Original practitioner master · Prepared 5 October 2026 · Proof review required

Intellectual Property Negative Pledge and Springing Lien Agreement

Matter Completion Sheet

Topic	Required completion	Owner and status
Structure	Confirm IP is excluded from the current grant under the Loan Agreement; confirm negative-pledge and springing-lien architecture	[●]
Obligations	Secured Obligations, excluded obligations and the Loan Agreement cross-references	[●]
IP perimeter	Owned, licensed, registered, unregistered, jointly developed and foreign IP; Material IP designation	[●]
Existing rights	Liens, exclusive licenses, covenants not to sue, options, escrow, university and government rights	[●]
Permitted activity	Ordinary-course license parameters, open-source distribution, abandonment, end-of-life and settlement carve-outs	[●]
Triggers	Objective Springing Lien Events, thresholds, notice, cure, waiver and Activation Time mechanics (Schedule G)	[●]
Grant mechanics	Automatic grant at Activation Time; delivery or escrow of executed IP Security Agreement (Exhibit 1)	[●]
Perfection	UCC filing, USPTO and Copyright Office recordation, foreign steps, timing and register (Schedule H)	[●]
Representations	Ownership, validity, infringement, personnel assignments, open source, government rights, registrations, licenses	[●]
Covenants	Prosecution, registration, notices, personnel agreements, open-source policy, escrow option, annual schedule update	[●]
Enforcement	Remedies, disposition license, standstill, customer-license continuity, source-code and data protections	[●]
Release	Payoff conditions, Release Documents (Exhibit 4), UCC-3, federal releases, escrow return, power-of-attorney revocation	[●]
Other financings	Permitted Senior IP Liens, intercreditor, Series A and strategic-license interaction, estoppel letters	[●]
Approvals	Board approval of the contingent grant, investor protective-provision consents, counterparty and regulatory consents	[●]

Structure Comparison and Founder Negotiation Notes — Not Part of the Agreement

A venture lender can take core intellectual property three ways. Each allocates perfection risk, control and flexibility differently. The table below is a negotiation aid; the operative provisions follow.

Feature	Lien on IP now	Negative pledge only	Negative pledge plus springing lien (this form)
Perfection	UCC-1 at closing; USPTO and Copyright Office recordation at closing; perfected from day one	None; lender holds a contractual promise, not a property interest	Nothing perfected until Activation Time; UCC, USPTO and Copyright Office steps occur after the trigger, with avoidance exposure if insolvency follows quickly
Lender control	Full secured-creditor remedies on any Event of Default; consent rights over every license outside the ordinary course	Breach of the pledge is an Event of Default but gives no lien; lender competes with unsecured creditors on IP value	Contractual control today; secured-creditor remedies on IP only after a defined trigger and the Perfection Period
Founder flexibility	Lowest; every exclusive license, IP transfer or IP holding-company step needs consent; future investors see a lender lien on the crown jewels	Highest among the three, but still restricts liens, exclusive licenses and transfers	Moderate; ordinary-course licensing and open-source distribution continue; exclusive and strategic licenses need consent; investors see a contingent, not current, lien
Cost	Recordation and filing fees at closing and on release; schedule maintenance; higher diligence burden for later rounds	Lowest closing cost; schedule maintenance and consent friction remain	Closing cost near the negative-pledge case; trigger-time cost of recordation, counsel and possibly escrow; ongoing schedule maintenance
Insolvency position	Strongest; perfected secured claim subject only to ordinary avoidance review	Unsecured as to IP	Lien granted and perfected inside the preference period is exposed to avoidance as a transfer on account of antecedent debt; a bankruptcy-filing trigger is largely ineffective because of the automatic stay
Signal to later investors and acquirers	Lender lien on core technology must be released or subordinated at exit	Clean title; pledge terminates at payoff	Clean title today; counsel for a new round will diligence the trigger definitions and may ask for threshold amendments or an estoppel letter

Why a negative pledge is not free. A negative pledge gives the lender no property interest, but it is a covenant whose breach is an Event of Default and often a Springing Lien Event. It blocks IP-backed financing alternatives (royalty monetization, patent-backed loans, licensing-revenue facilities), requires lender consent for exclusive or strategic licenses and intercompany IP transfers, invites counterparties to ask for lender acknowledgments, and imposes schedule-maintenance and notice duties that cost management time. The form limits those costs by defining Permitted Licenses broadly, using objective triggers, and providing deemed-consent and estoppel mechanics in Section 9.

Objective versus discretionary triggers. The single most important negotiation is Section 4.1. A trigger that depends on the lender’s election at any time is a current lien with a delay. Founders should insist that each Springing Lien Event be a verifiable fact (a payment default continuing beyond its grace period, a liquidity test failed on a reported date, a transfer of Material IP in breach of Section 2) and that each have notice and cure mechanics recorded on Schedule G.

What a springing lien means for a Series A or a strategic license. The contingent grant does not restrict equity issuance, but new investors will test the liquidity trigger against the post-money runway and may require the lender to re-set the Liquidity Threshold, deliver an estoppel letter or agree to release the springing lien on a Qualified Equity Financing. A strategic exclusive license is a prohibited Exclusive License under Section 2.2 unless consented to; the form provides a consent path with a deemed-consent clock in Section 9.5 so that the lender cannot block a strategic transaction by silence.

Interaction with existing investor consents. Most preferred-stock protective provisions require investor approval to incur debt or grant liens above a threshold. Because the grant in Section 4.3 is made today and becomes effective at the Activation Time, the board and any required investor class should approve the contingent grant at signing. Otherwise the Company may be unable to deliver the IP Security Agreement when the trigger occurs, converting a liquidity problem into a covenant default.

INTELLECTUAL PROPERTY NEGATIVE PLEDGE AND SPRINGING LIEN AGREEMENT

This Intellectual Property Negative Pledge and Springing Lien Agreement (this Agreement) is dated as of [DATE] (the Effective Date) and is entered into by [COMPANY LEGAL NAME], a [JURISDICTION] [ENTITY TYPE] (Company), [and each Subsidiary of Company that executes a joinder to this Agreement (together with Company, the Grantors),] in favor of [LENDER LEGAL NAME], [a [JURISDICTION] [ENTITY TYPE], in its capacity as collateral agent for the Lenders] (Secured Party).

Recitals

A. Company and Secured Party are parties to the [Loan and Security Agreement] dated as of [DATE] (as amended, restated, supplemented or otherwise modified from time to time, the Loan Agreement), under which the Lenders have agreed to extend credit to Company on the terms and conditions stated there.

B. Under Section [§] of the Loan Agreement, Company’s Intellectual Property is excluded from the present grant of a security interest, while Proceeds of Intellectual Property, accounts and payment intangibles arising from licenses, books and records, supporting obligations and other property remain Collateral to the extent stated in the Loan Agreement.

C. As a condition to the Lenders’ agreement to exclude Intellectual Property from the present grant, Company has agreed (i) not to encumber, exclusively license or transfer Material IP except as expressly permitted, (ii) to preserve, prosecute and protect its Intellectual Property, and (iii) upon the occurrence of a Springing Lien Event and delivery of a Trigger Notice, to grant and perfect a security interest in the Springing Collateral on the terms below.

D. The board of directors of Company [and the holders of the requisite classes of its capital stock] have approved this Agreement, including the contingent grant in Section 4.3, by resolutions dated [DATE].

The parties agree as follows.

1 Definitions and Interpretation

1.1 Defined Terms

Capitalized terms used but not defined in this Agreement have the meanings given in the Loan Agreement. The following terms have the meanings below.

Activation Time means the time at which the grant in Section 4.3 becomes effective, determined under Section 4.2(c).

Business Day has the meaning given in the Loan Agreement or, if none, means any day other than a Saturday, Sunday or day on which commercial banks in [CITY, STATE] are authorized or required to close.

Cash Burn means, for any measurement date, the average monthly net decrease in Liquidity over the trailing [three] calendar months, as reported in the most recent Compliance Certificate, excluding one-time proceeds of equity or debt financings and one-time non-recurring expenditures identified in that certificate.

Change of Control has the meaning given in the Loan Agreement or, if none, means (a) any person or group (other than holders of Company’s capital stock on the Effective Date and their affiliates) becoming the beneficial owner of more than [fifty percent (50%)] of the voting power of Company’s outstanding capital stock; (b) a merger or consolidation in which Company’s stockholders immediately before the transaction hold less than [fifty percent (50%)] of the voting power of the surviving entity immediately after; (c) a sale, exclusive license or other disposition of all or substantially all of Company’s assets or of all or substantially all Material IP; or (d) Company ceasing to own directly [one hundred percent (100%)] of any Subsidiary that owns Material IP. A bona fide equity financing for capital-raising purposes in which no single investor or group acquires control of the board of directors is not a Change of Control.

Collateral has the meaning given in the Loan Agreement.

Compliance Certificate has the meaning given in the Loan Agreement.

Copyleft License means any license that, as a condition of use, modification or distribution of software or other material licensed under it, requires that the software or other material, or any software or other material combined, linked or distributed with it, be (a) disclosed or distributed in source-code form, (b) licensed for the purpose of making derivative works, (c) licensed under terms that allow reverse engineering, or (d) redistributable at no or nominal charge, including the GNU General Public License, GNU Lesser General Public License, GNU Affero General Public License, Mozilla Public License, Eclipse Public License and any similar license identified on Schedule D.

Copyright Office means the United States Copyright Office.

Copyrights means all copyrights, works of authorship, mask works and database rights, whether registered or unregistered and whether published or unpublished, all registrations and applications for registration, all renewals and extensions, all rights to claim authorship and all moral rights to the extent assignable, in the United States and all other jurisdictions.

Default and Event of Default have the meanings given in the Loan Agreement.

Domain Names and Social Media Accounts means all internet domain names, uniform resource locators, social-media handles, application-store developer accounts and similar identifiers, together with the registrations, registrar and platform accounts and credentials associated with them.

Exclusive License means any license, covenant not to sue, option, right of first refusal or first negotiation or similar grant under which Company agrees not to grant the same or overlapping rights to others, in any field, territory, channel or period, whether or not the grant is labeled exclusive.

Excluded IP means (a) the Intellectual Property identified on Schedule E; (b) any Intellectual Property to the extent, and only for so long as, the grant of a security interest in it is prohibited by applicable law or would, under an enforceable provision of an Inbound License or other agreement in effect on the Effective Date or entered into as a Permitted License, result in the termination of Company’s rights or a breach of that agreement, in each case after giving effect to Sections 9-406, 9-407, 9-408 and 9-409 of the UCC and any other applicable anti-assignment override; (c) any application for a Trademark filed on an intent-to-use basis before an amendment to allege use or statement of use has been filed and accepted, to the extent that a grant of a security interest would impair the validity or enforceability of the application or any resulting registration; and (d) Intellectual Property that Company does not own, to the extent of the third party’s interest. Excluded IP does not include Proceeds of Excluded IP unless the pledge of those Proceeds is itself prohibited.

Inbound License means any agreement under which Company is granted rights in Intellectual Property owned by a third party, other than non-exclusive licenses of commercially available software or services on standard terms with aggregate annual fees below $[●].

Intellectual Property means all of the following, wherever arising, whether registered or unregistered, and whether now owned or later acquired: (a) Patents; (b) Trademarks, together with the goodwill of the business connected with their use and symbolized by them; (c) Copyrights; (d) Trade Secrets; (e) Software; (f) Domain Names and Social Media Accounts; (g) data, datasets, databases and compilations, including rights in training data, evaluation data and model weights to the extent protectable; (h) industrial designs, design rights and design patents; (i) rights of publicity and privacy to the extent held by Company; (j) Licenses and all rights under them; (k) all rights to sue for and recover damages for past, present and future infringement, misappropriation, dilution or other violation of any of the foregoing; and (l) all income, royalties, damages and payments due or payable under or with respect to any of the foregoing.

IP Security Agreement means a short-form intellectual property security agreement in substantially the form of Exhibit 1, suitable for recordation at the USPTO and the Copyright Office, covering the Springing Collateral that is Registered IP.

Lenders has the meaning given in the Loan Agreement or, if the Loan Agreement is bilateral, means Secured Party.

Licenses means Inbound Licenses and Outbound Licenses.

Lien has the meaning given in the Loan Agreement and in any event includes any security interest, mortgage, pledge, charge, hypothecation, encumbrance, conditional sale or assignment, sale of royalty or revenue streams, option or right exercisable upon a default or other contingency, or other arrangement having the practical effect of any of the foregoing, and any negative pledge or similar restriction in favor of a person other than Secured Party.

Liquidity means, as of any date, the sum of Company’s unrestricted and unencumbered cash and cash equivalents held in deposit and securities accounts [maintained with Secured Party or] subject to a control agreement in favor of Secured Party, [plus [●] percent of Company’s accounts receivable that are not more than [ninety] days past invoice date,] in each case as reported in the most recent Compliance Certificate or, if Secured Party reasonably requests, as certified by a Responsible Officer within [three] Business Days after request.

Liquidity Threshold means the greater of (a) $[●] and (b) an amount equal to [●] months of Cash Burn, or such other amount as the parties agree in writing in connection with a Qualified Equity Financing under Section 9.4.

Loan Documents has the meaning given in the Loan Agreement and includes this Agreement, each IP Security Agreement and each Trigger Notice.

Material IP means (a) each item of Registered IP designated as Material IP on Schedule A; (b) all Software, Trade Secrets and Copyrights embodied in or necessary to the development, operation, support or delivery of any product or service that generated [●] percent or more of Company’s revenue in the most recently completed fiscal quarter or that Company’s board of directors has designated in its current operating plan as a principal product; (c) each Trademark under which a product or service described in clause (b) is marketed; (d) each Domain Name and Social Media Account used as a principal customer-facing identifier; and (e) any other Intellectual Property the loss of which would reasonably be expected to have a Material Adverse Effect. Material IP does not include Excluded IP, but Company’s covenants under Sections 2, 5 and 6 apply to Material IP whether or not it would become Springing Collateral.

Obligations has the meaning given in the Loan Agreement.

Open Source Software means any software or other material licensed under (a) a license approved by the Open Source Initiative, (b) a Copyleft License, or (c) any other license that permits the licensee to freely use, copy, modify and redistribute the software or material.

Ordinary Course of Business means, with respect to a license or other transaction, that it is of a type, and on terms, consistent with Company’s past practice and the customary practice of companies in Company’s industry of comparable size and stage, is entered into for the purpose of commercializing Company’s products and services and not for the purpose of raising capital or transferring ownership of Intellectual Property, and does not require a disclosure of source code other than under an escrow arrangement permitted by Section 3.1(e).

Outbound License means any agreement under which Company grants a third party rights in Intellectual Property owned or controlled by Company.

Patents means all patents, patent applications, invention disclosures, provisional applications, continuations, continuations-in-part, divisionals, reissues, reexaminations, extensions and foreign counterparts, and all inventions and improvements described or claimed in any of them.

Payment in Full means the indefeasible payment in full in cash of all Obligations (other than contingent indemnification obligations for which no claim has been asserted), the termination or expiration of all commitments to extend credit under the Loan Agreement, and the cash collateralization, backstop or other arrangement acceptable to Secured Party of any outstanding letters of credit or similar contingent Obligations, in each case as provided in the Loan Agreement.

Perfection Period means the period beginning at the Activation Time and ending [ten (10)] Business Days later, as extended under Section 4.10.

Permitted Licenses means the licenses and dispositions permitted under Section 3.

Permitted Liens has the meaning given in the Loan Agreement.

