Exhibit 99.4
INTELLECTUAL PROPERTY SECURITY AGREEMENT
THIS INTELLECTUAL PROPERTY SECURITY AGREEMENT, dated as of September 13, 2004,
is made by Level 8 Systems, Inc., a Delaware corporation with offices at 0000
Xxxxx Xxxxxxx 00, Xxxxxxxx X, Xxxxxxxxxxx, Xxx Xxxxxx ("Grantor"), in favor of
LIRAZ SYSTEMS, Ltd., (the "Secured Party").
W I T N E S S E T H:
WHEREAS, pursuant to that certain secured promissory note dated as of the
date hereof (the "Note"), the Secured Party has agreed to make a loan for the
benefit of Grantor (the "Loan");
WHEREAS, Secured Party is willing to make the Loan, but only upon the
condition that Grantor execute and deliver to the Secured Party this
Intellectual Property Security Agreement ("Agreement");
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor hereby agrees as follows:
1. Definitions.
1.1. Defined Terms. Capitalized terms have the meanings set out below.
"Bankruptcy Code" means the provisions of Title 11 of the United States
Code, 11 U.S.C. Section 101 et seq or other applicable bankruptcy, insolvency or
similar laws.
"Copyright" means any and all of the following: (a) all copyrights (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including all registrations, recordings
and applications in the United States Copyright Office or in any similar office
or agency of the United States, any state or territory thereof, or any other
country or any political subdivision thereof, and (b) all reissues, extensions
or renewals thereof.
"Default" means any event or condition that with notice or passage of time
would be an Event of Default.
"Event of Default" is defined in Section 6 of this Agreement.
"Intellectual Property" means any and all Licenses, Copyrights, Patents and
Trademarks.
"Intellectual Property Collateral" is defined in Section 2 of this
Agreement.
"License" means any and all licenses of rights or interests of, or in, any
Copyright, Patent, Trademark or other rights or interests.
"Liens" means security interests, pledges, collateral assignments, liens
(statutory or other), mortgages, encumbrances, conditional sale or title
retention agreements, charges, claims, or financing leases having substantially
the same economic effect as the foregoing.
"Obligations" means any and all of the following: (i) Grantor's existing
and future obligations (of any kind whatsoever) under the Note and this
Agreement; and (ii) (a) any amounts that Secured Party may advance or spend for
the maintenance or preservation of the Intellectual Property Collateral and (b)
any other expenditures that Secured Party may make under the provisions of this
Agreement or for the benefit of Grantor; (iii) all amounts owed under any
modifications, renewals, refinancings, restructurings or extensions of any of
the forgoing obligations; (iv) all other amounts now or in the future owed by
Grantor to Secured Party; or (v) any of the foregoing that arises after the
filing of a petition by or against Grantor under the Bankruptcy Code, even if
the obligations do not accrue because of the automatic stay under Section 362 of
the Bankruptcy Code or otherwise.
"Loan Documents" means the Note and this Agreement.
"Patents" mean (a) all letters of patent of the United States or any other
country or jurisdiction, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any state or any other country or jurisdiction; and (b) all reissues,
continuations, continuations-in-part or extensions thereof.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, state, county, city, municipal, local, foreign, or
otherwise, including any instrumentality, division, agency, body or department
thereof).
"Trademarks" means any and all of the following: (a) all trademarks, trade
names, corporate names, business names, service marks, logos, all registrations
and recordings thereof, and all applications in connection therewith, including
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state or territory thereof, or any other country or jurisdiction; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.
"Termination Date" means the date all Obligations are paid in full
"UCC" means the Uniform Commercial Code as adopted and in effect in the
State of New Jersey.
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1.2. UCC Terms. Any capitalized terms defined in the UCC and not
defined in this Agreement shall have the meaning given to it in the UCC. If a
term is defined in more than one Article of the UCC, the definition in Article 9
will control.
