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Exhibit 10.6 Intellectual Property
Security Agreement dated as of March 28,
2008 between the Registrant and the secured parties named
therein
INTELLECTUAL PROPERTY SECURITY AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT (this "Agreement"), dated
as of March
28, 2008, by and among Conectisys Corporation, a Colorado
corporation
("Parent"), United Telemetry Company, a Nevada corporation and
eEnergyServices.com, Inc., a Nevada corporation (collectively the
"Subsidiary")(hereinafter the Parent and the Subsidiary shall
collectively be
referred to as the "Company") and the secured parties signatory
hereto and their
respective endorsees, transferees and assigns (collectively, the "Secured
Party").
W I T N E S S E T H :
WHEREAS, pursuant to a Securities Purchase Agreement, dated the
date hereof,
between Parent and the Secured Party (the "Purchase Agreement"),
Parent has
agreed to issue to the Secured Party and the Secured Party has
agreed to
purchase from Parent certain of Parent's 8% Callable Secured
Convertible Notes,
due three years from the date of issue (the "Notes"), which are
convertible into
shares of Company's Common Stock, no par value per share (the
"Common Stock").
In connection therewith, Parent shall issue the Secured Party
certain Common
Stock purchase warrants (the "Warrants"); and
WHEREAS, the Parent and the Subsidiary have been, and are now,
engaged in the
development of a low-cost automatic meter reading, or AMR solution.
The
company's AMR solution includes a proprietary system employing
specialized
hardware and software that allows for residential and commercial
applications.
United Telemetry Company Inc., a wholly owned subsidiary of
ConectiSys
Corporation, is a commercial telecommunications company in the
development
stage. The company transmits commercial data on time at the lowest
possible cost
to satisfying the demands of business domestically and abroad for
critical point
to point information. eEnergyServices.com, Inc., a wholly owned
subsidiary of
ConectiSys Corporation, has no assets and has not commenced
operations. In the
past, as now, the Parent has provided financing for the Subsidiary,
and the
Subsidiary has relied upon the Parent to provide such financing.
In addition,
it is anticipated that, if the Subsidiary executes and delivers
this Agreement,
the Parent will continue to provide such financing to the
Subsidiary, and that
the proceeds of the Purchase Agreement and Notes will be used, in
part, for the
general working capital purposes of the Subsidiary; and
WHEREAS, the Subsidiary constitutes all of the subsidiaries of the
Parent and it
is in the best interest of the Subsidiary as subsidiaries of the
Parent and the
indirect beneficiaries of the Purchase Agreement and Notes, that
the Secured
Party enter into the Purchase Agreement and purchase the Notes to
the Company;
and
WHEREAS, in order to induce the Secured Party to purchase the
Notes, Company has
agreed to execute and deliver to the Secured Party this Agreement
for the
benefit of the Secured Party and to grant to it a first priority
security
interest in certain Intellectual Property (defined below) of
Company to secure
the prompt payment, performance and discharge in full of all of
Company's
obligations under the Notes and exercise and discharge in full of
Company's
obligations under the Warrants; and
WHEREAS, in light of the foregoing, the Company expects to derive
substantial
benefit from the Purchase Agreement and sale of the Notes and the
transactions
contemplated thereby and, in furtherance thereof, has agreed to
execute and
deliver this Agreement.
NOW, THEREFORE, in consideration of the agreements herein contained
and for
other good and valuable consideration, the receipt and sufficiency
of which is
hereby acknowledged, the parties hereto hereby agree as
follows:
1. Defined
Terms. Unless
otherwise defined herein, terms which are defined
in the Purchase Agreement and used herein are so used as so
defined; and the
following terms shall have the following meanings:
"Software Intellectual Property" shall mean:
(a)
all software programs (including all source code, object code and
all
related applications and data files), whether now owned, upgraded,
enhanced,
licensed or leased or hereafter acquired by the Company, above;
(b)
all computers and electronic data processing hardware and
firmware
associated therewith;
(c)
all documentation (including flow charts, logic diagrams,
manuals,
guides and specifications) with respect to such software, hardware
and firmware
described in the preceding clauses (a) and (b); and
(d)
all rights with respect to all of the foregoing, including,
without
limitation, any and all upgrades, modifications, copyrights,
licenses, options,
warranties, service contracts, program services, test rights,
maintenance
rights, support rights, improvement rights, renewal rights and
indemnifications
and substitutions, replacements, additions, or model conversions of
any of the
foregoing.
