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EXHIBIT 10.32
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement (this "Agreement") is made
as of August 31, 1998, by and between JAYCOR NETWORKS, INC. ("Grantor"), and
JAYCOR, INC. ("Secured Party").
RECITALS
A. Secured Party has agreed to make certain advances of money and to
extend certain financial accommodations to Grantor (the "Loans") in the amounts
and manner set forth in that certain Revolving Loan Agreement effective as of
February 1, 1997 (as the same may be amended, the "Credit Agreement").
B. In order to induce Secured Party to make the Loans, Grantor has
agreed to grant a first priority security interest in certain intangible
property to Secured Party for purposes of securing the obligations of Grantor to
Secured Party.
NOW, THEREFORE, THE PARTIES HERETO AGREE 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 Secured Party, Grantor hereby
assigns, transfers, conveys and grants a first priority security interest to
Secured Party, as security, in and to Grantor's entire right, title and interest
in, to and under the following (all of which shall collectively be called the
"Intellectual Property Collateral"):
(a) Any and all copyright rights, copyright applications,
copyright registrations and like protections in each work or authorship and
derivative work thereof that is created by Grantor, 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unpublished and whether or not the same also constitutes a trade secret, now or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 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 servicemark rights, whether registered or
not, applications to register and registrations of the same and like
protections, and the entire goodwill
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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) Right to the proceeds (excluding attorneys' and other
professional and expert fees and expenses) arising from 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 on behalf of and
collect such damages for said use or infringement of the intellectual property
rights identified above;
(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; and
(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.
2. Authorization and Request. Grantor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this security agreement.
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 Agreement does not conflict with or
result in a breach of any agreement to which Grantor is party or by which
Grantor 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 Agreement constitutes
an assignment;
(c) During the term of this 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 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;
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(e) Grantor shall promptly advise Secured Party of any material
change in the composition of the Intellectual Property Collateral, including but
not limited to any subsequent ownership right of the Grantor in or to any
Trademark, Patent or Copyright not specified in this Agreement;
(f) Grantor 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 Secured Party 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 Secured Party, which
shall not be unreasonably withheld, unless Grantor determines that reasonable
business practices suggest that abandonment is appropriate.
(g) Grantor shall promptly register the most recent version of
any of Grantor'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 Secured Party may reasonably request from time to time to perfect or continue
the perfection of Secured Party's interest in the Intellectual Property
Collateral;
(h) This Agreement creates, and in the case of after acquired
Intellectual Property Collateral, this Agreement will create at the time Grantor
first has rights in such after acquired Intellectual Property Collateral, in
favor of Secured Party a valid and perfected first priority security interest in
the Intellectual Property Collateral in the United States securing the payment
and performance of the obligations evidenced by the Note 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
Grantor of the security interest granted hereby or for the execution, delivery
or performance of this Agreement by Grantor in the U.S. or (ii) for the
perfection in the United States or the exercise by Secured Party of its rights
and remedies hereunder;
(j) All information heretofore, herein or hereafter supplied to
Secured Party 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
Secured Party'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 interests in
any property included within the definition of the Intellectual Property
Collateral acquired under such
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contracts, except that certain contracts may contain anti-assignment provisions
that could in effect prohibit the creation of a security interest in such
contracts, and except that Grantor shall not be prohibited from granting
exclusive and non-exclusive licenses, or entering into marketing and
distribution agreements in the normal course of its business.
(l) Upon any executive officer of Grantor obtaining actual
knowledge thereof, Grantor will promptly notify Secured Party in writing of any
event that materially adversely affects the value of any Intellectual Property
Collateral, the ability of Grantor to dispose of any Intellectual Property
Collateral or the rights and remedies of Secured Party in relation thereto,
including the levy of any legal process against any of the Intellectual Property
Collateral.
4. Secured Party's Rights. Secured Party shall have the right, but not
the obligation, to take, at Grantor's sole expense, any actions that Grantor is
required under this Agreement to take but which Grantor fails to take, after
fifteen (15) days' notice to Grantor. Grantor shall reimburse and indemnify
Secured Party 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 Secured Party 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.