2. Grant of Security Interest. To secure the complete and timely payment of
all the Obligations of Grantor now or hereafter existing from time to time,
Grantor hereby pledges and grants to the Secured Party a continuing first
priority security interest in all of Grantor's right, title and interest in, to
under, and in connection with Grantor's e-mail security products that provide
crytographical digital content protection (sometimes referred to as the "Ensured
Mail Products"), whether presently existing or hereafter created or acquired
(collectively, the "Intellectual Property Collateral") including, but not
limited to:
(a) all of its Patents to which it is a party including those referred
to on Schedule I hereto;
(b) all of its Trademarks to which it is a party including those
referred to on Schedule II hereto;
(c) all of its Copyrights to which it is a party including those
referred to on Schedule III hereto;
(d) all Licenses to which it is a Party including those referred to on
Schedule I, Schedule II and Schedule III hereto;
(e) all reissues, continuations or extensions of the foregoing;
(f) all goodwill of the business connected with the use of, and
symbolized by, each Patent, each Patent License, each Trademark, each
Trademark License, each Copyright and each Copyright License; and
(g) all products and proceeds of the foregoing, including, without
limitation, any claim by Grantor against third parties for past, present or
future (i) infringement or dilution of any Patent or Patent licensed under
any Patent License, (ii) injury to the goodwill associated with any Patent
or any Patent licensed under any Patent License, (iii) infringement or
dilution of any Trademark or Trademark licensed under any Trademark
License, (iv) injury to the goodwill associated with any Trademark or any
Trademark licensed under any Trademark License, (v) infringement or
dilution of any Copyright or Copyright licensed under any Copyright
License, and (vi) injury to the goodwill associated with any Copyright or
any Copyright licensed under any Copyright License.
(h) Grantor authorizes Secured Party to file a financing statement
(the "Financing Statement") describing the Intellectual Property
Collateral.
2.1 Perfection of Security Interest.
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2.1.1. Grantor authorizes Secured Party to file (i) a
financing statement (the "Financing Statement") describing the Intellectual
Property Collateral with the Secretary of State of the State of Delaware
and (ii) this Agreement with the United States Patent and Trademark Office
and the United States Copyright Office.
2.1.2. Secured Party shall at Grantor's expense receive within 30
days after the date of this Agreement an official report from the Secretary
of State of the State of Delaware indicating that Secured Party's security
interest is properly filed and prior to all other security interests or
other interests reflected in the report.
3. Representations and Warranties. Grantor represents and warrants to
the Secured Party that:
3.1. Grantor does not have any interest in, or title to, any Patent,
Trademark or Copyright except as set forth in Schedule I, Schedule II and
Schedule III, respectively, hereto. This Intellectual Property Security
Agreement is effective to create valid and continuing Liens on and, upon (i) the
filing of the Financing Statement with the Secretary of State of the State of
Delaware and (ii) the filing hereof with the United States Patent and Trademark
Office and the United States Copyright Office, perfected security interests in
favor of the Secured Party in the Intellectual Property Collateral and such
perfected security interests are enforceable as such as against any and all
creditors of, and purchasers from, Grantor. Upon filing of this Agreement with
the United States Patent and Trademark Office and the United States Copyright
Office and the filing of the Financing Statement, all action necessary or
desirable to protect and perfect the Secured Party's Lien on the Intellectual
Property Collateral shall have been duly taken and the security interests of the
Secured Party shall be prior to all other Liens.
3.2. Title to and transfer of Collateral. It has rights in or the
power to transfer the Intellectual Property Collateral and its title to the
Intellectual Property Collateral is good and marketable title, free of all
adverse claims, Liens, enforceable restrictions on security interests, pledge,
assignment or transfer, except for any restrictions on transfer listed on
Schedule A hereto.
3.3. Location, State of Incorporation or Registration and Name of
Grantor. Grantor's:
3.3.1 chief executive office is located in New Jersey;
3.3.2 state of organization (i.e., the state under whose law
Grantor is organized) is Delaware; and
3.3.3 exact legal name as it appears in its certificate of
incorporation is as set forth in the first paragraph of this Agreement.
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3.4. Location of Records. All of its records relating to the
Intellectual Property Collateral are located at the location for Intellectual
Property Collateral records listed on Schedule A hereto.
