INTELLECTUAL PROPERTY SECURITY AGREEMENT
Exhibit 10.5
THIS INTELLECTUAL PROPERTY SECURITY AGREEMENT (the “Agreement”), dated as of February
29, 2008, is made by VERICHIP CORPORATION, a Delaware corporation (“Chip”) and XMARK CORPORATION, a
Canada corporation (“Xxxx”, together with Chip, each a “Grantor” and collectively,
“Grantors”), in favor of LV Administrative Services, Inc., a Delaware corporation, as
administrative and collateral agent for the Purchasers (as defined in the Purchase Agreement
referred to below)(the “Agent”).
WHEREAS, pursuant to that certain Securities Purchase Agreement dated as of the date hereof
(as amended, restated, supplemented and/or otherwise modified from time to time, the “Purchase
Agreement”) by and among the Grantors, the Purchasers party thereto from time to time and the
Agent, the Purchasers have agreed to provide financial accommodations to the Grantors;
WHEREAS, Creditor Parties are willing to enter into the Purchase Agreement, but only upon the
condition, among others, that Grantors shall have executed and delivered to Agent this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Grantor hereby agrees as follows:
Section 1. DEFINED TERMS.
(a) When used herein the following terms shall have the following meanings:
“Copyrights” means all copyrights arising under the laws of the United States, any
other country or any political subdivision thereof, whether registered or unregistered and whether
published or unpublished, all registrations and recordings thereof, and all applications in
connection therewith, including all registrations, recordings and applications in the United States
Copyright Office, and the right to obtain all renewals of any of the foregoing.
“Copyright Licenses” means all written agreements naming any Grantor as licensor or
licensee granting any right under any Copyright, including the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright.
“Excluded Collateral” has the meaning ascribed to such term in the Master Security
Agreement.
“General Intangibles” shall have the meaning provided thereto in Section 9-102 of the
UCC, as amended, restated or otherwise modified from time to time.
“Master Security Agreement” shall have the meaning provided thereto in Section
5 hereof.
“Obligations” shall have the meaning provided thereto in the Master Security
Agreement.
“Patents” means (a) all letters patent of the United States, any other country or any
political subdivision thereof, and all reissues and extensions of such letters patent, (b) all
applications for letters patent of the United States or any other county and all divisions,
continuations and continuations-in-part thereof, and (c) all rights to obtain any reissues or
extensions of the foregoing.
“Patent Licenses” means all agreements, whether written or oral, providing for the
grant by or to any Grantor of any right to manufacture, use or sell any invention covered in whole
or in part by a Patent.
“Trademarks” means (a) all trademarks, trade names, corporate names, business names,
fictitious business names, trade styles, services marks, logos and other source or business
identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired,
all registrations and recordings thereof, and all applications in connection therewith, whether in
the United States Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country or political subdivision thereof, or otherwise, and
all common-law rights thereto, and (b) the right to obtain all renewals thereof.
“Trademark Licenses” means, collectively, each agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark.
“UCC” shall have the meaning provided thereto in the Master Security Agreement.
(b) All capitalized terms used but not otherwise defined herein have the meanings given to
them in the Purchase Agreement.
Section 2. GRANT OF SECURITY INTEREST IN INTELLECTUAL PROPERTY COLLATERAL. To secure
the complete and timely payment of all the Obligations of the Grantors now or hereafter existing
from time to time, each Grantor hereby grants to Agent, for the ratable benefit of the Creditor
Parties, a continuing first priority security interest in all of Grantor’s right, title and
interest in, to and under the following, whether presently existing or hereafter created or
acquired (collectively, the “Collateral”):
(a) all of its Patents and Patent Licenses to which it is a party including
those referred to on Schedule I hereto;
(b) all of its Trademarks and Trademark Licenses to which it is a party
including those referred to on Schedule II hereto;
(c) all of its Copyrights and Copyright Licenses to which it is a party
including those referred to on Schedule III hereto;
(d) all reissues, continuations or extensions of the foregoing;
(e) all goodwill of the business connected with the use of, and symbolized by,
each Patent, each Patent License, each Trademark, each Trademark License, each
Copyright and each Copyright License; and
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(f) all products and proceeds of the foregoing, including, without limitation,
any claim by Grantor against third parties for past, present or future (i)
infringement or dilution of any Patent or Patent licensed under any Patent License,
(ii) injury to the goodwill associated with any Patent or any Patent licensed under
any Patent License, (iii) infringement or dilution of any Trademark or Trademark
licensed under any Trademark License, (iv) injury to the goodwill associated with
any Trademark or any Trademark licensed under any Trademark License, (v)
infringement or dilution of any Copyright or Copyright licensed under any Copyright
License, and (vi) injury to the goodwill associated with any Copyright or any
Copyright licensed under any Copyright License.
