INTELLECTUAL PROPERTY SECURITY AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT, dated as of April 7, 2000,
among Celexx Corporation, a Nevada Corporation ("Celexx" or the "Company"), and
the secured parties signatory hereto and their respective endorsees, transferees
and assignees (collectively, the "SECURED PARTY").
W I T N E S S E T H:
-------------------
WHEREAS, pursuant to a Secured Convertible Preferred Stock Purchase
Agreement, dated the date hereof among Celexx and the Secured Party (the
"PURCHASE AGREEMENT"), CeleXx has agreed to issue to the Secured Party and the
Secured Party has agreed to purchase from CeleXx an aggregate of 350 shares of
CeleXx's 6% Series A Secured Convertible Preferred Stock (the "PREFERRED
STOCK"), which are convertible into shares of CeleXx's Common Stock, $.001 par
value per share (the "COMMON STOCK"). In connection therewith, CeleXx issued to
the Secured Party certain Common Stock purchase warrants of even date herewith
to purchase shares of Common Stock (collectively, the "WARRANTS");
WHEREAS, in order to induce the Secured Party to purchase the Preferred
Stock, CeleXx has agreed to execute and deliver to the Secured Party this
Agreement and to grant to it a security interest in certain intangible property
of CeleXx, to secure the prompt payment, performance and discharge in full of
all of CeleXx's obligations under the Certificate of Designation governing the
Preferred stock (the "CERTIFICATE OF DESIGNATION"), the exercise and discharge
in full of all of CeleXx's obligations under the Warrants and the Company's
obligations under the Purchase Agreement and Registration Rights Agreement dated
the date hereof among the Company and the Secured Party (the "REGISTRATION
RIGHTS AGREEMENT") and, together with the Purchase Agreement, Certificate of
Designation and Warrants, the "TRANSACTION DOCUMENTS"); and
NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(Such as "GENERAL INTANGIBLES" and "PROCEEDS") shall have the respective
meanings given such terms in Article 9 of the UCC.
(A) "COLLATERAL" means all of the Company's right, title and
interest in and to all of Trademarks, Patents, Copyrights, and other general
intangible property of the Company, all trade secrets, intellectual property
rights in computer software and computer software products, design rights which
may be available to the Company, rights to proceeds arising from any and all
claims for damages by way of past, present and future infringement of any
-1-
Collateral with the right but not the obligation to ▇▇▇ on behalf of and collect
such damages for said use or infringement, licenses to use any of the
Copyrights, Patents or Trademarks, and all license fees and royalties arising
from such use to the extent permitted by such license or rights. The term
"Collateral" shall include all of the foregoing items, whether presently owned
or existing or hereafter acquired or coming into existence, all additions and
accessions thereto, all substitutions and replacements thereof, and all
proceeds, products and accounts thereof, including without limitation all
proceeds from the licensing or sale or other transfer of Collateral and of
insurance covering the same and of any tort claims in connection therewith.
(B) "COMPANY" shall mean, collectively, CeleXx and all of the
subsidiaries of CeleXx.
(C) "COPYRIGHTS" means any and all copyrights, copyright
applications, copyright registration and like protections in each work or
authorship and derivative work thereof that is created by the Company, whether
published or unpublished and whether or not the same also constitutes a trade
secret, now or hereafter existing, created, acquired or held, including, without
limitation, those set forth on Exhibit A attached hereto.
(D ) "OBLIGATIONS" means all of the Company's obligations
under this Agreement and the Transaction Documents, in each case, whether now or
hereafter existing, voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from the Secured Party as a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.
(E) "PATENTS" means all of the Company's patents, patent
applications, letters patent and like protections of the United States or any
other country, including, without limitation, improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the
same, and including, without limitation, those set forth on Exhibit B attached
hereto.
(F) "SENIOR INDEBTEDNESS" means (i) the lien and security
interests covering the collateral, if any, created in favor of Finova Bank
("FINOVA") by virtue of any credit agreement between Finova and the Company and
any successor facility thereto if such facility does not inhibit or restrict
CeleXx's rights to perform its obligations under the Transaction Documents in
any material manner with respect to liquidated damages and dividends; and (ii)
the lien and security interests, if any, created by the $260,000 of the
indebtedness owed by ▇▇▇▇▇▇▇▇.▇▇▇, Inc. to BB&T of South Carolina.
