Exhibit 10.37
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement (this "IP Agreement") is made
as of the 19 day of November, 1999 by and between PERITUS SOFTWARE SERVICES,
INC. ("Grantor"), and SILICON VALLEY BANK, a California banking corporation,
with its principal place of business at 3003 Tasman Drive, Santa Clara,
California 95054 and with an office located at Wellesley Office Park, 40 William
Street, Suite 350, Wellesley, Massachusetts 02481, 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 "Financings"), pursuant to an Accounts
Receivable Financing Agreement of even date herewith (the "Financing Agreement")
and Grantor desires to obtain such financings from Lender. The Financings are
or will be secured in part pursuant to the terms of the Financing Agreement.
Lender is willing to make such Financings to 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 to secure the
obligations of Grantor under the Financing Agreement. Defined terms used but
not defined herein shall have the same meanings as in the Financing Agreement.
B. Pursuant to the terms of the Financing 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 herein).
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 Obligations under the
Financing Agreement, 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 Obligations and
liabilities to Lender, Grantor hereby grants a security interest in all of
Grantor's right, title and interest in, to and under its 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 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 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 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");
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 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; 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.
2. Authorization and Request. Grantor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this IP Agreement.
3. Covenants and Warranties. Grantor represents, warrants, covenants and
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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 IP Agreement to which Grantor 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 IP
Agreement constitutes a security interest.
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 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 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, unless
Grantor determines that reasonable business practices suggest that
abandonment is appropriate.
g. Grantor shall promptly register the most recent version of any of
Grantor'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 Lender may reasonably request from time to
time to perfect or continue the perfection of Lender's interest in
the Intellectual Property Collateral;
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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 in the Intellectual
Property Collateral in the United States securing the payment and
performance of the obligations evidenced by the Financing Agreement
upon making the filings referred to in clause (i) below;
i. To its knowledge, except for, and upon, the filing with the United
States Patent and Trademark office with respect to the Patents and
Trademarks and the Register of Copyrights with respect to the
Copyrights and Mask Works necessary to perfect the security
interests created hereunder and except as has been already made or
obtained, 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 (i) 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 (ii)
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
by or on behalf of 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. 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, 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 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 of the rights and
remedies of Lender in relation thereto, including the levy of any
legal process against any of the Intellectual Property Collateral.
4. 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.
5. 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.
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6. Further Assurances; Attorney in Fact.
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i. On a continuing basis, Grantor will, 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 deemed necessary or
advisable, or as 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.
ii. 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 to time in
Lender's 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 accomplish the purposes of this IP
Agreement, including:
(1) To 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
(2) To file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to
any of the Intellectual Property Collateral without the
signature of Grantor where permitted by law.
7. Events of Default. The occurrence of any of the following shall
constitute an Event of Default under this IP Agreement:
a. An Event of Default occurs under the Financing Agreement; or any
document from Grantor to Lender; or
b. Grantor breaches any warranty or agreement made by Grantor in this
IP Agreement.
8. 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 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 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.
9. 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
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(including without limitation, reasonable attorneys fees and reasonable
expenses), except for losses arising from or out of Lender's gross negligence or
willful misconduct.
10. Reassignment. At such time as Grantor shall completely satisfy all
of the obligations secured hereunder, Lender shall execute and deliver to
Grantor all deeds, assignments, and other instruments as may be necessary or
proper to reinvest in Grantor full title to the property assigned hereunder,
subject to any disposition thereof which may have been made by Lender pursuant
hereto.
11. 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.
12. Attorneys' Fees. If any action relating to this IP Agreement is
brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys fees, costs and disbursements.
13. Amendments. This IP Agreement may be amended only by a written
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instrument signed by both parties hereto.
14. 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.
15. 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; PROVIDED, HOWEVER, THAT IF FOR ANY REASON LENDER CANNOT AVAIL ITSELF
OF THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS, GRANTOR ACCEPTS JURISDICTION
OF THE COURTS AND VENUE IN SANTA CLARA COUNTY, CALIFORNIA.
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.
16. Confidentiality. In handling any confidential information, Lender
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 IP
Agreement except that the disclosure of this information may be made (i) to the
affiliates of the Lender, (ii) to prospective transferee or purchasers of an
interest in the obligations secured hereby, provided that they have entered
into comparable confidentiality agreement in favor of Grantor and have deliver a
copy to Grantor, (iii) as required by law, regulation, rule or order, subpoena
judicial order or similar order and (iv) as may be required in connection with
the examination, audit or similar investigation of Lender.
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IN WITNESS WHEREOF, the undersigned has executed this IP Agreement as a
sealed instrument under the laws of the Commonwealth of Massachusetts, on the
day and year first above written.
ADDRESS OF GRANTOR: GRANTOR:
Two Federal Street PERITUS SOFTWARE SERVICES, INC.
Billerica, Massachusetts 01821
By:_________________________________________
Name:_______________________________________
Title:______________________________________
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Exhibit "A" attached to that certain Intellectual Property Security
Agreement dated ________________, 1999.
EXHIBIT "A"
COPYRIGHTS
SCHEDULE A - ISSUED COPYRIGHTS
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COPYRIGHT REGISTRATION DATE OF
DESCRIPTION NUMBER ISSUANCE
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SCHEDULE B - PENDING COPYRIGHT APPLICATIONS
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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 _______________, 1999.
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 _________________, 1999.
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 _____________, 1999.
EXHIBIT "D"
MASK WORKS
MASK WORK
DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS
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