Exhibit 10.23
COPYRIGHT SECURITY AGREEMENT
----------------------------
This Copyright Security Agreement ("Agreement") is made as of
the 27th day of June, 2002, among ADVA INTERNATIONAL, INC., a Delaware
corporation ("ADVA") having an address of 000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000,
Xxxx Xxxx, Xxxxx Xxxxxxxx 00000, GLOBAL INFORMATION GROUP USA, INC., a Delaware
corporation ("GIG"), having an address of 000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000,
Xxxx Xxxx, Xxxxx Xxxxxxxx 00000 (ADVA and GIG, collectively, "Debtors"), and
delivered to BLANK ROME COMISKY & XXXXXXXX LLP with an address of Xxx Xxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Secured Party").
BACKGROUND
A. Debtors are obligated to Secured Party for the payment of certain
legal fees and the reimbursement of certain expenses in an aggregate amount of
US$180,605.78 (the "Obligation"). To secure the Obligation, Debtors are granting
Secured Party a lien on and security interest in Debtors' registered and
unregistered copyrights, as well as any and all derivative works thereof and all
other copyrights now owned and/or hereafter acquired or created and under which
Secured Party is entitled to foreclose or otherwise deal with such copyrights
under the terms and conditions set forth therein.
B. GIG owns all right, title and interest in and to certain copyrighted
works listed on Schedule "A" attached hereto and made part hereof (the
"Copyrights").
C. Secured Party is acquiring a lien on, and security interest in, the
Copyrights as security for the Obligation, and desires to have its security
interest in such Copyrights confirmed by a document identifying same and in such
form that it may be recorded in the United States Copyright Office.
NOW THEREFORE, with the foregoing Background deemed incorporated by
reference and made a part hereof, and in consideration of the premises and
mutual promises herein contained, the parties hereto, intending to be legally
bound hereby, covenant and agree as follows:
1. As security for the Obligation, Debtors hereby xxxxx x xxxx and
security interest to Secured Party in all of its present and future right, title
and interest in and to its assets subject to copyright of every kind now or
hereafter known or recognized, in any and all media now existing or created in
the future, and any and all derivative works thereof and all other copyrightable
material now owned and/or hereafter acquired or created (collectively, the
"Collateral") including, without limitation:
a. the right to make adaptations or versions of the Collateral or
any part thereof for any purpose whatsoever;
b. the right to use, reproduce, transmit, exhibit, display, perform
and exploit the Collateral and any and all such adaptations and versions
thereof, or cause the same to be used, reproduced, transmitted, exhibited,
displayed, performed and exploited by any means or devices whatsoever now or
hereafter known;
c. the right to use, reproduce, transmit, exhibit, display, perform
and exploit the Collateral in whole or in part, to arrange and change the same,
and add to or subtract therefrom;
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d. the right to use the titles of the Collateral in connection with
any adaptation or version thereof, or in conjunction with other material not
based on the Collateral, and the right to use the Collateral with any different
titles;
e. the right to translate the Collateral and any adaptations and
versions thereof into any and all languages for use in any medium;
f. the right to secure renewals or extensions of the copyright
registrations for the Collateral, whether in Secured Party's name or otherwise;
and
g. the right (but not the obligation) to xxx for past, present and
future infringements, and the proceeds thereof, including, without limitation,
license royalties and proceeds of infringement suits.
2. Debtors hereby covenant and agree to maintain the Collateral in full
force and effect until the Obligation is satisfied in full.
