EXHIBIT 10.9
COLLATERAL ASSIGNMENT PATENT MORTGAGE
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AND SECURITY AGREEMENT
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This Collateral Assignment, Patent Mortgage and Security Agreement is made
as of September 18, 1996, by and between Evolving Systems, Inc. ("Assignor") and
SILICON VALLEY BANK, ("Assignee").
RECITALS
--------
A. Assignee has agreed to lend to Assignor certain funds (the "Loan"),
and Assignor desires to borrow such funds from Assignee pursuant to the terms of
a Loan and Security Agreement of even date herewith (the "Loan Agreement").
B. In order to induce Assignee to make the Loan, Assignor has agreed to
assign certain intangible property to Assignee for purposes of securing the
obligations of Assignor to Assignee
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. Assignment, Patent Mortgage and Grant of Security Interest. As
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collateral security for the prompt and complete payment and performance of all
of Assignor's present or future indebtedness, obligations and liabilities to
Assignee, Assignor hereby assigns, transfers, conveys and grants a security
interest and mortgage to Assignee, as security, in and to Assignor's entire
right, title and interest in, to and under the following (all of which shall
collectively be called the "Collateral"):
(a) Any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and derivative
work thereof, whether published or unpublished and whether or not the same also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
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(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 Assignor 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
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(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 of the business of Assignor connected with and symbolized by
such trademarks, including without limitation those set forth on Exhibit C
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attached hereto (collectively, the "Trademarks");
(f) 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 for and collect such damages for said use or infringement of
the intellectual property rights identified above;
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(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.
Assignee acknowledges that Assignor may create works for hire or assign the
intellectual property rights to certain software created by Assignor to its
customers. Nothing in this Agreement shall prevent Assignor from producing
software owned by its customers. In no event shall Assignee own any security
interest, mortgage, or other interest in or to any intellectual property rights
created by Borrower which contractually or legally are or will become the
property of a customer of Borrower.
THE INTEREST IN THE COLLATERAL BEING ASSIGNED HEREUNDER SHALL NOT BE
CONSTRUED AS A CURRENT ASSIGNMENT, BUT AS A CONTINGENT ASSIGNMENT TO SECURE
ASSIGNOR'S OBLIGATIONS TO ASSIGNEE UNDER THE LOAN AGREEMENT.
2. Authorization and Request. Assignor authorizes and requests that the
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Register of Copyrights and the Commissioner of Patents and Trademarks record
this conditional assignment.
3. Covenants and Warranties. Assignor represents, warrants, covenants
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and agrees as follows:
(a) Assignor is now the sole owner of the Collateral, except for non-
exclusive licenses granted by Assignor to its customers and agreements with
customers to share royalties in the ordinary course of business;
(b) Performance of this Assignment does not conflict with or result in
a breach of any agreement to which Assignor is party or by which Assignor 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 Assignment constitutes an
assignment;
(c) During the term of this Assignment, Assignor will not transfer or
otherwise encumber any interest in the Collateral, except for non-exclusive
licenses granted by Assignor in the ordinary course of business or as set forth
in this Assignment;
(d) To its knowledge, each of the Patents is valid and enforceable,
and no part of the Collateral has been judged invalid or unenforceable, in whole
or in part, and no claim has been made that any part of the Collateral violates
the rights of any third party;
(e) Assignor shall promptly advise Assignee of any material adverse
change in the composition of the Collateral, including but not limited to any
subsequent ownership right of the Assignor in or to any Trademark, Patent or
Copyright not specified in this Assignment;
(f) Assignor shall not allow any Trademarks, Patents or Copyrights to
be abandoned, forfeited or dedicated to the public without the written consent
of Assignee, which shall not be unreasonably withheld, unless Assignor
determines that reasonable business practices suggest that abandonment is
appropriate;
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(g) To the extent required in the Loan Agreement, Assignor shall
promptly register the most recent version of any of Assignor'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 Assignee may reasonably
request from time to time to perfect or continue the perfection of Assignee's
interest in the Collateral;
(h) None of the Collateral is presently subject to any security
interest or mortgage
granted by Borrower;
(i) To its knowledge, 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 for the grant by Assignor of the security interest
granted hereby or for the execution, delivery or performance of this Assignment
by Assignor in the U.S.
