EXHIBIT 4.11
INTELLECTUAL PROPERTY SECURITY AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT, dated as of January 18, 2002
(this "Agreement"), among x.Xxxxxxx Corporation, a Delaware corporation
("Parent"), x.Xxxxxxx Corporation, a California corporation ("Subsidiary" and,
each of Subsidiary and Parent are a "Debtor" and Subsidiary and Parent are,
collectively, the "Debtors"), and Xxxxxxxx Xxxx International Limited, its
endorsees, transferees and assigns (the "Secured Party").
W I T N E S S E T H:
WHEREAS, pursuant to the 5% Secured Promissory Note of the Parent, dated
the date of this Agreement, issued in the original principal amount of
$1,200,000 to the Secured Party (the "Note"), the Secured Party has agreed to
extend the loan to Parent evidenced by the Note; and
WHEREAS, in order to induce the Secured Party to extend the loan evidenced
by the Note, the Debtors have agreed to execute and deliver to the Secured Party
this Agreement and to grant Secured Party a first priority security interest in
certain property of the Debtors to secure the prompt payment, performance and
discharge in full of all of Parent's obligations under the Note.
NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as "general intangibles" and "proceeds") shall have the respective
meanings given such terms in Article 9 of the UCC.
(a) "Collateral" means all of the Debtors' respective right, title
and interest in and to all of Trademarks, Patents, Copyrights, and other general
intangible property of the Debtors, all trade secrets, intellectual property
rights in computer software and computer software products, design rights which
may be available to the Debtors, rights to proceeds arising from any and all
claims for damages by way of past, present and future infringement of any
Collateral with the right but not the obligation to xxx on behalf of and collect
such damages for said use or infringement, licenses 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. The term
"Collateral" shall include all of the foregoing items, whether presently owned
or existing or hereafter acquired or coming into existence, all additions and
accessions thereto, all substitutions and replacements thereof, and all
proceeds, products and accounts thereof, including without limitation all
proceeds from the licensing or sale or other transfer of Collateral and of
insurance covering the same and of any tort claims in connection therewith.
(b) "Copyrights" means any and all copyrights, copyright
applications, copyright registration and like protections in each work or
authorship and derivative work thereof that is created by either Debtor, 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.
(c) "Obligations" means all of the Debtors' respective obligations
under this Agreement and the Note, in each case, whether now or hereafter
existing, voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and whether
or not from time to time decreased or extinguished and later increased, created
or incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from the Secured Party as a preference, fraudulent
transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.
(d) "Patents" means all of each Debtors' patents, patent
applications, letters patent and like protections of the United States or any
other country, including, without limitation, improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the
same, and including, without limitation, those set forth on Exhibit B attached
hereto.
(e) "Trademarks" means any trademark, service xxxx right, whether
or not registered, applications to register and registrations of the same and
like protections, and the entire goodwill of the business of the Debtors
connected with or symbolized by such trademarks, including, without limitation,
those set forth on Exhibit C attached hereto.
(f) "UCC" means the Uniform Commercial Code and or any other
applicable law of any jurisdiction (including, without limitation, the state of
California) as to any Collateral located therein.
2. Grant of Security Interest. As an inducement for the Secured Party
to extend the loan as evidenced by the Note and to secure the complete and
timely payment, performance and discharge in full, as the case may be, of all of
the Obligations, each Debtor hereby, unconditionally and irrevocably, pledges,
grants and hypothecates to the Secured Party, a continuing first priority
security interest in, a first lien upon and a right of set-off against all of
their respective right, title and interest of whatsoever kind and nature in and
to the Collateral (the "Security Interest").
3. Representations, Warranties, Covenants and Agreements of the
Debtors. The Debtors jointly and severally represent and warrant to, and
covenant and agree with, the Secured Party as follows:
(a) The Debtors have the requisite corporate power and authority
to enter into this Agreement and otherwise to carry out their obligations
thereunder. The execution, delivery and performance by the Debtors of this
Agreement and the filings contemplated therein have been duly authorized by all
necessary action on the part of the Debtors and no further action is required by
the Debtors.
