Exhibit 10.16
Silicon Valley Bank
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ACCOUNTS RECEIVABLE PURCHASE AGREEMENT
This Accounts Receivable Purchase Agreement (the "Agreement") is made as of
the Effective Date by and between Silicon Valley Bank ("Buyer") having a place
of business at the address specified above and Cognigen Networks, Inc., a
Colorado corporation, ("Seller") having its principal place of business and
chief executive office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and with a FAX number of _(▇▇▇) ▇▇▇-▇▇▇▇. -
1. Definitions. When used herein, the following terms shall have the following
meanings. "Account Balance" shall mean, on any given day, the gross amount
of all Purchased Receivables unpaid on that day. "Account Debtor" shall
have the meaning set forth in the California Uniform Commercial Code and
shall include any person liable on any Purchased Receivable, including
without limitation, any guarantor of the Purchased Receivable and any
issuer of a letter of credit or banker's acceptance. "Adjustments" shall
mean all discounts, allowances, returns, disputes, counterclaims, offsets,
defenses, rights of recoupment, rights of return, warranty claims, or short
payments, asserted by or on behalf of any Account Debtor with respect to
any Purchased Receivable. "Advance" shall have the meaning set forth in
Section 2.2 hereof. "Collateral" shall have the meaning set forth in
Section 8 hereof. "Collections" shall mean all good funds received by Buyer
from or on behalf of an Account Debtor with respect to Purchased
Receivables. "Compliance Certificate" shall mean a certificate, in a form
provided by Buyer to Seller, which contains the certification of the chief
financial officer of Seller that, among other things, the representations
and warranties set forth in this Agreement are true and correct as of the
date such certificate is delivered. "Due Diligence Fee" shall have the
meaning set for in Section 3.7 hereof. "Effective Date" is the date Buyer
executes this Agreement. "Event of Default" shall have the meaning set
forth in Section 9 hereof. "Facility Fee" shall have the meaning set forth
in Section 3.6 hereof. "Finance Charges" shall have the meaning set forth
in Section 3.2 hereof. "Invoice Transmittal" shall mean a writing signed by
an authorized representative of Seller which accurately identifies the
receivables which Buyer, at its election, may purchase, and includes for
each such receivable the correct amount owed by the Account Debtor, the
name and address of the Account Debtor, the invoice number, the invoice
date and the account code. "Obligations" shall mean all advances, financial
accommodations, liabilities, obligations, covenants and duties owing,
arising, due or payable by Seller to Buyer of any kind or nature, present
or future, arising under or in connection with this Agreement or under any
other document, instrument or agreement, whether or not evidenced by any
note, guarantee or other instrument, whether arising on account or by
overdraft, whether direct or indirect (including those acquired by
assignment) absolute or contingent, primary or secondary, due or to become
due, now owing or hereafter arising, and however acquired; including,
without limitation, all Advances, Finance Charges, interest, Repurchase
Amounts, fees, expenses, professional fees and attorneys' fees and any
other sums chargeable to Seller hereunder or otherwise. "Purchased
Receivables" shall mean all those accounts, receivables, chattel paper,
instruments, contract rights, documents, general intangibles, letters of
credit, drafts, bankers acceptances, and rights to payment, and all
proceeds thereof (all of the foregoing being referred to as "receivables"),
arising out of the invoices and other agreements identified on or delivered
with any Invoice Transmittal delivered by Seller to Buyer which Buyer
elects to purchase and for which Buyer makes an Advance. "Refund" shall
have the meaning set forth in Section 3.5 hereof. "Reserve" shall have the
meaning set forth in Section 2.4 hereof. "Repurchase Amount" shall have the
meaning set forth in Section 4.2 hereof. "Reconciliation Date" shall mean
the last calendar day of each Reconciliation Period. "Reconciliation
Period" shall mean each calendar month of every year.
2. Purchase and Sale of Receivables.
2.1. Offer to Sell Receivables. During the term hereof, and provided that there
does not then exist any Event of Default or any event that with notice,
lapse of time or otherwise would constitute an Event of Default, Seller may
request that Buyer purchase receivables and Buyer may, in its sole
discretion, elect to purchase receivables. Seller shall deliver to Buyer an
Invoice Transmittal with respect to any receivable for which a request for
purchase is made. An authorized representative of Seller shall sign each
Invoice Transmittal delivered to Buyer. Buyer shall be entitled to rely on
all the information provided by Seller to Buyer on or with the Invoice
Transmittal and to rely on the signature on any Invoice Transmittal as an
authorized signature of Seller.
2.2. Acceptance of Receivables. Buyer shall have no obligation to purchase any
receivable listed on an Invoice Transmittal. Buyer may exercise its sole
discretion in approving the credit of each Account Debtor before buying any
receivable. Upon acceptance by Buyer of all or any of the receivables
described on any Invoice Transmittal, Buyer shall pay to Seller 65(%)
percent of the face amount of each receivable Buyer desires to purchase,
net of deferred revenue and ----- offsets related to each specific Account
Debtor. Such payment shall be the "Advance" with respect to such
receivable. Buyer may, from time to time, in its sole discretion, change
the percentage of the Advance. Upon Buyer's acceptance of the receivable
and payment to Seller of the Advance, the receivable shall become a
"Purchased Receivable." It shall be a condition to each Advance that (i)
all of the representations and warranties set forth in Section 6 of this
Agreement be true and correct on and as of the date of the related Invoice
Transmittal and on and as of the date of such Advance as though made at and
as of each such date, and (ii) no Event of Default or any event or
condition that with notice, lapse of time or otherwise would constitute an
Event of Default shall have occurred and be continuing, or would result
from such Advance. Notwithstanding the foregoing, in no event shall the
aggregate amount of all Purchased Receivables outstanding at any time
exceed One Million Two Hundred Fifty Thousand Dollars ($1,250,000).
