COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
This COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT (this
"Assignment") made as of this 19th day of September, 1996 by Amati
Communications Corporation, a Delaware corporation having its chief executive
office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Assignor") in favor
of Chatterjee Management Company, a Delaware corporation (the "Beneficiary", and
sometimes herein the "Assignee").
PRELIMINARY STATEMENTS.
(1) Beneficiary has agreed to loan the Assignor up to $3,000,000
(the "Loan"), to be evidenced by a promissory note delivered by the Assignor to
Beneficiary substantially in the form attached hereto as Exhibit A (the "Note").
(2) It is a condition precedent to the making of the Loan by the
Beneficiary under the Note that Assignor shall have assigned to the Beneficiary,
its Intellectual Property (as defined below).
NOW, THEREFORE, in consideration of the premises set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Assignor agrees as follows:
1. Incorporation of Note. The Note and the terms and provisions
thereof are hereby incorporated herein in their entirety by this reference
thereto. Terms used herein which are defined in the Note shall have the
respective meanings set forth in the Note unless otherwise defined herein.
2. Assignment and Grant of Security. To secure the complete and
timely payment of all the obligations of Assignor now or hereafter existing,
whether matured or unmatured, contingent or liquidated, under the Note,
including any extensions, modifications, substitutions, amendments and renewals
thereof, whether for principal, interest, premium, fees, expenses or otherwise,
and all obligations of Assignor now or hereafter existing under this Agreement
(all such obligations secured hereby being the "Obligations"), Assignor hereby
pledges, grants, sells, transfers, sets over, conveys and assigns to Assignee
for its benefit the entire right, title and interest of Assignor in and to the
following (the "Intellectual Property"): (i) all United States patents and
patent applications, including all proceeds thereof, in which Assignor has or,
in the future, may have the right (but not the obligation) to ▇▇▇ for past,
present and future infringements in the name of Assignor or in the name
of Assignee, all rights (but not obligations) corresponding hereto and all
reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof; (ii) all trademarks and service marks (registered
or unregistered), trade dress, trade names and other names and slogans embodying
business or product goodwill or indications of origin, all applications or
registrations in any jurisdiction pertaining to the foregoing and all goodwill
associated therewith, all as owned or used by Assignor; (iii) all patentable
inventions, discoveries, improvements, ideas, know-how, formula methodology,
processes, technology and computer programs, software and databases (including
source code, object code, development documentation, programming tools,
drawings, specifications and data), all as owned or used by Assignor; (iv) all
trade secrets, including confidential and other non-public information, and the
right in any jurisdiction to limit the use or disclosure thereof, all as owned
or used by Assignor; (v) all copyrights in writings, designs, mask works or
other works, and registrations or applications for registration of copyrights in
any jurisdiction, all as owned or used by Assignor; (vi) all licenses (including
the rights to revenue streams in respect of licenses granted by Assignor),
immunities, covenants not to ▇▇▇ and the like relating to any of the foregoing
(it being understood and agreed that the Intellectual Property assigned hereby
shall include, without limitation, rights and interests pursuant to licensing or
other contracts in favor of Assignor pertaining to Intellectual Property
presently or in the future owned or used by third parties, but in the case of
third parties which are not affiliates of Assignor only to the extent permitted
by such licensing or other contracts and, if not so permitted, only with the
consent of such third parties); and (vii) all claims or causes of action arising
out of or related to infringement or misappropriation of any of the foregoing.
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts that constitute part of the Obligations and would be owed
by Assignor to Assignee under the Note but for the fact that they are
unenforceable or not allowable because of the existence of a bankruptcy,
reorganization or similar proceeding involving Assignor.
3. Representations and Warranties. Assignor represents and
warrants as follows:
(a) A true and complete list of all Intellectual Property is set
forth in Schedule A hereto.
(b) The Intellectual Property is subsisting and has not been
adjudged invalid or unenforceable and Assignor is not aware of any
claim by any third party that the Intellectual Property is invalid or
unenforceable.
(c) To the best of Assignor's knowledge, each of the Intellectual
Property is valid and enforceable.
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(d) No claim has been made to Assignor in writing that the
practice of any of the Intellectual Property does or may violate the
rights of any third person.
