Document:

Exhibit 10.6

 

PATENT AND TRADEMARK SECURITY AGREEMENT

 

This PATENT AND TRADEMARK
SECURITY AGREEMENT dated as of the 18th day of June 2003, made by Photogen
Technologies, Inc., a Nevada corporation, (the “Grantor”) in favor of Oxford
BioScience Partners IV L.P., a Delaware limited partnership, MRNA Fund II L.P.,
a Delaware limited partnership,  and Mi3
L.P., a Delaware limited partnership (the “Secured Parties”)..

 

WITNESSETH

 

WHEREAS, the Grantor has agreed
to grant to the Secured Parties a security interest in certain of its property
and assets relating to the Product (as defined below) to secure the performance
of the obligations of the Grantor under certain Revolving Convertible Senior
Secured Promissory Notes in favor of each of the Secured Parties in the
aggregate original principal amount of up to $4,160,000 (collectively, the
“Convertible Notes”); and

 

NOW, THEREFORE, in
consideration of the premises set forth above the Grantor hereby agrees with
the Secured Parties as follows:

 

TERMS

 

1.                                       Defined
Terms.  The terms set forth below
have the following meanings:

 

“Code” means the Uniform
Commercial Code as from time to time in effect in the Commonwealth of
Massachusetts.

 

“Collateral” shall have
the meaning assigned to it in Section 2 of this Patent and Trademark Security
Agreement.

 

“Event of Default”
means:

 

(1)                                  the
failure by the Grantor to perform in any material respect any obligation of the
Grantor under this Patent and Trademark Security Agreement as and when required
by this Patent and Trademark Security Agreement; or

 

(2)                                  any
representation or warranty made by the Grantor pursuant to this Patent and
Trademark Security Agreement is untrue in any material respect when made; or

 

(3)                                  the
failure by the Grantor to perform in any material respect any obligation of the
Grantor under the Security Agreement as and when required by the Security
Agreement; or

 

(4)                                  any
representation or warranty made by the Grantor pursuant to the Security
Agreement is untrue in any material respect when made; or

 

(5)                                  the
security interests granted herein and pursuant to the Security Agreement do not
constitute for any reason a perfected security interest in the Collateral
covered thereby (other than as a result of a failure to make the filings
specified in Exhibit C, D and E of this Patent and Trademark Security
Agreement); or

 

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(6)                                  the
Grantor shall file a petition under bankruptcy, insolvency or debtor’s relief
law or make an assignment for the benefit of its creditors; or

 

(7)                                  a
court of competent jurisdiction enters an order or decree under any federal or
state bankruptcy law that (X) is for relief against the Grantor in an
involuntary case brought with respect to the Grantor in such court, (Y)
appoints a custodian, receiver or other similar official for all or
substantially all the Grantor’s property or (Z) orders the liquidation of the
Grantor, and the order or decree remains unstayed and in effect for 60 days; or

 

(8)                                  any
representation or warranty made by the Grantor pursuant to the Convertible
Notes is untrue in any material respect when made; or

 

(9)                                  failure
of the Grantor to pay any Obligation when due or to perform in any material
respect any other obligation of the Grantor under the Convertible Notes as and
when required by the Convertible Notes; or

 

(10)                            the
loss or suspension of the Food and Drug Administration approval relating to the
Product; or

 

(11)                            the
Grantor shall fail to pay when due (after the expiration of any cure period
provided by agreements governing the obligation) any principal of, premium or
interest on or any amount payable in respect of any borrowed money
indebtedness; or

 

(12)                            the
failure by the Grantor to perform in any material respect any obligation of the
Grantor under that certain Note made by the Grantor in favor of the Secured
Parties of even date herewith (the “Note”).

 

“General Intangibles”
shall have the meaning ascribed such term under the Code.

 

“License Rights” shall
mean any Grantor rights that were obtained through the grant, by the Grantor,
of rights to a third party under the Product Patents or Product Trademarks.

 

“Lien” shall mean any
lien, mortgage, security interest, chattel mortgage, pledge or other
encumbrance (statutory or otherwise) of any kind securing satisfaction or
performance of an obligation, including any agreement to give any of the
foregoing, any conditional sales or other title retention agreement, any lease
in the nature thereof, and the filing of or the agreement to give any financing
statement under the Code of any jurisdiction or similar evidence of any
encumbrance, whether within or outside the United States.

 

“Obligations” shall
mean:

 

(1)                                  all
obligations and liabilities to the Secured Parties, whether now existing or
hereafter arising, under the Convertible Notes, the Security Agreement, this
Patent and Trademark Security Agreement and/or any document or agreement
related to any of the foregoing and the due performance and compliance with the
terms of the Security Agreement, this Patent and Trademark Security Agreement
and/or any document or agreement related to any of the foregoing;

 

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(2)                                  any
and all sums advanced by the Secured Parties in order to preserve the
Collateral or to preserve the Secured Parties’ security interest in the
Collateral; and

 

(3)                                  in
the event of any proceeding for the collection or enforcement of any
obligations or liabilities of the Grantor referred to in the immediately
preceding clauses (1) through (2) in accordance with the terms of the
Convertible Notes, the Security Agreement, this Patent and Trademark Security
Agreement and/or any document or agreement related to the foregoing, the
expenses of re-taking, holding, preparing for sale, selling or otherwise
disposing of or realizing on the Collateral, or of any other exercise by the
Secured Parties of their rights hereunder, together with reasonable attorneys’
fees and court costs.

 

“Patent and Trademark
Security Agreement” means this Patent and Trademark Security Agreement,
including all amendments, supplements or modifications that are agreed to in
writing by the parties.

