COLLATERAL ASSIGNMENT, PATENT MORTGAGE
AND SECURITY AGREEMENT
This Collateral Assignment, Patent Mortgage and Security Agreement is
made as of June 27, 2000 by and between Teltech Resource Network Corporation, a
Minnesota corporation ("Assignor"), and Sopheon PLC, a United Kingdom public
company limited by shares ("Assignee").
RECITALS
A. Assignee has agreed to lend to Assignor certain funds (the "Loan"),
pursuant to a Secured Promissory Note dated June 27, 2000 (the "Loan Agreement")
and Assignor desires to borrow such funds from Assignee.
B. In order to induce Assignee to make the Loan, Assignor has agreed to
assign certain intangible property to Assignee for purposes of securing the
obligations of Assignor to Assignee.
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. ASSIGNMENT, PATENT MORTGAGE AND GRANT OF SECURITY INTEREST. As
collateral security for the prompt and complete payment and performance of all
Assignor's present or future indebtedness, obligations and liabilities to
Assignee, Assignor hereby assigns, transfers, conveys and grants a security
interest and mortgage to Assignee, as security, but not as an ownership
interest, in and to Assignor's entire right, title and interest in, to and under
the following (all of which shall collectively be called the "Collateral"):
(a) All of present and future United States registered
copyrights and copyright registrations, including, without limitation,
the registered copyrights listed in EXHIBIT A-1 to this Agreement (and
including all of the exclusive rights afforded a copyright registrant
in the United States under 17 U.S.C. Section 106 and any exclusive
rights which may in the future arise by act of Congress or otherwise)
and all present and future applications for copyright registrations
(including applications for copyright registrations of derivative works
and compilations) made by Assignor (collectively, the "Registered
Copyrights"), and any and all royalties, payments, and other amounts
payable to Assignor in connection with the Registered Copyrights,
together with all renewals and extensions of the Registered Copyrights,
the right to recover for all past, present, and future infringements of
the Registered Copyrights, and all computer programs, computer
databases, computer program flow diagrams, sourse codes, object codes
and all tangible property embodying or incorporating the Registered
Copyrights, and all other rights of every kind whatsoever accruing
thereunder or pertaining thereto;
(b) All present and future copyrights which are not registered
in the United States Copyright Office (the "Unregistered Copyrights"),
whether now owned or hereafter acquired by Assignor, including, without
limitation, the Unregistered
Copyrights listed in EXHIBIT A-2 to this Agreement, and any and all
royalties, payments, and other amounts payable to Assignor in
connection with the Unregistered Copyrights, together with all renewals
and extensions of the Unregistered Copyrights, the right to recover for
all past, present, and future infringements of the Unregistered
Copyrights, and all computer programs, computer databases, computer
program flow diagrams, source codes, object codes and all tangible
property embodying or incorporating the Unregistered Copyrights, and
all other rights of every kind whatsoever accruing thereunder or
pertaining thereto. The Registered Copyrights and the Unregistered
Copyrights collectively are referred to herein as the "Copyrights";
(c) All right, title and interest in and to any and all
present and future license agreements with respect to the Copyrights,
including, without limitation, the license agreements listed in EXHIBIT
A-3 to this Agreement (the "Licenses");
(d) All present and future accounts, accounts receivable and
other rights to payment arising from, in connection with, or relating
to the Copyrights;
(e) 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;
(f) Any and all design rights which may be available to
Assignor now or hereafter existing, created, acquired or held;
(g) 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");
(h) 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 Assignor
connected with and symbolized by such trademarks, including, without
limitation, those set forth on EXHIBIT C attached hereto (collectively,
the "Trademarks");
(i) Any and all claims for damages by way of past, present and
future infringements 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;
(j) 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;
(k) All amendments, extensions, renewals and extensions of any
of the Copyrights, Trademarks or Patents; and
2
(l) 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.
THE INTEREST IN THE COLLATERAL BEING ASSIGNED HEREUNDER SHALL NOT BE CONSTRUED
AS A CURRENT ASSIGNMENT, BUT AS A CONTINGENT ASSIGNMENT TO SECURE ASSIGNOR'S
OBLIGATIONS TO ASSIGNEE UNDER THE LOAN AGREEMENT.
