[EXHIBIT 10.19]
INTELLECTUAL PROPERTY SECURITY AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT (this
"Agreement" dated as of March 30, 2005, by and among Med Gen,
Inc., a Nevada corporation (the "Company"), and the secured
parties signatory hereto and their respective endorsees,
transferees and assigns (collectively, the "Secured Party").
W I T N E S S E T H :
WHEREAS, pursuant to a Securities Purchase Agreement, dated
the date hereof, between Company and the Secured Party (the
"Purchase Agreement"), Company has agreed to issue to the Secured
Party and the Secured Party has agreed to purchase from Company
certain of Company's 8% Callable Secured Convertible Notes, due
three years from the date of issue (the "Notes"), which are
convertible into shares of Company's Common Stock, par value
$.001 per share (the "Common Stock"). In connection therewith,
Company shall issue the Secured Party certain Common Stock
purchase warrants (the "Warrants"); and
WHEREAS, in order to induce the Secured Party to purchase
the Notes, Company has agreed to execute and deliver to the
Secured Party this Agreement for the benefit of the Secured Party
and to grant to it a first priority security interest in certain
Intellectual Property (defined below) of Company to secure the
prompt payment, performance and discharge in full of all of
Company's obligations under the Notes and exercise and discharge
in full of Company's obligations under the Warrants; and
NOW, THEREFORE, in consideration of the agreements herein
contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms
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which are defined in the Purchase Agreement and used herein are so used
as so defined; and the following terms shall have the following
meanings:
"Software Intellectual Property" shall mean:
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(a) all software programs (including all source code,
object code and all related applications and data files), whether now
owned, upgraded, enhanced, licensed or leased or hereafter
acquired by the Company, above;
(b) all computers and electronic data processing
hardware and firmware associated therewith;
(c) all documentation (including flow charts, logic
diagrams, manuals, guides and specifications) with respect to such
software, hardware and firmware described in the preceding
clauses (a) and (b); and
(d) all rights with respect to all of the foregoing,
including, without limitation, any and all upgrades, modifications,
copyrights, licenses, options, warranties, service contracts,
program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications
and substitutions, replacements, additions, or model conversions
of any of the foregoing.
"Copyrights" shall mean (a) all copyrights,
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registrations and applications for registration, issued or filed,
including any reissues, extensions or renewals thereof, by or
with the United States Copyright Office or any similar office or
agency of the United States, any state thereof, or any other
country or political subdivision thereof, or otherwise,
including, all rights in and to the material constituting the
subject matter thereof, including, without limitation, any
referred to in Schedule B hereto, and (b) any rights in any
material which is copyrightable or which is protected by common
law, United States copyright laws or similar laws or any law of
any State, including, without limitation, any thereof referred to
in Schedule B hereto.
"Copyright License" shall mean any agreement,
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written or oral, providing for a grant by the Company of any
right in any Copyright, including, without limitation, any
thereof referred to in Schedule B hereto.
"Intellectual Property" shall means, collectively,
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the Software Intellectual Property, Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses and Trade Secrets.
"Obligations" means all of the Company's
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obligations under this Agreement and the Notes, in each case,
whether now or hereafter existing, voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and
whether or not from time to time decreased or extinguished and
later decreased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all
or any part of such payment is avoided or recovered directly or
indirectly from the Secured Party as a preference, fraudulent
transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.
"Patents" shall mean (a) all letters patent of the
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United States or any other country or any political subdivision
thereof, and all reissues and extensions thereof, including,
without limitation, any thereof referred to in Schedule B hereto,
and (b) all applications for letters patent of the United States
and all divisions, continuations and continuations-in-part
thereof or any other country or any political subdivision,
including, without limitation, any thereof referred to in
Schedule B hereto.
"Patent License" shall mean all agreements,
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whether written or oral, providing for the grant by the Company
of any right to manufacture, use or sell any invention covered by
a Patent, including, without limitation, any thereof referred to
in Schedule B hereto.
"Security Agreement" shall mean the a Security
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Agreement, dated the date hereof between Company and the Secured
Party.
