EXHIBIT 10.16
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement, dated as of __________,
200__ (this "IP Security Agreement"), is made by and among Vitalstate Canada
Ltd., a Canadian corporation (the "Grantor"), and Scepter Holdings Inc., a
Canadian corporation (the "Secured Party").
RECITALS
A. The Secured Party has agreed to loan to Vitalstate Inc., a New York
corporation ("Vitalstate Parent"), up to US$6,400,000 pursuant to that certain
Loan Agreement, dated as of February 10, 2004 (the "Initial Loan Agreement"),
among Vitalstate Parent, the Grantor, Vitalstate US, Inc., a Florida corporation
("Vitalstate US"), and the Secured Party, as amended by Amendment No. 1 to Loan
Agreement, Guaranty and Security Agreement, dated as of June 15, 2004
("Amendment No. 1"), by Amendment No. 2 to Loan Agreement, Guaranty Security
Agreement and Notes, dated as of October 21, 2004 ("Amendment No. 2"), and by
Amendment No. 3 to Loan Agreement, Guaranty, Security Agreement and Notes, dated
as of _______, 200_ ("Amendment No. 3"), each among Vitalstate Parent, the
Grantor, Vitalstate US and the Secured Party. The Initial Loan Agreement, as
amended by Amendment Xx. 0, Xxxxxxxxx Xx. 0 and Amendment No. 3 (collectively,
the "Amendments"), is referred to as the "Loan Agreement."
B. As of the date of this IP Security Agreement, the Secured Party has
loaned to Vitalstate Parent an aggregate of US$_________ pursuant to the Loan
Agreement, which loan is evidenced by a series of promissory notes (the
"Notes").
C. Each of Vitalstate US and the Grantor have guaranteed the repayment of
the Notes pursuant to a Guaranty, dated February 10, 2004, made by Vitalstate US
and the Grantor in favor of the Secured Party, as amended by the Amendments
(such Guaranty, as amended by the Amendments, is referred to as the "Guaranty").
Each of Vitalstate Parent, Vitalstate US and the Grantor have granted to the
Secured Party a security interest in their accounts receivable, inventory and
certain other assets, as set forth in that certain Security Agreement, dated as
of February 10, 2004, among Vitalstate Parent, Vitalstate US, the Grantor and
the Secured Party, as amended by the Amendments.
D. To secure the Secured Obligations (as defined below), the Grantor has
agreed to grant the Secured Party a security interest in and lien upon the
Intellectual Property Collateral (as defined below).
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, and intending to be legally bound, the parties hereto agree
as follows:
1. Grant of Security Interest. The Grantor hereby unconditionally and
irrevocably pledges and grants to the Secured Party a continuing security
interest in and continuing first lien upon all of its right, title and interest
in and to its property and assets set forth below (the "Intellectual Property
Collateral"):
(a) Copyrights. Any and all U.S. and foreign copyright rights,
including copyright applications, copyright registrations and like protections,
in each work or authorship and derivative work thereof, whether published or
unpublished, and whether or not the same also constitutes a trade secret, now or
hereafter existing, created, acquired or held, including, but not limited to,
those set forth on Exhibit A attached hereto (collectively, the "Copyrights");
(b) Patents. Any and all U.S. and foreign patents, patent
applications and like protections now or hereafter existing, including, but not
limited to, improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same, including, but not limited to,
the patents and patent applications set forth on Exhibit B attached hereto
(collectively, the "Patents");
(c) Trademarks. Any and all U.S. and foreign trademark and
servicemark rights now or hereafter existing, whether registered or not,
applications to register and registrations of the same, including, but not
limited to, those set forth on Exhibit C attached hereto (collectively, the
"Trademarks"), and like protections, including, but not limited to, common law
rights, and the entire goodwill associated therewith and symbolized by such
Trademarks;
(d) Claims for Damages. Any and all claims for damages by way of
past, present and future infringements of any of the intellectual property
rights identified above, with the right, but not the obligation, to xxx for and
collect such damages for said infringement of the intellectual property rights
identified above;
(e) Licenses. Any and all licenses or other rights to use any of the
Copyrights, Patents or Trademarks (including any amendments, extension and
renewals thereof) and all license fees and royalties arising from such use to
the extent permitted by such license or rights;
(f) Amendments, Extensions and Renewals. Any and all amendments,
extensions and renewals of any of the Copyrights, Patents or Trademarks; and
(g) Proceeds and Products. Any and all proceeds and products of the
foregoing, including, but not limited to, all payments under insurance or any
indemnity or warranty payable in respect of any of the foregoing.
2. Continuing Security Interest. This IP Security Agreement will create a
continuing security interest in the Intellectual Property Collateral and will
(i) remain in full force and effect until payment or performance in full of the
Secured Obligations, (ii) be binding upon the Grantor and its successors and
assigns and (iii) inure to the benefit of the Secured Party and its successors
and assigns.
3. Secured Obligations. This IP Security Agreement is made and the
security interests created hereby are granted to the Secured Party to secure the
full and prompt payment or performance of the following (the "Secured
Obligations"): (a) the obligations of the Grantor pursuant to the Loan Agreement
and this IP Security Agreement, (b) the obligations of the Grantor pursuant to
the Guaranty, (c) all reasonable costs incurred by the Secured Party to obtain,
preserve, perfect and enforce the liens and security interests created hereby;
and (d) any renewals, continuations, modifications or extensions of any of the
foregoing.
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4. Authorization and Request. The Grantor authorizes and requests that the
Register of Copyrights, the Commissioner of Patents and Trademarks and any other
relevant U.S. or foreign governmental authority record this IP Security
Agreement.
5. Covenants and Warranties. The Grantor represents, warrants, covenants
and agrees as follows:
(a) The Grantor is now the sole owner of the Intellectual Property
Collateral, except for non-exclusive licenses granted by the Grantor to third
parties in the ordinary course of business.
(b) The Grantor has the requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The execution,
delivery and performance of this Agreement have been duly authorized by all
necessary action on the part of the Grantor. The performance of this IP Security
Agreement does not conflict with or result in a breach of any other agreement or
contract to which the Grantor is bound and this IP Security Agreement
constitutes a security interest.
(c) During the term of this IP Security Agreement, the Grantor will
not transfer or otherwise encumber any Intellectual Property Collateral, except
as set forth in this IP Security Agreement.
(d) To its knowledge, each of the Patents, if any, which has been
issued is valid and enforceable, and no part of the Intellectual Property
Collateral has been judged invalid, unenforceable or unprotectable, in whole or
in part, and no claim has been made that any part of the Intellectual Property
Collateral violates the rights of any third party.
(e) The Grantor shall promptly advise the Secured Party in writing
of any adverse change in the composition of the Intellectual Property Collateral
or any adverse determination against the Intellectual Property Collateral, as
well as any subsequent ownership right of the Grantor in or to any Copyright,
Patent or Trademark.
(f) The Grantor shall, at its own cost and expense, diligently
prosecute, file and make (to the extent that it has not already done so) an
application to register with all appropriate offices or agencies any of the
Intellectual Property Collateral created, acquired or held by the Grantor now or
in the future.
(g) The Grantor shall (i) protect, defend and maintain the validity
and enforceability of the Copyrights, Patents and Trademarks, (ii) use its best
efforts to detect infringements of the Copyrights, Patents and Trademarks and
promptly advise the Secured Party in writing of infringements detected and (iii)
not allow any Copyright, Patent or Trademark to be abandoned, forfeited or
dedicated to the public without the written consent of the Secured Party, which
shall not be unreasonably withheld, unless the Grantor determines that
reasonable business practices suggest that abandonment is appropriate.
(h) In the event that the Grantor shall register, seek to register,
or apply for or seek issuance of any copyright, patent or trademark with the
United States Copyright Office, the United States Patent and Trademark Office or
any similar office or agency of any foreign country it shall: (i) no later than
fifteen (15) business days' after such registration or the filing of such an
application, give notice to the Secured Party of such registration or the filing
of such application and provide the Secured Party with a copy thereof; (ii)
promptly upon the delivery by the Secured Party of a security agreement or such
other documents as the Secured Party may reasonably request in order to maintain
and perfect the priority of the Secured Party's security interest in the
Copyright, Patent or Trademark registered, execute the same; and (iii) promptly
after such execution, record such security documents with the United States
Copyright Office, the United States Patent and Trademark Office or any similar
office or agency of any foreign country. The Grantor shall promptly provide to
the Secured Party a copy of the Copyright, Patent or Trademark application(s) so
filed, together with evidence of the recording of the security documents
necessary for the Secured Party to maintain and perfect the priority of its
security interest in such Copyright, Patent or Trademark.
3
(i) This IP Security Agreement creates and, in the case of after
acquired Intellectual Property Collateral, this IP Security Agreement will
create at the time the Grantor first has rights in such after acquired
Intellectual Property Collateral, in favor of the Secured Party a valid and
perfected first priority security interest in the Intellectual Property
Collateral in the United States and throughout the world securing the payment
and performance of the Secured Obligations upon making the filings referred to
in clause (j) below.
(j) Except for the filing of appropriate UCC financing statements,
and the filing with the United States Patent and Trademark Office (or similar
office or agency of the appropriate foreign countries) with respect to the
Patents and Trademarks and the filing with the Register of Copyrights (or
similar office or agency of the appropriate foreign countries) with respect to
the Copyrights necessary to perfect the security interests created hereunder, no
authorization, approval or other action by, and no notice to or filing with, any
U.S. or foreign governmental authority or regulatory body is required either (i)
for the grant by the Grantor of the security interest granted hereby or for the
execution, delivery or performance of this IP Security Agreement by the Grantor
in the U.S. or abroad or (ii) for the perfection in the United States or abroad
or the exercise by the Secured Party of its rights and remedies hereunder.
(k) All information heretofore, herein or hereafter supplied to the
Secured Party by or on behalf of the Grantor with respect to the Intellectual
Property Collateral is accurate and complete in all material respects.