"Copyrights" shall mean (a) all copyrights, registrations and
applications for
registration, issued or filed, including any reissues, extensions
or renewals
thereof, by or with the United States Copyright Office or any
similar office or
agency of the United States, any state thereof, or any other
country or
political subdivision thereof, or otherwise, including, all rights
in and to the
material constituting the subject matter thereof, including,
without limitation,
any referred to in Schedule B hereto, and (b) any rights in any
material which
is copyrightable or which is protected by common law, United States
copyright
laws or similar laws or any law of any State, including, without
limitation, any
thereof referred to in Schedule B hereto.
"Copyright License" shall mean any agreement, written or oral,
providing for a
grant by the Company of any right in any Copyright, including,
without
limitation, any thereof referred to in Schedule B hereto.
"Intellectual Property" shall means, collectively, the Software
Intellectual
Property, Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trademarks,
Trademark Licenses and Trade Secrets.
"Obligations" means all of the Company's obligations under this
Agreement and
the Notes, in each case, whether now or hereafter existing,
voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated
or
unliquidated, whether or not jointly owed with others, and whether
or not from
time to time decreased or extinguished and later decreased, created
or incurred,
and all or any portion of such obligations or liabilities that are
paid, to the
extent all or any part of such payment is avoided or recovered
directly or
indirectly from the Secured Party as a preference, fraudulent
transfer or
otherwise as such obligations may be amended, supplemented,
converted, extended
or modified from time to time.
"Patents" shall mean (a) all letters patent of the United States or
any other
country or any political subdivision thereof, and all reissues and
extensions
thereof, including, without limitation, any thereof referred to in
Schedule B
hereto, and (b) all applications for letters patent of the United
States and all
divisions, continuations and continuations-in-part thereof or any
other country
or any political subdivision, including, without limitation, any
thereof
referred to in Schedule B hereto.
"Patent License" shall mean all agreements, whether written or
oral, providing
for the grant by the Company of any right to manufacture, use or
sell any
invention covered by a Patent, including, without limitation, any
thereof
referred to in Schedule B hereto.
"Security Agreement" shall mean the Security Agreement, dated the
date hereof
between Company and the Secured Party.
"Trademarks" shall mean (a) all trademarks, trade names, corporate
names,
company names, business names, fictitious business names, trade
styles, service
marks, logos and other source or business identifiers, and the
goodwill
associated therewith, now existing or hereafter adopted or
acquired, all
registrations and recordings thereof, and all applications in
connection
therewith, whether in the United States Patent and Trademark Office
or in any
similar office or agency of the United States, any state thereof or
any other
country or any political subdivision thereof, or otherwise,
including, without
limitation, any thereof referred to in Schedule B hereto, and (b)
all reissues,
extensions or renewals thereof.
"Trademark License" shall mean any agreement, written or oral,
providing for the
grant by the Company of any right to use any Trademark, including,
without
limitation, any thereof referred to in Schedule B hereto.
"Trade Secrets" shall mean common law and statutory trade secrets
and all other
confidential or proprietary or useful information and all know-how
obtained by
or used in or contemplated at any time for use in the business of
the Company
(all of the foregoing being collectively called a "Trade Secret"),
whether or
not such Trade Secret has been reduced to a writing or other
tangible form,
including all documents and things embodying, incorporating or
referring in any
way to such Trade Secret, all Trade Secret licenses, including each
Trade Secret
license referred to in Schedule B hereto, and including the right
to sue for and
to enjoin and to collect damages for the actual or threatened
misappropriation
of any Trade Secret and for the breach or enforcement of any such
Trade Secret
license.
