Exhibit 10.2
PATENT AND LICENSE SECURITY
AGREEMENT
This PATENT AND LICENSE SECURITY
AGREEMENT (this “ Agreement ”), dated as of
December 22, 2008, is by and between GTC BIOTHERAPEUTICS, INC.
(“ Grantor ”) and LFB BIOTECHNOLOGIES S.A.S.U.
(“ Grantee ”).
W I T N E S
S E T H :
WHEREAS, pursuant to that certain
Note and Warrant Purchase Agreement by and between the Grantor and
the Grantee dated October 31, 2008 (the “ Purchase
Agreement ”), the Grantor is issuing and selling to the
Grantee a secured convertible note in the original principal amount
of $15,000,000 (the “ Convertible Note ”) and a
warrant to purchase up to 23,193,548 shares of common stock of the
Grantor;
WHEREAS, in connection with the
Purchase Agreement and Convertible Note Grantor and Grantee have
entered into that certain Security Agreement, dated as of the date
hereof (as may be amended, restated, supplemented or otherwise
modified from time to time, the “ Security Agreement
”); and
WHEREAS, Grantor has agreed to
pledge the Patent Collateral (as defined below) to Grantee in
accordance with the terms of the Security Agreement and this
Agreement, to secure the Indebtedness (as defined in the Security
Agreement).
NOW, THEREFORE, in consideration of
these premises and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Defined Terms .
(i) Unless otherwise defined herein,
capitalized terms used herein which are defined in the Security
Agreement shall have the meanings specified in the Security
Agreement.
(ii) The words “hereof”,
“herein”, and “hereunder” and words of like
import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and
Section and schedule references are to this Agreement unless
otherwise specified.
(iii) All terms defined in this
Agreement in the singular shall have comparable meanings when used
in the plural, and vice versa , unless otherwise
specified.
(iv) “ Default ”
means the occurrence of either of the following events:
(a) any default by Grantor under the terms of the Security
Agreement or any other Debt Document; or (b) any Event of
Default.
2. Security Interest in
Patents . As security for prompt payment in full of all of the
Indebtedness, Grantor hereby grants to Grantee a first priority
security interest, having priority over all other security
interests in all of Grantor’s now owned or existing and
hereafter acquired or arising (collectively, the “ Patent
Collateral ”):
(i) patents and patent applications,
and the inventions and improvements described and claimed therein,
including, without limitation, those patents and patent
applications listed on Schedule A , and (a) the
reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, (b) all income, royalties,
damages and payments now and hereafter due and/or payable under and
with respect thereto, including, without limitation, payments under
all licenses entered into in connection therewith and damages and
payments for past or future infringements thereof, and (c) the
right to sue for past, present and future infringements thereof
(all of the foregoing patents and applications, together with the
items described in the foregoing clauses (a)-(c) ,
being sometimes hereinafter individually and/or alone or in
conjunction with the non-U.S. Patents identified in Schedule C
collectively referred to as the “ Patents
”);
(ii) license agreements with any
other party in connection with any Patents or such other
party’s patents or patent applications, whether Grantor is a
licensor or licensee under any such license agreement, including,
but not limited to, the license agreements listed on
Schedule B , and the right upon the occurrence and
during the continuance of a Default to use the foregoing in
connection with the enforcement of the rights of Grantee under the
Security Agreement (all of the foregoing being hereinafter referred
to collectively as the “ Licenses ”).
Notwithstanding the foregoing provisions of this
Section 2 , the Licenses shall not include any license
agreement which by its terms prohibits (which prohibition is
enforceable under applicable law) the grant of the security
interest contemplated by this Agreement for so long as such
prohibition continues; it being understood that upon request
of Grantee, Grantor will in good faith use reasonable efforts to
obtain consent for the creation of a security interest in favor of
Grantee in Grantor’s rights under such license agreement;
and
(iii) Non-U.S. Patents and Licenses,
including without limitation those listed on Schedule C
,
3. Restrictions on Future
Agreements . Grantor will not, without Grantee’s prior
written consent, enter into any agreement, including, without
limitation, any license agreement, which is inconsistent with this
Agreement, and Grantor further agrees that it will not take any
action, and will not permit any action to be taken by others
subject to its control, including licensees, or fail to take any
action, which would affect the validity or enforcement of the
rights transferred to Grantee, under this Agreement or any other
Debt Document or the rights associated with those Patents which are
necessary or desirable in the operation of Grantor’s
business.
4. New Patents . Grantor
represents and warrants that the Patents and Licenses listed on
Schedules A , B and C , collectively include
all of the patents, patent applications now owned by Grantor, and
all license agreements in force as of the date hereof with any
other party in connection with any Patents or such other
party’s patents or patent applications, whether Grantor is a
licensor or licensee under any such license agreement. If, prior to
the termination of this Agreement, Grantor shall (i) obtain
rights to any new patentable inventions or license agreements or
any patents or patent applications in connection therewith or
(ii) become entitled to the benefit of any patent, patent
application or any reissue, division, continuation, renewal,
extension or continuation-in-part related to any Patent or any
improvement on any Patent, the provisions of Section 2 shall
automatically apply thereto, and Grantor shall give to Grantee
prompt written
notice thereof. Grantor hereby authorizes
Grantee to modify this Agreement by (a) amending Schedules
A , B or C , as the case may be, to include
any future patents, patent applications and license agreements in
connection with patents and patent applications that are Patents or
Licenses under Section 2 or under this Section 4, and
(b) filing, in addition to and not in substitution for, this
Agreement, a short form of this Agreement containing on
Schedules A , B or C thereto, as
the case may be, such future patents, patent applications and
license agreements which are Patents or Licenses, as the case may
be, under Section 2 or this Section 4. Notwithstanding
the foregoing, Grantor agrees that Grantee’s security
interest shall extend to all of the collateral listed in
Section 2 and this Section 4, regardless of whether
Grantee actually amends Schedules A , B or C ,
respectively.
5. Royalties . Grantor hereby
agrees that the use by Grantee of the Patents and Licenses as
authorized hereunder shall be coextensive with Grantor’s
rights thereunder and with respect thereto and without any
liability for royalties or other related charges from Grantee to
Grantor.
6. Nature and Continuation of
Grantee’s Security Interest . This Agreement is made for
collateral security purposes only. This Agreement shall create a
continuing security interest in the Patents and the Licenses and
shall remain in full force and effect until the Indebtedness has
been paid in full and the Security Agreement terminated, at such
time the rights granted to Grantee hereunder shall also
terminate.
7. Further Assignments and
Security Interests . Grantor agrees not to sell or assign its
respective interests in, or grant any license under (other than
granting any license in the ordinary course of business), the
Patents without the prior written consent of Grantee.
8. Duties of Grantor .
Grantor shall have the duty to the extent desirable in the conduct
of Grantor’s business and consistent with Grantor’s
current business practices or Grantor’s reasonable business
judgment: (i) to prosecute diligently any patent application
that is part of the Patents pending as of the date hereof or
thereafter until the termination of this Agreement; (ii) to
make application on such unpatented but patentable inventions as
Grantor deems appropriate; (iii) to take reasonable steps to
preserve and maintain all of Grantor’s rights in the patent
applications and patents that are part of the Patents and
(iv) obtain any consents, waivers or agreements necessary to
enable Grantee to exercise its remedies with respect to
a