"Trademarks" shall mean (a) all trademarks, trade
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names, corporate names, company names, business names, fictitious
business names, trade styles, service marks, logos and other
source or business identifiers, and the goodwill associated
therewith, now existing or hereafter adopted or acquired, all
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registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United
States, any state thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation,
any thereof referred to in Schedule B hereto, and (b) all
reissues, extensions or renewals thereof.
"Trademark License" shall mean any agreement,
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written or oral, providing for the grant by the Company of any
right to use any Trademark, including, without limitation, any
thereof referred to in Schedule B hereto.
"Trade Secrets" shall mean common law and
statutory trade secrets and all other confidential or proprietary
or useful information and all know-how obtained by or used in or
contemplated at any time for use in the business of the Company
(all of the foregoing being collectively called a "Trade
Secret"), whether or not such Trade Secret has been reduced to a
writing or other tangible form, including all documents and
things embodying, incorporating or referring in any way to such
Trade Secret, all Trade Secret licenses, including each Trade
Secret license referred to in Schedule B hereto, and including
the right to xxx for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for
the breach or enforcement of any such Trade Secret license.
2. Grant of Security Interest. In accordance with
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Section 3(m) of the Security Agreement, to secure the complete and
timely payment, performance and discharge in full, as the case may be,
of all of the Obligations, the Company hereby, unconditionally
and irrevocably, pledges, grants and hypothecates to the Secured
Party, a continuing security interest in, a continuing first lien
upon, an unqualified right to possession and disposition of and a
right of set-off against, in each case to the fullest extent
permitted by law, all of the Company's right, title and interest
of whatsoever kind and nature in and to the Intellectual Property
(the "Security Interest").
3. Representations and Warranties. The Company hereby
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represents and warrants, and covenants and agrees with, the
Secured Party as follows:
(a) The Company has the requisite corporate power and
authority to enter into this Agreement and otherwise to carry out its
obligations thereunder. The execution, delivery and performance
by the Company of this Agreement and the filings contemplated
therein have been duly authorized by all necessary action on the
part of the Company and no further action is required by the
Company. This Agreement constitutes a legal, valid and binding
obligation of the Company enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditor's rights generally.
(b) The COmpany represents and warrants that it has no
place of business or offices where its respective books of account and
records are kept (other than temporarily at the offices of its
attorneys or accountants) or places where the Intellectual
Property is stored or located, except as set forth on Schedule A
attached hereto;
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(c) The Company is the sole owner of the Intellectual
Property (except for non-exclusive licenses granted by the Company in
the ordinary course of business), free and clear of any liens,
security interests, encumbrances, rights or claims, and is fully
authorized to grant the Security Interest in and to pledge the
Intellectual Property, except as set forth on Schedule D. There
is not on file in any governmental or regulatory authority,
agency or recording office an effective financing statement,
security agreement, license or transfer or any notice of any of
the foregoing (other than those that have been filed in favor of
the Secured Party pursuant to this Agreement) covering or
affecting any of the Intellectual Property, except as set forth
on Schedule D. So long as this Agreement shall be in effect, the
Company shall not execute and shall not knowingly permit to be on
file in any such office or agency any such financing statement or
other document or instrument (except to the extent filed or
recorded in favor of the Secured Party pursuant to the terms of
this Agreement), except as set forth on Schedule D, provided that
the value of the Intellectual Property covered by this Agreement
along with the Collateral (as defined in the Security Agreement)
is equal to at least 150% of the Obligations.
(d) The Company shall at all times maintain its books
of account and records relating to the Intellectual Property at its
principal place of business and its Intellectual Property at the
locations set forth on Schedule A attached hereto and may not
relocate such books of account and records unless it delivers to
the Secured Party at least 30 days prior to such relocation (i)
written notice of such relocation and the new location thereof
(which must be within the United States) and (ii) evidence that
the necessary documents have been filed and recorded and other
steps have been taken to perfect the Security Interest to create
in favor of the Secured Party valid, perfected and continuing
first priority liens in the Intellectual Property to the extent
they can be perfected through such filings.
(e) This Agreement creates in favor of the Secured
Party a valid security interest in the Intellectual Property securing
the payment and performance of the Obligations and, upon making the
filings required hereunder, a perfected first priority security
interest in such Intellectual Property to the extent that it can
be perfected through such filings.
