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Exhibit 10.23
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This INTELLECTUAL PROPERTY SECURITY AGREEMENT ("Agreement"), dated as
of March 16, 2001, is entered into between INTERACT COMMERCE CORPORATION, a
Delaware corporation ("Debtor") and FOOTHILL CAPITAL CORPORATION, a California
corporation ("Foothill"), in light of the following:
A. Debtor and Foothill are, contemporaneously herewith, entering into
that certain Loan and Security Agreement ("Loan Agreement") and other
instruments, documents and agreements contemplated thereby or related thereto
(collectively, together with the Loan Agreement, the "Loan Documents"); and
B. Debtor is the owner of certain intellectual property, identified
below, in which Debtor is granting a security interest to Foothill.
NOW THEREFORE, in consideration of the mutual promises, covenants,
conditions, representations, and warranties hereinafter set forth and for other
good and valuable consideration, the parties hereto mutually agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. The following terms, as used in this
Agreement, have the following meanings:
"Code" means the California Uniform Commercial Code,
as amended and supplemented from time to time, and any successor statute.
"Collateral" means:
(i) Each of the trademarks and rights and interest
which are capable of being protected as trademarks (including
trademarks, service marks, designs, logos, indicia, tradenames,
corporate names, company names, business names, fictitious business
names, trade styles, and other source or business identifiers, and
applications pertaining thereto), which are presently, or in the future
may be, owned, created, acquired, or used (whether pursuant to a
license or otherwise) by Debtor, in whole or in part, and all trademark
rights with respect thereto throughout the world, including all
proceeds thereof (including license royalties and proceeds of
infringement suits), and rights to renew and extend such trademarks and
trademark rights;
(ii) Each of the patents and patent applications
which are presently, or in the future may be, owned, issued, acquired,
or used (whether pursuant to a license or otherwise) by Debtor, in
whole or in part, and all patent rights with respect thereto throughout
the world, including all proceeds thereof (including license royalties
and proceeds of infringement suits), foreign filing rights, and rights
to extend such patents and patent rights;
(iii) Each of the copyrights and rights and interests
capable of being protected as copyrights, which are presently, or in
the future may be, owned authored,
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acquired, or used (whether pursuant to a license or otherwise) by
Debtor, in whole or in part, and all copyright rights with respect
thereto throughout the world, including all proceeds thereof (including
license royalties and proceeds of infringement suits), and all tangible
property embodying the copyrights (including books, records, films,
computer tapes or disks, photographs, specification sheets, source
codes, object codes, and other physical manifestations of the
foregoing)
(iv) All of Debtor's right, title, and interest in
and to the trademarks and trademark registrations listed on Schedule A,
attached hereto, as the same may be updated hereafter from time to
time;
(v) All of Debtor's right, title, and interest, in
and to the patents and patent applications listed on Schedule B,
attached hereto, as the same may be updated hereafter from time to
time;
(vi) All of Debtor's right, title, and interest, in
and to the copyrights and copyright registrations listed on Schedule C,
attached hereto, as the same may be updated hereafter from time to
time;
(vii) All of Debtor's rights to register trademark
claims under any state or federal trademark law or regulation of any
foreign country and to apply for, renew, and extend the trademark
registrations and trademark rights, the right (without obligation) to
▇▇▇ or bring opposition or cancellation proceedings in the name of
Debtor or in the name of Foothill for past, present, and future
infringements of the trademarks, registrations, or trademark rights and
all rights (but not obligations) corresponding thereto in the United
States and any foreign country, and the associated goodwill;
(viii) All of Debtor's right, title, and interest in
all patentable inventions, and rights to file applications for patent
under federal patent law or regulation of any foreign country, and to
request reexamination and/or reissue of the patents, the right (without
obligation) to ▇▇▇ or bring interference proceedings in the name of
Debtor or in the name of Foothill for past, present, and future
infringements of the patents, and all rights (but not obligations)
corresponding thereto in the United States and any foreign country;
(ix) All of Debtor's rights to register copyright
claims under any federal copyright law or regulation of any foreign
country and to apply for registrations on original works, compilations,
derivative works, collective works, and works for hire, the right
(without obligation) to ▇▇▇ in the name of Debtor or in the name of
Foothill for past, present, and future infringements of the copyrights,
and all rights (but not obligations) corresponding thereto in the
United States and any foreign country;
(x) All general intangibles relating to the
foregoing; and
(xi) All proceeds of any and all of the foregoing
(including, without limitation, license royalties and proceeds of
infringement suits) and, to the extent not otherwise included, all
payments under insurance, or any indemnity, warranty, or guaranty
payable by reason of loss or damage to or otherwise with respect to the
Collateral.
