INTELLECTUAL PROPERTY SECURITY AGREEMENT
INTELLECTUAL
PROPERTY SECURITY AGREEMENT (this
“Agreement”), dated as of May 29, 2008, by TXP Corporation (the “Company”) in
favor of YA Global Investments, L.P. (the “Secured Party”).
RECITALS:
A. Reference
is made to the Security Agreement, dated as of the date hereof, between the
Company and the Secured Party and the Security Agreement dated as of March
30,
2007 between the Company and the Secured Party (as may be amended and
supplemented from time to time, collectively, the “Security Agreement”).
B. The
Secured Party has extended financial accommodations to the Company, pursuant
to
the Convertible Debentures or otherwise, and the Company will directly benefit
from the extension of such financial accommodation and the Company acknowledges
that without this Agreement, the Secured Party would not be willing to enter
into the transaction documents related to such financial
accommodations.
D. The
Company has determined that the execution, delivery and performance of this
Agreement directly benefits, and is in the best interest of the
Company.
NOW
THEREFORE,
in
consideration of the mutual covenants, agreements, warranties, and
representations herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
SECTION
1. Definitions.
(a) Generally.
All references herein to the UCC shall mean the Uniform Commercial Code as
in
effect from time to time in the State of New Jersey; provided, however, that
if
a term is defined in Article 9 of the UCC differently than in another Article
thereof, the term shall have the meaning set forth in Article 9; provided
further that, if by reason of mandatory provisions of law, perfection, or the
effect of perfection or non-perfection, of the security interest in any IP
Collateral or the availability of any remedy hereunder is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than New Jersey,
“UCC” means the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such perfection or effect
of
perfection or non-perfection or availability of such remedy, as the case may
be.
(b) Definition
of Certain Terms Used Herein. Unless the context otherwise requires, all
capitalized terms used but not defined in this Agreement, including its preamble
and recitals, shall have the meanings set forth in the Security Agreement.
In
addition, as used herein, the following terms shall have the following
meanings:
“Copyrights”
shall mean all copyrights, copyright applications and like protections in each
work of authorship or derivative work thereof of the Company, whether registered
or unregistered, whether published or unpublished and whether or not
constituting a trade secret, including, without limitation, the United States
copyright registrations listed on EXHIBIT A annexed hereto and made a part
hereof, together with any goodwill of the business connected with, and
symbolized by, any of the foregoing.
“Copyright
Licenses” shall mean all agreements, whether written or oral, providing for the
grant by or to the Company of any right under any Copyright, including, without
limitation, the agreements listed on EXHIBIT A annexed
hereto and made a part hereof.
“Copyright
Office” shall mean the United States Copyright Office or any other federal
governmental agency which may hereafter perform its functions.
“IP
Collateral” shall have the meaning assigned to such term in Section 2 of this
Agreement.
“Licenses”
shall mean, collectively, the Copyright Licenses, Patent Licenses, Trademark
Licenses, and any other license providing for the grant by or to the Company
of
any right under any IP Collateral.
“Patents”
shall mean all patents and applications for patents of the Company, and the
inventions and improvements therein disclosed, and any and all divisions,
revisions, reissues and continuations, continuations-in-part, extensions, and
reexaminations of said patents including, without limitation, the United States
patent registrations listed on EXHIBIT B annexed hereto and made a part
hereof.
“Patent
Licenses” shall mean all agreements, whether written or oral, providing for the
grant by or to the Company of any right under any Patent, including, without
limitation, the agreements listed on EXHIBIT B annexed
hereto and made a part hereof.
“PTO”
shall mean the United States Patent and Trademark Office or any other federal
governmental agency which may hereafter perform its functions.
“Trademarks”
shall mean all trademarks, trade names, corporate names, company names, domain
names, business names, fictitious business names, trade dress, trade styles,
service marks, designs, logos and other source or business identifiers of the
Company, whether registered or unregistered, including, without limitation,
the
United States trademark registrations listed on EXHIBIT C annexed hereto and
made a part hereof, together with any goodwill of the business connected with,
and symbolized by, any of the foregoing.
“Trademark
Licenses” shall mean all agreements, whether written or oral, providing for the
grant by or to the Company of any right under any Trademark, including, without
limitation, the agreements listed on EXHIBIT C annexed
hereto and made a part hereof.
