INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement (this "IP Agreement") is
made as of the 31st day of October, 2006, by and between AXS-ONE INC., a
Delaware corporation with its chief executive office located at 000 Xxxxx 00
Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("Grantor"), and SILICON VALLEY BANK, a
California corporation with its principal place of business at 0000 Xxxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 and with a loan production office located
at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Lender").
RECITALS
A. Lender has agreed to make advances of money and to extend certain
financial accommodations to, among others, Grantor (the "Loan"), pursuant to a
certain Amended and Restated Loan and Security Agreement dated as of September
13, 2005 (as amended, the "Loan Agreement"). The Loan is secured pursuant to the
terms of the Loan Agreement. Lender is willing to enter into certain financial
accommodations with Grantor, but only upon the condition, among others, that
Grantor shall grant to Lender a security interest in certain Copyrights,
Trademarks, Patents, and Mask Works, and other assets, to secure the obligations
of Grantor under the Loan Agreement. Defined terms used but not defined herein
shall have the same meanings as in the Loan Agreement.
B. Pursuant to the terms of the Loan Agreement, Grantor has granted to
Lender a security interest in all of Grantor's right title and interest, whether
presently existing or hereafter acquired in, to and under all of the Collateral
(as defined therein).
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged and intending to be legally bound, as collateral security
for the prompt and complete payment when due of Grantor's Indebtedness (as
defined below), Grantor hereby represents, warrants, covenants and agrees as
follows:
1. Grant of Security Interest. As collateral security for the prompt
and complete payment and performance of all of Grantor's present or future
indebtedness, obligations and liabilities to Lender (hereinafter, the
"Indebtedness"), including, without limitation, under the Loan Agreement,
Grantor hereby grants a security interest in all of Grantor's right, title and
interest in, to and under its registered and unregistered intellectual property
collateral (all of which shall collectively be called the "Intellectual Property
Collateral"), including, without limitation, the following:
(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, registered
or unregistered, 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 secret rights, including any rights to
unpatented inventions, know-how, operating manuals, license rights and
agreements, and confidential information, and any and all intellectual
property rights in computer software and computer software products now or
hereafter existing, created, acquired or held;
(c) Any and all design rights which may be available to Grantor
now or hereafter existing, created, acquired or held;
(d) All patents, patent applications and like protections
including, without limitation, improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same,
including without limitation the patents and patent applications set forth
on EXHIBIT B attached hereto (collectively, the "Patents");
(e) Any trademark and service xxxx rights, slogans, trade dress,
and tradenames, trade styles, whether registered or not, applications to
register and registrations of the same and like protections, and the
-1-
entire goodwill of the business of Grantor connected with and symbolized
by such trademarks, including without limitation those set forth on
EXHIBIT C attached hereto (collectively, the "Trademarks");
(f) All mask works or similar rights available for the protection
of semiconductor chips, now owned or hereafter acquired, including,
without limitation those set forth on EXHIBIT D attached hereto
(collectively, the "Mask Works");
(g) 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;
(h) All licenses or other rights to use any of the Copyrights,
Patents, Trademarks, or Mask Works and all license fees and royalties
arising from such use to the extent permitted by such license or rights,
including, without limitation those set forth on EXHIBIT E attached hereto
(collectively, the "Licenses"); and
(i) All amendments, extensions, renewals and extensions of any of
the Copyrights, Trademarks, Patents, or Mask Works; and
(j) 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.
2. Authorization and Request. Grantor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this IP Agreement, and any amendments thereto, or copies thereof.
3. Covenants and Warranties. Grantor represents, warrants, covenants
and agrees as follows:
(a) Grantor is now the sole owner of the Intellectual Property
Collateral, except for non-exclusive licenses granted by Grantor to its
customers in the ordinary course of business.
(b) Performance of this IP Agreement does not conflict with or
result in a breach of any material agreement to which Grantor is bound.
