PATENT AND TRADEMARK SECURITY AGREEMENT
This PATENT AND TRADEMARK SECURITY AGREEMENT ("Agreement"), dated as of February
24, 1999, is entered into between V-ONE CORPORATION, a Delaware corporation
("Grantor"), which has a mailing address at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx 00000, and TRANSAMERICA BUSINESS CREDIT CORPORATION, a
Delaware corporation, ("TBCC") having its principal office at 0000 Xxxx Xxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000 and having an office at 00 Xxxxxxxxx
Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000-0000.
RECITALS
A. Grantor and TBCC are, contemporaneously herewith, entering into that
certain Loan and Security Agreement ("Loan Agreement") and other instruments,
documents and agreements contemplated thereby or related thereto (collectively,
together with the Loan Agreement, the "Loan Documents"); and
B. Grantor is the owner of certain intellectual property, identified
below, in which Grantor is granting a security interest to TBCC.
NOW THEREFORE, in consideration of the mutual promises, covenants,
conditions, representations, and warranties hereinafter set forth and for other
good and valuable consideration, the parties hereto mutually agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. The following terms, as used in this Agreement, have the
following meanings:
"CODE" means the Illinois Uniform Commercial Code, as amended and
supplemented from time to time, and any successor statute.
"COLLATERAL" means all of the following, whether now owned or
hereafter acquired:
(i) Each of the trademarks and rights and interest which are
capable of being protected as trademarks (including trademarks, service marks,
designs, logos, indicia, tradenames, corporate names, company names, business
names, fictitious business names, trade styles, and other source or business
identifiers, and applications pertaining thereto), which are presently, or in
the future may be, owned, created, acquired, or used (whether pursuant to a
license or otherwise) by Grantor, in whole or in part, and all trademark rights
with respect thereto throughout the world, including all proceeds thereof
(including license royalties and proceeds of infringement suits), and rights to
renew and extend such trademarks and trademark rights;
(ii) Each of the patents and patent applications which are
presently, or in the future may be, owned, issued to, acquired, or used (whether
pursuant to a license or otherwise) by Grantor, in whole or in part, and all
patent rights with respect thereto throughout the world, including all proceeds
thereof (including license royalties and proceeds of infringement suits),
foreign filing rights, and rights to extend such patents and patent rights;
(iii) All of Grantor's right to the trademarks and trademark
registrations listed on EXHIBIT A attached hereto, as the same may be updated
hereafter from time to time;
(iv) All of Grantor's right, title, and interest, in and to
the patents and patent applications listed on EXHIBIT B attached hereto, as the
same may be updated hereafter from time to time;
(v) All of Grantor's right, title and interest to register
trademarks under any state or federal trademark law or regulation of any foreign
country and to apply for, renew, and extend the trademark registrations and
trademark rights, the right (without obligation) to xxx or bring opposition or
cancellation proceedings in the name of Grantor or in the name of TBCC for past,
present, and future infringements of the trademarks, registrations, or trademark
rights and all rights (but not obligations) corresponding thereto in the United
States and any foreign country;
(vi) All of Grantor's right, title, and interest in all
patentable inventions, and to file applications for patent under federal patent
law or regulation of any foreign country, and to request reexamination and/or
reissue of the patents, the right (without obligation) to xxx or bring
interference proceedings in the name of Grantor or in the name of TBCC for past,
present, and future infringements of the patents, and all rights (but not
obligations) corresponding thereto in the United States and any foreign country;
(vii) the entire goodwill of or associated with the businesses
now or hereafter conducted by Grantor connected with and symbolized by any of
the aforementioned properties and assets;
(viii) All general intangibles relating to the foregoing and
all other intangible intellectual or other similar property of the Grantor of
any kind or nature, associated with or arising out of any of the aforementioned
properties and assets and not otherwise described above; and
(ix) All products and proceeds of any and all of the
foregoing (including, without limitation, license royalties and proceeds of
infringement suits) and, to the extent not otherwise included, all payments
under insurance, or any indemnity, warranty, or guaranty payable by reason of
loss or damage to or otherwise with respect to the Collateral.
"OBLIGATIONS" means all obligations, liabilities, and indebtedness
of Grantor to TBCC, whether direct, indirect, liquidated, or contingent, and
whether arising under this Agreement, the Loan Agreement, any other of the Loan
Documents, or otherwise, including all reasonable costs and expenses as set
forth in the Loan Agreement.