Permitted Senior IP Lien means a Lien on Intellectual Property identified in Part 2 of Schedule E and permitted under Section 9.2.

Personnel means each current and former founder, employee, officer, consultant, independent contractor and advisor of Company or any Subsidiary who has contributed to the conception, development, reduction to practice or authorship of any Material IP.

Proceeds has the meaning given in the UCC and includes all royalties, license fees, milestone payments, damages, insurance proceeds and other amounts received or receivable in respect of Intellectual Property, whether as a result of a license, sale, infringement claim or otherwise.

Qualified Equity Financing means a bona fide sale of Company’s equity securities for capital-raising purposes resulting in aggregate gross cash proceeds to Company of at least $[●] in a single transaction or series of related transactions.

Registered IP means all Patents, Trademarks, Copyrights and Domain Names and Social Media Accounts that are the subject of an issued registration or a pending application with the USPTO, the Copyright Office, a domain-name registrar or any equivalent foreign or international office, in each case as identified on Schedule A as updated under Section 6.8.

Release Documents means the documents described in Section 8.2, including a release in substantially the form of Exhibit 4.

Responsible Officer has the meaning given in the Loan Agreement.

Software means all computer programs, source code, object code, firmware, scripts, application programming interfaces, software development kits, algorithms, models, model weights and parameters, data structures, user interfaces, documentation, build and deployment tools and all versions, updates and derivative works of any of them.

Specified Covenant Breach means a breach of any covenant listed in Part 2 of Schedule G that continues beyond the cure period, if any, stated there, [which shall consist only of Section 2, Section 6.7 and the covenants in the Loan Agreement governing [delivery of financial statements and Compliance Certificates, maintenance of deposit accounts, and permitted indebtedness]].

Springing Collateral means all of Company’s right, title and interest in and to all Intellectual Property, whether now owned or later acquired, and all Proceeds of it, other than Excluded IP, in each case as further described in Section 4.4.

Springing Lien Event means any of the events described in Section 4.1, after giving effect to every applicable notice and cure period and to any effective written waiver.

Standstill Period has the meaning given in Section 7.3.

Subsidiary has the meaning given in the Loan Agreement.

Trade Secrets means all trade secrets, know-how, confidential and proprietary information, inventions (whether or not patentable), processes, formulae, methods, techniques, specifications, customer and supplier lists and other information that derives independent economic value from not being generally known.

Trademarks means all trademarks, service marks, trade names, trade dress, logos, slogans, corporate names and other source identifiers, all registrations and applications for registration, all renewals and all goodwill of the business connected with the use of and symbolized by any of them.

Trigger Notice means a written notice from Secured Party to Company in substantially the form of Exhibit 2 delivered under Section 4.2.

UCC means the Uniform Commercial Code as in effect in the State of [●] or, to the extent the law of another jurisdiction governs attachment, perfection, priority or enforcement, the Uniform Commercial Code as in effect in that jurisdiction.

USPTO means the United States Patent and Trademark Office.

1.2 Interpretation

Headings are for convenience only. “Including” means including without limitation. References to a Section, Schedule or Exhibit are to those of this Agreement unless otherwise stated. References to an agreement include all permitted amendments and restatements. References to a statute include its implementing regulations and any successor provision. The word “or” is not exclusive. References to a “person” include any individual, entity or governmental authority.

1.3 Relationship to the Loan Agreement

This Agreement is a Loan Document. If a provision of this Agreement governing Intellectual Property conflicts with the Loan Agreement, this Agreement controls as to Intellectual Property and the Loan Agreement controls as to all other matters. Nothing in this Agreement expands the present grant of a security interest under the Loan Agreement, and no filing, recordation or notice made under this Agreement enlarges the Collateral beyond the executed grant.

2 Negative Pledge

Until Payment in Full, Company will not, and will not permit any Subsidiary to, directly or indirectly:

2.1 No Liens

Create, incur, assume or permit to exist any Lien on any Intellectual Property, other than (a) Liens in favor of Secured Party, (b) Permitted Senior IP Liens, (c) non-consensual Liens that constitute Permitted Liens under the Loan Agreement and that attach by operation of law to Company’s assets generally, and (d) the rights of licensors under Inbound Licenses. For this purpose a Lien includes any sale of royalty or revenue streams derived from Intellectual Property, any conditional assignment, and any grant of an option to acquire Intellectual Property upon a default or other contingency.

2.2 No Exclusive Licenses Outside the Ordinary Course

Grant any Exclusive License of any Intellectual Property, other than (a) Exclusive Licenses identified in Part 2 of Schedule C as in effect on the Effective Date, within their existing scope, (b) Exclusive Licenses permitted under Sections 3.1(g), 3.4, 3.5 and 3.7, and (c) Exclusive Licenses consented to by Secured Party under Section 9.5.

2.3 No Transfers or Abandonment of Material IP

Sell, assign, convey, contribute, transfer or otherwise dispose of any Material IP, or permit any Material IP to lapse, expire, be abandoned, be dedicated to the public, be cancelled or become unenforceable through any act or omission within Company’s control, other than (a) Permitted Licenses, (b) dispositions permitted under Sections 3.3, 3.4 and 3.5, and (c) transfers to another Grantor that has executed a joinder to this Agreement and whose Intellectual Property is subject to this Agreement on the same terms.

2.4 No Relocation of Ownership

Transfer legal or beneficial ownership of any Material IP to any Subsidiary or affiliate that is not a Grantor, to any person organized outside the United States, or to any newly formed intellectual-property holding entity, except as part of a reorganization expressly permitted by the Loan Agreement and in respect of which the transferee becomes a Grantor before or concurrently with the transfer.

2.5 No Agreements to Do Any of the Foregoing

Enter into any agreement, commitment, letter of intent (other than a non-binding letter of intent that is conditioned on Secured Party’s consent) or other arrangement to do any of the things described in Sections 2.1 through 2.4, or enter into any negative pledge, covenant not to grant Liens, or similar restriction in favor of any person other than Secured Party that would prohibit or condition the grant contemplated by Section 4.3, other than customary restrictions in Inbound Licenses that are described on Schedule B and that are subject to Section 9-408 of the UCC.

2.6 No Present Grant

Nothing in this Section 2 or elsewhere in this Agreement grants Secured Party a present security interest in, or any present ownership or license interest in, any Intellectual Property before the Activation Time. The covenants in Sections 2, 5 and 6 are intended to preserve value and prevent an unauthorized encumbrance, not to create a disguised current Lien. Before the Activation Time, Secured Party will not file any financing statement, record any document with the USPTO or the Copyright Office, or deliver any notice to a third party that describes Intellectual Property as current Collateral, [except that Secured Party may file a financing statement describing the Springing Collateral under Section 9-502(d) of the UCC if the financing statement states that the security interest is effective only from the Activation Time].

Drafting note: Lenders typically ask that the negative pledge cover “all Intellectual Property” and prohibit “any license other than non-exclusive licenses in the ordinary course.” The market position is to prohibit Liens on all IP but to limit the transfer and abandonment restrictions to Material IP, so that routine abandonment of immaterial registrations does not require consent. Founders should (i) add the “No Present Grant” language in Section 2.6, (ii) resist pre-filing of a UCC-1 against the Springing Collateral, or, if the lender insists, require the filing to state that the lien is contingent, and (iii) confirm that the Loan Agreement’s “all assets” financing statement does not describe IP in a way that misleads later lenders or investors. The bracketed pre-filing language is a lender ask; it shortens the perfection gap after a trigger but does not cure antecedent-debt preference exposure and can complicate a later round’s diligence.

3 Permitted Licenses and Dispositions

3.1 Non-Exclusive Licenses in the Ordinary Course

Company may grant non-exclusive licenses of Intellectual Property in the Ordinary Course of Business, including (a) customer, subscriber and end-user licenses of Software in object-code form or as a hosted service; (b) reseller, distributor, channel-partner, marketplace and systems-integrator licenses that are non-exclusive and terminable in accordance with their terms; (c) developer, application-programming-interface and software-development-kit licenses; (d) Trademark licenses to customers, partners and vendors for co-marketing and attribution; (e) source-code escrow arrangements with a recognized escrow agent for the benefit of customers, with release conditions limited to Company’s insolvency, cessation of support or material uncured breach and with a license to the customer limited to internal use and support of the licensed product; (f) licenses to contractors, service providers and manufacturers solely to perform services for Company; and (g) licenses that are exclusive only as to a single customer’s own customized deliverables, white-label branding or a named-account restriction that does not prevent Company from licensing the underlying platform to others. A license is not in the Ordinary Course of Business if it (i) grants the licensee the right to sublicense to unaffiliated third parties for the sublicensee’s own products, (ii) assigns or purports to assign ownership of any Material IP, (iii) has a term that cannot be terminated by Company within [●] years and covers Material IP on a royalty-free or fully paid-up basis for the licensee’s own commercialization, or (iv) is granted principally in exchange for an up-front payment unrelated to the licensee’s use.

3.2 Open-Source Distribution Under Permitted Licenses

Company may (a) use, modify and distribute Open Source Software in compliance with its license terms and Company’s open-source policy adopted under Section 6.5; (b) contribute code to Open Source Software projects that is not Material IP; and (c) release Software owned by Company under an Open Source Software license approved by the Open Source Initiative, if (i) the released Software is not Material IP or the board of directors has determined in good faith that the release is in Company’s commercial interest and Company has delivered notice to Secured Party at least [ten (10)] Business Days before the release, (ii) the release is not under a Copyleft License that would require disclosure of proprietary source code that is Material IP, and (iii) Company retains ownership of the released Software and all Trademarks associated with it. Releases of Material IP under an Open Source Software license outside clause (i) require Secured Party’s consent, which will not be unreasonably withheld, conditioned or delayed.

3.3 Abandonment of Immaterial Registrations

Company may allow Registered IP that is not Material IP to lapse or be abandoned, may decline to file or prosecute applications, and may decline to pay maintenance, renewal or annuity fees, in each case in the reasonable business judgment of Company and if Company provides Secured Party with a list of lapsed and abandoned items in the next annual update under Section 6.8.

3.4 End-of-Life Products

Company may sell, assign, license on an exclusive basis or abandon Intellectual Property that is used solely in a product or service that Company has discontinued or has committed to discontinue within [twelve] months, if (a) the product or service generated less than [●] percent of Company’s revenue in the preceding four fiscal quarters, (b) the Intellectual Property is not used in, and is not reasonably necessary to, any other product or service of Company, (c) the consideration received is applied as required by the Loan Agreement, and (d) Company delivers notice to Secured Party at least [ten (10)] Business Days before the disposition describing the Intellectual Property, the counterparty and the consideration.

3.5 Settlements

Company may enter into settlements of infringement, misappropriation, ownership, inventorship or validity disputes that include licenses, covenants not to sue, releases or cross-licenses, if the settlement (a) is on arm’s-length terms, (b) does not assign ownership of Material IP, (c) does not grant an Exclusive License of Material IP except as to the counterparty’s own products identified in the settlement, (d) does not restrict Company from using Material IP in its principal products, and (e) in the case of any settlement involving Material IP or consideration exceeding $[●], is disclosed to Secured Party within [ten (10)] Business Days after execution.

3.6 Inbound Licenses, Development Agreements and Personnel Assignments

Company may enter into Inbound Licenses, joint-development, sponsored-research and professional-services agreements, and employee, consultant and contractor confidentiality and invention-assignment agreements, if the agreement does not (a) grant a Lien on Material IP, (b) transfer ownership of Material IP to the counterparty, or (c) grant the counterparty an Exclusive License of Material IP other than as to the counterparty’s own pre-existing materials and the specific deliverables created for the counterparty and identified in the agreement.

3.7 Intercompany Licenses

Company may grant non-exclusive licenses to Subsidiaries for the conduct of their businesses, if the license terminates automatically upon the Subsidiary ceasing to be a Subsidiary and upon the exercise of remedies by Secured Party after the Activation Time, and may grant exclusive territorial licenses to wholly owned foreign Subsidiaries that have executed a joinder to this Agreement if the license is terminable by Company on no more than [thirty] days’ notice.

3.8 Existing Licenses

The Licenses identified on Schedules B and C are Permitted Licenses within their scope as of the Effective Date. Renewals, extensions and amendments that do not expand exclusivity, field, territory or sublicense rights, and that do not add anti-encumbrance restrictions, are Permitted Licenses.

Any license or disposition not permitted by Sections 3.1 through 3.8 requires Secured Party’s prior written consent under Section 9.5. Consent to a particular transaction does not waive this Section 3 for any other transaction.

Drafting note: The lender’s standard carve-out is a single line permitting “non-exclusive licenses in the ordinary course.” That line does not clearly cover hosted-service terms, source-code escrow for enterprise customers, white-label arrangements, named-account exclusivity, API programs or open-source releases, all of which a software company does routinely. Founders should enumerate the categories above and keep the Ordinary Course of Business definition tied to commercialization rather than to a dollar basket. The open-source carve-out should distinguish (i) using third-party open source, (ii) contributing immaterial code and (iii) open-sourcing a product; lenders generally accept (i) and (ii) without consent and (iii) with notice. The end-of-life and settlement carve-outs are usually accepted once revenue and dollar thresholds are inserted.

4 Springing Lien

4.1 Springing Lien Events

Each of the following is a Springing Lien Event, in each case only after the expiration of any applicable notice and cure period under the Loan Agreement and Schedule G, and only if not waived in a writing signed by Secured Party:

Event of Default. An Event of Default under [Section [§] (payment), Section [§] (insolvency) or Section [§] (breach of this Agreement) of] the Loan Agreement has occurred and is continuing;
Specified Covenant Breach. A Specified Covenant Breach has occurred and is continuing;
Liquidity below threshold. Liquidity is less than the Liquidity Threshold [as of the last day of any calendar month as reported in the Compliance Certificate for that month] [on any date], and Company has not restored Liquidity to an amount at or above the Liquidity Threshold within [●] Business Days after the earlier of (i) delivery of that Compliance Certificate and (ii) written notice from Secured Party identifying the shortfall, whether through a Qualified Equity Financing, subordinated debt permitted under the Loan Agreement or otherwise;
**[Lender election after notice.** Secured Party delivers written notice of its election to designate a Springing Lien Event at any time when a Default has occurred and is continuing, and the Default is not cured within [●] Business Days after that notice;] and
Change of Control. A Change of Control occurs or Company enters into a definitive agreement providing for a Change of Control, unless the Obligations are to be, and are, paid in full concurrently with the closing of the Change of Control.

Each Springing Lien Event is independent. The occurrence of a Springing Lien Event does not itself accelerate the Obligations or constitute an Event of Default unless the underlying event is also an Event of Default under the Loan Agreement.

Drafting note: Trigger definitions are the center of the negotiation. The lender’s typical ask is clauses (a) through (e) with (a) covering any Event of Default and (d) permitting the lender to elect a trigger on any Default. The market range is: (a) limited to payment, insolvency and IP-covenant Events of Default, or to any Event of Default after its cure period; (b) limited to a short list in Schedule G; (c) a liquidity floor set between a fixed dollar amount and a multiple of Cash Burn, typically between [two] and [six] months, tested monthly on reported figures with a cure window; (d) deleted or limited to an election after an Event of Default (in which case it collapses into (a)); and (e) retained but with a payoff exception. Founder-protective positions: use only verifiable events, test Liquidity on reported dates rather than “at any time,” include a cure window long enough to close a bridge round, exclude technical and reporting Defaults, and record each parameter on Schedule G so that the Trigger Notice can be checked against a fixed list. A trigger consisting of the filing of a bankruptcy petition is of limited use to the lender because the automatic stay generally bars acts to create or perfect a lien after the petition; both sides should understand that the lender’s real protection comes from triggers that occur well before insolvency.