3. Debtors represent, warrant and covenant that:
a. The Copyrights have not been adjudged invalid or unenforceable;
b. Each of the Copyrights is valid and enforceable;
c. GIG is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the Copyrights and each
of the Copyrights is free and clear of any liens, claims, charges and
encumbrances, including, without limitation, pledges, assignments, licenses and
covenants by GIG not to xxx third persons;
d. Debtors have the unqualified right, power and authority to enter
into this Agreement and perform its terms;
e. Debtors have complied with, and will continue for the duration of
this Agreement to comply with, the requirements set forth in 15
U.S.C.ss.1051-1127 et seq. and any other applicable statutes, rules and
regulations in connection with its use of the Copyrights; and
f. Debtors have used, and will continue to use for the duration of
this Agreement, consistent standards of quality in products leased or sold under
the Copyrights and/or Collateral and hereby grants to Secured Party (with no
obligation of any kind upon Secured Party to do so) the right to visit the
locations of Debtors or Debtors' affiliates, including licensees, and to inspect
the use of the Copyrights and/or Collateral and quality control records relating
thereto at reasonable times during regular business hours to ensure Debtors'
compliance with this paragraph 3(f).
4. Debtors further covenant that:
a. The Obligation shall be paid in full by December 15, 2002.
b. Until the Obligation is indefeasibly paid and satisfied in full,
Debtors will not enter into any agreement, including without limitation, license
agreements or options other than in the ordinary course of business, which are
inconsistent with Debtors' obligations under this Agreement.
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c. The Copyrights listed on Schedule "A" constitute all of the
Copyrights, now owned by Debtors. If, before the Obligation has been satisfied
in full, Debtors shall (i) obtain rights to any new copyrights, or (ii) become
entitled to the benefit of any copyright application or any improvement of any
Copyright, the provisions of this Agreement shall automatically apply thereto
and such copyright application or any improvement of any Copyright, shall be
deemed part of the Collateral. Debtors shall give Secured Party prompt written
notice thereof along with an amended Schedule "A."
5. So long as this Agreement is in effect and so long as Debtors have
not received notice from Secured Party that: (i) Debtors have failed to pay the
Obligation in full prior to December 15, 2002, (ii) Debtors or either of them
cease to conduct business, elect to dissolve, dissolve, become insolvent, make a
general assignment for the benefit of creditors or file (or consent to the
filing by any other party of) any petition in bankruptcy or for relief under the
provisions of the bankruptcy laws; or (iii) Debtors otherwise have defaulted in
the Obligation hereunder (each such event or any other default hereunder an
"Event of Default"), and that Secured Party has not elected to exercise its
right hereunder: (x) Debtors shall continue to have the exclusive right to use
the Collateral; and (y) Secured Party shall have no right to use the Collateral
or issue any exclusive or non-exclusive license with respect thereto, or assign,
pledge or otherwise transfer title in the Collateral to anyone else.
6. Debtors shall not sell, license, grant any option, assign or further
encumber their rights and interest in the Collateral, other than licenses of the
Collateral pursuant to Debtors' ordinary business practices.
7. Anything herein contained to the contrary notwithstanding, if an
Event of Default exists under this Agreement, Debtors hereby covenant and agree
that Secured Party, as the holder of a security interest under the Uniform
Commercial Code, as now or hereafter in the jurisdiction set forth in paragraph
17 of this Agreement, or pursuant to any other applicable law, may take such
action permitted by law, in its exclusive discretion, to foreclose upon the
Collateral covered hereby. If an Event of Default exists or is continuing under
paragraph 5(ii) hereof, Debtors hereby authorize and empower Secured Party, its
successors and assigns, and any officer or agent of Secured Party as Secured
Party may select, in its exclusive discretion, as Debtors' true and lawful
attorney-in-fact, to endorse Debtors' names or either of them on all
applications, assignments, documents, papers and instruments necessary for
Secured Party to use the Collateral or to grant or issue any exclusive or
non-exclusive license under the Collateral to anyone else, or necessary for
Secured Party to assign, pledge, convey or otherwise transfer title in or
dispose of the Collateral to anyone else including, without limitation, the
power to execute a copyright assignment in the form attached hereto as Exhibit
1. Secured Party shall, to the extent possible, endeavor to give Debtors notice
of Secured Party's utilization of the power of attorney; provided that, failure
to give such notice shall not affect or limit the exercise thereof. Debtors
hereby ratify all that such attorney shall lawfully do or cause to be done by
virtue hereof, except for the gross negligence or willful misconduct of such
attorney. This power of attorney shall be coupled with an interest, irrevocable
for the life of this Agreement and until the Obligation is satisfied in full.