1.2 CONSTRUCTION. Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, and the term "including" is not limiting. The words
"hereof," "herein," "hereby," "hereunder," and other similar terms refer to this
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Agreement as a whole and not to any particular provision of this Agreement. Any
initially capitalized terms used but not defined herein shall have the meaning
set forth in the Loan Agreement. Any reference herein to any of the Loan
Documents includes any and all alterations, amendments, extensions,
modifications, renewals, or supplements thereto or thereof, as applicable.
Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against TBCC or Grantor, whether under any rule of
construction or otherwise. On the contrary, this Agreement has been reviewed by
Grantor, TBCC, and their respective counsel, and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of TBCC and Grantor. Headings have been
set forth herein for convenience only, and shall not be used in the construction
of this Agreement.
2. GRANT OF SECURITY INTEREST.
To secure the complete and timely payment and performance of all
Obligations, and without limiting any other security interest Grantor has
granted to TBCC, Grantor hereby grants, assigns, and conveys to TBCC a security
interest in Grantor's entire right, title, and interest in and to the
Collateral.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS.
Grantor hereby represents, warrants, and covenants that:
3.1 TRADEMARKS; PATENTS. A true and complete schedule setting forth all
federal and state trademark registrations owned or controlled by Grantor,
together with the information in respect of the filing or issuance thereof, is
set forth on EXHIBIT A; and a true and complete schedule setting forth all
patent and patent applications owned or controlled by Grantor, together with the
information in respect of the filing or issuance thereof, is set forth on
EXHIBIT B.
3.2 VALIDITY; ENFORCEABILITY. To Borrower's knowledge, each of the
patents and trademarks is valid and enforceable, and Grantor is not presently
aware of any past, present, or prospective claim by any third party that any of
the patents or trademarks are invalid or unenforceable, or that the use of any
patents or trademarks violates the rights of any third person, or of any basis
for any such claims.
3.3 TITLE. Grantor is the sole and exclusive owner of the entire and
unencumbered right, title, and interest in and to each of the patents, patent
applications, trademarks, and trademark registrations set forth in Exhibits A or
B, free and clear of any liens, charges, and encumbrances, including pledges,
assignments, licenses, and covenants by Grantor not to xxx third persons.
3.4 NOTICE. Grantor has used and will continue to use proper statutory
notice in connection with its use of each of the patents and trademarks.
3.5 QUALITY. Grantor has used and will continue to use consistent
standards of high quality (which may be consistent with Grantor's past
practices) in the manufacture, sale, and delivery of products and services sold
or delivered under or in connection with the trademarks, including, to the
extent applicable, in the operation and maintenance of its merchandising
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operations, and will continue to maintain the validity of the trademarks in
accordance with prudent business practices.
3.6 PERFECTION OF SECURITY INTEREST. Except as required under the United
States Assignment of Claims Act and for the filing of appropriate financing
statements and filings with the United States Patent and Trademark Office
necessary to perfect the security interests created hereunder, no authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required either for the grant by Grantor of the
security interest hereunder or for the execution, delivery, or performance of
this Agreement by Grantor or for the perfection of or the exercise by TBCC of
its rights hereunder to the Collateral in the United States.
4. AFTER-ACQUIRED PATENT OR TRADEMARK RIGHTS.
If Grantor shall obtain rights to any new trademarks, any new patentable
inventions or become entitled to the benefit of any patent application or patent
for any reissue, division, or continuation, of any patent, the provisions of
this Agreement shall automatically apply thereto. Grantor shall give prompt
notice in writing to TBCC with respect to any such new trademarks or patents, or
renewal or extension of any trademark registration. Grantor shall bear any
expenses incurred in connection with its future patent applications or trademark
registrations. Without limiting Grantor's obligation under this Section 4,
Grantor authorizes TBCC to modify this Agreement by amending EXHIBITS A OR B to
include any such new patent applications or trademark registrations.
Notwithstanding the foregoing, no failure to so modify this Agreement or amend
EXHIBITS A OR B shall in any way affect, invalidate or detract from TBCC's
continuing security interest in all Collateral, whether or not listed on EXHIBIT
A OR B.
5. LITIGATION AND PROCEEDINGS.
Grantor shall commence and diligently prosecute in its own name, as the
real party in interest, for its own benefit, and its own expense, such suits,
administrative proceedings, or other action for infringement or other damages as
are in its reasonable business judgment necessary to protect the Collateral.
Grantor shall provide to TBCC any information with respect thereto requested by
TBCC, but not to the extent that any attorney-client privilege may be waived.