(c) During the term of this IP Agreement, Grantor will not
transfer or otherwise encumber any interest in the Intellectual Property
Collateral, except for non-exclusive licenses granted by Grantor in the
ordinary course of business or as set forth in this IP Agreement;
(d) To its knowledge, each of the Patents is valid and
enforceable, and no part of the Intellectual Property Collateral has been
judged invalid or unenforceable, in whole or in part, and no claim has
been made that any part of the Intellectual Property Collateral violates
the rights of any third party;
(e) Grantor shall promptly advise Lender of any material adverse
change in the composition of the Collateral, including but not limited to
any subsequent ownership right of the Grantor in or to any Trademark,
Patent, Copyright, or Mask Work specified in this IP Agreement;
(f) Grantor shall (i) protect, defend and maintain the validity
and enforceability of the Trademarks, Patents, Copyrights, and Mask Works,
(ii) use its best efforts to detect infringements of the Trademarks,
Patents, Copyrights, and Mask Works and promptly advise Lender in writing
of material infringements detected and (iii) not allow any Trademarks,
Patents, Copyrights, or Mask Works to be abandoned, forfeited or dedicated
to the public without the written consent of Lender, which shall not be
unreasonably withheld, unless Grantor determines that reasonable business
practices suggest that abandonment is appropriate.
-2-
(g) Grantor shall take such further actions as Lender may
reasonably request from time to time to perfect or continue the perfection
of Lender's interest in the Intellectual Property Collateral;
(h) This IP Agreement creates, and in the case of after acquired
Intellectual Property Collateral this IP Agreement will create, at the
time Grantor first has rights in such after acquired Intellectual Property
Collateral, in favor of Lender a valid and perfected first priority
security interest and collateral assignment in the Intellectual Property
Collateral in the United States securing the payment and performance of
the obligations evidenced by the Loan Agreement;
(i) To its knowledge, except for, and upon, the filing of UCC
financing statements, or other notice filings or notations in appropriate
filing offices, if necessary to perfect the security interests created
hereunder, 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 (a) for the grant by Grantor of the security interest
granted hereby, or for the execution, delivery or performance of this IP
Agreement by Grantor in the U.S. or (b) for the perfection in the United
States or the exercise by Lender of its rights and remedies thereunder;
(j) All information heretofore, herein or hereafter supplied to
Lender by or on behalf of Grantor with respect to the Intellectual
Property Collateral is accurate and complete in all material respects.
(k) Grantor shall not enter into any agreement that would
materially impair or conflict with Grantor's obligations hereunder without
Lender's prior written consent, which consent shall not be unreasonably
withheld. Grantor shall not permit the inclusion in any material contract
to which it becomes a party of any provisions that could or might in any
way prevent the creation of a security interest in Grantor's rights and
interest in any property included within the definition of the
Intellectual Property Collateral acquired under such contracts.
(l) Upon any executive officer of Grantor obtaining actual
knowledge thereof, Grantor will promptly notify Lender in writing of any
event that materially adversely affects the value of any material
Intellectual Property Collateral, the ability of Grantor to dispose of any
material Intellectual Property Collateral or the rights and remedies of
Lender in relation thereto, including the levy of any legal process
against any of the Intellectual Property Collateral.
4. Lender's Rights. Lender shall have the right, but not the
obligation, to take, at Grantor's sole expense, any actions that Grantor is
required under this IP Agreement to take but which Grantor fails to take, after
fifteen (15) days' notice to Grantor. Grantor shall reimburse and indemnify
Lender for all reasonable costs and reasonable expenses incurred in the
reasonable exercise of its rights under this section 4.
5. Inspection Rights. Grantor hereby grants to Lender and its
employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to Grantor, any of Grantor's plants
and facilities that manufacture, install or store products (or that have done so
during the prior six-month period) that are sold utilizing any of the
Intellectual Property Collateral, and to inspect the products and quality
control records relating thereto upon reasonable written notice to Grantor and
as often as may be reasonably requested, but not more than once in every six (6)
months; provided, however, nothing herein shall entitle Lender access to
Grantor's trade secrets and other proprietary information.