4.2 Trigger Notice

Delivery. Upon the occurrence of a Springing Lien Event, Secured Party may deliver a Trigger Notice to Company in accordance with Section 10.1. The Trigger Notice must (i) identify the Springing Lien Event by reference to the applicable clause of Section 4.1 and Schedule G, (ii) state the facts on which Secured Party relies, including, for a Liquidity trigger, the Compliance Certificate or officer’s certificate and the calculation, (iii) confirm that applicable notice and cure periods have expired and that no written waiver is in effect, (iv) state the Activation Time, (v) describe the Springing Collateral by category, and (vi) list the deliverables required under Sections 4.6 through 4.8 and the dates by which they are due.
No activation without notice. No Lien attaches to any Intellectual Property under this Agreement unless and until a Trigger Notice has been delivered in compliance with this Section 4.2. Secured Party’s failure or election not to deliver a Trigger Notice after a Springing Lien Event is not a waiver of the Springing Lien Event or of any other right under the Loan Documents, but a Springing Lien Event that has been cured or waived before delivery of a Trigger Notice may not be the basis of a Trigger Notice.
Activation Time. The Activation Time is the later of (i) the time of delivery of the Trigger Notice under Section 10.1 and (ii) the time stated in the Trigger Notice, [which may not be earlier than [●] Business Days after delivery in the case of a Springing Lien Event under Section 4.1(c) or (d)].
Disputed trigger. If Company disputes in good faith that a Springing Lien Event has occurred, Company must deliver written notice of the dispute, with its reasons and supporting calculations, within [three (3)] Business Days after receipt of the Trigger Notice. Delivery of a dispute notice does not suspend the Activation Time or Company’s obligations under Sections 4.6 through 4.8, but Secured Party will not exercise remedies under Section 7.1 against Springing Collateral during the Standstill Period while the dispute is pending, and if it is finally determined that no Springing Lien Event occurred, Secured Party will promptly deliver Release Documents and the grant under Section 4.3 will be of no effect from the Activation Time.

4.3 Automatic Grant at the Activation Time

As security for the prompt and complete payment and performance of the Obligations, Company grants to Secured Party, for the benefit of the Lenders, a continuing security interest in and Lien on all of Company’s right, title and interest in, to and under the Springing Collateral, whether now owned or later acquired and wherever located. The grant in this Section 4.3 is made as of the Effective Date but is effective, and the security interest attaches, only as of and from the Activation Time and not before. Company acknowledges that value has been given, that this Agreement is an authenticated security agreement describing the Springing Collateral, and that no further act of Company is required for attachment at the Activation Time, although Company will deliver the documents described in Sections 4.6 through 4.8 to evidence, confirm and perfect the security interest. If applicable law requires an additional instrument for attachment to any item of Springing Collateral, Company will execute and deliver that instrument within the Perfection Period.

Drafting note: The grant is drafted as a present execution with deferred effectiveness so that the lender need not obtain a new signature at the trigger, when cooperation may be unavailable. Counsel for both sides should test this formulation under the governing UCC: attachment requires value, rights in the collateral and an authenticated security agreement, and parties may agree to postpone the time of attachment. Founders should insist on the words “only as of and from the Activation Time and not before” and on Section 2.6, so that neither a court nor a later investor reads this Agreement as a current grant. The lender’s reasonable protection is Section 4.6, under which the Company pre-signs the short-form IP Security Agreement and holds it in escrow or delivers it within a short deadline.

4.4 Scope of the Grant

Included. The Springing Collateral includes all Intellectual Property other than Excluded IP, including the Registered IP on Schedule A as updated, all Software and Trade Secrets, all Outbound Licenses and the right to receive payments under them, all Inbound Licenses to the extent assignable or to the extent a security interest may be granted under Section 9-408 of the UCC, all goodwill associated with the Trademarks, all rights to sue for past, present and future infringement, and all Proceeds.
Excluded. The Springing Collateral does not include Excluded IP, but includes any Intellectual Property that ceases to be Excluded IP (for example, upon acceptance of a statement of use for an intent-to-use application, receipt of a required consent or the expiration of a contractual restriction) automatically and without further action at the time it ceases to be Excluded IP.
After-acquired. Intellectual Property acquired or developed after the Activation Time becomes Springing Collateral automatically upon acquisition or creation.
No assumption. Secured Party does not assume any obligation of Company under any License or other agreement by reason of the grant, and Company remains liable to perform all of its obligations under the Licenses.
Licenses preserved. The security interest is subject to the rights of licensees under Permitted Licenses and other Licenses in effect at the Activation Time or entered into after the Activation Time with Secured Party’s consent, and Secured Party will not disturb those rights in exercising remedies except to the extent permitted by the applicable License and applicable law.

4.5 Perfection Cooperation

From and after the Activation Time, Company will, at its expense, take all actions reasonably requested by Secured Party to perfect, protect and maintain the priority of the security interest in the Springing Collateral, including (a) executing and delivering IP Security Agreements and supplements for after-acquired Registered IP; (b) delivering updated Schedules A through F as of the Activation Time within [five (5)] Business Days after the Activation Time; (c) obtaining consents required under Inbound Licenses identified on Schedule B as requiring consent; (d) providing registrar and platform information reasonably necessary to confirm Company’s ownership of Domain Names and Social Media Accounts, without disclosing credentials except under a documented enforcement protocol after an Event of Default; (e) where Material IP is registered outside the United States and Secured Party determines that foreign perfection is cost-justified, executing local-law security documents, notarizations and legalizations identified in Schedule H; and (f) delivering officer’s certificates confirming the accuracy of the Schedules. Company need not deliver source code, encryption keys, passwords or privileged materials under this Section 4.5.

4.6 Delivery of Executed IP Security Agreement

At signing. [Concurrently with the execution of this Agreement, Company will execute and deliver to [Secured Party / ESCROW AGENT] an undated IP Security Agreement covering the Registered IP on Schedule A, to be held in escrow and released only in accordance with Part 4 of Schedule G.] [Company will execute and deliver an IP Security Agreement only after the Activation Time as provided in clause (b).]
After the Activation Time. Within [three (3)] Business Days after the Activation Time, Company will execute and deliver to Secured Party an IP Security Agreement, dated as of the Activation Time, covering all Registered IP that is Springing Collateral as of the Activation Time, together with any supplements required to cover Registered IP acquired after the date of Schedule A.
Failure to deliver. If Company fails to deliver an IP Security Agreement when due, Secured Party may complete, date and record the escrowed IP Security Agreement or execute an IP Security Agreement on Company’s behalf under the power of attorney in Section 4.9, and Company’s failure constitutes an Event of Default under the Loan Agreement after the cure period, if any, stated there.

4.7 Recordation at the USPTO and the Copyright Office

Patents and Trademarks. Within the Perfection Period, Secured Party may record, and Company authorizes Secured Party to record, the IP Security Agreement with the USPTO against each Patent and Trademark registration and application listed on Schedule A that is Springing Collateral, using a recordation cover sheet consistent with Exhibit 3. The parties acknowledge that a UCC financing statement is generally the method of perfecting a security interest in Patents and Trademarks and that USPTO recordation is made to protect against subsequent purchasers and to give notice.
Copyrights. Within the Perfection Period, Secured Party may record, and Company authorizes Secured Party to record, the IP Security Agreement with the Copyright Office against each registered Copyright and pending application listed on Schedule A that is Springing Collateral. The parties acknowledge that recordation with the Copyright Office is generally required to perfect a security interest in registered Copyrights and that a UCC financing statement is generally the method of perfection for unregistered Copyrights. Company will, at Secured Party’s request after the Activation Time and at Company’s expense, apply to register the Copyright in each release of Software that is Material IP, using deposit procedures that protect Trade Secrets to the extent permitted by Copyright Office practice.
Domain Names and Social Media Accounts. Company will not transfer, and will instruct its registrars and platform providers not to permit the transfer of, any Domain Name or Social Media Account that is Material IP after the Activation Time without Secured Party’s consent, and will maintain registrar lock and multi-factor authentication on each such account.
Foreign. Foreign recordation and local-law security steps are governed by Section 4.5(e) and Schedule H.

4.8 UCC Financing Statements

From and after the Activation Time, Company authorizes Secured Party to file UCC financing statements and amendments in the jurisdiction of Company’s location under Section 9-307 of the UCC describing the Springing Collateral as “all intellectual property of the debtor, whether now owned or hereafter acquired, and all proceeds thereof, other than Excluded IP as defined in the Intellectual Property Negative Pledge and Springing Lien Agreement dated [DATE],” or any other description that is accurate and consistent with the executed grant. If a financing statement covering Company’s assets generally is already of record, Secured Party may file an amendment adding the Springing Collateral rather than a new initial financing statement. No financing statement filed under this Agreement will describe Excluded IP as Collateral.

4.9 Power of Attorney Limited to Perfection

Effective only from and after the Activation Time, Company irrevocably appoints Secured Party as its attorney-in-fact, with full power of substitution, coupled with an interest, solely to (a) complete, date, execute and deliver on Company’s behalf any IP Security Agreement, supplement or foreign-law security document that Company has failed to deliver when due under this Agreement; (b) execute and file recordation cover sheets, financing statements, amendments, continuation statements and similar perfection filings; (c) correct clerical errors in filings; and (d) obtain from registrars and offices confirmation of record ownership. This power of attorney does not authorize Secured Party to license, assign, settle, abandon, prosecute, respond to office actions or otherwise deal with any Intellectual Property, to access Company’s systems or source code, or to communicate with Company’s customers, except as separately permitted under Section 7 after an Event of Default. The power of attorney terminates automatically upon Payment in Full and the delivery of Release Documents.

4.10 Timing; Perfection Period

Company and Secured Party will complete the actions in Sections 4.5 through 4.8 within the Perfection Period. The Perfection Period is extended day-for-day for any delay caused by a filing office, registrar or foreign authority, or by Secured Party’s failure to provide information or signatures within its control, and may be extended by Secured Party in writing. Secured Party will deliver to Company copies of each filing and recordation and each acknowledgment within [five (5)] Business Days after receipt, and the parties will record each action in Schedule H.

4.11 Cure Before Activation; Rescission

If, before the Activation Time stated in a Trigger Notice, the Springing Lien Event is cured (including, in the case of Section 4.1(c), by the closing of a Qualified Equity Financing that restores Liquidity to at least the Liquidity Threshold) or waived in writing, the Trigger Notice is rescinded automatically, no grant becomes effective, and Secured Party will confirm the rescission in writing within [three (3)] Business Days after Company’s request. Secured Party may rescind a Trigger Notice at any time before the Activation Time by written notice. A rescinded Trigger Notice does not prevent Secured Party from delivering a new Trigger Notice upon a subsequent Springing Lien Event.

4.12 One-Time Activation; Continuing Lien

Once the Activation Time has occurred and has not been rescinded under Section 4.11 or reversed under Section 4.2(d), the security interest continues until Payment in Full notwithstanding any later cure of the Springing Lien Event, [except that if the Springing Lien Event was a Liquidity trigger under Section 4.1(c) and Company restores Liquidity to at least [●] percent of the Liquidity Threshold and no Default exists for [●] consecutive months, Company may request, and Secured Party will not unreasonably refuse, a release of the security interest under Section 8.3].

5 Representations and Warranties

Company represents and warrants to Secured Party on the Effective Date, on each date on which representations are made or deemed made under the Loan Agreement, and on the Activation Time, in each case subject to the exceptions on Schedules A through F as then in effect, that:

5.1 Ownership

Company (or a Grantor) is the sole and exclusive legal and beneficial owner of all Material IP that it purports to own, free and clear of all Liens other than Permitted Senior IP Liens and Liens permitted under Section 2.1, and holds valid and enforceable rights under each Inbound License to use the licensed Intellectual Property as currently used in its business. Schedule A lists the owner of record for each item of Registered IP, and where the owner of record differs from Company, Part 6 of Schedule A describes the discrepancy and the remediation plan.

5.2 Validity and Enforceability

To Company’s knowledge, each item of Registered IP that is Material IP is subsisting and has not been adjudged invalid or unenforceable in whole or in part, and no Registered IP that is Material IP is the subject of any pending or, to Company’s knowledge, threatened opposition, cancellation, interference, inter partes review, post-grant review, reexamination, invalidity or similar proceeding, except as disclosed on Schedule A. Company has not received written notice challenging the validity, enforceability or ownership of any Material IP.

5.3 No Infringement by Company

To Company’s knowledge, the conduct of Company’s business as currently conducted, including the development, use, licensing and distribution of its products and services, does not infringe, misappropriate, dilute or otherwise violate the Intellectual Property of any person, and Company has not received within the [three] years before the Effective Date any written claim, demand, cease-and-desist letter or offer to license alleging the foregoing, except as disclosed on Schedule A.

5.4 No Infringement Against Company

To Company’s knowledge, no person is infringing, misappropriating, diluting or otherwise violating any Material IP in a manner that would reasonably be expected to have a Material Adverse Effect, except as disclosed on Schedule A. Company has not asserted any claim of infringement against any person that remains pending, except as disclosed on Schedule A.

5.5 Personnel Assignment Agreements

Each item of Personnel has executed a written agreement that (a) presently assigns to Company (using present-tense assignment language) all right, title and interest in Intellectual Property conceived, developed or reduced to practice within the scope of the person’s work for Company, (b) contains confidentiality obligations protecting Company’s Trade Secrets, (c) includes any notice required by applicable state law concerning inventions developed on the employee’s own time, and (d) to the extent permitted by law, waives or agrees not to assert moral rights, in each case except as disclosed on Schedule F. No current or former Personnel has asserted, or to Company’s knowledge has a reasonable basis to assert, any ownership interest in or right to compensation in respect of any Material IP, other than compensation payable under the person’s engagement terms.

5.6 No Open-Source Contamination of Proprietary Code

Schedule D lists each component of Open Source Software licensed under a Copyleft License that is incorporated into, linked with, or distributed with any Software that is Material IP, and describes the manner of use. Except as disclosed on Schedule D, Company has not used, modified or distributed Open Source Software in any manner that (a) requires or conditions the use or distribution of any Software that is Material IP on the disclosure, licensing or distribution of its source code, (b) grants any person the right to decompile, disassemble or reverse engineer any Software that is Material IP, (c) requires that Software that is Material IP be licensed for the purpose of making derivative works or be redistributable at no charge, or (d) requires Company to grant any patent license or non-assertion covenant beyond the scope of the Open Source Software component itself. Company is in compliance in all material respects with the license terms of all Open Source Software it uses and distributes.

5.7 No Government or University Rights

Except as disclosed on Schedule B, (a) no funding, facilities, personnel or resources of any governmental authority, university, college, research institute, hospital or other non-profit organization were used in the development of any Material IP; (b) no governmental authority or such institution has any ownership interest, license, march-in right, retained right, manufacturing-preference right or other claim in or to any Material IP, including under the Bayh-Dole Act or any sponsored-research, grant or cooperative agreement; and (c) no Material IP is subject to any standards-setting organization obligation requiring Company to license it on fair, reasonable and non-discriminatory or royalty-free terms.

5.8 Registrations Current

All registrations and applications for Registered IP that is Material IP are in full force and effect, all maintenance, renewal and annuity fees due before the Effective Date have been paid, all required filings, declarations and responses due before the Effective Date have been made, and no such registration or application will lapse or go abandoned within [ninety] days after the Effective Date for failure to take an action within Company’s control, except as disclosed on Schedule A.