3.5. Organizational Matters. It is duly organized, validly existing,
and in good standing, under the laws of Delaware, has the authority and power
necessary to own its assets and to transact the business in which it is engaged,
and is duly qualified and in good standing to do business, in each jurisdiction
in which the conduct of its business or the ownership of its assets so requires.
It has the absolute and unrestricted right, power, authority, and capacity to
execute and deliver this Agreement and to perform its obligations hereunder. The
signatory below is duly authorized to execute and deliver this Agreement.
3.6. No Conflict. Its execution and delivery of this Agreement, and
the consummation and performance of any of the transactions contemplated hereby,
do not and will not: (i) violate any applicable law or any judgment, award,
order, writ, or decree of any court or other Governmental Authority, (ii)
violate any provision of its Certificate of Incorporation or bylaws, (iii)
violate any provision of, or cause any default under, any mortgage, indenture,
contract, agreement, or other undertaking to which it is a party or that
purports to be binding upon it or upon any of its assets, or (iv) result in the
creation or imposition of any Lien on any of its assets other than contemplated
by this Agreement.
3.7. Authorization and Enforceability. It has duly authorized,
executed, and delivered this Agreement. This Agreement constitutes the legal,
valid and binding obligations of Grantor, enforceable against it in accordance
with its terms.
4. Covenants and Rights to the Intellectual Property Collateral. Grantor
covenants and agrees with the Secured Party that from and after the date of this
Agreement and until the Termination Date:
(a) Grantor shall notify the Secured Party immediately if it knows or
has reason to know that any application or registration relating to the
Intellectual Property Collateral (now or hereafter existing) may become
abandoned or dedicated, or of any adverse determination or development
(including the institution of, or any such determination or development in,
any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any court) regarding Grantor's ownership of the
Intellectual Property Collateral, its right to register the same, or to
keep and maintain the same.
(b) In no event shall Grantor, either directly or through any agent,
employee, licensee or designee, file an application for the registration of
any Patent, Trademark or Copyright with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office
or agency in connection with the Intellectual Property Collateral without
giving the Secured Party prior written notice thereof, and, upon request of
the Secured Party, Grantor shall execute and deliver a supplement hereto
(in form and substance satisfactory to the Secured Party) to evidence The
Secured Party's Lien on such Patent,
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Trademark or Copyright, and the General Intangibles of Grantor relating
thereto or represented thereby.
(c) Grantor shall take all actions necessary or requested by the
Secured Party to maintain and pursue each application, to obtain the
relevant registration and to maintain the registration of each of the
Patents or Trademarks (now or hereafter existing), including the filing of
applications for renewal, affidavits of use, affidavits of
noncontestability and opposition and interference and cancellation
proceedings.
(d) In the event that the Intellectual Property Collateral is
infringed upon, or misappropriated or diluted by a third party, Grantor
shall notify the Secured Party promptly after Grantor learns thereof.
Grantor shall, unless it shall reasonably determine that such infringement,
misappropriation or dilution in no way materially impairs the Intellectual
Property Collateral, promptly xxx for infringement, misappropriation or
dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and shall take such other actions as the
Secured Party shall deem appropriate under the circumstances to protect the
Intellectual Property Collateral.
(e) Secured Party may, at any time upon 2 days written notice,
inspect, appraise, and evaluate the Intellectual Property Collateral
(f) For the purpose of enabling Secured Party to exercise rights and
remedies under this Agreement (including in order to take possession of,
hold, preserve, process, assemble, prepare for sale, market for sale, sell
or otherwise dispose of the Intellectual Property Collateral) at such time
as Secured Party shall be lawfully entitled to exercise those rights and
remedies, Grantor hereby grants to Secured Party, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to Grantor) to use, license or sublicense any Intellectual
Property now owned or hereafter acquired by Grantor, and wherever the same
may be located, and including in such license access to all media in which
any of the licensed items may be recorded or stored and to all computer
software and programs used for the compilation or printout thereof.