(f) Upon request of the Secured Party, the Company
shall execute and deliver any and all agreements, instruments,
documents, and papers as the Secured Party may request to
evidence the Secured Party's security interest in the
Intellectual Property and the goodwill and general intangibles of
the Company relating thereto or represented thereby, and the
Company hereby appoints the Secured Party its attorney-in-fact to
execute and file all such writings for the foregoing purposes,
all acts of such attorney being hereby ratified and confirmed;
such power being coupled with an interest is irrevocable until
the Obligations have been fully satisfied and are paid in full.
(g) Except as set forth on Schedule D, the execution,
delivery and performance of this Agreement does not conflict with or
cause a breach or default, or an event that with or without the passage
of time or notice, shall constitute a breach or default, under
any agreement to which the Company is a party or by which the
Company is bound. No consent (including, without limitation,
from stock holders or creditors of the Company) is required for
the Company to enter into and perform its obligations hereunder.
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(h) The Company shall at all times maintain the liens
and Security Interest provided for hereunder as valid and perfected
first priority liens and security interests in the Intellectual
Property to the extent they can be perfected by filing in favor
of the Secured Party until this Agreement and the Security
Interest hereunder shall terminate pursuant to Section 11. The
Company hereby agrees to defend the same against any and all
persons. The Company shall safeguard and protect all
Intellectual Property for the account of the Secured Party.
Without limiting the generality of the foregoing, the Company
shall pay all fees, taxes and other amounts necessary to maintain
the Intellectual Property and the Security Interest hereunder,
and the Company shall obtain and furnish to the Secured Party
from time to time, upon demand, such releases and/or
subordinations of claims and liens which may be required to
maintain the priority of the Security Interest hereunder.
(i) The Company will not transfer, pledge, hypothecate,
encumber, license (except for non-exclusive licenses granted by
the Company in the ordinary course of business), sell or
otherwise dispose of any of the Intellectual Property without the
prior written consent of the Secured Party.
(j) The Company shall, within ten (10) days of obtaining
knowledge thereof, advise the Secured Party promptly, in
sufficient detail, of any substantial change in the Intellectual
Property, and of the occurrence of any event which would have a
material adverse effect on the value of the Intellectual Property
or on the Secured Party's security interest therein.
(k) The Company shall permit the Secured Party and
its representatives and agents to inspect the Intellectual Property
at any time, and to make copies of records pertaining to the
Intellectual Property as may be requested by the Secured Party
from time to time.
(l) The Company will take all steps reasonably necessary
to diligently pursue and seek to preserve, enforce and collect any
rights, claims, causes of action and accounts receivable in
respect of the Intellectual Property.
(m) The Company shall promptly notify the Secured Party
in sufficient detail upon becoming aware of any attachment,
garnishment, execution or other legal process levied against any
Intellectual Property and of any other information received by
the Company that may materially affect the value of the
Intellectual Property, the Security Interest or the rights and
remedies of the Secured Party hereunder.
(n) All information heretofore, herein or hereafter
supplied to the Secured Party by or on behalf of the Company with respect
to the Intellectual Property is accurate and complete in all
material respects as of the date furnished.
(o) Schedule A attached hereto contains a list of all
of the subsidiaries of Company.
(p) Schedule B attached hereto includes all Licenses,
and all Patents and Patent Licenses, if any, owned by the Company in
its own name as of the date hereof. Schedule B hereto includes all
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Trademarks and Trademark Licenses, if any, owned by the Company
in its own name as of the date hereof. Schedule B hereto
includes all Copyrights and Copyright Licenses, if any, owned by
the Company in its own name as of the date hereof. Schedule B
hereto includes all Trade Secrets and Trade Secret Licenses, if
any, owned by the Company as of the date hereof. To the best of
the Company's knowledge, each License, Patent, Trademark,
Copyright and Trade Secret is valid, subsisting, unexpired,
enforceable and has not been abandoned. Except as set forth in
Schedule B, none of such Licenses, Patents, Trademarks,
Copyrights and Trade Secrets is the subject of any licensing or
franchise agreement. To the best of the Company's knowledge, no
holding, decision or judgment has been rendered by any
Governmental Body which would limit, cancel or question the
validity of any License, Patent, Trademark, Copyright and Trade
Secrets . No action or proceeding is pending (i) seeking to
limit, cancel or question the validity of any License, Patent,
Trademark, Copyright or Trade Secret, or (ii) which, if adversely
determined, would have a material adverse effect on the value of
any License, Patent, Trademark, Copyright or Trade Secret. The
Company has used and will continue to use for the duration of
this Agreement, proper statutory notice in connection with its
use of the Patents, Trademarks and Copyrights and consistent
standards of quality in products leased or sold under the
Patents, Trademarks and Copyrights.
