Intellectual Property Security Agreement - NaviSite Inc. and Silicon Valley Bank
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement (this "IP Agreement") is
made as of the 27th day of May, 2003 by and between NAVISITE, INC., a Delaware
corporation with its principal place of business at 400 Minuteman Road, Andover,
Massachusetts 01810 ("Grantor"), and SILICON VALLEY BANK, a California-chartered
bank, with its principal place of business at 3003 Tasman Drive, Santa Clara,
California 95054 and with a loan production office located at One Newton
Executive Park, Suite 200, 2221 Washington Street, Newton, Massachusetts 02462,
doing business under the name "Silicon Valley East" ("Lender").
RECITALS
A. Lender has agreed to make advances of money and to extend
certain financial accommodations to Grantor (the "Loan"), pursuant to a certain
Accounts Receivable Financing Agreement dated as of May 27, 2003 between Grantor
and Lender, as amended from time to time (as amended, the "Loan Agreement"). The
Loan is secured pursuant to the terms of the Loan Agreement. Lender is willing
to enter into certain financial accommodations with Grantor, but only upon the
condition, among others, that Grantor shall grant to Lender a security interest
in certain Copyrights, Trademarks, Patents, and Mask Works, and other assets, to
secure the obligations of Grantor under the Loan Agreement. Defined terms used
but not defined herein shall have the same meanings as in the Loan Agreement.
B. Pursuant to the terms of the Loan Agreement, Grantor has
granted to Lender a security interest in all of Grantor's right title and
interest, whether presently existing or hereafter acquired in, to and under all
of the Collateral (as defined therein).
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged and intending to be legally bound, as collateral security
for the prompt and complete payment when due of Grantor's Indebtedness (as
defined below), Grantor hereby represents, warrants, covenants and agrees as
follows:
1. Grant of Security Interest. As collateral security for the
prompt and complete payment and performance of all of Grantor's present or
future indebtedness, obligations and liabilities to Lender (hereinafter, the
"Indebtedness") under the Loan Agreement, Grantor hereby grants a security
interest in all of Grantor's right, title and interest in, to and under its
registered and unregistered intellectual property collateral (all of which shall
collectively be called the "Intellectual Property Collateral"), including,
without limitation, the following:
(a) Any and all copyright rights, copyright applications,
copyright registrations and like protections in each work or authorship
and derivative work thereof of Grantor, whether published or
unpublished, registered or unregistered, and whether or not the same
also constitutes a trade secret, now or hereafter existing, created,
acquired or held, including without limitation those set forth on
EXHIBIT A attached hereto (collectively, the "Copyrights");
(b) Any and all trade secret rights, including any rights
to unpatented inventions, know-how, operating manuals, license rights
and agreements, and confidential information owned by Grantor, and any
and all intellectual property rights in computer software and computer
software products now or hereafter existing, and created, acquired or
owned by Grantor;
(c) Any and all design rights owned by Grantor now or
hereafter existing, and created or acquired by Grantor;
(d) All patents, patent applications and like protections
owned by Grantor including, without limitation, improvements,
divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same, including without limitation the
patents and patent applications set forth on EXHIBIT B attached hereto
(collectively, the "Patents");
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(e) Any trademark and service mark rights, slogans, trade
dress, and trade names, trade styles, whether registered or not,
applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Grantor
connected with and symbolized by such trademarks, including without
limitation those set forth on EXHIBIT C attached hereto (collectively,
the "Trademarks");
(f) All mask works or similar rights available for the
protection of semiconductor chips, now owned or hereafter acquired,
including, without limitation those set forth on EXHIBIT D attached
hereto (collectively, the "Mask Works");
(g) Any and all claims for damages by way of past,
present and future infringements of any of the rights included above,
with the right, but not the obligation, to sue for and collect such
damages for said use or infringement of the intellectual property
rights identified above;
(h) All licenses or other rights to use any of the
Copyrights, Patents, Trademarks, or Mask Works and all license fees and
royalties arising from such use to the extent permitted by such license
or rights, including, without limitation those set forth on EXHIBIT E
attached hereto; and
(i) All amendments, extensions, renewals and extensions
of any of the Copyrights, Trademarks, Patents, or Mask Works; and
(j) All proceeds and products of the foregoing, including
without limitation all payments under insurance or any indemnity or
warranty payable in respect of any of the foregoing.
2. Authorization and Request. Grantor authorizes and requests
that the Register of Copyrights and the Commissioner of Patents and Trademarks
record this IP Agreement, and any amendments thereto, or copies thereof.
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 nonexclusive licenses granted by
Grantor to its customers and resellers in the ordinary course of
business.