(g) Grantor shall not (i) make any sales or leases of the Intellectual
Property Collateral, except, so long as no Event of Default is continuing
and sales of inventory in the ordinary course of business; (ii) license the
Intellectual Property Collateral; (iii) grant or permit any other Lien in
the Intellectual Property Collateral, except Permitted Encumbrances; or
(iv) move the records relating to the Intellectual Property Collateral from
the Record Locations, as the case may be, listed on Schedule A, except
after 30 days prior notice to Secured Party and taking all actions required
by Secured Party to assure the continued perfection and priority of Secured
Party's Liens and Secured Party's rights to the Intellectual Property
Collateral, provided, however, the records relating to the Intellectual
Property Collateral may not be moved outside any state of the United States
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without Secured Party's prior written consent, which will be given in its
sole discretion.
5. Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against Grantor for
liquidation or reorganization, should Grantor become insolvent or make an
assignment for the benefit of any creditor or creditors or should a receiver or
trustee be appointed for all or any significant part of Grantor's assets, and
shall continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
6. Events of Default.
The occurrence of any of the following shall, at the option of Secured
Party, be an "Event of Default":
6.1. The failure to pay the principal and interest on the Note or any
other Obligations when due or any Event of Default (as defined in the Note);
6.2. Any failure to pay or reimburse Secured Party for any expenses
reimbursable hereunder or under the Note upon Secured Party's demand for such
reimbursement or payment of expenses;
6.3. Any failure by Grantor to observe or perform any of the terms and
conditions of this Agreement or the Note;
6.4. Any representation or warranty in this Agreement shall have been
incorrect in any respect (or in any material respect if that representation or
warranty is not by its terms already qualified as to materiality);
6.5. Any attachment, execution or levy on the Intellectual Property
Collateral;
6.6. A case or proceeding is commenced against Grantor seeking a
decree or order in respect of Grantor (i) under the Bankruptcy Code, or any
other applicable federal, state or foreign bankruptcy or other similar law, (ii)
appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) for Grantor or for any substantial part of any of
Grantor's assets, or (iii) ordering the winding up or liquidation of the affairs
of Grantor, and such case or proceeding shall remain undismissed or unstayed for
30 days or more or a decree or order granting the relief sought in such case or
proceeding shall be entered by a court of competent jurisdiction.
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6.7. Grantor (i) files a petition seeking relief under the Bankruptcy
Code, or any other applicable federal, state or foreign bankruptcy or other
similar law, (ii) consents to or fails to contest in a timely and appropriate
manner the institution of proceedings thereunder or the filing of any such
petition or the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for Grantor
or for any substantial part of Grantor's assets, (iii) makes an assignment for
the benefit of creditors, (iv) takes any action in furtherance of any of the
foregoing; or (v) admits in writing its inability to, or is generally unable to,
pay its debts as such debts become due.
6.8. Grantor shall fail to comply with, or become subject to any
administrative or judicial proceeding under any federal, state or local (i)
hazardous waste or environmental law, (ii) asset forfeiture or similar law which
can result in the forfeiture of property, or (iii) other law, where
noncompliance may, in Secured Party's judgment, have any adverse effect on the
Intellectual Property Collateral or Secured Party's rights or remedies with
respect to the Intellectual Property Collateral;
6.9. Secured Party shall receive at any time following the date of the
Security Agreement a report from the Secretary of State or a reliable search
company indicating that Secured Party's security interest is not the only Lien
on the Intellectual Property Collateral in, other than Permitted Encumbrances;
or
6.10. Grantor shall default in any other agreement with Secured Party
or any of Secured Party's affiliates.
7. Default Costs.
Should an Event of Default occur, Grantor will pay to Secured Party,
upon demand, all costs incurred by Secured Party for the purpose of enforcing,
or potentially enforcing, its rights or remedies hereunder or under the Note,
including: (i) costs of foreclosure, (ii) costs of obtaining money damages, and
(iii) the reasonable fees and disbursements for the services of attorneys
employed by Secured Party for any purpose related to the Loan Documents or any
Obligations, including consultation, drafting documents, sending notices or
instituting, prosecuting or defending litigation, arbitration or other
proceedings.