(l) The Grantor shall not enter into any agreement that would impair
or conflict with the Grantor's obligations hereunder without the Secured Party's
prior written consent. The Grantor shall not permit the inclusion in any
contract to which it becomes a party of any provision that could or might in any
way prevent the creation of a security interest in the Grantor's rights and
interest in any property that would fit within the definition of Intellectual
Property Collateral herein contained and that is acquired under such contract.
(m) Upon any officer of the Grantor obtaining actual knowledge
thereof, the Grantor will promptly notify the Secured Party in writing of any
event that adversely affects the value of any Intellectual Property Collateral,
the ability of the Grantor to dispose of any Intellectual Property Collateral of
the rights and remedies of the Secured Party in relation thereto, including the
levy of any legal process against any of the Intellectual Property Collateral.
4
6. The Secured Party's Rights. The Secured Party shall have the right, but
not the obligation, to take, at the Grantor's sole expense, any actions that the
Grantor is required under this IP Security Agreement to take but which the
Grantor fails to take, after fifteen (15) business days' notice to the Grantor.
The Grantor shall reimburse and indemnify the Secured Party for all reasonable
costs and reasonable expenses incurred in the reasonable exercise of its rights
under this section 6.
7. Inspection Rights. The Grantor hereby grants to the Secured Party and
its employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to the Grantor, any of the Grantor's
plants and facilities that manufacture, install or store products (or that have
done so during the prior six-month period) that are sold utilizing any of the
Intellectual Property Collateral, and to inspect the products and quality
control records relating thereto upon reasonable written notice to the Grantor
and as often as may be reasonably requested; provided, however, that the Secured
Party may not exercise the rights granted to it pursuant to this Section 7 on
more than six (6) occasions in any calendar year.
8. Further Assurances; Attorney in Fact.
(a) On a continuing basis, the Grantor will make, execute,
acknowledge and deliver, and file and record in the proper filing and recording
places in the United States and foreign countries, as appropriate, all such
instruments, including appropriate financing and continuation statements and
collateral agreements and filings with the United States Patent and Trademarks
Office and the Register of Copyrights, and take all such action as may
reasonably be deemed necessary or advisable, or as requested by the Secured
Party, to perfect the Secured Party's security interest in the Intellectual
Property Collateral and otherwise to carry out the intent and purposes of this
IP Security Agreement, or for assuring and confirming to the Secured Party the
grant or perfection of a security interest in all Intellectual Property
Collateral.
(b) The Grantor hereby irrevocably appoints the Secured Party as the
Grantor's attorney-in-fact, with full authority in the place and stead of the
Grantor and in the name of the Grantor, the Secured Party or otherwise, from
time to time in the Secured Party's discretion, upon the Grantor's failure or
inability to do so, to take any action and to execute any instrument which the
Secured Party may deem necessary or advisable to accomplish the purposes of this
IP Security Agreement, including:
(i) To modify, in its sole discretion, this IP Security
Agreement without first obtaining the Grantor'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 Grantor after the execution
hereof or to delete any reference to any right, title or interest in any
Copyrights, Patents or Trademarks in which the Grantor no longer has or claims
any right, title or interest; provided, however, that the Secured Party may not
exercise the rights granted to it pursuant to this Section 8(b)(i) unless (A) it
shall have given the Grantor notice of its intent to exercise such rights (which
notification must set forth the manner in which the Secured Party intends to
modify Exhibit A, Exhibit B or Exhibit C) and the opportunity to amend such
exhibits in the manner contemplated by such notice and (B) the Grantor has not
so modified such exhibits within at least fifteen (15) calendar days after it
received such notice from the Secured Party; and
5
(ii) To file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the
Intellectual Property Collateral without the signature of the Grantor where
permitted by law.
9. Events of Default. The occurrence of any of the following shall
constitute an "Event of Default" under this IP Security Agreement:
(a) An event of default occurs under the Loan Agreement; or
(b) The Grantor breaches any warranty or agreement made by the
Grantor in this IP Security Agreement and such warranty or agreement is not
capable of being cured by the Grantor or, if such warranty or agreement is
capable of being cured by the Grantor, it is not cured within five (5) business
days of such breach.
10. Remedies. Upon the occurrence and continuance of an Event of Default,
the Secured Party shall have the right to exercise all the remedies of a secured
party under the Uniform Commercial Code, including, but not limited to, the
right to require the Grantor to assemble the Intellectual Property Collateral
and any tangible property in which the Secured Party has a security interest and
to make it available to the Secured Party at a place designated by the Secured
Party. The Secured Party shall have a nonexclusive, royalty free license to use
the Copyrights, Patents and Trademarks to the extent reasonably necessary to
permit the Secured Party to exercise its rights and remedies upon the occurrence
of an Event of Default. The Grantor will pay any expenses (including, but not
limited to, reasonable attorney's fees) incurred by the Secured Party in
connection with the exercise of any of the Secured Party's rights hereunder,
including, but not limited to, any expense incurred in disposing of the
Intellectual Property Collateral. The cash proceeds received by the Secured
Party in respect of any such sale are to be applied, first, to the payment of
any expenses incurred by the Secured Party in connection with the exercise of
any of its rights hereunder and to the payment of expenses that are the
responsibility of the Grantor pursuant to other provisions of this Agreement (to
the extent that they are then unpaid), second, to the payment of the Secured
Obligations, and third, the remaining proceeds, if any, are to be paid over to
the Grantor. All of the Secured Party's rights and remedies with respect to the
Intellectual Property Collateral shall be cumulative.
11. Indemnity. The Grantor agrees to defend, indemnify and hold harmless
the Secured Party and its owners, directors, officers, employees, and agents
against: (a) all obligations, demands, claims, and liabilities claimed or
asserted by any other party in connection with the transactions contemplated by
this IP Security Agreement, and (b) all losses or expenses in any way suffered,
incurred, or paid by the Secured Party as a result of or in any way arising out
of, following or consequential to transactions between the Secured Party and the
Grantor, under this IP Security Agreement or otherwise relating to the
Intellectual Property Collateral (including, but not limited to, reasonable
attorneys fees and reasonable expenses), including, but not limited to, all
losses or expenses arising out of any defect or malfunction in any product
manufactured, promoted or sold by the Grantor in connection with any Copyright,
Patent or Trademark. Notwithstanding the foregoing, the Grantor shall have no
obligations pursuant to this Section 11 for losses, claims, liabilities, demands
or expenses that result solely and directly from the Secured Party's gross
negligence or willful misconduct.
6
12. Fees and Expenses. The Grantor shall bear all reasonable legal
expenses of the Secured Party in connection with the negotiation, drafting and
execution of this IP Security Agreement and all filings contemplated hereby
13. Confidentiality. In handling any information of a confidential nature
that comes into its possession pursuant to the rights granted to it by this IP
Security Agreement ("Confidential Information"), the Secured Party shall
exercise the same degree of care that it exercises in respect of its own
confidential information. The foregoing sentence shall not be deemed to prohibit
disclosure of Confidential Information (a) to prospective assignees or
transferees of the rights and obligations of the Secured Party under the Loan
Agreement and/or the Guaranty, or (b) as the Secured Party considers appropriate
in exercising the remedies provided to it in this IP Security Agreement.
14. Termination and Reassignment. At such time as the Grantor shall
completely satisfy all of the Secured Obligations, this IP Security Agreement
shall terminate and the Secured Party shall execute and deliver to the Grantor
all deed, assignments, and other instruments as may be necessary or proper to
reinvest in the Grantor full title to the property assigned hereunder, subject
to any disposition thereof which may have been made by the Secured Party
pursuant hereto.
15. Course of Dealing. No course of dealing, nor any failure to exercise,
nor any delay in exercising any right, power or privilege hereunder shall
operate as a waiver thereof.
16. Attorneys' Fees. If any action relating to this IP Security Agreement
is brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys' fees, costs and
disbursements.
17. Amendments. Except as contemplated by Section 8(b)(i) hereof, this IP
Security Agreement may be amended only by a written instrument signed by both
parties hereto.
18. Counterparts. This IP Security Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
19. Severability. Each provision of this IP Security Agreement is intended
to be severable from every other provision, and the invalidity or illegality of
any provision of this IP Security Agreement shall not affect the validity or
legality of any other provision hereof.
20. Law and Jurisdiction. This IP Security Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
regard for choice of law provisions.
7
21. Assignment. Without the consent of the Grantor, the Secured Party may
assign or otherwise transfer its rights and obligations hereunder to any other
person or entity in connection with an assignment or other transfer of its
rights and obligations under the Loan Agreement and/or the Guaranty and, in such
event, the assignee shall be entitled, upon notifying the Grantor, to the rights
of the Secured Party hereunder and shall be liable for all of the obligations of
the Secured Party hereunder. Without the prior written consent of the Secured
Party, the Grantor may not assign or otherwise transfer any of its rights or
obligations hereunder.
[The remainder of the page has intentionally been left blank.]
8
IN WITNESS WHEREOF, the parties hereto have executed this IP Security
Agreement on the day and year first above written.