2.3. Effectiveness of Sale to Buyer. Effective upon Buyer's payment of an
Advance, and for and in consideration therefor and in consideration of the
covenants of this Agreement, Seller hereby absolutely sells, transfers and
assigns to Buyer, all of Seller's right, title and interest in and to each
Purchased Receivable and all monies due or which may become due on or with
respect to such Purchased Receivable. Buyer shall be the absolute owner of
each Purchased Receivable. Buyer shall have, with respect to any goods
related to the Purchased Receivable, all the rights and remedies of an
unpaid seller under the California Uniform Commercial Code and other
applicable law, including the rights of replevin, claim and delivery,
reclamation and stoppage in transit.
2.4. Establishment of a Reserve. Upon the purchase by Buyer of each Purchased
Receivable, Buyer shall establish a reserve. The reserve shall be the
amount by which the face amount of the Purchased Receivable exceeds the
Advance on that Purchased Receivable (the "Reserve"); provided, the Reserve
with respect to all Purchased Receivables outstanding at any one time shall
be an amount not less than 35(%) percent of the Account Balance at that
time and may be set at a higher percentage at Buyer's sole discretion. The
reserve shall be a book balance maintained on the records of Buyer and
shall not be a segregated fund.
3. Collections, Charges and Remittances.
3.1. Collections. Upon receipt by Buyer of Collections, Buyer shall promptly
credit such Collections to Seller's Account Balance on a daily basis;
provided, that if Seller is in default under this Agreement, Buyer shall
apply all Collections to Seller's Obligations hereunder in such order and
manner as Buyer may determine. If an item of collection is not honored or
Buyer does not receive good funds for any reason, the amount shall be
included in the Account Balance as if the Collections had not been received
and Finance Charges under Section 3.2 shall accrue thereon.
3.2. Finance Charges. On each Reconciliation Date Seller shall pay to Buyer a
finance charge in an amount equal to 1.30 (%) percent per month of the
average daily Account Balance outstanding during the applicable
Reconciliation Period (the "Finance Charges"). Buyer shall deduct the
accrued Finance Charges from the Reserve as set forth in Section 3.5 below.
3.3. Intentionally Omitted
3.4. Accounting. Buyer shall prepare and send to Seller after the close of
business for each Reconciliation Period, an accounting of the transactions
for that Reconciliation Period, including the amount of all Purchased
Receivables, all Collections, Adjustments and Finance Charges The
accounting shall be deemed correct and conclusive unless Seller makes
written objection to Buyer within thirty (30) days after the Buyer mails
the accounting to Seller.
3.5. Refund to Seller. Provided that there does not then exist an Event of
Default or any event or condition that with notice, lapse of time or
otherwise would constitute an Event of Default, Buyer shall refund to
Seller by check after the Reconciliation Date, the amount, if any, which
Buyer owes to Seller at the end of the Reconciliation Period according to
the accounting prepared by Buyer for that Reconciliation Period (the
"Refund"). The Refund shall be an amount equal to:
(A) (1) The Reserve as of the beginning of that Reconciliation Period, plus
(2) the Reserve created for each Purchased Receivable purchased during
that Reconciliation Period, minus
(B) The total for that Reconciliation Period of:
(1) Intentionally Omitted;
(2) Finance Charges;
(3) Adjustments;
(4) Repurchase Amounts, to the extent Buyer has agreed to accept payment thereof by deduction from
the Refund;
(5) the Reserve for the Account Balance as of the first day of the following Reconciliation Period in
the minimum percentage set forth in Section 2.4 hereof; and
(6) all amounts due, including professional fees and expenses, as set
forth in Section 12 for which oral or written demand has been
made by Buyer to Seller during that Reconciliation Period to the
extent Buyer has agreed to accept payment thereof by deduction
from the Refund. In the event the formula set forth in this
Section 3.5 results in an amount due to Buyer from Seller, Seller
shall make such payment in the same manner as set forth in
Section 4.3 hereof for repurchases. If the formula set forth in
this Section 3.5 results in an amount due to Seller from Buyer,
Buyer shall make such payment by check, subject to Buyer's rights
under Section 4.3 and Buyer's rights of offset and recoupment.
3.6. Facility Fee. A fully earned, non-refundable facility fee of $10,000 shall
be due upon execution of this Agreement.
3.7. Due Diligence Fee. A fully earned, non-refundable due diligence fee of
$2,500 is due immediately (the "Due Diligence Fee") (previously received by
Buyer).
4. Recourse and Repurchase Obligations.
4.1. Recourse. Buyer's acquisition of Purchased Receivables from Seller shall be
with full recourse against Seller. In the event the Obligations exceed the
amount of Purchased Receivables and Collateral, Seller shall be liable for
any deficiency.