(b) Except for the indebtedness and subordinated liens of the
holders of the Parent's 12% Secured Promissory Notes due December 31, 2002 in
the principal amount of $1,000,000, the Debtors are the sole owners of the
Collateral (except for non-exclusive licenses granted by the Debtors in the
ordinary course of business), free and clear of any liens, security interests,
encumbrances, rights or claims, and are fully authorized to grant the Security
Interest in and to pledge the Collateral. There is not on file in any
governmental or regulatory authority, agency or recording office an effective
financing statement, security agreement, license or transfer or any notice of
any of the foregoing (other than those that have been filed in favor of the
Secured Party pursuant to this Agreement) covering or affecting any of the
Collateral. So long as this Agreement shall be in effect, neither Debtor shall
not execute and shall not knowingly permit to be on file in any such office or
agency any such financing statement or other document or instrument (except to
the extent filed or recorded in favor of the Secured Party pursuant to the terms
of this Agreement).
(c) Exhibit A sets forth a true and complete list of all
Copyrights in existence as of the date of this Agreement. Exhibit B sets forth a
true and complete list of all Patents that have been filed as of the date of
this Agreement. Exhibit C sets forth a true and complete list of all Trademarks
filed as of the date of this Agreement. The Debtors shall, within ten (10) days
of obtaining knowledge thereof, advise the Secured Party in writing of any
change in the composition of the Collateral, including, without limitation, any
subsequent ownership rights of the Debtors in or to any Copyright, Patent or
Trademark.
(d) Each of the Patents, Trademarks and Copyrights is valid and
enforceable, and no part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any of the Patents,
Trademarks or Copyrights or the Debtors' use of any Collateral violates the
rights of any third party. There has been no adverse decision to the Debtors'
claim of ownership rights in or exclusive rights to use the Collateral in any
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jurisdiction or to the Debtors' right to keep and maintain such Collateral in
full force and effect, and there is no proceeding involving said rights pending
or, to the best knowledge of the Debtors, threatened before any court, judicial
body, administrative or regulatory agency, arbitrator or other governmental
authority.
(e) The Debtors shall at all times maintain their respective books
of account and records relating to the Collateral at their principal place of
business and may not relocate such books of account and records unless they
deliver to the Secured Party at least 30 days prior to such relocation (i)
written notice of such relocation and the new location thereof (which must be
within the United States) and (ii) evidence that appropriate financing
statements and other necessary documents have been filed and recorded and other
steps have been taken to perfect the Security Interest to create in favor of the
Secured Party a valid, perfected and continuing first priority liens in the
Collateral. The principal place of business of the Debtors is located at the
address set forth in the introduction to this Agreement.
(f) This Agreement creates in favor of the Secured Party a valid
security interest in the Collateral, including the Collateral listed on the
Exhibits hereto, securing the payment and performance of the Obligations, and,
upon making the filings described in the immediately following sentence, a
perfected first priority security interest in such Collateral. Except for (x)
the filing of this Agreement with the United States Patent and Trademark Office
with respect to the Patents and Trademarks and the filing of this Agreement with
the United States Copyrights Office with respect to the Copyrights, and (y) the
filing of financing statements on Form UCC-1 under the UCC with the
jurisdictions indicated in Schedule A, attached hereto, no authorization or
approval of or filing with or notice to any governmental authority or regulatory
body is required either (i) for the grant by the Debtors of, or the
effectiveness of, the Security Interest granted hereby or for the execution,
delivery and performance of this Agreement by the Debtors or (ii) for the
perfection of or exercise by the Secured Party of its rights and remedies
hereunder. The Debtors acknowledge and agree that a copy of this Agreement (or
instruments executed and delivered pursuant hereto) will be filed and recorded
with each of the United States Patent and Trademark Office and the United States
Copyrights Office with respect to the Patents, Trademarks and Copyrights that
are now or hereafter in existence.
(g) On the date of execution of this Agreement, the Debtors will
deliver to the Secured Party: (i) one or more executed financing statements
under the UCC with respect to the Security Interest for filing with the
jurisdictions indicated on Schedule A, attached hereto and in such other
jurisdictions as may be requested by the Secured Party and (ii) one or more
executed recordation sheets relating to the filing and recording of this
Agreement with each of the United States Patent and Trademark Office and the
United States Copyrights Office with respect to the Patents, Trademarks and
Copyrights that are now in existence.