Notwithstanding anything contained herein to the contrary, the Collateral shall not include
any Excluded Collateral.
Section 3. REPRESENTATIONS AND WARRANTIES. Each Grantor represents and warrants that
such Grantor does not have any ownership interest in, or title to, any Patent, Trademark or
Copyright except as set forth in Schedule I, Schedule II, Schedule III and
Schedule IV, respectively, hereto. To the best of each Grantor’s knowledge, each Grantor’s
registered Patents, registered Trademarks and registered Copyrights are valid and enforceable, are
solely owned by such Grantor and there is no pending or, to Grantor’s knowledge, threatened claim
that the use of any of them violates the rights of any third person. Subject to any previously
perfected security agreements previously recorded at the U.S. Patent and Trademark Office, this
Agreement is effective to create a valid and continuing lien on and perfected security interests in
favor of Agent, for the ratable benefit of Creditor Parties, in all of each Grantor’s Patents,
Trademarks and Copyrights and such perfected security interests are enforceable as such as against
any and all creditors of, and purchasers from, such Grantor. Upon filing of this Agreement with
the United States Patent and Trademark Office and the United States Copyright Office and the filing
of appropriate financing statements, all action necessary or desirable to protect and perfect
Agent’s Lien on each Grantor’s Patents, Trademarks and Copyrights shall have been duly taken.
Section 4. COVENANTS. Each Grantor covenants and agrees with Agent that from and
after the date of this Agreement:
(a) Such Grantor shall notify Agent promptly if it knows or has reason to know
that any application or registration relating to any Collateral material to its
business may become abandoned (excluding those Trademarks listed on Schedule
IV) or dedicated, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in the
United States Patent and Trademark Office, the United States Copyright Office or any
court) regarding such Grantor’s ownership of any Patent, Trademark or Copyright, its
right to register the same, or to keep and maintain the same.
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(b) In no event shall any Grantor, either directly or through any agent,
employee, licensee or designee, file an application for the registration of any
Patent, Trademark or Copyright with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency
without giving Agent prior written notice thereof, and, upon request of Agent, the
applicable Grantor shall execute and deliver a supplement hereto (in form and
substance satisfactory to Lender) to evidence Agent’s Lien on such Patent, Trademark
or Copyright, and the General Intangibles of such Grantor relating thereto or
represented thereby.
(c) Except for the Trademarks set forth on Schedule IV, with respect to
each Patent and Trademark material to the conduct of its business or operations,
such Grantor shall take all actions necessary or requested by Agent to maintain and
pursue each application, to obtain the relevant registration and to maintain the
registration of each of the Patents or Trademarks (now or hereafter existing),
including the filing of applications for renewal, affidavits of use, affidavits of
noncontestability and opposition and interference and cancellation proceedings.
(d) In the event that any of the Collateral is infringed upon, or
misappropriated or diluted by a third party, such Grantor shall notify Agent
promptly after such Grantor learns thereof. Such Grantor shall, unless it shall
reasonably determine that such Collateral is in no way material to the conduct of
its business or operations, promptly xxx for infringement, misappropriation or
dilution and to recover any and all damages for such infringement, misappropriation
or dilution, and shall take such other actions as Agent shall reasonably deem
appropriate under the circumstances to protect such Collateral.
Section 5. MASTER SECURITY AGREEMENT. The security interests granted pursuant to this
Agreement are granted in conjunction with the security interests granted to Agent by Grantors
pursuant to the Master Security Agreement. Each Grantor hereby acknowledges and affirms that the
rights and remedies of Agent with respect to the security interest in the Collateral made and
granted hereby are more fully set forth in the Master Security Agreement, the terms and provisions
of which relating to the such right and remedies are incorporated by reference herein as if fully
set forth herein.
Section 6. REINSTATEMENT. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against any Grantor for liquidation or
reorganization, should any Grantor become insolvent or make an assignment for the benefit of any
creditor or creditors or should a receiver or trustee be appointed for all or any significant part
of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any
obligee of the Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or
otherwise, all as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or
returned.
