and the exercise of any other rights or remedies,
and of all proper fees, expenses, liability and advances, including reasonable
legal expenses and attorneys' fees, incurred or made hereunder by the Secured
Party; (ii) Second, to the payment to the Secured Party of the amount then owing
or unpaid to the Secured Party (to be applied first to accrued interest and
second to outstanding principal); and (iii) Third, to the payment of the
surplus, if any, to the Company, its successors and assigns, or to whomsoever
may be lawfully entitled to receive the same. 7. Miscellaneous. (a) Notices.
Except as otherwise provided herein, all notices, requests, demands, consents,
instructions or other communications to or upon the Company or the Secured Party
under this Security Agreement shall be in writing and faxed, mailed or delivered
to each party to the facsimile number or its address set forth below (or to such
other facsimile number or address as the recipient of any notice shall have
notified the other in writing). All such notices and communications shall be
effective (a) when sent by Federal Express or other overnight service of
recognized standing, on the business day following the deposit with such
service; (b) when mailed, by registered or certified mail, first class postage
prepaid and addressed as aforesaid through the United States Postal Service,
upon receipt; (c) when delivered by hand, upon delivery; and (d) when faxed,
upon confirmation of receipt.
Secured Party:
Facsimile:
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with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Feucther
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
the Company:
Miravant Medical Technologies
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Hampton, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Termination of Security Interest. Upon the payment in full of all
Obligations and the cancellation or termination of any commitment to extend
credit or purchase Notes under the Purchase Agreement, the security interest
granted herein shall terminate and all rights to the Collateral shall revert to
the Company. Upon such termination the Secured Party hereby authorizes the
Company to file any UCC termination statements necessary to effect such
termination and the Secured Party will execute and deliver to the Company any
additional documents or instruments as the Company shall reasonably request to
evidence such termination. (c) Nonwaiver. No failure or delay on the Secured
Party's part in exercising any right hereunder shall operate as a waiver thereof
or of any other right nor shall any single or partial exercise of any such right
preclude any other further exercise thereof or of any other right.
(d) Amendments and Waivers. This Security Agreement may not be amended or
modified, nor may any of its terms be waived, except by written instruments
signed by the Company and the Secured Party. Each waiver or consent under any
provision hereof shall be effective only in the specific instances for the
purpose for which given.
(e) Assignments. This Security Agreement shall be binding upon and inure to the
benefit of the Secured Party and the Company and their respective successors and
assigns; provided, however, that the Company may not sell, assign or delegate
rights and obligations hereunder without the prior written consent of the
Secured Party. (f) Cumulative Rights, etc. The rights, powers and remedies of
the Secured Party under this Security Agreement shall be in addition to all
rights, powers and remedies given to the Secured Party by virtue of any
applicable law, rule or regulation of any governmental authority, any
Transaction Document or any other agreement, all of which rights, powers, and
remedies shall be cumulative and may be exercised successively or concurrently
without impairing the Secured Party's rights hereunder. The Company waives any
right to require the Secured Party to proceed against any person or entity or to
exhaust any Collateral or to pursue any remedy in the Secured Party's power.
(g) Payments Free of Taxes, Etc. All payments made by the Company under the
Transaction Documents shall be made by the Company free and clear of and without
deduction for any and all present and future taxes, levies, charges, deductions
and withholdings. In addition, the Company shall pay upon demand any stamp or
other taxes, levies or charges of any jurisdiction with respect to the
execution, delivery, registration, performance and enforcement of this Security
Agreement. Upon request by the Secured Party, the Company shall furnish evidence
satisfactory to the Secured Party that all requisite authorizations and
approvals by, and notices to and filings with, governmental authorities and
regulatory bodies have been obtained and made and that all requisite taxes,
levies and charges have been paid.
(h) Partial Invalidity. If at any time any provision of this Security Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Security Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
(i) Construction. Each of this Security Agreement and the other Transaction
Documents is the result of negotiations among, and has been reviewed by, the
Company, the Secured Party and their respective counsel. Accordingly, this
Security Agreement and the other Transaction Documents shall be deemed to be the
product of all parties hereto, and no ambiguity shall be construed in favor of
or against the Company or the Secured Party. (j) Entire Agreement. This Security
Agreement taken together with the other Transaction Documents constitute and
contain the entire agreement of the Company and the Secured Party and supersede
any and all prior agreements, negotiations, correspondence, understandings and
communications among the parties, whether written or oral, respecting the
subject matter hereof.