 

“Proceeds” shall have
the meaning assigned to such term under the Code.

 

“Product” means Imagent®,
a sterile, non-pyrogenic white powder with a diluted perflexane headspace that,
after reconstitution into a suspension of microspheres, is used for contrast
enhancement during the indicated ultrasound imaging procedures and is indicated
for use in patients with suboptimal echocardiograms to opacify the left
ventricular chamber and to improve the delineation of the left ventricular
endocardial border.

 

“Product Patent(s)”
means all letters patent of the United States and foreign jurisdictions,
including any and all extensions, reissues, re-extensions and renewals thereof,
that are now owned by the Grantor or are acquired by the Grantor during the
term of this Patent and Trademark Security Agreement, and are necessary or
beneficial for the use, development, manufacture, marketing, sale or
distribution of the Product, and all letters patent of the United States or
foreign jurisdictions that issue from Product Patent Applications, including,
but not limited to:

 

(1)                                  all
letters patent of the United States listed in Exhibit A hereto or added
thereto by written agreement of the parties during the term of this Patent and
Trademark Security Agreement; and

 

(2)                                  all
letters patent of the United States that claim know-how that is now owned by
the Grantor or that is acquired by the Grantor during the term of this Patent
and Trademark Security Agreement (“Grantor Know-How”) and are necessary or
beneficial for the use, development, manufacture, marketing, sale or
distribution of the Product in the Territory.

 

Provided,
that the term Product Patent does not include claims under the Product Patents
that do not relate to the Product, are not necessary for the use, development,
manufacture, marketing, sale or distribution of the Product in the Territory,
and are, as a condition to the consummation of the transactions contemplated by
the Asset Purchase Agreement, licensed by Photogen to Alliance pursuant to a
license agreement of even date herewith.

 

“Product Patent
Application(s)” means all applications for letters patent of the United
States or foreign jurisdictions, including any and all provisionals,
continuations,

 

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continuations-in-part
and divisionals that claim inventions, discoveries or technology that is now
owned by the Grantor or is acquired by the Grantor during the term of this
Patent and Trademark Service Agreement, and are necessary or beneficial for the
use, development, manufacture, marketing, sale or distribution of the Product,
including, but not limited to:

 

(1)                                  all
applications for United States letters patent listed in Exhibit A hereto or added
thereto by written agreement of the parties during the term of this Patent and
Trademark Agreement; and

 

(2)                                all
applications for United States letters patent that claim Grantor Know-How and
are necessary or beneficial for the use, development, manufacture, marketing,
sale or distribution of the Product in the Territory.

 

“Product Trademarks”
means all United States and foreign jurisdiction trademarks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers of the
Grantor that are now owned by the Grantor or are acquired by the Grantor during
the term of this Patent and Trademark Security Agreement, whether currently in
use or not, and are adopted solely for use in conjunction with the sale of the
Product in the Territory, including, without limitation, those listed on Exhibit B
and the goodwill associated therewith, all registrations and recordings
thereof.

 

“Product Trademark Applications”
means all applications for registration of all United States and foreign
jurisdiction trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, logos and other
source or business identifiers of the Grantor that are now owned by the Grantor
or are acquired by the Grantor during the term of this Patent and Trademark
Security Agreement, whether currently in use or not and which will, upon
registration thereof, be adopted solely for use in conjunction with the sale of
the Product in the Territory, including, without limitation, those listed on Exhibit B.

 

“Security Agreement”
means that certain Security Agreement, dated as of the date hereof, between the
Grantor and the Secured Parties.

 

2.                                       Grant
of Security Interest.  As collateral
security for the prompt and complete payment and performance when due of the
Obligations, the Grantor hereby grants to the Secured Parties a continuing
security interest in all of the following property now or hereafter owned by
the Grantor, and/or in which the Grantor has or acquires, at any time during
the term of this Patent and Trademark Security Agreement, an unrestricted
right, title or interest:

 

All Product Patents and Product
Patent Applications; all Product Trademarks together with any good will of the
business associated with the use of such Product Trademarks; all License Rights
and all Accounts (as defined in the Code), contract rights and General
Intangibles arising under or relating to said License Rights and to the extent
not otherwise included, all products and proceeds of any and all of the
foregoing (collectively, the “Collateral”).

 

3.                                       Representations
and Warranties.  The Grantor hereby
represents and warrants that:

 

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(a)                                  Title;
No Other Liens.  Except for the Lien
granted to the Secured Parties pursuant to this Patent and Trademark Security
Agreement and the Lien granted to the Secured Parties pursuant to the terms of
the Security Agreement and the GSW Ownership Rights (as defined in the Security
Agreement), the Grantor solely owns each item of the Collateral free and clear
of any and all Liens or claims of others. 
No security agreement, financing statement or other public notice with
respect to all or any part of the Collateral is on file or of record in any
public office, except such as may have been filed in favor of the Secured
Parties pursuant to this Patent and Trademark Security Agreement or the
Security Agreement.

 

(b)                                 Perfected
Liens.  The Liens granted pursuant
to this Patent and Trademark Security Agreement will constitute upon the
completion of all the filings or notices listed in Exhibit C hereto, which Exhibit includes all UCC-1 financing
statements to be filed pursuant to the terms of the Security Agreement, and all
requisite filings to be made with the U.S. Patent and Trademark Office in the
form substantially similar to that of Exhibit
D and Exhibit E,
perfected Liens on all Collateral, which are prior to all other Liens on such
Collateral and which are enforceable as such against all creditors of the
Grantor.