2. AUTHORIZATION AND REQUEST. Assignor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this conditional assignment.
3. COVENANTS AND WARRANTIES. Assignor represents, warrants, covenants
and agrees as follows:
(a) Assignor is now the sole owner of the Collateral, except
for non-exclusive licenses granted by Assignor to its customers in the
ordinary course of business and except for lien granted to Silicon
Valley Bank pursuant to a Collateral Assignement, Patent Mortgage and
Security Agreement of even date herewith;
(b) Listed on Exhibits A-1 and A-2 are all copyrights owned by
Assignor, in which Assignor has an interest, or which are used in
Assignor's business;
(c) Each employee, agent and/or independent contractor who has
participated in the creation of the property constituting the
Collateral has either executed an assignment of his or her rights of
authorship to Assignor or is an employee of Assignor acting within the
scope of his or her employment and was such an employee at the time of
said creation;
(d) All of Assignor's present and future software, computer
programs and other works of authorship subject to United States
copyright protection, the sale, licensing or other disposition of which
results in royalties receivable, license fees receivable, accounts
receivable or other sums owing to Assignor (collectively,
"Receivables"), have been and shall be registered with the United
States Copyright Office prior to the date Assignor requests or accepts
any loan from Assignee with respect to such Receivables and prior to
the date Assignor includes any such Receivables in any accounts
receivable aging, borrowing base report or certificate or other similar
report provided to Assignee, and Assignor shall provide to Assignee
copies of all such registrations promptly upon the receipt of the same;
(e) Assignor shall undertake all reasonable measures to cause
its employees, agents and independent contractors to assign to Assignor
all rights of authorship to any copyrighted material in which Assignor
has or may subsequently acquire any right or interest;
3
(f) Performance of this Assignment does not conflict with or
result in a breach of any agreement to which Assignor 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 Assignment constitutes an
assignment other than the Security Agreement with Silicon Valley Bank
which has consented to the execution of this Agreement;
(g) During the term of this Agreement, Assignor will not
transfer or otherwise encumber any interest in the Collateral, except
for non-exclusive licenses granted by Assignor in the ordinary course
of business or as set forth in this Assignment;
(h) 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;
(i) Assignor shall promptly advise Assignee of any material
adverse change in the composition of the collateral, including, but not
limited to, any subsequent ownership right of the Assignor in or to any
Trademark, Patent, or Copyright not specified in this Assignment;
(j) Assignor 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 Assignee 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 Assignee, which shall not be
unreasonably withheld unless Assignor determines that reasonable
business practices suggest that abandonment is appropriate;
(k) Assignor shall promptly register the most recent version
of any of Assignor's Copyrights, if not so already registered, and
shall, from time to time, execute and file such other instruments, and
take such further actions as Assignee may reasonably request from time
to time to perfect or continue the perfection of Assignee's interest in
the Collateral;
(l) This Assignment creates, and in the case of after acquired
Collateral, this Assignment will create at the time Assignor first has
rights in such after acquired Collateral, in favor of Assignee a valid
and perfected security interest in the Collateral in the United States,
subordinate only to the first priority interest of Silicon Valley Bank,
securing the payment and performance of the obligations evidenced by
the Loan Agreement upon making the filings referred to in clause (m)
below;
(m) To its knowledge, except for, and upon, the filing with
the United States Patent and Trademarks Office with respect to the
Patents and Trademarks and the Register of Copyrights with respect to
the Copyrights necessary to perfect the security interests and
assignment 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,
4
any U.S. governmental authority or U.S. regulatory body is required
either (i) for the grant by Assignor of the security interest granted
hereby or for the execution, delivery or performance of this Assignment
by Assignor in the U.S., or (ii) for the perfection in the United
States or the exercise by Assignee of its rights and remedies
thereunder;
(n) All information heretofore, herein, or hereafter supplied
to Assignee by or on behalf of Assignor with respect to the Collateral
is accurate and complete in all material respects;
(o) Assignor shall not enter into any agreement that would
materially impair or conflict with Assignor's obligations hereunder
without Assignee's prior written consent, which consent shall not be
unreasonably withheld. Assignor 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 Assignor's rights and interest in any property included within he
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;
and
(p) Upon any executive officer of Assignor obtaining actual
knowledge thereof, Assignor will promptly notify Assignee in writing of
any event that materially adversely affects the value of any material
Collateral, the ability of Assignor to dispose of any material
Collateral or the rights and remedies of Assignee in relation thereto,
including the levy of any legal process against any of the Collateral.
4. ASSIGNEE'S RIGHTS. Assignee shall have the right, but not the
obligation, to take, at Assignor's sole expense, any actions that Assignor is
required under this Assignment to take but which Assignor fails to take, after
fifteen (15) days' notice to Assignor. Assignor shall reimburse and indemnify
Assignee for all reasonable costs and reasonable expenses incurred in the
reasonable exercise of its rights under this Section 4.
5. INSPECTION RIGHTS. Assignor hereby grants to Assignee and its
employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to Assignor, and any of Assignor'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 written notice to Assignor and as often as may be
reasonable requested, but not more than one (1) in every six (6) months;
provided, however, nothing herein shall entitle Assignee access to Assignor's
trade secrets and other proprietary information.