4.2. Seller's Agreement to Repurchase. Seller agrees to pay to Buyer on demand,
the full face amount, or any unpaid portion, of any Purchased Receivable:
(A) which remains unpaid ninety (90) calendar days after the invoice date;
or
(B) which is owed by any Account Debtor who has filed, or has had filed
against it, any bankruptcy case, assignment for the benefit of
creditors, receivership, or insolvency proceeding or who has become
insolvent (as defined in the United States Bankruptcy Code) or who is
generally not paying its debts as such debts become due; or
(C) with respect to which there has been any breach of warranty or
representation set forth in Section 6 hereof or any breach of any
covenant contained in this Agreement; or
(D) with respect to which the Account Debtor asserts any discount,
allowance, return, dispute, counterclaim, offset, defense, right of
recoupment, right of return, warranty claim, or short payment;
together with all reasonable attorneys' and professional fees and
expenses and all court costs incurred by Buyer in collecting such
Purchased Receivable and/or enforcing its rights under, or collecting
amounts owed by Seller in connection with, this Agreement
(collectively, the "Repurchase Amount").
4.3. Seller's Payment of the Repurchase Amount or Other Amounts Due Buyer. When
any Repurchase Amount or other amount owing to Buyer becomes due, Buyer
shall inform Seller of the manner of payment which may be any one or more
of the following in Buyer's sole discretion: (a) in cash immediately upon
demand therefor; (b) by delivery of substitute invoices and an Invoice
Transmittal acceptable to Buyer which shall thereupon become Purchased
Receivables; (c) by adjustment to the Reserve pursuant to Section 3.5
hereof; (d) by deduction from or offset against the Refund that would
otherwise be due and payable to Seller; (e) by deduction from or offset
against the amount that otherwise would be forwarded to Seller in respect
of any further Advances that may be made by Buyer; or (f) by any
combination of the foregoing as Buyer may from time to time choose.
4.4. Seller's Agreement to Repurchase All Purchased Receivables. Upon and after
the occurrence of an Event of Default, Seller shall, upon Buyer's demand
(or, in the case of an Event of Default under Section 9(B), immediately
without notice or demand from Buyer) repurchase all the Purchased
Receivables then outstanding, or such portion thereof as Buyer may demand.
Such demand may, at Buyer's option, include and Seller shall pay to Buyer
immediately upon demand, cash in an amount equal to the Advance with
respect to each Purchased Receivable then outstanding together with all
accrued Finance Charges, Adjustments, attorney's and professional fees,
court costs and expenses as provided for herein, and any other Obligations.
Upon receipt of payment in full of the Obligations, Buyer shall immediately
instruct Account Debtors to pay Seller directly, and return to Seller any
Refund due to Seller. For the purpose of calculating any Refund due under
this Section only, the Reconciliation Date shall be deemed to be the date
Buyer receives payment in good funds of all the Obligations as provided in
this Section 4.4.
5. Power of Attorney. Seller does hereby irrevocably appoint Buyer and its
successors and assigns as Seller's true and lawful attorney in fact, and
hereby authorizes Buyer, regardless of whether there has been an Event of
Default, (a) to sell, assign, transfer, pledge, compromise, or discharge
the whole or any part of the Purchased Receivables; (b) to demand, collect,
receive, ▇▇▇, and give releases to any Account Debtor for the monies due or
which may become due upon or with respect to the Purchased Receivables and
to compromise, prosecute, or defend any action, claim, case or proceeding
relating to the Purchased Receivables, including the filing of a claim or
the voting of such claims in any bankruptcy case, all in Buyer's name or
Seller's name, as Buyer may choose; (c) to prepare, file and sign Seller's
name on any notice, claim, assignment, demand, draft, or notice of or
satisfaction of lien or mechanics' lien or similar document with respect to
Purchased Receivables; (d) to notify all Account Debtors with respect to
the Purchased Receivables to pay Buyer directly; (e) to receive, open, and
dispose of all mail addressed to Seller for the purpose of collecting the
Purchased Receivables; (f) to endorse Seller's name on any checks or other
forms of payment on the Purchased Receivables; (g) to execute on behalf of
Seller any and all instruments, documents, financing statements and the
like to perfect Buyer's interests in the Purchased Receivables and
Collateral; and (h) to do all acts and things necessary or expedient, in
furtherance of any such purposes. If Buyer receives a check or item which
is payment for both a Purchased Receivable and another receivable, the
funds shall first be applied to the Purchased Receivable and, so long as
there does not exist an Event of Default or an event that with notice,
lapse of time or otherwise would constitute an Event of Default, the excess
shall be remitted to Seller. Upon the occurrence and continuation of an
Event of Default, all of the power of attorney rights granted by Seller to
Buyer hereunder shall be applicable with respect to all Purchased
Receivables and all Collateral.