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"Obligations" means all obligations, liabilities, and
indebtedness of Debtor to Foothill, whether direct, indirect, liquidated, or
contingent, and whether arising under this Agreement, the Loan Agreement, any
other of the Loan Documents, or otherwise, including all costs and expenses
described in Section 11.8 hereof.
1.2 CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, and the term "including" is not limiting. The
words "hereof," "herein," "hereby," "hereunder," and other similar terms refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Any initially capitalized terms used but not defined herein shall
have the meaning set forth in the Loan Agreement. Any reference herein to any of
the Loan Documents includes any and all alterations, amendments, extensions,
modifications, renewals, or supplements thereto or thereof, as applicable.
Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against Foothill or Debtor, whether under any rule of
construction or otherwise. On the contrary, this Agreement has been reviewed by
Debtor, Foothill, and their respective counsel, and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of Foothill and Debtor.
2. GRANT OF SECURITY INTEREST.
Debtor hereby grants to Foothill a first-priority security
interest in all of Debtor's right, title, and interest in and to the Collateral
to secure the Obligations.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS.
Debtor hereby represents, warrants, and covenants that:
3.1 COPYRIGHTS; TRADEMARKS; SERVICE MARKS; PATENTS.
(i) A true and complete schedule setting forth all
federal and state trademark and service ▇▇▇▇ registrations owned or
controlled by Debtor or licensed to Debtor, together with a summary
description and full information in respect of the filing or issuance
thereof and expiration dates is set forth on Schedule A;
(ii) A true and complete schedule setting forth all
patent and patent applications owned or controlled by Debtor or
licensed to Debtor, together with a summary description and full
information in respect of the filing or issuance thereof and expiration
dates is set forth on Schedule B; and
(iii) A true and complete schedule setting forth all
federal copyright registrations owned or controlled by Debtor or
licensed to Debtor, together with a summary description and full
information in respect of the filing or issuance thereof and expiration
dates is set forth on Schedule C.
3.2 VALIDITY; ENFORCEABILITY. To Debtor's knowledge, each of
Debtor's copyrights, patents, service marks and trademarks is valid and
enforceable, and Debtor is not presently aware of any past, present, or
prospective claim by any third party that any of its copyrights, patents,
service marks, or trademarks are invalid or unenforceable, or that its use of
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any copyrights, patents, service marks, or trademarks violates the rights of any
third person, or of any basis for any such claims;
3.3 TITLE. Debtor is the sole and exclusive owner of the
entire and unencumbered right, title, and interest in and to each of the
copyrights, copyright registrations, patents, patent applications, service
marks, service ▇▇▇▇ registrations, trademarks, and trademark registrations set
forth on Schedules A, B, and C, free and clear of any liens, charges, and
encumbrances, including pledges, assignments, licenses, shop rights, and
covenants by Debtor not to ▇▇▇ third persons, except Permitted Liens;
3.4 NOTICE. To Debtor's knowledge, Debtor has used and will
continue to use proper statutory notice in connection with its use of each of
its copyrights, patents, service marks, and trademarks;
3.5 QUALITY. Debtor has used and will continue to use
consistent standards of high quality (which may be consistent with Debtor's past
practices) in the manufacture, sale, and delivery of products and services sold
or delivered under or in connection with its service marks and trademarks,
including, to the extent applicable, in the operation and maintenance of its
merchandising operations;
3.6 INTENTIONALLY OMITTED.
4. AFTER-ACQUIRED COPYRIGHT, PATENT, SERVICE ▇▇▇▇, OR TRADEMARK RIGHTS.
If Debtor shall obtain rights to any new copyright, service
marks, trademarks, any new patentable inventions or become entitled to the
benefit of any patent application or patent for any reissue, division, or
continuation, of any patent, the provisions of this Agreement shall
automatically apply thereto. Debtor shall give prompt notice in writing to
Foothill with respect to any such new service marks, trademarks or patents, or
renewal or extension of any service ▇▇▇▇ or trademark registration. Debtor shall
bear any expenses incurred in connection with future patent applications or
service ▇▇▇▇ or trademark registrations.