6. Further Assurances; Attorney in Fact.
(a) On a continuing basis, Grantor will, subject to any prior
licenses, encumbrances and restrictions and prospective licenses, make, execute,
acknowledge and deliver, and file and record in the proper filing and recording
places in the United States, all such instruments, including appropriate
financing and continuation statements and collateral agreements and filings with
the 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 Secured Party, to perfect Secured Party's security interest in
all Copyrights, Patents and Trademarks and otherwise to carry out the intent and
purposes of this Agreement, or for assuring and confirming to Secured Party the
grant or perfection of a security interest in all Intellectual Property
Collateral.
(b) Grantor hereby irrevocably appoints Secured Party as
Grantor's attorney-in-fact, with full authority in the place and stead of
Grantor and in the name of Grantor, from time to time in Secured Party's
discretion, to take any action and to execute any instrument which 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 Grantor'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
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in any Copyrights, Patents or Trademarks acquired by Grantor after the execution
hereof or to delete any reference to any right, title or interest in any
Copyrights, Patents or Trademarks 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, relative to any of
the Intellectual Property Collateral without the signature of Grantor where
permitted by law.
7. Events of Default. The occurrence of any of the following shall
constitute an Event of Default under this Agreement:
(a) An Event of Default occurs under the Credit Agreement; or
(b) Grantor breaches any warranty or agreement made by Grantor in
this Agreement and, as to any breach that is capable of cure, Grantor 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,
Secured Party 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 Grantor to assemble the Intellectual Property Collateral
and any tangible property in which Secured Party has a security interest and to
make it available to Secured Party at a place designated by Secured Party.
Secured Party shall have a nonexclusive, royalty free license to use the
Copyrights, Patents and Trademarks to the extent reasonably necessary to permit
Secured Party to exercise its rights and remedies upon the occurrence of an
Event of Default. Grantor will pay any expenses (including reasonable attorneys'
fees) incurred by Secured Party in connection with the exercise of any of
Secured Party's rights hereunder, including without limitation any expense
incurred in disposing of the Intellectual Property Collateral. All of Secured
Party's rights and remedies with respect to the Intellectual Property Collateral
shall be cumulative.
9. Indemnity. Grantor agrees to defend, indemnify and hold harmless
Secured Party 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 Secured
Party as a result of or in any way arising out of, following or consequential to
transactions between Secured Party and Grantor, whether under this Agreement or
otherwise (including without limitation reasonable attorneys' fees and
reasonable expenses), except for losses arising from or out of Secured Party's
gross negligence or willful misconduct.
10. Reassignment. At such time as Grantor shall completely satisfy all
of the obligations secured hereunder, Secured Party shall execute and deliver to
Grantor all deeds, assignments and other instruments as may be necessary or
proper to revest in Grantor full title to the property assigned hereunder,
subject to any disposition thereof which may have been made by Secured Party
pursuant hereto.
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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 Agreement is brought
by either party hereto against the other party, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and disbursements.
13. Amendments. This Agreement may be amended only by a written
instrument signed by both parties hereto.
14. Counterparts. This 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.
15. Governing Law. This Agreement shall be governed by the laws of the
State of California, without regard for choice of law provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
Address of Grantor: Grantor:
0000 Xxxxx Xxxxxx Xxxxx JAYCOR NETWORKS, INC.
Xxx Xxxxx, XX 00000
Attn: Chief Financial Officer By: /s/ XXXXX X. XXXXXXXX
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Title: President
Address of Secured Party: Secured Party:
0000 Xxxxx Xxxxxx Xxxxx JAYCOR, INC.
Xxx Xxxxx, XX 00000
Attn: Chief Financial Officer By: /s/ XXXXX XXXXXXX
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Title: Chief Financial Officer
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EXHIBIT A
Copyrights
Registration/ Registration/
Application Application
Description Number Date
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EXHIBIT B
Patents
Registration/ Registration/
Application Application
Description Number Date
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EXHIBIT C
Trademarks
Registration/ Registration/
Application Application
Description Number Date
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