Exhibit 10.20
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PATENT SECURITY AGREEMENT
This Patent Security Agreement, dated as of October 30, 2006, between
Speaking Roses International, Inc., a Utah corporation (the "Debtor"), and Dos
Lagos, LLC, a Utah limited liability company (the "Secured Party").
WHEREAS, Debtor has executed and delivered to Secured Party a Secured
Promissory Note of even date herewith in the original principal amount of
$181,000 (as it may be amended, restated, modified or replaced in substitution
from time to time, the "Note"); and
WHEREAS, to induce Secured Party to incur the indebtedness under the
Note, Debtor wishes to grant a security interest in favor of Lender as herein
provided;
NOW, THEREFORE, in consideration of the promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Definitions; Interpretation.
(a) Terms Defined in Note. All capitalized terms used in this Agreement
and not otherwise defined herein shall have the meanings assigned to them in the
Note.
(b) Terms Defined in UCC. Where applicable in the context of this
Agreement and except as otherwise defined herein, terms used in this Agreement
shall have the meanings assigned to them in the Uniform Commercial Code of the
State of Utah.
(c) Obligations. The term "Obligations," as used herein, means all of
the indebtedness, obligations and liabilities of Debtor to Secured Party,
individually or collectively, whether direct or indirect, joint or several,
absolute or contingent, due or to become due, now existing or hereafter arising
under or in respect of the Note and this Agreement, and any additional
indebtedness, obligations and liabilities of Debtor to Secured Party hereafter
arising.
(d) Construction. In this Agreement, the following rules of
construction and interpretation shall be applicable: (i) no reference to
"proceeds" in this Agreement authorizes any sale, transfer, or other disposition
of any Collateral by Debtor; (ii) "includes" and "including" are not limiting;
(iii) "or" is not exclusive; and (iv) "all" includes "any" and "any" includes
"all."
2. Security Interest.
(a) Grant of Security Interest. As security for the payment and
performance of the Obligations, Debtor hereby assigns, transfers and conveys to
Secured Party, and grants to Secured Party a security interest in and mortgage
to, all of Debtor's right, title and interest in, to and under the following
property, in each case whether now or hereafter existing or arising or in which
Debtor now has or hereafter owns, acquires or develops an interest and wherever
located (collectively, the "Collateral"):
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(i) all patents and patent applications, domestic or foreign, all
licenses relating to any of the foregoing and all income and royalties with
respect to any licenses as described in Schedule A, all rights to xxx for past,
present or future infringement thereof, all rights arising therefrom and
pertaining thereto and all reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof; and
(ii) all proceeds of any and all of the foregoing Collateral
(including license royalties, rights to payment, accounts and proceeds of
infringement suits) and, to the extent not otherwise included, all payments
under insurance (whether or not Secured Party is the loss payee thereof) or any
indemnity, warranty or guaranty payable by reason of loss or damage to or
otherwise with respect to the foregoing Collateral.
(b) Continuing Security Interest. Debtor agrees that this Agreement
shall create a continuing security interest in the Collateral which shall remain
in effect until terminated in accordance with Section 10.
3. Perfection. Debtor hereby authorizes Secured Party to record and file this
Agreement, or an abstract thereof, or any other document describing Secured
Party's interest in the Collateral with the United States Patent and Trademark
Office and the Utah Division of Corporations and Commercial Code at any time
following the date on which the Board of Directors of Debtor has approved and
authorized the Note, this Agreement and the respective transactions contemplated
thereby. Debtor shall use its commercially reasonable efforts to cause the Board
of Directors of Debtor to approve and authorized the Note, this Agreement and
the respective transactions contemplated thereby within twenty days of the date
hereof. If the Board of Directors of Debtor does not approve or authorize the
Note, this Agreement or the respective transactions contemplated thereby within
twenty days of the date hereof, Secured Party acknowledges that Debtor shall not
be deemed to have authorized to record and file this Agreement, or an abstract
thereof, or any other document describing Secured Party's interest in the
Collateral with the United States Patent and Trademark Office or the Utah
Division of Corporations and Commercial Code.
