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Exhibit 10.37  

 
 

INTELLECTUAL PROPERTY SECURITY AGREEMENT    
  

        THIS INTELLECTUAL PROPERTY SECURITY AGREEMENT dated as of October 24, 2002, is made by DOT HILL SYSTEMS CORPORATION, a Delaware corporation, and DOT HILL
SYSTEMS B.V., a Netherlands corporation (sometimes individually and sometimes collectively referred to herein as "Grantor"), in favor of SUN MICROSYSTEMS, INC., a Delaware corporation
("Lender"). 

W I T N E S S E T H:  

        WHEREAS, pursuant to that certain Loan and Security Agreement dated as of the date hereof by and among Grantor and Lender (as from time to time amended, restated,
supplemented or otherwise modified, the "Loan Agreement"), Lender has agreed to make the Loans for the benefit of Grantor; and 

        WHEREAS,
Lender is willing to make the Loans as provided for in the Loan Agreement, but only upon the condition, among others, that Grantor shall have executed and delivered to Lender
this Intellectual Property Security Agreement; 

        NOW,
THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Grantor hereby agrees as follows: 

        1.    DEFINED TERMS.    All initially capitalized terms used but not otherwise defined herein have the meanings given
to them in Schedule A to the Loan Agreement. 

        2.    GRANT OF SECURITY INTEREST IN INTELLECTUAL PROPERTY COLLATERAL.    To secure the complete and timely payment of
all the Obligations of Grantor now or hereafter existing from time to time, Grantor hereby pledges and grants to Lender a continuing first priority security interest in all of Grantor's right, title
and interest in, to and under the following, whether presently existing or hereafter created or acquired (collectively, the "Intellectual Property
Collateral"): 

        (a)  all
of its Patents and Patent Licenses to which it is a party including those referred to on Schedule I hereto; 

        (b)  all
of its Trademarks and Trademark Licenses to which it is a party including those referred to on Schedule II hereto; 

        (c)  all
of its Copyrights and Copyright Licenses to which it is a party including those referred to on Schedule III hereto; 

        (d)  all
reissues, continuations or extensions of the foregoing; 

        (e)  all
goodwill of the business connected with the use of, and symbolized by, each Patent, each Patent License, each Trademark, each Trademark License, each Copyright and
each Copyright License; and 

        (f)    all
products and proceeds of the foregoing, including, without limitation, any claim by Grantor against third parties for past, present or future (i) infringement
or dilution of any Patent or Patent licensed under any Patent License, (ii) injury to the goodwill associated with any Patent or any Patent licensed under any Patent License,
(iii) infringement or dilution of any Trademark or Trademark licensed under any Trademark License, (iv) injury to the goodwill associated with any Trademark or any Trademark licensed
under any Trademark License, (v) infringement or dilution 

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of any Copyright or Copyright licensed under any Copyright License, and (vi) injury to the goodwill associated with any Copyright or any Copyright licensed under any Copyright License. 

        3.    REPRESENTATIONS AND WARRANTIES.    Grantor represents and warrants that Grantor does not have any interest in,
or title to, any Patent, Trademark or Copyright except as set forth in Schedule I, Schedule II and Schedule III, respectively, hereto. This Intellectual Property Security
Agreement is effective to create a valid and continuing Lien on and, upon the filing hereof with the United States Patent and Trademark Office and the United States Copyright Office, perfected
security interests in favor of Lender in all of Grantor's Patents, Trademarks and Copyrights and such perfected security
interests are enforceable as such as against any and all creditors of, and purchasers from, Grantor. Upon filing of this Intellectual Property Security Agreement with the United States Patent and
Trademark Office and the United States Copyright Office and the filing of appropriate financing statements listed on Disclosure Schedule (6.1) to
the Loan Agreement, all action necessary or desirable to protect and perfect Lender's Lien on Grantor's Patents, Trademarks and Copyrights shall have been duly taken. 

        4.    COVENANTS.    Grantor covenants and agrees with Lender that from and after the date of this Intellectual
Property Security Agreement and until the Termination Date: 

        (a)  Grantor
shall notify Lender immediately if it knows or has reason to know that any application or registration relating to any Patent, Trademark or Copyright (now or
hereafter existing) may become abandoned or dedicated, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the
United States Patent and Trademark Office, the United States Copyright Office or any court) regarding Grantor's ownership of any Patent, Trademark or Copyright, its right to register the same, or to
keep and maintain the same. 

