|
Exhibit 10.7 INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property
Security Agreement dated as of October 27, 2008 ("
Security Agreement "), is made by Avalon
Pharmaceuticals, Inc. , a Delaware corporation ("
Grantor "), in favor of Clinical Data, Inc. ("
Secured Party "). Recitals
A. Secured Party has
made or has agreed to make certain advances of money and to extend
certain financial accommodations to Grantor pursuant to that
certain Note Purchase Agreement dated of even date herewith between
Grantor and Secured Party (as the same may be amended, the "
Note Purchase Agreement ") and as evidenced by that
certain Term Note dated of even date herewith executed by Grantor
in favor of Secured Party and such other promissory notes which may
be executed by Grantor in favor of Secured Party after the date
hereof (as each may be amended, individually, the "
Note " and, collectively, the " Notes
"), such advances, future advances, and financial accommodations
being referred to herein as the " Loans ".
B. Secured Party is
willing to make the Loans to Grantor, but only upon the condition,
among others, that Grantor shall have executed and delivered to
Secured Party this Security Agreement. Agreement
Now, Therefore , in order to
induce Secured Party to make the Loans and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, Grantor
hereby represents, warrants, covenants and agrees as follows:
1. Defined Terms . Terms
used but not otherwise defined herein shall have the meanings given
to them in the Note Purchase Agreement. When used in this Security
Agreement the following terms shall have the following meanings
(such meanings being equally applicable to both the singular and
plural forms of the terms defined): "
AvalonRx® Technology " shall have the meaning
given such term in the License Agreement.
" Bankruptcy Code "
means Title XI of the United States Code.
" Collateral " shall
have the meaning assigned to such term in Section 2 of
this Security Agreement. "
Contracts " means all contracts (including any
customer, vendor, supplier, service or maintenance contract),
leases, licenses, undertakings, purchase orders, permits, franchise
agreements or other agreements, whether in written or electronic
form, in or under which Grantor now holds or hereafter acquires any
right, title or interest, including, without limitation, with
respect to an account receivable, any agreement relating to the
terms of payment or the terms of performance thereof.
" Copyright License
" means any agreement, whether in written or electronic form, in
which Grantor now holds or hereafter acquires any interest,
granting any right in or to any Copyright or Copyright registration
(whether Grantor is the licensee or the licensor thereunder)
including, without limitation, licenses pursuant to which Grantor
has obtained the exclusive right to use a copyright owned by a
third party. "
Copyrights " means all of the following now owned or
hereafter acquired or created (as a work for hire for the benefit
of Grantor) by Grantor or in which Grantor now holds or hereafter
acquires or receives any right or interest, in whole or in part:
(a) all copyrights, whether registered or unregistered, held
pursuant to the laws of the United States, any State thereof or any
other country; (b) registrations, applications, recordings and
proceedings in the United States Copyright Office or in any similar
office or agency of the United States, any State thereof or any
other country; (c) any continuations, renewals or extensions
thereof; (d) any registrations to be issued in any pending
applications, and shall include any right or interest in and to
work protectable by any of the foregoing which are presently or in
the future owned, created or authorized (as a work for hire for the
benefit of Grantor) or acquired by Grantor, in whole or in part;
(e) prior versions of works covered by copyright and all works
based upon, derived from or incorporating such works;
(f) income, royalties, damages, claims and payments now and
hereafter due and/or payable with respect to copyrights, including,
without limitation, damages, claims and recoveries for past,
present or future infringement; (g) rights to sue for past,
present and future infringements of any copyright; and (h) any
other rights corresponding to any of the foregoing rights
throughout the world. " Event
of Default " means any "Event of Default" as defined in the
Note Purchase Agreement. "
General Intangible " means and includes any "
general intangible, " as such term is defined in
Article 9 of the UCC, now owned or hereafter acquired or
received by Grantor or in which Grantor now holds or hereafter
acquires or receives any right or interest, and shall include, in
any event, any Contract (including any License), Copyright,
Trademark, Patent or other Intellectual Property, Payment
Intangible, books and records, ledger card, file, correspondence,
computer program, tape, disk and related data processing software
that at any time evidences or contains information relating to any
of the Collateral, permit, goodwill (including the goodwill
associated with any Trademark, Trademark registration or Trademark
licensed under any Trademark License), insurance policy or any
claim in or under any policy of insurance (including unearned
premiums), chose in action , judgment taken or any rights or
claims included in the Collateral, any right to sue for past,
present and future infringement of any Copyright, Trademark,
Patent, any right to any tax refund of any kind from any
governmental authority, any right to receive the proceeds of any
indemnity, warranty (including any manufacturer’s warranty)
or guaranty (including any performance guaranty) in favor of
Grantor, any claim of Grantor arising out of any breach or default
under any Contract (including any License) or claim for damages
arising out of such breach or default and any right of Grantor to
terminate, amend, supplement, modify or exercise rights, options or
remedies under any Contract (including any License).