SECTION
2. Grant
of
Security Interest. In furtherance and as confirmation of the security interest
granted by the Company to the Secured Party under the Security Agreement, and
as
further security for the payment or performance in full of the Obligations,
the
Company hereby grants to the Secured Party a continuing security interest,
with
a power of sale (which power of sale shall be exercisable only following the
occurrence and during the continuance of an Event of Default), in all of the
present and future right, title and interest of the Company in and to the
following property, and each item thereof, whether now owned or existing or
hereafter acquired or arising, together with all products, proceeds,
substitutions, and accessions of or to any of the following property
(collectively, the “IP Collateral”):
(b) All
Patents and Patent Licenses;
(d) All
other
Licenses;
(e) All
renewals of any of the foregoing;
(f) All
trade
secrets, know-how and other proprietary information; works of authorship and
other copyright works (including copyrights for computer programs), and all
tangible and intangible property embodying the foregoing; inventions (whether
or
not patentable) and all improvements thereto; industrial design applications
and
registered industrial designs; books, records, writings, computer tapes or
disks, flow diagrams, specification sheets, computer software, source codes,
object codes, executable code, data, databases, and other physical
manifestations, embodiments or incorporations of any of the foregoing, and
any
Licenses in any of the foregoing, and all other IP Collateral and proprietary
rights;
(g) All
General Intangibles connected with the use of, or related to, any and all IP
Collateral (including, without limitation, all goodwill of the Company and
its
business, products and services appurtenant to, associated with, or symbolized
by, any and all IP Collateral and the use thereof);
(h) All
income, royalties, damages and payments now and hereafter due and/or payable
under and with respect to any of the foregoing, including, without limitation,
payments under all Licenses entered into in connection therewith and damages
and
payments for past or future infringements, misappropriations or dilutions
thereof;
(i) The
right
to xxx for past, present and future infringements, misappropriations, and
dilutions of any of the foregoing; and
(j) All
of
the Company’s rights corresponding to any of the foregoing throughout the
world.
SECTION
3. Protection
of IP Collateral By Company. Except as set forth below in this Section 3,
the
Company shall undertake the following with respect to each of the items
respectively described in Sections 2(a), (b), (c), (d), (e), (f) and
(g):
(a) Pay
all
renewal fees and other fees and costs associated with maintaining the IP
Collateral and with the processing and prosecution of the IP Collateral and
take
all other steps reasonably necessary to maintain each registration of the IP
Collateral.
(b) Take
all
actions reasonably necessary to prevent any of the IP Collateral from becoming
forfeited, abandoned, dedicated to the public, invalidated or impaired in any
way.
(c) At
the
Company’s sole cost, expense, and risk, pursue the processing and prosecution of
each application for registration which is the subject of the security interest
created herein and not abandon or delay any such efforts.
(d) At
the
Company’s sole cost, expense, and risk, take any and all action which the
Company reasonably deem necessary or desirable under the circumstances to
protect the IP Collateral from infringement, misappropriation or dilution,
including, without limitation, the prosecution and defense of infringement
actions.
SECTION
4. Company’s
Representations and Warranties. In addition to any representations and
warranties contained in any of the other Transaction Documents, the Company
represents and warrants that:
(i) EXHIBIT
A
is a true, correct and complete list of all United States Copyright
registrations owned by the Company and all Copyright Licenses to which the
Company is a party as of the date hereof.
(ii) EXHIBIT
B
is a true, correct and complete list of all United States Patents owned by
the
Company and all Patent Licenses to which the Company is a party as of the date
hereof.
(iii) EXHIBIT
C
is a true, correct and complete list of all United States Trademark
registrations owned by the Company and all Trademark Licenses to which the
Company is a party as of the date hereof.
(iv) Except
as
set forth in EXHIBITS A, B and C,
none
of the IP Collateral owned by the Company is the subject of any licensing or
franchise agreement pursuant to which the Company is the licensor or franchisor
as of the date hereof.
(v) The
Company shall not transfer or otherwise encumber any interest in the IP
Collateral, except for non-exclusive licenses granted by the Company in the
ordinary course of business, as set forth in this Agreement, or Permitted
Liens.