6. Representations, Warranties and Covenants.
6.1. Receivables' Warranties, Representations and Covenants. To induce Buyer to
buy receivables and to renders its services to Seller, and with full
knowledge that the truth and accuracy of the following are being relied
upon by the Buyer in determining whether to accept receivables as Purchased
Receivables, Seller represents, warrants, covenants and agrees, with
respect to each Invoice Transmittal delivered to Buyer and each receivable
described therein, that:
(A) Seller is the absolute owner of each receivable set forth in the
Invoice Transmittal and has full legal right to sell, transfer and
assign such receivables;
(B) The correct amount of each receivable is as set forth in the Invoice
Transmittal and is not in dispute;
(C) The payment of each receivable is not contingent upon the fulfillment
of any obligation or contract, past or future and any and all
obligations required of the Seller have been fulfilled as of the date
of the Invoice Transmittal;
(D) Each receivable set forth on the Invoice Transmittal is based on an
actual sale and delivery of goods and/or services actually rendered,
is presently due and owing to Seller, is not past due or in default,
has not been previously sold, assigned, transferred, or pledged, and
is free of any and all liens, security interests and encumbrances
other than liens, security interests or encumbrances in favor of Buyer
or any other division or affiliate of Silicon Valley Bank;
(E) There are no defenses, offsets, or counterclaims against any of the
receivables, and no agreement has been made under which the Account
Debtor may claim any deduction or discount, except as otherwise stated
in the Invoice Transmittal;
(F) Each Purchased Receivable shall be the property of the Buyer and shall
be collected by Buyer, but if for any reason it should be paid to
Seller, Seller shall promptly notify Buyer of such payment, shall hold
any checks, drafts, or monies so received in trust for the benefit of
Buyer, and shall promptly transfer and deliver the same to the Buyer;
(G) Buyer shall have the right of endorsement, and also the right to
require endorsement by Seller, on all payments received in connection
with each Purchased Receivable and any proceeds of Collateral;
(H) Seller, and to Seller's best knowledge, each Account Debtor set forth
in the Invoice Transmittal, are and shall remain solvent as that term
is defined in the United States Bankruptcy Code and the California
Uniform Commercial Code, and no such Account Debtor has filed or had
filed against it a voluntary or involuntary petition for relief under
the United States Bankruptcy Code;
(I) Each Account Debtor named on the Invoice Transmittal will not object
to the payment for, or the quality or the quantity of the subject
matter of, the receivable and is liable for the amount set forth on
the Invoice Transmittal;
(J) Each Account Debtor shall promptly be notified, after acceptance by
Buyer, that the Purchased Receivable has been transferred to and is
payable to Buyer, and Seller shall not take or permit any action to
countermand such notification; and
(K) All receivables forwarded to and accepted by Buyer after the date
hereof, and thereby becoming Purchased Receivables, shall comply with
each and every one of the foregoing representations, warranties,
covenants and agreements referred to above in this Section 6.1.
6.2. Additional Warranties, Representations and Covenants. In addition to the
foregoing warranties, representations and covenants, to induce Buyer to buy
receivables and to render its services to Seller, Seller hereby represents,
warrants, covenants and agrees that:
(A) Seller will not assign, transfer, sell, or grant, or permit any lien
or security interest in any Purchased Receivables or Collateral to or
in favor of any other party, without Buyer's prior written consent;
(B) The Seller's name, form of organization, chief executive office, and
the place where the records concerning all Purchased Receivables and
Collateral are kept is set forth at the beginning of this Agreement,
Collateral is located only at the location set forth in the beginning
of this Agreement, or, if located at any additional location, as set
forth on a schedule attached to this Agreement, and Seller will give
Buyer at least thirty (30) days prior written notice if such name,
organization, chief executive office or other locations of Collateral
or records concerning Purchased Receivables or Collateral is changed
or added and shall execute any documents necessary to perfect Buyer's
interest in the Purchased Receivables and the Collateral;
(C) Seller shall (i) pay all of its normal gross payroll for employees,
and all federal and state taxes, as and when due, including without
limitation all payroll and withholding taxes and state sales taxes;
(ii) deliver at any time and from time to time at Buyer's request,
evidence satisfactory to Buyer that all such amounts have been paid to
the proper taxing authorities; and (iii) if requested by Buyer, pay
its payroll and related taxes through a bank or an independent payroll
service acceptable to Buyer.
(D) Seller has not, as of the ▇▇▇▇ ▇▇▇▇▇▇ delivers to Buyer an Invoice
Transmittal, or as of the ▇▇▇▇ ▇▇▇▇▇▇ accepts any Advance from Buyer,
filed a voluntary petition for relief under the United States
Bankruptcy Code or had filed against it an involuntary petition for
relief;
(E) If Seller owns, holds or has any interest in, any copyrights (whether
registered, or unregistered), patents or trademarks, and licenses of
any of the foregoing, such interest has been disclosed to Buyer and is
specifically listed and identified on a schedule to this Agreement,
and Seller shall immediately notify Buyer if Seller hereafter obtains
any interest in any additional copyrights, patents, trademarks or
licenses that are significant in value or are material to the conduct
of its business;
(F) Seller shall provide Buyer with: (i) a Compliance Certificate on a
monthly basis (when outstanding Advances exist) to be received by
Buyer no later than 30 days following each Reconciliation Period or on
a more frequent or other basis if and as requested by Buyer, (ii)
accounts receivable agings and accounts payable agings (when
outstanding Advances exist) within 20 days after the end of each
month, (iii) estimates of commissions receivable within 10 days after
the last day of each month, and (iv) reporting of collections of
commissions within 10 days after the last day of each month;
(G) Seller shall provide Buyer with, (i) as soon as available, but no
later than 30 days following each Reconciliation Period, a company
prepared balance sheet and income statement (if outstanding Advances
exist), prepared under GAAP, consistently applied, covering Seller's
operations during the period; (ii) as soon as available, but no later
than 120 days after the last day of Seller's fiscal year, audited
consolidated financial statements prepared under GAAP, consistently
applied, together with an unqualified opinion on the financial
statements from an independent certified public accounting firm
reasonably acceptable to Buyer; (iii) a prompt report of any legal
actions pending or threatened against Seller that could result in
damages or costs to Seller; (iv) budgets, sales projections, operating
plans or other financial information Buyer reasonably requests;
(H) On request by Buyer, Seller will promptly furnish any information
Buyer may reasonably request to determine financial condition of
Seller, including, but not limited to all of Seller's Obligations, and
the condition of any of Seller's receivables which may include but are
not limited to Purchased Receivables; and
(I) Within 45 days after the Effective Date and through the term of this
Agreement, Seller will maintain its primary operating deposit accounts
with Buyer.
