Exhibit 10.19
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement (this "IP Agreement") is
made as of the _____ day of____________, 2003 by and between INTERNET COMMERCE
CORPORATION, a Delaware corporation with its principal place of business at 805
Third Avenue, 9th Floor, New York, New York 10022 ("Grantor"), and SILICON
VALLEY BANK, a California-chartered bank, with its principal place of business
at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production
office located at One Newton Executive Park, Suite 200, 2221 Washington Street,
Newton, Massachusetts 02462, doing business under the name "Silicon Valley East"
("Lender").
RECITALS
A. Lender has agreed to make advances of money and to extend certain
financial accommodations to Grantor (the "Loan"), pursuant to a certain Accounts
Receivable Financing Agreement of even date herewith between Grantor and Lender,
as amended from time to time (as amended, the "Loan Agreement"). The Loan is
secured pursuant to the terms of the Loan Agreement. Lender is willing to enter
into certain financial accommodations with Grantor, but only upon the condition,
among others, that Grantor shall grant to Lender a security interest in certain
Copyrights, Trademarks, Patents, and Mask Works, and other assets, to secure the
obligations of Grantor under the Loan Agreement. Defined terms used but not
defined herein shall have the same meanings as in the Loan Agreement.
B. Pursuant to the terms of the Loan Agreement, Grantor has granted to
Lender a security interest in all of Grantor's right title and interest, whether
presently existing or hereafter acquired in, to and under all of the Collateral
(as defined therein).
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged and intending to be legally bound, as collateral security
for the prompt and complete payment when due of Grantor's Indebtedness (as
defined below), Grantor hereby represents, warrants, covenants and agrees as
follows:
1. Grant of Security Interest. As collateral security for the prompt
and complete payment and performance of all of Grantor's present or future
indebtedness, obligations and liabilities to Lender (hereinafter, the
"Indebtedness") under the Loan Agreement, Grantor hereby grants a security
interest in all of Grantor's right, title and interest in, to and under its
registered and unregistered intellectual property collateral (all of which shall
collectively be called the "Intellectual Property Collateral"), including,
without limitation, the following:
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, registered or unregistered, 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 (collectively, the "Copyrights");
b. Any and all trade secret rights, including any rights to
unpatented inventions, know-how, operating manuals, license rights
and agreements, and confidential information, 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 of Grantor 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 (collectively, the "Patents");
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e. Any trademark and service mark rights, slogans, trade dress,
and tradenames, trade styles, whether registered or not,
applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Grantor
connected with and symbolized by such trademarks, including without
limitation those set forth on EXHIBIT C attached hereto
(collectively, the "Trademarks");
f. All mask works or similar rights available for the protection
of semiconductor chips, now owned or hereafter acquired, including,
without limitation those set forth on EXHIBIT D attached hereto
(collectively, the "Mask Works");
g. Any and all claims for damages by way of past, present and
future infringements of any of the rights included above, with the
right, but not the obligation, to sue for and collect such damages
for said use or infringement of the intellectual property rights
identified above;
h. All licenses or other rights to use any of the Copyrights,
Patents, Trademarks, or Mask Works and all license fees and
royalties arising from such use to the extent permitted by such
license or rights, including, without limitation those set forth on
EXHIBIT E attached hereto; and
i. All amendments, extensions, renewals and extensions of any of
the Copyrights, Trademarks, Patents, or Mask Works; and
j. 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.
1. Authorization and Request. Grantor authorizes and requests that
the Register of Copyrights and the Commissioner of Patents and Trademarks record
this IP Agreement, and any amendments thereto, or copies thereof.