(j) All information heretofore, herein or hereafter supplied to
Assignee by or on behalf of Assignor with respect to the Collateral is accurate
and complete in all material respects.
(k) Assignor shall not enter into any agreement that would materially
impair or conflict with Assignor's obligations hereunder without Assignee's
prior written consent, which consent shall not be unreasonably withheld.
Assignee agrees that non-exclusive licenses of the Collateral and royalty
sharing agreements with customers of Assignor shall not be deemed to materially
impair or conflict with Assignor's obligations under this Agreement. Assignor
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 Assignor's rights and interests in any property included
within the definition of the Collateral acquired under such contracts, except
that certain contracts may contain anti-assignment provisions that could in
effect prohibit the creation of a security interest in such contracts.
(l) Upon any executive officer of Assignor obtaining actual knowledge
thereof, Assignor will promptly notify Assignee in writing of any event that
materially adversely affects the value of any Collateral, the ability of
Assignor to dispose of any Collateral or the rights and remedies of Assignee in
relation thereto, including the levy of any legal process against any of the
Collateral.
4. Assignee's Rights. Assignee shall have the right, but not the
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obligation, to take, at Assignor's sole expense, any actions that Assignor is
required under this Assignment to take but which Assignor fails to take, after
fifteen (15) days' notice to Assignor and only if the value of the Collateral
taken as a whole would be materially adversely affected in the absence of such
action. Assignor shall reimburse and indemnify Assignee for all reasonable costs
and reasonable expenses incurred in the reasonable exercise of its rights under
this section 4.
5. Inspection Rights. Assignor hereby grants to Assignee and its
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employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to Assignor, any of Assignor'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
Collateral, and to inspect the products and quality control records relating
thereto upon reasonable written notice to Assignor and as often as may be
reasonably requested.
6. Further Assurances; Attorney in Fact.
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(a) On a continuing basis, Assignor will 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 as Assignor
deems to
3
be necessary and advisable to protect ownership of the Collateral, and take all
such action as may reasonably be deemed necessary or advisable, or as requested
by Assignee, to perfect Assignee's security interest in all Copyrights, Patents
and Trademarks and otherwise to carry out the intent and purposes of this
Collateral Assignment, or for assuring and confirming to Assignee the grant or
perfection of a security interest in all Collateral.
(b) Assignor hereby irrevocably appoints Assignee as Assignor's
attorney-in-fact, with full authority in the place and stead of Assignor and in
the name of Assignor, from time to time in Assignee's discretion, to take the
following actions and to execute the following instruments as Assignee may deem
necessary or advisable to accomplish the purposes of this Collateral Assignment,
(i) to modify, in its sole discretion, this Collateral Assignment without first
obtaining Assignor'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 in any Copyrights, Patents or
Trademarks acquired by Assignor after the execution hereof or to delete any
reference to any right, title or interest in any Copyrights, Patents or
Trademarks in which Assignor no longer has or claims any right, title or
interest, (ii) to file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the
Collateral without the signature of Assignor where permitted by law and (iii)
after the occurrence of an Event of Default, to transfer the Collateral into the
name of Bank or a third party to the extent permitted under the California
Uniform Commercial Code.
7. Events of Default. The occurrence of any of the following shall
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constitute an Event of Default under the Assignment:
(a) An Event of Default occurs under the Loan Agreement; or
(b) Assignor breaches any warranty or agreement made by Assignor in
this Assignment and fails to cure such breach within thirty (30) days of the
occurrence of such breach.
8. Remedies. Upon the occurrence and continuance of an Event of Default,
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Assignee 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 Assignor to assemble the Collateral and any tangible property
in which Assignee has a security interest and to make it available to Assignee
at a place designated by Assignee. Assignee shall have a nonexclusive, royalty
free license to use the Copyrights, Patents and Trademarks to the extent
reasonably necessary to permit Assignee to exercise its rights and remedies upon
the occurrence of an Event of Default. Assignor will pay any expenses (including
reasonable attorneys' fees) incurred by Assignee in connection with the exercise
of any of Assignee's rights hereunder, including without limitation any expense
incurred in disposing of the Collateral. All of Assignee's rights and remedies
with respect to the Collateral shall be cumulative.