7. Adjustments. In the event of a breach of any of the representations,
warranties, or covenants set forth in Section 6.1, or in the event any
Adjustment or dispute is asserted by any Account Debtor, Seller shall
promptly advise Buyer and shall, subject to the Buyer's approval, resolve
such disputes and advise Buyer of any adjustments. Unless the disputed
Purchased Receivable is repurchased by Seller and the full Repurchase
Amount is paid, Buyer shall remain the absolute owner of any Purchased
Receivable which is subject to Adjustment or repurchase under Section 4.2
hereof, and any rejected, returned, or recovered personal property, with
the right to take possession thereof at any time. If such possession is not
taken by Buyer, Seller is to resell it for Buyer's account at Seller's
expense with the proceeds made payable to Buyer. While Seller retains
possession of said returned goods, Seller shall segregate said goods and
▇▇▇▇ them "property of Silicon Valley Bank."
8. Security Interest. To secure the prompt payment and performance to Buyer of
all of the Obligations, Seller hereby grants to Buyer a continuing lien
upon and security interest in all of Seller's now existing or hereafter
arising rights and interest in the following, whether now owned or existing
or hereafter created, acquired, or arising, and wherever located
(collectively, the "Collateral"):
(A) All accounts, receivables, contract rights, chattel paper,
instruments, documents, letters of credit, bankers acceptances,
drafts, checks, cash, investment property, securities, and general
intangibles (including, without limitation, all claims, causes of
action, deposit accounts, guaranties, rights in and claims under
insurance policies (including rights to premium refunds), rights to
tax refunds, copyrights, patents, trademarks, rights in and under
license agreements, and all other intellectual property);
(B) All inventory, including Seller's rights to any returned or rejected
goods, with respect to which Buyer shall have all the rights of any
unpaid seller, including the rights of replevin, claim and delivery,
reclamation, and stoppage in transit;
(C) All monies, refunds and other amounts due Seller, including, without
limitation, amounts due Seller under this Agreement (including
Seller's right of offset and recoupment);
(D) All equipment, machinery, furniture, furnishings, fixtures, tools,
supplies and motor vehicles;
(E) All farm products, crops, timber, minerals and the like (including oil
and gas);
(F) All accessions to, substitutions for, and replacements of, all of the
foregoing;
(G) All books and records pertaining to all of the foregoing; and
(H) All proceeds of the foregoing, whether due to voluntary or involuntary
disposition, including insurance proceeds. Seller is not authorized to
sell, assign, transfer or otherwise convey any Collateral without
Buyer's prior written consent, except for the sale of finished
inventory in the Seller's usual course of business. Seller agrees to
sign any instruments and documents requested by Buyer to evidence,
perfect, or protect the interests of Buyer in the Collateral. Seller
authorizes Buyer to file financing statements without notice to
Seller, with all appropriate jurisdictions, as Buyer deems
appropriate, in order to perfect or protect Buyer's interest in the
Collateral. Seller agrees to deliver to Buyer the originals of all
instruments, chattel paper and documents evidencing or related to
Purchased Receivables and Collateral.
9. Default. The occurrence of any one or more of the following shall constitute an Event of Default hereunder.
(A) Seller fails to pay any amount owed to Buyer as and when due;
(B) There shall be commenced by or against Seller any voluntary or
involuntary case under the United States Bankruptcy Code, or any
assignment for the benefit of creditors, or appointment of a receiver
or custodian for any of its assets;
(C) Seller shall become insolvent in that its debts are greater than the
fair value of its assets, or Seller is generally not paying its debts
as they become due or is left with unreasonably small capital;
(D) Any involuntary lien, garnishment, attachment or the like is issued
against or attaches to the Purchased Receivables or any Collateral;
(E) Seller shall breach any covenant, agreement, warranty, or
representation shall constitute an immediate default hereunder;
(F) Seller is not in compliance with, or otherwise is in default under,
any term of any document, instrument or agreement evidencing a debt,
obligation or liability of any kind or character of Seller, now or
hereafter existing, in favor of Buyer or any division or affiliate of
Silicon Valley Bank, regardless of whether such debt, obligation or
liability is direct or indirect, primary or secondary, joint, several
or joint and several, or fixed or contingent, together with any and
all renewals and extensions of such debts, obligations and
liabilities, or any part thereof;
(G) An event of default shall occur under any guaranty executed by any
guarantor of the Obligations of Seller to Buyer under this Agreement,
or any material provision of any such guaranty shall for any reason
cease to be valid or enforceable or any such guaranty shall be
repudiated or terminated, including by operation of law;
(H) A default or event of default shall occur under any agreement between
Seller and any creditor of Seller that has entered into a
subordination agreement with Buyer;
(I) Any creditor that has entered into a subordination agreement with
Buyer shall breach any of the terms of or not comply with such
subordination agreement; or
(J) (i) There is a material adverse change in the business, operations, or
condition (financial or otherwise) of the Seller, or (ii) there is a
material impairment of the prospect of repayment of any portion of the
Obligations or (iii) there is a material impairment of the value or
priority of Buyer's security interests in the Collateral.