        (b)  In
no event shall Grantor, either directly or through any agent, employee, licensee or designee, file an application for the registration of any Patent, Trademark or
Copyright with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency without giving Lender prior written notice thereof, and, upon request
of Lender, Grantor shall execute and deliver a supplement hereto (in form and substance satisfactory to Lender) to evidence Lender's Lien on such Patent, Trademark or Copyright, and the General
Intangibles of Grantor relating thereto or represented thereby. 

        (c)  Grantor
shall take all actions necessary or requested by Lender to maintain and pursue each application, to obtain the relevant registration and to maintain the
registration of each of the Patents or Trademarks (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition and
interference and cancellation proceedings. 

        (d)  In
the event that any of the Intellectual Property Collateral is infringed upon, or misappropriated or diluted by a third party, Grantor shall notify Lender promptly
after Grantor learns thereof. Grantor shall, unless it shall reasonably determine that such Intellectual Property Collateral is in no way material to the conduct of its business or operations,
promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and shall take such other actions as Lender shall
deem appropriate under the circumstances to protect such Intellectual Property Collateral. 

        5.    SECURITY AGREEMENT.    The security interests granted pursuant to this Intellectual Property Security Agreement
are granted in conjunction with the security interests granted to Lender pursuant to the Loan Agreement. Grantor hereby acknowledges and affirms that the rights and remedies of Lender with respect to
the security interest in the Intellectual Property Collateral made 

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and granted hereby are more fully set forth in the Loan Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. 

        6.    REINSTATEMENT.    This Intellectual Property Security Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against Grantor for liquidation or reorganization, should Grantor become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any significant part of Grantor's assets, and shall continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a "voidable preference," "fraudulent conveyance," or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof,
is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned. 

        7.    NOTICES.    Whenever it is provided herein that any notice, demand, request, consent, approval, declaration or
other communication shall or may be given to or served upon any of the parties by any other party, or whenever any of the parties desires to give and serve upon any other party any communication with
respect to this Intellectual Property Security Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be given in the manner,
and deemed received, as provided for in the Loan Agreement. 

        8.    TERMINATION OF THIS SECURITY AGREEMENT.    Subject to Section 6 hereof, this Intellectual Property
Security Agreement shall terminate upon the Termination Date. 

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        IN
WITNESS WHEREOF, Grantor has caused this Intellectual Property Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above. 

	 	 	DOT HILL SYSTEMS CORPORATION
	

 	
 	

By:	
 	

 
	 	 	 	 	

	 	 	Name:	 	 
	 	 	 	 	

	 	 	Title:	 	 
	 	 	 	 	

	

 	
 	

DOT HILL SYSTEMS B.V.
	

 	
 	

By:	
 	

 
	 	 	 	 	

	 	 	Name:	 	 
	 	 	 	 	

	 	 	Title:	 	 
	 	 	 	 	

	

 	
 	

ACCEPTED and ACKNOWLEDGED by:
	

 	
 	

SUN MICROSYSTEMS, INC.
	

 	
 	

By:	
 	

 
	 	 	 	 	

	 	 	Name:	 	 
	 	 	 	 	

	 	 	Title:	 	 
	 	 	 	 	

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SCHEDULE I
  to
  INTELLECTUAL PROPERTY SECURITY AGREEMENT    
  

	I.
	PATENT
REGISTRATIONS 

	Patent
 
	 	Reg. No.
	 	Date

	 	 	 	 	 

	II.
	PATENT
APPLICATIONS 

	Patent
 
	 	Application No.
	 	Date

	 	 	 	 	 

	III.
	PATENT
LICENSES 

	Name of Agreement
 
	 	Date of Agreement
	 	Parties

	 	 	 	 	 

 
 

SCHEDULE II
  to
  INTELLECTUAL PROPERTY SECURITY AGREEMENT    
  

	I.
	TRADEMARK
REGISTRATIONS 

	Mark
 
	 	Reg. No.
	 	Date

	 	 	 	 	 

	II.
	TRADEMARK
APPLICATIONS 

	Mark
 
	 	Application No.
	 	Date

	 	 	 	 	 

	III.
	TRADEMARK
LICENSES 

	Name of Agreement
 
	 	Date of Agreement
	 	Parties

	 	 	 	 	 

 
 

SCHEDULE III
  to
  INTELLECTUAL PROPERTY SECURITY AGREEMENT    
  

	I.
	COPYRIGHT
REGISTRATIONS 

	Copyright
 
	 	Reg. No.
	 	Date

	 	 	 	 	 