TBCC shall provide at Grantor's expense all necessary cooperation in connection
with any such suits, proceedings, or action, including, without limitation,
joining as a necessary party. Following Grantor's becoming aware thereof,
Grantor shall notify TBCC of the institution of, or any adverse determination
in, any proceeding in the United States Patent and Trademark Office, or any
United States, state, or foreign court regarding Grantor's claim of ownership in
any of the patents or trademarks, its right to apply for the same, or its right
to keep and maintain such patent or trademark rights.
6. POWER OF ATTORNEY.
Grantor hereby appoints TBCC as Grantor's true and lawful attorney, with
full power of substitution, to do any or all of the following, in the name,
place and stead of Grantor: (a) file this Agreement (or an abstract hereof) or
any other document describing TBCC's interest in the Collateral with the United
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States Patent and Trademark Office; (b) execute any modification of this
Agreement pursuant to Section 4 of this Agreement; (c) take any action and
execute any instrument which TBCC may deem necessary or advisable to accomplish
the purposes of this Agreement; and (d) following an Event of Default (as
defined in the Loan Agreement), (i) endorse Grantor's name on all applications,
documents, papers and instruments necessary for TBCC to use or maintain the
Collateral; (ii) ask, demand, collect, xxx for, recover, impound, receive, and
give acquittance and receipts for money due or to become due under or in respect
of any of the Collateral; (iii) file any claims or take any action or institute
any proceedings that TBCC may deem necessary or desirable for the collection of
any of the Collateral or otherwise enforce TBCC's rights with respect to any of
the Collateral, and (iv) assign, pledge, convey, or otherwise transfer title in
or dispose of the Collateral to any person.
7. RIGHT TO INSPECT.
Grantor grants to TBCC and its employees and agents the right to visit
Grantor's plants and facilities which manufacture, inspect, or store products
sold under any of the patents or trademarks, and to inspect the products and
quality control records relating thereto at reasonable times during regular
business hours.
8. SPECIFIC REMEDIES.
Upon the occurrence of any Event of Default (as defined in the Loan
Agreement), TBCC shall have, in addition to, other rights given by law or in
this Agreement, the Loan Agreement, or in any other Loan Document, all of the
rights and remedies with respect to the Collateral of a secured party under the
Code, including the following:
8.1 NOTIFICATION. TBCC may notify licensees to make royalty payments
on license agreements directly to TBCC;
8.2 SALE. TBCC may sell or assign the Collateral and associated goodwill
at public or private sale for such amounts, and at such time or times as TBCC
deems advisable. Any requirement of reasonable notice of any disposition of the
Collateral shall be satisfied if such notice is sent to Grantor five (5) days
prior to such disposition. Grantor shall be credited with the net proceeds of
such sale only when they are actually received by TBCC, and Grantor shall
continue to be liable for any deficiency remaining after the Collateral is sold
or collected. If the sale is to be a public sale, TBCC shall also give notice of
the time and place by publishing a notice one time at least five (5) days before
the date of the sale in a newspaper of general circulation in the county in
which the sale is to be held. To the maximum extent permitted by applicable law,
TBCC may be the purchaser of any or all of the Collateral and associated
goodwill at any public sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any public sale, to use and apply all or any part of the
Obligations as a credit on account of the purchase price of any collateral
payable by TBCC at such sale.
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9. GENERAL PROVISIONS.
9.1 EFFECTIVENESS. This Agreement shall be binding and deemed effective
when executed by Grantor and TBCC.
9.2 NOTICES. Except to the extent otherwise provided herein, all notices,
demands, and requests that either party is required or elects to give to the
other shall be in writing and shall be governed by the notice provisions of the
Loan Agreement.
9.3 NO WAIVER. No course of dealing between Grantor and TBCC, nor any
failure to exercise nor any delay in exercising, on the part of TBCC, any right,
power, or privilege under this Agreement or under the Loan Agreement or any
other agreement, shall operate as a waiver. No single or partial exercise of any
right, power, or privilege under this Agreement or under the Loan Agreement or
any other agreement by TBCC shall preclude any other or further exercise of such
right, power, or privilege or the exercise of any other right, power, or
privilege by TBCC.
9.4 RIGHTS ARE CUMULATIVE. All of TBCC's rights and remedies with respect
to the Collateral whether established by this Agreement, the Loan Agreement, or
any other documents or agreements, or by law shall be cumulative and may be
exercised concurrently or in any order.