10. Remedies Upon Default. Upon the occurrence of an Event of Default, (1)
without implying any obligation to buy receivables, Buyer may cease buying
receivables or extending any financial accommodations to Seller; (2) all or
a portion of the Obligations shall be, at the option of and upon demand by
Buyer, or with respect to an Event of Default described in Section 9(B),
automatically and without notice or demand, due and payable in full; and
(3) Buyer shall have and may exercise all the rights and remedies under
this Agreement and under applicable law, including the rights and remedies
of a secured party under the California Uniform Commercial Code, all the
power of attorney rights described in Section 5 with respect to all
Collateral, and the right to collect, dispose of, sell, lease, use, and
realize upon all Purchased Receivables and all Collateral in any commercial
reasonable manner. Seller and Buyer agree that any notice of sale required
to be given to Seller shall be deemed to be reasonable if given five (5)
days prior to the date on or after which the sale may be held. In the event
that the Obligations are accelerated hereunder, Seller shall repurchase all
of the Purchased Receivables as set forth in Section 4.4.
11. Accrual of Interest. If any amount owed by Seller hereunder is not paid
when due, including, without limitation, amounts due under Section 3.5,
Repurchase Amounts, amounts due under Section 12, and any other
Obligations, such amounts shall bear interest at a per annum rate equal to
the per annum rate of the Finance Charges until the earlier of (i) payment
in good funds or (ii) entry of a final judgment thereof, at which time the
principal amount of any money judgment remaining unsatisfied shall accrue
interest at the highest rate allowed by applicable law.
12. Fees, Costs and Expenses; Indemnification. The Seller will pay to Buyer
immediately upon demand all fees, costs and expenses (including fees of
attorneys and professionals and their costs and expenses) that Buyer incurs
or may from time to time impose in connection with any of the following:
(a) preparing, negotiating, administering, and enforcing this Agreement or
any other agreement executed in connection herewith, including any
amendments, waivers or consents in connection with any of the foregoing,
(b) any litigation or dispute (whether instituted by Buyer, Seller or any
other person) in any way relating to the Purchased Receivables, the
Collateral, this Agreement or any other agreement executed in connection
herewith or therewith, (c) enforcing any rights against Seller or any
guarantor, or any Account Debtor, (d) protecting or enforcing its interest
in the Purchased Receivables or the Collateral, (e) collecting the
Purchased Receivables and the Obligations, and (f) the representation of
Buyer in connection with any bankruptcy case or insolvency proceeding
involving Seller, any Purchased Receivable, the Collateral, any Account
Debtor, or any guarantor. Seller shall indemnify and hold Buyer harmless
from and against any and all claims, actions, damages, costs, expenses, and
liabilities of any nature whatsoever arising in connection with any of the
foregoing.
13. Severability, Waiver, and Choice of Law. In the event that any provision of
this Agreement is deemed invalid by reason of law, this Agreement will be
construed as not containing such provision and the remainder of the
Agreement shall remain in full force and effect. Buyer retains all of its
rights, even if it makes an Advance after an Event of Default. If Buyer
waives an Event of Default, it may enforce a later Event of Default. Any
consent or waiver under, or amendment of, this Agreement must be in
writing. Nothing contained herein, or any action taken or not taken by
Buyer at any time, shall be construed at any time to be indicative of any
obligation or willingness on the part of Buyer to amend this Agreement or
to grant to Seller any waivers or consents. This Agreement has been
transmitted by Seller to Buyer at Buyer's office in the State of California
and has been executed and accepted by Buyer in the State of California.
This Agreement shall be governed by and interpreted in accordance with the
internal laws of the State of California.
14. Account Collection Services. Certain Account Debtors may require or prefer
that all of Seller's receivables be paid to the same address and/or party,
or Seller and Buyer may agree that all receivables with respect to certain
Account Debtors be paid to one party. In such event Buyer and Seller may
agree that Buyer shall collect all receivables whether owned by Seller or
Buyer and (provided that there does not then exist an Event of Default or
event that with notice, lapse or time or otherwise would constitute an
Event of Default, and subject to Buyer's rights in the Collateral) Buyer
agrees to remit to Seller the amount of the receivables collections it
receives with respect to receivables other than Purchased Receivables. It
is understood and agreed by Seller that this Section does not impose any
affirmative duty on Buyer to do any act other than to turn over such
amounts. All such receivables and collections are Collateral and in the
event of Seller's default hereunder, Buyer shall have no duty to remit
collections of Collateral and may apply such collections to the obligations
hereunder and Buyer shall have the rights of a secured party under the
California Uniform Commercial Code.