(b) Performance of this IP Agreement does not conflict
with or result in a breach of any material agreement to which Grantor
is bound.
(c) During the term of this IP Agreement, Grantor will
not transfer or otherwise encumber any interest in the Intellectual
Property Collateral, except for non-exclusive licenses granted by
Grantor in the ordinary course of business or as set forth in this IP
Agreement;
(d) To its knowledge, each of the issued Patents is valid
and enforceable, and no part of the Intellectual Property Collateral
which had been registered 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 Intellectual Property
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 use its reasonable efforts to (unless
in the judgment of the Grantor, it is no longer necessary for the
business of the Grantor) (i) protect, defend and maintain the validity
and enforceability of the Trademarks, Patents, Copyrights, and Mask
Works, (ii) 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
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<PAGE>
abandoned, forfeited or dedicated to the public without the written
consent of Lender, which shall not be unreasonably withheld, unless
Grantor determines in its business judgment that abandonment is
appropriate.
(g) Grantor shall take such further actions as Lender may
reasonably request from time to time to perfect or continue the
perfection of Lender's interest in the Intellectual Property
Collateral;
(h) This IP Agreement creates, and in the case of after
acquired Intellectual Property Collateral, this IP Agreement will
create at the time Grantor first has rights in such after acquired
Intellectual Property Collateral, in favor of Lender a valid and
perfected first priority security interest and collateral assignment in
the Intellectual Property Collateral in the United States securing the
payment and performance of the obligations evidenced by the Loan
Agreement;
(i) To its knowledge, except for, and upon, the filing of
UCC financing statements, filings with the U.S. Patent and Trademark
Office or the U.S. Copyright Office, or other notice filings or
notations in appropriate filing offices, if necessary to perfect the
security interests created hereunder, no authorization, approval or
other action by, and no notice to or filing with, any U.S. governmental
authority or U.S. regulatory body is required 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.;
(j) All information heretofore or herein 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.
(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' written 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. Further Assurances; Attorney in Fact.
(a) On a continuing basis, Grantor will, upon the
reasonable request by Lender, subject to any prior licenses, encumbrances and
restrictions and prospective licenses, make, execute, acknowledge and deliver,
and file and record in the proper filing and recording places in the United
States, all such instruments, including appropriate financing and continuation
statements and collateral agreements and filings with the United States Patent
and Trademarks Office and the Register of Copyrights, and take all such action
as may reasonably be deemed necessary or advisable, or as reasonably requested
by Lender, to perfect Lender's security interest in all Copyrights, Patents,
Trademarks, and Mask Works and otherwise to carry out the intent and purposes of
this IP Agreement, or for assuring and confirming to Lender the grant or
perfection of a security interest in all Intellectual Property Collateral.
(b) In addition to Section 5(a) above, Grantor shall not
register any of its Copyrights or Mask Works with the Register of Copyrights
without first executing and simultaneously registering an IP Agreement, in the
identical form of this IP Agreement, with the Register of Copyrights, listing
such Copyrights(s) on Exhibit A thereto and/or such Mask Works on Exhibit D in
order to protect and perfect Lender's security interest in such
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<PAGE>
Copyrights or Mask Works. Promptly after such registration, Grantor shall
forward to the Lender, at the address listed above, a copy of, and the original
IP Agreement as filed with the Register of Copyrights.
(c) Grantor hereby irrevocably appoints Lender as
Grantor's attorney-in-fact, with full authority in the place and stead of
Grantor and in the name of Grantor, Lender or otherwise, from time to time in
Lender's discretion, upon Grantor's failure or inability to do so, after written
request by Lender, 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:
(i) To modify, in its sole discretion, without
first obtaining Grantor's approval of or signature to such
modification, 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, or other
notice filings or notations in appropriate filing offices, relative to
any of the Intellectual Property Collateral, with notice to, but
without the consent of, Grantor, with all appropriate jurisdictions, as
Lender deems appropriate, in order to further perfect or protect
Lender's interest in the Intellectual Property Collateral.
6. 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 and is continuing under
the Loan Agreement; or
(b) Grantor breaches any warranty or agreement made by
Grantor in this IP Agreement, which breach is not cured within ten (10)
days of the occurrence thereof.
7. 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.
8. Indemnity. Grantor will indemnify, defend and hold harmless
Lender and its officers, employees, and agents against: (a) obligations,
demands, claims, and liabilities asserted by any other party in connection with
the transactions contemplated by this IP Agreement; and (b) losses or expenses
incurred, or paid by Lender from or consequential to transactions between Lender
and Grantor (including reasonable attorneys fees and expenses), except for
losses caused by Lender's gross negligence or willful misconduct.