8. Remedies Upon Default.
8.1. General. Upon any Event of Default, Secured Party may pursue any
remedy available at law (including those available under the provisions of the
UCC) or in equity to collect, enforce or satisfy any Obligations then owing,
whether by acceleration or otherwise and exercise all rights and remedies
available under the Loan Documents, any other agreement, instrument or document
or otherwise available to Secured Party. All Obligations shall be deemed to have
been accelerated simultaneously with the occurrence of any Event of Default.
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8.2. Remedies. Upon any Event of Default, Secured Party shall have the
right to pursue any rights and remedies separately, successively or
simultaneously including the following:
8.2.1 file suit and obtain judgment and, in conjunction with any
action, Secured Party may seek any ancillary remedies provided by law,
including levy of attachment and garnishment;
8.2.2 without taking possession, sell, lease or otherwise dispose
of the Intellectual Property Collateral at public or private sale in
accordance with the UCC.
9. Sale Procedures and Matters.
9.1. No Waiver. No delay or omission by Secured Party to exercise any
right or remedy shall: (i) impair any right or remedy, (ii) waive any default or
operate as an acquiescence to the Event of Default, or (iii) affect any
subsequent default of the same or of a different nature.
9.2. Notices. Secured Party shall give Grantor such notice of any
private or public sales as may be required by the UCC. Grantor agrees that ten
days prior notice of the time and place of any public sale or the time after
which a private sale may take place, is reasonable notice of such matters and
that any such sale may be adjourned in Secured Party's discretion.
9.3. Condition of Collateral. Secured Party has no duty to prepare the
Intellectual Property Collateral for sale or take any other action to protect or
preserve any Collateral or rights in the Intellectual Property Collateral.
9.4. No Obligation to Pursue Others. Secured Party has no duty to
attempt to satisfy the Obligations by collecting them from any other person who
is or may be liable for the Obligations before proceeding against Grantor
obligations. Secured Party may release, modify or waive any collateral provided
by any other Person to secure any of the Obligations, all without affecting
Secured Party's rights against Grantor. Grantor waives any right it may have to
require Secured Party to pursue any other Person for any of the Obligations.
9.5. Use of Collateral. Until Secured Party effects a sale, lease, or
other disposition of the Intellectual Property Collateral, Secured Party shall
have the right to hold or use the Intellectual Property Collateral, or any part
thereof, to the extent that it deems appropriate for the purpose of preserving
the Intellectual Property Collateral or its value or for any other purpose
deemed appropriate by Secured Party.
9.6. Compliance With Other Laws. Secured Party may comply with any
applicable state or federal law requirements in connection with a disposition of
the Collateral and compliance will not be considered adversely to affect the
commercial reasonableness of any sale of the Intellectual Property Collateral.
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9.7. Aspects of Sale. To the extent that applicable law imposes upon
Secured Party duties to exercise remedies in a commercially reasonable manner,
Grantor acknowledges that it is not commercially unreasonable if Secured Party:
(a) sells the Intellectual Property Collateral without giving any warranties as
to the Intellectual Property Collateral, or Secured Party specifically disclaims
any warranties of title or the like, (b) fails to obtain any required third
party or government consent for sale of the Intellectual Property Collateral or
for the disposition of Collateral, (c) hires or does not hire brokers,
investment bankers, auctioneers, liquidators, professionals or others to assist,
or manage, the disposition of the Intellectual Property Collateral, or (d)
conducts the sale using the internet. This procedure will not be considered
adversely to affect the commercial reasonableness of the sale of the
Intellectual Property Collateral.
9.8. Sales on Credit. If Secured Party sells the Intellectual Property
Collateral upon credit, Grantor will be credited only with payments actually
made by the purchaser, received by Secured Party and applied to the indebtedness
of the Purchaser. In the event the purchaser fails to pay for the Intellectual
Property Collateral, Secured Party may resell the Intellectual Property
Collateral and Grantor shall be credited with the proceeds of the sale.
9.9. Purchases by Secured Party. In the event Secured Party purchases
the Intellectual Property Collateral, Secured Party may pay for the Intellectual
Property Collateral by crediting some or all of the Obligations of Grantor.
9.10. No Marshaling. Secured Party has no obligation to marshal any
assets in favor of Grantor, or against or in payment of: (i) any Obligations or
(ii) any other obligation owed to Secured Party by Grantor or any other Person.