(q) With respect to any Intellectual Property:
(i) such Intellectual Property is subsisting and
has not been adjudged invalid or unenforceable,
in whole or in part;
(ii) such Intellectual Property is valid and
enforceable;
(iii) the Company has made all necessary filings and
recordations to protect its interest in such
Intellectual Property, including, without
limitation, recordations of all of its interests
in the Patents, Patent Licenses, Trademarks and
Trademark Licenses in the United States Patent
and Trademark Office and in corresponding offices
throughout the world and its claims to the
Copyrights and Copyright Licenses in the United
States Copyright Office and in corresponding
offices throughout the world;
(iv) other than as set forth in Schedule B, the Company
is the exclusive owner of the entire and
unencumbered right, title and interest in and to
such Intellectual Property and no claim has
been made that the use of such Intellectual
Property infringes on the asserted rights of any
third party; and
(v) the Company has performed and will continue to
perform all acts and has paid all required fees
and taxes to maintain each and every item of
Intellectual Property in full force and effect
throughout the world, as applicable.
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(r) Except with respect to any Trademark or Copyright that
the Company shall reasonably determine is of negligible economic
value to the Company, the Company shall:
(i) maintain each Trademark and Copyright in full force
free from any claim of abandonment for non-use, maintain as in the
past the quality of products and services offered under such
Trademark or Copyright; employ such Trademark or Copyright with
the appropriate notice of registration; not adopt or use any xxxx
which is confusingly similar or a colorable imitation of such
Trademark or Copyright unless the Secured Party shall obtain a
perfected security interest in such xxxx pursuant to this
Agreement; and not (and not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby
any Trademark or Copyright may become invalidated;
(ii) not, except with respect to any Patent that it
shall reasonably determine is of negligible economic value to it, do
any act, or omit to do any act, whereby any Patent may become
abandoned or dedicated; and
(iii) notify the Secured Party immediately if it knows,
or has reason to know, that any application or registration relating
to any Patent, Trademark or Copyright may become abandoned or
dedicated, or of any adverse determination or development
(including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United
States Patent and Trademark Office, United States Copyright
Office or any court or tribunal in any country) regarding its
ownership of any Patent, Trademark or Copyright or its right to
register the same or to keep and maintain the same.
(s) Whenever the Company, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Patent, Trademark or Copyright with the
United States Patent and Trademark Office, United States
Copyright Office or any similar office or agency in any other
country or any political subdivision thereof or acquire rights to
any new Patent, Trademark or Copyright whether or not registered,
report such filing to the Secured Party within five business days
after the last day of the fiscal quarter in which such filing
occurs.
(t) The Company shall take all reasonable and necessary
steps, including, without limitation, in any proceeding before the
United States Patent and Trademark Office, United States
Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, to maintain and
pursue each application (and to obtain the relevant registration)
and to maintain each registration of the Patents, Trademarks and
Copyrights, including, without limitation, filing of applications
for renewal, affidavits of use and affidavits of
incontestability.
(u) In the event that any Patent, Trademark or
Copyright included in the Intellectual Property is infringed,
misappropriated or diluted by a third party, promptly notify the
Secured Party after it learns thereof and shall, unless it shall
reasonably determine that such Patent, Trademark or Copyright is
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of negligible economic value to it, which determination it shall
promptly report to the Secured Party, promptly xxx for
infringement, misappropriation or dilution, to seek injunctive
relief where appropriate and to recover any and all damages for
such infringement, misappropriation or dilution, or take such
other actions as it shall reasonably deem appropriate under the
circumstances to protect such Patent, Trademark or Copyright. If
the Company lacks the financial resources to comply with this
Section 3(t), the Company shall so notify the Secured Party and
shall cooperate fully with any enforcement action undertaken by
the Secured Party on behalf of the Company.