5. LITIGATION AND PROCEEDINGS.
Debtor shall commence and diligently prosecute in its own
name, as the real party in interest, for its own benefit, and its own expense,
such suits, administrative proceedings, or other action for infringement or
other damages as are in its reasonable business judgment necessary to protect
the Collateral. Debtor shall provide to Foothill any information with respect
thereto requested by Foothill. Foothill shall provide at Debtor's expense all
necessary cooperation in connection with any such suits, proceedings, or action,
including, without limitation, joining as a necessary party. Following Debtor's
becoming aware thereof, Debtor shall notify Foothill of the institution of, or
any adverse determination in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office, or any United States,
state, or foreign court regarding Debtor's claim of ownership in any of the
copyrights, patents, service marks or trademarks, its right to apply for the
same, or its right to keep and maintain such copyright, patent, service ▇▇▇▇ or
trademark rights.
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6. POWER OF ATTORNEY.
Debtor grants Foothill power of attorney, having the full
authority, and in the place of Debtor and in the name of Debtor, from time to
time following an Event of Default in Foothill's discretion, to take any action
and to execute any instrument which Foothill may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation, as may
be subject to the provisions of this Agreement: to endorse Debtor's name on all
applications, documents, papers, and instruments necessary for Foothill to use
or maintain the Collateral; to ask, demand, collect, ▇▇▇ for, recover, impound,
receive, and give acquittance and receipts for money due or to become due under
or in respect of any of the Collateral; to file any claims or take any action or
institute any proceedings that Foothill may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce Foothill's rights
with respect to any of the Collateral and to assign, pledge, convey, or
otherwise transfer title in or dispose of the Collateral to any person.
7. INTENTIONALLY OMITTED.
8. EVENTS OF DEFAULT.
Any of the following events shall be an Event of Default:
8.1 LOAN AGREEMENT. An Event of Default shall occur as defined
in the Loan Agreement;
8.2 MISREPRESENTATION. Any representation or warranty made
herein by Debtor or in any document furnished to Foothill by Debtor under this
Agreement is incorrect in any material respect when made or when reaffirmed; and
8.3 BREACH. Debtor fails to observe or perform any covenant,
condition, or agreement to be observed or performed pursuant to the terms hereof
which materially and adversely affects Foothill, and fails to cure such breach
in a manner consistent with the Loan Agreement.
9. SPECIFIC REMEDIES.
Upon the occurrence of any Event of Default, Foothill shall
have, in addition to, other rights given by law or in this Agreement, the Loan
Agreement, or in any other Loan Document, all of the rights and remedies with
respect to the Collateral of a secured party under the Code, including the
following:
9.1 NOTIFICATION. Foothill may notify licensees to make
royalty payments on license agreements directly to Foothill;
9.2 SALE. Foothill may sell or assign the Collateral and
associated goodwill at public or private sale for such amounts, and at such time
or times as Foothill deems advisable. Any requirement of reasonable notice of
any disposition of the Collateral shall be satisfied if such notice is sent to
Debtor five days prior to such disposition. Debtor shall be credited with the
net proceeds of such sale only when they are actually received by Foothill, and
Debtor shall continue to be liable for any deficiency remaining after the
Collateral is sold or collected. If the
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sale is to be a public sale, Foothill shall also give notice of the time and
place by publishing a notice one time at least five days before the date of the
sale in a newspaper of general circulation in the county in which the sale is to
be held. To the maximum extent permitted by applicable law, Foothill may be the
purchaser of any or all of the Collateral and associated goodwill at any public
sale and shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Collateral sold at
any public sale, to use and apply all or any part of the Obligations as a credit
on account of the purchase price of any collateral payable by Foothill at such
sale.
10. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED
UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA, WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAWS PRINCIPLES. THE
PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS
LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION
OF FOOTHILL, IN ANY OTHER COURT IN WHICH FOOTHILL SHALL INITIATE LEGAL OR
EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER
IN CONTROVERSY. EACH OF DEBTOR AND FOOTHILL WAIVES, TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 10. DEBTOR AND FOOTHILL 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. DEBTOR AND FOOTHILL REPRESENT THAT EACH
HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
11. GENERAL PROVISIONS.
11.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Debtor and Foothill.
11.2 SUCCESSORS AND ASSIGNS. This Agreement shall bind and
inure to the benefit of the respective successors and assigns of each of the
parties; provided, however, that Debtor may not assign this Agreement or any
rights or duties hereunder without Foothill's prior written consent and any
prohibited assignment shall be absolutely void. Foothill may assign this
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Agreement and its rights and duties hereunder and no consent or approval by
Debtor is required in connection with any such assignment.
11.3 SECTION HEADINGS. Headings and numbers have been set
forth herein for convenience only. Unless the contrary is compelled by the
context, everything contained in each section applies equally to this entire
Agreement.
11.4 INTERPRETATION. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against Foothill
or Debtor, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties hereto.
11.5 SEVERABILITY OF PROVISIONS. Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.
11.6 AMENDMENTS IN WRITING. This Agreement can only be amended
by a writing signed by both Foothill and Debtor.
11.7 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may
be executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver a manually executed
counterpart of this Agreement but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement.
11.8 FEES AND EXPENSES. Debtor shall pay to Foothill on demand
all costs and expenses that Foothill pays or incurs in connection with the
negotiation, preparation, consummation, administration, enforcement, and
termination of this Agreement, including: (a)reasonable attorneys' and
paralegals' fees and disbursements of counsel to Foothill; (b) costs and
expenses (including reasonable attorneys' and paralegals' fees and
disbursements) for any amendment, supplement, waiver, consent, or subsequent
closing in connection with this Agreement and the transactions contemplated
hereby; (c) costs and expenses of lien and title searches; (d) taxes, fees, and
other charges for filing this Agreement at the United States Patent and
Trademark Office, or for filing financing statements, and continuations, and
other actions to perfect, protect, and continue the security interest created
hereunder; (e) sums paid or incurred to pay any amount or take any action
required of Debtor under this Agreement that Debtor fails to pay or take; (f)
costs and expenses of preserving and protecting the Collateral; and (g) costs
and expenses (including reasonable attorneys' and paralegals' fees and
disbursements) paid or incurred to enforce the security interest created
hereunder, sell or otherwise realize upon the Collateral, and otherwise enforce
the provisions of this Agreement, or to defend any claims made or threatened
against Foothill arising out of the transactions contemplated hereby (including
preparations for the consultations concerning any such matters). The foregoing
shall not be construed to limit any other provisions of this Agreement or the
Loan Documents regarding costs
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and expenses to be paid by Debtor. The parties agree that reasonable attorneys'
and paralegals' fees and costs incurred in enforcing any judgment are
recoverable as a separate item in addition to fees and costs incurred in
obtaining the judgment and that the recovery of such attorneys' and paralegals'
fees and costs is intended to survive any judgment, and is not to be deemed
merged into any judgment.
11.9 NOTICES. Except as otherwise provided herein, all
notices, demands, and requests that either party is required or elects to give
to the other shall be in writing and shall be governed by the provisions of
Section 12 of the Loan Agreement.
11.10 TERMINATION BY FOOTHILL. As soon as possible but no
later than fifteen (15) days after termination of the Loan Agreement and when
Foothill has received payment and performance, in full, of all Obligations,
Foothill shall execute and deliver to Debtor a termination of all of the
security interests granted by Debtor hereunder.
11.11 INTEGRATION. This Agreement, together with the other
Loan Documents, reflect the entire understanding of the parties with respect to
the transactions contemplated hereby and shall not be contradicted or qualified
by any other agreement, oral or written, before the date hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first written above.
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Senior Vice President
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INTERACT COMMERCE CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President of Finance
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