6. Further Assurances; Attorney in Fact.
(a) On a continuing basis, Grantor will, upon request by Lender,
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 Trademarks Office and
the Register of Copyrights, and take all such action as may reasonably be deemed
necessary or advisable, or as requested by Lender, to perfect Lender's security
interest in all Copyrights, Patents, Trademarks,
-3-
and Mask Works and otherwise to carry out the intent and purposes of this IP
Agreement, or for assuring and confirming to Lender the grant or perfection of a
security interest in all Intellectual Property Collateral.
(b) In addition to section 6(a) above, Grantor shall not register
any Copyrights or Mask Works in the United States Copyright Office unless it:
(i) has given at least fifteen (15) days' prior written notice to Lender of its
intent to register such Copyrights or Mask Works and has provided Lender with a
copy of the application it intends to file with the United States Copyright
Office (excluding exhibits thereto); (ii) executes a security agreement or such
other documents as Lender may reasonably request in order to maintain the
perfection and priority of Lender's security interest in the Copyrights proposed
to be registered with the United States Copyright Office; and (iii) records such
security documents with the United States Copyright Office contemporaneously
with filing the Copyright application(s) with the United States Copyright
Office. Grantor shall promptly provide to Lender a copy of the Copyright
application(s) filed with the United States Copyright Office, together with
evidence of the recording of the security documents necessary for Lender to
maintain the perfection and priority of its security interest in such Copyrights
or Mask Works. Grantor shall provide written notice to Lender of any application
filed by Grantor in the United States Patent Trademark Office for a patent or to
register a trademark or service xxxx within 30 days of any such filing.
(c) Grantor hereby irrevocably appoints Lender as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Lender or otherwise, from time to time in Lender's
discretion, upon Grantor's failure or inability to do so, to take any action and
to execute any instrument which Lender may deem necessary or advisable to
accomplish the purposes of this IP Agreement, including:
(i) To modify, in its sole discretion, this IP Agreement
without first obtaining Grantor's approval of or signature to such
modification by amending Exhibit A, Exhibit B, Exhibit C, and Exhibit D
hereof, as appropriate, to include reference to any right, title or
interest in any Copyrights, Patents, Trademarks or Mask Works acquired by
Grantor after the execution hereof or to delete any reference to any
right, title or interest in any Copyrights, Patents, Trademarks, or Mask
Works in which Grantor 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, or other notice filings
or notations in appropriate filing offices, relative to any of the
Intellectual Property Collateral, without notice to Grantor, with all
appropriate jurisdictions, as Lender deems appropriate, in order to
further perfect or protect Lender's interest in the Intellectual Property
Collateral.
7. Events of Default. The occurrence of any of the following shall
constitute an Event of Default under this IP Agreement:
(a) An Event of Default occurs under the Loan Agreement; or any
document from Grantor to Lender; or
(b) Grantor breaches any warranty or agreement made by Grantor in
this IP Agreement.
8. Remedies. Upon the occurrence and continuance of an Event of
Default, Lender shall have the right to exercise all the remedies of a secured
party under the Massachusetts Uniform Commercial Code, including without
limitation the right to require Grantor to assemble the Intellectual Property
Collateral and any tangible property in which Lender has a security interest and
to make it available to Lender at a place designated by Lender. Lender shall
have a nonexclusive, royalty free license to use the Copyrights, Patents,
Trademarks, and Mask Works to the extent reasonably necessary to permit Lender
to exercise its rights and remedies upon the occurrence of an Event of Default.
Grantor will pay any expenses (including reasonable attorney's fees) incurred by
Lender in connection with the exercise of any of Lender's rights hereunder,
including without limitation any expense incurred in disposing of the
Intellectual Property Collateral. All of Lender's rights and remedies with
respect to the Intellectual Property Collateral shall be cumulative.