" Intellectual Property
" means any intellectual property, in any medium, of any kind or
nature whatsoever, now or hereafter owned or acquired or received
by Grantor or in which
2.
Grantor now holds or hereafter acquires or receives any right or
interest, and shall include, in any event, any Copyright,
Trademark, Patent, trade secret, customer list, marketing plan,
internet domain name (including any right related to the
registration thereof), proprietary or confidential information,
mask work, source, object or other programming code, invention
(whether or not patented or patentable), technical information,
procedure, design, knowledge, know-how, software, data base, data,
skill, expertise, recipe, experience, process, model, drawing,
material or record. "
License " means any Copyright License, Patent
License, Trademark License or other license of rights or interests,
whether in-bound or out-bound, whether in written or electronic
form, now or hereafter owned or acquired or received by Grantor or
in which Grantor now holds or hereafter acquires or receives any
right or interest, and shall include any renewals or extensions of
any of the foregoing thereof. "
License Agreement " shall mean that certain
AvalonRx® License Agreement between the Buyer and Seller, dated
on or about the date hereof, as amended.
" Lien " means any
mortgage, lien, deed of trust, charge, pledge, security interest or
other encumbrance. " Patent
License " means any agreement, whether in written or
electronic form, in which Grantor now holds or hereafter acquires
any interest, granting any right with respect to any invention on
which a Patent is in existence (whether Grantor is the licensee or
the licensor thereunder). "
Patents " means all of the following in which Grantor
now holds or hereafter acquires any interest: (a) all letters
patent of the United States or any other country, all registrations
and recordings thereof and all applications for letters patent of
the United States or any other country, including, without
limitation, registrations, recordings and applications 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; (b) all reissues, divisions, continuations, renewals,
continuations-in-part or extensions thereof; (c) all petty
patents, divisionals and patents of addition; (d) all patents
to issue in any such applications; (e) income, royalties,
damages, claims and payments now and hereafter due and/or payable
with respect to patents, including, without limitation, damages,
claims and recoveries for past, present or future infringement; and
(f) rights to sue for past, present and future infringements
of any patent. " Payment
Intangibles " means and includes any " payment
intangible " as such term is defined in Article 9 of the
UCC, now or hereafter owned or acquired or received by Grantor or
in which Grantor now holds or hereafter acquires or receives any
right or interest. "
Proceeds " means and includes any " proceeds,
" as such term is defined in Article 9 of the UCC, now or
hereafter owned or acquired or received by Grantor or in which
Grantor now holds or hereafter acquires or receives any right or
interest " Secured
Obligations " means the Obligations (as such term is
defined in the Note Purchase Agreement).
3.
" Security Agreement
" means this Security Agreement and all Schedules hereto, as the
same may from time to time be amended, modified, supplemented or
restated. " Trademark
License " means any agreement, whether in written or
electronic form, in which Grantor now holds or hereafter acquires
any interest, granting any right in and to any Trademark or
Trademark registration (whether Grantor is the licensee or the
licensor thereunder). "
Trademarks " means any of the following in which
Grantor now holds or hereafter acquires any interest: (a) any
trademarks, tradenames, corporate names, company names, business
names, trade styles, service marks, logos, other source or business
identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature,
now existing or hereafter adopted or acquired, all registrations
and recordings thereof and any applications in connection
therewith, including, without limitation, registrations, recordings
and applications 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 (collectively, the "
Marks "); (b) any reissues, extensions or
renewals thereof; (c) the goodwill of the business symbolized
by or associated with the Marks; (d) income, royalties,
damages, claims and payments now and hereafter due and/or payable
with respect to the Marks, including, without limitation, damages,
claims and recoveries for past, present or future infringement; and
(e) rights to sue for past, present and future infringements
of the Marks. " UCC "
means the Uniform Commercial Code as the same may from time to time
be in effect in the State of New York (and each reference in this
Security Agreement to an Article thereof (denoted as a Division of
the UCC as adopted and in effect in the State of New York) shall
refer to that Article (or Division, as applicable) as from time to
time in effect; provided, however, in the event that, by
reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of Secured Party’s
security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State
of New York, the term " UCC " shall mean the Uniform
Commercial Code (including the Articles thereof) as in effect at
such time in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for
purposes of definitions related to such provisions.