(G) "TRADEMARKS" means any trademark, service ▇▇▇▇ right,
whether or not registered, applications to register and registrations of the
same and like protections, and the entire goodwill of the business of the
Company connected with or symbolized by such trademarks, including, without
limitation, those set forth on Exhibit C attached hereto.
-2-
(H) "UCC" means the Uniform Commercial Code, as currently in
effect in the State of Nevada.
2. GRANT OF SECURITY INTEREST. As an inducement for the Secured Party
to purchase the Preferred Stock and to secure the complete and timely payment,
performance and discharge in full, as the case may be, of all of the
Obligations, the Company hereby, unconditionally and irrevocably, pledges,
grants and hypothecates to the Secured Party, a continuing security interest in,
a second lien upon and a right of set-off against all of the Company's right,
title and interest of whatsoever kind and nature in and to the collateral (the
"SECURITY INTEREST"). The Secured Party acknowledges that the security
interests, if any, granted to the holders of the Senior Indebtedness shall have
a senior position with respect to the Collateral covered thereby to the liens
and security interest created by this Agreement.
3. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE
COMPANY. The Company represents and warrants to, and covenants and agrees with,
the Secured Party as follows:
(a) The Company has the requisite corporate power and
authority to enter into this Agreement and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by the Company
of this Agreement and the filings contemplated therein have been duly authorized
by all necessary action on the part of the Company and no further action is
required by the Company.
(b) The Company is the sole owner of the Collateral (except
for non-exclusive licenses granted by the Company in the ordinary course of
business), free and clear of any liens, other than as specified in Schedule
3(c), security interests, encumbrances, rights or claims, and is fully
authorized to grant the Security Interest in and to pledge the Collateral. Other
than as specified in Schedule 3(c), there is not on file in any governmental or
regulatory authority, agency or recording office an effective financing
statement, security agreement, license or transfer or any notice of any of the
foregoing (other than those that have been filed in favor of the Secured Party
pursuant to this Agreement) covering or affecting any of the Collateral. So long
as this Agreement shall be in effect, the Company shall not execute and shall
not knowingly permit to be on file in any such office or agency any such
financing statement or other document or instrument (except to the extent filed
or recorded in favor of the Secured Party pursuant to the terms of this
Agreement).
(c) EXHIBIT A sets forth a true and complete list of all
Copyrights in existence as of the date of this agreement. Exhibit B sets forth a
true and complete list of all Patents that have been filed as of the date of
this agreement. Exhibit C sets forth a true and complete list of all Trademarks
filed as of the date of this Agreement. The Company shall, within ten (10) days
of obtaining knowledge thereof, advise the Secured Party in writing of any
change in the composition of the Collateral, including, without limitation, any
subsequent ownership rights of the Company in or to any Copyright, Patent or
Trademark.
(d) Each of the Patents, Trademarks and Copyrights is valid
and enforceable, and no part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any of the Patents,
Trademarks or Copyrights or the Company's use of any Collateral violates the
-3-
rights of any third party. There has been no adverse decision to the Company's
claim of ownership rights in or exclusive rights to use the Collateral in any
jurisdiction or to the Company's right to keep and maintain such Collateral in
full force and effect, and there is no proceeding involving said rights pending
or, to the best knowledge of the Company, threatened before any court, judicial
body, administrative or regulatory agency, arbitrator or other governmental
authority.
(e) The Company shall at all times maintain its books of
account and records relating to the Collateral at its principal place of
business and may not relocate such books of account and records unless it
delivers to the Secured Party at least 30 days prior to such relocation (i)
written notice of such relocation and the new location thereof (which must be
within the United States) and (ii) evidence that appropriate financing
statements and other necessary documents have been filed and recorded and other
steps have been taken to perfect the Security Interest to create in favor of the
Secured Party a valid, perfected and continuing second priority liens in the
Collateral. The principal place of business of the Company is located at the
address set forth in the introduction to this Agreement.
