INTELLECTUAL PROPERTY SECURITY AGREEMENT FOR COPYRIGHTS AND MASK WORKS
EXHIBIT 99.9
INTELLECTUAL
PROPERTY SECURITY AGREEMENT FOR COPYRIGHTS AND MASK WORKS
This
Intellectual Property Security Agreement for Copyrights and Mask Works
(“Agreement”) dated June 30, 2008 is between Lightning Poker, Inc. (“Grantor”)
and The Co-Investment Fund II, L.P. (“Lenders’ Agent”), on behalf of the Lenders
(as hereinafter defined).
RECITALS
A. Lenders’
Agent and other Lenders will make advances to Grantor (“Loans”) as described in
the Loan Agreement dated of even date herewith between Grantor, Lenders’ Agent,
and the other lenders (the “Lenders”) named therein, (the “Loan Agreement”), but
only if Grantor grants Lenders’ Agent, on behalf of the Lenders and in
accordance with the terms of the Loan Agreement, a security interest in its
intellectual property, including copyrights and mask works.
B. Grantor
has granted Lenders’ Agent, for the benefit of the Lenders, a security interest
in all of its right, title and interest, presently existing or later acquired,
in and to all the Collateral described in the Security Agreement dated of even
date herewith (the “Security Agreement”) executed by Grantor, the Lenders and
Lenders’ Agent contemporaneously with the Loan Agreement.
NOW
THEREFORE, in consideration of the mutual promises, covenants, conditions,
representations, and warranties hereinafter set forth and for other good and
valuable consideration, and intending to be legally bound, the parties hereto
mutually agree as follows:
1.DEFINITIONS
Capitalized
terms used but not defined herein shall have the meanings given to them in the
Loan Agreement and the Security Agreement. In addition, the following
terms, as used in this Agreement, have the following meanings:
“Intellectual Property
Collateral” means:
(i) Each
of the copyrights and works which are capable of being protected as copyrights
(including all of Grantor’s right to the copyright registrations listed on Exhibit A, attached
hereto, as the same may be updated hereafter from time to time and all other
original works of authorship and derivative works thereof, whether registered or
non-registered, and applications for registration pertaining thereto), which are
presently owned by Grantor, in whole or in part, and all copyrights with respect
thereto throughout the world, and all proceeds thereof (including license
royalties and proceeds of infringement suits), and rights to renew and extend
such copyrights provided, however, that “Intellectual Property Collateral” shall
not include any rights in or to works created by or on behalf of Grantor as a
“work for hire” for others or which Grantor assigns to others in its ordinary
course of business;
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(ii) All
of Grantor’s right, title, and interest to file applications for copyright
registration under federal or state copyright law or regulation of any foreign
country, and the right (without obligation) to xxx in the name of Grantor or in
the name of Lenders’ Agent 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;
(iii) Each
of the mask works and works which are capable of being protected as mask works
(including all of Grantor’s right to the mask work registrations listed on Exhibit B, attached
hereto, as the same may be updated hereafter from time to time) and all
applications for mask work registration, which are presently owned by Grantor,
in whole or in part, and all rights with respect thereto throughout the world,
including all proceeds thereof (including license royalties and proceeds of
infringement suits), and rights to extend such mask work
registrations;
(iv) All
of Grantor’s right, title, and interest to file applications for mask work
registration under federal and state law or regulation of any foreign country,
the right (without obligation) to xxx in the name of Grantor or in the name of
Lenders’ Agent for past, present, and future infringements of the mask work
registrations, and all rights (but not obligations) corresponding thereto in the
United States and any foreign country;
(v) All
general intangibles relating to the foregoing; and
(vi) All
proceeds of any and all of the foregoing (including, without limitations,
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.
Notwithstanding
the foregoing, “Intellectual Property Collateral” shall not include any license,
property or contract right the granting of a security interest in which would be
prohibited by law or contract.