10. Miscellaneous.
10.1. Assignment. This Agreement shall bind and shall inure to
the benefit of the heirs, legatees, executors, administrators, successors and
assigns of Secured Party and shall bind Grantor and its successors and assigns
and all other persons who become bound as a Grantor to this Agreement. Secured
Party may assign its rights and interests under this Agreement. If an assignment
is made, Grantor shall render performance under this Agreement to the assignee.
Grantor waives and will not assert against any assignee any claims, defenses or
set-offs which Grantor could assert against Secured Party except defenses which
cannot be waived.
10.2. Severability. Should any provision of this Agreement be
found to be void, invalid or unenforceable by a court of competent jurisdiction,
that finding shall only affect the provisions found to be void, invalid or
unenforceable and shall not affect the remaining provisions of this Agreement.
10.3. Notices. All notices, consents, requests, and other
communications under this Agreement shall be in writing and shall be effective:
(i) upon delivery by hand; (ii) one day after being deposited with a recognized
overnight delivery service; or (iii) three days after being deposited in the
United States mail, first-class, postage
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prepaid, registered or certified, return receipt requested -- in each case
addressed to such party as follows (or to such other address as hereafter
may be designated in writing by such party to the other party):
If to Grantor:
Xxxxx 0 Systems, Inc
0000 Xxxxx Xxxxxxx 00
Xxxxxxxx X
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxx Xxxxxxxxx
Phone: 000-000-0000, Extension 377
Telecopy: 000-000-0000
If to Secured Party:
Liraz Systems, Ltd.
With a copy to:
Xxxxxxxxxx & Xxxxxx LLP
000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
10.4. Headings. Section headings used in this Agreement are for
convenience only. They are not a part of this Agreement and shall not be used in
construing it.
10.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey, regardless of
the conflict of laws principles thereof. Any legal action, suit or other
proceeding arising out of or in any way connected with, this Agreement may be
brought in the court of the County of Essex, State of New Jersey, or in the
United States Courts of the District of New Jersey. With respect to any such
proceeding in any such court: (a) each of Grantor and Secured Party generally
and unconditionally submits itself and its property to the nonexclusive
jurisdiction of such court; (b) each of Grantor and Secured Party waive, to the
fullest extent permitted by law, any objection it has or hereafter may have to
the venue of such proceeding, as well as any claim it has or may have that such
proceeding is in an inconvenient form; and (c) process may be served on a party
any where in the world, by the same methods as are required for notice under
this Agreement.
10.6. Survival. All representations, warranties and agreements contained in this
Agreement shall survive the consummation of the transactions contemplated by
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this Agreement notwithstanding any investigation conducted, or knowledge
acquired, with respect thereto.
10.7. Attorney In Fact. Grantor hereby appoints Secured Party,
with full power of substitution, as Grantor's attorney in fact to take all
actions in Grantor's name that Secured Party, in its discretion, deems to be
necessary or advisable to protect or perfect its interest in the Intellectual
Property Collateral and during the continuance of an Event of Default, to take
any action that Grantor is required to take under this Agreement, to exercise
Secured Party's rights and remedies, change Grantor's mailing address, give
notices, and make endorsements in Grantor's name and confirm, enforce rights
under, collect, sell or dispose of the Intellectual Property Collateral. This
power being coupled with an interest is irrevocable.
10.8. No Strict Construction. Grantor and Secured Party
acknowledge that this Agreement has been prepared jointly, and shall not be
strictly construed against any party.
10.9. Counterparts. This Agreement may be executed in
counterparts.
10.10. Expenses. Any expenses (including attorneys fees and
disbursements) incurred by or on behalf of, Secured Party to protect, perfect
its interest in, liquidate, collect, dispose of, appraise, insure, audit or
evaluate the Intellectual Property Collateral or take any other action
authorized under this Agreement or any other Loan Document with respect to the
Intellectual Property Collateral, Grantor or any Obligation or to negotiate,
document and close the transactions relating to this Security Agreement
(including the Note and Opinion of Grantor's counsel, shall be paid by Grantor
upon demand and, if not paid on demand, shall accrue interest at the highest
rate in effect from time to time under any Obligation.