 

(c)                                  Chief
Executive Office.  The Grantor’s
chief executive office and chief place of business is located at 140 Union
Square Drive, New Hope, PA 18938.

 

(d)                                 Authority.  The Grantor has full power, authority and
legal right to enter into this Patent and Trademark Security Agreement and to
grant the Secured Parties the Lien on the Collateral pursuant to this Patent
and Trademark Security Agreement.

 

(e)                                  Due
Execution and Delivery.  This Patent
and Trademark Security Agreement has been duly executed and delivered by the
Grantor and constitutes a legal, valid and binding obligation of the Grantor
enforceable in accordance with its terms.

 

(f)                                    No
Violation.  The execution, delivery
and performance of this Patent and Trademark Security Agreement will not
violate any provision of any applicable law or regulation or of any order,
judgment, writ, award or decree of any court, arbitrator or governmental
authority, domestic or foreign, or of any securities issued by the Grantor, or
of any mortgage, indenture, lease, contract or other agreement, instrument or
undertaking to which the Grantor is a party or which purports to be binding
upon the Grantor or upon any of its assets and will not result in the creation
or imposition of any Lien on any of the assets of the Grantor except as
contemplated by this Patent and Trademark Security Agreement and the Security
Agreement.

 

(g)                                 No
Consent or Approval.  No consent,
filing, approval, registration, recording, or other action is required (x) for
the grant by the Grantor of the Lien on the Collateral pursuant to this Patent
and Trademark Security Agreement or for the execution, delivery or performance
of this Patent and Trademark Security Agreement by the Grantor, or (y) to
perfect the Lien purported to be created by this Patent and Trademark Security
Agreement.

 

(h)                                 Validity
of Collateral.  To the knowledge of
the Grantor, all of the Collateral is subsisting and is valid.

 

(i)                                     Organization.  The Grantor is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
duly qualified and in good standing in 

 

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every other state or jurisdiction in which the
nature of the Grantor’s business or the ownership of its assets requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the Grantor or the Collateral.

 

4.                                       Covenants.  The Grantor covenants and agrees with the
Secured Parties that from and after the date of this Patent and Trademark
Security Agreement until the payment or performance in full by the Grantor of
all of its Obligations:

 

(a)                                  Further
Documentation.  At any time and from
time to time, upon the written request of the Secured Parties, and at the sole
expense of the Grantor, the Grantor will promptly and duly execute and deliver
such further instruments and documents and take such further action as the
Secured Parties may request for the purpose of obtaining or preserving the full
benefits of this Patent and Trademark Security Agreement and of the rights and
powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Code in effect in any such
jurisdiction with respect to the Liens created hereby.  The Grantor also hereby authorizes the
Secured Parties to file any such financing or continuation statement without
the signature of the Grantor to the extent permitted by applicable law. A
carbon, photographic or other reproduction of this Patent and Trademark
Security Agreement shall be sufficient as a financing statement for filing in
any jurisdiction.

 

(b)                                 Indemnification.  The Grantor agrees to pay, and to save the
Secured Parties and each Secured Party harmless from, any and all liabilities,
costs and expenses (including, without limitation, legal fees and expenses) (i)
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 Collateral, (ii) with respect to, or resulting from, any
delay by the Grantor in complying with any law or regulation applicable to any
of the Collateral or (iii) in connection with any action taken by the Secured
Parties in exercising its rights under this Patent and Trademark Security
Agreement.

 

(c)                                  Maintenance
of Records.  The Grantor will keep
and maintain at its own cost and expense satisfactory and complete records of
the Collateral.  The Grantor hereby
grants to the Secured Parties access to all of the Grantor’s books and records
pertaining to the Collateral, and the Grantor shall turn over any such books
and records for inspection at the office of the Grantor to the Secured Parties
or to their representatives during normal business hours at the request of the
Secured Parties.

 

(d)                                 Limitation
on Liens on Collateral.  Except as
provided in paragraph (f) below, the Grantor will not create, incur or permit
to exist, will defend at its own expense the Collateral against, and will take
such other action as is necessary to remove, any Lien or claim on or to the
Collateral, and will defend the right, title and interest of the Secured
Parties in and to any of the Collateral against the claims and demands of all
persons whomsoever.

 

(e)                                  Limitations
on Dispositions of Collateral.  The
Grantor will not sell, transfer, or assign any of the Collateral, or attempt,
offer or contract to do so without express, written agreement by the Secured
Parties, such consent not to be unreasonably witheld.

 

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(f)                                    Limitations
on Licensing of the Collateral. 
Grantor may execute non-exclusive, revocable licenses to Product Patents
and Product Trademarks, and may disclose the contents of Product Patent
Applications under fully executed confidentiality agreements, only upon prior
written notice to Secured Parties and only when the execution of such license
is reasonably unlikely to (i) diminish the value of the Collateral, (ii) have a
material impact on the rights of the Secured Parties and (iii) otherwise
reasonably be considered to have a material adverse effect on the security
interest granted to the Secured Parties in the Collateral in Section 2 of this
Patent and Trademark Security Agreement (the “Security Interest”).  Any and all such licenses shall contain
provisions that enable the Secured Parties, at their discretion, to revoke such
Product Patent and/or Product Trademark licenses when the Secured Parties have
a reasonable belief that their rights are being adversely effected.

 

(g)                                 Further
Identification of Collateral.  The
Grantor will furnish to the Secured Parties from time to time, upon the request
of the Secured Parties, statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Secured Parties may reasonably request, all in reasonable
detail.