	II.
	COPYRIGHT
APPLICATIONS 

	Copyright
 
	 	Application No.
	 	Date

	 	 	 	 	 

	III.
	COPYRIGHT
LICENSES 

	Name of Agreement
 
	 	Date of Agreement
	 	Parties

	 	 	 	 	 

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INTELLECTUAL PROPERTY SECURITY AGREEMENT

SCHEDULE I to INTELLECTUAL PROPERTY SECURITY AGREEMENT

SCHEDULE II to INTELLECTUAL PROPERTY SECURITY AGREEMENT

SCHEDULE III to INTELLECTUAL PROPERTY SECURITY AGREEMENTEXHIBIT 10.9  

[LETTERHEAD OF IMAGIS
TECHNOLOGIES INC.] 

August 30, 2002 

Intacta Technologies, Inc. 

Resurgens Plaza South 

945 E. Paces Ferry Road, N.E. 

Suite 1445 

Atlanta, Georgia 

30326 

Dear Sirs/Mesdames: 

Intacta Technologies, Inc.
(“Intacta”) has developed certain data encoding technologies which may be used
in combination with technologies developed by Imagis Technologies Inc.
(“Imagis”). This Agreement sets out the terms on which Imagis is acquiring
rights to certain technologies of Intacta for use in certain specified fields. 

In this Agreement, “Intacta
Technology” means the ITI Software together with any updates, upgrades or
improvements to the Intacta Technology made at any time after the date of this Agreement.
“ITI Software” means a patented and proprietary suite of software development
tools owned by Intacta called the INTACTA.CODETM SDK, INTACTA.CODETM SDK —
Developer’s Edition, INTACTA.CODETM SDK – Enterprise Edition, and the
interpreter and related software that is intended to run on the handheld or target device.
The ITI Software also includes a patented and proprietary suite of biometric software
applications owned by Intacta called INTACTA XPRESS.ID-2000TM. 

1.     License 

In consideration for U.S.$150,000
(the “Fee”), Intacta hereby grants a fully paid-up license (the
“License”) to Imagis of the Intacta Technology for use in the following fields
(the “Fields”): 

	  	(a)  	all
applications pursuant to a License Agreement (the “Zixsys           Agreement”)
dated April 23, 2002 between Intacta and Zixsys Inc., as           amended July 22, 2002;  

	  	(b)  	all
applications related to the creation of a national identity card in Mexico;           and  

	  	(c)  	all
applications relating to ID verification or access control, with or without
          embedded biometric security; except those applications related to the
healthcare           industry or healthcare clients.  

The Fee will be payable on the
signing of this Agreement. 

-2- 

2.     Terms of License 

The License is exclusive to Imagis
(even to the exclusion of Intacta), royalty-free and has a term that expires on the later
of August 31, 2017 and the expiry date of the last patent which forms part of the Intacta
Technology. 

In each case the License also assigns
to Imagis all revenues or other payments due by third parties to Intacta from the date of
this Agreement in respect of the application of the Intacta Technology in the Fields,
including all amounts due under the Zixsys Agreement. 

3.     Source Code Escrow 

As soon as practicable after the
execution of this Agreement, Intacta will deposit with an escrow agent acceptable to
Intacta and Imagis, a copy of the source code, software listings, functional specification
and all other written and/or magnetic material and all related documentation necessary
(together, the “Data”), to enable an independent, reasonably-skilled programmer
to understand, maintain, modify, correct and enhance the Intacta Technology. The expenses
of the escrow agent will be paid by Imagis. 

Intacta will ensure that during the
term of this Agreement the Data will be kept fully up-to-date and will accurately reflect
all modifications, amendments, updates, new releases and levels relating to the Intacta
Technology (“Updates”), and for such purposes, Intacta will deposit with the
escrow agent a copy of all Updates within three days of their availability. Intacta will
inform Imagis and the escrow agent in writing as soon as each Update is available and that
it is are ready for deposit with escrow agent. 

4.     Intacta Employees 

Intacta will retain sufficient
employees to provide technical support to Imagis and purchasers of the Intacta Technology,
and to further develop the Intacta Technology. As soon as practicable after the execution
of this Agreement, Imagis and Intacta will negotiate a support agreement under which the
parties will detail the support to be made available to Imagis and the costs of such
support that will be borne by Imagis. 

5.     Representations, Warranties and Indemnity 

Imagis is acquiring the Intacta
Technology on an as is basis, without any representation as to the merchantability or
fitness for purpose of such technology. Imagis acknowledges that it is aware of a patent
infringement action that has been commenced by Datastrip Intl. Ltd. against Intacta in the
US District Court for the Northern District of Georgia, Atlanta Division, Case Number 101
CV 3029, November 13, 2001, relating to the Intacta Technology (the “Patent
Claim”). 