(vi) The
Company owns, or is licensed to use, all IP Collateral in connection with the
conduct of its business. No claim has been asserted and is pending by any person
challenging or questioning the use by the Company of any of its IP Collateral,
or the validity or effectiveness of any of its IP Collateral. TheTo
the
Company’s knowledge, the
Company
considers that the use by the Company of the IP Collateral does not infringe
the
rights of any person in any material respect. No holding, decision or judgment
has been rendered by any governmental authority which would limit, cancel or
question the validity of, or a Company’s rights in, any IP Collateral in any
material respect.
(vii) Performance
of this Agreement does not conflict with or result in a breach of any material
agreement to which the Company is bound.
(viii) The
Company shall give the Secured Party prompt written notice, with reasonable
detail, following the occurrence of any of the following:
(A) The
Company’s obtaining rights to, or being issued a registration in or receiving an
issuance of, any new IP Collateral, or otherwise acquiring ownership of any
registered IP Collateral (other than the acquisition by the Company of the
right
to sell products containing the trademarks of others in the ordinary course
of
the Company’s business).
(B) The
Company becoming entitled to the benefit of any registered IP Collateral whether
as licensee or licensor (other than commercially available off the shelf
computer programs, products or applications and the Company’s right to sell
products containing the trademarks of others in the ordinary course of the
Company’s business).
(C) The
Company entering into any new Licenses with respect to the IP Collateral (other
than commercially available off the shelf computer programs, products or
applications and the Company’s right to sell products containing the trademarks
of others in the ordinary course of the Company’s business).
(D) The
Company’s knowing, or having reason to know, that any registration relating to
any IP Collateral may, other than as provided in SECTION 3 above, become
forfeited, abandoned 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 PTO, the Copyright Office
or any court or tribunal) regarding the Company’s ownership of, or the validity
or enforceability of, any IP Collateral or the Company’s right to register the
same or to own and maintain the same.
SECTION
5. Agreement
Applies to Future IP Collateral.
(a) The
provisions of this Agreement shall automatically apply to any such additional
property or rights described in Section 4(viii) above, all of which shall be
deemed to be and treated as “IP Collateral” within the meaning of this
Agreement. Upon the acquisition by the Company of any additional IP Collateral,
the Company shall promptly deliver to the Secured Party an updated EXHIBIT
A, B,
and/or C
(as
applicable) to this Agreement and hereby authorizes the Secured Party to file,
at the Company’s expense, such updated Exhibit as set forth in Section
5(b).
(b) The
Company shall execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Secured Party may reasonably request
to
evidence the Secured Party’s security interest in any
IP
Collateral (including, without limitation, filings with the PTO, the Copyright
Office or any similar office), and the Company hereby constitutes the Secured
Party as its attorney-in-fact to execute and file all such writings for the
foregoing purposes, all such acts of such attorney being hereby ratified and
confirmed; provided, however, that the Secured Party’s taking of such action
shall not be a condition to the creation or perfection of the security interest
created hereby.
(c) The
Company authorizes and requests that the Copyright Office and the PTO record
this Agreement, any amendments thereto or copies thereof..
(a) The
Company provides the Secured Party with written notice of the Company’s
institution of any legal proceedings for enforcement of any IP
Collateral.
(b) Upon
the
occurrence and during the continuance of any Event of Default, the Secured
Party, by notice to the Company, may terminate or limit the Company’s rights
under this Section 6.
SECTION
7. Secured
Party’s Actions To Protect IP Collateral. In the event of:
(a) The
Company’s failure, within fifteen (15) days of written notice from the Secured
Party, to cure any failure by the Company to observe or perform any of the
Company’s covenants, agreements or other obligations hereunder;
and/or
(b) the
occurrence and continuance of any other Event of Default,
the
Secured Party, acting in its own name or in that of the Company, may (but shall
not be required to) act in the Company’s place and stead and/or in the Secured
Party’s own right in connection therewith.