15. Notices. All notices shall be given to Buyer and Seller at the addresses or
faxes set forth on the first page of this Agreement and shall be deemed to
have been delivered and received: (a) if mailed, three (3) calendar days
after deposited in the United States mail, first class, postage pre-paid,
(b) one (1) calendar day after deposit with an overnight mail or messenger
service; or (c) on the same date of confirmed transmission if sent by hand
delivery, telecopy, telefax or telex.
16. Jury Trial. SELLER AND BUYER EACH HEREBY (a) WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL ON ANY CLAIM OR ACTION ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT, ANY RELATED AGREEMENTS, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY; (b) RECOGNIZE AND AGREE THAT THE FOREGOING
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT; AND (c) REPRESENT AND WARRANT THAT IT HAS REVIEWED THIS WAIVER,
HAS DETERMINED FOR ITSELF THE NECESSITY TO REVIEW THE SAME WITH ITS LEGAL
COUNSEL, AND KNOWINGLY AND VOLUNTARILY WAIVES ALL RIGHTS TO A JURY TRIAL.
17. Term and Termination. The term of this Agreement shall be for one (1) year
from the date hereof, and from year to year thereafter unless terminated in
writing by Buyer or Seller. Seller and Buyer shall each have the right to
terminate this Agreement at any time. Notwithstanding the foregoing, any
termination of this Agreement shall not affect Buyer's security interest in
the Collateral and Buyer's ownership of the Purchased Receivables, and this
Agreement shall continue to be effective, and Buyer's rights and remedies
hereunder shall survive such termination, until all transactions entered
into and Obligations incurred hereunder or in connection herewith have been
completed and satisfied in full.
18. Titles and Section Headings. The titles and section headings used herein
are for convenience only and shall not be used in interpreting this
Agreement.
19. Other Agreements. The terms and provisions of this Agreement shall not
adversely affect the rights of Buyer or any other division or affiliate of
Silicon Valley Bank under any other document, instrument or agreement. The
terms of such other documents, instruments and agreements shall remain in
full force and effect notwithstanding the execution of this Agreement. In
the event of a conflict between any provision of this Agreement and any
provision of any other document, instrument or agreement between Seller on
the one hand, and Buyer or any other division or affiliate of Silicon
Valley Bank on the other hand, Buyer shall determine in its sole discretion
which provision shall apply. Seller acknowledges specifically that any
security agreements, liens and/or security interests currently securing
payment of any obligations of Seller owing to Buyer or any other division
or affiliate of Silicon Valley Bank also secure Seller's obligations under
this Agreement, and are valid and subsisting and are not adversely affected
by execution of this Agreement. Seller further acknowledges that (a) any
collateral under other outstanding security agreements or other documents
between Seller and Buyer or any other division or affiliate of Silicon
Valley Bank secures the obligations of Seller under this Agreement and (b)
a default by Seller under this Agreement constitutes a default under other
outstanding agreements between Seller and Buyer or any other division or
affiliate of Silicon Valley Bank.
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on the
day and year above written.
SELLER: Cognigen Networks, Inc.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
Title SVP/CFO
BUYER: SILICON VALLEY BANK
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title VP, Sr. Portfolio Mgr.
Effective Date 12/26/03
EXHIBIT "A"
TO FINANCING STATEMENT AND SECURITY AGREEMENT
This FINANCING STATEMENT and SECURITY AGREEMENT covers the following types
or items of property (in addition to, and without limiting the types of
property set forth on page 1 hereof):
A) All accounts, receivables, contract rights, chattel paper, instruments,
documents, letters of credit, bankers acceptances, drafts, checks, cash,
investment property, securities, deposit accounts, and general intangibles
(including, without limitation, all claims, causes of action, guaranties,
rights in and claims under insurance policies (including rights to premium
refunds), rights to tax refunds, copyrights, patents, trademarks, rights in
and under license agreements, and all other intellectual property);
B) All inventory, including Seller's rights to any returned or rejected goods,
with respect to which Buyer shall have all the rights of any unpaid seller,
including the rights of replevin, claim and delivery, reclamation, and
stoppage in transit;
C) All monies, refunds and other amounts due Seller, including, without
limitation, amounts due Seller under this Agreement (including Seller's
right of offset and recoupment);
D) All equipment, machinery, furniture, furnishings, fixtures, tools, supplies
and motor vehicles;
E) All farm products, crops, timber, minerals and the like (including oil and
gas);
F) All accessions to, substitutions for, and replacements of, all of the
foregoing;
G) All books and records pertaining to all of the foregoing; and
H) All proceeds of the foregoing, whether due to voluntary or involuntary
disposition, including insurance proceeds.
Initials: GLC
------------------
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement (this "IP Agreement") is made
as of the Effective Date by and between Cognigen Networks, Inc. ("Grantor"), and
Silicon Valley Bank, a California banking corporation ("Bank").
RECITALS
A. Bank will make advances to Grantor ("Advances") as described in the
Accounts Receivable Purchase Agreement (the "Purchase Agreement"), but only
if Grantor grants Bank a security interest in its Copyrights, Trademarks,
Patents, and Mask Works. Defined terms used but not defined herein shall
have the same meanings as in the Purchase Agreement.
B. Pursuant to the terms of the Purchase Agreement, Grantor has granted to
Bank 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.