(e) Assignor is the legal and beneficial owner of the
Intellectual Property free and clear of any lien or other encumbrance,
including without limitation, assignments, licenses, shop rights and
covenants by Assignor not to ▇▇▇ third persons, except for (i) the
security interest and assignment created by this Assignment and (ii)
the licenses granted by Assignor set forth on Schedule B hereto. No
effective financing statement or other instrument similar in effect
covering all or any part of the Patents is on file in any recording
office except such as may have been filed in favor of Assignee
relating to this Assignment or for which duly executed termination
statements have been recorded or delivered to Assignee.
(f) This Assignment will create in favor of Assignee a valid and
perfected first priority security interest in the Intellectual
Property upon making the filings referred to in clause (g) below.
(g) Except for the filing of financing statements with the
Secretary of State of California under the Uniform Commercial Code and
filings with the United States Patent and Trademark Office, no
authorization, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required either
(i) for the grant by Assignor of the security interest granted hereby
or for the execution, delivery or performance of this Assignment by
Assignor or (ii) for the perfection of or the exercise by Assignee of
its rights and remedies hereunder to the Intellectual Property in the
United States of America.
(h) The chief executive office of Assignor is located at the
address set forth above for Assignor.
4. New Intellectual Property and Applications. If, at any time
while amounts are outstanding under the Note, Assignor shall obtain rights to
any new Intellectual Property, the provisions of this Assignment shall
automatically apply thereto. With respect to all of the foregoing rights or
benefits, Assignor shall give to Assignee prompt notice thereof in writing.
5. Assignor's Covenants. On a continuing basis, Assignor will
make, execute, acknowledge and deliver, and file and record in the proper filing
and recording places, all such instruments, including, without limitation,
appropriate financing and continuation statements and security agreements, and
take all such action as may be deemed necessary or desirable by Assignee to
carry out the intent and purposes of this Assignment, or for assuring and
confirming to Assignee the grant or perfection of a
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security interest in all Intellectual Property. Without limiting the generality
of the foregoing sentence, Assignor:
(a) will not enter into any agreement which would or might in any
way impair or conflict with Assignor's obligations hereunder without
Assignee's prior written consent;
(b) will, upon the written request of Assignee, use its best
efforts to obtain any necessary consents of third parties to the grant
or perfection of a security interest to Assignee with respect to the
Intellectual Property;
(c) authorizes Assignee in its sole discretion to modify this
Assignment without first obtaining Assignor's approval of or signature
to such modification by amending Schedule A hereto to include
reference to any right, title or interest in any existing Intellectual
Property or any Intellectual Property acquired by Assignor after the
execution hereof or to delete any reference to any right, title or
interest in any Intellectual Property in which Assignor no longer has
or claims any right, title or interest;
(d) will, from time to time, upon Assignee's request, cause its
books and records to be marked with such legends or segregated in such
manner as Assignee may specify, and take or cause to be taken such
other action and adopt such procedures as Assignee may specify to give
notice of or to perfect the security interest in the Intellectual
Property intended to be created hereby;
(e) will at all times keep at least one complete set of its
records concerning all of the Intellectual Property at its chief
executive office as set forth above and will not change the location
of its chief executive office or such records without giving Assignee
at least 30 days prior written notice thereof;
(f) will promptly, following its becoming aware thereof,
notify Assignee of the institution of, or any adverse determination in,
any proceeding in the United States Patent and Trademark Office or any
United States or foreign court regarding Assignee's claim of ownership
in any of the Intellectual Property;
(g) concurrently with the filing of an application for any
Intellectual Property, will execute, deliver and record (i) in all
places where this Assignment is recorded an appropriate Patent
Collateral Assignment and Security Agreement, substantially in the form
hereof, with appropriate insertions to the extent of its interest
therein, and (ii) such appropriate financing statements as
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may be necessary in order to perfect and preserve the security
interest and assignment granted thereby;
(h) will not permit the inclusion in any contract to which it
becomes a party of any provisions which could in any way reasonably be
expected to impair or prevent the creation of a security interest in
Assignor's rights and interest in any property included within the
definition of the Intellectual Property acquired under such contracts;
(i) will properly maintain the Intellectual Property;
(j) will not grant any security interest in any Intellectual
Property except in the name of Assignee;
(k) except as provided in Section 9 hereof, will not sell,
license or contract for sale or otherwise dispose of any Intellectual
Property;
(l) will, upon any officer of Assignor obtaining knowledge
thereof, promptly notify Assignee of any event which materially
adversely affects the value of any Intellectual Property, the ability
of Assignor or Assignee to dispose of any of the Intellectual Property
or the rights and remedies of Assignee in relation thereto including,
without limitation, the levy of any legal process against any of the
Intellectual Property;
(m) will, until Assignee exercises its rights to make collection,
diligently keep reasonable records respecting the Intellectual
Property;
(n) will promptly notify Assignee of any suspected infringement
of any of the Intellectual Property by any third party and of all
steps, including the commencement and course of litigation, taken to
remedy such infringement; and
(o) will apply proper statutory patent notice to all products
covered by the Intellectual Property.