SECTION
8. Rights
Upon Default. Upon the occurrence and during the continuance of an Event of
Default, in addition to all other rights and remedies, the Secured Party may
exercise all rights and remedies of a secured party under the UCC, with respect
to the IP Collateral, in addition to which the Secured Party may sell, license,
assign, transfer, or otherwise dispose of the IP Collateral, subject to those
restrictions to which the Company is subject under applicable law and by
contract. Any person may conclusively rely upon an affidavit of an officer
of
the Secured Party that an Event of Default has occurred and that the Secured
Party is authorized to exercise such rights and remedies. In connection with
such exercise of rights, the Secured Party shall have a non-exclusive, royalty
free license to use the IP Collateral.
SECTION
9. Secured
Party As Attorney-In-Fact.
(a) The
Company hereby irrevocably make, constitute and appoint the Secured Party (and
all officers, employees or agents designated by the Secured Party) as and for
the Company’s true and lawful agent and attorney-in-fact, effective following
the occurrence and during the continuance of any Event of Default, and in such
capacity the Secured Party shall have the right, with power of substitution
for
the Company and in the Company’s names or otherwise, for the use and benefit of
the Secured Party:
(A) To
supplement and amend from time to time EXHIBITS A, B and
C of
this Agreement to include any newly developed, applied for, registered, or
acquired IP Collateral of the Company and any intent-to-use Trademark
applications for which a statement of use or an amendment to allege use has
been
filed and accepted by the PTO.
(B) To
exercise any of the rights and powers referenced herein.
(C) To
execute all such instruments, documents, and papers as the Secured Party
reasonably determines to be necessary or desirable in connection with the
exercise of such rights and remedies and to cause the sale, license, assignment,
transfer, or other disposition of the IP Collateral, subject to those
restrictions to which the Company is subject under applicable law and by
contract.
(b) The
power
of attorney granted herein, being coupled with an interest, shall be irrevocable
until this Agreement is terminated in writing by a duly authorized officer
of
the Secured Party.
(c) The
Secured Party shall not be obligated to do any of the acts or to exercise any
of
the powers authorized by SECTION 9(a).
SECTION
10. Intent.
This Agreement is being executed and delivered by the Company for the purpose
of
registering and confirming the grant of the security interest of the Secured
Party in the IP Collateral with the PTO and the Copyright Office. It is intended
that the security interest granted pursuant to this Agreement is granted as
a
supplement to, and not in limitation of, the security interest granted to the
Secured Party under the Security Agreement. All provisions of the Security
Agreement (including, without limitation, the rights, remedies, powers,
privileges and discretions of the Secured Party thereunder) shall apply to
the
IP Collateral. In the event of a conflict between this Agreement and the
Security Agreement, the terms of this Agreement shall control with respect
to
the IP Collateral and the terms of the Security Agreement shall control with
respect to all other Collateral.
SECTION
11. Further
Assurances. The Company agrees, at its own expense, to execute, acknowledge,
deliver and cause to be duly filed all such further documents, financing
statements, agreements and instruments and take all such further actions as
the
Secured Party may from time to time reasonably request to better assure,
preserve, protect and perfect the security interest in the IP Collateral granted
pursuant to this Agreement and the rights and remedies created hereby or the
validity or priority of such security interest, including the payment of any
fees and taxes required in connection with the execution and delivery of this
Agreement, the granting of the security interest and the filing of any financing
statements or other documents in connection herewith or therewith.
SECTION
12. Release
of IP Collateral. Upon payment and performance in full of all Obligations,
the
Secured Party shall, at the Company’s expense, execute and deliver to the
Company all instruments and other documents as may be necessary or proper to
release the lien on any security interest in the IP Collateral which has been
granted hereunder.
SECTION
13. Additional
Grantors.
Pursuant to Section 6.13 of the Security Agreement, any subsidiary of the
Company that was not in existence or not a subsidiary on the date of the
Security Agreement is required to become a party to this Agreement. Such
subsidiary shall become a party hereunder, and grant securtity interests in
its
assets in favor of the Secured Party, with the same force and effect as if
originally named herein. The rights and obligations of the Company hereunder
shall remain in full force and effect notwithstanding the addition of any new
subsidiaries as a party to this Agreement.
SECTION
14. Notices.
Unless otherwise provided herein, all demands, notices, consents, service of
process, requests and other communications hereunder shall be in writing and
shall be delivered to the addresses provided in the Security
Agreement.