ADDRESS OF GRANTOR: GRANTOR:
0000 xxxx. Xxxxxxx, Xxxxx 000 XXXXXXXXXX XXXXXX LTD., a Xxxxxxxx
Xxxxx-Xxxxxxx, Xxxxxx xxxxxxxxxxx
X0X 0X0
By:_____________________________
Name:
Title:
ADDRESS OF SECURED PARTY: SECURED PARTY:
000 Xxxxxxx Xxxx SCEPTER HOLDINGS INC., a Canadian
Xxxxxxx, Xxxxxxx X0X 0X0 corporation
By:_____________________________
Name:
Title:
9
EXHIBIT "A"
COPYRIGHTS (U.S. AND FOREIGN)
SCHEDULE A - ISSUED COPYRIGHTS
COPYRIGHT TITLE AND REGISTRATION DATE OF OWNER OF
DESCRIPTION NUMBER COUNTRY ISSUANCE RECORD
----------- ------ ------- -------- ------
SCHEDULE B - PENDING COPYRIGHT APPLICATIONS
COPYRIGHT TITLE AND APPLICATION DATE OF OWNER OF
DESCRIPTION NUMBER COUNTRY FILING RECORD
----------- ------ ------- ------ ------
SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)
COPYRIGHT FIRST DATE ORIGINAL AUTHOR OR
TITLE AND DATE OF OF OWNER OF COPYRIGHT (IF
DESCRIPTION CREATION PUBLICATION DIFFERENT FROM GRANTOR)
----------- -------- ----------- -----------------------
10
EXHIBIT "B"
SCHEDULE A - PATENTS (U.S. AND FOREIGN)
TITLE NUMBER COUNTRY INVENTORS FILING DATE STATUS
----- ------ ------- --------- ----------- ------
SCHEDULE B - PATENT APPLICATIONS (U.S. AND FOREIGN)
------------------------------------------------------------------------------------------------------------------
Title Number Country Inventor(s)
------------------------------------------------------------------------------------------------------------------
A Carbohydrate-based Delivery System 10/416,815 U.S. Xxxxxxx Xxxxxx/Xxxxxxxx Xxxxxx
for Creatine and Other Bioactive
Ingredients
------------------------------------------------------------------------------------------------------------------
Delivery Systems For Functional PCT/CA03/00411 International Xxxxxxx Xxxxxx/Xxxxxxxx Xxxxxx
Ingredients
------------------------------------------------------------------------------------------------------------------
Delivery Systems For Functional 10/416,547 U.S. Xxxxxxx Xxxxxx/Xxxxxxxx Xxxxxx
Ingredients
------------------------------------------------------------------------------------------------------------------
A Starch-Based Delivery System for 10/297,983 U.S. Xxxxxxx Xxxxxx/Xxxxxxxx Xxxxxx
Creatine
------------------------------------------------------------------------------------------------------------------
Transmucosal Delivery System PCT/CA03/01034 International Xxxxxxx Xxxxxx/Xxxxxxxx Xxxxxx
(Renamed to " Oral Delivery System
Containing a Gel matrix and Liposomes")
------------------------------------------------------------------------------------------------------------------
Multi-Phase Delivery System PCT/CA03/01206 International Xxxxxxx Xxxxxx/Xxxxxxxx Xxxxxx
(Renamed to "Multi-phase Oral delivery
System Comprising a Semi-Solid Matrix
Phase")
------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Title Priority Date Status
-------------------------------------------------------------------------------------------------
A Carbohydrate-based Delivery System September 25, 2001 Filed US May 7, 2003
for Creatine and Other Bioactive
Ingredients
-------------------------------------------------------------------------------------------------
Delivery Systems For Functional April 16, 2002 Full PCT Filed Mar 23,
Ingredients 2003
-------------------------------------------------------------------------------------------------
Delivery Systems For Functional April 16, 2002 Filed US May 13, 2003
Ingredients
-------------------------------------------------------------------------------------------------
A Starch-Based Delivery System for September 25, 2001 Filed US Dec 10, 2002
Creatine
-------------------------------------------------------------------------------------------------
Transmucosal Delivery System July 19, 2002 Full PCT Filed July 18,
(Renamed to " Oral Delivery System 2003
Containing a Gel matrix and Liposomes")
-------------------------------------------------------------------------------------------------
Multi-Phase Delivery System August 13, 2002 Full PCT Filed Aug 13,
(Renamed to "Multi-phase Oral delivery 2003
System Comprising a Semi-Solid Matrix
Phase")
-------------------------------------------------------------------------------------------------
11
SCHEDULE C - PROVISIONAL PATENT APPLICATIONS (U.S. AND FOREIGN)
------------------------------------------------------------------------------------------------------------------------------------
Title Number Country Inventor(s) Filing Date
------------------------------------------------------------------------------------------------------------------------------------
Delivery System for Non-steroidal 60/550,603 U.S. Xxxxxxxx Xxxxxx March 5, 2004
anti-inflammatory drugs (NSAIDs)
------------------------------------------------------------------------------------------------------------------------------------
Delivery Systems for Calcium U.S. Xxxxxxxx Xxxxxx February 19, 2004
------------------------------------------------------------------------------------------------------------------------------------
Delivery Systems for Antacids 60/558,906 U.S. Xxxxxxxx Xxxxxx April 1, 2004
------------------------------------------------------------------------------------------------------------------------------------
Oral gel delivery system 60/519,664 U.S. Xxxxxxxx Xxxxxx November 13, 2003
------------------------------------------------------------------------------------------------------------------------------------
Gel Delivery System for Bioactive U.S. Xxxxxxxx Xxxxxx January 8, 2004
Ingredients
------------------------------------------------------------------------------------------------------------------------------------
Oral gel delivery system for 60/525,596 U.S. Xxxxxxxx Xxxxxx April 26, 2004
Functional ingredients
------------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------
Title Status
-----------------------------------------------------------------------
Delivery System for Non-steroidal US Provisional
anti-inflammatory drugs (NSAIDs)
-----------------------------------------------------------------------
Delivery Systems for Calcium US Provisional
-----------------------------------------------------------------------
Delivery Systems for Antacids US Provisional
-----------------------------------------------------------------------
Oral gel delivery system US Provisional
-----------------------------------------------------------------------
Gel Delivery System for Bioactive US Provisional
Ingredients
-----------------------------------------------------------------------
Oral gel delivery system for US Provisional
Functional ingredients
-----------------------------------------------------------------------
12
EXHIBIT "C"
SCHEDULE A - TRADEMARKS (U.S. AND FOREIGN)
-------------------------------------------------------------------------------------------------------------
Application
Trademark No. Country Filing Date Status
-------------------------------------------------------------------------------------------------------------
ACTIJUBE 76421274 U.S. 14-Jun-02 Statement of Use filed
1138072 Canada 19-Apr-02 Allowed; Statement of Use due by 19/04/2005
2894798 EU 16-Oct-02 Publication complete, registration pending
-------------------------------------------------------------------------------------------------------------
ACTIJUBE and DESIGN 78259876 U.S. 9-Jun-03 Allowed September 21, 2004
1179033 Canada 3-Jun-03 Time extension to Nov 4, 2004 - in prosecution
-------------------------------------------------------------------------------------------------------------
ATTACK THE PACK 78259495 U.S. 6-Jun-03 Pub for Opp on 9/14/04; extension to oppose
filed 10/14/04
-------------------------------------------------------------------------------------------------------------
COMMAND and DESIGN 78262818 U.S. 16-Jun-03 USPTO wrongly abandoned - Filed to reinstate
Sept 1
-------------------------------------------------------------------------------------------------------------
COMMAND PERFORMANCE 78245226 U.S. 2-May-03 Allowed 11/02/2004
-------------------------------------------------------------------------------------------------------------
EXPANDING YOUR POTENTIAL 78251623 U.S. 19-May-03 Allowed 5/11/2004; Extension of time or
Statement of Use due 11/11/2004
-------------------------------------------------------------------------------------------------------------
FITKIDS NUTRITION 78259491 U.S. 6-Jun-03 Published for opposition October 7
Approved for publication on 9/05/2004 but
not published yet
-------------------------------------------------------------------------------------------------------------
FITKIDS NUTRITION DESIGN 78259487 U.S. 6-Jun-03 Approved for publication October 4, 2004
-------------------------------------------------------------------------------------------------------------
FOUNDATION 78270251 U.S. 3-Jul-03 Published for opposition on 9/28/2004
-------------------------------------------------------------------------------------------------------------
LIQUID LIGHTNING 78259988 U.S. 9-Jun-03 10/13/2004 - suspension letter mailed
-------------------------------------------------------------------------------------------------------------
LIQUID THUNDER 78259909 U.S. 9-Jun-03 9/2/4/2004 - publication complete
-------------------------------------------------------------------------------------------------------------
PROTEIN SPLASH 78260010 U.S. 9-Jun-03 8/30/2004 - suspension letter mailed
-------------------------------------------------------------------------------------------------------------
PROTEIN WAVE 78260000 U.S. 9-Jun-03 8/30/2004 - suspension letter mailed
-------------------------------------------------------------------------------------------------------------
RIPPED QUICK 78268189 U.S. 27-Jun-03 USPTO wrongly abandoned - Filed to reinstate
1175077 Canada 29-Apr-03 8/25/04
Searched - in prosecution
-------------------------------------------------------------------------------------------------------------
RUSSIAN RED 76421463 U.S. 14-Jun-02 Published for Opposition Sept 7, 2004
1217734 Canada 21-May-04 Refile - approved on Oct 27, 2004
1136432 Canada 5-Apr-02 In prosecution
2878908 EU 10-Apr-02 Publication period completed on 11/02/2004
-------------------------------------------------------------------------------------------------------------
TRIM PHYSIQUE 1136431 Canada 5-Apr-02 Searched - in prosecution
-------------------------------------------------------------------------------------------------------------
13
-------------------------------------------------------------------------------------------------------------
Application
Trademark No. Country Filing Date Status
-------------------------------------------------------------------------------------------------------------
VITALSTATE DESIGN 78265094 U.S. 20-Jun-03 Published for opp on Oct. 12, 2004
1178654 Canada 29-May-03 In prosecution
-------------------------------------------------------------------------------------------------------------
VITALSTATE 76421450 U.S. 14-Jun-02 Allowed
1136430 Canada 5-Apr-02 In prosecution
2877702 EU 10-Apr-02 Publication competed on Oct 5, 2004
-------------------------------------------------------------------------------------------------------------
WOLVERINES and DESIGN 78259485 U.S. 6-Jun-03 Published for Opposition Sept 21, 2004
-------------------------------------------------------------------------------------------------------------
SCHEDULE B - COMMON LAW TRADEMARKS
OTHER
DATE OF FIRST COUNTRIES IN
USE IN COUNTRY OF WHICH XXXX IS OWNER OF
TRADEMARK COMMERCE FIRST USE IN USE TRADEMARK
--------- -------- --------- ------ ---------
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EXHIBIT 10.16
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement, dated as of __________,
200_ (this "IP Security Agreement"), is made by and among Vitalstate US, Inc., a
Florida corporation (the "Grantor"), and Scepter Holdings Inc., a Canadian
corporation (the "Secured Party").