6. Amounts Payable in Respect of the Intellectual Property.
Except as otherwise provided in this Section 6, Assignor shall continue to
collect, at its own expense, all amounts due or to become due Assignor in
respect of the Intellectual Property. If the Assignor fails to pay or perform
any of the Obligations in accordance with their respective terms and such
failure continues following 10 days written notice thereof (a "Default"),
Assignee is hereby given full power and authority (a) to notify any and all
obligors with respect to any Patent which Assignor, except for the execution
hereof, could notify, and (b) to demand, take, collect, ▇▇▇ for and receive for
its own use all amounts due or to become due Assignor in respect of the
Intellectual Property, and in connection therewith to enforce all rights and
remedies with respect to any Intellectual
5
Property which Assignor could enforce if this Assignment had not been made; and
Assignor hereby ratifies any action which Assignee shall lawfully take to
enforce Assignee's rights hereunder. Whether or not Assignee shall have so
notified any obligors, Assignor shall at its expense render all reasonable
assistance to Assignee in enforcing claims against such obligors.
7. Power of Attorney. Assignor hereby authorizes and empowers the
Assignee, from time to time in the Assignee's discretion from and after the
occurrence and during the continuance of a Default, to make, constitute and
appoint any officer or agent of the Assignee as Assignor's true and lawful
attorney-in-fact, with power (a) to endorse Assignor's name on all applications,
documents, papers and instruments necessary or desirable for the Assignee in the
use or maintenance of the Intellectual Property, (b) to take any other actions
with respect to the Intellectual Property, including without limitation,
commencement or continuation of any litigation or administrative proceeding, as
the Assignee deems in to be in its best interests, (c) to grant or issue an
exclusive or non-exclusive license to the Intellectual Property to anyone, or
(d) to assign, pledge, convey or otherwise transfer title in or dispose of the
Intellectual Property to anyone.
8. Patent Applications, Maintenance and Litigation. Assignor
shall have the duty, through counsel identified in Section 15 hereof or
otherwise reasonably acceptable to Assignee, to prosecute diligently any patent
application of the Patents specifically identified in Schedule A hereto pending
as of the date of this Assignment or thereafter as long as any amounts are
outstanding under the Note, to make application on any existing or future
unpatented but patentable inventions and to preserve and maintain all
Intellectual Property as to which a security interest has been or is in the
future granted pursuant to this Assignment (except those having a commercial
value that in the good faith business judgment of the Assignor do not warrant
such application or preservation). Any expenses incurred in connection with such
an application, or in protecting, maintaining or preserving the Patents, shall
be borne by Assignor.
Notwithstanding Section 2 hereof, Assignor, through counsel
identified in Section 15 hereof or otherwise reasonably acceptable to Assignee,
shall have the exclusive right and obligation prior to the occurrence and during
the continuance of a Default, to commence and diligently prosecute in its own
name, as real party in interest, for its own benefit and at its own expense,
such suits, proceedings or other actions for infringement, or other damage or
reexamination or reissue proceedings as are reasonable to protect any of the
Intellectual Property except those which do not in the good faith business
judgment of Assignor warrant such action. However, no such suit, proceeding or
other action shall be settled or voluntarily dismissed, nor shall any party be
released or excused of any
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claims of, or liability for, infringement, without the prior written consent of
Assignee, which consent shall not be unreasonably withheld. Assignee shall
provide all reasonable and necessary cooperation in connection with any such
suit, proceeding or action, including without limitation, joining as a necessary
party.