9. Indemnity. Assignor agrees to defend, indemnify and hold harmless
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Assignee 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 Assignee as a
result of or in any way arising out of, following or consequential to
transactions between Assignee and Assignor, whether under this Assignment or
otherwise (including without limitation reasonable attorneys' fees and
reasonable expenses), except for losses arising from or out of Assignee's
negligence or misconduct.
10. Reassignment. At such time as Assignor shall completely repay all
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amounts due under the Loan Agreement, Assignee shall execute and deliver to
Assignor all deeds, assignments and other instruments as may be necessary or
proper to revest in Assignor full title to the property assigned hereunder,
subject to any disposition thereof which may have been made by Assignee pursuant
hereto.
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11. Course of Dealing. No course of dealing, nor any failure to exercise,
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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 Assignment is brought
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by either party hereto against the other party, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and disbursements.
13. Amendments. Assignment may be amended only by a written instrument
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signed by both parties hereto.
14. Counterparts. This Assignment may be executed in two or more
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counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
15. California Law and Jurisdiction: Jury Waiver. This Assignment shall
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be governed by the laws of the State of California, without regard for choice of
law provisions. Assignor and Assignee consent to the non-exclusive jurisdiction
of any state or federal court located in Santa Xxxxx County, California.
ASSIGNOR AND ASSIGNEE EACH WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THE LOAN AGREEMENT, THIS
ASSIGNMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS.
16. Confidentiality. In handling any confidential information, Assignee
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shall exercise the same degree of care that it exercises with respect to its own
proprietary information of the same types to maintain the confidentiality of any
non-public information thereby received or received pursuant to this Assignment
(which degree of care shall in no event be less than reasonable care for the
type of information in question) except that disclosure of such information may
be made (i) to the affiliates of Assignee, (ii) to prospective transferees or
purchasers of an interest in the obligations secured hereby, provided that they
have entered into a comparable confidentiality agreement in favor of Assignor
and have delivered a copy to Assignor, (iii) as required by law, regulation,
rule or order, subpoena, judicial order or similar order, (iv) as may be
required in connection with the examination, audit or similar investigation of
Assignee and (v) as Bank may determine in connection with the enforcement of any
remedies hereunder in accordance with standards specified in the Loan Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment on the
day and year first above written.
Address of Assignor:
ASSIGNOR:
0000 X. Xxxxxxxx Xxxxxx EVOLVING SYSTEMS, INC.
Xxxxxxxxx, XX 00000
Attn: Chief Financial Office By:
Title:
Address of Assignee: ASSIGNEE:
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000 SILICON VALLEY BANK
Xxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx By:
Title:
EXHIBIT A
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Copyrights
Registration/ Registration
Application Application
Description Number Date
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None registered
EXHIBIT B
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Patents
Registration/ Registration
Application Application
Description Number Date
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None registered
EXHIBIT C
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Trademarks/Servicemarks
Registration/ Registration/
Application Application
Description Number Date
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ESI logo (SM) 1,848,371 Aug. 2, 1994
ESI initials (SM) 1,848,372 Aug. 2, 1994
ESI Environment Not registered
VDIS Not registered
Checker Not registered
Checknet Not registered
Pilot Plus Not registered
BACE Not registered
AMENDMENT NO. I
TO
COLLATERAL ASSIGNMENT, PATENT MORTGAGE
AND SECURITY AGREEMENT
----------------------
This Amendment No. 1 to Collateral Assignment, Patent Mortgage and Security
Agreement (the "Amendment") is entered into as of December 16, 1997, by and
between Silicon Valley Bank ("Bank") and Evolving Systems, Inc. ("Borrower").