RECITALS
A. The Secured Party has agreed to loan to Vitalstate Inc., a New York
corporation ("Vitalstate Parent"), up to US$6,400,000 pursuant to that certain
Loan Agreement, dated as of February 10, 2004 (the "Initial Loan Agreement"),
among Vitalstate Parent, Vitalstate Canada Ltd., a Canadian corporation
("Vitalstate Canada"), the Grantor and the Secured Party, as amended by
Amendment No. 1 to Loan Agreement, Guaranty and Security Agreement, dated as of
June 15, 2004 ("Amendment No. 1"), by Amendment No. 2 to Loan Agreement,
Guaranty, Security Agreement and Notes, dated as of October 21, 2004 ("Amendment
No. 2"), and by Amendment No. 3 to Loan Agreement, Guaranty, Security Agreement
and Notes, dated as of ________, 200_ ("Amendment No. 3"), each among Vitalstate
Parent, Vitalstate Canada, the Grantor and the Secured Party. The Initial Loan
Agreement, as amended by Amendment Xx. 0, Xxxxxxxxx Xx. 0 and Amendment No. 3
(collectively, the "Amendments"), is referred to as the "Loan Agreement."
B. As of the date of this IP Security Agreement, the Secured Party has
loaned to Vitalstate Parent an aggregate of US$_________ pursuant to the Loan
Agreement, which loan is evidenced by a series of promissory notes (the
"Notes").
C. Each of Vitalstate Canada and the Grantor have guaranteed the repayment
of the Notes pursuant to a Guaranty, dated February 10, 2004, made by Vitalstate
Canada and the Grantor in favor of the Secured Party, as amended by the
Amendments (such Guaranty, as amended by the Amendments, is referred to as the
"Guaranty"). Each of Vitalstate Parent, Vitalstate Canada and the Grantor have
granted to the Secured Party a security interest in their accounts receivable,
inventory and certain other assets, as set forth in that certain Security
Agreement, dated as of February 10, 2004, among Vitalstate Parent, Vitalstate
Canada, the Grantor and the Secured Party, as amended by the Amendments.
D. To secure the Secured Obligations (as defined below), the Grantor has
agreed to grant the Secured Party a security interest in and lien upon the
Intellectual Property Collateral (as defined below).
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, and intending to be legally bound, the parties hereto agree
as follows:
1. Grant of Security Interest. The Grantor hereby unconditionally and
irrevocably pledges and grants to the Secured Party a continuing security
interest in and continuing first lien upon all of its right, title and interest
in and to its property and assets set forth below (the "Intellectual Property
Collateral"):
(a) Copyrights. Any and all U.S. and foreign copyright rights,
including copyright applications, copyright registrations and like protections,
in each work or authorship and derivative work thereof, whether published or
unpublished, and whether or not the same also constitutes a trade secret, now or
hereafter existing, created, acquired or held, including, but not limited to,
those set forth on Exhibit A attached hereto (collectively, the "Copyrights");
(b) Patents. Any and all U.S. and foreign patents, patent
applications and like protections now or hereafter existing, including, but not
limited to, improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same, including, but not limited to,
the patents and patent applications set forth on Exhibit B attached hereto
(collectively, the "Patents");
(c) Trademarks. Any and all U.S. and foreign trademark and
servicemark rights now or hereafter existing, whether registered or not,
applications to register and registrations of the same, including, but not
limited to, those set forth on Exhibit C attached hereto (collectively, the
"Trademarks"), and like protections, including, but not limited to, common law
rights, and the entire goodwill associated therewith and symbolized by such
Trademarks;
(d) Claims for Damages. Any and all claims for damages by way of
past, present and future infringements of any of the intellectual property
rights identified above, with the right, but not the obligation, to xxx for and
collect such damages for said infringement of the intellectual property rights
identified above;
(e) Licenses. Any and all licenses or other rights to use any of the
Copyrights, Patents or Trademarks (including any amendments, extension and
renewals thereof) and all license fees and royalties arising from such use to
the extent permitted by such license or rights;
(f) Amendments, Extensions and Renewals. Any and all amendments,
extensions and renewals of any of the Copyrights, Patents or Trademarks; and
(g) Proceeds and Products. Any and all proceeds and products of the
foregoing, including, but not limited to, all payments under insurance or any
indemnity or warranty payable in respect of any of the foregoing.
2. Continuing Security Interest. This IP Security Agreement will create a
continuing security interest in the Intellectual Property Collateral and will
(i) remain in full force and effect until payment or performance in full of the
Secured Obligations, (ii) be binding upon the Grantor and its successors and
assigns and (iii) inure to the benefit of the Secured Party and its successors
and assigns.
3. Secured Obligations. This IP Security Agreement is made and the
security interests created hereby are granted to the Secured Party to secure the
full and prompt payment or performance of the following (the "Secured
Obligations"): (a) the obligations of the Grantor pursuant to the Loan Agreement
and this IP Security Agreement, (b) the obligations of the Grantor pursuant to
the Guaranty, (c) all reasonable costs incurred by the Secured Party to obtain,
preserve, perfect and enforce the liens and security interests created hereby;
and (d) any renewals, continuations, modifications or extensions of any of the
foregoing.
2
4. Authorization and Request. The Grantor authorizes and requests that the
Register of Copyrights, the Commissioner of Patents and Trademarks and any other
relevant U.S. or foreign governmental authority record this IP Security
Agreement.
5. Covenants and Warranties. The Grantor represents, warrants, covenants
and agrees as follows:
(a) The Grantor is now the sole owner of the Intellectual Property
Collateral, except for non-exclusive licenses granted by the Grantor to third
parties in the ordinary course of business.
(b) The Grantor has the requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The execution,
delivery and performance of this Agreement have been duly authorized by all
necessary action on the part of the Grantor. The performance of this IP Security
Agreement does not conflict with or result in a breach of any other agreement or
contract to which the Grantor is bound and this IP Security Agreement
constitutes a security interest.
(c) During the term of this IP Security Agreement, the Grantor will
not transfer or otherwise encumber any Intellectual Property Collateral, except
as set forth in this IP Security Agreement.
(d) To its knowledge, each of the Patents, if any, which has been
issued is valid and enforceable, and no part of the Intellectual Property
Collateral has been judged invalid, unenforceable or unprotectable, in whole or
in part, and no claim has been made that any part of the Intellectual Property
Collateral violates the rights of any third party.
(e) The Grantor shall promptly advise the Secured Party in writing
of any adverse change in the composition of the Intellectual Property Collateral
or any adverse determination against the Intellectual Property Collateral, as
well as any subsequent ownership right of the Grantor in or to any Copyright,
Patent or Trademark.
(f) The Grantor shall, at its own cost and expense, diligently
prosecute, file and make (to the extent that it has not already done so) an
application to register with all appropriate offices or agencies any of the
Intellectual Property Collateral created, acquired or held by the Grantor now or
in the future.
(g) The Grantor shall (i) protect, defend and maintain the validity
and enforceability of the Copyrights, Patents and Trademarks, (ii) use its best
efforts to detect infringements of the Copyrights, Patents and Trademarks and
promptly advise the Secured Party in writing of infringements detected and (iii)
not allow any Copyright, Patent or Trademark to be abandoned, forfeited or
dedicated to the public without the written consent of the Secured Party, which
shall not be unreasonably withheld, unless the Grantor determines that
reasonable business practices suggest that abandonment is appropriate.
3
(h) In the event that the Grantor shall register, seek to register,
or apply for or seek issuance of any copyright, patent or trademark with the
United States Copyright Office, the United States Patent and Trademark Office or
any similar office or agency of any foreign country it shall: (i) no later than
fifteen (15) business days' after such registration or the filing of such an
application, give notice to the Secured Party of such registration or the filing
of such application and provide the Secured Party with a copy thereof; (ii)
promptly upon the delivery by the Secured Party of a security agreement or such
other documents as the Secured Party may reasonably request in order to maintain
and perfect the priority of the Secured Party's security interest in the
Copyright, Patent or Trademark registered, execute the same; and (iii) promptly
after such execution, record such security documents with the United States
Copyright Office, the United States Patent and Trademark Office or any similar
office or agency of any foreign country. The Grantor shall promptly provide to
the Secured Party a copy of the Copyright, Patent or Trademark application(s) so
filed, together with evidence of the recording of the security documents
necessary for the Secured Party to maintain and perfect the priority of its
security interest in such Copyright, Patent or Trademark.
(i) This IP Security Agreement creates and, in the case of after
acquired Intellectual Property Collateral, this IP Security Agreement will
create at the time the Grantor first has rights in such after acquired
Intellectual Property Collateral, in favor of the Secured Party a valid and
perfected first priority security interest in the Intellectual Property
Collateral in the United States and throughout the world securing the payment
and performance of the Secured Obligations upon making the filings referred to
in clause (j) below.
(j) Except for the filing of appropriate UCC financing statements,
and the filing with the United States Patent and Trademark Office (or similar
office or agency of the appropriate foreign countries) with respect to the
Patents and Trademarks and the filing with the Register of Copyrights (or
similar office or agency of the appropriate foreign countries) with respect to
the Copyrights necessary to perfect the security interests created hereunder, no
authorization, approval or other action by, and no notice to or filing with, any
U.S. or foreign governmental authority or regulatory body is required either (i)
for the grant by the Grantor of the security interest granted hereby or for the
execution, delivery or performance of this IP Security Agreement by the Grantor
in the U.S. or abroad or (ii) for the perfection in the United States or abroad
or the exercise by the Secured Party of its rights and remedies hereunder.
(k) All information heretofore, herein or hereafter supplied to the
Secured Party by or on behalf of the Grantor with respect to the Intellectual
Property Collateral is accurate and complete in all material respects.
(l) The Grantor shall not enter into any agreement that would impair
or conflict with the Grantor's obligations hereunder without the Secured Party's
prior written consent. The Grantor shall not permit the inclusion in any
contract to which it becomes a party of any provision that could or might in any
way prevent the creation of a security interest in the Grantor's rights and
interest in any property that would fit within the definition of Intellectual
Property Collateral herein contained and that is acquired under such contract.