 

(h)                                 Notices.  The Grantor will advise the Secured Parties
promptly, in reasonable detail, at its address set forth in accordance with
Section 13 hereof, (i) of any Lien on, or claim asserted against, any of the
Collateral, other than as created hereby or as permitted hereby, and (ii) of
the occurrence of any other event which could reasonably be expected to have a
material adverse effect on the Collateral or on the Liens created hereunder.

 

(i)                                     Patents.

 

(i)                                     The Grantor will,
at Grantor’s expense, take commercially reasonable steps to monitor and manage
its portfolio of Product Patents and Product Patent Applications, and will
notify the Secured Parties immediately if it knows that any application
relating to any Product Patent or Product Patent Application may become
abandoned 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 or any court or
tribunal in any country) regarding the patentability of any Product Patent
Application, the validity or enforceability of any Product Patent or Grantor’s
ownership of any Product Patent or Product Patent Application.

 

(ii)                                  The Grantor will, at
Grantor’s expense, with respect to any Product Patent that the Grantor obtains
after the date hereof, promptly (i) take all actions necessary so that the
Secured Parties shall obtain a perfected Security Interest in such Product
Patent and (ii) provide to the Secured Parties updated versions of Exhibit A, listing all Product Patents and
all License Rights in which Grantor has an interest.  With respect to this paragraph 4(i)(ii), an Event of Default is
“continuing” if, after a period of 30 days following issuance of any Product
Patent, the Grantor has not provided notice thereof to the Secured Parties.

 

(iii)                               The Grantor will, at
Grantor’s expense, with respect to any Product Patent Application that the
Grantor obtains after the date hereof, promptly (i) take all actions 

 

7

 

necessary so that the Secured Parties shall
obtain a perfected Security Interest in such Product Patent and (ii) provide to
the Secured Parties updated versions of Exhibit A listing all such Product
Patent Applications.  With respect to
this paragraph 4(i)(iii), an Event of Default is continuing if after a period
of 30 days following receipt of a filing receipt that identifies the serial
number thereof, Grantor has not provided notice thereof to the Secured Parties.

 

(iv)                              Upon request of the
Secured Parties, the Grantor shall execute and deliver any and all agreements,
instruments, documents, and papers as the Secured Parties may request to
evidence the Secured Parties’ Security Interest in any or all Product Patents
or Product Patent Applications.

 

(v)                                 The Grantor will, at
its own expense, take all commercially reasonable steps, including, without
limitation, those required in any proceeding before the United States Patent
and Trademark Office, to reasonably maintain and pursue each Product Patent and
Product Patent Application including, without limitation, payment of
maintenance and other fees.

 

(vi)                              In the event that the
Grantor believes that any Product Patent included in the Collateral has been
infringed by a third party, the Grantor shall, within 20 days of forming a
belief that the Collateral is being infringed by a third party, obtain a legal
opinion from outside counsel and notify the Secured Parties of such
infringement and shall, if appropriate in the Grantor’s sole discretion, at its
own expense, sue for infringement, seeking injunctive relief where appropriate
and to recover any and all damages for such infringement, or take such other
actions as the Grantor shall reasonably, in its sole discretion, deem
appropriate under the circumstances to protect such Patent.  In the event Grantor declines to pursue
infringement claims, the Secured Parties shall have the right to pursue such
claims pursuant to the powers granted in Section 6 hereof.

 

(j)                                     Trademarks.

 

(i)                                     The Grantor will,
with respect to each Product Trademark identified in Exhibit B hereto as it may be amended, supplemented or
otherwise modified from time to time, take reasonable steps to monitor its
portfolio of trademarks, and for each Product Trademark set forth on Exhibit B,
the Grantor will (i) continue to use or have used such Product Trademark to the
extent necessary to maintain such Product Trademark in full force free from any
claim of abandonment for non-use, (ii) maintain as in the past the quality of
products and services offered under such Product Trademark to the extent
appropriate, (iii) employ such Product Trademark with the appropriate notice of
registration, (iv) not adopt or use any mark which is confusingly similar or a
colorable imitation of such Product Trademark unless the Secured Parties shall
obtain a perfected Security Interest in the Company’s interest in such mark
pursuant to this Patent and Trademark Security Agreement, and (v) not do any
act or knowingly omit to do any act whereby any such Product Trademark may
become invalidated, abandoned, rendered unenforceable or otherwise diminish
Grantor’s rights therein.

 

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(ii)                                  The Grantor will
promptly notify the Secured Parties if any application or registration relating
to any Product Trademark may become opposed, abandoned, canceled or dedicated
to the public, 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
or any court or tribunal in any country) regarding the validity, enforceability
or Grantor’s ownership interest in such Product Trademark; or its right to
register the same or to keep and maintain the same.

 

(iii)                               The Grantor will, at
Grantor’s expense, with respect to any Product Trademark or Product Trademark
Application that is registered or for which an application for registration is
filed after the date hereof, promptly (i) take all actions necessary so that
the Secured Parties shall obtain a perfected Security Interest in such Product
Trademark or Product Trademark Application and (ii) provide to the Secured
Parties an updated version of Exhibit B listing
all registered Product Trademarks and Product Trademark Applications in which
the Grantor has an interest.  With
respect to this paragraph 4(j)(iii), an Event of Default is continuing if after
a period of 30 days following the mailing of the Certificate of Registration or
30 days following receipt of a filing receipt that identifies the serial number
thereof, Grantor has not provided notice thereof to the Secured Parties.

