Exhibit 10.48
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Security Agreement") is entered into
as of October 8, 1999, between Epix Medical, Inc., a Delaware corporation, with
its principal executive offices in Cambridge, Massachusetts (the "Debtor"), and
Mallinckrodt Inc., a Delaware corporation, with its principal offices in St.
Louis, Missouri (the "Secured Party ").
WHEREAS, on and as of the date hereof, the Debtor has executed and
delivered to Secured Party a certain Non-Negotiable Promissory Note ("Note")
with a maximum principal amount of Nine Million Five Hundred Thousand Dollars
($9,500,000) (such promissory note, and any and all amendments, modifications,
extensions, restatements, renewals, refinancings and/or replacements thereof
from time to time being herein referred to as the "Note");
WHEREAS, the indebtedness evidenced by the Note will be secured as
provided in Section 6 thereof and as consistently hereinafter provided; and
WHEREAS, Debtor, in consideration of and in order to induce Secured
Party, from time to time and in accordance with the procedures and limitations
set forth in the Note, to make advances aggregating to a maximum of Nine Million
Dollars ($9,500,000), has determined that it is in the best interest of Debtor
to execute, deliver and perform this Security Agreement;
NOW, THEREFORE, for valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the Debtor and the Secured Party
hereby agree as follows:
1. Definitions. As used in this Security Agreement, and in addition
to terms defined elsewhere in this Security Agreement, the term "Secured Assets"
shall mean and include all of Debtor's intellectual property, and Debtor's
interests therein of every kind and description, wherever located, now owned or
hereafter acquired by the Debtor, and whether now existing or hereafter arising,
including, without limitation, all patents and applications for patents (among
them being those patents and applications for patents set forth on Schedule 1
attached hereto), trademarks, trademark applications, trade secrets and
confidential and proprietary scientific and technical data and information.
2. Definitions Incorporated. Ail capitalized terms used herein,
unless otherwise specifically defined, shall have the meaning ascribed to such
terms in the Note or in the Strategic Collaboration Agreement, as appropriate.
In the event that the Note is from time to time amended or modified or any
instrument is substituted in replacement thereof, such amendment, modification
or substitution shall, from and after the date thereof, be included within the
definition of the "Note" as used herein.
1
3. Security Interest. The Debtor hereby gives and grants to the
Secured Party a security interest in all the Secured Assets and all of their
right, title and interest therein, whether now owned or existing or hereafter
acquired or arising, together with all proceeds therefrom to secure (i) the
payment of all principal of and interest heretofore or hereafter owing or
outstanding on the Note (including any notes substituted therefor), (ii) the
payment by the Debtor of all costs and expenses (including reasonable attorney's
fees) incurred by the Secured Party in the collection of amounts due under the
Note or in enforcing its rights under the Note or this Security Agreement and
(iii) the performance by the Debtor of all its obligations under the Note or
this Security Agreement.
4. Debtor Remains Liable. Anything herein to the contrary
notwithstanding, (i) Debtor shall remain liable under all contracts and
agreements included in the Secured Assets to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Security Agreement had not been executed, (ii) the exercise by the Secured
Party of any of its rights hereunder shall not release Debtor from any of its
duties or obligations under the contracts and agreements included in the Secured
Assets, and (iii) the Secured Party shall not have any obligation or liability
under the contracts and agreements included in the Secured Assets or be
obligated to perform any of the obligations or duties of Debtor thereunder or to
take any action to collect or enforce any claim for payment assigned hereunder.
5. Records. Debtor will at all times keep accurate and complete
records of all items included in the Secured Assets, and the Secured Party shall
have the right at all reasonable times, without disruption to the business of
the Debtor, to examine and inspect the same and to make copies thereof.
6. Representations, Warranties and Covenants of the Debtor. With
respect to the Secured Assets, Debtor hereby represents, warrants and covenants
to the Secured Party as follows:
(i) During the term of this Security Agreement, Debtor will have
such rights of ownership or other rights to each item of the Secured
Assets as Debtor has on and as of the date hereof; the same will be used
solely in connection with the Debtor's business; all of the Secured Assets
are free and clear of all liens and encumbrances whatsoever, including any
security interests or collateral interests of any other party.