(m) Upon any officer of the Grantor obtaining actual knowledge
thereof, the Grantor will promptly notify the Secured Party in writing of any
event that adversely affects the value of any Intellectual Property Collateral,
the ability of the Grantor to dispose of any Intellectual Property Collateral of
the rights and remedies of the Secured Party in relation thereto, including the
levy of any legal process against any of the Intellectual Property Collateral.
4
6. The Secured Party's Rights. The Secured Party shall have the right, but
not the obligation, to take, at the Grantor's sole expense, any actions that the
Grantor is required under this IP Security Agreement to take but which the
Grantor fails to take, after fifteen (15) business days' notice to the Grantor.
The Grantor shall reimburse and indemnify the Secured Party for all reasonable
costs and reasonable expenses incurred in the reasonable exercise of its rights
under this section 6.
7. Inspection Rights. The Grantor hereby grants to the Secured Party and
its employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to the Grantor, any of the Grantor's
plants and facilities that manufacture, install or store products (or that have
done so during the prior six-month period) that are sold utilizing any of the
Intellectual Property Collateral, and to inspect the products and quality
control records relating thereto upon reasonable written notice to the Grantor
and as often as may be reasonably requested; provided, however, that the Secured
Party may not exercise the rights granted to it pursuant to this Section 7 on
more than six (6) occasions in any calendar year.
8. Further Assurances; Attorney in Fact.
(a) On a continuing basis, the Grantor will make, execute,
acknowledge and deliver, and file and record in the proper filing and recording
places in the United States and foreign countries, as appropriate, all such
instruments, including appropriate financing and continuation statements and
collateral agreements and filings with the United States Patent and Trademarks
Office and the Register of Copyrights, and take all such action as may
reasonably be deemed necessary or advisable, or as requested by the Secured
Party, to perfect the Secured Party's security interest in the Intellectual
Property Collateral and otherwise to carry out the intent and purposes of this
IP Security Agreement, or for assuring and confirming to the Secured Party the
grant or perfection of a security interest in all Intellectual Property
Collateral.
(b) The Grantor hereby irrevocably appoints the Secured Party as the
Grantor's attorney-in-fact, with full authority in the place and stead of the
Grantor and in the name of the Grantor, the Secured Party or otherwise, from
time to time in the Secured Party's discretion, upon the Grantor's failure or
inability to do so, to take any action and to execute any instrument which the
Secured Party may deem necessary or advisable to accomplish the purposes of this
IP Security Agreement, including:
(i) To modify, in its sole discretion, this IP Security
Agreement without first obtaining the Grantor'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 Grantor after the execution
hereof or to delete any reference to any right, title or interest in any
Copyrights, Patents or Trademarks in which the Grantor no longer has or claims
any right, title or interest; provided, however, that the Secured Party may not
exercise the rights granted to it pursuant to this Section 8(b)(i) unless (A) it
shall have given the Grantor notice of its intent to exercise such rights (which
notification must set forth the manner in which the Secured Party intends to
modify Exhibit A, Exhibit B or Exhibit C) and the opportunity to amend such
exhibits in the manner contemplated by such notice and (B) the Grantor has not
so modified such exhibits within at least fifteen (15) calendar days after it
received such notice from the Secured Party; and
5
(ii) To file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the
Intellectual Property Collateral without the signature of the Grantor where
permitted by law.
9. Events of Default. The occurrence of any of the following shall
constitute an "Event of Default" under this IP Security Agreement:
(a) An event of default occurs under the Loan Agreement; or
(b) The Grantor breaches any warranty or agreement made by the
Grantor in this IP Security Agreement and such warranty or agreement is not
capable of being cured by the Grantor or, if such warranty or agreement is
capable of being cured by the Grantor, it is not cured within five (5) business
days of such breach.
10. Remedies. Upon the occurrence and continuance of an Event of Default,
the Secured Party shall have the right to exercise all the remedies of a secured
party under the Uniform Commercial Code, including, but not limited to, the
right to require the Grantor to assemble the Intellectual Property Collateral
and any tangible property in which the Secured Party has a security interest and
to make it available to the Secured Party at a place designated by the Secured
Party. The Secured Party shall have a nonexclusive, royalty free license to use
the Copyrights, Patents and Trademarks to the extent reasonably necessary to
permit the Secured Party to exercise its rights and remedies upon the occurrence
of an Event of Default. The Grantor will pay any expenses (including, but not
limited to, reasonable attorney's fees) incurred by the Secured Party in
connection with the exercise of any of the Secured Party's rights hereunder,
including, but not limited to, any expense incurred in disposing of the
Intellectual Property Collateral. The cash proceeds received by the Secured
Party in respect of any such sale are to be applied, first, to the payment of
any expenses incurred by the Secured Party in connection with the exercise of
any of its rights hereunder and to the payment of expenses that are the
responsibility of the Grantor pursuant to other provisions of this Agreement (to
the extent that they are then unpaid), second, to the payment of the Secured
Obligations, and third, the remaining proceeds, if any, are to be paid over to
the Grantor. All of the Secured Party's rights and remedies with respect to the
Intellectual Property Collateral shall be cumulative.
11. Indemnity. The Grantor agrees to defend, indemnify and hold harmless
the Secured Party and its owners, directors, officers, employees, and agents
against: (a) all obligations, demands, claims, and liabilities claimed or
asserted by any other party in connection with the transactions contemplated by
this IP Security Agreement, and (b) all losses or expenses in any way suffered,
incurred, or paid by the Secured Party as a result of or in any way arising out
of, following or consequential to transactions between the Secured Party and the
Grantor under this IP Security Agreement or otherwise relating to the
Intellectual Property Collateral (including, but not limited to, reasonable
attorneys fees and reasonable expenses), including, but not limited to, all
losses or expenses arising out of any defect or malfunction in any product
manufactured, promoted or sold by the Grantor in connection with any Copyright,
Patent or Trademark. Notwithstanding the foregoing, the Grantor shall have no
obligations pursuant to this Section 11 for losses, claims, liabilities, demands
or expenses that result solely and directly from the Secured Party's gross
negligence or willful misconduct.
6
12. Fees and Expenses. The Grantor shall bear all reasonable legal
expenses of the Secured Party in connection with the negotiation, drafting and
execution of this IP Security Agreement and all filings contemplated hereby
13. Confidentiality. In handling any information of a confidential nature
that comes into its possession pursuant to the rights granted to it by this IP
Security Agreement ("Confidential Information"), the Secured Party shall
exercise the same degree of care that it exercises in respect of its own
confidential information. The foregoing sentence shall not be deemed to prohibit
disclosure of Confidential Information (a) to prospective assignees or
transferees of the rights and obligations of the Secured Party under the Loan
Agreement and/or the Guaranty, or (b) as the Secured Party considers appropriate
in exercising the remedies provided to it in this IP Security Agreement.
14. Termination and Reassignment. At such time as the Grantor shall
completely satisfy all of the Secured Obligations, this IP Security Agreement
shall terminate and the Secured Party shall execute and deliver to the Grantor
all deed, assignments, and other instruments as may be necessary or proper to
reinvest in the Grantor full title to the property assigned hereunder, subject
to any disposition thereof which may have been made by the Secured Party
pursuant hereto.
15. Course of Dealing. No course of dealing, nor any failure to exercise,
nor any delay in exercising any right, power or privilege hereunder shall
operate as a waiver thereof.
16. Attorneys' Fees. If any action relating to this IP Security Agreement
is brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys' fees, costs and
disbursements.
17. Amendments. Except as contemplated by Section 8(b)(i) hereof, this IP
Security Agreement may be amended only by a written instrument signed by both
parties hereto.
18. Counterparts. This IP Security Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
19. Severability. Each provision of this IP Security Agreement is intended
to be severable from every other provision, and the invalidity or illegality of
any provision of this IP Security Agreement shall not affect the validity or
legality of any other provision hereof.
20. Law and Jurisdiction. This IP Security Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
regard for choice of law provisions.
7
21. Assignment. Without the consent of the Grantor, the Secured Party may
assign or otherwise transfer its rights and obligations hereunder to any other
person or entity in connection with an assignment or other transfer of its
rights and obligations under the Loan Agreement and/or the Guaranty and, in such
event, the assignee shall be entitled, upon notifying the Grantor, to the rights
of the Secured Party hereunder and shall be liable for all of the obligations of
the Secured Party hereunder. Without the prior written consent of the Secured
Party, the Grantor may not assign or otherwise transfer any of its rights or
obligations hereunder.
[The remainder of the page has intentionally been left blank.]
8
IN WITNESS WHEREOF, the parties hereto have executed this IP Security
Agreement on the day and year first above written.