6. FURTHER ASSURANCES; ATTORNEY IN FACT.
(a) Upon an Event of Default, on a continuing basis
thereafter, Assignor will, subject to any prior licenses, encumbrances
and restrictions and prospective licenses, 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
5
United States Patent and Trademarks Office and the Register of
Copyrights, and take all such action as may reasonably be deemed
necessary or advisable, or as requested by Assignee, to perfect
Assignee's security interest in all Copyrights, Patents and Trademarks,
and otherwise to carry out the intent and purposes of this Collateral
Assignment, or for assuring and confirming to Assignee the grant or
perfection of a security interest in all Collateral; and
(b) Upon an Event of Default, Assignor hereby irrevocably
appoints Assignee as Assignor's attorney-in-fact, with full authority
in the place and stead of Assignor and in the name of Assignor,
Assignee or otherwise, from time to time in Assignee's discretion, upon
Assignor's failure or inability to do so, to take any action and to
execute any instrument which Assignee may deem necessary or advisable
to accomplish the purposes of this Collateral Assignment, including:
(i) To modify, in its sole discretion, this
Collateral Assignment without first obtaining Assignor's
approval of or signature to such modification by amending
Exhibit X-0, Xxxxxxx X-0, Exhibit A-3, Exhibit B and Exhibit
C, thereof, as appropriate, to include reference to any right,
title or interest in any Copyrights, Patents or Trademarks
acquired by Assignor after the execution hereof or to delete
any reference to any right, title or interest in any
Copyrights, Patents or Trademarks in which Assignor no longer
has or claims any right, title or interest; and
(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
Assignor where permitted by law.
7. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an Event of Default under the Assignment:
(a) An Event of Default occurs under the Loan Agreement; or
(b) Assignor breaches any warranty or agreement made by
Assignor in this Assignment.
8. REMEDIES. Upon the occurrence and continuance of an Event of
Default, Assignee shall have the right to exercise all the remedies of a secured
party under the Minnesota Uniform Commercial Code, including, without
limitation, the right to require Assignor to assemble the Collateral and any
tangible property in which Assignee has a security interest and to make it
available to Assignee at a place designated by Assignee. Assignee shall have a
nonexclusive, royalty-free license to use the Copyrights, Patents and Trademarks
to the extent reasonably necessary to permit Assignee to exercise its rights and
remedies upon the occurrence of an Event of Default. Assignor will pay any
expenses (including reasonable attorney's fees) incurred by Assignee in
connection with the exercise of any of Assignee's rights hereunder, including,
without limitation, any expense incurred in disposing of the Collateral. All of
Assignee's rights and remedies with respect to the Collateral shall be
cumulative.
6
9. INDEMNITY. Assignor agrees to defend, indemnify and hold harmless
Assignee 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 Assignee as a
result of or in any way arising out of, following or consequential to
transactions between Assignee and Assignor, whether under this Assignment or
otherwise (including, without limitation, reasonable attorneys' fees and
reasonable expenses), except for losses arising from or out of Assignee's gross
negligence or willful misconduct.
10. RELEASE. At such time as Assignor shall completely satisfy all of
the obligations secured hereunder, Assignee shall execute and deliver to
Assignor all assignments and other instruments as may be reasonable necessary or
proper to terminate Assignee's security interest in the Collateral, subject to
any disposition of the Collateral which may have been made by Assignee pursuant
to this Agreement. For the purpose of this Agreement, the obligations secured
hereunder shall be deemed to continue if Assignor enters into any bankruptcy or
similar proceeding at a time when any amount paid to Assignee 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.
11. NO WAIVER. No course of dealing between Assignor and Assignee, nor
any failure to exercise nor any delay in exercising, on the part of Assignee,
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 Assignee shall preclude any other or further
exercise of such right, power, or privilege or the exercise of any other right,
power or privilege by Assignee.
12. RIGHTS ARE CUMULATIVE. All of Assignee'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.
13. 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.
14. ATTORNEYS' FEES. If any action relating to this Assignment is
brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys' fees, costs, and
disbursements.
15. AMENDMENTS. This Assignment may be amended only by a written
instrument signed by both parties hereto. To the extent that any provision of
this Agreement conflicts with any provision of the Loan Agreement, the provision
giving Assignee 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 Assignee 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.
7
16. 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.
17. COUNTERPARTS. This Assignment 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.
18. MINNESOTA LAW AND JURISDICTION. This Assignment shall be governed
by the laws of the State of Minnesota, without regard for choice of law
provisions. Assignor and Assignee consent to the nonexclusive jurisdiction of
any state or federal court located in Hennepin County, Minnesota.