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Section 7. INDEMNIFICATION. (A) Each Grantor assumes all responsibility and liability
arising from its use of the Patents, Trademarks and/or Copyrights and each Grantor hereby
indemnifies and holds each Creditor Party harmless from and against any claim, suit, loss, damage
or expense (including reasonable attorneys’ fees) arising out of such Grantor’s operations of its
business from the use of the Patents, Trademarks and/or Copyrights. (B) In any suit, proceeding or
action brought by Agent under any Patent License, Trademark License or Copyright License for any
sum owing thereunder, or to enforce any provisions of such license, each Grantor will indemnify and
keep each Creditor Party harmless from and against all expense, loss or damage suffered by reason
of any defense, set off, counterclaim, recoupment or reduction or liability whatsoever of the
obligee thereunder, arising out of (i) a breach by such Grantor of any obligation thereunder or
(ii) any other agreement, indebtedness or liability at any time owing to or in favor of such
obligee or its successors from such Grantor (items (i) and (ii) are referred to collectively as
“Affected Obligations”), and all such Affected Obligations of such Grantor shall be and remain
enforceable against and only against such Grantor and shall not be enforceable against any Creditor
Party.
Section 8. NOTICES. Whenever it is provided herein that any notice, demand, request,
consent, approval, declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to give and serve upon
any other party any communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in writing and shall be
given in the manner, and deemed received, as provided for in the Purchase Agreement.
Section 9. TERMINATION OF THIS AGREEMENT. Subject to Section 6 hereof, this
Agreement shall terminate upon payment of the Obligations under the Note in full in immediately
available funds.
Section 10. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall constitute one instrument.
It is understood and agreed that if facsimile copies of this Agreement bearing facsimile
signatures are exchanged between the parties hereto, such copies shall in all respects have the
same weight, force and legal effect and shall be fully as valid, binding, and enforceable as if
such signed facsimile copies were original documents bearing original signature.
[Signature Page to Follow]
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IN WITNESS WHEREOF, each Grantor has caused this Intellectual Property Security Agreement to
be executed and delivered by its duly authorized officer as of the date first set forth above.
| VERICHIP CORPORATION |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | President and Chief Financial Officer | |||
| XMARK CORPORATION |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Chief Financial Officer and Secretary | |||
| ACCEPTED and ACKNOWLEDGED by: | ||||
| LV ADMINISTRATIVE SERVICES, INC., as Agent |
||||
By:
|
/s/ Xxxxx Xxxxxxxxx
|
|||
| Title: Authorized Signatory | ||||
signature page to
intellectual property
security agreement
intellectual property
security agreement
I. GRANTOR PATENT REGISTRATIONS
| Patent | Reg. No. | Issue/Reg. Date | ||
| Asset Security Tag | US Patent No. 6,137,414 | October 24, 2000 | ||
| Fibre Optic Security and Communications Link | Canadian Patent No. 2,055,266 | March 14, 2000 | ||
| Fibre Optic Security and Communications Link | US Patent No. 5,374,921 | December 20, 1994 | ||
| Method of Detecting
Objects Within Range
of a Receiver
|
US Patent No. 6,727,810 | April 27, 2004 | ||
| Multiple Conductor Security Tag | US Patent No. 5,977,877 | November 2, 1999 | ||
| Tag and System for Patient Safety Monitoring | US Patent No. 6,144,303 | November 7, 2000 | ||
| Tag and System for Patient Safety Monitoring | Canadian Patent No. 2,260,577 | July 23, 2002 | ||