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 under the
Purchase 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 future
Indebtedness, obligations and liabilities to Bank, 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 ▇▇▇ 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
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 Bank 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 Bank 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
Bank, which shall not be unreasonably withheld, unless Grantor
determines that reasonable business practices suggest that abandonment
is appropriate.
(g) Grantor shall not register any Copyrights or Mask Works with the
United States Copyright Office unless it: (i) has given at least
fifteen (15) days' prior notice to Bank of its intent to register such
Copyrights or Mask Works and has provided Bank with a copy of the
application it intends to file with the United States Copyright Office
(excluding exhibits thereto); (ii) executes a security agreement or
such other documents as Bank may reasonably request in order to
maintain the perfection and priority of Bank's security interest in
the Copyrights proposed to b e registered with the United States
Copyright Office; and (iii) records such security documents with the
United States Copyright Office contemporaneously with filing the
Copyright application(s) with the United States Copyright Office.
Grantor shall promptly provide to Bank a copy of the Copyright
application(s) filed with the United States Copyright Office, together
with evidence of the recording of the security documents necessary for
Bank to maintain the perfection and priority of its security interest
in such Copyrights or Mask Works. Grantor shall provide written notice
to Bank of any application filed by Grantor in the United States
Patent Trademark Office for a patent or to register a trademark or
service ▇▇▇▇ within 30 days of any such filing;
(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 Bank 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 Purchase 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 of 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 Bank of its rights and remedies
thereunder;
(j) All information heretofore, herein or hereafter supplied to Bank 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 Bank'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 Bank 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 Bank in relation thereto, including the levy of any legal
process against any of the Intellectual Property Collateral.
4. Bank's Rights. Bank 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 Bank 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 Bank and its employees,
representatives and agents the right to visit, during reasonable hours upon
prior reasonable written notice to Grantor, and 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 one (1) in
every six (6) months; provided, however, nothing herein shall entitle Bank
access to Grantor's trade secrets and other proprietary information.
6. Further Assurances; Attorney in Fact.
(a) 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 Bank,
to perfect Bank'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 Bank
the grant or perfection of a security interest in all Intellectual
Property Collateral.
(b) Grantor hereby irrevocably appoints Bank as Grantor's
attorney-in-fact, with full authority in the place and stead of
Grantor and in the name of Grantor, Bank or otherwise, from time to
time in Bank's discretion, upon Grantor's failure or inability to do
so, to take any action and to execute any instrument which Bank may
deem necessary or advisable to accomplish the purposes of this IP
Agreement, including:
(i) 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
(ii) 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 Purchase Agreement; 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, Bank
shall have the right to exercise all the remedies of a secured party under
the California Uniform Commercial Code, including without limitation the
right to require Grantor to assemble the Intellectual Property Collateral
and any tangible property in which Bank has a security interest and to make
it available to Bank at a place designated by Bank. Bank shall have a
nonexclusive, royalty free license to use the Copyrights, Patents,
Trademarks, and Mask Works to the extent reasonably necessary to permit
Bank 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 Bank in connection with the exercise of any of Bank's
rights hereunder, including without limitation any expense incurred in
disposing of the Intellectual Property Collateral. All of Bank's rights and
remedies with respect to the Intellectual Property Collateral shall be
cumulative.
9. Indemnity. Grantor agrees to defend, indemnify and hold harmless Bank 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 Bank as a
result of or in any way arising out of, following or consequential to
transactions between Bank 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 Bank's gross
negligence or willful misconduct.
10. Reassignment. At such time as Grantor shall completely satisfy all of the
obligations secured hereunder, Bank shall execute and deliver to Grantor
all deed, 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 Bank
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 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 State of California, without regard for
choice of law provisions. Grantor and Bank consent to the nonexclusive
jurisdiction of any state or federal court located in Santa ▇▇▇▇▇ County,
California.
16. Confidentiality. In handling any confidential information, Bank 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 Bank, (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 Bank.
IN WITNESS WHEREOF, the parties hereto have executed this IP Agreement on
the day and year first above written.
Address of Grantor: GRANTOR:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇ COGNIGEN NETWORKS, INC.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Title: CFO
---------------------------------
Exhibit "A" attached to that certain Intellectual Property Security Agreement.
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 TO
OWNER OF
ORIGINAL GRANTOR (IF)
AUTHOR OR ORIGINAL AUTHOR
OWNER OF OR OWNER OF
COPYRIGHT COPYRIGHT IS
COPYRIGHT DATE FIRST DATE OF (IF DIFFERENT DIFFERENT FROM
DESCRIPTION CREATION DISTRIBUTION FROM GRANTOR) GRANTOR)
----------- -------- ------------- ------------- ---------------------
Exhibit "B" attached to that certain Intellectual Property Security Agreement.
EXHIBIT "B"
PATENTS
PATENT
DESCRIPTION DOCKET NO. COUNTRY SERIAL NO. FILING DATE STATUS
----------- ---------- ------- ---------- ----------- ------
Exhibit "C" attached to that certain Intellectual Property Security Agreement.
EXHIBIT "C"
TRADEMARKS
TRADEMARK
DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS
----------- ------- ---------- ------- ------
Exhibit "D" attached to that certain Intellectual Property Security Agreement.
EXHIBIT "D"
MASK WORKS
MASK WORK
DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS
----------- ------- ---------- ------- ------