2. Covenants and Warranties. Grantor represents, warrants, covenants
and agrees as follows:
a. Grantor is now the sole owner of the Intellectual Property
Collateral, except for non-exclusive licenses granted by Grantor to its
customers in the ordinary course of business.
b. Performance of this IP Agreement does not conflict with or result in
a breach of any material agreement to which Grantor is bound.
c. During the term of this IP Agreement, Grantor will not transfer or
otherwise encumber any interest in the Intellectual Property Collateral, except
for non-exclusive licenses granted by Grantor in the ordinary course of business
or as set forth in this IP Agreement;
d. To its knowledge, each of the Patents is valid and enforceable, and
no part of the Intellectual Property Collateral has been judged invalid or
unenforceable, in whole or in part, and no claim has been made in writing that
any part of the Intellectual Property Collateral violates the rights of any
third party;
e. Grantor shall promptly advise Lender of any material adverse change
in the composition of the Collateral, including but not limited to any
subsequent ownership right of the Grantor in or to any Trademark, Patent,
Copyright, or Mask Work specified in this IP Agreement;
f. Grantor shall (i) protect, defend and maintain the validity and
enforceability of the Trademarks, Patents, Copyrights, and Mask Works, (ii) use
its reasonable best efforts to detect infringements of the Trademarks, Patents,
Copyrights, and Mask Works and promptly advise Lender in writing of material
infringements detected and (iii) not allow any Trademarks, Patents, Copyrights,
or Mask Works to be abandoned, forfeited or dedicated to the public without the
written consent of Lender, which shall not be unreasonably withheld or delayed,
unless Grantor determines that reasonable business practices suggest that
abandonment is appropriate.
g. Grantor shall take such further actions as Lender may reasonably
request from time to time to perfect or continue the perfection of Lender's
security interest in the Intellectual Property Collateral;
h. This IP Agreement creates, and in the case of after acquired
Intellectual Property Collateral, this IP Agreement will create at the time
Grantor first has rights in such after acquired Intellectual Property
Collateral, in favor of Lender a valid and perfected first priority security
interest and collateral assignment in the Intellectual Property Collateral in
the United States securing the payment and performance of the obligations
evidenced by the Loan Agreement;
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i. To its knowledge, except for, and upon, the filing of UCC financing
statements, or other notice filings or notations in appropriate filing offices,
if necessary to perfect the security interests created hereunder, 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 either (a) for
the grant by Grantor of the security interest granted hereby, or for the
execution, delivery or performance of this IP Agreement by Grantor in the U.S.
or (b) for the perfection in the United States or the exercise by Lender of its
rights and remedies thereunder;
j. All information heretofore, herein or hereafter supplied to Lender
in writing by Grantor with respect to the Intellectual Property Collateral is
accurate and complete in all material respects.
k. Grantor shall not enter into any agreement that would materially
impair or conflict with Grantor's obligations hereunder without Lender's prior
written consent, which consent shall not be unreasonably withheld or delayed.
Grantor 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 Grantor's rights and interest in any property
included within the definition of the Intellectual Property Collateral acquired
under such contracts.
l. Upon any executive officer of Grantor obtaining actual knowledge
thereof, Grantor will promptly notify Lender in writing of any event that
materially adversely affects the value of any material Intellectual Property
Collateral, the ability of Grantor to dispose of any material Intellectual
Property Collateral or the rights and remedies of Lender in relation thereto,
including the levy of any legal process against any of the Intellectual Property
Collateral.
2. Lender's Rights. Lender shall have the right, but not the
obligation, to take, at Grantor's sole expense, any actions that Grantor is
required under this IP Agreement to take but which Grantor fails to take, after
fifteen (15) days' notice to Grantor. Grantor shall reimburse and indemnify
Lender for all reasonable costs and reasonable expenses incurred in the
reasonable exercise of its rights under this Section 4.
3. Inspection Rights. Grantor hereby grants to Lender and its
employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to Grantor, any of Grantor'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
Intellectual Property Collateral, and to inspect the products and quality
control records relating thereto upon reasonable written notice to Grantor and
as often as may be reasonably requested, but not more than once in every six (6)
months; provided, however, nothing herein shall entitle Lender access to
Grantor's trade secrets and other proprietary information.