 

(iv)                              Upon request of the
Secured Parties, the Grantor shall execute and deliver any and all agreements,
instruments, documents, and papers as the Secured Parties may request to
evidence the Secured Parties’ Security Interest in any Product Trademark set
forth on Exhibit B and the
goodwill and general intangibles of the Grantor relating thereto or represented
thereby, and the Grantor hereby constitutes the Secured Parties their
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 Grantor shall
have paid and performed in full all of its obligations under the Convertible
Notes.

 

(v)                                 The Grantor will, at
Grantor’s expense, take all reasonable and necessary steps, including, without
limitation, in any proceeding before the United States Patent and Trademark
Office to maintain and pursue each Product Trademark Application (and to obtain
the relevant registration) and to maintain the registration of the Product
Trademarks, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability.

 

(vi)                              In the event that Grantor
believes that any Product Trademark included in the Collateral has been
infringed, misappropriated or diluted by a third party, the Grant shall, within
10 days of forming such belief, send a written notice to such third party demanding
that they cease such infringement, misappropriation or dilution, and the
Grantor shall notify the Secured Parties and, if appropriate in Grantor’s sole
discretion, at its own expense, sue for infringement, misappropriation or
dilution, seeking injunctive relief where appropriate and to recover any and
all damages for such infringement, misappropriation or dilution, or take such
other action as the Grantor reasonably, in its sole discretion, deems
appropriate under the circumstances to protect such Trademark.

 

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With respect to this paragraph, an Event of
Default is continuing if a copy of any written notice of infringement,
misappropriation or dilution is not been provided to the Secured Parties within
20 days following the date such communication was supposed to have been
provided to the infringing party.  In
the event Grantor declines to pursue infringement claims, the Secured Parties
shall have the right to pursue such claims pursuant to the powers granted in
Section 6 hereof.

 

(k)                                  Changes
in Locations, Name, Etc.  The
Grantor will not (i) change the location of its chief executive office/chief
place of business from that specified in Section 3(d) hereof or (ii) change its
name, identity or corporate structure to such an extent that any statement
filed by the Secured Parties with the Patent and Trademark Office in connection
with this Patent and Trademark Security Agreement would become misleading,
unless it shall have given the Secured Parties at least 30 days prior written
notice thereof and, prior to such action or event, shall have taken appropriate
action to preserve and protect the Secured Parties’ Security Interest under
this Patent and Trademark Security Agreement.

 

5.                                       Performance
by Secured Parties of Grantor’s Obligations.  If the Grantor fails to perform or comply with any of its
agreements contained herein and the Secured Parties, as provided for by the
terms of this Patent and Trademark Security Agreement and following reasonable
written notice to the Grantor, shall itself perform or comply, or otherwise
cause performance or compliance, with such agreements, the expenses of the
Secured Parties incurred in connection with such performance or compliance
shall be payable by the Grantor to the Secured Parties on demand and shall
constitute Obligations secured hereby.

 

6.                                       Secured
Parties’ Appointment as Attorney-in-Fact.

 

(a)                                  The
Grantor hereby irrevocably constitutes and appoints the Secured Parties and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Grantor and in the name of the Grantor or in its own name,
from time to time in the Secured Parties’ discretion, for the purposes of
carrying out the terms of this Patent and Trademark Security Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Patent and Trademark Security Agreement and, without limiting the
generality of the foregoing, hereby gives the Secured Parties the power and
right, upon the occurrence and continuance of an Event of Default, on behalf of
the Grantor to do the following:

 

(i)                                     to
ask, demand, collect, receive and give acquittances and receipts for any and
all moneys due and to become due under any License Rights and, in the name of
the Grantor or its own name or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any License Rights and to file any claim or to take
any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Secured Parties for the purpose of collecting any and
all such moneys due under any License Rights whenever payable;

 

(ii)                                  to
pay or discharge taxes, liens, security interests or other encumbrances levied
or placed on or threatened against the Collateral, to effect any repairs or 

 

10

 

any insurance called for by the terms of this
Patent and Trademark Security Agreement and to pay all or any part of the
premiums therefor and the costs thereof; and

 

(iii)                               to
direct any party liable for any payment under any of the License Rights to make
payment of any and all moneys due and to become due thereunder directly to the
Secured Parties or as the Secured Parties shall direct;

 

(iv)                              to
receive payment of and receipt for any and all moneys, claims and other amounts
due and to become due at any time in respect of or arising out of any
Collateral;

 

(v)                                 to
commence and prosecute any suits, actions or proceedings at law or in equity in
any court of competent jurisdiction to collect the Collateral or any part
thereof and to enforce any other right in respect of any Collateral including,
without limitation, infringement suits against third parties;

 

(vi)                              to
defend any suit, action or proceeding brought against the Grantor with respect
to any Collateral;

 

(vii)                           to
settle, compromise, or adjust any suit, action or proceeding described above
and, in connection therewith, to give such discharges or releases as the
Secured Parties may deem appropriate;

 

(viii)                        generally
to sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Secured
Parties were the absolute owner thereof for all purposes, and to do, at the
Secured Parties’ option all acts and things which the Secured Parties deems
necessary to protect, preserve or realize upon the Collateral and the Secured
Parties’ Security Interest therein, in order to effect the intent of this
Patent and Trademark Security Agreement, all as fully and effectively as the
Grantor might do; and

 

(ix)                                take
such actions and make such filings with the U.S. Patent and Trademark Office as
are necessary to protect the Collateral.

 

(b)                                 This
power of attorney is a power coupled with an interest and shall be irrevocable.
Notwithstanding the foregoing, the Grantor further agrees to execute any
additional documents which the Secured Parties may require in order to confirm
this power of attorney, or which the Secured Parties may deem necessary to
enforce any of its rights contained in this Patent and Trademark Security
Agreement.