SECTION
15. Binding
Effect. All of the covenants and obligations contained herein shall be binding
upon and shall inure to the benefit of the respective parties, their successors
and assigns.
SECTION
16. Governing
Law; Venue. The validity, interpretation and performance of this Agreement
shall
be determined in accordance with the laws of the State of New Jersey without
regard to the principles of conflict of laws. The parties further agree that
any
action between them shall be heard in Xxxxxx County, New Jersey or Federal
district courts located in Newark, New Jersey, and expressly consent to the
jurisdiction and venue of the Superior Court of New Jersey, sitting in Xxxxxx
County and the United States District Court for the District of New Jersey
sitting in Newark, New Jersey for the adjudication of any civil action asserted
pursuant to this Paragraph, provided, however, that nothing herein shall prevent
the Secured Party from enforcing its rights and remedies (including, without
limitation, by filing a civil action) with respect to the IP Collateral and/or
the Company in any other jurisdiction which the Secured Party deems necessary
or
appropriate in order to realize on the IP Collateral or to otherwise enforce
the
Secured Party’s rights against the Company or the IP Collateral.
SECTION
17. JURY
TRIAL. AS A MATERIAL INDUCEMENT FOR THE SECURED PARTY TO MAKE FINANCIAL
ACCOMMODATIONS TO THE COMPANY, THE COMPANY HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY
LEGAL
PROCEEDING RELATED IN ANY WAY TO THIS AGREEMENT AND/OR ANY AND ALL OF THE OTHER
DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.
SECTION
18. Severability.
If any provision of this Agreement is, for any reason, invalid or unenforceable,
the remaining provisions of this Agreement will nevertheless be valid and
enforceable and will remain in full force and effect. Any provision of this
Agreement that is held invalid or unenforceable by a court of competent
jurisdiction will be deemed modified to the extent necessary to make it valid
and enforceable and as so modified will remain in full force and
effect.
SECTION
19. Amendment
and Waiver. This Agreement may be amended, or any provision of this Agreement
may be waived, provided that any such amendment or waiver will be binding on
a
party hereto only if such amendment or waiver is set forth in a writing executed
by the parties hereto. The waiver by any such party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any
other breach. The Secured Party’s failure to exercise any right, remedy or
option under this Agreement or other agreement between the Secured Party and
the
Company or delay by the Secured Party in exercising the same will not operate
as
a waiver. No waiver by the Secured Party shall affect its right to require
strict performance of this Agreement.
SECTION
20. Entire
Agreement. This Agreement and the other documents or agreements delivered in
connection herewith set forth the entire understanding of the parties with
respect to the subject matter hereof, and shall not be modified or affected
by
any offer, proposal, statement or representation, oral or written, made by
or
for any party in connection with the negotiation of the terms hereof, and may
be
modified only by instruments signed by all of the parties hereto.
SECTION
21. Counterparts.
This Agreement may be executed and delivered by exchange of facsimile signatures
of the Secured Party and the Company, and those signatures need not be affixed
to the same copy. This Agreement may be executed in any number of
counterparts.
IN
WITNESS WHEREOF, the
parties hereto have executed this Intellectual Property Security Agreement
as of
the date first above written.
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TXP
CORPORATION
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By
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/s/
Xxxxxxx X. Xxxxxx
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Name:
Xxxxxxx X. Xxxxxx
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Title:Chief
Executive Officer
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STATE
OF ____________________)
)
SS:
COUNTY
OF __________________)
BEFORE
ME,
a Notary
Public in and for said County and State, personally appeared the above-named
_______________________ who acknowledged that he/she did sign the foregoing
agreement and that the same is his/her free act and deed.
IN
TESTIMONY WHEREOF,
I have
hereunto set my hand an official seal at __________________,
____________________, this ___ day of __________, 2008.
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Notary
Public
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IN
WITNESS WHEREOF, the
parties hereto have executed this Intellectual Property Security Agreement
as of
the date first above written.
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SECURED
PARTY:
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YA
GLOBAL INVESTMENTS, L.P.
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By:
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Yorkville
Advisors, LLC
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Its:
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Investment
Manager
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By:
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/s/
Xxxxxx Xxxxx
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Name:
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Xxxxxx
Xxxxx
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Title:
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Managing
Partner
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