(f) This Agreement creates in favor of the Secured Party a
valid security interest in the Collateral, including the Collateral listed on
the Exhibits hereto, securing the payment and performance of the Obligations,
and, upon making the filings described in the immediately following sentence, a
perfected priority security interest in such Collateral. The Secured Party
acknowledges that the security interests, if any, granted to the holders of the
Senior Indebtedness shall have a senior position to the liens and security
interest created by this Agreement. Other than Senior Indebtedness, CeleXx shall
not, without the prior written consent of the Secured Party, create or suffer to
exist any lien for borrowing money that is senior to the security interests and
liens created by this Agreement. Except for (x) the filing of this Agreement
with the United States Patent and Trademark Office with respect to the Patents
and Trademarks and the filing of this Agreement with the Register of Copyrights
with respect to the Copyrights, and (y) the filing of financing statements on
Form UCC-1 under the UCC with the jurisdictions indicated in Schedule A,
attached hereto, no authorization or approval of or filing with or notice to any
governmental authority or regulatory body is required either (i) for the grant
by the Company of, or the effectiveness of, the Security Interest granted hereby
or for the execution, delivery and performance of this Agreement by the Company
or (ii) for the perfection of or exercise by the Secured Party of its rights and
remedies hereunder. The Company acknowledges and agrees that a copy of this
Agreement (or instruments executed and delivered pursuant hereto) will be filed
and recorded with each of the United States Patent and Trademark Office and the
Register of Copyrights with respect to the Patents, Trademarks and Copyrights
that are now or hereafter in existence.
(g) On the date of execution of this Agreement, the Company
will deliver to the Secured Party (i) one or more executed UCC financing
statements on Form UCC-1 with respect to the security interest for filing with
the jurisdictions indicated on Schedule A, attached hereto and in such other
jurisdictions as may be requested by the Secured Party and (ii) one or more
executed recordation sheets relating to the filing and recording of this
Agreement with each of the United States Patent and Trademark Office and the
Register of Copyrights with respect to the Patents, Trademarks and Copyrights
that are now in existence.
-4-
(h) The execution, delivery and performance of this Agreement
does not conflict with or cause a breach or default, or an event that with or
without the passage of time or notice, shall constitute a breach or default,
under any agreement to which the Company is a party or by the Company is bound.
No consent (including, without limitation, from stock holders or creditors of
the Company) is required for the Company to enter into and perform its
obligations hereunder.
(i) The Company shall at all times maintain the liens and
Security Interest provided for hereunder as valid and perfected first or second
priority liens and security interests in the Collateral (as required by this
Section 3 with respect to Senior Indebtedness) in favor of the Secured Party
until this Agreement and the Security Interest hereunder shall be terminated
pursuant to Section 10 hereof. The Company hereby agrees to defend the same
against any and all persons. The Company shall safeguard and protect all
Collateral for the account of the Secured Party. At the request of the Secured
Party, the Company will sign and deliver to the Secured Party at any time or
from time to time one or more financing statements pursuant to the UCC (or any
other applicable statute) in form reasonably satisfactory to the Secured Party
and will pay the cost of filing the same in all public offices wherever filing
is, or is deemed by the Secured Party to be, necessary or desirable to effect
the rights and obligations provided for herein. Without limiting the generality
of the foregoing, the Company shall pay all fees, taxes and other amounts
necessary to maintain the Collateral and the Security Interest hereunder, and
the Company shall obtain and furnish to the Secured Party from time to time,
upon demand, such releases and/or subordinations of claims and liens which may
be required to maintain the priority of the Security Interest hereunder.
(j) The Company will not allow any Collateral to be abandoned,
forfeited or dedicated to the public without the prior written consent of the
Secured Party. The Company will not transfer, pledge, hypothecate, encumber,
license (except for non-exclusive licenses granted by the Company in the
ordinary course of business), sell or otherwise dispose of any of the Collateral
without the prior written consent of the Secured Party.
(k) The Company shall, within ten (10) days of obtaining
knowledge thereof, advise the Secured Party, in sufficient detail, of any
substantial change in the Collateral, and of the occurrence of any event which
would have a material adverse effect on the value of the Collateral or on the
Secured Party's security interest therein.