5.9 No Undisclosed Licenses

Schedule B lists all Inbound Licenses and Schedule C lists all Outbound Licenses that (a) are exclusive in any respect, (b) involve Material IP and provide for annual payments by or to Company exceeding $[●], (c) contain source-code escrow, release or access provisions, (d) contain provisions restricting the grant of a Lien on, or the assignment of, Intellectual Property, (e) contain change-of-control, anti-assignment or termination-on-insolvency provisions that would be triggered by the exercise of remedies under this Agreement, or (f) grant any option, right of first refusal, right of first negotiation, most-favored-customer right or covenant not to sue relating to Material IP. No party to any License listed on Schedule B or C has delivered written notice of termination or material breach that remains unresolved.

5.10 No Liens or Competing Pledges

No Intellectual Property is subject to any Lien other than those permitted under Section 2.1, no financing statement or recorded security document covering Intellectual Property is of record in any UCC filing office, the USPTO or the Copyright Office except as listed in Part 2 of Schedule E and those in favor of Secured Party, and Company is not party to any negative pledge or similar covenant in favor of any person other than Secured Party that would restrict the grant in Section 4.3.

5.11 Schedules Complete

Schedules A through F are true, correct and complete in all material respects as of the date made or updated, and the Material IP designations on Schedule A are consistent with the definition of Material IP.

5.12 Authority and Consents

Company has all requisite power and authority to execute, deliver and perform this Agreement, including the contingent grant in Section 4.3 and the delivery of the IP Security Agreement at the Activation Time; this Agreement has been duly authorized by all necessary corporate action, including any approval of holders of preferred stock required under Company’s certificate of incorporation, investors’ rights agreement or other investor agreements; and no consent of any governmental authority or third party is required for the grant or perfection of the security interest in the Springing Collateral other than the filings and recordations described in Section 4 and the consents identified on Schedule B.

5.13 Qualifications

The representations in this Section 5 are made subject to the knowledge and materiality qualifiers stated in them and are not guarantees that any Patent will issue, that any registration will remain valid, that no third party will assert a claim, or that any infringement claim by Company will succeed. “Knowledge” means the actual knowledge of the Responsible Officers and of Company’s [chief technology officer / head of engineering / general counsel] after reasonable inquiry of the persons responsible for the relevant subject matter.

Drafting note: Lenders ask for flat representations of ownership, validity and non-infringement. The market position accepts a knowledge qualifier on validity, enforceability and infringement (both directions), a flat representation on ownership of Registered IP and on the existence of Personnel assignment agreements, and a scheduled exception approach for open source and government rights. Founders should (i) define knowledge as the actual knowledge of named roles after reasonable inquiry, (ii) bring down the representations only on dates when Loan Agreement representations are brought down, and (iii) make sure the Personnel representation refers to present-assignment language and does not promise that every former contractor from the company’s history signed, which is rarely true; Schedule F exists to disclose the gaps and a remediation plan.

6 Covenants

Until Payment in Full, Company will, and will cause each Grantor to:

6.1 Maintain and Prosecute Registered IP

Maintain each item of Registered IP that is Material IP in full force and effect; pay all maintenance, renewal and annuity fees when due; file all declarations of use, affidavits, renewals and responses to office actions within the applicable period, excluding extensions available only on payment of surcharges unless commercially reasonable; and diligently prosecute each pending application that is Material IP, in each case using patent and trademark counsel of recognized standing. (b) Not do or omit to do any act whereby any Material IP may become invalidated, abandoned, dedicated to the public or unenforceable, other than as permitted by Section 3. (c) Maintain a docketing system or engage docketing counsel that tracks every deadline for Registered IP, and provide Secured Party with a summary of the docket on request not more than [twice] per year absent a Default.

6.2 Register Material New IP

Within [ninety (90)] days after the first commercial release of any product or service that is or is reasonably expected to become a principal product, or after the adoption of any new principal brand, file (a) applications to register the principal Trademarks under which the product or service is marketed in the United States [and in each jurisdiction that accounts for more than [●] percent of Company’s revenue], and (b) applications to register the Copyright in the Software constituting the product, using deposit methods that protect Trade Secrets. Company will consider in good faith, and document its decision regarding, the filing of Patent applications for inventions that Company’s engineering leadership identifies as material, but Company is not required to seek Patent protection for any invention if it reasonably determines that Trade Secret protection or publication is the better course. Company will notify Secured Party of each new application and registration in the next annual update under Section 6.8 or, after the Activation Time, within [ten (10)] Business Days.

6.3 Notice of Claims, Challenges and Lapses

Deliver written notice to Secured Party within [ten (10)] Business Days after a Responsible Officer obtains knowledge of (a) any written claim or demand alleging that Company’s products or services infringe, misappropriate or violate any person’s Intellectual Property, where the claim could reasonably be expected to result in liability or royalties exceeding $[●] or to require Company to cease using any Material IP; (b) any pending or threatened opposition, cancellation, interference, inter partes review, post-grant review, reexamination or other proceeding challenging the validity, enforceability or ownership of any Material IP; (c) any claim by any current or former Personnel to ownership of or compensation for any Material IP; (d) any lapse, abandonment, cancellation, expiration (other than at the end of the statutory term) or final rejection of any Registered IP that is Material IP; (e) any material breach or threatened termination of any License listed on Schedule B or C; (f) any discovery that Software that is Material IP has been combined with Open Source Software in a manner described in Section 5.6(a) through (d); and (g) any infringement of Material IP by a third party that Company reasonably determines to be material. Each notice must describe the matter, Company’s assessment and its intended response.

6.4 Personnel Assignment Agreements

Require each person who becomes Personnel after the Effective Date to execute, before commencing work, a written confidentiality and invention-assignment agreement meeting the requirements of Section 5.5; use commercially reasonable efforts to obtain, within [one hundred eighty (180)] days after the Effective Date, confirmatory assignments from each person identified on Schedule F as having a gap; record assignments of Registered IP with the USPTO and any applicable foreign office within [sixty (60)] days after execution; and update Schedule F in each annual update under Section 6.8.

6.5 Open-Source Policy

Within [sixty (60)] days after the Effective Date (if not already in effect), adopt and thereafter maintain and enforce a written open-source software policy that (a) requires engineering approval before any Open Source Software licensed under a Copyleft License is incorporated into, linked with or distributed with Software that is Material IP; (b) requires maintenance of a software bill of materials or equivalent inventory identifying each Open Source Software component, its version, its license and its manner of use; (c) prohibits the use of Open Source Software in any manner described in Section 5.6(a) through (d) without approval by [the chief technology officer and counsel]; (d) requires compliance with attribution, notice and source-availability obligations; and (e) requires periodic scanning of the code base using a recognized software-composition-analysis tool, not less than [annually] and before each major release. Company will deliver a copy of the policy and a summary of the most recent scan results to Secured Party with each annual update under Section 6.8.

6.6 Source-Code Escrow Option

[Company is not required to deposit source code in escrow for the benefit of Secured Party before the Activation Time.] [Within [●] days after the Effective Date, Company will deposit, and thereafter update not less than [quarterly], the source code, build instructions and deployment documentation for the Software that is Material IP with [ESCROW AGENT] under a three-party escrow agreement in form reasonably acceptable to Secured Party, providing for release to Secured Party only after the Activation Time and the occurrence and continuance of an Event of Default, with use by Secured Party limited to the exercise of remedies under Section 7 and subject to the confidentiality and security protocols in Part 4 of Schedule G.] If Company maintains source-code escrow arrangements for customers, Company will deliver to Secured Party a list of those arrangements and their release conditions on Schedule C, and will not agree to release conditions that would be triggered by the exercise of Secured Party’s remedies under this Agreement without Secured Party’s consent.

Not grant any Exclusive License of Material IP, or amend any existing Exclusive License to expand its field, territory, term or sublicense rights, without Secured Party’s prior written consent under Section 9.5, other than as permitted by Section 3.1(g), Section 3.4, Section 3.5 or Section 3.7.

6.8 Annual IP Schedule Update

Deliver to Secured Party, within [thirty (30)] days after the end of each fiscal year [and within [thirty (30)] days after the end of each fiscal quarter in which Company files or acquires Registered IP, enters into a License required to be listed on Schedule B or C, or identifies a change to Schedule D, E or F], updated Schedules A through F certified by a Responsible Officer as true, correct and complete in all material respects as of the update date, together with a summary of (a) new applications, registrations, lapses and abandonments; (b) new Licenses required to be scheduled; (c) changes in Material IP designations; (d) changes in Personnel assignment status; (e) open-source policy compliance; and (f) pending or threatened claims. Updated Schedules supplement and, to the extent they conflict, supersede prior Schedules, but an update does not cure a breach of a representation made on a prior date.

6.9 Records; Inspection

Maintain records reasonably sufficient to establish authorship, inventorship, dates of conception and reduction to practice, chain of title and material License terms for all Material IP, and permit Secured Party, on reasonable notice and not more than [once] per year absent a Default, to review those records and discuss them with Company’s officers and outside IP counsel, subject to the confidentiality obligations in Section 10.9 and to preservation of attorney-client privilege and work-product protection.

6.10 Trade Secret Protection and Security Controls

Maintain commercially reasonable measures to protect the secrecy of Trade Secrets and the integrity and availability of Software that is Material IP, including access controls, source-code repository controls, confidentiality agreements with all persons given access, encryption of source code at rest and in transit, offsite or cloud backups tested not less than [quarterly], and an information-security program consistent with the Loan Agreement.

6.11 Compliance with Inbound Licenses

Perform all material obligations under each Inbound License listed on Schedule B, not take any action that would permit the licensor to terminate the Inbound License, and use commercially reasonable efforts to obtain, before the Activation Time or within the Perfection Period, any consent identified on Schedule B as required for the grant of a security interest in Company’s rights under the Inbound License.

6.12 Further Assurances Before the Activation Time

Before the Activation Time, provide, within [ten (10)] Business Days after Secured Party’s reasonable request and not more than [twice] per year absent a Default, information reasonably necessary to evaluate Material IP and to prepare contingent filings, including draft recordation cover sheets and UCC descriptions, and maintain the Schedules in accordance with Section 6.8. Before the Activation Time, Company is not required to deliver an executed IP Security Agreement (other than as provided in Section 4.6(a)), source code, passwords, encryption keys or privileged communications.

Drafting note: The covenant package above is broader than the typical lender form, which usually contains only maintenance, notice and schedule-update covenants. The additional covenants (open-source policy, personnel-assignment remediation, trade-secret controls) are included because they are the areas where a lender’s diligence most often finds problems, and because a founder who has already adopted these controls can accept them at little cost. Founders should negotiate (i) that the obligation to register new IP is limited to Trademarks and Copyrights for principal products, with Patent decisions left to business judgment; (ii) that notice thresholds carry dollar amounts; (iii) that the source-code escrow option remains a bracketed option and, if accepted, releases only after the Activation Time and an Event of Default; and (iv) that schedule updates are annual with event-driven supplements rather than monthly.

7 Secured Party’s Rights After the Activation Time

7.1 Remedies

From and after the Activation Time, and subject to the Standstill Period and the Loan Agreement, upon the occurrence and during the continuance of an Event of Default, Secured Party may exercise with respect to the Springing Collateral all rights and remedies of a secured party under the UCC and other applicable law and under the Loan Documents, including the right to (a) notify licensees under Outbound Licenses to make payments directly to Secured Party; (b) collect and apply Proceeds; (c) sell, license, assign or otherwise dispose of the Springing Collateral at public or private sale in accordance with Section 9-610 of the UCC, with Company agreeing that [ten (10)] days’ notice of a disposition is commercially reasonable; (d) retain the Springing Collateral in full or partial satisfaction of the Obligations in accordance with Sections 9-620 through 9-622 of the UCC; and (e) exercise all rights of Company under the Licenses to the extent assignable. Secured Party may dispose of Springing Collateral together with or separately from other Collateral.

7.2 License to Use Intellectual Property to Dispose of Collateral

Effective only from and after the Activation Time and during the continuance of an Event of Default, Company grants Secured Party an irrevocable, non-exclusive, royalty-free license (exercisable without payment of royalty or other compensation to Company) to use, operate, copy, display, modify and sublicense the Intellectual Property, including Excluded IP to the extent Company has the right to grant such a license, solely to the extent necessary to (a) complete, maintain, host, support, advertise, market, collect, sell or otherwise dispose of the Collateral and the Springing Collateral; (b) collect accounts and payment intangibles; (c) continue service to customers under Outbound Licenses during a transition period not exceeding [●] months; and (d) transfer customer relationships to a purchaser of the Springing Collateral. The license is subject to the rights of licensors under Inbound Licenses, to Company’s quality-control standards for Trademarks, and to the confidentiality and data-protection protocols in Section 7.4. The license terminates upon Payment in Full or upon completion of the disposition of the Collateral, whichever occurs first, and does not authorize Secured Party to operate Company’s business for its own account.

7.3 Standstill

Notwithstanding Section 7.1, Secured Party will not sell, license, assign or otherwise dispose of any Springing Collateral, or notify licensees or customers to redirect payments, until the date that is [thirty (30)] days after the Activation Time (the Standstill Period), except that the Standstill Period does not apply (a) if the Springing Lien Event is an Event of Default under the insolvency provisions of the Loan Agreement, (b) if Company has failed to deliver the IP Security Agreement or to perform Section 4.5 when due, (c) to protective filings, recordations and notices to preserve or perfect the security interest, or (d) if Company or any Subsidiary has taken any action to transfer or encumber Material IP in breach of Section 2. During the Standstill Period Company may pursue a refinancing, Qualified Equity Financing or sale transaction sufficient to achieve Payment in Full, and Secured Party will cooperate reasonably by providing payoff information and, upon Payment in Full, Release Documents.

7.4 Enforcement Safeguards

In exercising remedies against Springing Collateral, Secured Party will (a) respect the rights of licensees under Permitted Licenses and other Licenses in effect at the Activation Time, including customer rights to continued service and support in accordance with their terms, and will require any purchaser of Springing Collateral to assume or honor those Licenses to the extent required by their terms and applicable law; (b) not disclose source code, Trade Secrets, personal data or regulated data except to prospective purchasers, agents and advisors under written confidentiality agreements no less protective than Section 10.9 and in compliance with applicable privacy, data-protection and export-control laws; (c) conduct any disposition in a manner that preserves evidence of chain of title and does not knowingly impair the validity of any Registered IP, including by transferring Trademarks together with their associated goodwill and quality-control obligations; (d) comply with any consent requirements under Inbound Licenses identified on Schedule B and applicable law; and (e) use commercially reasonable efforts to minimize avoidable interruption of service to Company’s customers. Secured Party has no duty to preserve rights against prior parties, to prosecute or maintain any Registered IP, or to pursue infringers, and is not an operator or fiduciary of Company’s business by reason of holding a security interest or exercising remedies.

7.5 Transition Assistance

After an Event of Default and the Activation Time, Company will provide Secured Party and any purchaser of Springing Collateral with transition assistance reasonably necessary to transfer the Springing Collateral and continue service to customers, including delivery of source code, build environments, documentation and credentials under a documented protocol, for a period not exceeding [●] days, [at Secured Party’s expense at Company’s then-current cost for personnel time] [as part of the Obligations]. Company’s obligation is limited to the extent of its then-available personnel and resources and does not require Company to retain personnel it would otherwise terminate.

7.6 Application of Proceeds

Proceeds of any disposition of Springing Collateral will be applied in the order required by the Loan Agreement and, to the extent applicable, any intercreditor agreement, and any surplus will be paid to Company or as a court of competent jurisdiction directs. Company remains liable for any deficiency to the extent provided in the Loan Agreement.