(h) The execution, delivery and performance of this Agreement by
the Debtors does not conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) of, any agreement, credit facility,
debt or other instrument (evidencing a Debtor's debt or otherwise) or other
understanding to which either Debtor is a party or by which any property or
asset of the Debtors is bound or affected. No consent (including, without
limitation, from stock holders or creditors of a Debtor) is required for the
Debtors to enter into and perform its obligations hereunder.
(i) The Debtors shall at all times maintain the liens and Security
Interest provided for hereunder as valid and perfected first priority liens and
security interests in the Collateral in favor of the Secured Party until this
Agreement and the Security Interest hereunder shall be terminated pursuant to
Section 11 hereof. The Debtors hereby agree to defend the same against any and
all persons. The Debtors shall safeguard and protect all Collateral for the
account of the Secured Party. At the request of the Secured Party, the Debtors
will sign and deliver to the Secured Party at any time or from time to time one
or more financing statements pursuant to the UCC in form reasonably satisfactory
to the Secured Party and will pay the cost of filing the same in all public
offices wherever filing is, or is deemed by the Secured Party to be, necessary
or desirable to effect the rights and obligations provided for herein. Without
limiting the generality of the foregoing, the Debtors shall pay all fees, taxes
and other
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amounts necessary to maintain the Collateral and the Security Interest
hereunder, and the Debtors shall obtain and furnish to the Secured Party from
time to time, upon demand, such releases and/or subordinations of claims and
liens which may be required to maintain the priority of the Security Interest
hereunder.
(j) The Debtors will not allow any Collateral to be abandoned,
forfeited or dedicated to the public without the prior written consent of the
Secured Party. The Debtors will not transfer, pledge, hypothecate, encumber,
license (except for non-exclusive licenses granted by the Debtors in the
ordinary course of business), sell or otherwise dispose of any of the Collateral
without the prior written consent of the Secured Party.
(k) The Debtors shall, within ten (10) days of obtaining knowledge
thereof, advise the Secured Party, in sufficient detail, of any substantial
change in the Collateral, and of the occurrence of any event which would have a
material adverse effect on the value of the Collateral or on the Secured Party's
security interest therein.
(l) The Debtor's shall permit the Secured Party and its
representatives and agents to inspect the Collateral at any time, and to make
copies of records pertaining to the Collateral as may be requested by the
Secured Party from time to time.
(m) The Debtor's shall take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.
(n) The Debtors shall promptly notify the Secured Party in
sufficient detail upon becoming aware of any attachment, garnishment, execution
or other legal process levied against any Collateral and of any other
information received by a Debtor that may materially affect the value of the
Collateral, the Security Interest or the rights and remedies of the Secured
Party hereunder.
(o) All information heretofore, herein or hereafter supplied to
the Secured Party by or on behalf of the Debtors with respect to the Collateral
is accurate and complete in all material respects as of the date furnished.
(p) The Debtors shall at all times preserve and keep in full force
and effect their respective valid existence and good standing and any rights and
franchises material to its business.
(q) A Debtor will not change its name, FEIN, corporate structure,
or identity, or add any new fictitious name unless it provides at least 30 days
prior written notice to the Secured Party of such change and, at the time of
such written notification, such Debtor provides any financing statements or
fixture filings necessary to perfect and continue perfected the first priority
Security Interest granted and evidenced by this Agreement and the Note as to the
Collateral.
(r) A Debtor may not consign any of its Inventory or sell any of
its Inventory on xxxx and hold, sale or return, sale on approval, or other
conditional terms of sale without the consent of the Secured Party which shall
not be unreasonably withheld.
(s) A Debtor may not relocate its chief executive office to a new
location without providing 30 days prior written notification thereof to the
Secured Party and so long as, at the time of such written notification, such
Debtor provides any financing statements or fixture filings necessary to perfect
and continue perfected the first priority Security Interest granted and
evidenced by this Agreement and the Note as to the Collateral.
(v) Parent owns 100% of the capital stock of Subsidiary.