ADDRESS OF GRANTOR: GRANTOR:
0000 Xxxx Xxxxx Xxxx XXXXXXXXXX XX, INC., a Florida
Xxxxxxx Xxxxx, Xxxxxxx 00000 corporation
By:___________________________________
Name:
Title:
ADDRESS OF SECURED PARTY: SECURED PARTY:
000 Xxxxxxx Xxxx SCEPTER HOLDINGS INC., a Canadian
Xxxxxxx, Xxxxxxx X0X 0X0 corporation
By:___________________________________
Name:
Title:
9
EXHIBIT "A"
COPYRIGHTS (U.S. AND FOREIGN)
SCHEDULE A - ISSUED COPYRIGHTS
COPYRIGHT TITLE AND REGISTRATION DATE OF OWNER OF
DESCRIPTION NUMBER COUNTRY ISSUANCE RECORD
----------- ------ ------- -------- ------
SCHEDULE B - PENDING COPYRIGHT APPLICATIONS
COPYRIGHT TITLE AND APPLICATION DATE OF OWNER OF
DESCRIPTION NUMBER COUNTRY FILING RECORD
----------- ------ ------- ------ ------
SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)
COPYRIGHT FIRST DATE ORIGINAL AUTHOR OR
TITLE AND DATE OF OF OWNER OF COPYRIGHT (IF
DESCRIPTION CREATION PUBLICATION DIFFERENT FROM GRANTOR)
----------- -------- ----------- -----------------------
10
EXHIBIT "B"
SCHEDULE A - PATENTS (U.S. AND FOREIGN)
TITLE NUMBER COUNTRY INVENTORS FILING DATE STATUS
----- ------ ------- --------- ----------- ------
SCHEDULE B - PATENT APPLICATIONS (U.S. AND FOREIGN)
------------------------------------------------------------------------------------------------------
Title Number Country Inventor(s)
------------------------------------------------------------------------------------------------------
A Carbohydrate-based Delivery 10/416,815 U.S. Xxxxxxx Xxxxxx/Xxxxxxxx Xxxxxx
System for Creatine and Other
Bioactive Ingredients
------------------------------------------------------------------------------------------------------
Delivery Systems For Functional PCT/CA03/00411 International Xxxxxxx Xxxxxx/Xxxxxxxx Xxxxxx
Ingredients
------------------------------------------------------------------------------------------------------
Delivery Systems For Functional 10/416,547 U.S. Xxxxxxx Xxxxxx/Xxxxxxxx Xxxxxx
Ingredients
------------------------------------------------------------------------------------------------------
A Starch-Based Delivery System 10/297,983 U.S. Xxxxxxx Xxxxxx/Xxxxxxxx Xxxxxx
for Creatine
------------------------------------------------------------------------------------------------------
Transmucosal Delivery System PCT/CA03/01034 International Xxxxxxx Xxxxxx/Xxxxxxxx Xxxxxx
(Renamed to " Oral Delivery
System Containing a Gel matrix
and Liposomes")
------------------------------------------------------------------------------------------------------
Multi-Phase Delivery System PCT/CA03/01206 International Xxxxxxx Xxxxxx/Xxxxxxxx Xxxxxx
(Renamed to "Multi-phase Oral
delivery System Comprising a
Semi-Solid Matrix Phase")
------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Title Priority Date Status
--------------------------------------------------------------------------------
A Carbohydrate-based Delivery September 25, 2001 Filed US May 7, 2003
System for Creatine and Other
Bioactive Ingredients
--------------------------------------------------------------------------------
Delivery Systems For Functional April 16, 2002 Full PCT Filed Mar 23,
Ingredients 2003
--------------------------------------------------------------------------------
Delivery Systems For Functional April 16, 2002 Filed US May 13, 2003
Ingredients
--------------------------------------------------------------------------------
A Starch-Based Delivery System September 25, 2001 Filed US Dec 10, 2002
for Creatine
--------------------------------------------------------------------------------
Transmucosal Delivery System July 19, 2002 Full PCT Filed July
(Renamed to " Oral Delivery 18, 2003
System Containing a Gel matrix
and Liposomes")
--------------------------------------------------------------------------------
Multi-Phase Delivery System August 13, 2002 Full PCT Filed Aug 13,
(Renamed to "Multi-phase Oral 2003
delivery System Comprising a
Semi-Solid Matrix Phase")
--------------------------------------------------------------------------------
11
SCHEDULE C - PROVISIONAL PATENT APPLICATIONS (U.S. AND FOREIGN)
------------------------------------------------------------------------------------------------------
Title Number Country Inventor(s) Filing Date Status
------------------------------------------------------------------------------------------------------
Delivery System for 60/550,603 U.S. Xxxxxxxx Xxxxxx March 5, 2004 US Provisional
Non-steroidal
anti-inflammatory
drugs (NSAIDs)
------------------------------------------------------------------------------------------------------
Delivery Systems for U.S. Xxxxxxxx Xxxxxx February 19, US Provisional
Calcium 2004
------------------------------------------------------------------------------------------------------
Delivery Systems for 60/558,906 U.S. Xxxxxxxx Xxxxxx April 1, 2004 US Provisional
Antacids
------------------------------------------------------------------------------------------------------
Oral gel delivery 60/519,664 U.S. Xxxxxxxx Xxxxxx November 13, US Provisional
system 2003
------------------------------------------------------------------------------------------------------
Gel Delivery System U.S. Xxxxxxxx Xxxxxx January 8, 2004 US Provisional
for Bioactive
Ingredients
------------------------------------------------------------------------------------------------------
Oral gel delivery 60/525,596 U.S. Xxxxxxxx Xxxxxx April 26, 2004 US Provisional
system for
Functional
ingredients
------------------------------------------------------------------------------------------------------
12
EXHIBIT "C"
SCHEDULE A - TRADEMARKS (U.S. AND FOREIGN)
--------------------------------------------------------------------------------------------------------------
Trademark Application Country Filing Date Status
No.
--------------------------------------------------------------------------------------------------------------
ACTIJUBE 76421274 U.S. 14-Jun-02 Statement of Use filed
1138072 Canada 19-Apr-02 Allowed; Statement of Use due by 19/04/2005
2894798 EU 16-Oct-02 Publication complete, registration pending
--------------------------------------------------------------------------------------------------------------
ACTIJUBE and DESIGN 78259876 U.S. 9-Jun-03 Allowed September 21, 2004
1179033 Canada 3-Jun-03 Time extension to Nov 4, 2004 - in prosecution
--------------------------------------------------------------------------------------------------------------
ATTACK THE PACK 78259495 U.S. 6-Jun-03 Pub for Opp on 9/14/04; extension to oppose
filed 10/14/04
--------------------------------------------------------------------------------------------------------------
COMMAND and DESIGN 78262818 U.S. 16-Jun-03 USPTO wrongly abandoned - Filed to
reinstate Sept 1
--------------------------------------------------------------------------------------------------------------
COMMAND PERFORMANCE 78245226 U.S. 2-May-03 Allowed 11/02/2004
--------------------------------------------------------------------------------------------------------------
EXPANDING YOUR POTENTIAL 78251623 U.S. 19-May-03 Allowed 5/11/2004; Extension of time or
Statement of Use due 11/11/2004
--------------------------------------------------------------------------------------------------------------
FITKIDS NUTRITION 78259491 U.S. 6-Jun-03 Published for opposition October 7
Approved for publication on 9/05/2004 but
not published yet
--------------------------------------------------------------------------------------------------------------
FITKIDS NUTRITION DESIGN 78259487 U.S. 6-Jun-03 Approved for publication October 4, 2004
--------------------------------------------------------------------------------------------------------------
FOUNDATION 78270251 U.S. 3-Jul-03 Published for opposition on 9/28/2004
--------------------------------------------------------------------------------------------------------------
LIQUID LIGHTNING 78259988 U.S. 9-Jun-03 10/13/2004 - suspension letter mailed
--------------------------------------------------------------------------------------------------------------
LIQUID THUNDER 78259909 U.S. 9-Jun-03 9/2/4/2004 - publication complete
--------------------------------------------------------------------------------------------------------------
PROTEIN SPLASH 78260010 U.S. 9-Jun-03 8/30/2004 - suspension letter mailed
--------------------------------------------------------------------------------------------------------------
PROTEIN WAVE 78260000 U.S. 9-Jun-03 8/30/2004 - suspension letter mailed
--------------------------------------------------------------------------------------------------------------
RIPPED QUICK 78268189 U.S. 27-Jun-03 USPTO wrongly abandoned - Filed to reinstate
1175077 Canada 29-Apr-03 8/25/04
Searched - in prosecution
--------------------------------------------------------------------------------------------------------------
RUSSIAN RED 76421463 U.S. 14-Jun-02 Published for Opposition Sept 7, 2004
1217734 Canada 21-May-04 Refile - approved on Oct 27, 2004
1136432 Canada 5-Apr-02 In prosecution
2878908 EU 10-Apr-02 Publication period completed on 11/02/2004
--------------------------------------------------------------------------------------------------------------
13
------------------------------------------------------------------------------------------------------------
Trademark Application Country Filing Date Status
No.
------------------------------------------------------------------------------------------------------------
TRIM PHYSIQUE 1136431 Canada 5-Apr-02 Searched - in prosecution
------------------------------------------------------------------------------------------------------------
VITALSTATE DESIGN 78265094 U.S. 20-Jun-03 Published for opp on Oct. 12, 2004
1178654 Canada 29-May-03 In prosecution
------------------------------------------------------------------------------------------------------------
VITALSTATE 76421450 U.S. 14-Jun-02 Allowed
1136430 Canada 5-Apr-02 In prosecution
2877702 EU 10-Apr-02 Publication competed on Oct 5, 2004
------------------------------------------------------------------------------------------------------------
WOLVERINES and DESIGN 78259485 U.S. 6-Jun-03 Published for Opposition Sept 21, 2004
------------------------------------------------------------------------------------------------------------
SCHEDULE B - COMMON LAW TRADEMARKS
OTHER
DATE OF FIRST COUNTRIES IN
USE IN COUNTRY OF WHICH XXXX IS OWNER OF
TRADEMARK COMMERCE FIRST USE IN USE TRADEMARK
--------- -------- --------- ------ ---------
14
EXHIBIT 10.16
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement, dated as of __________,
200_ (this "IP Security Agreement"), is made by and among Vitalstate Inc., a New
York corporation (the "Grantor"), and Scepter Holdings Inc., a Canadian
corporation (the "Secured Party").
RECITALS
A. The Secured Party has agreed to loan to the Grantor up to US$6,400,000
pursuant to that certain Loan Agreement, dated as of February 10, 2004 (the
"Initial Loan Agreement"), among the Grantor, Vitalstate Canada Ltd., a Canadian
corporation ("Vitalstate Canada"), Vitalstate US, Inc., a Florida corporation
("Vitalstate US"), and the Secured Party, as amended by Amendment No. 1 to Loan
Agreement, Guaranty and Security Agreement, dated as of June 15, 2004
("Amendment No. 1"), by Amendment No. 2 to Loan Agreement, Guaranty Security
Agreement and Notes, dated as of October 21, 2004 ("Amendment No. 2"), and by
Amendment No. 3 to Loan Agreement, Guaranty, Security Agreement and Notes, dated
as of _________, 200_ ("Amendment No. 3"), each among the Grantor, Vitalstate
Canada, Vitalstate US and the Secured Party. The Initial Loan Agreement, as
amended by Amendment Xx. 0, Xxxxxxxxx Xx. 0 and Amendment No. 3 (collectively,
the "Amendments"), is referred to as the "Loan Agreement."