(l) The Company shall permit the Secured Party and its
representatives and agents to inspect the Collateral at any time, and to make
copies of records pertaining to the Collateral as may be requested by the
Secured Party from time to time.
(m) The Company will take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.
(n) The Company shall promptly notify the Secured Party in
sufficient detail upon becoming aware of any attachment, garnishment, execution
or other legal process levied against any Collateral and of any other
information received by the Company that may materially affect the
-5-
value of the Collateral, the Security Interest or the rights and remedies of the
Secured Party hereunder.
(o) All information heretofore, herein or hereafter supplied
to the Secured Party by or on behalf of the Company with respect to the
Collateral is accurate and complete in all material respects as of the date
furnished.
4. DEFAULTS. THE FOLLOWING EVENTS SHALL BE "EVENTS OF DEFAULT":
(a) The occurrence of a Triggering Event (as defined in the
Certificate of Designation) under the Certificate of Designation;
(b) Any representation or warranty of the Company in this
Agreement or in the Security Agreement, dated the date hereof between the
Company and the Secured Party, shall prove to have been incorrect in any
material respect when made;
(c) The failure by the Company to observe or perform any of
its obligations hereunder or in the Security Agreement, dated the date hereof
between the Company and the Secured Party, for ten (10) days after receipt by
the Company of notice of such failure from the Secured Party; and
(d) Any breach or default under the Warrants; and
(e) An acceleration or Event of Default under the Company's
credit facility with Finova.
5. DUTY TO HOLD IN TRUST. Upon the occurrence of any Event of Default
and at any time thereafter, the Company shall, upon receipt by it of any
revenue, income or other sums subject to the Security Interest, whether payable
pursuant to the Certificate of Designation or otherwise, or of any check, draft,
note, trade acceptance or other instrument evidencing an obligation to pay any
such sum, hold the same in trust for the Secured Party and shall forthwith
endorse and transfer any such sums or instruments, or both, to the Secured Party
for application to the satisfaction of the Obligations.
6. RIGHTS AND REMEDIES UPON DEFAULT. Upon the occurrence of any Event
of Default and at any time thereafter, the Secured Party shall have the right to
exercise all of the remedies conferred hereunder and under the Certificate of
Designation and the Warrants, and the Secured Party shall have all the rights
and remedies of a secured party under the UCC and/or any other applicable law
(including the Uniform Commercial Code of any jurisdiction in which any
Collateral is then located). Without limitation, the Secured Party shall have
the following rights and powers:
(a) The Secured Party shall have the right to take possession
of all tangible manifestations or embodiments of the Collateral and, for that
purpose, enter, with the aid and assistance of any person, any premises where
the Collateral, or any part thereof, is or may be placed
-6-
and remove the same, and the Company shall assemble the Collateral and make it
available to the Secured Party at places which the Secured Party shall
reasonably select, whether at the Company's premises or elsewhere.
(b) The Secured Party shall have the right to operate the
business of the Company using the Collateral and shall have the right to assign,
sell, or otherwise dispose of and deliver all or any part of the Collateral, at
public or private sale or otherwise, either with or without special conditions
or stipulations, for cash or on credit or for future delivery, in such parcel or
parcels and at such time or times and at such place or places, and upon such
terms and conditions as the Secured Party may deem commercially reasonable, all
without (except as shall be required by applicable statute and cannot be waived)
advertisement or demand upon or notice to the Company or right of redemption of
the Company, which are hereby expressly waived. Upon each such sale, assignment
or other transfer of Collateral, the Secured Party may, unless prohibited by
applicable law which cannot be waived, purchase all or any part of the
Collateral being sold, free from and discharged of all trusts, claims, right of
redemption and equities of the Company, which are hereby waived and released.
(c) The Secured Party may license or, to the same extent the
Company is permitted by law and contract to do so, sublicense, whether or an
exclusive or non-exclusive basis, any of the Collateral throughout the world for
such term, on such conditions and in such manner as the Secured Party shall, in
its sole discretion, determine.
(d) The Secured Party may (without assuming any obligations or
liabilities thereunder), at any time, enforce (and shall have the exclusive
right to enforce) against licensee or sublicensee all rights and remedies of the
Company in, to and under any license agreement with respect to such Collateral,
and take or refrain from taking any action thereunder.