4. Defaults. The following events shall be "Events of
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Default":
(a) The occurrence of an Event of Default (as defined
in the Notes) under the Notes;
(b) Any representation or warranty of the Company in
this Agreement or in the Security Agreement shall prove to have been
incorrect in any material respect when made;
(c) The failure by the Company to observe or perform
any of its obligations hereunder or in the Security Agreement for
ten (10) days after receipt by the Company of notice of such failure
from the Secured Party; and
(d) Any breach of, or default under, the Warrants.
5. Duty To Hold In Trust. Upon the occurrence of any Event
---------------------
of Default and at any time thereafter, the Company shall, upon
receipt by it of any revenue, income or other sums subject to the
Security Interest, whether payable pursuant to the Notes or
otherwise, or of any check, draft, note, trade acceptance or
other instrument evidencing an obligation to pay any such sum,
hold the same in trust for the Secured Party and shall forthwith
endorse and transfer any such sums or instruments, or both, to
the Secured Party for application to the satisfaction of the
Obligations.
6. Rights and Remedies Upon Default. Upon occurrence of
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any Event of Default and at any time thereafter, the Secured Party
shall have the right to exercise all of the remedies conferred
hereunder and under the Notes, and the Secured Party shall have
all the rights and remedies of a secured party under the UCC
and/or any other applicable law (including the Uniform Commercial
Code of any jurisdiction in which any Intellectual Property is
then located). Without limitation, the Secured Party shall have
the following rights and powers:
(a) The Secured Party shall have the right to take
possession of the Intellectual Property and, for that purpose, enter,
with the aid and assistance of any person, any premises where the
Intellectual Property, or any part thereof, is or may be placed
and remove the same, and the Company shall assemble the
Intellectual Property and make it available to the Secured Party
at places which the Secured Party shall reasonably select,
whether at the Company's premises or elsewhere, and make
available to the Secured Party, without rent, all of the
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Company's respective premises and facilities for the purpose of
the Secured Party taking possession of, removing or putting the
Intellectual Property in saleable or disposable form.
(b) The Secured Party shall have the right to operate
the business of the Company using the Intellectual Property and shall
have the right to assign, sell, lease or otherwise dispose of and
deliver all or any part of the Intellectual Property, at public
or private sale or otherwise, either with or without special
conditions or stipulations, for cash or on credit or for future
delivery, in such parcel or parcels and at such time or times and
at such place or places, and upon such terms and conditions as
the Secured Party may deem commercially reasonable, all without
(except as shall be required by applicable statute and cannot be
waived) advertisement or demand upon or notice to the Company or
right of redemption of the Company, which are hereby expressly
waived. Upon each such sale, lease, assignment or other transfer
of Intellectual Property, the Secured Party may, unless
prohibited by applicable law which cannot be waived, purchase all
or any part of the Intellectual Property being sold, free from
and discharged of all trusts, claims, right of redemption and
equities of the Company, which are hereby waived and released.
7. Applications of Proceeds. The proceeds of any such sale,
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lease or other disposition of the Intellectual Property hereunder
shall be applied first, to the expenses of retaking, holding,
storing, processing and preparing for sale, selling, and the like
(including, without limitation, any taxes, fees and other costs
incurred in connection therewith) of the Intellectual Property,
to the reasonable attorneys' fees and expenses incurred by the
Secured Party in enforcing its rights hereunder and in connection
with collecting, storing and disposing of the Intellectual
Property, and then to satisfaction of the Obligations, and to the
payment of any other amounts required by applicable law, after
which the Secured Party shall pay to the Company any surplus
proceeds. If, upon the sale, license or other disposition of the
Intellectual Property, the proceeds thereof are insufficient to
pay all amounts to which the Secured Party is legally entitled,
the Company will be liable for the deficiency, together with
interest thereon, at the rate of 15% per annum (the "Default
Rate"), and the reasonable fees of any attorneys employed by the
Secured Party to collect such deficiency. To the extent
permitted by applicable law, the Company waives all claims,
damages and demands against the Secured Party arising out of the
repossession, removal, retention or sale of the Intellectual
Property, unless due to the gross negligence or willful
misconduct of the Secured Party.