RECITALS
--------
Borrower and Bank are parties to that certain Loan and Security Agreement
dated as of September 18, 1996, as amended from time to time (the "Loan
Agreement"). Borrower and Bank propose to enter into an Amendment to Loan and
Security Agreement dated as of the date hereof (the "Loan Amendment"). Borrower
previously executed for the benefit of Bank a Collateral Assignment, Patent
Mortgage and Security Agreement (the "Collateral Assignment").
AGREEMENT
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NOW, THEREFORE, the parties agree as follows:
1. As of the date of this Amendment, Exhibits A, B and C to the
Collateral Assignment hereby deleted in their entirety and replaced with
Exhibits A, B and C attached to this Amendment.
2. Unless otherwise defined, all capitalized terms in this Amendment
shall be as defined in the Collateral Assignment. Except as amended, the
Collateral Assignment remains in full force and effect.
3. This Amendment may be executed in two or more counterparts, each of
which, deemed an original, but all of which together shall constitute one
instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.
EVOLVING SYSTEMS, INC.
BY:_____________________________
Title:__________________________
SILICON VALLEY BANK
BY:_____________________________
Title:__________________________
EXHIBIT A
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Copyrights
Registration/ Registration
Application Application
Description Number Date
----------- ------ ----
None registered
EXHIBIT B
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Patents
Registration/ Registration
Application Application
Description Number Date
----------- ------ ----
Predictive Dialer Pacing System 04/26/94
Systems and Methods for Providing Service
Mediation Between Regional Service Management
Systems and Local Element Management Systems
For Number Portability (Provisional Application 60/033,422
for NumberManager) (Provisional) 12/24/96
Systems and Methods for Providing Order Mediation
Between Existing Information Systems and Regional
Service Management Systems for Number Portability 60/033,423
(Provisional Application for OrderPath) (Provisional) 12/24/96
Systems and Methods for Providing Network Element
Management Functionality for Managing and
Provisioining Network Elements Associated with
Number Portability 60/033,421
(Provisional Application for Nodemaster) (Provisional) 12/24/96
Systems and Methods for Providing Order and Service
Mediation for Telecommunications Systems
(Application for NumberManager and OrderPath
combined) 08/906,751 08/06/97
Systems and Methods for Providing Network Element
Management Functionality for Managing and Provisioning
Network Elements
(Application for NodeMaster) 08/907,323 08/06/97
Inproved Telecommuncations Systems and Methods 60/046,240
(Provisional Application for 21st Century Operational (Provisional) 05/12/97
Support Systems or OSS)
EXHIBIT C
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Trademarks
Registration/ Registration/
Application Application
Description Number Date
----------- ------ ----
ESI Environment Not registered
VDIS Not registered
Checker Not registered
Checknet Not registered
Pilot Plus Not registered
BACE Not registered
APEX Environment Not registered
US FILINGS
ESI "Bullet" Logo (SM) 1,848,371 08/02/94
ESI initials (SM) 1,848,372 08/02/94
Evolving Systems, Inc. Trade Name Registration
(State of Colorado) L22-77953-000 01/01/96
Evolving Systems (Class 9) 75/193,976 11/06/96
Evolving Systems and Design (bullet and block) 75/193,977 11/06/96
(subsequently abandoned)
Bullet and Block Design 75/194,261 11/06/96
(subsequently abandoned)
OrderPath 75/217,683 12/23/96
NumberManager 75/217,681 12/23/96
NodeMaster 75/217,682 12/23/96
Evolving Systems (Class 42) 75/292,405 05/15/97
Evolving Systems and Design (evolving triangle) 75,284,808 05/01/97
Evolving Systems CTM 75,217,682
What Your World Is Coming To 75/264,673 03/25/97
What The World Of Telecom Is Coming To 75/264,673 05/16/97
FOREIGN FILINGS
Evolving Systems European
Economic Community
No. 00385856 12/16/96
Evolving Systems Canada
No. 848669 06/20/97
Evolving Systems and Design (evolving triangle) Canada
No. 848668 06/20/97
What The World Of Telecom Is Coming To Canada
No. 848673 06/20/97
OrderPath Canada
No. 848670 06/20/97
NumberManager Canada
No. 848672 06/20/97
NodeMaster Canada
No. 848671 06/20/97
