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EXHIBIT 10.29
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement (the "Agreement") is made
as of July 8, 1999, by and between Avanex Corporation ("Grantor"), and COMERICA
BANK-CALIFORNIA, ("Secured Party")
RECITALS
A. Secured Party has agreed to lend to Grantor, certain funds (the
"Loan") and Grantor desires to borrow such funds from Secured Party pursuant to
the terms of a REVOLVING CREDIT & SECURITY AGREEMENT, dated of even date
herewith, (the "Loan Documents"). All capitalized terms used herein without
definition shall have the meanings ascribed to them in the Loan Documents.
B. In order to induce Secured Party to make the Loan, Grantor has agreed
to assign certain intangible property to Secured Party for purposes of securing
the obligations of Grantor to Secured Party.
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. Grant of Security Interest. As collateral security for the prompt and
complete payment and performance of all of Grantor's present or future
indebtedness, obligations and liabilities to Secured Party, Grantor hereby
grants a security interest and mortgage to Secured Party, as security, in and to
Grantor's entire right, title and interest in, to and under the following (all
of which shall collectively be called the "Collateral"):
(a) Any and all copyright rights, copyright applications,
copyright registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether or not the
same also constitutes a trade secret, now or hereafter existing, created,
acquired or held, including without limitation those set forth on Exhibit A
attached hereto (collectively, the "Copyrights");
(b) Any and all trade secrets, and any and all intellectual
property rights in computer software and computer software products now or
hereafter existing, created, acquired or held;
(c) Any and all design rights which may be available to Grantor
now or hereafter existing, created, acquired or held;
(d) All patents, patent applications and like protections
including, without limitation, improvements, divisions, continuations, renewals,
reissues, extensions and continuations-in-part of the same, including without
limitation the patents and patent applications set forth on Exhibit B attached
hereto (collectively, the "Patents");
(e) Any trademark and servicemark rights, whether registered or
not, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Grantor connected with
and symbolized by such trademarks, including without limitation those set forth
on Exhibit C attached hereto (collectively, the "Trademarks");
(f) Any and all claims for damages by way of past, present and
future infringement of any of the rights included above, with the right, but not
the obligation, to xxx for and collect such damages for said use or infringement
of the intellectual property rights identified above;
(g) All licenses or other rights to use any of the Copyrights,
Patents or Trademarks, and all license fees and royalties arising from such use
to the extent permitted by such license or rights; and
(h) All amendments, extensions, renewals and extensions of any of
the Copyrights, Trademarks or Patents; and
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(i) All proceeds and products of the foregoing, including without
limitation all payments under insurance or any indemnity or warranty payable in
respect of any of the foregoing.
Notwithstanding the foregoing, the security interest granted herein shall not
extend to and the term "Collateral" shall not include any property, rights or
licenses to the extent the granting of a security interest therein (i) would be
contrary to applicable law or (ii) is prohibited by or would constitute a
default under any agreement or document governing such property, rights or
licenses (but only to the extent such prohibition is enforceable under
applicable law including without limitation Section 9318 of the Code); provided
that immediately and automatically upon the ineffectiveness, lapse or
termination of any such prohibition or restriction, the Collateral shall include
such property, rights or licenses, and Borrower shall be deemed to have granted
a security interest in all such rights and interests as if such prohibition or
restriction has never been in effect.
2. Authorization and Request. Grantor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this security agreement.
3. Covenants and Warranties. Grantor represents, warrants, covenants and
agrees as follows:
(a) Grantor is now the sole owner of the Collateral, except for
non-exclusive licenses granted by Grantor to its customers in the ordinary
course of business;
(b) Performance of this Agreement does not conflict with or
result in a breach of any agreement to which Grantor is party or by which
Grantor is bound, except to the extent that certain intellectual property
agreements prohibit the assignment of the rights thereunder to a third party
without the licensor's or other party's consent and this Agreement constitutes
an assignment;
(c) During the term of this Agreement, Grantor will not transfer
or otherwise encumber any interest in the Collateral, except for non-exclusive
licenses granted by Grantor in the ordinary course of business, or as set forth
in this Agreement or other Permitted Liens (as defined in the Loan Documents);
(d) Each of the Patents is valid and enforceable, and no part of
the Collateral has been judged invalid or unenforceable, in whole or in part,
and no claim has been made that any part of the Collateral violates the rights
of any third party;
(e) Grantor shall deliver to Secured Party within thirty (30)
days of the last day of each fiscal quarter, a report signed by Grantor, in form
reasonably acceptable to Secured Party, listing any applications or
registrations that Grantor has made or filed in respect of any patents,
copyrights or trademarks and the status of any outstanding applications or
registrations. Grantor shall promptly advise Secured Party of any material
change in the composition of the Collateral, including but not limited to any
subsequent ownership right of the Grantor in or to any Trademark, Patent or
Copyright not specified in this Agreement;
(f) Grantor shall (i) protect, defend and maintain the validity
and enforceability of the Trademarks, Patents and Copyrights, (ii) use its best
efforts to detect infringements of the Trademarks, Patents and Copyrights and
promptly advise Secured Party in writing of material infringements detected and
(iii) not allow any Trademarks, Patents or Copyrights to be abandoned, forfeited
or dedicated to the public without the written consent of Secured Party, which
shall not be unreasonably withheld, unless Grantor determines that reasonable
business practices suggest that abandonment is appropriate;
(g) Grantor shall register or cause to be registered (to the
extent not already registered) with the United States Patent and Trademark
Office or the United States Copyright Office, as applicable, those intellectual
property rights listed on Exhibits A, B and C hereto within thirty (30) days of
the date of this Agreement. Grantor shall register or cause to be registered
with the United States Patent and Trademark Office or the United States
Copyright Office, as applicable, those additional intellectual property rights
developed or acquired by Grantor from time to time in connection with any
product prior to the sale or licensing of such product to any third party
(including without limitation revisions or additions to the intellectual
property rights listed on such Exhibits A, B and C). Grantor shall, from time to
time, execute and file such other instruments, and take such further actions as
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Secured Party may reasonably request from time to time to perfect or continue
the perfection of Secured Party's interest in the Collateral:.