4. Further Assurances; Attorney in Fact.
a. On a continuing basis, Grantor will, upon request by Lender,
subject to any prior licenses, encumbrances and restrictions and prospective
licenses, 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 Trademarks Office and
the Register of Copyrights, and take all such action as may reasonably be
requested by Lender, to perfect Lender's security interest in all Copyrights,
Patents, Trademarks, and Mask Works and otherwise to carry out the intent and
purposes of this IP Agreement, or for assuring and confirming to Lender the
grant or perfection of a security interest in all Intellectual Property
Collateral.
b. In addition to section 6(a) above, Grantor shall not register
any of its Copyrights or Mask Works with the Register of Copyrights without
first executing and simultaneously registering an IP Agreement, in the identical
form of this IP Agreement, with the Register of Copyrights, listing such
Copyrights(s) on Exhibit A thereto and/or such Mask Works on Exhibit D in order
to protect and perfect Lender's security interest in such Copyrights or Mask
Works. Reasonably promptly after such registration, Grantor shall forward to the
Lender, at the address listed above, a copy of, and the original IP Agreement as
filed with the Register of Copyrights.
c. Grantor hereby irrevocably appoints Lender as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Lender or otherwise, from time
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to time in Lender's reasonable discretion, upon Grantor's failure or inability
to do so, to take any action and to execute any instrument which Lender may deem
necessary or advisable to:
i. modify, in its sole discretion, this IP Agreement without first
obtaining Grantor's approval of or signature to such modification by amending
Exhibit A, Exhibit B, Exhibit C, and Exhibit D hereof, as appropriate, to
include reference to any right, title or interest in any Copyrights, Patents,
Trademarks or Mask Works acquired by Grantor after the execution hereof or to
delete any reference to any right, title or interest in any Copyrights, Patents,
Trademarks, or Mask Works in which Grantor no longer has or claims any right,
title or interest; and
ii. file, in its sole discretion, one or more financing or continuation
statements and amendments thereto, or other notice filings or notations in
appropriate filing offices, relative to any of the Intellectual Property
Collateral, without notice to Grantor, with all appropriate jurisdictions, as
Lender reasonably deems appropriate, in order to further perfect or protect
Lender's interest in the Intellectual Property Collateral.
5. Events of Default. The occurrence of any Event of Default (as set
forth in the Loan Agreement) shall constitute an Event of Default under this IP
Agreement.
6. Remedies. Upon the occurrence and continuance of an Event of
Default, Lender shall have the right to exercise all the remedies of a secured
party under the Massachusetts Uniform Commercial Code, including without
limitation the right to require Grantor to assemble the Intellectual Property
Collateral and any tangible property in which Lender has a security interest and
to make it available to Lender at a place designated by Lender. Lender shall
have a nonexclusive, royalty free license to use the Copyrights, Patents,
Trademarks, and Mask Works to the extent reasonably necessary to permit Lender
to exercise its rights and remedies upon the occurrence of an Event of Default.
Grantor will pay any reasonable expenses (including reasonable attorney's fees)
incurred by Lender in connection with the exercise of any of Lender's rights
hereunder, including without limitation any reasonable expense incurred in
disposing of the Intellectual Property Collateral. All of Lender's rights and
remedies with respect to the Intellectual Property Collateral shall be
cumulative.
7. Indemnity. Grantor agrees to defend, indemnify and hold harmless
Lender 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 IP Agreement, and (b) all
losses or expenses in any way suffered, incurred, or paid by Lender as a result
of or in any way arising out of, following or consequential to transactions
between Lender and Grantor, whether under this IP Agreement or otherwise
(including without limitation, reasonable attorneys fees and reasonable
expenses), except for losses arising from or out of Lender's gross negligence or
willful misconduct.
8. Termination. At such time as Grantor shall completely satisfy all
of the obligations secured hereunder, Lender shall execute and deliver to
Grantor all releases, terminations, and other instruments as may be necessary or
proper to release the security interest hereunder.
9. Course of Dealing. No course of dealing, nor any failure to
exercise, nor any delay in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.
10. Amendments. This IP Agreement may be amended only by a written
instrument signed by both parties hereto.