| Tag System With Anti-Collision Features | US Patent No. 6,456,191 | September 24, 2002 | ||
| Tag System With Anti-Collision Features | Canadian Patent No. 2,266,337 | June 8, 2004 | ||
| Transceiver Enclosure | US Design Patent No. D414,178 | September 21, 1999 | ||
| Transceiver Enclosure | US Design Patent No. D417,667 | December 14, 1999 | ||
| Associated Articles Identifying System | ATE 310296 (Austria) | November 16, 2005 | ||
| Associated Articles Identifying System | CH 1362335 (Switzerland) | November 16, 2005 | ||
| Associated Articles Identifying System | DE 60115096 (Germany) | November 16, 2005 | ||
| Associated Articles Identifying System | ES 1362335 (Spain) | November 16, 2005 | ||
| Associated Articles Identifying System | FR 1362335 (France) | November 16, 2005 | ||
| Associated Articles Identifying System | GB 1362335 (United Kingdom) | November 16, 2005 | ||
| Associated Articles Identifying System | IE 1362335 (Ireland) | November 16, 2005 | ||
| Associated Articles Identifying System | IT 00000/XX00 (Xxxxx) | November 16, 2005 | ||
| Associated Articles Identifying System | US Patent No. 6,977,586 | December 20, 2005 | ||
| Asset Location System | US Patent No. 7,116,230 | October 3, 2006 | ||
A Method of Detecting
Objects Within Range
of a Receiver
|
Canadian Patent No. 2,299,053 | February 5, 2008 | ||
| Multiple Conductor Security Tag | Canadian Patent No. 2,271,925 | February 5, 2008 |
II. GRANTOR PATENT APPLICATIONS
| Patent | Reg. No. | Date | ||
| Asset Location System | Canadian Patent
Application No. 2,473,983 |
July 14, 2004 | ||
| An Asset Security Tag | Canadian Patent Application No. 2,254,832 | November 30, 1998 | ||
Associated Articles
Identifying System
|
Canadian Patent Application No. 2,436,798 | February 13, 2001 | ||
| Multiple Conductor Security Tag | Canadian Patent Application No. 2,596,458 | May 14, 1999 |
III. MATERIAL PATENT LICENSES
| Patent | Reg. No. | Date | ||
| Tag for Use with Personal Monitoring System(1) | US Patent No. 4,952,913 | August 28, 1990 | ||
| Tag for Use with Personal Monitoring System(1) | US Patent No. 4,885,571 | December 5, 1989 | ||
| Tag for Use with Personal Monitoring System(1) | Canadian Patent No. 1,299,660 | April 28, 1992 | ||
| Tag for Use with Personal Monitoring System(1) | New Zealand Patent No. 219,982 | April 14, 1987 | ||
| Programmable Channel Search Reader(2) | US Patent No. 5,952,935 | September 14, 1999 | ||
| Syringe-Implantable Identification Transponder(2)(3) | US Patent No. 5,211,129 | May 18, 1993 | ||
| Passive Integrated Transponder with Unitary Antenna Core(2) | US Patent No. 6,400,338 | June 4, 2002 | ||
| US2002/0154065 A1(2) | Continuation of Passive Integrated Transponder with Unitary Antenna Core |
| (1) | BI Patent License Agreement dated as of March 6, 2000, as amended, between BI Incorporated and
Instantel Inc. |
|
| (2) | Amended and Restated Supply, License and Development Agreement dated December 27, 2005, as
amended, between VeriChip Corporation and Digital Angel Corporation |
|
| (3) | Patent expires in April 2008. |
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I. GRANTOR TRADEMARK REGISTRATIONS
| REG. NO. | XXXX | COUNTRY | REG DATE | |||
2650018
|
ASSETRAC | United States | 12-Nov-2002 | |||
TMA596,013
|
ASSETRAC | Canada | 28-Nov-2003 | |||
1628968
|
BLASTMATE | United States | 25-Dec-1990 | |||
TMA347,303
|
BLASTMATE | Canada | 28-Oct-1988 | |||
1697379
|
BLASTWARE | United States | 30-Jun-1992 | |||
TMA364,522
|
BLASTWARE | Canada | 19-Jan-1990 | |||
2768516
|
EXI | United States | 30-Sep-2003 | |||
TMA552,196
|
EXI | Canada | 10-Oct-2001 | |||
2292993
|
FINDIT | United States | 16-Nov-1999 | |||
TMA465,572
|
FINDIT | Canada | 1-Nov-1996 | |||
2833540
|
HEARTBEAT | United States | 20-Apr-2004 |
3
| REG. NO. | XXXX | COUNTRY | REG DATE | |||
TMA582,108
|
HEARTBEAT | Canada | 22-May-2003 | |||
2390878
|
HUGS | United States | 3-Oct-2000 | |||
TMA518,570
|