(ii) Debtor will execute all financing statements and amendments and
supplements thereto, if any, and will attend to the filing of any and all
continuation statements, as may be reasonably requested by the Secured
Party in order to continue the validity of the security interests of the
Secured Party hereunder.
(iii) Debtor shall, from time to time as requested by the Secured
Party, take
2
such action and execute and deliver to the Secured Party all such
instruments, supplements, further assurances and security or other
agreements as may be reasonably required or reasonably requested by the
Secured Party in order to perfect and continue the Secured Party's
security interest in the Secured Assets hereunder.
(iv) Debtor agrees to pay, and to save the Secured Party harmless
from, any and all liabilities, costs and expenses (including, without
limitation, reasonable legal fees and expenses) except those caused by
wilful misconduct or gross negligence of the Secured Party (1) with
respect to, or resulting from, any delay in paying, any and all excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Secured Assets, and (2) in connection with any of
the transactions contemplated by this Security Agreement.
(v) Debtor will not create, incur or permit to exist, and it will
defend the Secured Assets against, and it will take such other action as
is necessary to remove, any lien or claim on or to the Secured Assets,
other than the liens created hereby, and, subject to the terms of any
agreements relating to licensed Secured Assets, it will defend the right,
title and interest of the Secured Party in and to any of the Secured
Assets against the claims and demands of all persons whomsoever.
(vi) Debtor will not sell, transfer, lease, license or otherwise
dispose of any of the Secured Assets, except upon the advance written
consent of the Secured Party.
(vii) Debtor has the power to execute and deliver this Security
Agreement and to perform its obligations hereunder and has taken all
necessary action and has received all required consents (private and
governmental) to authorize such execution, delivery and performance, and
therefore this Security Agreement constitutes the legal, valid and binding
obligation of the Debtor, enforceable against it and the Secured Assets in
accordance with its terms. Furthermore, this Security Agreement does not
and will not violate any judicial decree or order, or any rules or
regulations of any federal, state or local government, or any branch,
agency or instrumentality of same.
(viii) The execution, performance and delivery of this Security
Agreement does not violate or conflict with the terms or provisions of, or
the Debtor's performance under, any agreement, document or instrument by
which the Debtor is bound.
Notwithstanding anything to the contrary contained herein,
including, without limitation, the provisions of clauses (i), (v) and (vi) of
this Xxxxxxx 0, Xxxxxx may, prior to the occurrence of an Event of Default,
without the consent of the
3
Secured Party, grant licenses to or under such of the Secured Assets as do not
relate to EPIX s AngioMARK product, and any payments received by EPIX in
connection with the grant of any such license (whether in the form of license
fees, upfront payments, milestone payments, royalties or otherwise) shall not be
considered proceeds covered by the security interest granted to the Secured
Party hereunder; provided that, all proceeds from the grant of any such license
that are received by the Debtor or which the Debtor is entitled to receive
subsequent to the occurrence of an Event of Default shall be considered proceeds
covered by the security interest granted to the Secured Party hereunder.
7. Secured Party's Duties. The powers conferred on the Secured
Party hereunder are solely to protect its interest in the Secured Assets and
shall not impose any duty upon it to exercise any such powers. Secured Party
shall have no obligation to preserve rights against prior parties.