8. Costs and Expenses. The Company agrees to pay all out-of-
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pocket fees, costs and expenses incurred in connection with any
filing required hereunder, including without limitation, any
financing statements, continuation statements, partial releases
and/or termination statements related thereto or any expenses of
any searches reasonably required by the Secured Party. The
Company shall also pay all other claims and charges which in the
reasonable opinion of the Secured Party might prejudice, imperil
or otherwise affect the Intellectual Property or the Security
Interest therein. The Company will also, upon demand, pay to the
Secured Party the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of
any experts and agents, which the Secured Party may incur in
connection with (i) the enforcement of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or
other realization upon, any of the Intellectual Property, or
(iii) the exercise or enforcement of any of the rights of the
Secured Party under the Notes. Until so paid, any fees payable
hereunder shall be added to the principal amount of the Notes and
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shall bear interest at the Default Rate.
9. Responsibility for Intellectual Property. The Company
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assumes all liabilities and responsibility in connection with all
Intellectual Property, and the obligations of the Company
hereunder or under the Notes and the Warrants shall in no way be
affected or diminished by reason of the loss, destruction, damage
or theft of any of the Intellectual Property or its
unavailability for any reason.
10. Security Interest Absolute. All rights of the Secured
--------------------------
Party and all Obligations of the Company hereunder, shall be absolute
and unconditional, irrespective of: (a) any lack of validity or
enforceability of this Agreement, the Notes, the Warrants or any
agreement entered into in connection with the foregoing, or any
portion hereof or thereof; (b) any change in the time, manner or
place of payment or performance of, or in any other term of, all
or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Notes, the Warrants or any
other agreement entered into in connection with the foregoing;
(c) any exchange, release or nonperfection of any of the
Intellectual Property, or any release or amendment or waiver of
or consent to departure from any other Intellectual Property for,
or any guaranty, or any other security, for all or any of the
Obligations; (d) any action by the Secured Party to obtain,
adjust, settle and cancel in its sole discretion any insurance
claims or matters made or arising in connection with the
Intellectual Property; or (e) any other circumstance which might
otherwise constitute any legal or equitable defense available to
the Company, or a discharge of all or any part of the Security
Interest granted hereby. Until the Obligations shall have been
paid and performed in full, the rights of the Secured Party shall
continue even if the Obligations are barred for any reason,
including, without limitation, the running of the statute of
limitations or bankruptcy. The Company expressly waives
presentment, protest, notice of protest, demand, notice of
nonpayment and demand for performance. In the event that at any
time any transfer of any Intellectual Property or any payment
received by the Secured Party hereunder shall be deemed by final
order of a court of competent jurisdiction to have been a
voidable preference or fraudulent conveyance under the bankruptcy
or insolvency laws of the United States, or shall be deemed to be
otherwise due to any party other than the Secured Party, then, in
any such event, the Company's obligations hereunder shall survive
cancellation of this Agreement, and shall not be discharged or
satisfied by any prior payment thereof and/or cancellation of
this Agreement, but shall remain a valid and binding obligation
enforceable in accordance with the terms and provisions hereof.
The Company waives all right to require the Secured Party to
proceed against any other person or to apply any Intellectual
Property which the Secured Party may hold at any time, or to
marshal assets, or to pursue any other remedy. The Company
waives any defense arising by reason of the application of the
statute of limitations to any obligation secured hereby.
11. Term of Agreement. This Agreement and the Security
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Interest shall terminate on the date on which all payments under the
Notes have been made in full and all other Obligations have been paid
or discharged. Upon such termination, the Secured Party, at the
request and at the expense of the Company, will join in executing
any termination statement with respect to any financing statement
executed and filed pursuant to this Agreement.
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12. Power of Attorney; Further Assurances.