 

(c)                                  The
powers conferred on the Secured Parties hereunder are solely to protect its
interests in the Collateral and shall not impose any duty upon it to exercise
any such powers. The Secured Parties shall be accountable only for amounts that
it actually receives as a result of the exercise of such powers and neither it
nor any of its officers, directors, employees or agents shall be responsible to
the Grantor for any act or failure to act, except for its own gross (not mere)
negligence or willful misconduct.

 

11

 

(d)                                 The
Grantor also authorizes the Secured Parties to execute, in connection with the
sale provided for in paragraph 6 of this Patent and Trademark Security
Agreement, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.

 

7.                                       Remedies.  If an Event of Default (i) has occurred and
has continued for a period of 30 consecutive days without cure by the Grantor
with respect to items 1, 2, and 3 set forth in the definition of Event of
Default, or (ii) has occurred and is continuing with respect all other items
set forth in the definition of Event of Default, the Secured Parties may
exercise, in addition to all other rights and remedies granted to it in this
Security Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the Code.  Without limiting
the generality of the foregoing, the Secured Parties, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below or expressly
provided for) to or upon the Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are, to the extent permitted by
applicable law, hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, license, assign, give option or options to purchase,
or otherwise dispose of and deliver the Collateral or any part thereof (or
contract to do any of the foregoing), at public or private sale or sales, at
any exchange, broker’s board or office of the Secured Parties or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk.  The Secured Parties
shall have the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption
in the Grantor, which right or equity is hereby waived, to the extent permitted
by applicable law, or released.

 

8.                                       Severability.  Any provision of this Patent and Trademark
Security Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.

 

9.                                       Paragraph
Headings.  The paragraph headings
used in this Patent and Trademark Security Agreement are for convenience of
reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.

 

10.                                 Cumulative
Remedies.  The rights and remedies
provided herein and in Convertible Notes may be exercised singly or
concurrently and are not exclusive of any rights or remedies provided by law or
in equity or by statute.

 

11.                                 Waivers
and Amendments; Successors and Assigns. 
None of the terms or provisions of this Patent and Trademark Security
Agreement may be waived, amended, supplemented or otherwise modified except by
a written instrument executed by the party to be charged with enforcement. No
course of dealing between the Grantor and the Secured Parties nor any delay in
exercising or failure to exercise any rights, power or privilege under this
Patent and 

 

12

 

Trademark Security Agreement shall operate as
a waiver.  This Patent and Trademark
Security Agreement shall be binding upon the successors and assigns of the
Grantor and shall inure to the benefit of the Secured Parties and their
successors and assigns. The Grantor may not assign its rights or obligations
under this Patent and Trademark Security Agreement without the prior written
consent of the Secured Parties.

 

12.                                 Termination
of Security Interest; Release of Collateral.  Upon the payment and performance in full by the Grantor of its
Obligation, the Security Interest shall terminate and all rights to the
Collateral shall revert to the Grantor.

 

13.                                 Notices.  Any notices required or permitted to be
given under the terms of this Agreement shall be in writing and shall be sent
by mail, personal delivery, telephone line facsimile transmission or courier
and shall be effective five days after being placed in the mail, if mailed, or
upon receipt, if delivered personally, by telephone line facsimile transmission
or by courier, in each case addressed to a party at such party’s address (or
telephone line facsimile transmission number) shown below or such other address
(or telephone line facsimile transmission number) as a party shall have
provided by notice to the other party in accordance with this provision. In the
case of any notice to the Grantor, such notice shall be addressed to the
Grantor at 140 Union Square Drive, New Hope, PA 18938, Attention: Chief
Financial Officer (telephone line facsimile number (215) 862-7139), and a copy
shall also be given to: Epstein, Becker & Green, P.C., 111 Huntington
Avenue, Boston, MA 02199, Attention: Susan E. Pravda, Esq. (telephone line
facsimile transmission number (617) 342-4001), and in the case of any notice to
the Secured Parties, such notice shall be addressed to the Secured Parties at
Oxford BioScience Partners IV L.P., 222 Berkley Street, Suite 1650, Boston, MA
02116, Attention: Jonathan Fleming (telephone line facsimile transmission
number (212) 247-1329), and a copy shall be given to: Epstein, Becker &
Green, P.C., 111 Huntington Avenue, Boston, MA 02199, Attention: Susan E.
Pravda, Esq. (telephone line facsimile transmission number (617) 342-4001).

 

14.                                 Integration.  This Patent and Trademark Security Agreement
represents the agreement of the Grantor and the Secured Parties with respect to
the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Secured Parties relative to subject matter
hereof not expressly set forth or referred to herein.

 

15.                                 Governing
Law.  This Patent and Trademark
Security Agreement and the rights and obligations of the Grantor and the
Secured Parties under this Patent and Trademark Security Agreement shall be
governed by, and construed and interpreted in accordance with, the law of the
Commonwealth of Massachusetts, except to the extent that under the
Massachusetts Uniform Commercial Code the laws of another jurisdiction govern
matters of perfection and the effect of perfection or non-perfection of any
Security Interest granted hereunder, and except to the further extent that the
United States patent and trademark laws are applicable.

 

16.                                 Counterparts.  This Patent and Trademark Security Agreement
may be executed in counterparts and by the parties hereto on separate
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.  A telephone line facsimile transmission of
this Patent and Trademark Security Agreement bearing a signature on behalf of a
party hereto shall be legal and binding on such party.