“Obligations” means
the Debt as defined in the Security Agreement.
2. GRANT OF
SECURITY INTEREST.
Grantor
hereby grants Lenders’ Agent, for the benefit of the Lenders, a first-priority
security interest in all of Grantor’s right, title, and interest in and to the
Intellectual Property Collateral to secure the Obligations.
This
security interest is granted in conjunction with the security interest granted
under the Loan Agreement and Security Agreement, and the Intellectual Property
Security Agreement for Patents and Trademarks dated of even date
herewith. Lenders’ Agent’s rights and remedies in the security
interest are in addition to those in the Loan Agreement, the Security Agreement,
and the Intellectual Property Security Agreement for Patents and Trademarks, and
those available in law or equity. Lenders’ Agents’ rights, powers and
interests are cumulative with every right, power or remedy provided
hereunder. Lenders’ Agent’s exercise of its rights, powers or
remedies in this Agreement, the Loan Agreement or any other Loan Document (as
defined in the
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Loan
Agreement), and does not preclude the simultaneous or later exercise of any or
all other rights, powers or remedies.
3. REPRESENTATIONS,
WARRANTIES AND COVENANTS.
Grantor
hereby represents, warrants, and covenants that:
3.1 Copyrights;
Mask Works
(i) A
true and complete schedule setting forth all copyright registrations owned or
controlled by Grantor, together with a summary description in respect of the
filing or issuance thereof and expiration dates is set forth on Exhibit
A;
(ii) A
true and complete schedule setting forth all mask work registrations owned or
controlled by Grantor, together with a summary description in respect of the
filing or issuance thereof and expiration dates is set forth on Exhibit
B;
3.2 Validity;
Enforceability. To the Grantor’s knowledge and belief, each of
the copyrights and mask works is valid and enforceable, and Grantor is not
presently aware of any past, present, or prospective claim by any third party
that any of the copyrights or mask works are invalid or unenforceable, or that
the use of any copyrights or mask works violates the rights of any third person,
or of any basis for any such claims;
3.3 Title. To the
Grantor’s knowledge and belief, Grantor is the sole and exclusive owner of the
entire and unencumbered right, title, and interest in and to each of the
copyrights, copyright registrations, mask works, and mask work registrations
free and clear of any liens, charges, and encumbrances, including pledges and
assignments, or has the rights to use the same under a valid license; provided,
however, that it is understood and agreed that Grantor has not done exhaustive
prior art searches or other searches with respect to such property;
3.4 Notice. To the
Grantor’s knowledge and belief, Grantor has used and will continue to exercise
reasonable efforts to use proper statutory notice in connection with its use of
each of the copyrights and mask works; and
3.5 Perfection of Security
Interest. Except for the filing of a financing statement
with the Secretary of the Commonwealth of Pennsylvania and filings with the
United States Copyright Office necessary to perfect the security interests
created hereunder, to the Grantor’s knowledge and belief no authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body in the United States is
required either for the grant by Grantor of the security interest hereunder or
for the execution, delivery, or performance of this Agreement by Grantor or for
the perfection of or the exercise by Lenders’ Agent of its rights hereunder with
respect to the Intellectual Property Collateral.
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4. AFTER-ACQUIRED
COPYRIGHT OR MASK WORK RIGHTS.
If
Grantor shall obtain ownership rights to any new copyrights or mask works the
provisions of this Agreement shall automatically apply
thereto. Grantor shall, upon reasonable request by Lenders’ Agent,
provide a report from time to time in writing to Lenders’ Agent with respect to
any such new copyrights or mask works, or renewal or extension of any copyright
or mask work registration. Grantor shall bear any expenses incurred
in connection with future copyright or mask work registrations.
5. LITIGATION
AND PROCEEDINGS.