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(a) The Company authorizes the Secured Party, and does
hereby make, constitute and appoint it, and its respective officers,
agents, successors or assigns with full power of substitution, as
the Company's true and lawful attorney-in-fact, with power, in
its own name or in the name of the Company, to, after the
occurrence and during the continuance of an Event of Default, (i)
endorse any notes, checks, drafts, money orders, or other
instruments of payment (including payments payable under or in
respect of any policy of insurance) in respect of the
Intellectual Property that may come into possession of the
Secured Party; (ii) to sign and endorse any UCC financing
statement or any invoice, freight or express xxxx, xxxx of
lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with
accounts, and other documents relating to the Intellectual
Property; (iii) to pay or discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on
or threatened against the Intellectual Property; (iv) to demand,
collect, receipt for, compromise, settle and xxx for monies due
in respect of the Intellectual Property; and (v) generally, to
do, at the option of the Secured Party, and at the Company's
expense, at any time, or from time to time, all acts and things
which the Secured Party deems necessary to protect, preserve and
realize upon the Intellectual Property and the Security Interest
granted therein in order to effect the intent of this Agreement,
the Notes and the Warrants, all as fully and effectually as the
Company might or could do; and the Company hereby ratifies all
that said attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney is coupled with an
interest and shall be irrevocable for the term of this Agreement
and thereafter as long as any of the Obligations shall be
outstanding.
(b) On a continuing basis, the Company will make,
execute, acknowledge, deliver, file and record, as the case may be,
in the proper filing and recording places in any jurisdiction,
including, without limitation, the jurisdictions indicated on
Schedule C, attached hereto, all such instruments, and take all
such action as may reasonably be deemed necessary or advisable,
or as reasonably requested by the Secured Party, to perfect the
Security Interest granted hereunder and otherwise to carry out
the intent and purposes of this Agreement, or for assuring and
confirming to the Secured Party the grant or perfection of a
security interest in all the Intellectual Property.
(c) The Company hereby irrevocably appoints the
Secured Party as the Company's attorney-in-fact, with full authority
in the place and stead of the Company and in the name of the Company,
from time to time in the Secured Party's discretion, to take any
action and to execute any instrument which the Secured Party may
deem necessary or advisable to accomplish the purposes of this
Agreement, including the filing, in its sole discretion, of one
or more financing or continuation statements and amendments
thereto, relative to any of the Intellectual Property without the
signature of the Company where permitted by law.
13. Notices. All notices, requests, demands and other
-------
communications hereunder shall be in writing, with copies to all
the other parties hereto, and shall be deemed to have been duly
given when (i) if delivered by hand, upon receipt, (ii) if sent
by facsimile, upon receipt of proof of sending thereof, (iii) if
sent by nationally recognized overnight delivery service (receipt
requested), the next business day or (iv) if mailed by first-
11
class registered or certified mail, return receipt requested,
postage prepaid, four days after posting in the U.S. mails, in
each case if delivered to the following addresses:
If to the Company: Med Gen, Inc.
0000 X. Xxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
With a copy to: Law Office if Xxxxxxx X. Xxxxxx
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Secured Party: AJW Partners, LLC
AJW Offshore, Ltd.
AJW Qualified Partners, LLC
New Millennium Capital Partners, II, LLC
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: 000-000-0000
With copies to: Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esquire
Facsimile: 000-000-0000
14. Other Security. To the extent that the Obligations are
--------------
now or hereafter secured by property other than the Intellectual
Property or by the guarantee, endorsement or property of any
other person, firm, corporation or other entity, then the Secured
Party shall have the right, in its sole discretion, to pursue,
relinquish, subordinate, modify or take any other action with
respect thereto, without in any way modifying or affecting any of
the Secured Party's rights and remedies hereunder.
15. Miscellaneous.
-------------
(a) No course of dealing between the Company and the
Secured Party, nor any failure to exercise, nor any delay in
exercising, on the part of the Secured Party, any right, power or
12
privilege hereunder or under the Notes shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege.
(b) All of the rights and remedies of the Secured Party
with respect to the Intellectual Property, whether established hereby
or by the Notes or by any other agreements, instruments or
documents or by law shall be cumulative and may be exercised
singly or concurrently.
(c) This Agreement and the Security Agreement constitute
the entire agreement of the parties with respect to the subject
matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto.