19. CONFIDENTIALITY. In handling any confidential information, Assignee
shall exercise the same degree of care that it exercises with respect to its own
proprietary information of the same types to maintain the confidentiality of any
non-public information thereby received or received pursuant to this Assignment
except that the disclosure of this information may be made (i) to the affiliates
of the Assignee, (ii) to prospective transferee or purchasers of an interest in
the obligations secured hereby, provided that they have entered into a
comparable confidentiality agreement in favor of Assignor and have delivered a
copy to Assignor, (iii) as required by law, regulation, rule or order, subpoena,
judicial order or similar order, and (iv) as may be required in connection with
the examination, audit or similar investigation of Assignee.
20. WAIVER OF RIGHT TO JURY TRIAL. ASSIGNEE AND ASSIGNOR 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 ASSIGNEE AND ASSIGNOR; OR (III) ANY
CONDUCT, ACTS, OR OMISSIONS OF ASSIGNEE OR ASSIGNOR OR ANY OF THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH
ASSIGNEE OR ASSIGNOR; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE.
[SIGNATURE PAGE FOLLOWS]
8
IN WITNESS WHEREOF, the parties hereto have executed this Assignment on
the day and year first above written.
ASSIGNOR:
Teltech Resource Network Corporation
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Title: CEO
---
Name: Xxxxxx X. Xxxxxxx
-----------------
(Please Print)
ADDRESS OF ASSIGNOR:
0000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
STATE OF MINNESOTA )
) ss.
COUNTY OF SCOH )
On June 27, 2000, before me, Xxxxx X. Xxxxxxxx, Notary Public,
personally appeared Xxxxxx X. Xxxxxxx, whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
Witness my hand and official seal.
/s/ Xxxxx X. Xxxxxxxx (Seal)
---------------------------
9
EXHIBIT "A-1"
REGISTERED COPYRIGHTS
COPYRIGHT REGISTRATIONS:
Network of experts technical coverage; Tech tree-C-
Exhibit "A-1", Page 1
EXHIBIT "A-2"
UNREGISTERED COPYRIGHTS
COMPANY SOFTWARE PROGRAMS:
Kscope
ch_ks
xdrsserv
hsftext
xxxx
AutoEMail
AutoFax
AutoPrint
SEScheduler
SESExecuter
AutoDisk
Apache
AOLServer
linux
firewall toolkit
KTTS
Winkscop
Word Macros
Exhibit "A-2", Page 1
EXHIBIT "A-3"
DESCRIPTION OF LICENSE AGREEMENTS
NONE
Exhibit "A-3", Page 1
EXHIBIT "B"
PATENTS
PATENTS*:
APPLICATION
TITLE SERIAL NUMBER PATENT NO. COUNTRY
INFORMATION 08/585,383 5,634,051 USA
MANAGEMENT SYSTEM
INFORMATION 2175187 PUBLISHED Canada
MANAGEMENT SYSTEM
* Pursuant to the Cross License Agreement dated 3/10/99 with Northern Light
Technology listed below, Northern Light granted Teltech a non-exclusive,
nontransferable, royalty-free, worldwide license to certain Northern Light
Patent Rights.
Exhibit "B", Page 1
EXHIBIT "C"
TRADEMARKS
TRADEMARKS:
U.S. APPLICATION NUMBER/ REGISTRATION NUMBER/
XXXX FILING DATE REGISTRATION DATE
...THE KNOWLEDGE 286,653 1,817,211
TO COMPETE 6/22/92 1/18/94
KMS 74/642,519 1,947,040
3/6/95 1/9/96
KNOWLEDGE 74/286,569 1,866,590
COMMONS 6/17/92 12/6/94
KNOWLEDGESCOPE 74/359,495 1,848,332
2/16/93 8/2/94
TELTECH 74/050,657 1,642,386
4/19/90 4/23/91
TELTECH...THE
KNOWLEDGE- 74/642,525 2,169,831
MANAGEMENT 3/6/95 6/30/98
COMPANY
SERVICE MARKS:
Teltech-Registered Trademark-
Sentry*
Knowledge Commons-Registered Trademark-
Knowledgescope-Registered Trademark-
KMS-Registered Trademark-
...the knowledge to compete-Registered Trademark-
Teltech...the knowledge management company-Registered Trademark-
* Registration abandoned in February of 1997, but Company continues to use the
xxxx and has common law rights in the xxxx.
INTERNET DOMAIN NAMES:
XX.Xxxxxxx.xxx
Xxxxxxx.xxx
Exhibit "C", Page 1