(e) The Secured Party may, in order to implement the
assignment, license, sale or other disposition of any of the Collateral pursuant
to this Section, pursuant to the authority provided for in Section 11, execute
and deliver on behalf of the Company one or more instruments of assignment of
the Collateral in form suitable for filing, recording or registration in any
jurisdictions as the Secured Party may determine advisable.
7. APPLICATIONS OF PROCEEDS; EXPENSES. (a) The proceeds of any such
sale, lease, license or other disposition of the Collateral hereunder shall be
applied first, to the expenses of retaking, holding, storing, processing and
preparing for sale, selling, and the like (including, without limitation, any
taxes, fees and other costs incurred in connection therewith) of the Collateral,
to the reasonable attorneys' fees and expenses incurred by the Secured Party in
enforcing its rights hereunder and in connection with collecting, storing and
disposing of the Collateral, and then to satisfaction of the Obligations, and to
the payment of any other amounts required by applicable law, after which the
Secured Party shall pay to the Company any surplus proceeds. If, upon the sale,
license or other disposition of the Collateral, the proceeds thereof are
insufficient to pay all amounts to which the Secured Party is legally entitled,
the Company will be liable for the deficiency, together with interest thereon,
at the rate of 18% per annum or the lesser amount permitted by applicable law
(the "DEFAULT RATE"), and the reasonable fees of any attorneys employed by the
-7-
Secured Party to collect such deficiency. To the extent permitted by applicable
law, the Company waives all claims, damages and demands against the Secured
Party arising out of the repossession, removal, retention or sale of the
Collateral, unless due to the gross negligence or willful misconduct of the
Secured Party.
(b) The Company agrees to pay all out-of-pocket fees, costs
and expenses incurred in connection with any filing required hereunder,
including, without limitation, any financing statements, continuation
statements, partial releases and/or termination statements related thereto or
any expenses of any searches reasonably required by the Secured Party. The
Company shall also pay all other claims and charges which in the reasonable
opinion of the Secured Party might prejudice, imperil or otherwise affect the
Collateral or the Security Interest therein. The Company will also, upon demand,
pay to the Secured Party the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Secured Party may incur in connection with (i) the enforcement
of this Agreement, (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral, or (iii) the
exercise or enforcement of any of the rights of the Secured Party under the
Certificate of Designation. Until so paid, any fees payable hereunder shall be
added to the Stated Value (as defined in the Certificate of Designation) of the
Preferred Stock and shall bear interest at the Default Rate.
8. RESPONSIBILITY FOR COLLATERAL. The Company assumes all liabilities
and responsibility in connection with all Collateral, and the obligations of the
Company hereunder or under the Certificate of Designation and the Warrants shall
in no way be affected or diminished by reason of the loss, destruction, damage
or theft of any of the Collateral or its unavailability for any reason.
9. SECURITY INTEREST ABSOLUTE. All rights of the Secured Party and all
Obligations of the Company hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Certificate of Designation, the Warrants or any agreement entered into in
connection with the foregoing, or any portion hereof or thereof; (b) any change
in the time, manner or place of payment or performance of, or in any other term
of, all or any of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Certificate of Designation, the Warrants or
any other agreement entered into in connection with the foregoing; (c) any
exchange, release or nonperfection of any of the Collateral, or any release or
amendment or waiver of or consent to departure from any other collateral for, or
any guaranty, or any other security, for all or any of the Obligations; (d) any
action by the Secured Party to obtain, adjust, settle and cancel in its sole
discretion any insurance claims or matters made or arising in connection with
the Collateral; or (e) any other circumstance which might otherwise constitute
any legal or equitable defense available to the Company, or a discharge of all
or any part of the Security Interest granted hereby. Until the Obligations shall
have been paid and performed in full, the rights of the Secured Party shall
continue even if the Obligations are barred for any reason, including, without
limitation, the running of the statute of limitations or bankruptcy. The Company
expressly waives presentment, protest, notice of protest, demand, notice of
nonpayment and demand for performance. In the event that at any time any
transfer of any Collateral or any payment received by the Secured Party
hereunder shall be deemed by final order of a court of competent jurisdiction to
have been a voidable preference or fraudulent conveyance under the bankruptcy or
insolvency laws of the United States, or shall be deemed to be otherwise due to
-8-
any party other than the Secured Party, then, in any such event, the Company's
obligations hereunder shall survive cancellation of this Agreement, and shall
not be discharged or satisfied by any prior payment thereof and/or cancellation
of this Agreement, but shall remain a valid and binding obligation enforceable
in accordance with the terms and provisions hereof. The Company waives all right
to require the Secured Party to proceed against any other person or to apply any
Collateral which the Secured Party may hold at any time, or to marshal assets,
or to pursue any other remedy. The Company waives any defense arising by reason
of the application of the statute of limitations to any obligation secured
hereby.