 

13

 

17.                                 Waiver
of Jury Trial.  To the extent
permitted by applicable law, each of the Grantor and the Secured Parties waives
any right to have a jury participate in resolving any dispute, whether sounding
in contract, tort, or otherwise between the parties hereto arising out of,
connected with, related to, or incidental to the relationship between any of
them in connection with this Security Agreement or the transactions contemplated
hereby.  Instead, any such dispute
resolved in court will be resolved in a bench trial without a jury, submitted
to jurisdiction in the federal and state courts located in Boston,
Massachusetts.

 

[Next Page is Signature Page]

 

14

 

IN WITNESS WHEREOF, the Grantor
has caused this Patent and Trademark Security Agreement to be duly executed and
delivered as of the date first above written.

 

	
   

  	
  PHOTOGEN
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/
  Brooks Boveroux

  	
   

  
	
   

  	
   

  	
  Name: Brooks Boveroux

  
	
   

  	
   

  	
  Title:
   Chief Financial Officer

  
	
   

  	
   

  	
   

  

 

	
  ACKNOWLEDGED
  AND AGREED:

  
	
   

  
	
  OXFORD BIOSCIENCE PARTNERS IV L.P.

  
	
  By  OBP Management IV L.P. , its General
  Partner

  
	
   

  
	
   

  
	
  By:

  	
   /s/ Jonathan Fleming

  	
   

  
	
  Name:  Jonathan Fleming

  
	
  Title:  General Partner

  
	
   

  
	
   

  
	
  MRNA FUND II L.P., its General Partner

  
	
  By  OBP Management IV L.P.

  
	
   

  
	
   

  
	
  By:

  	
   /s/ Jonathan Fleming

  	
   

  
	
  Name:  Jonathan Fleming

  
	
  Title:  General Partner

  
	
   

  
	
  MI3 L.P.

  
	
  By  Mi3 Services L.L.C., its General Partner

  
	
   

  
	
   

  
	
  By:

  	
   /s/ William D. McPhee

  	
   

  
	
  Name:  William D. McPhee

  
	
  Title:  Managing General Partner

  
					

 

15Exhibit
10.7

 

REVOLVING
CONVERTIBLE

SENIOR SECURED PROMISSORY NOTE

 

	
  Up to
  $[      ]

  	
   

  	
  June 18, 2003

  

 

For value
received, Photogen Technologies, Inc., a Nevada corporation (the “Company”),
hereby absolutely and unconditionally promises to pay on or before August 5,
2003 to the order of
                      ,
or registered assigns (the “Payee”), the outstanding principal balance of the
revolving credit loans (the “Revolving Credit Loans”) made by the Payee,
together with interest thereon, all as hereinafter provided.

 

The aggregate
principal amount of the Revolving Credit Loans shall not exceed $[     ], up to which an amount may be borrowed,
prepaid in whole or in part and re-borrowed as hereinafter provided.  Revolving Credit Loans shall be made in
amounts and at times as Payee determines in its sole discretion.  This Note does not constitute and is not
intended to be a commitment by the Payee to lend further money to or to provide
other financing of any nature, including without limitation equity financing,
to the Company.  The Payee is hereby
authorized to record on the schedule annexed hereto, and any continuation
sheets which the Payee may attach hereto, the (a) date and amount of each
Revolving Credit Loan made by the Payee, and (b) date and amount of each
payment or prepayment of principal of any such Revolving Credit Loan.  No failure to so record or any error in so
recording shall affect the obligation of the Company to repay the Revolving
Credit Loans, together with interest thereon, and the outstanding principal
balance of the Revolving Credit Loans made by the Payee as set forth in such
schedule shall be presumed to be correct absent manifest error.  The Payee shall send the Company a copy of
the schedule as and when updated.

 

The unpaid
principal balance outstanding, from time to time, hereunder shall accrue
interest at a rate equal to 7.25% per annum. 
Interest shall be compounded monthly and shall be computed on the basis
of a 360-day year and a 30-day month. 
Notwithstanding any other provision of this Note, the Payee does not
intend to charge and the Company shall not be required to pay any interest or
other fees or charges in excess of the maximum permitted by applicable law; and
any payments in excess of such maximum shall be refunded to the Company or
credited to reduce principal hereunder.

 

Subject to the
conversion of this Note pursuant the provisions herein, the entire principal
amount hereof, together with all interest incurred thereon and all fees and
expenses (if any) due hereunder, shall be due and payable ON DEMAND on the
sooner to occur of (the “Maturity Date”) (a) 5:00 P.M., Boston, Massachusetts
time on August 5, 2003, and (b) the date of an Acceleration Event (as defined
herein).  The Payee’s right to make such
demand shall be unconditional and unlimited. 
The Company agrees that the Payee may make such demand, at any time on
or after the Maturity Date, in the exercise of the Payee’s sole
discretion.  The Company agrees that, in
exercising its discretion, the Payee may make demand for any reasons that it
deems appropriate, and such reasons may be related or unrelated to the Company,
its business or financial condition or prospects.  The Payee’s right to make demand shall be a continuing right, and
acceptance by the Payee of any payment after demand shall not be deemed a
waiver of such right to make demand on any other occasion.

 

 

This Note may be
prepaid, in whole or in part, at any time, without penalty or premium, provided
that the Company gives the Payee not less than three (3) business days’ prior
written notice of such prepayment.

 

Principal and
interest shall be payable in lawful money of the United States of America, at
222 Berkley Street, Suite 1650 Boston, MA 02116 or at such other address as the
Payee or any subsequent holder may designate from time to time to the Company
in writing.  If any day on which a
payment is due pursuant to the terms of this Note is not a business day, such
payment shall be due on the next business day following.  All payments received by the Payee hereunder
will be applied first to costs of collection and fees, if any, then to interest
and the balance to principal.