9.5 SUCCESSORS. The benefits and burdens of this Agreement shall inure to
the benefit of and be binding upon the respective successors and permitted
assigns of the parties; provided that Grantor may not transfer any of the
Collateral or any rights hereunder, without the prior written consent of TBCC,
except as specifically permitted hereby.
9.6 SEVERABILITY. The provisions of this Agreement are severable. If any
provision of this Agreement is held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such provision or part thereof in any other jurisdiction, or any
other provision of this Agreement in any jurisdiction.
9.7 ENTIRE AGREEMENT. This Agreement is subject to modification only by a
writing signed by the parties, except as provided in Section 4 of this
Agreement. To the extent that any provision of this Agreement conflicts with any
provision of the Loan Agreement, the provision giving TBCC greater rights or
remedies shall govern, it being understood that the purpose of this Agreement is
to add to, and not detract from, the rights granted to TBCC under the Loan
Agreement. This Agreement, the Loan Agreement, and the documents relating
thereto comprise the entire agreement of the parties with respect to the matters
addressed in this Agreement.
9.8 FEES AND EXPENSES. Grantor shall pay to TBCC on demand all costs and
expenses that TBCC pays or incurs in connection with the negotiation,
preparation, consummation, administration, enforcement, and termination of this
Agreement, including: (a) reasonable attorneys' and paralegals' fees and
disbursements of counsel to TBCC; (b) costs and expenses (including reasonable
attorneys' and paralegals' fees and disbursements) for any amendment,
supplement, waiver, consent, or subsequent closing in connection with this
Agreement and the transactions contemplated hereby; (c) costs and expenses of
lien and title searches; (d) taxes, fees, and other charges for filing this
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Agreement at the United States Patent and Trademark Office, or for filing
financing statements, and continuations, and other actions to perfect, protect,
and continue the security interest created hereunder; (e) sums paid or incurred
to pay any amount or take any action required of Grantor under this Agreement
that Grantor fails to pay or take; (f) costs and expenses of preserving and
protecting the Collateral; and (g) costs and expenses (including reasonable
attorneys' and paralegals' fees and disbursements) paid or incurred to enforce
the security interest created hereunder, sell or otherwise realize upon the
Collateral, and otherwise enforce the provisions of this Agreement, or to defend
any claims made or threatened against the TBCC arising out of the transactions
contemplated hereby (including preparations for the consultations concerning any
such matters). The foregoing shall not be construed to limit any other
provisions of this Agreement or the Loan Documents regarding costs and expenses
to be paid by Grantor. The parties agree that reasonable attorneys' and
paralegals' fees and costs incurred in enforcing any judgment are recoverable as
a separate item in addition to fees and costs incurred in obtaining the judgment
and that the recovery of such attorneys' and paralegals' fees and costs is
intended to survive any judgment, and is not to be deemed merged into any
judgment.
9.9 FURTHER ASSURANCES. At TBCC's request, Grantor shall execute and
deliver to TBCC any further instruments or documentation, and perform any acts,
that may be reasonably necessary or appropriate to implement this Agreement, the
Loan Agreement or any other agreement, and the documents relating thereto,
including without limitation any instrument or documentation reasonably
necessary or appropriate to create, maintain, perfect, or effectuate TBCC's
security interests in the Collateral.
9.10 RELEASE. At such time as Grantor shall completely satisfy all of the
Obligations and the Loan Agreement shall be terminated, TBCC shall execute and
deliver to Grantor all assignments and other instruments as may be reasonably
necessary or proper to terminate TBCC's security interest in the Collateral,
subject to any disposition of the Collateral which may have been made by TBCC
pursuant to this Agreement. For the purpose of this Agreement, the Obligations
shall be deemed to continue if Grantor enters into any bankruptcy or similar
proceeding at a time when any amount paid to TBCC could be ordered to be repaid
as a preference or pursuant to a similar theory, and shall continue until it is
finally determined that no such repayment can be ordered.
9.11 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AGREEMENT AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT,
WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY
THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS. ALL DISPUTES BETWEEN
THE GRANTOR AND TBCC, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
SHALL BE RESOLVED ONLY BY STATE AND FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS,
AND THE COURTS TO WHICH AN APPEAL THEREFROM MAY BE TAKEN; PROVIDED, HOWEVER,
THAT TBCC SHALL HAVE THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO
PROCEED AGAINST THE GRANTOR OR ITS PROPERTY IN ANY LOCATION REASONABLY SELECTED
BY TBCC IN GOOD FAITH TO ENABLE TBCC TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE
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A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF TBCC. [RESERVED] THE GRANTOR WAIVES
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH TBCC HAS
COMMENCED A PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON FORUM NON CONVENIENS.