8. This Agreement shall not be modified without the written consent of
the party against whom enforcement is being sought.
9. Upon full and unconditional satisfaction of the Obligation, Secured
Party shall, at Debtors' expense, execute and deliver to Debtors all documents
reasonably necessary to terminate Secured Party's security interest in the
Collateral.
10. Any and all reasonable fees, costs and expenses, of whatever kind
or nature, including the reasonable attorneys' fees and legal expenses incurred
by Secured Party in connection with the filing or recording of any documents
(including all taxes in connection therewith) in public offices, the payment or
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discharge of any taxes, reasonable counsel fees, maintenance fees, encumbrances
or costs otherwise incurred in protecting, maintaining, preserving the
Collateral, or in defending or prosecuting any actions or proceedings arising
out of or related to the Collateral, or defending, protecting or enforcing
Secured Party's rights hereunder, in each case in accordance with the terms of
this Agreement, shall be borne and paid by Debtors on demand by Secured Party
and until so paid shall be added to the Obligation.
11. Debtors shall have the duty to prosecute diligently any copyright
application with respect to the Copyrights pending as of the date of this
Agreement or thereafter, until the Obligation shall have been indefeasibly paid
and satisfied in full to preserve and maintain all rights in the Collateral, and
upon request of Secured Party, Debtors shall make federal application on
registrable but unregistered copyrights belonging to Debtors or either of them.
Any reasonable expenses incurred in connection with such applications shall be
borne by Debtors. Debtors shall not abandon any Collateral without the prior
written consent of Secured Party.
12. Debtors shall have the right to bring suit in their own names to
enforce the Collateral, in which event Secured Party, may, if Debtors reasonably
deem it necessary, be joined as a nominal party to such suit if Secured Party
shall have been satisfied, in its sole discretion, that it is not thereby
incurring any risk of liability because of such joinder. Debtors shall promptly,
upon demand, reimburse and indemnify Secured Party for all damages, reasonable
costs and expenses, including attorneys' fees, incurred by Secured Party in the
fulfillment of the provisions of this paragraph.
13. Secured Party is hereby authorized by Debtors to file any financing
statements covering the Collateral or an amendment to a financing statement that
adds collateral covered thereby or an amendment to a financing statement that
adds a debtor thereto, in each case whether or not Debtors' signature appears
thereon. Debtors hereby authorize Secured Party to file all such financing
statements and amendments to financing statements describing the Collateral in
any filing office as Secured Party, in its reasonable discretion, may determine.
In addition to the foregoing, Debtors shall perform all further acts that may be
lawfully and reasonably required by Secured Party to secure Secured Party and
effectuate the intentions and objects of this Agreement, including, but not
limited to, the execution and delivery of continuation statements, amendments to
financing statements, security agreements, contracts and any other documents
required hereunder.
14. No course of dealing between Debtors and Secured Party nor any
failure to exercise, nor any delay in exercising, on the part of Secured Party
any right, power or privilege hereunder, shall operate as a waiver thereof, and
all of Secured Party's rights and remedies with respect to the Collateral,
whether established hereby or by any other future agreements between Debtors and
Secured Party or by law, shall be cumulative and may be exercised singularly or
concurrently.
15. The provisions of this Agreement are severable and the invalidity
or unenforceability of any provision herein shall not affect the remaining
provisions which shall continue unimpaired and in full force and effect.
16. This Agreement shall inure to the benefit of and be binding upon
the respective successors and permitted assigns of the parties.
17. This Agreement shall be governed by and construed in accordance
with the substantive laws of the State of Delaware, without regard to its
otherwise applicable principles of conflicts of laws.