4. Representations and Warranties. Debtor represents and warrants to Secured
Party that a true and correct list of all of the existing Collateral consisting
of U.S. patents and patent applications or registrations owned by Debtor, in
whole or in part, is set forth in Schedule A.
5. Further Acts. Subject to Section 3 hereof, on a continuing basis, Debtor
shall make, execute, acknowledge and deliver, and file and record in the proper
filing and recording places, all such instruments and documents, and take all
such action as may be necessary or advisable or may be requested by Secured
Party to carry out the intent and purposes of this Agreement, or for assuring,
confirming or protecting the grant or perfection of the security interest
granted or purported to be granted hereby, to ensure Debtor's compliance with
this Agreement or to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to the Collateral, including any documents for
filing with the United States Patent and Trademark Office or any applicable
state office. Subject to Section 3 hereof, Secured Party may record this
Agreement, an abstract thereof, or any other document describing Secured Party's
interest in the Collateral with the United States Patent and Trademark Office.
In addition, subject to Section 3 hereof, Debtor authorizes Secured Party to
file financing statements describing the Collateral in any filing office in the
State of Utah deemed appropriate by Secured Party.
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6. Binding Effect. This Agreement shall be binding upon, inure to the benefit
of and be enforceable by Debtor, Secured Party and their respective successors
and assigns. Debtor may not assign, transfer, hypothecate or otherwise convey
its rights, benefits, obligations or duties hereunder except as specifically
permitted by the Note.
7. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of Utah, except as required by mandatory
provisions of law or to the extent the perfection or priority of the security
interests hereunder, or the remedies hereunder, in respect of any Collateral are
governed by the law of a jurisdiction other than Utah.
8. Entire Agreement; Amendment. This Agreement and the Note, together with
the Schedules hereto and thereto, contains the entire agreement of the parties
with respect to the subject matter hereof and supersedes all prior drafts and
communications relating to such subject matter. Neither this Agreement nor any
provision hereof may be modified, amended or waived except by the written
agreement of the parties.
9. Counterparts. This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement. Delivery of an executed counterpart
of this Agreement by facsimile shall be equally as effective as delivery of a
manually executed counterpart. Any party hereto delivering a counterpart of this
Agreement by facsimile shall also deliver a manually executed counterpart, but
the failure to so deliver a manually executed counterpart shall not affect the
validity, enforceability, or binding effect hereof.
10. Termination. Upon payment and performance in full of all Obligations, the
security interests created by this Agreement shall terminate and Secured Party
shall promptly execute and deliver to Debtor such documents and instruments
reasonably requested by Debtor as shall be necessary to evidence termination of
all such security interests given by Debtor to Secured Party hereunder,
including cancellation of this Agreement by written notice from Secured Party to
the United States Patent and Trademark Office.
11. Severability. If one or more provisions contained in this Agreement shall
be invalid, illegal or unenforceable in any respect in any jurisdiction or with
respect to any party, such invalidity, illegality or unenforceability in such
jurisdiction or with respect to such party shall, to the fullest extent
permitted by applicable law, not invalidate or render illegal or unenforceable
any such provision in any other jurisdiction or with respect to any other party,
or any other provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Patent
Security Agreement, as of the date first above written.
Dos Lagos, LLC Speaking Roses International, Inc.
By: By:
Xxxxxx X. Xxxxxx, Manager Xxxx X. Xxxxxxx, President
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SCHEDULE A
to the Patent Security Agreement
Debtor: Speaking Roses International, Inc.
Pending U.S. Patents and Applications of Debtor
Patent No.
U.S. Patent #: 6,874,419.
U.S. Patent #: 7,089,860.
Tangier Patent #: 2621.
New Zealand Patent #: 531922.
South Africa Patent #: 2004/2378.
Morocco Patent #: 26335.
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