4. Defaults. The following events shall be "Events of Default":
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(a) The occurrence of an Event of Default (as defined in the Note)
under the Note;
(b) Any representation or warranty of a Debtor in this Agreement
or in the Intellectual Property Security Agreement shall prove to have been
incorrect in any material respect when made;
(c) The failure by a Debtor to observe or perform any of its
obligations hereunder or in the Intellectual Property Security Agreement for
five (5) days after delivery to such Debtor of notice of such failure by or on
behalf of the Secured Party;
(d) A Debtor shall prepay, redeem, defease, purchase, or otherwise
acquire any of its or its subsidiaries' indebtedness, other than permitted
prepayments under the Note;
(e) A Debtor shall make any distribution or declare or pay any
dividends (in cash or other property, other than common stock) on, or purchase,
acquire, redeem, or retire any of its capital stock, of any class, whether now
or hereafter outstanding;
(f) Parent shall modify or change its method of accounting or
enter into, modify, or terminate any agreement currently existing, or at any
time hereafter entered into with any third party accounting firm or service
bureau for the preparation or storage of its accounting records;
(g) If a judgment or other claim becomes a lien or encumbrance
upon any material portion of a Debtor's assets; and
(h) If any provision of this Agreement shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by a Debtor, or a proceeding shall be commenced by a
Debtor, or by any governmental authority having jurisdiction over a Debtor,
seeking to establish the invalidity or unenforceability thereof, or a Debtor
shall deny that a Debtor has any liability or obligation purported to be created
under this Agreement.
5. Duty To Hold In Trust. Upon the occurrence of any Event of Default
and at any time thereafter, the Debtors shall, upon receipt of any revenue,
income or other sums subject to the Security Interest, whether payable pursuant
to the Note or otherwise, or of any check, draft, note, trade acceptance or
other instrument evidencing an obligation to pay any such sum, hold the same in
trust for the Secured Party and shall forthwith endorse and transfer any such
sums or instruments, or both, to the Secured Party for application to the
satisfaction of the Obligations.
6. Rights and Remedies Upon Default. Upon the occurrence of any Event
of Default and at any time thereafter, the Secured Party shall have the right to
exercise all of the remedies conferred hereunder and under the Note, and the
Secured Party shall have all the rights and remedies of a secured party under
the UCC. Without limitation, the Secured Party shall have the following rights
and powers:
(a) The Secured Party shall have the right to take possession of
all tangible manifestations or embodiments of the Collateral and, for that
purpose, enter, with the aid and assistance of any person, any premises where
the Collateral, or any part thereof, is or may be placed and remove the same,
and the Debtors shall assemble the Collateral and make it available to the
Secured Party at places which the Secured Party shall reasonably select, whether
at a Debtor's premises or elsewhere.
(b) The Secured Party shall have the right to operate their
respective businesses of the Debtors using the Collateral and shall have the
right to assign, sell or otherwise dispose of and deliver all or any part of the
Collateral, at public or private sale or otherwise, either with or without
special conditions or stipulations, for cash or on credit or for future
delivery, in such parcel or parcels and at such time or times and at such place
or places, and upon such terms and conditions as the Secured Party may deem
commercially reasonable, all without
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(except as shall be required by applicable statute and cannot be waived)
advertisement or demand upon or notice to the Debtors or right of redemption of
a Debtor, which are hereby expressly waived. Upon each such sale, assignment or
other transfer of Collateral, the Secured Party may, unless prohibited by
applicable law which cannot be waived, purchase all or any part of the
Collateral being sold, free from and discharged of all trusts, claims, right of
redemption and equities of the Debtors, which are hereby waived and released.
(c) The Secured Party may license or, to the same extent the
Debtors are permitted by law and contract to do so, sublicense, whether or an
exclusive or non-exclusive basis, any of the Collateral throughout the world for
such term, on such conditions and in such manner as the Secured Party shall, in
its sole discretion, determine.
(d) The Secured Party may (without assuming any obligations or
liabilities thereunder), at any time, enforce (and shall have the exclusive
right to enforce) against licensee or sublicensee all rights and remedies of the
Debtors in, to and under any license agreement with respect to such Collateral,
and take or refrain from taking any action thereunder.