B. As of the date of this IP Security Agreement, the Secured Party has
loaned to the Grantor an aggregate of US$_________ pursuant to the Loan
Agreement, which loan is evidenced by a series of promissory notes (the
"Notes").
C. Each of Vitalstate Canada and Vitalstate US have guaranteed the
repayment of the Notes pursuant to a Guaranty, dated February 10, 2004, made by
Vitalstate Canada and Vitalstate US in favor of the Secured Party, as amended by
the Amendments (such Guaranty, as amended by the Amendments, is referred to as
the "Guaranty"). Each of the Grantor, Vitalstate Canada and Vitalstate US have
granted to the Secured Party a security interest in their accounts receivable,
inventory and certain other assets, as set forth in that certain Security
Agreement, dated as of February 10, 2004, among the Grantor, Vitalstate Canada,
Vitalstate US and the Secured Party, as amended by the Amendments.
D. To secure the Secured Obligations (as defined below), the Grantor has
agreed to grant the Secured Party a security interest in and lien upon the
Intellectual Property Collateral (as defined below).
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, and intending to be legally bound, the parties hereto agree
as follows:
1. Grant of Security Interest. The Grantor hereby unconditionally and
irrevocably pledges and grants to the Secured Party a continuing security
interest in and continuing first lien upon all of its right, title and interest
in and to its property and assets set forth below (the "Intellectual Property
Collateral"):
(a) Copyrights. Any and all U.S. and foreign copyright rights,
including copyright applications, copyright registrations and like protections,
in each work or authorship and derivative work thereof, whether published or
unpublished, and whether or not the same also constitutes a trade secret, now or
hereafter existing, created, acquired or held, including, but not limited to,
those set forth on Exhibit A attached hereto (collectively, the "Copyrights");
(b) Patents. Any and all U.S. and foreign patents, patent
applications and like protections now or hereafter existing, including, but not
limited to, improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same, including, but not limited to,
the patents and patent applications set forth on Exhibit B attached hereto
(collectively, the "Patents");
(c) Trademarks. Any and all U.S. and foreign trademark and
servicemark rights now or hereafter existing, whether registered or not,
applications to register and registrations of the same, including, but not
limited to, those set forth on Exhibit C attached hereto (collectively, the
"Trademarks"), and like protections, including, but not limited to, common law
rights, and the entire goodwill associated therewith and symbolized by such
Trademarks;
(d) Claims for Damages. Any and all claims for damages by way of
past, present and future infringements of any of the intellectual property
rights identified above, with the right, but not the obligation, to xxx for and
collect such damages for said infringement of the intellectual property rights
identified above;
(e) Licenses. Any and all licenses or other rights to use any of the
Copyrights, Patents or Trademarks (including any amendments, extension and
renewals thereof) and all license fees and royalties arising from such use to
the extent permitted by such license or rights;
(f) Amendments, Extensions and Renewals. Any and all amendments,
extensions and renewals of any of the Copyrights, Patents or Trademarks; and
(g) Proceeds and Products. Any and all proceeds and products of the
foregoing, including, but not limited to, all payments under insurance or any
indemnity or warranty payable in respect of any of the foregoing.
2. Continuing Security Interest. This IP Security Agreement will create a
continuing security interest in the Intellectual Property Collateral and will
(i) remain in full force and effect until payment or performance in full of the
Secured Obligations, (ii) be binding upon the Grantor and its successors and
assigns and (iii) inure to the benefit of the Secured Party and its successors
and assigns.
3. Secured Obligations. This IP Security Agreement is made and the
security interests created hereby are granted to the Secured Party to secure the
full and prompt payment or performance of the following (the "Secured
Obligations"): (a) the obligations of the Grantor pursuant to the Loan Agreement
and this IP Security Agreement, (b) all reasonable costs incurred by the Secured
Party to obtain, preserve, perfect and enforce the liens and security interests
created hereby; and (c) any renewals, continuations, modifications or extensions
of any of the foregoing.
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4. Authorization and Request. The Grantor authorizes and requests that the
Register of Copyrights, the Commissioner of Patents and Trademarks and any other
relevant U.S. or foreign governmental authority record this IP Security
Agreement.
5. Covenants and Warranties. The Grantor represents, warrants, covenants
and agrees as follows:
(a) The Grantor is now the sole owner of the Intellectual Property
Collateral, except for non-exclusive licenses granted by the Grantor to third
parties in the ordinary course of business.
(b) The Grantor has the requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The execution,
delivery and performance of this Agreement have been duly authorized by all
necessary action on the part of the Grantor. The performance of this IP Security
Agreement does not conflict with or result in a breach of any other agreement or
contract to which the Grantor is bound and this IP Security Agreement
constitutes a security interest.
(c) During the term of this IP Security Agreement, the Grantor will
not transfer or otherwise encumber any Intellectual Property Collateral, except
as set forth in this IP Security Agreement.
(d) To its knowledge, each of the Patents, if any, which has been
issued is valid and enforceable, and no part of the Intellectual Property
Collateral has been judged invalid, unenforceable or unprotectable, in whole or
in part, and no claim has been made that any part of the Intellectual Property
Collateral violates the rights of any third party.
(e) The Grantor shall promptly advise the Secured Party in writing
of any adverse change in the composition of the Intellectual Property Collateral
or any adverse determination against the Intellectual Property Collateral, as
well as any subsequent ownership right of the Grantor in or to any Copyright,
Patent or Trademark.
(f) The Grantor shall, at its own cost and expense, diligently
prosecute, file and make (to the extent that it has not already done so) an
application to register with all appropriate offices or agencies any of the
Intellectual Property Collateral created, acquired or held by the Grantor now or
in the future.
(g) The Grantor shall (i) protect, defend and maintain the validity
and enforceability of the Copyrights, Patents and Trademarks, (ii) use its best
efforts to detect infringements of the Copyrights, Patents and Trademarks and
promptly advise the Secured Party in writing of infringements detected and (iii)
not allow any Copyright, Patent or Trademark to be abandoned, forfeited or
dedicated to the public without the written consent of the Secured Party, which
shall not be unreasonably withheld, unless the Grantor determines that
reasonable business practices suggest that abandonment is appropriate.
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(h) In the event that the Grantor shall register, seek to register,
or apply for or seek issuance of any copyright, patent or trademark with the
United States Copyright Office, the United States Patent and Trademark Office or
any similar office or agency of any foreign country it shall: (i) no later than
fifteen (15) business days' after such registration or the filing of such an
application, give notice to the Secured Party of such registration or the filing
of such application and provide the Secured Party with a copy thereof; (ii)
promptly upon the delivery by the Secured Party of a security agreement or such
other documents as the Secured Party may reasonably request in order to maintain
and perfect the priority of the Secured Party's security interest in the
Copyright, Patent or Trademark registered, execute the same; and (iii) promptly
after such execution, record such security documents with the United States
Copyright Office, the United States Patent and Trademark Office or any similar
office or agency of any foreign country. The Grantor shall promptly provide to
the Secured Party a copy of the Copyright, Patent or Trademark application(s) so
filed, together with evidence of the recording of the security documents
necessary for the Secured Party to maintain and perfect the priority of its
security interest in such Copyright, Patent or Trademark.
(i) This IP Security Agreement creates and, in the case of after
acquired Intellectual Property Collateral, this IP Security Agreement will
create at the time the Grantor first has rights in such after acquired
Intellectual Property Collateral, in favor of the Secured Party a valid and
perfected first priority security interest in the Intellectual Property
Collateral in the United States and throughout the world securing the payment
and performance of the Secured Obligations upon making the filings referred to
in clause (j) below.
(j) Except for the filing of appropriate UCC financing statements,
and the filing with the United States Patent and Trademark Office (or similar
office or agency of the appropriate foreign countries) with respect to the
Patents and Trademarks and the filing with the Register of Copyrights (or
similar office or agency of the appropriate foreign countries) with respect to
the Copyrights necessary to perfect the security interests created hereunder, no
authorization, approval or other action by, and no notice to or filing with, any
U.S. or foreign governmental authority or regulatory body is required either (i)
for the grant by the Grantor of the security interest granted hereby or for the
execution, delivery or performance of this IP Security Agreement by the Grantor
in the U.S. or abroad or (ii) for the perfection in the United States or abroad
or the exercise by the Secured Party of its rights and remedies hereunder.
(k) All information heretofore, herein or hereafter supplied to the
Secured Party by or on behalf of the Grantor with respect to the Intellectual
Property Collateral is accurate and complete in all material respects.
(l) The Grantor shall not enter into any agreement that would impair
or conflict with the Grantor's obligations hereunder without the Secured Party's
prior written consent. The Grantor shall not permit the inclusion in any
contract to which it becomes a party of any provision that could or might in any
way prevent the creation of a security interest in the Grantor's rights and
interest in any property that would fit within the definition of Intellectual
Property Collateral herein contained and that is acquired under such contract.
(m) Upon any officer of the Grantor obtaining actual knowledge
thereof, the Grantor will promptly notify the Secured Party in writing of any
event that adversely affects the value of any Intellectual Property Collateral,
the ability of the Grantor to dispose of any Intellectual Property Collateral of
the rights and remedies of the Secured Party in relation thereto, including the
levy of any legal process against any of the Intellectual Property Collateral.
4
6. The Secured Party's Rights. The Secured Party shall have the right, but
not the obligation, to take, at the Grantor's sole expense, any actions that the
Grantor is required under this IP Security Agreement to take but which the
Grantor fails to take, after fifteen (15) business days' notice to the Grantor.
The Grantor shall reimburse and indemnify the Secured Party for all reasonable
costs and reasonable expenses incurred in the reasonable exercise of its rights
under this section 6.