Except as specifically set forth in this Agreement, no provision
of this Agreement may be modified or amended except by a written
agreement specifically referring to this Agreement and signed by
the parties hereto.
(d) In the event that any provision of this Agreement
is held to be invalid, prohibited or unenforceable in any jurisdiction
for any reason, unless such provision is narrowed by judicial
construction, this Agreement shall, as to such jurisdiction, be
construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid,
prohibited or unenforceable. If, notwithstanding the foregoing,
any provision of this Agreement is held to be invalid, prohibited
or unenforceable in any jurisdiction, such provision, as to such
jurisdiction, shall be ineffective to the extent of such
invalidity, prohibition or unenforceability without invalidating
the remaining portion of such provision or the other provisions
of this Agreement and without affecting the validity or
enforceability of such provision or the other provisions of this
Agreement in any other jurisdiction.
(e) No waiver of any breach or default or any right
under this Agreement shall be considered valid unless in writing and
signed by the party giving such waiver, and no such waiver shall be
deemed a waiver of any subsequent breach or default or right,
whether of the same or similar nature or otherwise.
(f) This Agreement shall be binding upon and inure to
the benefit of each party hereto and its successors and assigns.
(g) Each party shall take such further action and
execute and deliver such further documents as may be necessary or
appropriate in order to carry out the provisions and purposes of this
Agreement.
(h) This Agreement shall be construed in accordance with
the laws of the State of New York, except to the extent the validity,
perfection or enforcement of a security interest hereunder in
respect of any particular Intellectual Property which are
governed by a jurisdiction other than the State of New York in
which case such law shall govern. Each of the parties hereto
irrevocably submit to the exclusive jurisdiction of any New York
State or United States Federal court sitting in Manhattan county
over any action or proceeding arising out of or relating to this
Agreement, and the parties hereto hereby irrevocably agree that
all claims in respect of such action or proceeding may be heard
and determined in such New York State or Federal court. The
13
parties hereto agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. The parties hereto further waive any objection
to venue in the State of New York and any objection to an action
or proceeding in the State of New York on the basis of forum non
conveniens.
(i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT MAY BE FILED
IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL
CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.
EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY HAS
KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL
FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING
THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT
BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS AND SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF A LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE COURT.
(j) This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to
be an original and, all of which taken together shall constitute
one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create
a valid binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force
and effect as if such facsimile signature were the original
thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
14
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above
written.
MED GEN, INC.
By:
_____________________________________
Xxxx X. Xxxxxxx
Chairman and Chief Executive Officer
AJW PARTNERS, LLC
By: SMS Group, LLC
By:
____________________________________
_
Xxxxx X. Xxxxxxxx
Manager
AJW OFFSHORE, LTD.
By: First Street Manager II, LLC
By:
____________________________________
Xxxxx X. Xxxxxxxx
Manager
AJW QUALIFIED PARTNERS, LLC
By: AJW Manager, LLC
By:
____________________________________
Xxxxx X. Xxxxxxxx
Manager
15
NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By: First Street Manager II, LLC
By:
_____________________________________
Xxxxx X. Xxxxxxxx
Manager
16
SCHEDULE A
----------
Principal Place of Business of the Company:
------------------------------------------
Locations Where Intellectual Property is Located or Stored:
----------------------------------------------------------
List of Subsidiaries of the Company:
-----------------------------------
17
SCHEDULE B
----------
A. Licenses, Patents and Patent Licenses
-------------------------------------
Registration or
Patent Application or Registration No. Country Filing Date
------ ------------------------------- ------- ---------------
B. Trademarks and Trademark Licenses
---------------------------------
Registration or
Trademark Application or Registration No. Country Filing Date
--------- ------------------------------- ------- ---------------
C. Copyrights and Copyright Licenses
---------------------------------
Registration or
Name Application or Registration No. Country Filing Date
---- ------------------------------- ------- ---------------
D. Trade Secrets and Trade Secret Licenses
---------------------------------------
Registration or
Name Application or Registration No. Country Filing Date
---- ------------------------------- ------- ---------------
18
SCHEDULE C
----------
Jurisdictions:
-------------