10. TERM OF AGREEMENT. This Agreement and the Security Interest shall
terminate on the earliest of (i) the date on which a registration statement
registering the resale by the Secured Party of the shares of the Company's
Common Stock issuable upon conversion of the Company's Series A Convertible
Preferred Stock and Warrants issued to the Secured Party in connection with the
closing of the sale of such preferred stock is first declared effective by the
Securities and Exchange Commission and (ii) the date, if any, on which all
shares of Series A Convertible Preferred Stock shall have been redeemed in
accordance with its terms and (iii) the date on which all Obligations have been
satisfied, paid or discharged in full. Upon such termination, the Secured Party,
at the request and at the expense of the Company, will join in executing any
termination statement with respect to any financing statement executed and filed
pursuant to this Agreement.
11. POWER OF ATTORNEY; FURTHER ASSURANCES. (a) The Company authorizes
the Secured Party, and does hereby make, constitute and appoint it, and its
respective officers, agents, successors or assigns with full power of
substitution, as the Company's true and lawful attorney-in-fact, with power, in
its own name or in the name of the Company, to, after the occurrence and during
the continuance of an Event of Default, (i) endorse any notes, checks, drafts,
money orders, or other instruments of payment (including payments payable under
or in respect of any policy of insurance) in respect of the Collateral that may
come into possession of the Secured Party; (ii) to sign and endorse any UCC
financing statement or any invoice, freight or express ▇▇▇▇, ▇▇▇▇ of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other documents
relating to the Collateral; (iii) to pay or discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on or threatened
against the Collateral; (iv) to demand, collect, receipt for, compromise, settle
and ▇▇▇ for monies due in respect of the Collateral; and (v) generally, to do,
at the option of the Secured Party, and at the Company's expense, at any time,
or from time to time, all acts and things which the Secured Party deems
necessary to protect, preserve and realize upon the Collateral and the Security
Interest granted therein in order to effect the intent of this Agreement, the
Certificate of Designation and the Warrants, all as fully and effectually as the
Company might or could do; and the Company hereby ratifies all that said
attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney is coupled with an interest and shall be irrevocable for the term of
this Agreement and thereafter as long as any of the Obligations shall be
outstanding.
(b) On a continuing basis, the Company will make, execute,
acknowledge, deliver, file and record, as the case may be, in the proper filing
and recording places in any jurisdiction, including, without limitation, the
jurisdictions indicated on Schedule A, attached hereto, all such instruments,
including appropriate financing and continuation statements and collateral
-9-
agreements and filings with the United States Patent and Trademark Office and
the Register of Copyrights, and take all such action as may reasonably be deemed
necessary or advisable, or as reasonably requested by the Secured Party, to
perfect the Security Interest granted hereunder and otherwise to carry out the
intent and purposes of this Agreement, or for assuring and confirming to the
Secured Party the grant or perfection of a security interest in all the
Collateral.
(c) The Company hereby irrevocably appoints the Secured Party
as the Company's attorney-in-fact, with full authority in the place and stead of
the Company and in the name of the Company, from time to time in the Secured
Party's discretion, to take any action and to execute any instrument which the
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including:
(i) To modify, in its sole discretion, this Agreement
without first obtaining the Company's approval of or signature to such
modification by amending Exhibit A, Exhibit B and Exhibit C, hereof, as
appropriate, to include reference to any right, title or interest in any
Copyrights, Patents or Trademarks acquired by the Company after the execution
hereof or to delete any reference to any right,
title or interest in any Copyrights, Patents or Trademarks in which the Company
no longer has or claims any right, title or interest; and
(ii) To file, in its sole discretion, one or more
financing or continuation statements and amendments thereto, relative to any of
the Collateral without the signature of the Company where permitted by law.
12. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing, with copies to all the other
parties hereto, and shall be deemed to have been duly given when (i) if
delivered by hand, upon receipt, (ii) if sent by facsimile, upon receipt of
proof of sending thereof, (iii) if sent by nationally recognized overnight
delivery service (receipt requested), the next business day or (iv) if mailed by
first-class registered or certified mail, return receipt requested, postage
prepaid, four days after posting in the U.S. mails, in each case if delivered to
the following addresses:
If to the Company: CeleXx Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
With copies to: Atlas ▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
If to the Secured Party: Birch Circle LLC
▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇) Limited
-10-
Commercial Centre
P.O. Box 31106 SMB
Grand Cayman, Cayman Islands
British West Indies
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ and
(▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇. Esq.
13. OTHER SECURITY. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Party shall have the right, in its sole discretion, to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured Party's rights and
remedies hereunder.
14. MISCELLANEOUS.
(a) No course of dealing between the Company and the Secured
Party, nor any failure to exercise, nor any delay in exercising, on the part of
the Secured Party, any right, power or privilege hereunder or under the
Certificate of Designation shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
(b) All of the rights and remedies of the Secured Party with
respect to the Collateral, whether established hereby or by the Certificate of
Designation or by any other agreements, instruments or documents or by law shall
be cumulative and may be exercised singly or concurrently.
(c) This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and is intended to supersede
all prior negotiations, understandings and agreements with respect thereto.
Except as specifically set forth in this Agreement, no provision of this
Agreement may be modified or amended except by a written agreement specifically
referring to this Agreement and signed by the parties hereto.
(d) In the event that any provision of this Agreement is held
to be invalid, prohibited or unenforceable in any jurisdiction for any reason,
unless such provision is narrowed by judicial construction, this Agreement
shall, as to such jurisdiction, be construed as if such invalid, prohibited or
unenforceable provision had been more narrowly drawn so as not to be invalid,
prohibited or unenforceable. If, notwithstanding the foregoing, any provision of
this Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
-11-
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.
(e) No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the party
giving such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default or right, whether of the same or similar nature or
otherwise.
(f) This Agreement shall be binding upon and inure to the
benefit of each party hereto and its successors and assigns.
(g) Each party shall take such further action and execute and
deliver such further documents as may be necessary or appropriate in order to
carry out the provisions and purposes of this Agreement.
(h) This Agreement shall be construed in accordance with the
laws of the State of New York, except to the extent the validity, perfection or
enforcement of a security interest hereunder in respect of any particular
Collateral which are governed by a jurisdiction other than the State of New York
in which case such law shall govern. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of any New York State or United States
Federal court sitting in New York county over any action or proceeding arising
out of or relating to this Agreement, and the parties hereto hereby irrevocably
agree that all claims in respect of such action or proceeding may be heard and
determined in such New York State or Federal court. The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. The parties hereto further waive any objection to venue
in the State of New York and any objection to an action or proceeding in the
State of New York on the basis of forum non convenient.
(i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING
OF ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR
EACH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY
RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL
CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY
FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A
JURY TRIAL FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING
THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE
-12-
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. IN THE EVENT OF A LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
(j) This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.
* * * * * * * * * * *
-13-
IN WITNESS WHEREOF, the parties hereto have caused this
Intellectual Property Security Agreement to be duly executed on the day and year
first above written.
CELEXX CORPORATION
By:_________________________________
Name:
Title:
BIRCH CIRCLE LLC
By:_________________________________
Name:
Title:
-14-
EXHIBIT A
COPYRIGHTS
Description Registration Registration
Number Date
--------------------------------------------------------------------------------
-15-
EXHIBIT B
PATENTS
Description Registration Registration
Number Date
--------------------------------------------------------------------------------
-16-
EXHIBIT C
TRADEMARKS
Description Registration Registration
Number Date
--------------------------------------------------------------------------------
-17-
SCHEDULE A
JURISDICTIONS:
-18-