8. Default Remedies.
(a) Except as expressly and unambiguously set forth herein,
this Security Agreement shall be deemed absolute and without conditions, and
upon an Event of Default the Secured Party may enforce its rights with respect
to the Secured Assets without first being required to attempt collection of any
sums due from the Debtor. If an Event of Default shall occur and remain uncured
(if it is curable by the express terms of the Note) for sixty (60) days after
receipt of notice thereof by Debtor from the Secured Party, the Secured Party
shall have the following rights:
(i) to perform any defaulted covenant or agreement of this Security
Agreement to such extent as the Secured Party shall reasonably determine
and advance such moneys as it shall deem reasonably advisable for the
aforesaid purpose and all moneys so advanced, together with interest
thereon from the date advanced until paid at a rate per annum equal to the
rate then in effect on the Note, shall be secured hereby and shall be
repaid promptly after notice of the amount due without demand, provided,
however, that nothing herein contained shall be construed to require the
Secured Party to advance money for any of the aforesaid purposes;
(ii) to notify all account debtors, to the extent permitted by
applicable law or regulations, to pay directly to the Secured Party or
otherwise as the Secured Party may specify all amounts they owe then or
thereafter to Debtor until such time as the Secured Party has received all
amounts to which it is entitled under the Note and this Security
Agreement;
(iii) to take control of any and all proceeds to which the Secured
Party may be entitled under this Security Agreement, the Note, or under
any applicable laws;
4
(iv) to take immediate possession of the Secured Assets and, with or
without taking possession of the Secured Assets, to sell, lease or
otherwise dispose of any or all of the Secured Assets, either at public or
private sale, upon commercially reasonable terms, and the Secured Party
may become the purchaser thereof at public sale; provided that, any sale
may be adjourned at any time and from time to time to a reasonably
specified time and place by announcement at the time and place of sale or
by publication or otherwise of the time and place of such adjourned sale;
provided further that, the proceeds of any sale shall be applied (1) first
to the expenses of taking, holding and preparing for sale or disposition,
and sale or disposition and the like (including reasonable attorneys'
fees), (2) next to the principal and interest due under the Note and the
other amounts secured under clauses (i) and (ii) of Section 3 hereof, (3)
next to amounts secured under clause (iii) of Section 3 hereof, (4) next
to the holder of any subordinate security interest therein if written
notification of demand therefor is received and verified by the Debtor
before distribution of the proceeds and (5) lastly, any surplus to Debtor
and Debtor shall remain liable for any deficiency; and provided finally
that, any such sale, public or private, may be made on credit at the
option of the Secured Party;
(v) to take immediate possession of the Secured Assets and to use or
operate the Secured Assets in order to preserve the same or their value,
and collect, receive and use all of the net profits from such use or
operation to pay indebtedness secured by such Secured Assets; provided
that, any continuing royalties or other similar amounts derived from the
commercial sale of any products developed from the Secured Assets (as
opposed to the sale of any products deriving from intellectual property
that may be developed by the Secured Party after the termination hereof or
after such time as there shall be the occurrence of an Event of Default
hereunder, whichever occurs first) shall be deemed to be Operating Margin
for purposes of Section 8.6 of the Strategic Collaboration Agreement;
provided further that, any sale or license by the Secured Party of any
intellectual property included in the Secured Assets to any third party
shall be deemed to be solely for the account of the Secured Party and not
in any manner or portion for the account of Debtor or distributable to
Debtor under and pursuant to the terms of the Strategic Collaboration
Agreement;
(vi) to require Debtor, to the extent practicable, to assemble the
Secured Assets and make them available to the Secured Party at such
locations as the Secured Party shall reasonably designate;
(vii) to enter all of the Debtor's facilities to remove the Secured
Assets therefrom and take possession of the appropriate portions of the
Debtor's books and records and computer hardware and software, and to use
all of the same in a manner the Secured Party deems appropriate in order
to preserve and sell or otherwise dispose of the Secured Assets;
5
(viii) to (without assuming any obligations or liability
thereunder), at any time and from time to time, enforce against any
licensee or sublicensee all rights and remedies of the Debtor in, to and
under any patent licenses or trademark licenses included in the Secured
Assets and, in the exercise of commercial reasonableness, take or refrain
from taking any action under any such licenses, and the Debtor hereby
releases the Secured Party free and harmless from and against any claims
arising out of, any lawful action so taken or omitted to be taken under
applicable law with respect thereto;
(ix) to proceed to protect and enforce its rights under the Note and
this Security Agreement by a suit or suits in equity or at law, whether
for specific performance or observance of any terms, provisions, covenants
or conditions herein or therein contained in aid of the execution of any
power therein or herein granted, for any foreclosure hereunder or
thereunder, or for the enforcement of any other proper legal or equitable
remedy;
(x) to exercise any such additional and/or different rights or
remedies as are provided for in the Note; and
(xi) to act as true and lawful attorney-in-fact of the Debtor, with
full power of substitution, with full irrevocable power and authority in
the place and stead of the Debtor, in the name of the Debtor, or in its
own name, for the purpose of carrying out the terms of this Security
Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be reasonably necessary or
desirable to accomplish the purposes of this Security Agreement.