(h) This Agreement creates, and in the case of after acquired
Collateral, this Agreement will create at the time Grantor first has rights in
such after acquired Collateral, in favor of Secured Party a valid and perfected
first priority security interest in the Collateral in the United States securing
the payment and performance of the obligations evidenced by the Loan Documents
upon making the filings referred to in clause (i) below;
(i) Except for, and upon, the filing with the United States
Patent and Trademark office with respect to the Patents and Trademarks and the
Register of Copyrights with respect to the Copyrights necessary to perfect the
security interests created hereunder, and, except as has been already made or
obtained, no authorization, approval or other action by, and no notice to or
filing with, any U.S. governmental authority or U.S. regulatory body is required
either (i) for the grant by Grantor of the security interest granted hereby or
for the execution, delivery or performance of this Agreement by Grantor in the
U.S. or (ii) for the perfection in the United States or the exercise by Secured
Party of its rights and remedies hereunder;
(j) All information heretofore, herein or hereafter supplied to
Secured Party by or on behalf of Grantor with respect to the Collateral is
accurate and complete in all material respects.
(k) Grantor shall not enter into any agreement that would
materially impair or conflict with Grantor's obligations hereunder without
Secured Party's prior written consent, which consent shall not be unreasonably
withheld. Grantor shall not permit the inclusion in any material contract to
which it becomes a party of any provisions that could or might in any way
prevent the creation of a security interest in Grantor's rights and interests in
any property included within the definition of the Collateral acquired under
such contracts, except that certain contracts may contain anti-assignment
provisions that could in effect prohibit the creation of a security interest in
such contracts if Grantor is required, in its commercially reasonable judgment
to accept such provisions; and
(l) Upon any executive officer of Grantor obtaining knowledge
thereof, Grantor will promptly notify Secured Party in writing of any event that
materially adversely affects the value of any of the Collateral, the ability of
Grantor to dispose of any Collateral or the rights and remedies of Secured Party
in relation thereto, including the levy of any legal process against any of the
Collateral.
4. Secured Party's Rights. Secured Party shall have the right, but not
the obligation, to take, at Grantor's sole expense, any actions that Grantor is
required under this Agreement to take but which Grantor fails to take, after
fifteen (15) days' notice to Grantor. Grantor shall reimburse and indemnify
Secured Party for all reasonable costs and expenses incurred in the reasonable
exercise of its rights under this section 4.
5. Inspection Rights. Grantor hereby grants to Secured Party and its
employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to Grantor, any of Grantor's plants
and facilities that manufacture, install or store products (or that have done so
during the prior six-month period) that are sold utilizing any of the
Collateral, and to inspect the products and quality control records relating
thereto upon reasonable notice to Grantor and as often as may be reasonably
requested. Notwithstanding any provision of this Agreement to the contrary,
except upon the occurrence and continuation of an Event of Default, Grantor
shall not be required to disclose, permit the inspection, examination, copying
or making extracts of, or discuss, any document, information or other matter
that (i) constitutes non-financial trade secrets or non-financial proprietary
information, or (ii) the disclosure of which to the Secured Party, or its
designated representative, is then prohibited by (a) law, or (b) an agreement
binding on the Grantor that was not entered into by the Grantor for the primary
purpose of concealing information from the Secured Party.