HUGS | Canada | 22-Oct-1999 | |||
1637432
|
INSTANTEL | United States | 12-Mar-1991 | |||
TMA371,010
|
INSTANTEL | Canada | 20-Jul-1990 | |||
2833459
|
KEEPIT | United States | 20-Apr-2004 | |||
TMA580,218
|
KEEPIT | Canada | 30-Apr-2003 | |||
2844176
|
KISSES | United States | 25-May-2004 | |||
2,963,817
|
MINIMATE | United States | 28-Jun-2005 | |||
2901382
|
MYCALL | United States | 9-Nov-2004 | |||
TMA485,797
|
MYCALL | Canada | 19-Nov-1997 | |||
1816759
|
ROAMALERT | United States | 18-Jan-1994 | |||
TMA428,843
|
WATCHMATE | Canada | 17-Jun-1994 | |||
1823615
|
WATCHMATE | United States | 22-Feb-1994 |
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| REG. NO. | XXXX | COUNTRY | REG DATE | |||
2,940,393
|
XMARK | United States | 12-Apr-2005 | |||
XXX000000
|
XMARK | Canada | 24-Mar-2004 | |||
339.174
|
VERIMED | Colombia | 08/13/2007 | |||
003542271
|
VERIMED | CTM (European Union) | 04/05/2005 | |||
831309
|
VERIMED | Mexico | 04/20/2004 | |||
339.172
|
VERIGUARD | Colombia | 08/13/2007 | |||
003574233
|
VERIGUARD | CTM (European Union) | 12/08/2003 | |||
831307
|
VERIGUARD | Mexico | 04/20/2004 | |||
003574167
|
VERIPAY | CTM (European Union) | 12/08/2003 | |||
831308
|
VERIPAY | Mexico | 04/20/2004 | |||
648,478
|
VERICHIP | Canada | 09/20/2005 | |||
680.295
|
VERICHIP | Chile | 03/16/2004 | |||
3538381
|
VERICHIP | China | 01/07/2006 |
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| REG. NO. | XXXX | COUNTRY | REG DATE | |||
319089
|
VERICHIP | Colombia | 07/12/2006 | |||
002912319
|
VERICHIP | CTM (European Union) | 04/24/2004 | |||
00000
|
XXXXXXXX | Xxxxxxx | 06/24/2003 | |||
611263
|
VERICHIP | Korea | 03/14/2005 | |||
790076
|
VERICHIP | Mexico | 04/30/2003 | |||
288421
|
VERICHIP | Russia | 05/05/2005 | |||
519350
|
VERICHIP | Switzerland | 03/18/2004 | |||
01091002
|
VERICHIP | Taiwan | 04/01/2004 | |||
P-273400
|
VERICHIP | Venezuela | 09/04/2006 | |||
2,772,634
|
GET CHIPPED | United States | 10/07/2003 | |||
2,807,427
|
VERIPASS | United States | 01/20/2004 | |||
2,679,587
|
ECO-LITE | United States | 01/28/2003 |
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II. GRANTOR TRADEMARK APPLICATIONS
| APPLICATION | APPLICATION | |||||
| NUMBER | XXXX | COUNTRY | DATE | |||
3394905
|
INSTANTEL | EU | 10/09/2003 | |||
826230733
|
VERIMED | Brazil | 12/09/2003 | |||
78/259979
|
VERIMED | United States | 06/09/2003 | |||
826059325
|
VERIGUARD | Brazil | 11/14/2003 | |||
78/598039
|
VERIGUARD | United States | 03/30/2005 | |||
826113800
|
VERIPAY | Brazil | 12/09/2003 | |||
78/260027
|
VERIPAY | United States | 06/09/2003 | |||
826059317
|
VERIKID | Brazil | 11/14/2003 | |||
78/309237
|
VERIKID | United States | 10/03/2003 | |||
2.425.463
|
VERICHIP | Argentina | 04/16/2003 | |||
825387060
|
VERICHIP | Brazil | 03/10/2003 | |||
2004-00069
|
VERICHIP | South Africa | 01/05/2004 | |||
78/099039
|
VERICHIP | Xxxxxx Xxxxxx | 00/00/0000 | |||
00/000000
|
XXXXXXXXX | Xxxxxx Xxxxxx | 05/12/2006 |
III. MATERIAL TRADEMARK LICENSES – N/A
| REG. NO. | XXXX | COUNTRY | REG. DATE | |||
Trademark Assignment Agreement dated December 21, 2006 between Applied Digital Solutions, Inc. and
VeriChip Corporation
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I. GRANTOR COPYRIGHT REGISTRATIONS – N/A
| Copyright | Reg. No. | Date | ||
II. GRANTOR COPYRIGHT APPLICATIONS – N/A
| Copyright | Reg. No. | Date | ||
III. MATERIAL COPYRIGHT LICENSES – N/A
| Copyright | Reg. No. | Date | ||
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The following Trademarks have been abandoned by the Grantors:
| REG./APPLICATION NO. | XXXX | COUNTRY | ||
TMA568,111
|
E-LINK ENABLED | Canada | ||
TMA559,903
|
ECO-LITE | Canada | ||
TMA511,093
|
PERCEPTIS | Canada | ||
TMA664,993
|
ROAM@HOME | Canada | ||
TMA435,529
|
BLASTER’S TOOL BOX | Canada | ||
TMA447,659
|
WATCHIT | Canada | ||
77/204734
|
EVITRACE | United States |
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