 

If any of the
following events or circumstances (each an “Acceleration Event”) shall occur:

 

(a)           the Company shall fail to cure any
breach of its covenants, agreements or obligations under the terms of that
certain Security Agreement by and between the Company and the Payee of even
date herewith within five (5) days after written notice by the Payee to the
Company specifying such breach; or

 

(c)           any representation or warranty made
by the Company in the Security Agreement shall have been false in any material
respect when made; or

 

(d)           the Company shall make an assignment
for the benefit of creditors, or admit in writing its inability to pay or
generally fail to pay its debts as they mature or become due, or shall petition
or apply for the appointment of a trustee or other custodian, liquidator or
receiver of the Company or of any substantial part of its assets or shall
commence any case or other proceeding relating to its assets under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, or shall take
any action to authorize or in furtherance of any of the foregoing; or any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against the Company, and the same shall not have been
dismissed within 60 days of the filing or commencement thereof or the Company
shall indicate its approval thereof, consent thereto or acquiescence therein;
or a decree or order shall be entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating the Company bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree or order
for relief shall be entered in respect of the Company in an involuntary case
under any such bankruptcy or insolvency laws; or

 

(e)           the Company shall take any corporate
action to liquidate its assets, dissolve or sell all or substantially all of
its assets or capital stock, or shall take any corporate action to consolidate
or merge with or into any other corporation or business entity; or

 

(f)            the Company shall, on or after the
date hereof, have incurred or committed to incur indebtedness which is or will
be senior or pari passu to its indebtedness hereunder;

 

2

 

then, the Payee at its option at any time thereafter may declare the
entire and unpaid principal of this Note and all interest, fees and expenses
(if any) payable on or in respect of this Note and the obligations evidenced
hereby due and payable, and the same shall thereupon forthwith become and be
due and payable to the Payee without presentment, demand, protest, notice of
protest or any other formalities of any kind, all of which are hereby expressly
and irrevocably waived by the Company.

 

The entire amount
of principal and interest outstanding under this Note shall, simultaneously
with the closing of a Qualified Equity Financing (as defined herein),
automatically be converted into that number of shares of Equity Financing
Securities (as defined herein) at the same price and on the same terms as sold
to the investors in such Qualified Equity Financing.  In addition, the Payee shall thereupon be permitted to become a
party to, and shall have the benefit of all of the rights granted to and shall
be subject to all of the obligations of the other purchasers of Equity
Financing Securities in connection with a Qualified Equity Financing, pursuant
to each of the documents, instruments and agreements executed and delivered by
and between and/or among the Company and such other purchasers of Equity
Financing Securities in connection with such Qualified Equity Financing.  No fractional shares or scrip representing
fractional shares shall be issued upon the conversion of this Note, and the
price with respect to any such fractional shares shall be payable to the Payee
in cash by the Company within ten (10) days after the date of any such
conversion. “Qualified  Equity  Financing” shall mean the issuance
of equity securities or other capital stock or other securities of the Company
(“Equity Financing Securities”) on or prior to August 5, 2003 for the purpose
of and in an amount sufficient for financing the acquisition by the Company of
all of the assets of Alliance Pharmaceutical Corp. related to the Alliance’s
Imagent® (formerly ImavistTM) product. 
Notwithstanding the foregoing, no amounts outstanding under this Note
shall convert or be convertable into shares of common stock of the Company
prior to stockholder approval, if and to the extent such conversion would
violate Nasdaq rules applicable to the Company, including without limitation
Rule 4350(i).

 

In the event any
one or more of the provisions of this Note shall for any reason be held to be
invalid, illegal or unenforceable, in whole or in part or in any respect, or in
the event that any one or more of the provisions of this Note operate or would
prospectively operate to invalidate this Note, then and in any such event, such
provision(s) only shall be deemed null and void and shall not affect any other
provision of this Note and the remaining provisions of this Note shall remain
operative and in full force and effect and in no way shall be affected,
prejudiced, or disturbed thereby. 
Should all or any part of the indebtedness represented by this Note be
collected by action at law, or in bankruptcy, insolvency, receivership or other
court proceedings, or should this Note be placed in the hands of attorneys for
collection after default, the Company hereby promises to pay to the Payee, upon
demand by the Payee at any time, in addition to the outstanding principal
balance of, accrued interest and all (if any) other amounts payable on or in
respect of this Note, all court costs and reasonable attorneys’ fees and other
collection charges and expenses incurred or sustained by the Payee.  This Note shall be governed by, and
construed in accordance with, the laws of The Commonwealth of Massachusetts and
shall have the effect of a sealed instrument. 
The Company hereby irrevocably waives notice of acceptance, presentment,
notice of nonpayment, protest, notice of protest, suit and all other conditions
precedent in connection with the delivery, acceptance, collection and/or
enforcement of this Note or any collateral or security therefor.  The failure of the Payee to exercise any or
all of its rights, remedies, powers or privileges hereunder in any instance

 

3

 

shall not constitute a waiver thereof in that or any other
instance.  The Company will at all times
in good faith assist, insofar as it is able, in the carrying out of all of the
provisions of this Note in a reasonable manner and in the taking of all other
action which may be necessary in order to protect and preserve the rights of
the Payee set forth herein.

 

IN WITNESS
WHEREOF, the Company has caused this Note to be duly executed and delivered as
of the date hereof.

 

	
   

  	
  PHOTOGEN
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Brooks Bovereux

  
	
   

  	
  Its:

  	
  Chief Financial
  Officer

  

 

4

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