7.7 Secured Party’s Duties Limited

Secured Party’s sole duty with respect to the custody of any Springing Collateral in its possession is to deal with it in the same manner as Secured Party deals with similar property for its own account. Secured Party has no obligation to take any step to preserve rights in or against the Springing Collateral, to maintain any registration, to pay any fee or to respond to any office action, and is not liable for any failure to do so.

Drafting note: Lenders’ standard forms include the disposition license in Section 7.2 as an immediately effective license at signing; it exists so the lender can sell inventory bearing the borrower’s marks. For a software company whose IP is excluded from the current grant, that license should become effective only after the Activation Time and during an Event of Default, should be limited to disposing of Collateral and transitioning customers, and should exclude operating the business. A standstill is not standard; lenders sometimes agree to a short period (ten to thirty days) when the trigger is a liquidity shortfall rather than a payment default, because it gives the Company a window to close financing that achieves payoff. The enforcement safeguards in Section 7.4 are generally accepted when framed as commercially reasonable conduct rather than as conditions to the exercise of remedies.

8 Release and Termination

8.1 Termination

This Agreement, the negative pledge in Section 2, the covenants in Section 6 and any security interest granted under Section 4.3 terminate automatically upon Payment in Full, except for provisions that by their terms survive (including Sections 8.4, 10.2 through 10.4, 10.9 and 10.10). If the Activation Time has not occurred before Payment in Full, no security interest in Intellectual Property will have attached and no release of a security interest is required, but Secured Party will deliver, upon Company’s request, a written confirmation that this Agreement has terminated and that no Lien on Intellectual Property exists in favor of Secured Party, and will terminate any financing statement filed under the bracketed language in Section 2.6.

8.2 Release Documents

Within [ten (10)] Business Days after Payment in Full (or, if earlier, concurrently with a payoff closing against receipt of the payoff amount), Secured Party will, at Company’s expense, execute and deliver to Company (a) a release in substantially the form of Exhibit 4, in recordable form, releasing the security interest in all Springing Collateral; (b) UCC-3 termination statements for each financing statement filed under this Agreement, or written authorization for Company to file them; (c) releases suitable for recordation with the USPTO and the Copyright Office against each Patent, Trademark and Copyright against which an IP Security Agreement was recorded; (d) releases, discharges and reconveyances under foreign law for each foreign security document; (e) the return or certified destruction of any escrowed IP Security Agreement, escrowed source code and other materials delivered under Sections 4.6(a) and 6.6, and written instructions to any escrow agent to release them to Company; (f) written revocation of the power of attorney under Section 4.9; and (g) any other document Company reasonably requests to evidence the release. Secured Party will record the releases described in clause (c) if Company requests and will provide copies of each filing acknowledgment. If Secured Party fails to deliver a termination statement within [twenty (20)] days after Company’s written demand following Payment in Full, Company is authorized to file it to the extent permitted by Section 9-513 of the UCC.

8.3 Partial Release

Secured Party will, at Company’s expense and within [ten (10)] Business Days after request, release the security interest (if any) in, and confirm that this Agreement does not restrict, any Intellectual Property that is disposed of in a transaction permitted by Section 3 or consented to under Section 9.5, and any Intellectual Property that Secured Party agrees to release under Section 4.12, Section 9.4 or otherwise. A partial release does not affect the Lien on any other Springing Collateral.

8.4 Reinstatement

If any payment applied to the Obligations is rescinded or must be returned by Secured Party as a preference, fraudulent transfer or otherwise under any insolvency law, this Agreement and any security interest released under Section 8.2 will be reinstated to the extent of the payment returned, as if the payment had not been made, to the extent provided in the Loan Agreement.

8.5 Payoff Letter Coordination

Company and Secured Party will coordinate so that any payoff letter identifies this Agreement, states whether the Activation Time has occurred, lists each filing and recordation to be released, identifies any escrowed materials to be returned, and specifies the surviving contingent Obligations, so that release timing is not left implicit.

9 Interaction with the Loan Agreement, Other Liens and Future Financings

9.1 Loan Document Status; Conflicts

This Agreement is a Loan Document, and a breach of this Agreement is an Event of Default to the extent provided in the Loan Agreement. Section 1.3 governs conflicts. Secured Party’s rights under this Agreement are in addition to its rights under the other Loan Documents.

9.2 Permitted Senior IP Liens

Company may permit the Liens identified in Part 2 of Schedule E to exist on the Intellectual Property described there (the Permitted Senior IP Liens), if (a) each such Lien is subject to an intercreditor agreement among Secured Party, the holder of the Lien and Company in form reasonably acceptable to Secured Party, or the Lien secures obligations not exceeding $[●] in aggregate principal amount and is limited to Intellectual Property that is not Material IP, and (b) the obligations secured are not increased, extended or refinanced except as permitted by the Loan Agreement. [No other Lien on Intellectual Property that would rank senior to or pari passu with the security interest contemplated by Section 4.3 is permitted.] [Company may incur a Lien on Intellectual Property in favor of a senior lender under a refinancing of the Obligations if the proceeds are applied to Payment in Full.]

9.3 Intercreditor and Subordination

Any security interest granted under Section 4.3 ranks senior to the claims of all holders of indebtedness that is subordinated to the Obligations under any subordination agreement, and those holders are not entitled to any Lien on Intellectual Property. Secured Party will enter into customary intercreditor arrangements with the holder of any Permitted Senior IP Lien and with any purchase-money lender or lessor whose Lien is limited to specific equipment and embedded software, providing for lien priority, standstill and access rights consistent with this Agreement.

9.4 Equity Financings

Nothing in this Agreement restricts Company from issuing equity securities or convertible instruments permitted under the Loan Agreement. In connection with any Qualified Equity Financing, (a) Company will deliver notice to Secured Party not less than [ten (10)] Business Days before the anticipated closing; (b) Secured Party will, within [five (5)] Business Days after Company’s request, deliver to Company and the lead investor an estoppel letter confirming whether any Default, Springing Lien Event or Activation Time has occurred, whether any Trigger Notice is outstanding, whether any financing statement or recordation covering Intellectual Property has been made under this Agreement, and the current Liquidity Threshold; (c) the parties will discuss in good faith, and Secured Party will not unreasonably refuse, a reset of the Liquidity Threshold to an amount proportionate to Company’s post-closing Cash Burn and runway; and (d) [if the Qualified Equity Financing results in gross proceeds of at least $[●] and no Default exists, Secured Party will, at Company’s request, agree that Section 4.1(c) and (d) cease to apply for a period of [●] months after the closing] [Secured Party will consider in good faith Company’s request to release the springing lien or amend the Springing Lien Events].

If Company proposes an Exclusive License, disposition or other transaction involving Material IP that is not a Permitted License, Company will deliver to Secured Party a written request describing the counterparty, the Intellectual Property involved, the field, territory, term, exclusivity, consideration, sublicense rights, source-code access, change-of-control and termination provisions, and the intended application of proceeds, together with the proposed definitive agreement when available. Secured Party will respond within [fifteen (15)] Business Days after receipt of a complete request. Secured Party will not unreasonably withhold, condition or delay its consent if (a) no Default has occurred and is continuing, (b) the transaction is on arm’s-length terms and the consideration is fair value as reasonably determined by Company’s board of directors, (c) the license does not transfer ownership of Material IP and preserves Company’s right to use the Material IP in its principal products outside the licensed field, (d) any up-front or milestone consideration exceeding $[●] is applied as required by the Loan Agreement, and (e) the licensee acknowledges that its rights are subject to this Agreement and agrees that Secured Party’s exercise of remedies will not, by itself, terminate the license or trigger a release of source code. [If Secured Party fails to respond within [fifteen (15)] Business Days after receipt of a complete request and a second notice stating that consent will be deemed given absent a response within [five (5)] Business Days, Secured Party’s consent is deemed given for that transaction.]

9.6 Refinancing and Payoff

Company may at any time refinance the Obligations and obtain Payment in Full, whereupon this Agreement terminates under Section 8.1. Secured Party will deliver a payoff letter within [five (5)] Business Days after request stating the amount required for Payment in Full and confirming the Release Documents to be delivered against payment. Nothing in this Agreement prohibits Company from granting a Lien on Intellectual Property to a refinancing lender that attaches concurrently with Payment in Full.

9.7 Existing Investor Consents and Charter Restrictions

Company represents that the execution and performance of this Agreement, including the delivery of the IP Security Agreement at the Activation Time, have been approved by Company’s board of directors and by the holders of each class or series of capital stock whose approval is required under Company’s certificate of incorporation, bylaws, investors’ rights agreement, voting agreement or other investor agreements, and that the approvals are listed in Part 5 of Schedule G. Company will not agree to any amendment of its organizational or investor documents that would require an additional consent for the performance of this Agreement, and will obtain any consent required for an amendment to this Agreement or the Loan Agreement before the amendment becomes effective.

9.8 Change of Control; Successor Assumption

In connection with any Change of Control permitted under the Loan Agreement in which the Obligations are not paid in full, Company will cause the acquirer or successor to assume this Agreement and to deliver updated Schedules, and the Springing Lien Event under Section 4.1(e) will not apply if the assumption is completed and no other Springing Lien Event has occurred.

9.9 Notice of Other Financings

Company will give Secured Party written notice at least [ten (10)] Business Days before entering into any indebtedness, royalty-monetization, receivables-sale or other financing arrangement that involves Intellectual Property or its Proceeds, whether or not permitted under the Loan Agreement, so that Secured Party may confirm that the arrangement does not breach Section 2.

Drafting note: Section 9 addresses the questions that most often arise after signing. For a Series A or later round, the investors’ counsel will ask whether the springing lien is a “lien” for purposes of the preferred-stock protective provisions (it should be approved as one at signing), whether the Liquidity Threshold is appropriate for the post-money runway, and whether the lender will deliver an estoppel letter at closing; founders should negotiate the estoppel obligation and the threshold-reset discussion before the lender has leverage. For a strategic exclusive license, the lender’s typical ask is an absolute consent right; the market position is consent not to be unreasonably withheld with stated conditions; the founder position adds a deemed-consent clock. Permitted Senior IP Liens are uncommon in venture debt; the usual answer is that no senior or pari passu IP lien is permitted except in a refinancing that pays the lender off. The investor-consent representation in Section 9.7 is frequently omitted and is the provision most likely to prevent delivery of the IP Security Agreement when it is needed.

10 Miscellaneous

10.1 Notices

All notices under this Agreement must be in writing and delivered in the manner provided in Section [§] of the Loan Agreement to the addresses stated there or, for Trigger Notices, to the addresses and electronic-mail addresses listed in Part 6 of Schedule G, with a copy to Company’s outside counsel identified there. A Trigger Notice is effective upon the earlier of actual receipt and [the next Business Day after] transmission by electronic mail to each address listed in Part 6 of Schedule G with confirmation of delivery, and must also be sent by overnight courier.

10.2 Governing Law

This Agreement and any claim arising out of or relating to it are governed by the laws of the State of [●], without regard to conflict-of-laws principles that would require the application of the laws of another jurisdiction, except to the extent that the UCC provides that the law of another jurisdiction governs perfection, the effect of perfection or non-perfection, or priority, and except to the extent that federal law governs the recordation or enforcement of security interests in Patents, Trademarks or Copyrights.

10.3 Venue

Each party irrevocably submits to the [exclusive] jurisdiction of the state and federal courts located in [COUNTY, STATE] for any action arising out of or relating to this Agreement, waives any objection to venue in those courts, and agrees that process may be served in the manner provided for notices in Section 10.1, except that Secured Party may bring an action to enforce its security interest in any jurisdiction where Springing Collateral is located or registered.

10.4 Jury Trial Waiver

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY IP SECURITY AGREEMENT, ANY TRIGGER NOTICE OR THE TRANSACTIONS CONTEMPLATED BY THEM. [If the jury trial waiver is unenforceable under the governing law selected in Section 10.2, the parties agree to the judicial reference or arbitration provision in Section [§] of the Loan Agreement.]

10.5 Amendments and Waivers

No amendment or waiver of any provision of this Agreement is effective unless in writing and signed by Company and Secured Party [with the consent of the Required Lenders to the extent required by the Loan Agreement]. No failure or delay in exercising any right operates as a waiver, and no single or partial exercise precludes any other exercise. A waiver of a Springing Lien Event must be in a writing that identifies the Springing Lien Event and states that it is waived; forbearance, continued funding, acceptance of payments or failure to deliver a Trigger Notice is not a waiver.

10.6 Counterparts; Electronic Signatures

This Agreement, each IP Security Agreement, each Trigger Notice and each Release Document may be executed in counterparts, each of which is an original and all of which together constitute one instrument, and may be executed and delivered by electronic signature and electronic transmission, which are as effective as manual signatures, except that any document to be recorded with the USPTO, the Copyright Office or a foreign office will be executed in the form the office requires.

10.7 Successors and Assigns

This Agreement binds and benefits the parties and their successors and permitted assigns. Company may not assign this Agreement or any of its rights or obligations without Secured Party’s prior written consent except in connection with a transaction permitted under Section 9.8. Secured Party may assign its rights under this Agreement to any successor Secured Party or to any assignee of the Obligations permitted under the Loan Agreement, and will give Company notice of any assignment and of the address for notices of the assignee.

10.8 Severability

If any provision of this Agreement is held invalid or unenforceable in any jurisdiction, the provision will be limited to the minimum extent necessary to make it enforceable, the remaining provisions remain in full force, and the invalidity does not affect the enforceability of the provision in any other jurisdiction, in each case without changing the negotiated allocation of collateral and triggers between the parties.

10.9 Confidentiality

Secured Party will hold the Schedules, the IP Security Agreement before recordation, all information concerning Trade Secrets, Software, Licenses, Personnel and open-source composition, and all other non-public information delivered under this Agreement in confidence in accordance with Section [§] of the Loan Agreement, will use it solely to administer and enforce the Loan Documents, and will not disclose it except (a) to its affiliates, Lenders, participants, prospective assignees, auditors, regulators, counsel and advisors who are bound by confidentiality obligations no less protective, (b) as required by law, regulation or legal process after notice to Company where lawful, (c) to the extent the information becomes public other than through a breach, (d) in connection with the exercise of remedies after the Activation Time, subject to Section 7.4, and (e) in filings and recordations required to perfect the security interest, which will be limited to information necessary for that purpose. Personnel information on Schedule F will be delivered in anonymized form unless Secured Party reasonably requires identification to evaluate a specific gap.

10.10 Expenses

Company will pay the reasonable and documented out-of-pocket expenses of Secured Party, including filing and recordation fees and the reasonable fees of one outside counsel [and one local or foreign counsel in each relevant jurisdiction], incurred in connection with the preparation of Trigger Notices, the perfection of the security interest after the Activation Time, the exercise of remedies and the delivery of Release Documents, in each case to the extent provided in Section [§] of the Loan Agreement. Company is not responsible for Secured Party’s expenses of monitoring compliance before the Activation Time except as provided in the Loan Agreement.

10.11 Entire Agreement

This Agreement, the Schedules and Exhibits, the Loan Agreement and the other Loan Documents constitute the entire agreement of the parties concerning the subject matter and supersede all prior term sheets, proposals and understandings concerning Intellectual Property collateral.

10.12 Subsidiary Joinder

Any Subsidiary that owns or acquires Material IP will, within [thirty (30)] days after acquiring it or becoming a Subsidiary, execute a joinder to this Agreement in form reasonably acceptable to Secured Party under which it becomes a Grantor, makes the representations in Section 5 as to its Intellectual Property and agrees to be bound by Sections 2 through 10, and will deliver Schedules A through F for its Intellectual Property.