Grantor
shall commence and diligently prosecute in its own name, as the real party in
interest, for its own benefit, and at its own expense, such suits,
administrative proceedings, or other actions for infringement or other damages
as are in its reasonable business judgment necessary and appropriate to protect
the Intellectual Property Collateral. Grantor shall provide to
Lenders’ Agent any non-privileged information with respect thereto requested by
Lenders’ Agent. Lenders’ Agent shall provide at Grantor’s expense all
necessary cooperation in connection with any such suits, proceedings, or action,
including, without limitation, joining as a necessary
party. Following Grantor’s becoming aware thereof, Grantor shall
notify Lenders’ Agent of the institution of, or any adverse determination in,
any proceeding in the United States Copyright Office, or any United States,
state, or foreign court regarding Grantor’s claim of ownership in any of the
copyrights or mask works, its right to apply for the same, or its right to keep
and maintain such copyright or mask work right.
6. POWER OF
ATTORNEY.
To the
extent it does not adversely affect the validity of the Intellectual Property
Collateral, Grantor grants Lenders’ Agent power of attorney, coupled with an
interest, having the full authority, and in the place of Grantor and in the name
of Grantor, from time to time during the occurrence and continuance of an Event
of Default in Lenders’ Agent’s discretion, to take any action and to execute any
instrument which Lenders’ Agent 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 Grantor’s name on all
applications, documents, papers, and instruments necessary for Lenders’ Agent to
use or maintain the Intellectual Property Collateral; to ask, demand, collect,
xxx for, recover, impound, receive, and give acquittance and receipts for money
due or to become due under or in respect of any of the Intellectual Property
Collateral; to file any claims or take any action or institute any proceedings
that Lenders’ Agent may deem necessary for the collection of any of the
Intellectual Property Collateral or otherwise to enforce Grantor’s or the
Lenders’ rights with respect to any of the Intellectual Property Collateral and
to assign, pledge, convey, or otherwise transfer title in or dispose of the
Intellectual Property Collateral to any person.
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7. EVENTS
OF DEFAULT.
An Event
of Default (as defined in the Security Agreement) shall be an Event of Default
under this Agreement.
8. SPECIFIC
REMEDIES.
Upon the
occurrence and continuation of any Event of Default, Lenders’ Agent shall have,
in addition to, other rights given by law or in this Agreement, the Loan
Agreement, the Security Agreement, the Intellectual Property Security Agreement
for Patents and Trademarks, or in the Notes, all of the rights and remedies with
respect to the Intellectual Property Collateral of a secured party under the
Code, including the following:
8.1 Notification. Lenders’
Agent may notify licensees to make royalty payments on license agreements
directly to Lenders’ Agent for the benefit of the Lenders; and
8.2 Sale. Lenders’
Agent may sell or assign the Intellectual Property Collateral at public or
private sale for such amounts, and at such time or times as Lenders’ Agent deems
advisable. Any requirement of reasonable notice of any disposition of
the Intellectual Property Collateral shall be satisfied if such notice is sent
to Grantor thirty days prior to such disposition. Grantor shall be
credited with the net proceeds of such sale only when they are actually received
by Lenders’ Agent, and Grantor shall continue to be liable for any deficiency
remaining after the Intellectual Property Collateral is sold or
collected. If the sale is to be a public sale, Lenders’ Agent shall
also give notice of the time and place by publishing a notice one time at least
ten 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, Lenders’ Agent may be the purchaser of any or all
of the Intellectual Property 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 Intellectual
Property 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 Lenders’ Agent at such sale.
9. CHOICE OF
LAW
The Code
shall govern the perfection and the effect of attachment and perfection of the
Lenders' security interest in the Collateral, and the rights, duties and
obligations of the Lenders, the Lenders’ Agent and Grantor with respect to the
Intellectual Property Collateral. This Agreement shall be deemed to
be a contract under the laws of the Commonwealth of Pennsylvania and, to the
extent not inconsistent with the preceding sentence, the terms and provisions of
this Agreement shall be governed by and construed in accordance with the laws of
that State.