(k) Other Interpretive Provisions. References in this Security Agreement and
each of the other Transaction Documents to any document, instrument or agreement
(a) includes all exhibits, schedules and other attachments thereto, (b) includes
all documents, instruments or agreements issued or executed in replacement
thereof, and (c) means such document, instrument or agreement, or replacement or
predecessor thereto, as amended, modified and supplemented from time to time and
in effect at any given time. The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Security Agreement or any other
Transaction Document refer to this Security Agreement or such other Transaction
Document, as the case may be, as a whole and not to any particular provision of
this Security Agreement or such other Transaction Document, as the case may be.
The words "include" and "including" and words of similar import when used in
this Security Agreement or any other Transaction Document shall not be construed
to be limiting or exclusive.
(l) Governing Law. This Security Agreement shall be governed by and construed in
accordance with the laws of the State of California without reference to
conflicts of law rules (except to the extent governed by the UCC). (m)
Counterparts. This Security Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall be deemed to constitute one instrument.
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[Signature page to Security Agreement]
IN WITNESS WHEREOF, the Company has caused this Security Agreement to
be executed as of the day and year first above written.
MIRAVANT MEDICAL TECHNOLOGIES
By:
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
AGREED:
ST. CLOUD INVESTMENTS, LTD. a British Virgin Islands company, as Secured Party
By:
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Name:
Title:
ATTACHMENT 1
TO SECURITY AGREEMENT
All right, title, interest, claims and demands of the Company in and to
the following property: (i) All goods and equipment now owned or hereafter
acquired, including, without limitation, all laboratory equipment, computer
equipment, office equipment, machinery, fixtures, vehicles, and any interest in
any of the foregoing, and all attachments, accessories, accessions,
replacements, substitutions, additions, and improvements to any of the
foregoing, wherever located; (ii) All inventory now owned or hereafter acquired,
including, without limitation, all merchandise, raw materials, parts, supplies,
packing and shipping materials, work in process and finished products including
such inventory as is temporarily out of the Company's custody or possession or
in transit and including any returns upon any accounts or other proceeds,
including insurance proceeds, resulting from the sale or disposition of any of
the foregoing and any documents of title representing any of the above, and the
Company's books relating to any of the foregoing; (iii) All contract rights,
general intangibles, health care insurance receivables, payment intangibles and
commercial tort claims, now owned or hereafter acquired, including, without
limitation, all patents, patent rights (and applications and registrations
therefor), trademarks and service marks (and applications and registrations
therefor), inventions, copyrights, mask works (and applications and
registrations therefor), trade names, trade styles, software and computer
programs, trade secrets, methods, processes, know how, drawings, specifications,
descriptions, and all memoranda, notes, and records with respect to any research
and development, goodwill, license agreements, franchise agreements, blueprints,
drawings, purchase orders, customer lists, route lists, infringements, claims,
computer programs, computer disks, computer tapes, literature, reports,
catalogs, design rights, income tax refunds, payments of insurance and rights to
payment of any kind and whether in tangible or intangible form or contained on
magnetic media readable by machine together with all such magnetic media; (iv)
All now existing and hereafter arising accounts, contract rights, royalties,
license rights and all other forms of obligations owing to the Company arising
out of the sale or lease of goods, the licensing of technology or the rendering
of services by the Company (subject, in each case, to the contractual rights of
third parties to require funds received by the Company to be expended in a
particular manner), whether or not earned by performance, and any and all credit
insurance, guaranties, and other security therefor, as well as all merchandise
returned to or reclaimed by the Company and the Company's books relating to any
of the foregoing; (v) All documents, cash, deposit accounts, letters of credit,
letter of credit rights, supporting obligations, certificates of deposit,
instruments, chattel paper, electronic chattel paper, tangible chattel paper and
investment property, including, without limitation, all securities, whether
certificated or uncertificated, security entitlements, securities accounts,
commodity contracts and commodity accounts, and all financial assets held in any
securities account or otherwise, wherever located, now owned or hereafter
acquired and the Company's books relating to the foregoing; and (vi) Any and all
claims, rights and interests in any of the above and all substitutions for,
additions and accessions to and proceeds thereof, including, without limitation,
insurance, condemnation, requisition or similar payments and the proceeds
thereof.