10.13 Survival

All representations, covenants and agreements in this Agreement survive the execution and delivery of this Agreement and continue until Payment in Full, and the provisions of Sections 8.4, 10.2 through 10.4, 10.9 and 10.10 survive termination.

11 Signatures

IN WITNESS WHEREOF, the parties have executed this Intellectual Property Negative Pledge and Springing Lien Agreement as of the Effective Date.

COMPANY: [COMPANY LEGAL NAME]

By: ______________________________
Name: [NAME]
Title: [TITLE]
Date: [DATE]

SECURED PARTY: [LENDER LEGAL NAME][, as collateral agent]

By: ______________________________
Name: [NAME]
Title: [TITLE]
Date: [DATE]

[SUBSIDIARY GRANTOR: [SUBSIDIARY LEGAL NAME]

By: ______________________________
Name: [NAME]
Title: [TITLE]
Date: [DATE]]

SCHEDULES

Schedules A through F are delivered on the Effective Date, certified by a Responsible Officer, and updated under Section 6.8. Schedule G records the negotiated trigger parameters and consent and notice details. Schedule H is the perfection and release register maintained from the Activation Time. Circulated copies should redact Trade Secret descriptions, credentials and Personnel names in accordance with Section 10.9; the unredacted versions are kept in the secure deal workspace.

Schedule A — Registered Intellectual Property

Instructions: List each item exactly as it appears in the records of the applicable office or registrar. Where the owner of record is not Company, complete Part 6. Mark each item “Material” or “Not Material” by reference to the definition of Material IP. Include foreign counterparts as separate rows. Do not include trade-secret detail beyond a general category description; use Part 5 for a description-only inventory of unregistered Material IP.

Part 1 — Patents and Patent Applications

No.	Jurisdiction	Title	Application No.	Patent No.	Filing date	Issue date	Status	Owner of record	Material IP	Next maintenance or response deadline	Product supported	Liens or licenses of record
A1-1	[●]	[●]	[●]	[●]	[●]	[●]	[PENDING / ISSUED / ALLOWED / ABANDONED]	[●]	[Y / N]	[●]	[●]	[NONE / DESCRIBE]
A1-2	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[Y / N]	[●]	[●]	[●]

Part 2 — Trademarks and Service Marks

No.	Jurisdiction	Mark	Serial No.	Registration No.	Classes	Filing date	Registration date	Filing basis	Status	Owner of record	Material IP	Next deadline (Section 8 or 71 declaration, renewal, statement of use)	Liens or licenses of record
A2-1	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[USE / INTENT-TO-USE / FOREIGN]	[PENDING / REGISTERED / OPPOSED / CANCELLED]	[●]	[Y / N]	[●]	[●]
A2-2	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[Y / N]	[●]	[●]

Intent-to-use applications for which no statement of use has been accepted are Excluded IP under clause (c) of that definition until acceptance; list them here and cross-reference Schedule E.

Part 3 — Copyright Registrations and Applications

No.	Jurisdiction	Title of work	Registration No.	Registration date	Type of work	Version or release covered	Deposit method (redacted, trade-secret)	Owner of record	Material IP	Liens or licenses of record
A3-1	[●]	[●]	[●]	[●]	[COMPUTER PROGRAM / LITERARY / AUDIOVISUAL / OTHER]	[●]	[●]	[●]	[Y / N]	[●]
A3-2	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[Y / N]	[●]

No.	Domain name or account handle	Registrar or platform	Registrant or account owner of record	Administrative contact (role, not name)	Expiration date	Auto-renew	Registrar lock and multi-factor authentication	Material IP	Notes
A4-1	[●]	[●]	[●]	[●]	[●]	[Y / N]	[Y / N]	[Y / N]	[●]
A4-2	[●]	[●]	[●]	[●]	[●]	[Y / N]	[Y / N]	[Y / N]	[●]

Part 5 — Material Unregistered Intellectual Property (Description Only)

No.	Category	General description (no confidential detail)	Products or services supported	Protection method	Location of detailed inventory (secure workspace reference)	Material IP
A5-1	[SOFTWARE / TRADE SECRET / DATASET / MODEL / UNREGISTERED MARK / UNREGISTERED COPYRIGHT]	[●]	[●]	[TRADE SECRET CONTROLS / UNREGISTERED COPYRIGHT / COMMON-LAW MARK]	[●]	[Y / N]
A5-2	[●]	[●]	[●]	[●]	[●]	[Y / N]

Part 6 — Chain-of-Title Exceptions, Pending Proceedings and Claims

No.	Asset (cross-reference)	Issue (owner-of-record mismatch, unrecorded assignment, prior-owner lien, pending opposition or review, infringement claim by or against Company, upcoming lapse)	Section 5 representation affected	Remediation plan	Owner	Target date	Status
A6-1	[●]	[●]	[5.1 / 5.2 / 5.3 / 5.4 / 5.8]	[●]	[●]	[●]	[●]

Schedule B — Material Inbound Licenses

Instructions: List each Inbound License described in Section 5.9, including university, government-funded, sponsored-research and standards-related agreements, and each agreement containing an anti-assignment or anti-encumbrance restriction. Identify whether a consent is required for the grant contemplated by Section 4.3 and the status of any consent request. Describe any government or university rights in Part 2.

Part 1 — Inbound Licenses

No.	Licensor	Agreement title and date	Licensed Intellectual Property	Exclusive or non-exclusive	Field and territory	Term and renewal	Fees and royalties	Sublicense rights	Assignment or change-of-control restriction	Restriction on Liens (Section 9-408 analysis)	Consent required for springing lien	Consent status	Material IP dependency
B1-1	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[Y / N]	[OBTAINED / REQUESTED / NOT REQUESTED]	[●]
B1-2	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[Y / N]	[●]	[●]

Part 2 — Government, University and Standards-Body Rights

No.	Institution or body	Agreement, grant or award and date	Intellectual Property affected	Nature of right (ownership, license, march-in, manufacturing preference, FRAND or royalty-free commitment, publication right)	Reporting or election obligations and status	Effect on Springing Collateral	Remediation or consent
B2-1	[●]	[●]	[●]	[●]	[●]	[●]	[●]

Schedule C — Material Outbound Licenses and Exclusivity

Instructions: List each Outbound License described in Section 5.9. Part 2 isolates every grant of exclusivity, whether or not labeled exclusive, so that it can be tested against Sections 2.2, 3.1(g) and 3.8. Part 3 lists customer source-code escrow arrangements and release conditions under Section 6.6.

Part 1 — Outbound Licenses

No.	Licensee	Agreement title and date	Licensed Intellectual Property	Exclusive (Y/N)	Field, territory and channel	Term and termination rights	Sublicense rights	Trailing-twelve-month revenue	Assignment or change-of-control provisions	Lender consent, non-disturbance or acknowledgment given	Most-favored-customer, option, right of first refusal or covenant not to sue	Permitted License basis (Section 3 reference)
C1-1	[●]	[●]	[●]	[Y / N]	[●]	[●]	[●]	$[●]	[●]	[●]	[●]	[3.1(a) / 3.1(b) / 3.1(g) / 3.8 / CONSENT 9.5]
C1-2	[●]	[●]	[●]	[Y / N]	[●]	[●]	[●]	$[●]	[●]	[●]	[●]	[●]

Part 2 — Exclusivity Summary

No.	Agreement (cross-reference)	Exact scope of exclusivity (field, territory, channel, named accounts, period)	Material IP affected	Company’s retained rights	Expiration or conversion to non-exclusive	Compatible with Section 2.2 as of Effective Date	Consent obtained under Section 9.5
C2-1	[●]	[●]	[●]	[●]	[●]	[Y / N]	[N/A / DATE]

Part 3 — Customer Source-Code Escrow Arrangements

No.	Beneficiary	Escrow agent	Deposited materials (general description)	Release conditions	Would exercise of Secured Party remedies trigger release	License scope on release	Update frequency	Remediation if release condition conflicts with Section 6.6
C3-1	[●]	[●]	[●]	[●]	[Y / N / UNCLEAR]	[●]	[●]	[●]

Schedule D — Open-Source Components Under Copyleft Licenses

Instructions: List each Open Source Software component licensed under a Copyleft License that is incorporated into, linked with, or distributed with Software that is Material IP, and describe the manner of use with enough precision to evaluate Section 5.6. Components under permissive licenses need not be listed individually but should be covered by the software bill of materials referenced in Part 2. Where the manner of use may impose a source-disclosure or other obligation on proprietary code, describe the remediation.

Part 1 — Copyleft Components

No.	Component	Version	License and version	Product or module	Manner of use (unmodified, modified, statically linked, dynamically linked, separate process, network interaction only, build tool only)	Distributed to third parties, hosted only or internal only	Interaction with proprietary Software that is Material IP	Compliance status (attribution, notice, source availability)	Section 5.6 risk assessment	Remediation and owner
D1-1	[●]	[●]	[GPL-2.0 / GPL-3.0 / LGPL-2.1 / LGPL-3.0 / AGPL-3.0 / MPL-2.0 / EPL-2.0 / OTHER]	[●]	[●]	[●]	[●]	[●]	[LOW / MEDIUM / HIGH]	[●]
D1-2	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]

Part 2 — Open-Source Policy and Inventory Attestation

Item	Response
Open-source policy adopted (date and version)	[●]
Approval authority for Copyleft components	[●]
Software bill of materials maintained (tool and location)	[●]
Most recent software-composition-analysis scan (date, tool, scope)	[●]
Open findings and remediation plan	[●]
Company-originated Open Source Software releases (project, license, Material IP determination, notice date under Section 3.2)	[●]
Contributor license agreements or developer certificates of origin used for external contributions	[●]

Schedule E — Excluded IP

Instructions: Part 1 lists Intellectual Property excluded from the Springing Collateral and the basis for exclusion. An exclusion based on a contractual restriction applies only to the extent and for the period the restriction is enforceable after giving effect to Sections 9-406 through 9-409 of the UCC. Part 2 lists Permitted Senior IP Liens under Section 9.2.

Part 1 — Excluded Intellectual Property

No.	Asset or category	Basis for exclusion (negotiated exclusion, legal prohibition, enforceable contractual restriction, intent-to-use application, third-party ownership, de minimis)	Source document and section	Duration or condition of exclusion	Treatment of Proceeds	Becomes Springing Collateral automatically when exclusion ends (Section 4.4(b))	Notes
E1-1	[●]	[●]	[●]	[●]	[INCLUDED / EXCLUDED]	[Y / N]	[●]
E1-2	[●]	[●]	[●]	[●]	[●]	[Y / N]	[●]

Part 2 — Permitted Senior IP Liens

No.	Lienholder	Obligations secured and maximum principal amount	Intellectual Property subject to Lien	Filing or recordation references (UCC, USPTO, Copyright Office, foreign)	Intercreditor agreement (date and parties) or basket relied on under Section 9.2	Maturity or release date	Status
E2-1	[●]	$[●]	[●]	[●]	[●]	[●]	[●]

Schedule F — Personnel IP-Assignment Status

Instructions: List each item of Personnel. The circulated copy should use anonymized identifiers; names and agreement copies are maintained in the secure deal workspace under Section 10.9. Identify each gap (no agreement, agreement lacks present-assignment language, agreement governed by a jurisdiction that limits assignment of employee inventions, missing state-law notice, missing moral-rights waiver, agreement signed after work began, prior-inventions carve-out that overlaps Material IP) and the remediation plan under Section 6.4.

Part 1 — Personnel Register

No.	Identifier	Role (founder, employee, contractor, consultant, advisor, former)	Jurisdiction of engagement	Period of contribution	Material IP contributed to (cross-reference Schedule A)	Agreement type and date	Present-assignment language	Confidentiality obligations	State-law invention notice (where required)	Moral-rights waiver or non-assertion	Prior-inventions carve-out overlapping Material IP	Assignment of Registered IP recorded	Gap identified	Remediation and status
F1-1	[●]	[●]	[●]	[●]	[●]	[●]	[Y / N]	[Y / N]	[Y / N / N/A]	[Y / N / N/A]	[Y / N]	[Y / N / N/A]	[NONE / DESCRIBE]	[●]
F1-2	[●]	[●]	[●]	[●]	[●]	[●]	[Y / N]	[Y / N]	[●]	[●]	[Y / N]	[●]	[●]	[●]

Part 2 — Remediation Plan

No.	Gap (cross-reference)	Remediation (confirmatory assignment, quitclaim, amended agreement, recordation, release)	Consideration required	Owner	Target date (Section 6.4 deadline)	Status	Residual risk if not remediated
F2-1	[●]	[●]	[●]	[●]	[●]	[●]	[●]

Schedule G — Springing Lien Event Parameters, Approvals and Notice Details

Instructions: Complete every row. A Springing Lien Event not recorded here with its threshold, testing method, notice and cure period cannot be the basis of a Trigger Notice. Part 4 applies only if the escrow option in Section 4.6(a) or 6.6 is selected.

Part 1 — Springing Lien Event Parameters

Event (Section 4.1 clause)	Included (Y/N)	Objective definition and threshold	Measurement or testing method and frequency	Loan Agreement cross-reference	Notice requirement	Cure period	Decision-maker and written determination required	Waiver mechanism	Minimum interval between Trigger Notice and Activation Time (Section 4.2(c))
(a) Event of Default	[Y / N]	[Payment / insolvency / Section 2 breach / all Events of Default]	Occurrence and continuation beyond grace	Section [§]	[●]	Per Loan Agreement	[Secured Party / Required Lenders]	Written waiver signed by [●]	[●] Business Days
(b) Specified Covenant Breach	[Y / N]	Breach of covenants listed in Part 2	Occurrence and continuation beyond cure	Section [§]	Written notice from Secured Party	[●] Business Days	[●]	[●]	[●] Business Days
(c) Liquidity below Liquidity Threshold	[Y / N]	Liquidity Threshold: greater of $[●] and [●] months of Cash Burn	[Month-end Compliance Certificate / any date on officer certificate]	Section [§]	Compliance Certificate or Secured Party notice	[●] Business Days to restore	[●]	[●]	[●] Business Days
(d) Lender election after notice	[Y / N]	Election only while a Default is continuing	Written election	Section [§]	Election notice	[●] Business Days	[●]	[●]	[●] Business Days
(e) Change of Control	[Y / N]	As defined; payoff exception	Occurrence or signing of definitive agreement	Section [§]	Company notice under Loan Agreement	None	[●]	[●]	[●] Business Days

Part 2 — Specified Covenants

No.	Covenant	Agreement and section	Cure period	Rationale for inclusion
G2-1	Negative pledge	This Agreement, Section 2	[None / ● Business Days]	Direct protection of Springing Collateral
G2-2	No exclusive licensing without consent	This Agreement, Section 6.7	[●]	Direct protection of Springing Collateral
G2-3	[Delivery of financial statements and Compliance Certificate]	Loan Agreement, Section [§]	[●]	Needed to test Liquidity
G2-4	[Maintenance of controlled deposit accounts]	Loan Agreement, Section [§]	[●]	Needed to measure Liquidity
G2-5	[●]	[●]	[●]	[●]

Part 3 — Liquidity Threshold History

Effective date	Liquidity Threshold	Basis (fixed amount or Cash Burn multiple)	Reason for change (Qualified Equity Financing, amendment, Section 9.4(c) reset)	Approved by
[●]	$[●]	[●]	Initial	[●]

Part 4 — Escrow Protocol for Pre-Signed IP Security Agreement and Source Code (if elected)

Item	Detail
Escrow agent and agreement date	[●]
Escrowed materials	[UNDATED IP SECURITY AGREEMENT / SOURCE CODE DEPOSIT / BOTH]
Release condition	Delivery to escrow agent of a copy of the Trigger Notice and an officer’s certificate of Secured Party confirming the Activation Time has occurred and has not been rescinded under Section 4.11
Company objection window	[●] Business Days after notice of release request; objection suspends release only as to source code, not the IP Security Agreement, unless otherwise agreed
Authentication of release request	[Dual authorization by named Secured Party officers; callback verification]
Permitted recipients and use	Secured Party and its counsel; use limited to Sections 4.6 and 7
Confidentiality and security	Encrypted storage; access log; no copying except for recordation and remedies
Return or destruction	Within [●] Business Days after Payment in Full under Section 8.2(e)
Dispute procedure	[●]

Part 5 — Approvals Obtained for Contingent Grant (Section 9.7)

Approval	Body or holders	Document and date	Scope (this Agreement, contingent grant, IP Security Agreement delivery, future amendments)	Location of evidence
Board of directors	[●]	[●]	[●]	[●]
Preferred stockholders (protective provisions)	[SERIES ●]	[●]	[●]	[●]
Other investor or lender consents	[●]	[●]	[●]	[●]
Third-party consents under Inbound Licenses	[●]	[●]	[●]	[●]

Part 6 — Notice Details for Trigger Notices

Party	Attention (role)	Address	Electronic mail (role-based address)	Copy to counsel	Verification channel for authenticity
Company	[CHIEF EXECUTIVE OFFICER / CHIEF FINANCIAL OFFICER]	[●]	[●]	[OUTSIDE COUNSEL]	[●]
Secured Party	[●]	[●]	[●]	[OUTSIDE COUNSEL]	[●]

Schedule H — Perfection and Release Register

Instructions: Open this register at the Activation Time. Record every action required by Sections 4.5 through 4.10 with its evidence, and every release action under Section 8.2. Assign each row to a named person on each side. A filing acknowledgment does not establish attachment, perfection or priority; counsel confirms each.