7. Inspection Rights. The Grantor hereby grants to the Secured Party and
its employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to the Grantor, any of the Grantor's
plants and facilities that manufacture, install or store products (or that have
done so during the prior six-month period) that are sold utilizing any of the
Intellectual Property Collateral, and to inspect the products and quality
control records relating thereto upon reasonable written notice to the Grantor
and as often as may be reasonably requested: provided, however, that the Secured
Party may not exercise the rights granted to it pursuant to this Section 7 on
more than six (6) occasions in any calendar year.
8. Further Assurances; Attorney in Fact.
(a) On a continuing basis, the Grantor will make, execute,
acknowledge and deliver, and file and record in the proper filing and recording
places in the United States and foreign countries, as appropriate, all such
instruments, including appropriate financing and continuation statements and
collateral agreements and filings with the United States Patent and Trademarks
Office and the Register of Copyrights, and take all such action as may
reasonably be deemed necessary or advisable, or as requested by the Secured
Party, to perfect the Secured Party's security interest in the Intellectual
Property Collateral and otherwise to carry out the intent and purposes of this
IP Security Agreement, or for assuring and confirming to the Secured Party the
grant or perfection of a security interest in all Intellectual Property
Collateral.
(b) The Grantor hereby irrevocably appoints the Secured Party as the
Grantor's attorney-in-fact, with full authority in the place and stead of the
Grantor and in the name of the Grantor, the Secured Party or otherwise, from
time to time in the Secured Party's discretion, upon the Grantor's failure or
inability to do so, to take any action and to execute any instrument which the
Secured Party may deem necessary or advisable to accomplish the purposes of this
IP Security Agreement, including:
(i) To modify, in its sole discretion, this IP Security
Agreement without first obtaining the Grantor'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 Grantor after the execution
hereof or to delete any reference to any right, title or interest in any
Copyrights, Patents or Trademarks in which the Grantor no longer has or claims
any right, title or interest; provided, however, that the Secured Party may not
exercise the rights granted to it pursuant to this Section 8(b)(i) unless (A) it
shall have given the Grantor notice of its intent to exercise such rights (which
notification must set forth the manner in which the Secured Party intends to
modify Exhibit A, Exhibit B or Exhibit C) and the opportunity to amend such
exhibits in the manner contemplated by such notice and (B) the Grantor has not
so modified such exhibits within at least fifteen (15) days after it received
such notice from the Secured Party; and
5
(ii) To file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the
Intellectual Property Collateral without the signature of the Grantor where
permitted by law.
9. Events of Default. The occurrence of any of the following shall
constitute an "Event of Default" under this IP Security Agreement:
(a) An event of default occurs under the Loan Agreement; or
(b) The Grantor breaches any warranty or agreement made by the
Grantor in this IP Security Agreement and such warranty or agreement is not
capable of being cured by the Grantor or, if such warranty or agreement is
capable of being cured by the Grantor, it is not cured within five (5) business
days of such breach.
10. Remedies. Upon the occurrence and continuance of an Event of Default,
the Secured Party shall have the right to exercise all the remedies of a secured
party under the Uniform Commercial Code, including, but not limited to, the
right to require the Grantor to assemble the Intellectual Property Collateral
and any tangible property in which the Secured Party has a security interest and
to make it available to the Secured Party at a place designated by the Secured
Party. The Secured Party shall have a nonexclusive, royalty free license to use
the Copyrights, Patents and Trademarks to the extent reasonably necessary to
permit the Secured Party to exercise its rights and remedies upon the occurrence
of an Event of Default. The Grantor will pay any expenses (including, but not
limited to, reasonable attorney's fees) incurred by the Secured Party in
connection with the exercise of any of the Secured Party's rights hereunder,
including, but not limited to, any expense incurred in disposing of the
Intellectual Property Collateral. The cash proceeds received by the Secured
Party in respect of any such sale are to be applied, first, to the payment of
any expenses incurred by the Secured Party in connection with the exercise of
any of its rights hereunder and to the payment of expenses that are the
responsibility of the Grantor pursuant to other provisions of this Agreement (to
the extent that they are then unpaid), second, to the payment of the Secured
Obligations, and third, the remaining proceeds, if any, are to be paid over to
the Grantor. All of the Secured Party's rights and remedies with respect to the
Intellectual Property Collateral shall be cumulative.
11. Indemnity. The Grantor agrees to defend, indemnify and hold harmless
the Secured Party and its owners, directors, officers, employees, and agents
against: (a) all obligations, demands, claims, and liabilities claimed or
asserted by any other party in connection with the transactions contemplated by
this IP Security Agreement, and (b) all losses or expenses in any way suffered,
incurred, or paid by the Secured Party as a result of or in any way arising out
of, following or consequential to transactions between the Secured Party and the
Grantor, under this IP Security Agreement or otherwise relating to the
Intellectual Property Collateral (including, but not limited to, reasonable
attorneys fees and reasonable expenses), including, but not limited to, all
losses or expenses arising out of any defect or malfunction in any product
manufactured, promoted or sold by the Grantor in connection with any Copyright,
Patent or Trademark. Notwithstanding the foregoing, the Grantor shall have no
obligations pursuant to this Section 11 for losses, claims, liabilities, demands
or expenses that result solely and directly from the Secured Party's gross
negligence or willful misconduct.
6
12. Fees and Expenses. The Grantor shall bear all reasonable legal
expenses of the Secured Party in connection with the negotiation, drafting and
execution of this IP Security Agreement and all filings contemplated hereby
13. Confidentiality. In handling any information of a confidential nature
that comes into its possession pursuant to the rights granted to it by this IP
Security Agreement ("Confidential Information"), the Secured Party shall
exercise the same degree of care that it exercises in respect of its own
confidential information. The foregoing sentence shall not be deemed to prohibit
disclosure of Confidential Information (a) to prospective assignees or
transferees of the rights and obligations of the Secured Party under the Loan
Agreement and/or the Guaranty, or (b) as the Secured Party considers appropriate
in exercising the remedies provided to it in this IP Security Agreement.
14. Termination and Reassignment. At such time as the Grantor shall
completely satisfy all of the Secured Obligations, this IP Security Agreement
shall terminate and the Secured Party shall execute and deliver to the Grantor
all deed, assignments, and other instruments as may be necessary or proper to
reinvest in the Grantor full title to the property assigned hereunder, subject
to any disposition thereof which may have been made by the Secured Party
pursuant hereto.
15. Course of Dealing. No course of dealing, nor any failure to exercise,
nor any delay in exercising any right, power or privilege hereunder shall
operate as a waiver thereof.
16. Attorneys' Fees. If any action relating to this IP Security Agreement
is brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys' fees, costs and
disbursements.
17. Amendments. Except as contemplated by Section 8(b)(i) hereof, this IP
Security Agreement may be amended only by a written instrument signed by both
parties hereto.
18. Counterparts. This IP Security Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
19. Severability. Each provision of this IP Security Agreement is intended
to be severable from every other provision, and the invalidity or illegality of
any provision of this IP Security Agreement shall not affect the validity or
legality of any other provision hereof.
20. Law and Jurisdiction. This IP Security Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
regard for choice of law provisions.
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21. Assignment. Without the consent of the Grantor, the Secured Party may
assign or otherwise transfer its rights and obligations hereunder to any other
person or entity in connection with an assignment or other transfer of its
rights and obligations under the Loan Agreement and, in such event, the assignee
shall be entitled, upon notifying the Grantor, to the rights of the Secured
Party hereunder and shall be liable for all of the obligations of the Secured
Party hereunder. Without the prior written consent of the Secured Party, the
Grantor may not assign or otherwise transfer any of its rights or obligations
hereunder.
[The remainder of the page has intentionally been left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this IP Security
Agreement on the day and year first above written.
ADDRESS OF GRANTOR: GRANTOR:
0000 Xxxx Xxxxx Xxxx VITALSTATE INC., a New York corporation
Xxxxxxx Xxxxx, Xxxxxxx 00000
By:___________________________________
Name:
Title:
ADDRESS OF SECURED PARTY: SECURED PARTY:
000 Xxxxxxx Xxxx SCEPTER HOLDINGS INC., a Canadian
Xxxxxxx, Xxxxxxx X0X 0X0 corporation
By:___________________________________
Name:
Title:
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EXHIBIT "A"
COPYRIGHTS (U.S. AND FOREIGN)
SCHEDULE A - ISSUED COPYRIGHTS
COPYRIGHT TITLE AND REGISTRATION DATE OF OWNER OF
DESCRIPTION NUMBER COUNTRY ISSUANCE RECORD
----------- ------ ------- -------- ------
SCHEDULE B - PENDING COPYRIGHT APPLICATIONS
COPYRIGHT TITLE AND APPLICATION DATE OF OWNER OF
DESCRIPTION NUMBER COUNTRY FILING RECORD
----------- ------ ------- ------ ------
SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)
COPYRIGHT FIRST DATE ORIGINAL AUTHOR OR
TITLE AND DATE OF OF OWNER OF COPYRIGHT (IF
DESCRIPTION CREATION PUBLICATION DIFFERENT FROM GRANTOR)
----------- -------- ----------- -----------------------
10
EXHIBIT "B"
SCHEDULE A - PATENTS (U.S. AND FOREIGN)
TITLE NUMBER COUNTRY INVENTORS FILING DATE STATUS
----- ------ ------- --------- ----------- ------
SCHEDULE B - PATENT APPLICATIONS (U.S. AND FOREIGN)
TITLE NUMBER COUNTRY INVENTORS FILING DATE STATUS
----- ------ ------- --------- ----------- ------
11
EXHIBIT "C"
SCHEDULE A - TRADEMARKS (U.S. AND FOREIGN)
REGISTRATION FILING DATE
OR OR
APPLICATION REGISTRATION OWNER OF
TRADEMARK COUNTRY NUMBER DATE STATUS RECORD
--------- ------- ------ ---- ------ ------
SCHEDULE B - COMMON LAW TRADEMARKS
OTHER
DATE OF FIRST COUNTRIES IN
USE IN COUNTRY OF WHICH XXXX IS OWNER OF
TRADEMARK COMMERCE FIRST USE IN USE TRADEMARK
--------- -------- --------- ------ ---------
12