Assignor hereby agrees to indemnify and hold harmless the
Assignee for any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs and reasonable expenses (including reasonable
attorneys' fees) of any kind whatsoever which may be imposed on, incurred by or
asserted against Assignee in connection with or in any way arising out of any
suits, proceedings or other actions relating to any or all the Intellectual
Property, whether brought by Assignor or any other person or entity, including
without limitation, suits, proceedings or other actions in which an allegation
of the liability, strict or otherwise, is or may be made by any person or entity
who alleges or may allege having suffered damages as a consequence of alleged
improper, imprudent, reckless, negligent, willful, faulty, defective or
substandard design, testing, specification, manufacturing supervision,
manufacturing defect, manufacturing deficiency, publicity or advertisement, or
improper use, howsoever arising or by whomsoever caused, of any inventions
disclosed and claimed in the Intellectual Property or any of them; provided,
however, that Assignor shall not be liable to Assignee for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs or
expenses attributable to the gross negligence or willful misconduct of Assignee,
as the case may be.
9. License to Assignor. Unless and until there shall have
occurred and be continuing a Default, Assignee hereby grants to Assignor the
exclusive right and license under the Intellectual Property to make, have made
for it, use and sell the inventions disclosed and claimed in the Intellectual
Property, and otherwise use the Intellectual Property, for Assignor's own
benefit and account to grant sublicenses under the license granted to Assignor
under this Section 9 which are granted in the ordinary course of Assignor's
business. Assignor agrees not to otherwise sell or assign or in any way transfer
its interest in, or grant any sublicense under, the license granted to Assignor
under this Section 9, without the prior written consent of Assignee, which
consent shall not be unreasonably withheld.
10. Remedies. Upon the occurrence and during the continuation of
a Default, Assignor's license under the Patents as set forth in Section 9 shall
terminate forthwith and Assignee shall have the sole right but shall in no way
be obligated to bring suit to enforce the Patents and any license thereunder, in
which event Assignor shall at the request of Assignee do any and all lawful acts
and execute any and all proper documents required by Assignee in aid of such
enforcement. Assignor shall promptly, upon demand, reimburse and indemnify
Assignee for all costs and
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expenses incurred by Assignee in the reasonable exercise of its rights referred
to or specified in this Section 10.
11. Amendments, etc. No amendment or waiver of any provision of
this Assignment nor consent to any departure by the Assignor herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given, except as
provided in Section 5(o), in which case the writing need only be signed by
Assignee.
12. Address for Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and shall be sent by mail (by
registered or certified mail, return receipt requested), telecopier, telegraph,
telex, cable or hand delivery:
(a) If to Assignor, to it at the address set forth above, or at
such other address as shall be designated by it in a written notice to
the Assignee complying as to delivery with the terms of this Section;
and
(b) If to the Assignee to Chatterjee Management Company, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn.: legal counsel,
or at such other address as shall be designated by the Assignee in a
written notice to Assignor complying as to delivery with the terms of
this Section;
All such notices, requests, demands and other communications shall be effective
(a) when mailed, on the earlier of receipt or the third business day after being
deposited in the mails with postage prepaid, (b) when telegraphed or cabled,
immediately when delivered to the telegraph company or the cable company, (c)
when sent by telex, upon confirmation by telex answerback, and (d) upon personal
delivery thereof. All notices, communications and other documents delivered
hereunder shall, unless submitted in the English language, be accompanied by a
certified English translation thereof.
13. Continuing Assignment; Transfer of Notes. This Assignment
shall create a continuing assignment of the Intellectual Property and shall (a)
remain in full force and effect until payment in full of the Obligations, (b) be
binding upon Assignor, its successors and assigns and (c) inure to the benefit
of Assignee, its successors, transferees and assigns. Upon the payment in full
of the Obligations, the assignment hereunder shall terminate and all rights to
the Intellectual Property shall revert to Assignor, subject to any disposition
thereof which may have been made by Assignee pursuant hereto. Upon any such
termination, Assignee will, at Assignor's expense,
8
execute and deliver to Assignor such documents as Assignor shall reasonably
request to evidence such termination.
14. Cumulative Remedies. All of the Assignee's rights and
remedies with respect to the Intellectual Property, or by any other agreements
or by law shall be cumulative and may be exercised singularly or concurrently.
Assignor hereby acknowledges and agrees that this Assignment is not intended to
limit or restrict in any way the rights and remedies of the Assignee but rather
is intended to facilitate the exercise of such rights and remedies.