Part 1 — Perfection Actions After the Activation Time

ID	Asset or category	Action (UCC-1 or UCC-3 amendment, USPTO patent recordation, USPTO trademark recordation, Copyright Office recordation, foreign security document, consent under Inbound License, registrar confirmation)	Office or jurisdiction	Responsible party and counsel	Due date within Perfection Period	Filed or effective date	Reference or reel and frame number	Evidence location	Continuation or renewal date	Status
H1-01	All Springing Collateral	UCC-1 or amendment under Section 4.8	[STATE OF LOCATION]	[●]	[●]	[●]	[●]	[●]	[FIVE YEARS FROM FILING]	[●]
H1-02	Patents on Schedule A Part 1	Record IP Security Agreement (Exhibit 1) under Section 4.7(a)	USPTO	[●]	[●]	[●]	[●]	[●]	N/A	[●]
H1-03	Trademarks on Schedule A Part 2	Record IP Security Agreement (Exhibit 1) under Section 4.7(a)	USPTO	[●]	[●]	[●]	[●]	[●]	N/A	[●]
H1-04	Copyrights on Schedule A Part 3	Record IP Security Agreement (Exhibit 1) under Section 4.7(b)	Copyright Office	[●]	[●]	[●]	[●]	[●]	N/A	[●]
H1-05	Unregistered Software that is Material IP	Copyright applications under Section 4.7(b)	Copyright Office	[●]	[●]	[●]	[●]	[●]	N/A	[●]
H1-06	Foreign Registered IP	Local-law security document under Section 4.5(e)	[JURISDICTION]	[●]	[●]	[●]	[●]	[●]	[●]	[●]
H1-07	Inbound Licenses requiring consent	Consent under Section 4.5(c)	[LICENSOR]	[●]	[●]	[●]	[●]	[●]	N/A	[●]
H1-08	Domain Names and Social Media Accounts	Registrar lock confirmation under Section 4.7(c)	[REGISTRAR]	[●]	[●]	[●]	[●]	[●]	[●]	[●]

Part 2 — Release Actions After Payment in Full

ID	Release action (Section 8.2 reference)	Office or recipient	Responsible party	Due date	Delivered or filed date	Reference	Evidence location	Status
H2-01	Release in form of Exhibit 4 (8.2(a))	Company	Secured Party	[●]	[●]	[●]	[●]	[●]
H2-02	UCC-3 termination (8.2(b))	[STATE]	[●]	[●]	[●]	[●]	[●]	[●]
H2-03	USPTO release recordation (8.2(c))	USPTO	[●]	[●]	[●]	[●]	[●]	[●]
H2-04	Copyright Office release recordation (8.2(c))	Copyright Office	[●]	[●]	[●]	[●]	[●]	[●]
H2-05	Foreign discharge (8.2(d))	[JURISDICTION]	[●]	[●]	[●]	[●]	[●]	[●]
H2-06	Return of escrowed materials and escrow instruction (8.2(e))	Escrow agent	[●]	[●]	[●]	[●]	[●]	[●]
H2-07	Revocation of power of attorney (8.2(f))	Company	Secured Party	[●]	[●]	[●]	[●]	[●]
H2-08	Pre-trigger confirmation letter (8.1), if Activation Time never occurred	Company	Secured Party	[●]	[●]	[●]	[●]	[●]

EXHIBITS

Exhibit 1 — Form of IP Security Agreement

Instructions: This short-form grant is executed at the Activation Time (or pre-signed and escrowed under Section 4.6(a)) and recorded with the USPTO and the Copyright Office. It is intentionally brief and does not restate the Agreement. Attach Annexes A, B and C listing only the Registered IP to be recorded; confirm that each number matches office records. Trademarks must be conveyed together with their goodwill. Do not record Trade Secret descriptions or source code.

INTELLECTUAL PROPERTY SECURITY AGREEMENT

This Intellectual Property Security Agreement (this IP Security Agreement) is dated as of [ACTIVATION DATE] and is made by [COMPANY LEGAL NAME], a [JURISDICTION] [ENTITY TYPE] with an address at [ADDRESS] (Grantor), in favor of [LENDER LEGAL NAME][, as collateral agent] with an address at [ADDRESS] (Secured Party).

Recitals

A. Grantor and Secured Party are parties to the Intellectual Property Negative Pledge and Springing Lien Agreement dated as of [EFFECTIVE DATE] (the Springing Lien Agreement) and the [Loan and Security Agreement] dated as of [DATE] (the Loan Agreement).

B. The Activation Time under the Springing Lien Agreement occurred on [DATE AND TIME], and Grantor has agreed to execute this IP Security Agreement to evidence and confirm the security interest granted under Section 4.3 of the Springing Lien Agreement and to permit its recordation.

1. Grant of Security Interest. As security for the prompt and complete payment and performance of the Obligations (as defined in the Loan Agreement), Grantor grants to Secured Party, for the benefit of the Lenders, a continuing security interest in all of Grantor’s right, title and interest in, to and under the following, whether now owned or hereafter acquired (the IP Collateral): (a) the patents and patent applications listed on Annex A, together with all reissues, continuations, continuations-in-part, divisionals, extensions and reexaminations of them, all inventions described or claimed in them, and all rights to sue for past, present and future infringement; (b) the trademark registrations and applications listed on Annex B, together with the goodwill of the business connected with the use of and symbolized by them, all renewals, and all rights to sue for past, present and future infringement or dilution, excluding any intent-to-use application to the extent that the grant of a security interest would impair its validity or enforceability under applicable federal law until a statement of use or amendment to allege use has been filed and accepted; (c) the copyright registrations and applications listed on Annex C, together with all renewals and extensions, all works of authorship embodied in them, and all rights to sue for past, present and future infringement; and (d) all proceeds, royalties, income and payments of any kind in respect of the foregoing.

2. Relationship to Springing Lien Agreement. This IP Security Agreement is executed under and is subject to the Springing Lien Agreement and the Loan Agreement, which are incorporated by reference. The rights and remedies of Secured Party with respect to the IP Collateral are as provided in the Springing Lien Agreement and the Loan Agreement. If any provision of this IP Security Agreement conflicts with the Springing Lien Agreement, the Springing Lien Agreement controls. This IP Security Agreement does not grant a security interest in any Excluded IP (as defined in the Springing Lien Agreement).

3. Recordation. Grantor authorizes and requests that the Commissioner for Patents, the Commissioner for Trademarks and the Register of Copyrights record this IP Security Agreement against the IP Collateral. Grantor will execute and deliver supplements to this IP Security Agreement, with updated Annexes, for registered intellectual property acquired after the date of this IP Security Agreement that constitutes Springing Collateral, within the period required by the Springing Lien Agreement.

4. Release. Upon Payment in Full (as defined in the Springing Lien Agreement), the security interest granted by this IP Security Agreement terminates and Secured Party will execute and deliver a release in recordable form in accordance with Section 8.2 of the Springing Lien Agreement.

5. Governing Law; Counterparts. This IP Security Agreement is governed by the laws of the State of [●], except to the extent federal law governs. It may be executed in counterparts and by electronic signature in the form the recording office requires.

GRANTOR: [COMPANY LEGAL NAME]

By: ______________________________
Name: [NAME]
Title: [TITLE]

ACCEPTED: [LENDER LEGAL NAME][, as collateral agent]

By: ______________________________
Name: [NAME]
Title: [TITLE]

Annex A — Patents and Patent Applications

Title	Jurisdiction	Application No.	Patent No.	Filing date	Issue date	Owner of record
[●]	[●]	[●]	[●]	[●]	[●]	[●]

Annex B — Trademark Registrations and Applications

Mark	Jurisdiction	Serial No.	Registration No.	Filing date	Registration date	Filing basis	Owner of record
[●]	[●]	[●]	[●]	[●]	[●]	[USE / ITU — EXCLUDED UNTIL SOU ACCEPTED]	[●]

Annex C — Copyright Registrations and Applications

Title of work	Registration No.	Registration date	Type of work	Owner of record
[●]	[●]	[●]	[●]	[●]

Exhibit 2 — Form of Trigger Notice

Instructions: Deliver under Section 10.1 to each address in Part 6 of Schedule G. Complete every bracketed item; a Trigger Notice that omits the factual basis, the cure-period confirmation or the Activation Time is defective under Section 4.2(a). Attach the supporting Compliance Certificate or calculation for a Liquidity trigger.

[LENDER LETTERHEAD]

[DATE]

VIA ELECTRONIC MAIL AND OVERNIGHT COURIER

[COMPANY LEGAL NAME]
Attention: [CHIEF EXECUTIVE OFFICER / CHIEF FINANCIAL OFFICER]
[ADDRESS]
[ELECTRONIC MAIL ADDRESS]

Copy to: [COMPANY OUTSIDE COUNSEL]

Re: Trigger Notice under Section 4.2 of the Intellectual Property Negative Pledge and Springing Lien Agreement dated as of [EFFECTIVE DATE] (the “Agreement”)

Capitalized terms used but not defined in this notice have the meanings given in the Agreement.

1. Springing Lien Event. The undersigned Secured Party notifies Company that the following Springing Lien Event has occurred and is continuing (check each that applies):

Applies	Clause	Event	Schedule G Part 1 row
[ ]	Section 4.1(a)	Event of Default under Section [§] of the Loan Agreement	(a)
[ ]	Section 4.1(b)	Specified Covenant Breach of [COVENANT] (Schedule G Part 2, row [●])	(b)
[ ]	Section 4.1(c)	Liquidity below Liquidity Threshold	(c)
[ ]	Section 4.1(d)	Lender election after notice dated [●]	(d)
[ ]	Section 4.1(e)	Change of Control	(e)

2. Factual basis. [Describe the facts: dates, amounts, Loan Agreement sections, Compliance Certificate date, Liquidity reported of $[●] against a Liquidity Threshold of $[●], prior notices delivered on [DATES], and any other supporting information. Attach supporting documents as Attachment 1.]

3. Notice and cure. The applicable notice and cure period under Section [§] of the Loan Agreement and Schedule G Part 1 [expired on [DATE]] [does not apply because [●]]. No written waiver of the Springing Lien Event is in effect.

4. Activation Time. The Activation Time is [DATE AND TIME, TIME ZONE], which is not earlier than [the time of delivery of this notice] [[●] Business Days after delivery as required by Section 4.2(c) and Schedule G]. Pursuant to Section 4.3 of the Agreement, the security interest in the Springing Collateral attaches at the Activation Time.

5. Springing Collateral. The Springing Collateral consists of all Intellectual Property of Company other than Excluded IP, including the Registered IP listed on Schedule A to the Agreement as most recently updated on [DATE], all Software and Trade Secrets, all Licenses to the extent provided in Section 4.4, and all Proceeds.

6. Required deliverables. Company is requested to deliver the following under Sections 4.5 through 4.8 of the Agreement:

Deliverable	Agreement section	Due date
Executed IP Security Agreement (Exhibit 1) dated as of the Activation Time [or release of escrowed IP Security Agreement under Schedule G Part 4]	4.6	[●]
Updated Schedules A through F as of the Activation Time	4.5(b)	[●]
Consents under Inbound Licenses listed on Schedule B as requiring consent	4.5(c)	[●]
Registrar and platform ownership confirmations	4.5(d)	[●]
Officer’s certificate as to Schedules	4.5(f)	[●]
[Foreign-law security documents under Schedule H]	4.5(e)	[●]

7. Filings by Secured Party. Secured Party intends to [file a UCC financing statement or amendment under Section 4.8] [record the IP Security Agreement with the USPTO and the Copyright Office under Section 4.7] within the Perfection Period and will provide copies under Section 4.10.

8. Standstill. [The Standstill Period under Section 7.3 ends on [DATE].] [The Standstill Period does not apply because [Section 7.3(a)/(b)/(d)].]

9. Dispute. Any dispute notice under Section 4.2(d) must be delivered within [three (3)] Business Days after receipt of this notice.

10. Reservation of rights. This notice is delivered without waiver of, and with full reservation of, all rights and remedies of Secured Party and the Lenders under the Loan Documents and applicable law. No course of dealing, forbearance or acceptance of payment constitutes a waiver. This notice does not accelerate the Obligations [except as separately stated in the notice of acceleration dated [●]].

[LENDER LEGAL NAME][, as collateral agent]

By: ______________________________
Name: [NAME]
Title: [TITLE]

Attachment 1 — Supporting documents
Attachment 2 — Form of IP Security Agreement (Exhibit 1) with proposed Annexes

Exhibit 3 — Form of USPTO / Copyright Office Recordation Cover Sheet Summary

Instructions: This summary collects the data required to complete the current recordation forms and electronic systems of the USPTO (patents and trademarks) and the Copyright Office. Confirm current form versions, electronic-filing requirements and fee schedules with the applicable office at the time of filing; the offices change forms and fees periodically. Names must match the records of the office exactly, including punctuation and entity designations. Submit one cover sheet per office per conveyance; a single IP Security Agreement may be recorded against multiple properties.