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10. GENERAL
PROVISIONS.
10.1 Effectiveness. This
Agreement shall be binding and deemed effective when executed by Grantor and
Lenders’ Agent.
10.2 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 Grantor
may not assign the Agreement or any rights or duties hereunder without Lenders’
Agent’s prior written consent and any prohibited assignment shall be absolutely
void. Lenders’ Agent may assign this Agreement and its rights and
duties hereunder, subject only to Section 6 of the Loan Agreement and no consent
or approval by Grantor is required in connection with any such
assignment.
10.3 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 applied equally to this entire
Agreement.
10.4 Interpretation. Neither
this Agreement nor any uncertainty or ambiguity herein shall be construed or
resolved against Lenders’ Agent or Grantor, 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.
10.5 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.
10.6 Amendments in
Writing. This Agreement can only be amended by a writing
signed by both Lenders’ Agent and Grantor.
10.7 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.
10.8 Fees and
Expenses. Grantor shall pay to Lenders’ Agent reasonable 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 Intellectual Property Collateral,
and otherwise enforce the provisions of this Agreement, or to defend any claims
made or threatened against the Lenders 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 and
expenses to be paid by Grantor.
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10.9 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(c) of the Security
Agreement.
10.10 Termination by
Agent. Lenders’ Agent shall release its security interest in
the Intellectual Property Collateral at such time as the non-contingent
Obligations have been fully and finally discharged, the outstanding Notes have
been paid in full, and the Lenders’ obligation to provide additional credit
under the Loan Agreement has been terminated, and in such event at the
reasonable request of Grantor, Lenders and Lenders’ Agent each shall, at
Grantor’s expense, make such filings with the State of Delaware and the United
States Patent and Trademark Office as may be deemed by Grantor to be necessary
or appropriate to evidence such release and terminate any financing statement
nor notice relating to the liens and security interests created
hereby. In the event that, for any reason, any portion of such
payments to the Lenders is set aside or restored, whether voluntarily or
involuntarily, after the making thereof, then the obligation intended to be
satisfied thereby shall be revived and continued in full force and effect as if
said payment or payments had not been made.
10.11 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, entered into before the date hereof.
10.12 Resolution of
Conflicts. In the event that any express provision
or term of this Agreement conflicts with the express provisions and terms of the
Loan Agreement, the provision or term in the Loan Agreement shall
control.
10.13 Confidentiality. Lenders
and Lenders’ Agent acknowledge and agree that the information set forth in
Exhibit A and Exhibit B attached hereto (the “IP Information”) contains
proprietary information of Grantor, including trade secrets and that disclosure
of the IP Information to third parties could adversely affect the value of the
Intellectual Property Collateral. Accordingly, Lenders and Lenders’
Agent agree to keep the IP Information strictly confidential and to ensure that
the IP Information is not disclosed to any third parties. Grantor
agrees to assist Lenders’ Agent in creating a summary version of the IP
Information as may be necessary for filing with the United States Patent and
Trademark Office and any other applicable filing offices to perfect the security
interest created hereunder while avoiding unnecessary disclosure.
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IN WITNESS WHEREOF, the
parties have executed this Agreement on the date first written
above.
GRANTOR:
LIGHTNING
POKER, INC.
By: /s/ Xxxxx
Xxxxxxx
Title: CEO
LENDERS’
AGENT:
THE CO-INVESTMENT FUND II,
L.P.
By: Co-Invest
Management II, L.P.
its general partner
By: Co-Invest
Capital Partners, Inc.
its general partner
By:/s/ Xxxxx
Xxxxxxx
Title: CFO and
Treasurer
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EXHIBIT
A
Copyrights
Lightning
Poker Software
Versions:
1.0.2
1.1.0
1.1.0
1
1.1.3
1.1.5
1.2.0
1.2.1
1.3.6
1.4.2
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EXHIBIT
B
Mask
Works
None
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