9. Termination. At such time as Grantor shall completely satisfy
all of the obligations secured hereunder, Lender shall execute and deliver to
Grantor and the appropriate registration/recording authorities, all releases,
terminations, and other instruments as may be necessary or proper to release the
security interest hereunder.
10. 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.
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<PAGE>
11. Amendments. This IP Agreement may be amended only by a written
instrument signed by both parties hereto.
12. 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.
EXECUTED as a sealed instrument under the laws of the Commonwealth of
Massachusetts on the day and year first written above.
ADDRESS OF GRANTOR: GRANTOR:
400 Minuteman Road NAVISITE, INC.
Andover, Massachusetts 01810 By: /s/ Jim Pluntze
--------------------------
Name: Jim Pluntze
------------------------
Title: Chief Financial Officer
-----------------------
SILICON VALLEY BANK
By: /s/ David Reich
--------------------------
Name: David Reich
------------------------
Title: Vice President
-----------------------
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<PAGE>
Exhibit "A" attached to that certain Intellectual Property Security
Agreement dated May 27, 2003.
EXHIBIT "A"
COPYRIGHTS
SCHEDULE A - ISSUED COPYRIGHTS
<TABLE>
<CAPTION>
COPYRIGHT REGISTRATION DATE OF
DESCRIPTION NUMBER ISSUANCE
----------- ------ --------
<S> <C> <C>
</TABLE>
NONE
SCHEDULE B - PENDING COPYRIGHT APPLICATIONS
<TABLE>
<CAPTION>
FIRST DATE
COPYRIGHT APPLICATION DATE OF DATE OF OF PUBLIC
DESCRIPTION NUMBER FILING CREATION DISTRIBUTION
----------- ------ ------ -------- ------------
<S> <C> <C> <C> <C>
</TABLE>
NONE
SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)
<TABLE>
<CAPTION>
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
----------- -------- ------------ ------------ -------
<S> <C> <C> <C> <C>
</TABLE>
NONE
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<PAGE>
Exhibit "B" attached to that certain Intellectual Property Security Agreement
dated May 27, 2003.
EXHIBIT "B"
PATENTS
<TABLE>
<CAPTION>
PATENT
DESCRIPTION DOCKET NO. COUNTRY SERIAL NO. FILING DATE STATUS
----------- ---------- ------- ---------- ----------- ------
<S> <C> <C>
SYSTEMS AND METHODS FOR U.S. APPLICATION NUMBER FILED MAY 13, 2002
CENTRALIZED 10/145292
MANAGEMENT OF
DISTRIBUTED APPLICATIONS
REMOTE MANAGEMENT OF U.S. APPLICATION NUMBER FILED MAY 13, 2002
DISTRIBUTED DATACENTERS 10/145,453
REMOTE RESOURCE U.S. APLICATION NUMBER FILED MAY 13, 2002
MANAGEMENT 10/145,429
CUSTOMER CONSOLE FOR U.S. APPLICATION NUMBER FILED MAY 13, 2002
USE IN A NETWORK 10/145,188
RESOURCE MANAGEMENT
SYSTEM
REMOTE DEVICE U.S. APPLICATION NUMBER FILED MAY 13, 2002
MANAGEMENT 10/145,478
AUTOMATIC PROVISIONING U.S. APPLICATION NUMBER FILED MAY 13, 2002
OF REMOTE SERVERS 10/145,183
COLLABORATIVE MULTI- U.S. APPLICATION NUMBER FILED MAY 13, 2002
VENDOR MANAGEMENT OF 10/145266
WEB SITES
PROBLEM RESOLUTION U.S. APPLICATION #10/266102 FILED OCTOBER 7, 2002
MANAGEMENT IN AN
OUTSOURCED WEB MODEL
</TABLE>
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<PAGE>
Exhibit "C" attached to that certain Intellectual Property Security Agreement
dated May 27, 2003.
EXHIBIT "C"
TRADEMARKS
<TABLE>
<CAPTION>
TRADEMARK
DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS
------------------- ---------- ------- ------
<S> <C> <C> <C>
</TABLE>
NONE
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<PAGE>
Exhibit "D" attached to that certain Intellectual Property Security Agreement
dated May 27, 2003.
EXHIBIT "D"
MASK WORKS
<TABLE>
<CAPTION>
MASK WORK
DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS
------------------- ---------- ------- ------
<S> <C> <C> <C>
</TABLE>
NONE
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<PAGE>
Exhibit "E" attached to that certain Intellectual Property Security Agreement
dated May 27, 2003.
EXHIBIT "E"
LICENSES
NONE
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