Each of Intacta and Imagis represents
to the other that all necessary consents have been obtained to enter into this Agreement
and complete the licensing of the Intacta Technology to Imagis. Intacta also represents
that the transactions contemplated under this Agreement will not constitute a disposition
of all or substantially all of the assets of Intacta. 

-3- 

Intacta will indemnify and hold
Imagis and each of its affiliates and their officers, directors, employees, agents,
distributors and licensees (the “Imagis Indemnified Parties”) harmless from and
against any judgement, claim, action, proceeding, loss, deficiency, damages, liability,
cost and expense (including reasonable attorneys’ fees and expenses), that may be
incurred by an Imagis Indemnified Party in any connection with any claim, demand, suit,
action or proceeding arising as a result of the Patent Claim or from an allegation that
the Intacta Technology infringes on the intellectual property rights of another party. 

6.     Other Intacta Technologies 

Imagis and Intacta agree that for a
period of 90 days after the date of this Agreement, they will negotiate in good faith the
acquisition by Imagis of an exclusive license from Intacta to use the Intacta
Technology’s open source code application for machine readable travel documents. 

Imagis and Intacta confirm their
understanding that they will also explore the possibility of Imagis acquiring any and all
of Intacta’s property and tangible and intangible assets, including the Intacta
Technology for use outside of the Fields. 

7.     Further Assurances 

Each of Imagis and Intacta will, at
its own expense and without expense to the other, execute and deliver such further
agreements and other documents and do such further acts and things as the other party
reasonably requests to evidence, carry out or give full force and effect to the intent of
this Agreement, including a more formal license agreement with respect to the rights
granted under paragraphs 1 to 3. 

8.     Fees and Expenses 

Each of Imagis and Intacta represents
and warrants that it has not incurred any liability for any finder’s fee or
broker’s commission in connection with the execution of this Agreement. Each of
Imagis and Intacta agrees that it will pay its own fees and expenses, and the fees and
expenses of its representatives, including any fee for advice or opinions incurred in
connection with the negotiation, preparation, execution and delivery of this Agreement and
any other agreements contemplated thereby. 

9.     Publicity 

Neither Imagis nor Intacta will make
any press release, public announcement or public statement about the transactions
contemplated herein which has not been previously approved by the other party, except that
either party may make a press release or filing with a regulatory authority if counsel for
such party advises that such press release or filing is necessary (in which case such
party will first make a reasonable effort to obtain the approval of the other). 

10.     Assignment 

Neither party may assign this
Agreement without the written consent of the other party, except that Imagis may assign
this Agreement at any time to an affiliate. 

-4- 

11.    Entire Agreement 

This Agreement constitutes the entire
agreement between Imagis and Intacta and supersedes every previous agreement,
communication, expectation, negotiation, representation or understanding, whether oral or
written, express or implied, statutory or otherwise, between the parties with respect to
the subject matter of this Agreement. No director, officer, employee or agent of either
Imagis or Intacta has any authority to make any representation or commitment not contained
in this Agreement, and each party has executed this Agreement without reliance upon any
such representation or commitment. 

12.    Governing Law 

This Agreement is and will be deemed
to be made in British Columbia, for all purposes will be governed exclusively by and
construed and enforced in accordance with the domestic laws prevailing in British
Columbia, other than the International Sale of Goods Act (British Columbia), and
the rights and remedies of Imagis and Intacta will be determined in accordance with such
domestic laws. 

13.    Attornment 

Each of Imagis and Intacta
irrevocably and exclusively attorns to the jurisdiction of the courts of British Columbia
and all courts having appellate jurisdiction thereover, and any proceeding commenced or
maintained by Imagis or Intacta in respect of or arising because of this Agreement will be
commenced or maintained only in such of those courts as is appropriate. 

14.    Counterparts 

This Agreement may be executed in any
number of counterparts with the same effect as if Imagis and Intacta had signed the same
document, and all counterparts will be construed together and constitute one and the same
instrument. 

Yours very truly, 

IMAGIS TECHNOLOGIES INC. 

Per:  signed “Iain Drummond”
              

        Authorized Signatory

Acknowledged, accepted and agreed to
September 4th, 2002. 

INTACTA TECHNOLOGIES,
INC. 

Per:  signed “Noel Bambrough”
          

        Authorized Signatory

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