Part 1 — USPTO Patent Recordation (Recordation Form Cover Sheet — Patents, or electronic equivalent)

Field	Entry
Name of conveying party	[COMPANY LEGAL NAME, EXACTLY AS OWNER OF RECORD]
Entity type and state or country of organization of conveying party	[●]
Name and address of receiving party	[LENDER LEGAL NAME][, as collateral agent]; [ADDRESS]
Entity type and state or country of organization of receiving party	[●]
Nature of conveyance	Security Agreement
Execution date of conveyance document	[ACTIVATION DATE]
Application numbers and patent numbers	[LIST FROM ANNEX A]
Total number of applications and patents	[●]
Correspondence name and address for acknowledgment	[COUNSEL NAME AND ADDRESS]
Fee (per property) and payment method	[CONFIRM CURRENT FEE; DEPOSIT ACCOUNT / CREDIT CARD / EFT]
Document being recorded	IP Security Agreement (Exhibit 1) with Annex A, [●] pages
Signature, name and date	[●]

Part 2 — USPTO Trademark Recordation (Recordation Form Cover Sheet — Trademarks, or electronic equivalent)

Field	Entry
Name of conveying party and entity type, state or country	[COMPANY LEGAL NAME, EXACTLY AS OWNER OF RECORD]; [●]
Name, address, entity type and citizenship of receiving party	[LENDER LEGAL NAME][, as collateral agent]; [ADDRESS]; [●]
Nature of conveyance	Security Interest
Execution date	[ACTIVATION DATE]
Trademark application serial numbers and registration numbers	[LIST FROM ANNEX B; EXCLUDE INTENT-TO-USE APPLICATIONS WITHOUT ACCEPTED STATEMENT OF USE]
Total number of applications and registrations	[●]
Goodwill statement included in conveyance document	Yes (Section 1(b) of Exhibit 1)
Correspondence name and address	[●]
Fee and payment method	[CONFIRM CURRENT FEE]
Document being recorded	IP Security Agreement (Exhibit 1) with Annex B, [●] pages
Signature, name and date	[●]

Part 3 — Copyright Office Recordation (Document Cover Sheet, or electronic recordation equivalent)

Field	Entry
Name of first party (assignor or grantor)	[COMPANY LEGAL NAME]
Name of first party of second part (grantee)	[LENDER LEGAL NAME][, as collateral agent]
First title in document and total number of titles	[TITLE OF FIRST WORK FROM ANNEX C]; [●]
Registration numbers	[LIST FROM ANNEX C]
Type of document	Security Interest
Date of execution	[ACTIVATION DATE]
Completeness of document	[COMPLETE DOCUMENT / REDACTED — CONFIRM OFFICE REQUIREMENTS]
Certification of copy (if a copy rather than the original is submitted)	[SWORN OR OFFICIAL CERTIFICATION]
Special handling requested	[Y / N, WITH JUSTIFICATION]
Fee basis and payment method	[CONFIRM CURRENT FEE; NUMBER OF TITLES]
Return address for recorded document	[●]
Affirmation and signature	[●]

Part 4 — Common Rejection Reasons and Pre-Filing Checks

Check	Confirmed by	Date
Conveying party name matches owner of record for every listed property; unrecorded assignments recorded first	[●]	[●]
Trademark conveyance includes goodwill language	[●]	[●]
Intent-to-use applications excluded or handled under Excluded IP clause (c)	[●]	[●]
Every serial, application, patent and registration number verified against office records	[●]	[●]
Document legible, complete and in the format the office accepts	[●]	[●]
Fees calculated per property or per title and payment method confirmed	[●]	[●]
UCC financing statement filed or amended separately under Section 4.8; recordation is not a substitute	[●]	[●]
Acknowledgment or notice of recordation received and entered in Schedule H	[●]	[●]

Exhibit 4 — Form of Release

Instructions: Deliver under Section 8.2(a) within the stated period after Payment in Full. Record with the USPTO and the Copyright Office against each property against which the IP Security Agreement was recorded; file UCC-3 termination statements separately. If the Activation Time never occurred, use Part 2 instead.

Part 1 — Release of Security Interest in Intellectual Property

RELEASE OF SECURITY INTEREST IN INTELLECTUAL PROPERTY

This Release of Security Interest in Intellectual Property (this Release) is dated as of [DATE] and is made by [LENDER LEGAL NAME][, as collateral agent] (Secured Party) in favor of [COMPANY LEGAL NAME], a [JURISDICTION] [ENTITY TYPE] (Company).

Recitals

A. Company granted Secured Party a security interest in certain intellectual property under the Intellectual Property Negative Pledge and Springing Lien Agreement dated as of [EFFECTIVE DATE] (the Springing Lien Agreement) and the Intellectual Property Security Agreement dated as of [ACTIVATION DATE] (the IP Security Agreement), recorded with the United States Patent and Trademark Office at Reel [●], Frame [●] (patents) and Reel [●], Frame [●] (trademarks) and with the United States Copyright Office at Volume [●], Document [●].

B. Payment in Full (as defined in the Springing Lien Agreement) has occurred.

1. Release. Secured Party releases, terminates and discharges the security interest and Lien granted under the Springing Lien Agreement and the IP Security Agreement in all Springing Collateral, including the patents, trademarks and copyrights listed on Annex 1, and reassigns to Company, without recourse, representation or warranty, any right, title or interest in the Springing Collateral that Secured Party may have acquired under those agreements. All right, title and interest in the Springing Collateral is vested in Company free of any Lien in favor of Secured Party.

2. Recordation. Secured Party authorizes and requests that the Commissioner for Patents, the Commissioner for Trademarks and the Register of Copyrights record this Release against each property listed on Annex 1.

3. UCC Terminations; Escrow; Power of Attorney. Secured Party (a) authorizes Company to file UCC-3 termination statements with respect to each financing statement listed on Annex 2, and has delivered or will deliver executed termination statements for any filing requiring Secured Party’s signature; (b) instructs [ESCROW AGENT] to release to Company all materials held under the escrow agreement dated [●]; and (c) revokes the power of attorney granted under Section 4.9 of the Springing Lien Agreement.

4. Termination. The Springing Lien Agreement and the IP Security Agreement have terminated in accordance with their terms, except for provisions that by their terms survive, and Secured Party confirms that it has no further right to deliver a Trigger Notice under the Springing Lien Agreement.

5. Reinstatement. This Release is subject to reinstatement solely to the extent provided in Section 8.4 of the Springing Lien Agreement.

6. Further Assurances. Secured Party will, at Company’s expense, execute and deliver any further document Company reasonably requests to evidence the release described in this Release in any jurisdiction.

7. Governing Law; Counterparts. This Release is governed by the laws of the State of [●], except to the extent federal law governs, and may be executed in counterparts and by electronic signature in the form the recording office requires.

[LENDER LEGAL NAME][, as collateral agent]

By: ______________________________
Name: [NAME]
Title: [TITLE]

Annex 1 — Released Registered Intellectual Property

Category	Title or mark	Jurisdiction	Application or serial No.	Patent or registration No.	Original recordation reference (reel and frame or volume and document)
[PATENT / TRADEMARK / COPYRIGHT]	[●]	[●]	[●]	[●]	[●]

Annex 2 — Financing Statements to Be Terminated

Filing office	Debtor name of record	Initial file number	Filing date	Amendments	Termination filed (date and number)
[●]	[●]	[●]	[●]	[●]	[●]

Part 2 — Confirmation of No Lien (Activation Time Not Occurred)

[LENDER LETTERHEAD]

[DATE]

[COMPANY LEGAL NAME]
[ADDRESS]

Re: Termination of Intellectual Property Negative Pledge and Springing Lien Agreement dated as of [EFFECTIVE DATE] (the “Agreement”)

The undersigned confirms that (1) Payment in Full under the Agreement occurred on [DATE]; (2) no Trigger Notice was delivered and the Activation Time did not occur; (3) no security interest or Lien in favor of the undersigned attached to any Intellectual Property of [COMPANY LEGAL NAME] under the Agreement; (4) no IP Security Agreement was recorded with the United States Patent and Trademark Office or the United States Copyright Office under the Agreement; (5) [no financing statement describing Intellectual Property was filed under Section 2.6 of the Agreement] [the financing statement filed under Section 2.6 of the Agreement, file number [●], has been terminated]; (6) any escrowed materials have been released to [COMPANY LEGAL NAME]; and (7) the Agreement has terminated in accordance with Section 8.1, except for the provisions that by their terms survive. This confirmation may be relied upon by [COMPANY LEGAL NAME], its successors and assigns and any prospective investor, lender or acquirer identified in writing to the undersigned.

[LENDER LEGAL NAME][, as collateral agent]

By: ______________________________
Name: [NAME]
Title: [TITLE]

Website Posting README — Not Part of the Agreement

What this form is for

This form documents the negotiated middle position between a present lien on core intellectual property and a bare negative pledge. The company keeps title to its technology free of any current lien, continues ordinary-course and open-source licensing, and agrees to preserve and protect its intellectual property; the lender receives a negative pledge, a covenant package, and a contingent security interest that attaches automatically on defined, objective triggers and is then perfected through a pre-agreed set of UCC, USPTO and Copyright Office steps. The form is built for a venture-debt facility in which the loan agreement excludes intellectual property from the collateral grant and cross-refers to this agreement for the IP structure. It includes fully drafted schedules for registered IP, inbound and outbound licenses, copyleft components, excluded IP, personnel assignment status, trigger parameters and a perfection and release register, together with forms of the short-form IP Security Agreement, Trigger Notice, recordation cover-sheet summary and release.

Completion checklist

Confirm that the Loan Agreement excludes IP from the present grant and that its “all assets” financing statement does not describe IP as current collateral.
Define Intellectual Property and Material IP independently of the lender’s standard form; tie Material IP to identified products and a revenue threshold.
Enumerate every Permitted License category the company actually uses, including hosted-service terms, source-code escrow, white-label, named-account exclusivity, API programs and open-source releases.
Select only objective Springing Lien Events; record each threshold, testing method, notice, cure and waiver mechanic on Schedule G; delete or narrow the lender-election trigger.
Decide whether the IP Security Agreement is pre-signed and escrowed or delivered after the Activation Time, and complete the escrow protocol if elected.
Obtain board and preferred-stockholder approval of the contingent grant at signing and list the approvals in Schedule G Part 5.
Complete Schedules A through F from office records, license files, a software-composition scan and the personnel agreement file; redact confidential detail in circulated copies.
Negotiate the estoppel-letter, threshold-reset and deemed-consent mechanics in Section 9 before closing.
Build the perfection and release register (Schedule H) and confirm that the release package includes the pre-trigger confirmation letter.

AI completion prompt

Act as senior borrower-side secured-transactions and technology-transactions counsel. Using the executed or near-final loan and security agreement, the perfection certificate, USPTO and Copyright Office records, domain registrar records, the inbound and outbound license files, the most recent software-composition-analysis report, the personnel invention-assignment file, the certificate of incorporation and investor agreements, the capitalization table, UCC and lien searches, and lender comments, complete EF-102 without inventing assets, rights, consents or approvals. Reconcile every defined term with the loan agreement; designate Material IP against the revenue and product tests; classify every license into a Section 3 category or flag it for consent; populate Schedules A through F from source records and identify every chain-of-title, open-source, government-rights and personnel gap with a remediation owner; complete Schedule G with objective trigger parameters and all approvals obtained; draft the Exhibit 1 annexes from office records; and return an unresolved-issues list separating lender asks, market positions and founder-protective alternatives for each bracketed provision.

Three pass review

Pass 1 Completeness. Confirm parties, recitals, every defined term, the negative pledge, each Permitted License category, each Springing Lien Event and its Schedule G parameters, grant and perfection mechanics, representations, covenants, post-trigger rights, release, interaction provisions, miscellaneous terms, signatures, Schedules A through H and Exhibits 1 through 4.
Pass 2 Risk. Test accidental present-grant language, discretionary or ambiguous triggers, missing cure windows, pre-filed financing statements, the bankruptcy-trigger and preference exposure, intent-to-use applications, anti-assignment clauses in inbound licenses, open-source contamination, personnel assignment gaps, investor protective-provision approvals, strategic-license consent paths, escrow release conditions and release mechanics.
Pass 3 Publication. Remove party names, asset identifiers, product names, source-code and trade-secret descriptions, license terms, filing and recordation numbers, personnel identifiers, contacts, comments, tracked changes and hidden metadata while preserving the blank structure, bracketed fields and drafting notes.

Attorney review warning

Intellectual-property collateral requires coordinated secured-transactions, intellectual-property, insolvency and local-law analysis. The effectiveness of a deferred grant, the method of perfection for each category of intellectual property, the treatment of intent-to-use applications and licensed-in rights, and the avoidance exposure of a lien perfected shortly before an insolvency proceeding depend on the governing law and the facts. This master should not be used to make, record or release a grant, or to deliver a Trigger Notice, until responsible counsel has confirmed the negotiated structure, the filing strategy and the required approvals.

Intellectual Property Negative Pledge and Springing Lien Agreement

Intellectual Property Negative Pledge and Springing Lien Agreement

Matter Completion Sheet

Structure Comparison and Founder Negotiation Notes — Not Part of the Agreement

INTELLECTUAL PROPERTY NEGATIVE PLEDGE AND SPRINGING LIEN AGREEMENT

Recitals

1 Definitions and Interpretation

1.1 Defined Terms

1.2 Interpretation

1.3 Relationship to the Loan Agreement

2 Negative Pledge

2.1 No Liens

2.2 No Exclusive Licenses Outside the Ordinary Course

2.3 No Transfers or Abandonment of Material IP

2.4 No Relocation of Ownership

2.5 No Agreements to Do Any of the Foregoing

2.6 No Present Grant

3 Permitted Licenses and Dispositions

3.1 Non-Exclusive Licenses in the Ordinary Course

3.2 Open-Source Distribution Under Permitted Licenses

3.3 Abandonment of Immaterial Registrations

3.4 End-of-Life Products

3.5 Settlements

3.6 Inbound Licenses, Development Agreements and Personnel Assignments

3.7 Intercompany Licenses

3.8 Existing Licenses

3.9 Transactions Requiring Consent

4 Springing Lien

4.1 Springing Lien Events

4.2 Trigger Notice

4.3 Automatic Grant at the Activation Time

4.4 Scope of the Grant

4.5 Perfection Cooperation

4.6 Delivery of Executed IP Security Agreement

4.7 Recordation at the USPTO and the Copyright Office

4.8 UCC Financing Statements

4.9 Power of Attorney Limited to Perfection

4.10 Timing; Perfection Period

4.11 Cure Before Activation; Rescission

4.12 One-Time Activation; Continuing Lien

5 Representations and Warranties

5.1 Ownership

5.2 Validity and Enforceability

5.3 No Infringement by Company

5.4 No Infringement Against Company

5.5 Personnel Assignment Agreements

5.6 No Open-Source Contamination of Proprietary Code

5.7 No Government or University Rights

5.8 Registrations Current

5.9 No Undisclosed Licenses

5.10 No Liens or Competing Pledges

5.11 Schedules Complete

5.12 Authority and Consents

5.13 Qualifications

6 Covenants

6.1 Maintain and Prosecute Registered IP

6.2 Register Material New IP

6.3 Notice of Claims, Challenges and Lapses

6.4 Personnel Assignment Agreements

6.5 Open-Source Policy

6.6 Source-Code Escrow Option

6.7 No Exclusive Licensing Without Consent

6.8 Annual IP Schedule Update

6.9 Records; Inspection

6.10 Trade Secret Protection and Security Controls

6.11 Compliance with Inbound Licenses

6.12 Further Assurances Before the Activation Time

7 Secured Party’s Rights After the Activation Time

7.1 Remedies

7.2 License to Use Intellectual Property to Dispose of Collateral

7.3 Standstill

7.4 Enforcement Safeguards

7.5 Transition Assistance

7.6 Application of Proceeds

7.7 Secured Party’s Duties Limited

8 Release and Termination

8.1 Termination

8.2 Release Documents

8.3 Partial Release

8.4 Reinstatement