18. Each of ADVA, GIG and Secured Party waives any and all rights it
may have to a jury trial in connection with any litigation, proceeding or
counterclaim arising with respect to rights and obligations of the parties
hereto or with respect to any claims arising out of any discussions,
negotiations or communications involving or related to any proposed renewal,
extension, amendment, modification, restructure, forbearance, workout, or
enforcement of the Obligations.
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IN WITNESS WHEREOF, the parties hereto have executed this Copyright
Security Agreement, under seal, the day and year first above written.
Debtor: Debtor:
ADVA INTERNATIONAL INC. GLOBAL INFORMATION GROUP USA, INC.
By:/s/Xxxxx X. Xxxxxxxx By:/s/Xxxxxx X. Down
--------------------------- ------------------------------
Name: Xxxxx X. Xxxxxxxx Name: Xxxxxx X. Down
Title: Chief Executive Officer Title: President
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SCHEDULE "A" TO COPYRIGHT SECURITY AGREEMENT
--------------------------------------------
COPYRIGHTS REGISTRATION NO. DATE FILED
---------- ---------------------------
1. Computer software titled Unregistered
"GIG3DGO",
as well as any and all derivative
works thereof
2. Computer software titled Unregistered
"GIGVIZ",
as well as any and all derivative
works thereof
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SCHEDULE "A" TO COPYRIGHT ASSIGNMENT
------------------------------------
COPYRIGHTS REGISTRATION NO. DATE FILED
---------- ---------------------------
1. Computer software titled Unregistered
"GIG3DGO",
as well as any and all derivative
works thereof
2. Computer software titled Unregistered
"GIGVIZ",
as well as any and all derivative
works thereof
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SCHEDULE "A" TO TRADEMARK SECURITY AGREEMENT
--------------------------------------------
APPLICATION OR
TRADEMARK REGISTRATION NO. COUNTRY REGISTRATION DATE
--------- ---------------- ------- -----------------
1. GIG3DGO Reg. no. 0000000 X.X.X. 9/23/1997
2. ELECTROGIG Reg. no. 0000000 X.X.X. 1/22/1991
and Design
3. ELECTROGIG Reg. no. 0000000 X.X.X. 6/11/1991
4. GIG Reg. no. 0000000 X.X.X. 12/4/1990
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Exhibit 1 to Trademark Security Agreement
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TRADEMARK ASSIGNMENT
WHEREAS, GLOBAL INFORMATION GROUP USA, INC., a Delaware Corporation
("Grantor"), is the registered owner of the United States trademarks, tradenames
and registrations listed on Schedule "A" attached hereto and made a part hereof
(the "Trademarks"), which are registered in the United States Patent and
Trademark Office; and
WHEREAS, ___________________("Grantee") having a place of business at
___________________________________, is desirous of acquiring the Trademarks;
NOW THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, and intending to be legally bound hereby, Grantor, its
successors and assigns, does hereby transfer, assign and set over unto Grantee,
its successors, transferees and assigns, all of its present and future right,
title and interest in and to the Trademarks and all proceeds thereof and all
goodwill associated therewith.
IN WITNESS WHEREOF, the undersigned has caused this Trademark
Assignment to be executed as of the ____ day of _________, 200_.
GLOBAL INFORMATION GROUP USA, INC.
Witness: _____________________ By:___________________________________
As Attorney-in-fact
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SCHEDULE "A" TO TRADEMARK ASSIGNMENT
------------------------------------
APPLICATION/ REGISTRATION
TRADEMARKS REGISTRATION NO. COUNTRY DATE
---------- ---------------- ------- ------------
1. GIG3DGO Reg. no. 0000000 X.X.X. 9/23/1997
2. ELECTROGIG Reg. no. 0000000 X.X.X. 1/22/1991
and Design
3. ELECTROGIG Reg. no. 0000000 X.X.X. 6/11/1991
4. GIG Reg. no. 0000000 X.X.X. 12/4/1990
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