(b) The Secured Party shall have any and all other rights and
remedies provided by law or equity, including, without limitation, the rights
and remedies of a secured party. All of the Secured Party's rights and remedies
will be cumulative, and no waiver of any default will affect any other
subsequent default. The rights and remedies provided in this Security Agreement
are cumulative, may be exercised concurrently or separately, may be exercised
from time to time and in such order, without any marshalling, as the Secured
Party shall determine. Nothing herein contained shall be construed as preventing
the Secured Party from taking all reasonable and lawful actions to protect its
interest in the event that liquidation, insolvency, bankruptcy, reorganization
or foreclosure proceedings of any nature whatsoever affecting the property or
assets of Debtor should be instituted. The Secured Party's sole duty with
respect to the custody, safekeeping and physical preservation of the Secured
Assets in its possession, shall be to deal with it in the same manner as the
Secured Party deals with similar property for its own account. Neither the
Secured Party, nor any of its respective directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon all or any
part of the Secured Assets or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Secured Assets upon
6
the request of the Debtor or otherwise.
9. General Provisions. (a) This Security Agreement and the security
interests of the Secured Party in the Secured Assets created hereby shall cease
and terminate only upon repayment in full of the principal and any accrued
interest under and pursuant to the Note.
(b) Debtor hereby waives all demands, notices, presentments, claims,
defenses and protests of any kind, except as expressly and unambiguously
provided herein and unless not permitted by applicable law, which might in any
manner adversely affect the rights of Secured Party herein.
(c) This Security Agreement shall be construed to be a contract made
under and pursuant to the laws of New York, and all of the terms, covenants and
conditions contained herein shall be governed by and construed in accordance
with such laws, without giving effect to the conflict of laws principles
contained in such laws.
(d) This Security Agreement, all supplements hereto and all
amendments hereof, shall inure to the benefit of and be binding upon the Debtor,
the Secured Party, and their respective successors and assigns, but this
Security Agreement may not be assigned by Debtor or the Secured Party without
the advance written consent of the other party.
(e) No course of dealing between the Debtor and the Secured Party or
any delay on the part of the Secured Party in exercising any rights hereunder
shall affect the rights of the Secured Party, on any future occasion, to insist
on strict compliance with the terms hereof or to exercise any available remedy.
No waiver by either party of any term, provision, covenant or condition
contained in this Security Agreement, or of any breach of any such term,
provision, covenant or condition, shall constitute a waiver by that party of any
subsequent breach or justify or authorize the non-observance by the other party
on any other occasion of such term, provision, covenant or condition contained
in this Security Agreement.
(f) The invalidity or unenforceability of any term or condition
hereof shall not affect the validity or enforceability of any other term or
condition hereof or of this Security Agreement as a whole.
(g) In the event of any conflict or inconsistency between the terms
of the Note and those of this Security Agreement, the former shall prevail.
(h) No remedy herein conferred upon the Secured Party is intended to
be exclusive of any other remedy and each and every such remedy shall be
cumulative and shall be in addition to every other remedy provided hereunder or
now or hereafter existing at law or in equity.
7
IN WITNESS WHEREOF, the parties have caused this Security Agreement
to be executed in St. Louis, Missouri at the time first above written by their
officers thereunto duly authorized.
MALLINCKRODT INC.
("SECURED PARTY")
By : /s/ Xxxxxxx X. Haggons
--------------------------
EPIX MEDICAL, INC.
("DEBTOR")
By : /s/ Xxxxxxx X. Xxxx
--------------------------
Xxxxxxx X. Xxxx, President
8