2. Grant of
Security Interest. In
accordance with Section 3(m) of the
Security Agreement, to secure the complete and timely payment,
performance and
discharge in full, as the case may be, of all of the Obligations,
the Company
hereby, unconditionally and irrevocably, pledges, grants and
hypothecates to the
Secured Party, a continuing security interest in, a continuing
first lien upon,
an unqualified right to possession and disposition of and a right
of set-off
against, in each case to the fullest extent permitted by law, all
of the
Company's right, title and interest of whatsoever kind and nature
in and to the
Intellectual Property (the "Security Interest").
3.
Representations and Warranties. The Company hereby represents
and
warrants, and covenants and agrees with, the Secured Party as
follows:
(a)
The Company has the requisite corporate power and authority to
enter
into this Agreement and otherwise to carry out its obligations
thereunder. The
execution, delivery and performance by the Company of this
Agreement and the
filings contemplated therein have been duly authorized by all
necessary action
on the part of the Company and no further action is required by the
Company.
This Agreement constitutes a legal, valid and binding obligation of
the Company
enforceable in accordance with its terms, except as enforceability
may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws
affecting the enforcement of creditor's rights generally.
(b)
The Company represents and warrants that it has no place of
business or
offices where its respective books of account and records are kept
(other than
temporarily at the offices of its attorneys or accountants) or
places where the
Intellectual Property is stored or located, except as set forth on
Schedule A
attached hereto;
(c)
The Company is the sole owner of the Intellectual Property (except
for
non-exclusive licenses granted by the Company in the ordinary
course of
business), free and clear of any liens, security interests,
encumbrances, rights
or claims, and is fully authorized to grant the Security Interest
in and to
pledge the Intellectual Property, except as set forth on Schedule
B. There is
not on file in any governmental or regulatory authority, agency or
recording
office an effective financing statement, security agreement,
license or transfer
or any notice of any of the foregoing (other than those that have
been filed in
favor of the Secured Party pursuant to this Agreement or a security
agreement
prior to the date hereof) covering or affecting any of the
Intellectual
Property, except as set forth on Schedule B. So long as this Agreement shall
be
in effect, the Company shall not execute and shall not knowingly
permit to be on
file in any such office or agency any such financing statement or
other document
or instrument (except to the extent filed or recorded in favor of
the Secured
Party pursuant to the terms of this Agreement or a security
agreement prior to
the date hereof), except for a financing statement covering assets
acquired by
the Company after the date hereof or as set forth on Schedule B,
provided that
the value of the Intellectual Property covered by this Agreement
along with the
Collateral (as defined in the Security Agreement) is equal to at
least 150% of
the Obligations.
(d)
The Company shall at all times maintain its books of account and
records
relating to the Intellectual Property at its principal place of
business and its
Intellectual Property at the locations set forth on Schedule A
attached hereto
and may not relocate such books of account and records unless it
delivers to the
Secured Party at least 30 days prior to such relocation (i) written
notice of
such relocation and the new location thereof (which must be within
the United
States) and (ii) evidence that the necessary documents have been
filed and
recorded and other steps have been taken to perfect the Security
Interest to
create in favor of the Secured Party valid, perfected and
continuing first
priority liens in the Intellectual Property to the extent they can
be perfected
through such filings.
(e)
This Agreement creates in favor of the Secured Party a valid
security
interest in the Intellectual Property securing the payment and
performance of
the Obligations and, upon making the filings required hereunder, a
perfected
first priority security interest in such Intellectual Property to
the extent
that it can be perfected through such filings.
(f) Upon
request of the Secured Party, the Company shall execute and
deliver any and all agreements, instruments, documents, and papers
as the
Secured Party may request to evidence the Secured Party's security
interest in
the Intellectual Property and the goodwill and general intangibles
of the
Company relating thereto or represented thereby, and the Company
hereby appoints
the Secured Party its attorney-in-fact to execute and file all such
writings for
the foregoing purposes, all acts of such attorney being hereby
ratified and
confirmed; such power being coupled with an interest is irrevocable
until the
Obligations have been fully satisfied and are paid in full.