(e) The Secured Party may, in order to implement the assignment,
license, sale or other disposition of any of the Collateral pursuant to this
Section, pursuant to the authority provided for in Section 11, execute and
deliver on behalf of the Debtors one or more instruments of assignment of the
Collateral in form suitable for filing, recording or registration in any
jurisdictions as the Secured Party may determine advisable.
7. Applications of Proceeds; Expenses. (a) The proceeds of any such
sale, lease or other disposition of the Collateral hereunder shall be applied
first, to the expenses of retaking, holding, storing, processing and preparing
for sale, selling, and the like (including, without limitation, any taxes, fees
and other costs incurred in connection therewith) of the Collateral, to the
reasonable attorneys' fees and expenses incurred by the Secured Party in
enforcing its rights hereunder and in connection with collecting, storing and
disposing of the Collateral, and then to satisfaction of the Obligations, and to
the payment of any other amounts required by applicable law, after which the
Secured Party shall pay to the applicable Debtor any surplus proceeds. If, upon
the sale, license or other disposition of the Collateral, the proceeds thereof
are insufficient to pay all amounts to which the Secured Party is legally
entitled, the Debtors will be jointly and severally liable for the deficiency,
together with interest thereon, at the rate of 10% per annum or the lesser
amount permitted by applicable law (the "Default Rate"), and the reasonable fees
of any attorneys employed by the Secured Party to collect such deficiency. To
the extent permitted by applicable law, the Debtors waive all claims, damages
and demands against the Secured Party arising out of the repossession, removal,
retention or sale of the Collateral, unless due to the gross negligence or
willful misconduct of the Secured Party.
(b) The Debtors agree to pay all reasonable out-of-pocket fees,
costs and expenses incurred in connection with any filing required hereunder,
including without limitation, any financing statements, continuation statements,
partial releases and/or termination statements related thereto or any expenses
of any searches reasonably required by the Secured Party. The Debtors shall also
pay all other claims and charges which in the reasonable opinion of the Secured
Party might prejudice, imperil or otherwise affect the Collateral or the
Security Interest therein. The Debtors will also, upon demand, pay to the
Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Secured Party may incur in connection with (i) the enforcement of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, or (iii) the exercise or
enforcement of any of the rights of the Secured Party under the Note. Until so
paid, any fees payable hereunder shall be added to the principal amount of the
Note and shall bear interest at the Default Rate. The Debtors shall be jointly
and severally liable to Secured Party for all costs and expenses due or owing
under or in accordance with this Agreement.
8. Responsibility for Collateral. The Debtors jointly and severally
assume all liabilities and responsibility in connection with all Collateral, and
the obligations of a Debtor hereunder or under the Note shall in no way be
affected or diminished by reason of the loss, destruction, damage or theft of
any of the Collateral or its
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unavailability for any reason.
9. Security Interest Absolute. All rights of the Secured Party and all
Obligations of the Debtors hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Note or any agreement entered into in connection with the foregoing, or any
portion hereof or thereof; (b) any change in the time, manner or place of
payment or performance of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Note or any other agreement entered into in connection with the
foregoing; (c) any exchange, release or nonperfection of any of the Collateral,
or any release or amendment or waiver of or consent to departure from any other
collateral for, or any guaranty, or any other security, for all or any of the
Obligations; (d) any action by the Secured Party to obtain, adjust, settle and
cancel in its sole discretion any insurance claims or matters made or arising in
connection with the Collateral; or (e) any other circumstance which might
otherwise constitute any legal or equitable defense available to a Debtor, or a
discharge of all or any part of the Security Interest granted hereby. Until the
Obligations shall have been paid and performed in full, the rights of the
Secured Party shall continue even if the Obligations are barred for any reason,
including, without limitation, the running of the statute of limitations or
bankruptcy. The Debtors expressly waives presentment, protest, notice of
protest, demand, notice of nonpayment and demand for performance. In the event
that at any time any transfer of any Collateral or any payment received by the
Secured Party hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable preference or fraudulent conveyance under
the bankruptcy or insolvency laws of the United States, or shall be deemed to be
otherwise due to any party other than the Secured Party, then, in any such
event, the Debtors' respective obligations hereunder shall survive cancellation
of this Agreement, and shall not be discharged or satisfied by any prior payment
thereof and/or cancellation of this Agreement, but shall remain a valid and
binding obligation enforceable in accordance with the terms and provisions
hereof. Each Debtor waives all right to require the Secured Party to proceed
against any other person or to apply any Collateral which the Secured Party may
hold at any time, or to marshal assets, or to pursue any other remedy. Each
Debtor waives any defense arising by reason of the application of the statute of
limitations to any obligation secured hereby.