10.11. Integration and Modifications. This Agreement is the
entire agreement of Grantor and Secured Party concerning its subject matter
other than the other Loan Documents. Any modification to this Security Agreement
must be made in writing and signed by the party adversely affected.
10.12. Waiver. Any party to this Agreement may waive the
enforcement of any provision to the extent the provision is for its benefit
provided that the waiver must be in writing.
10.13. Further Assurances. Grantor agrees to execute any further
documents, and to take any further actions, reasonably requested by Secured
Party to evidence or perfect the security interest granted herein, to maintain
the first priority of the security interests (subject only to Permitted
Encumbrances), or to effectuate the rights granted to Secured Party herein or
obtain the full benefits of this Agreement.
11. WAIVER OF JURY TRIAL AND DAMAGES. EACH OF GRANTOR AND SECURED
PARTY HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING
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ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY AND, TO THE FULLEST EXTENT PERMITTED BY LAW, WAIVES ANY
RIGHT THAT IT MAY HAVE TO CLAIM OR RECEIVE CONSEQUENTIAL OR SPECIAL DAMAGES IN
CONNECTION WITH ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE
TRANSACTIONS CONTEMPLATED HEREBY.
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IN WITNESS WHEREOF, Grantor has caused this Intellectual Property Security
Agreement to be executed and delivered by its duly authorized officer or other
representative as of the date first set forth above.
XXXXX 0 SYSTEMS, INC.
By: /s/ Xxxx Xxxxxxxxx
Name: Xxxx Xxxxxxxxx
Title: Chief Financial Officer
SCHEDULE I
to
INTELLECTUAL PROPERTY SECURITY AGREEMENT
I. PATENT REGISTRATIONS
Patent Reg. No. Date
------ -------- ----
II. PATENT APPLICATIONS
Patent Application No. Date
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AN UBIQUITOUS EMAIL 09/621,001 July 20, 2000
ENCRYPTION SYSTEM
III. PATENT LICENSES
Name of Agreement Date of Agreement Parties
----------------- ----------------- -------
SCHEDULE II
to
INTELLECTUAL PROPERTY SECURITY AGREEMENT
I. TRADEMARK REGISTRATIONS
Xxxx Reg. No. Date
---- -------- ----
ENSUREDMAIL 2,492,225 September 25, 2001
Service xxxx
XX. TRADEMARK APPLICATIONS
Xxxx Application No. Date
---- --------------- ----
III. TRADEMARK LICENSES
Name of Agreement Date of Agreement Parties
----------------- -------------------------
SCHEDULE III
to
INTELLECTUAL PROPERTY SECURITY AGREEMENT
I. COPYRIGHT REGISTRATIONS
Copyright Reg. No. Date
--------- -------- ----
II. COPYRIGHT APPLICATIONS
Copyright Application No. Date
--------- --------------- ----
III. COPYRIGHT LICENSES
Name of Agreement Date of Agreement Parties
----------------- ----------------- -------
SCHEDULE A
DISCLOSURES FOR REPRESENTATIONS AND WARRANTIES
[If none, write "none"]
Section
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3.2 The following are the only Liens on the Intellectual Property Collateral
that:
(i) exist on the date of the Agreement and will continue to remain in
effect ("Remaining Liens"):
Maximum Filing/Perfection Date,
Amount Secured Place and Number
Collateral Secured Creditor or Claimed -----------------------
---------- ------- -------------------
NONE
OR
--
(ii) exist on the date of this Agreement and are being
terminated as of this date:
Maximum
Amount Secured Filing/Perfection Date,
Collateral Secured Creditor Place and Number
---------- ------- -------- -----------------------
NONE
The following are the only restrictions on transfer or Liens that relate to
the Intellectual Property Collateral:
Nature of Restriction Approximate Value of
Intellectual Property Collateral --------------------- Affected Collateral
-------------------------------- -------------------
NONE
3.4 Grantor's Intellectual Property Collateral Cary, North Carolina
records are located at the following
locations ("Record Locations"):