(g)
Except as set forth on Schedule B, the execution, delivery and
performance of this Agreement does not conflict with or cause a
breach or
default, or an event that with or without the passage of time or
notice, shall
constitute a breach or default, under any agreement to which the
Company is a
party or by which the Company is bound. No consent (including, without
limitation, from stock holders or creditors of the Company) is
required for the
Company to enter into and perform its obligations hereunder.
(h)
The Company shall at all times maintain the liens and Security
Interest
provided for hereunder as valid and perfected first priority liens
and security
interests in the Intellectual Property to the extent they can be
perfected by
filing in favor of the Secured Party until this Agreement and the
Security
Interest hereunder shall terminate pursuant to Section 11.
The Company hereby
agrees to defend the same against any and all persons. The Company shall
safeguard and protect all Intellectual Property for the account of
the Secured
Party. Without
limiting the generality of the foregoing, the Company shall pay
all fees, taxes and other amounts necessary to maintain the
Intellectual
Property and the Security Interest hereunder, and the Company shall
obtain and
furnish to the Secured Party from time to time, upon demand, such
releases
and/or subordinations of claims and liens which may be required to
maintain the
priority of the Security Interest hereunder.
(i)
The Company will not transfer, pledge, hypothecate, encumber,
license
(except for non-exclusive licenses granted by the Company in the
ordinary course
of business), sell or otherwise dispose of any of the Intellectual
Property
without the prior written consent of the Secured Party.
(j)
The Company shall, within ten (10) days of obtaining knowledge
thereof,
advise the Secured Party promptly, in sufficient detail, of any
substantial
change in the Intellectual Property, and of the occurrence of any
event which
would have a material adverse effect on the value of the
Intellectual Property
or on the Secured Party's security interest therein.
(k)
The Company shall permit the Secured Party and its representatives
and
agents to inspect the Intellectual Property at any time and to make
copies of
records pertaining to the Intellectual Property as may be requested
by the
Secured Party from time to time.
(l)
The Company will take all steps reasonably necessary to
diligently
pursue and seek to preserve, enforce and collect any rights,
claims, causes of
action and accounts receivable in respect of the Intellectual
Property.
(m)
The Company shall
promptly notify the Secured Party in sufficient detail
upon becoming aware of any attachment, garnishment, execution
or other legal
process levied against any Intellectual Property and of any other
information
received by the Company that may materially affect the value of the
Intellectual
Property, the Security Interest or the rights and remedies of the
Secured Party
hereunder.
(n)
All information heretofore, herein or hereafter supplied to the
Secured
Party by or on behalf of the Company with respect to the
Intellectual Property
is accurate and complete in all material respects as of the date
furnished.
(o)
Schedule A attached hereto contains a list of all of the
subsidiaries of
Company.
(p)
Schedule B attached hereto includes all Licenses, and all Patents
and
Patent Licenses, if any, owned by the Company in its own name as of
the date
hereof. Schedule B
hereto includes all Trademarks and Trademark Licenses, if
any, owned by the Company in its own name as of the date hereof.
Schedule B
hereto includes all Copyrights and Copyright Licenses, if any,
owned by the
Company in its own name as of the date hereof. Schedule B hereto includes all
Trade Secrets and Trade Secret Licenses, if any, owned by the
Company as of the
date hereof. To the
best of the Company's knowledge, each License, Patent,
Trademark, Copyright and Trade Secret is valid, subsisting,
unexpired,
enforceable and has not been abandoned. Except as set forth in Schedule B,
none
of such Licenses, Patents, Trademarks, Copyrights and Trade Secrets
is the
subject of any licensing or franchise agreement. To the best of the Company's
knowledge, no holding, decision or judgment has been rendered by
any
Governmental Body which would limit, cancel or question the
validity of any
License, Patent, Trademark, Copyright and Trade Secrets .
No action or
proceeding is pending (i) seeking to limit, cancel or question the
validity of
any License, Patent, Trademark, Copyright or Trade Secret, or (ii)
which, if
adversely determined, would have a material adverse effect on the
value of any
Licens