2. Grant of Security
Interest . As collateral security for the full, prompt,
complete and final payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of all the Secured
Obligations and in order to induce Secured Party to cause the Loans
to be made, Grantor hereby assigns, conveys, mortgages, pledges,
hypothecates and transfers to Secured Party, and hereby grants to
Secured Party, a security interest in all of Grantor’s right,
title and interest in, to and under the following, whether now
owned or hereafter acquired (all of which being collectively
referred to herein as the " Collateral "):
(a) the AvalonRx® Technology;
(b) All Intellectual Property of Grantor, including
without limitation, in respect of the AvalonRx® Technology, and
General Intangibles related to all Intellectual Property of
Grantor;
4.
(c) All Contracts of Grantor in respect of the
AvalonRx® Technology;
(d) To the extent not otherwise included, all books
and records of Grantor with respect to each of the foregoing, all
Proceeds of each of the foregoing and all accessions to,
substitutions and replacements for and rents, profits and products
of each of the foregoing.
Notwithstanding
anything to the contrary set for in this Security Agreement,
"Collateral" shall not include any asset, now owned or hereafter
acquired or arising, to the extent that the creation or attachment
of a security interest in such asset would require the consent of
any third party under a Contract to which the Grantor is a party in
order for the Grantor to avoid a breach of or default under the
Contract if the requirement of consent under the Contract for the
creation or attachment of the security interest is enforceable
under applicable law and such consent has not be obtained,
provided , however , that the "Collateral" shall
include and the security interests hereunder shall immediately
attach to any Contract upon receipt of any required consent or
amendment to such Contract modifies such Contract to eliminate the
requirement for any required consent.
3. Rights Of Secured
Party .
(a) Notwithstanding anything contained in this
Security Agreement to the contrary, Grantor expressly agrees that
it shall remain liable under each of its Contracts and Licenses to
observe and perform all the conditions and obligations to be
observed and performed by it thereunder and that it shall perform
all of its duties and obligations thereunder, all in accordance
with and pursuant to the terms and provisions of each such Contract
and License. Secured Party shall not have any obligation or
liability under any such Contract or License by reason of or
arising out of this Security Agreement or the granting to Secured
Party of a lien therein or the receipt by Secured Party of any
payment relating to any such Contract or License pursuant hereto,
nor shall Secured Party be required or obligated in any manner to
perform or fulfill any of the obligations of Grantor under or
pursuant to any such Contract or License, or to make any payment,
or to make any inquiry as to the nature or the sufficiency of any
payment received by it or the sufficiency of any performance by any
party under any such Contract or License, or to present or file any
claim, or to take any action to collect or enforce any performance
or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.
(b) Secured Party may at any time, upon the occurrence
and during the continuance of any Event of Default, without
notifying Grantor of its intention to do so, notify parties to the
Contracts of Grantor which constitute Collateral that the right,
title and interest of Grantor in and under such Contracts have been
assigned to Secured Party and that payments shall be made directly
to Secured Party. Upon the occurrence and during the continuance of
any Event of Default, upon the request of Secured Party, Grantor
shall so notify such parties to such Contracts. Upon the occurrence
and during the continuance of any Event of Default, Secured Party
may, in its name or in the name of others, communicate with such
parties to such Contracts to verify with such parties, to Secured
Party’s satisfaction, the existence, amount and terms of any
such Contracts.
5.
4. Representations And
Warranties . Grantor hereby represents and warrants to Secured
Party that:
(a) Except for the security interest granted to
Secured Party under this Security Agreement, Grantor is the sole
legal and equitable owner of each item of the Collateral in which
it purports to grant a security interest hereunder, having good and
marketable title thereto, free and clear of any and all Liens.
(b) No effective security agreement, financing
statement, equivalent security or lien instrument or continuation
statement covering all or any part of the Collateral exists, except
such as may have been filed by Grantor in favor of Secured Party
pursuant to this Security Agreement.
(c) This Security Agreement creates a legal and valid
security interest on and in all of the Collateral in which Grantor
now has rights and will create a legal and valid security interest
in the Collateral in which Grantor later acquires rights.
(d) GrantorR
|