9.12 WAIVER OF RIGHT TO JURY TRIAL. TBCC AND GRANTOR EACH HEREBY WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF,
OR IN ANY WAY RELATING TO: (I) THIS AGREEMENT; OR (II) ANY OTHER PRESENT OR
FUTURE INSTRUMENT OR AGREEMENT BETWEEN TBCC AND GRANTOR; OR (III) ANY CONDUCT,
ACTS OR OMISSIONS OF TBCC OR GRANTOR OR ANY OF THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH TBCC OR
GRANTOR; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
TRANSAMERICA BUSINESS CREDIT V-ONE CORPORATION
CORPORATION
By: /s/ Xxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
--------------------- -------------------------
Title: Senior Vice President Title Senior Vice President and
--------------------- Chief Financial Officer
-------------------------
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EXHIBIT "A"
-----------
REGISTERED TRADEMARKS
---------------------
TRADEMARK REGISTRATION DATE REGISTRATION NO.
--------- ----------------- ----------------
SECURITY FOR A
CONNECTED WORLD 17 Mar 1998 2145060
SMARTCAT 02 July 1996 1983774
SMARTGATE 10 Feb 1998 2136175
SMARTWALL 19 Mar 1996 1963260
V-ONE 13 Jan 1998 2128458
V-ONE (STYLIZED) 20 Feb 1996 1957890
PENDING TRADEMARKS
------------------
TRADEMARK FILING DATE SERIAL NO.
--------- ----------- ----------
AIR SMARTPASS 21 Sep 1998 75/559332
AIRSMARTGATE 27 Oct 1998 75/583848
DMSGATE 14 Apr 1997 75/273621
GATE TECHNOLOGY 25 Feb 1997 75/251184
KRAKIT 08 Aug 1997 75/338172
MAXVPN 27 Mar 1998 75/458405
MULTI-ACCESS VPN 17 Sep 1997 75/358493
SECUREPAGE 04 May 1998 75/480638
SMARTADMIN 24 Feb 1997 75/246218
SMARTFILE 23 Jan 1997 75/229486
SMARTPASS 24 Feb 1997 75/246217
SMARTSEAL 24 Feb 1997 75/246213
TRUSTED FIRST PARTY 04 May 1998 75/480639
VIRTUAL PRIVATE NETWORK 17 Sept 1997 75/358492
V-ONE VIRTUAL OPEN
NETWORK ENVIRONMENT
AND DESIGN 29 Mar 1996 75/081197
EXHIBIT "B"
-----------
PATENTS
-------
PATENT DESCRIPTION/TITLE ISSUE DATE PATENT NO. NAME OF INVENTOR
------------------------ ---------- ---------- ----------------
Token Distribution, 7/21/98 5,784,463 Xxxxx X. Xxxx
Registration, And Jieh-Xxxx Xxxx
Dynamic Configuration Of
User Entitlement For An
Application Level
Security System And Method
Counterfeit Proof 12/2/97 5,694,471 Xxxxx X. Xxxx
Identification Card Jieh-Xxxx Xxxx
Application Level Security 2/11/97 5,602,918 Xxxxx X. Xxxx
System And Method Jieh-Xxxx Xxxx
Electronic Payment System 12/31/96 5,590,197 Xxxxx X. Xxxx
And Method Jieh-Xxxx Xxxx
PATENT APPLICATIONS
-------------------
DESCRIPTION FILING DATE SERIAL NO. NAME OF INVENTOR
----------- ----------- ---------- ----------------
Key Encryption System 12/31/97 09/001,463 Xxxxxx X. Xxxxxx
And Method, Pager Unit, Xxxxxxxxxxx X. Xxxxx
And Pager Proxy, For A
Two-Way Alphanumeric
Pager Network
Session Key Recovery System 11/26/97 08/980,064 Xxxxx X. Xxxxxxx
And Method Xxxxxx X. Xxxxxx
Xxxxxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Multi-Access Virtual 8/26/97 08/917,341 Xxxxx X. Xxxx
Private Network Jieh-Xxxx Xxxx
Xxxxxxxxxxx X. Xxxxx
Xxxxxxx Xxxxxx
File Encryption With 7/15/97 08/892,947 Xxxxx X. Xxxxxxx
Key Recovery Xxxxxxxxxxx X. Xxxxx
Jieh-Xxxx Xxxx
Xxxxx X. Xxxx