10. Term of Agreement. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Note have been made in
full and all other Obligations have been paid or discharged. Upon such
termination, the Secured Party, at the request and at the expense of the
Debtors, will join in executing any termination statement with respect to any
financing statement executed and filed pursuant to this Agreement.
11. Power of Attorney; Further Assurances. (a) Each Debtor
authorizes the Secured Party, and does hereby make, constitute and appoint
Secured Party and its respective officers, agents, successors or assigns with
full power of substitution, as the Debtors' true and lawful attorney-in-fact,
with power, in the name of the Secured Party or a Debtor, to, after the
occurrence and during the continuance of an Event of Default, (i) endorse any
notes, checks, drafts, money orders, or other instruments of payment (including
payments payable under or in respect of any policy of insurance) in respect of
the Collateral that may come into possession of the Secured Party; (ii) to sign
and endorse any financing statement or any invoice, freight or express xxxx,
xxxx of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with accounts, and other
documents relating to the Collateral; (iii) to pay or discharge taxes, liens,
security interests or other encumbrances at any time levied or placed on or
threatened against the Collateral; (iv) to demand, collect, receipt for,
compromise, settle and xxx for monies due in respect of the Collateral; and (v)
generally, to do, at the option of the Secured Party, and at the expense of the
Debtors, at any time, or from time to time, all acts and things which the
Secured Party deems necessary to protect, preserve and realize upon the
Collateral and the Security Interest granted therein in order to effect the
intent of this Agreement and the Note all as fully and effectually as a Debtor
might or could do; and each Debtor hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof. This power of attorney is
coupled with an interest and shall be irrevocable for the term of this Agreement
and thereafter as long as any of the Obligations shall be outstanding.
(b) On a continuing basis, the Debtors will make, execute,
acknowledge, deliver, file and record, as the case may be, in the proper filing
and recording places in any jurisdiction, including, without limitation,
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the jurisdictions indicated on Schedule A, attached hereto, all such
instruments, including appropriate financing and continuation statements and
collateral agreements and filings with the United States Patent and Trademark
Office and the United States Copyrights Office, and take all such action as may
reasonably be deemed necessary or advisable, or as reasonably requested by the
Secured Party, to perfect the Security Interest granted hereunder and otherwise
to carry out the intent and purposes of this Agreement, or for assuring and
confirming to the Secured Party the grant or perfection of a first priority
security interest in all the Collateral.
(c) The Debtors hereby irrevocably appoint the Secured Party as
the Debtors' attorney-in-fact, with full authority in the place and stead of the
Debtors and in the name of the Debtors, from time to time in the Secured Party's
discretion, to take any action and to execute any instrument which the 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 the Debtors' 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 the Debtors after the execution
hereof or to delete any reference to any right, title or interest in any
Copyrights, Patents or Trademarks in which the Debtors 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 the Debtors where permitted by law.
12. Notices. All notices, requests, demands and other communications
hereunder shall be in writing, with copies to all the other parties hereto, and
shall be deemed to have been duly given when (i) if delivered by hand, upon
receipt, (ii) if sent by facsimile, upon receipt of proof of sending thereof,
(iii) if sent by nationally recognized overnight delivery service (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, four days after
posting in the U.S. mails, in each case if delivered to the following addresses:
If to either Debtor: x.Xxxxxxx Corporation
00000 Xxxxxxx Xxxxx Xxxxx Xxxxx,
Xxx Xxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Ran Xxxxxx, Chief Financial Officer
With copies to: Higham, XxXxxxxxx & Xxxxxxx LLP
00000 Xxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attn: Xxxx X. Xxxxxxx, Esq.
If to Secured Party: Xxxxxxxx Xxxx International Limited
c/o Beacon Capital Management
Harbor House, 2nd Floor
Waterfront Drive
Roadtown, Tortola
British Virgin Islands
Attn: Xxxxx Xxxx
With copies to: Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx &
Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
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Facsimile No.: (000) 000-0000 and
(000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
13. Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Party shall have the right, in its sole discretion, to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured Party's rights and
remedies hereunder.