11. Counterparts. This IP Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
12. Law and Jurisdiction. This IP Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
GRANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT,
OR PROCEEDING OF ANY KIND, AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS
AGREEMENT. NOTWITHSTANDING THE FOREGOING, THE LENDER SHALL HAVE THE RIGHT TO
BRING
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ANY ACTION OR PROCEEDING AGAINST THE GRANTOR OR ITS PROPERTY IN THE COURTS OF
ANY OTHER JURISDICTION WHICH THE LENDER DEEMS NECESSARY OR APPROPRIATE IN ORDER
TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE THE LENDER'S RIGHTS AGAINST
THE GRANTOR OR ITS PROPERTY.
GRANTOR AND LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF
THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH
PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
13. Confidentiality. In handling any confidential information,
Lender shall exercise the same degree of care that it exercises for its own
proprietary information, but disclosure of information may be made: (i) to
Lender's subsidiaries or affiliates in connection with their present or
prospective business relations with Grantor; (ii) to prospective transferees or
purchasers of any interest in the Loans; (iii) as required by law, regulation,
subpoena, or other order, (iv) as required in connection with Lender's
examination or audit; and (v) as Lender considers appropriate in exercising
remedies under this Agreement. Confidential information does not include
information that either: (a) is in the public domain or in Lender's possession
when disclosed to Lender, or becomes part of the public domain after disclosure
to Lender; or (b) is disclosed to Lender by a third party, if Lender reasonably
does not know that the third party is prohibited from disclosing the
information.
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EXECUTED as a sealed instrument under the laws of the Commonwealth
of Massachusetts on the day and year first written above.
Address of Grantor: GRANTOR:
805 Third Avenue, 9th Floor INTERNET COMMERCE CORPORATION
New York, New York 10022 By:_____________________________________
Name:___________________________________
Title:__________________________________
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Exhibit "A" attached to that certain Intellectual Property Security
Agreement dated ________________, 2003.
EXHIBIT "A"
COPYRIGHTS
SCHEDULE A - ISSUED COPYRIGHTS
COPYRIGHT REGISTRATION DATE OF
DESCRIPTION NUMBER ISSUANCE
- ----------- ------------ ---------------------------------
SCHEDULE B - PENDING COPYRIGHT APPLICATIONS
FIRST DATE
COPYRIGHT APPLICATION DATE OF DATE OF OF PUBLIC
DESCRIPTION NUMBER FILING CREATION DISTRIBUTION
- ----------- ----------- -------- -------- -------------
SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)
DATE AND
RECORDATION
NUMBER OF IP
AGREEMENT WITH
OWNER OR ORIGINAL
GRANTOR IF ORIGINAL AUTHOR
AUTHOR OR OWNER OR OWNER OF
FIRST DATE OF COPYRIGHT COPYRIGHT IS
COPYRIGHT DATE OF OF IS DIFFERENT DIFFERENT ROM
DESCRIPTION CREATION DISTRIBUTION FROM GRANTOR GRANTOR
- ----------- -------- ------------------------ ------------ -------------------
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Exhibit "B" attached to that certain Intellectual Property Security
Agreement dated _______________, 2003.
EXHIBIT "B"
PATENTS
PATENT
DESCRIPTION DOCKET NO. COUNTRY SERIAL NO. FILING DATE STATUS
- ----------- ---------- ------- ---------- ----------- ------
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Exhibit "C" attached to that certain Intellectual Property Security
Agreement dated _________________, 2003.
EXHIBIT "C"
TRADEMARKS
TRADEMARK
DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS
----------- ------- ---------- ------- ------
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Exhibit "D" attached to that certain Intellectual Property Security
Agreement dated _____________, 2003.
EXHIBIT "D"
MASK WORKS
MASK WORK
DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS
- ----------- ------- ---------- ------- ------
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Exhibit "E" attached to that certain Intellectual Property Security
Agreement dated _________________, 2003.
EXHIBIT "E"
LICENSES
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