15. Attorney of Record. Assignor and Assignee hereby designate
Assignor's counsel, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇. Assignor shall cause such
attorney of record to send a copy of any notices received from the Patent and
Trademark Office relating to any of the Intellectual Property to the Assignee
promptly after receipt thereof.
16. Counterparts. This Assignment may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
17. Severability. The provisions of this Assignment are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Assignment
in any jurisdiction.
18. Waiver of Jury Trial. The Assignor hereby irrevocably waives
all right to trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement or the Note.
19. Governing Law; Terms. This Assignment shall be governed by
and construed in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this
Assignment to be executed by their respective officers thereunder duly
authorized, as of the date first above written.
AMATI COMMUNICATIONS CORPORATION
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: VP - Corporate Development
Agreed and Accepted this 19th
day of September, 1996:
CHATTERJEE MANAGEMENT COMPANY
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
STATE OF CA )
) ss.:
COUNTY OF Santa ▇▇▇▇▇)
The foregoing Collateral Assignment and Security Agreement was
executed and acknowledged before me this 19 day of September, 1996, by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ personally known to me to be the VP Corp Development of Amati
Communications Corporation, a Delaware corporation.
(SEAL)
/s/ ▇▇▇▇ ▇▇▇▇▇▇
Notary Public
My Commission expires:
April 23 2000
Collateral Assignment and Security Agreement
Schedule A
1. Patents -- See list attached as Annex I.
2. Other Intellectual Property -- See list Attached as Annex II.
Schedule B
Licenses
1. License Agreement with Motorola MOS Digital Analog IC Division dated
March 2, 1995.
2. License Agreement with Northern Telecom Ltd. dated May 10, 1995.
1
SCHEDULE A
File Date or Issue
Patent No. or Serial No. Title Inventor Date
------------------------ ----- -------- ------------------
5,400,322 Updating of Bit Allocations in a Multicarrier ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ 3/21/95
Modulation Transmission System
08/107/200 Multicarrier Modulation Transmission System with ▇▇▇▇ ▇▇▇▇▇▇, Po ▇▇▇▇, ▇▇▇▇▇ 8/17/93
Variable Delay Aslanis, ▇.▇. ▇▇▇▇▇
08/165,509 Mitigating Clippings and Quantization Effects in ▇▇▇▇▇ ▇▇▇▇, ▇. ▇▇▇▇▇▇▇, 12/13/93
Digital Transmission Systems M. Flowers, ▇. ▇▇▇▇▇▇
08/275,409 Frame Synchronization in Multicarrier ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ 7/15/94
Transmission Systems
Filed/Pending Efficient Address Generation for Convolutional Po Tong 3/29/96
Interleaving Using Minimal Amount of Memory
Filed/Pending Interpolated and Dithering Method used for ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ 6/-/96
reducing required ADS prevision in ADSL and ▇▇▇▇ ▇▇▇▇▇▇▇
echo-canceled DMT
PCT/US94/10170 Digital Sound Broadcasting Using a Dedicated ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ A.C. 9/10/93
Control Channel ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
5,519,731 ADSL Compatible Discrete Multitone Apparatus for ▇▇▇▇ ▇. ▇▇▇▇▇▇ 5/21/96
Mitigation of TI Noise
08/252,829 Discrete Multitone Data Transmission System ▇▇▇▇ ▇. ▇▇▇▇▇▇ 6/2/94
Using an Overhead Bus for Synchronizing Multiple
Remote Units
08/396,132 Method and Apparatuses for Establishing ▇.▇.▇. ▇▇▇▇▇▇▇ and K. 1/20/95
Communication in a Multi-toned Data Transmission ▇▇▇▇▇▇▇▇
System
PCT/US95/07035 Method and Apparatuses for Coordinating ▇.▇. ▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇ 2/6/95
Multipoint Communication in a Multitone Data and ▇. ▇▇▇▇▇▇▇▇
Transmission System
Pending Radio Frequency Noise Canceller ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇ 4/19/96
and ▇.▇. ▇▇▇▇▇▇▇
Pending Mitigating RF Interference in ▇. ▇▇▇▇▇▇▇ 4/19/96
Discrete-Multi-Carrier Transmission Systems
Pending Power Multiplier for Complex Numbers Debu Pal 3/29/96