6. Further Assurances; Attorney in Fact.
(a) On a continuing basis, Grantor will make, execute,
acknowledge and deliver, and file and record in the proper filing and recording
places in the United States, all such instruments, including, appropriate
financing and continuation statements and collateral agreements and filings with
the United States Patent and
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Trademark Office and the Register of Copyrights, and take all such action as may
reasonably be deemed necessary or advisable, or as requested by Secured Party,
to perfect Secured Party's security interest in all Copyrights, Patents and
Trademarks and otherwise to carry out the intent and purposes of this Agreement,
or for assuring and confirming to Secured Party the grant or perfection of a
security interest in all Collateral.
(b) Grantor hereby irrevocably appoints Secured Party as
Grantor's attorney-in-fact, with full authority in the place and stead of
Grantor and in the name of Grantor, from time to time in Secured Party's
discretion, to take any action and to execute any instrument which Secured Party
may deem necessary or advisable to accomplish the purposes of this Agreement,
including:
(i) To modify, in its sole discretion, this Agreement
without first obtaining Grantor's approval of or signature to such modification
by amending Exhibit A, Exhibit B and Exhibit C, hereof, as appropriate, to
include reference to any right, title or interest in any Copyrights, Patents or
Trademarks acquired by Grantor after the execution hereof or to delete any
reference to any right, title or interest in any Copyrights, Patents or
Trademarks in which Grantor no longer has or claims any right, title or
interest;
(ii) To file, in its sole discretion, one or more
financing or continuation statements and amendments thereto, relative to any of
the Collateral without the signature of Grantor where permitted by law; and
(iii) After the occurrence of an Event of Default, to
transfer the Collateral into the name of Secured Party or a third party to the
extent permitted under the California Uniform Commercial Code.
7. Events of Default. The occurrence of any of the following shall
constitute an Event of Default under this Agreement:
(a) An Event of Default occurs under the Loan Documents; or
(b) Grantor breaches any warranty or agreement made by Grantor in
this Agreement and, as to any breach that is capable of cure, Grantor fails to
cure such breach within ten (10) days of Grantor learns of such breach.
8. Remedies. Upon the occurrence of an Event of Default, Secured Party
shall have the right to exercise all the remedies of a secured party under the
California Uniform Commercial Code, including without limitation the right to
require Grantor to assemble the Collateral and any tangible property in which
Secured Party has a security interest and to make it available to Secured Party
at a place designated by Secured Party. Secured Party shall have a nonexclusive,
royalty free license to use the Copyrights, Patents and Trademarks to the extent
reasonably necessary to permit Secured Party to exercise its rights and remedies
upon the occurrence of an Event of Default. Grantor will pay any expenses
(including attorneys' fees) incurred by Secured Party in connection with the
exercise of any of Secured Party's rights hereunder, including without
limitation any expense incurred in disposing of the Collateral. All of Secured
Party's rights and remedies with respect to the Collateral shall be cumulative.
9. Indemnity. Grantor agrees to defend, indemnify and hold harmless
Secured Party and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by this Agreement, and
(b) all losses or expenses in any way suffered, incurred, or paid by Secured
Party as a result of or in any way arising out of, following or consequential to
transactions between Secured Party and Grantor, whether under this Agreement or
otherwise (including without limitation attorneys fees and expenses), except for
losses arising from or out of Secured Party's gross negligence or willful
misconduct.
10. Course of Dealing. No course of dealing, nor any failure to
exercise, nor any delay in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.
11. Attorneys Fees. If any action relating to this Agreement is brought
by either party hereto against the other party, the prevailing party shall be
entitled to recover reasonable attorneys fees, costs and disbursements.
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12. Amendments. This Agreement may be amended only by a written
instrument signed by both parties hereto
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
14. California Law and Jurisdiction: Jury Waiver. This Agreement shall
be governed by the laws of the State of California, without regard for choice of
law provisions. Grantor and Secured Party consent to the exclusive jurisdiction
of any state or federal court located in Santa Xxxxx County, California. GRANTOR
AND SECURED PARTY EACH WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THE LOAN DOCUMENTS, THIS
AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
Address of Grantor: GRANTOR:
00000 Xxxxxx Xxxxxx Xxxxxx Corporation
Fremont, Ca. 94538
By: /s/ XXXXX XXXX
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Title:
--------------------------------
XXXXX XXXX
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DIRECTOR OF FINANCE
Address of Secured Party: SECURED PARTY:
00 X. Xxxxxxx Xxxx Xxxxxxxx Bank-California, a California
Xxx Xxxx, XX. 00000 Banking Corporation
By: /s/ XXXXXXXXX XXXXXXXXX
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Xxxxxxxxx Xxxxxxxxx
Title: Corporate Banking Officer
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EXHIBIT A
List Of Copyrights
N/A
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EXHIBIT B
List of Patents
N/A
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EXHIBIT C
List of Trademarks
Name Serial Number Date of Filing
A AVANEX 75 673,262 April 2, 1999
DESIGN ONLY 75 673,256 April 2, 1999
AVANEX 75 673,049 April 2, 1999
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