14. Miscellaneous.
(a) No course of dealing between the Debtors and the Secured
Party, nor any failure to exercise, nor any delay in exercising, on the part of
the Secured Party, any right, power or privilege hereunder or under the Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
(b) All of the rights and remedies of the Secured Party with
respect to the Collateral, whether established hereby or by the Note or by any
other agreements, instruments or documents or by law shall be cumulative and may
be exercised singly or concurrently.
(c) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto. Except as
specifically set forth in this Agreement, no provision of this Agreement may be
modified or amended except by a written agreement specifically referring to this
Agreement and signed by the parties hereto.
(d) In the event that any provision of this Agreement is held to
be invalid, prohibited or unenforceable in any jurisdiction for any reason,
unless such provision is narrowed by judicial construction, this Agreement
shall, as to such jurisdiction, be construed as if such invalid, prohibited or
unenforceable provision had been more narrowly drawn so as not to be invalid,
prohibited or unenforceable. If, notwithstanding the foregoing, any provision of
this Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.
(e) No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the party
giving such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default or right, whether of the same or similar nature or
otherwise.
(f) This Agreement shall be binding upon and inure to the benefit
of each party hereto and its successors and assigns.
(g) Each party shall take such further action and execute and
deliver such further documents as may be necessary or appropriate in order to
carry out the provisions and purposes of this Agreement.
(h) All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and the Note (whether
brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts
9
sitting in the City of New York, Borough of Manhattan. Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such proceeding
is improper. Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any such proceeding by mailing a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If either party shall commence a proceeding to enforce any
provisions of this Agreement, then the prevailing party in such proceeding shall
be reimbursed by the other party for its reasonable attorneys fees and other
costs and expenses incurred with the investigation, preparation and prosecution
of such proceeding.
(i) This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and, all of
which taken together shall constitute one and the same Agreement. In the event
that any signature is delivered by facsimile transmission, such signature shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.
* * * * * * * * * * *
10
IN WITNESS WHEREOF, the parties hereto have caused this Intellectual
Property Security Agreement to be duly executed on the day and year first above
written.
x.XXXXXXX CORPORATION
By:___________________________________
Name:
Title:
X.XXXXXXX CORPORATION
By:___________________________________
Name:
Title:
XXXXXXXX XXXX INTERNATIONAL LIMITED
By:___________________________________
Name:
Title:
11
EXHIBIT A
COPYRIGHTS
Description Registration Registration
Number Date
---------------------------------------------------------------------------------
12
EXHIBIT B
PATENTS
Description Registration Registration
Number Date
---------------------------------------------------------------------------------
1. Flash Memory File System
in a Handheld Record and Playback Device. 5,839,108 11/17/1998
2. Method for Recording Voice Messages
on Flash Memory in a Hand Held Recorder 5,742,737 4/21/1998
3. Operating System including improved file
management for use in devices utilizing
flash memory as main memory 5,787,445 7/28/1998
4. Handheld Record and playback
device with Flash Memory 5,491,774 2/13/1996
5. Method for Editing in Hand Held Recorder 5,842,170 11/24/1998
13
EXHIBIT C
TRADEMARKS
Description Registration Registration
Number Date
---------------------------------------------------------------------------------
1. Flashback 1,912,361 8/15/1995
2. Soundclip 1,914,141 8/22/1995
3. MXP serial #76/306,604 8/29/2001
4. Renegade serial #76/306,605 8/29/2001
5. 3GO serial #76/306,603 8/29/2001
6. RENEGADE serial #76/306,605 8/29/2001
7. Smart Solutions for a Digital World serial #76/275,478 6/21/2001
8. Powered by x.Xxxxxxx serial #76/210,265 2/14/2001
9. x.Xxxxxxx; European Community Trademark 1275114 6/13/2001
10. Music Explorer serial #76/338,113 12/13/2001
11. VoiceNav serial #76/288,067 7/19/2001
14