-4-
9. Indemnity. Grantor agrees to defend, indemnify and hold harmless
Lender 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 IP Agreement, and (b) all
losses or expenses in any way suffered, incurred, or paid by Lender as a result
of or in any way arising out of, following or consequential to transactions
between Lender and Grantor, whether under this IP Agreement or otherwise
(including without limitation, reasonable attorneys fees and reasonable
expenses), except for losses arising from or out of Lender's gross negligence or
willful misconduct.
10. Termination. At such time as Grantor shall completely satisfy all of
the obligations secured hereunder, Lender shall execute and deliver to Grantor
all releases, terminations, and other instruments as may be necessary or proper
to release the security interest hereunder.
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. Amendments. This IP Agreement may be amended only by a written
instrument signed by both parties hereto.
13. Counterparts. This IP Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
14. Law and Jurisdiction. This IP Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
GRANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT,
OR PROCEEDING OF ANY KIND, AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS
AGREEMENT; PROVIDED, HOWEVER, THAT IF FOR ANY REASON LENDER CANNOT AVAIL ITSELF
OF THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS, GRANTOR ACCEPTS JURISDICTION
OF THE COURTS AND VENUE IN SANTA XXXXX COUNTY, CALIFORNIA. NOTWITHSTANDING THE
FOREGOING, THE LENDER SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING
AGAINST THE GRANTOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION
WHICH THE LENDER DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE
COLLATERAL OR TO OTHERWISE ENFORCE THE LENDER'S RIGHTS AGAINST THE GRANTOR OR
ITS PROPERTY.
GRANTOR AND LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH
PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
15. Confidentiality. In handling any confidential information, Lender
shall exercise the same degree of care that it exercises for its own proprietary
information, but disclosure of information may be made: (i) to Lender's
subsidiaries or affiliates in connection with their present or prospective
business relations with Grantor; (ii) to prospective transferees or purchasers
of any interest in the Loans; (iii) as required by law, regulation, subpoena, or
other order, (iv) as required in connection with Lender's examination or audit;
and (v) as Lender considers appropriate in exercising remedies under this
Agreement. Confidential information does not include information that either:
(a) is in the public domain or in Lender's possession when disclosed to Lender,
or becomes part of the public domain after disclosure to Lender; or (b) is
disclosed to Lender by a third party, if Lender reasonably does not know that
the third party is prohibited from disclosing the information.
-5-
EXECUTED as a sealed instrument under the laws of the Commonwealth of
Massachusetts on the day and year first written above.
ADDRESS OF GRANTOR: GRANTOR:
000 Xxxxx 00 Xxxxx XXX-XXX INC.
-----------------------------------
Xxxxxxxxxx, Xxx Xxxxxx 00000 By: /s/ Xxxxxx X. Xxxxx
----------------------------------- --------------------------------------
Name: Xxxxxx X. Xxxxx
------------------------------------
Title: Chief Financial Officer
-----------------------------------
SILICON VALLEY BANK
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------- --------------------------------------
Name: Xxxxxxx Xxxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
-6-
Exhibit "A" attached to that certain Intellectual Property Security
Agreement dated October 31, 2006.
EXHIBIT "A"
COPYRIGHTS
[TO BE PROVIDED]
-7-
Exhibit "B" attached to that certain Intellectual Property Security
Agreement dated October 31, 2006.
EXHIBIT "B"
PATENTS
[TO BE PROVIDED]
-8-
Exhibit "C" attached to that certain Intellectual Property Security
Agreement dated October 31, 2006.
EXHIBIT "C"
TRADEMARKS
[TO BE PROVIDED]
-9-
Exhibit "D" attached to that certain Intellectual Property Security
Agreement dated October 31, 2006.
EXHIBIT "D"
MASK WORKS
[TO BE PROVIDED]
-10-
Exhibit "E" attached to that certain Intellectual Property Security
Agreement dated October 31, 2006.
EXHIBIT "E"
LICENSES
[TO BE PROVIDED]
-11-
