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EXHIBIT 10.32 Collateral Assignment, Patent Mortgage and Security
Agreement, dated October 23, 1996, by and between
Registrant and Silicon Valley Bank.
COLLATERAL ASSIGNMENT, PATENT MORTGAGE
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AND SECURITY AGREEMENT
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This Collateral Assignment, Patent Mortgage and Security Agreement is made
as of October 23, 1996, by and between ELECTRONIC DESIGNS, INC., a Delaware
corporation ("Assignor"), and SILICON VALLEY BANK, a California banking
corporation ("Assignee").
RECITALS
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A. Assignee has agreed to lend to Assignor certain funds (the "Loan"), and
Assignor desires to borrow such funds from Assignee pursuant to the terms of a
Loan and Security Agreement of even date herewith, as amended from time to time
(the "Loan Agreement").
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
of Assignor's present or future indebtedness, obligations and liabilities to
Assignee under the Loan Agreement, Assignor hereby assigns, transfers, conveys
and grants a security interest and mortgage to Assignee, as security, 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) 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derivative work thereof, whether published or unpublished and whether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 Assignor 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 Assignor
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;
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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;
h) All amendments, renewals and extensions of any of the Copyrights,
Trademarks or Patents; and
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.
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;
b) Performance of this Assignment does not conflict with or result in a
breach of any agreement to which Assignor is party or by 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;
c) During the term of this Assignment, 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;
d) To its knowledge, 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) Assignor shall promptly advise Assignee of any material 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;
f) 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.
g) Except as Assignor reasonably determines is not necessary or
appropriate in the management of its business, 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;
h) 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 first priority (except for Permitted Liens as such term is
defined in the Loan Agreement) security interest in the Collateral in
the United States securing the payment and
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performance of the obligations of Assignor to Assignee under the Loan
Agreement upon making the filings referred to in clause (i) below;
i) To its knowledge, 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 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, 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
hereunder;
j) 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.
k) 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 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.
l) 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 Collateral,
the ability of Assignor to dispose of any 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, 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
reasonably requested.
6. Further Assurances; Attorney in Fact.
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a) On a continuing basis, Assignor will, except as Assignor reasonably
determines is not necessary or appropriate in the management of its
business, 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 United States Patent and Trademark 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.
b) 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, from time to time in Assignee's
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discretion, 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 A, 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 and, as to any breach that is capable of cure, Assignor
fails to cure such breach within five (5) days of the occurrence of
such breach.
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 California 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 attorneys' 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.
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 under this Assignment which result
from any breach or failure to perform by Assignor of any representation,
warranty, covenant or agreement of Assignor contained in this Assignment;
including without limitation in each case with respect to (a) and (b) reasonable
attorneys fees and expenses, but excluding in the case of (a) and (b) all
obligations, demands, claims, liabilities, Bank Expenses and losses caused by
Bank's gross negligence or willful misconduct.
10. REASSIGNMENT. At such time as Assignor shall completely satisfy all of
the obligations secured hereunder, Assignee shall execute and deliver to
Assignor all deeds, assignments and other instruments as may be necessary or
proper to revest in Assignor full title to the property assigned hereunder,
subject to any disposition thereof which may have been made by Assignee pursuant
hereto.
11. 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.
12. 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.
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13. AMENDMENTS. This Assignment may be amended only by a written instrument
signed by both parties hereto.
14. 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.
15. CALIFORNIA LAW AND JURISDICTION; JURY WAIVER. This Assignment shall be
governed by the laws of the State of California, without regard for choice of
law provisions. Assignor and Assignee consent to the exclusive jurisdiction of
any state or federal court located in Santa Xxxxx County, California. ASSIGNOR
AND ASSIGNEE EACH WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THE LOAN AGREEMENT, THIS
ASSIGNMENT, 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 Assignment on the
day and year first above written.
Address of Assignor: ASSIGNOR:
One Research Drive ELECTRONIC DESIGNS, INC.
Xxxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx By:
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Title:
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Address of Assignee: ASSIGNEE:
00 Xxxxxxx Xxxxxx, Xxxxx 000 SILICON VALLEY BANK
Wellesley, MA 02181
Attn: Xxxx Xxxxx By:
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Title:
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