Exhibit (10)(a)(ix)
COLLATERAL PATENT,
TRADEMARK, COPYRIGHT AND LICENSE ASSIGNMENT
THIS COLLATERAL PATENT, TRADEMARK, COPYRIGHT AND LICENSE ASSIGNMENT
("Assignment") made as of October 30, 1996, by Hauppauge Record Manufacturing
Ltd., a New York corporation (the "Assignor"), with a mailing address at 00
Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, to American National Bank and Trust
Company of Chicago (the "Assignee") with a mailing address at 00 Xxxxx XxXxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, Assignor has entered into that certain Amended and Restated Loan
and Security Agreement dated as of October 30, 1996 (as amended, modified or
supplemented from time to time, the "Loan Agreement") with Assignee; and
WHEREAS, it is a condition to the effectiveness of the Loan Agreement and
any extensions of credit to or for the benefit of the Assignor thereunder that,
among other things, Assignor execute and deliver to Assignee this Assignment;
NOW, THEREFORE, in consideration of the premises set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Assignor agrees as follows:
1. Incorporation of Loan Agreement. The Loan Agreement and the terms and
provisions thereof are hereby incorporated herein in their entirety by this
reference thereto. Terms used herein which are not defined herein but are
defined in the Loan Agreement shall have the meanings ascribed to them therein.
2. Collateral Assignment of Patents, Trademarks, Copyrights and Licenses.
To secure the complete and timely satisfaction of all of the Liabilities, the
Assignor hereby mortgages, pledges and assigns to Assignee, as and by way of a
mortgage and security interest having priority over all other security
interests, with power of sale upon the occurrence of a Default, and grants
Assignee a security interest in, all of Assignor's right, title and interest in
and to all of the following, whether now existing or hereafter arising:
(i) patents and patent applications, including, without limitation, the
inventions and improvements described and claimed therein, and those patents and
patent applications listed on Schedule A attached hereto and made a part hereof,
and (a) the reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, (b) all income, royalties, damages and payments
now and hereafter due and/or payable under and with respect thereto, including,
without limitation, damages and payments for past or future infringements
thereof, (c) the right to xxx for past, present and future infringements
thereof, and (d) all rights corresponding thereto throughout the world (all of
the foregoing patents and applications, together with the items described in
clauses (a) through (d), inclusive, in which Assignor now or hereafter has any
right, title or interest are sometimes hereinafter individually and/or
collectively referred to as the "Patents");
(ii) all service marks, trademarks, trademark or service xxxx
registrations, trademark or service xxxx applications, trade names, copyrights,
copyright registrations and copyright applications including, without
limitation, the trademarks, service marks, copyrights and applications listed on
Schedule B attached hereto and made a part hereof, and (a) renewals thereof, (b)
all income, royalties, damages and payments now and hereafter due and/or payable
with respect thereto, including, without limitation, damages and payments for
past or future infringements thereof, (c) the right to xxx for past, present and
future infringements thereof, and (d) all rights corresponding thereto
throughout the world (all of the foregoing service marks, trademarks,
registrations, applications and trade names, together with the items described
in clauses (a) through (d), inclusive, with respect thereto in which Assignor
now or hereafter has any right, title or interest are sometimes hereinafter
individually and/or collectively referred to as the "Marks" and all of the
foregoing copyrights, copyright registrations and copyright applications,
together with the items described in clauses (a) through (d), inclusive, in
which Assignor now or hereafter has any right, title or interest are sometimes
hereinafter individually and/or collectively referred to as the "Copyrights");
(iii) all Assignor's rights and obligations pursuant to its license
agreements with any other Person or Persons with respect to any Patents, Marks
and Copyrights, whether Assignor is a licensor or licensee under any such
license agreements, including, without limitation, the licenses listed on
Schedule C attached hereto and made a part hereof, and, subject to the terms of
such licenses, the right to prepare for sale, sell and advertise for sale, all
Inventory now or hereafter owned by the Assignor and now or hereafter covered by
such licenses (all of the foregoing is hereinafter referred to collectively as
the "Licenses"); and
(iv) the goodwill of Assignor's business connected with and symbolized by
the Marks;
-2-
provided, however, that there shall be excluded from the foregoing collateral
assignment and grant of a security interest any of the existing Licenses to
which Assignor is a licensee (and any Patents, Marks and Copyrights currently
licensed by others to Assignor pursuant to such Licenses) in each case to the
extent (but only to the extent) that the applicable License lawfully prohibits
such collateral assignment or grant of a security interest; provided further,
however, that , upon Assignee's request, Assignor will use its best efforts to
obtain any consent needed to subject any such property to this collateral
assignment and grant of a security interest.
3. Restrictions on Future Agreements. Assignor agrees and covenants that
until the Liabilities shall have been satisfied in full and the Loan Agreement
shall have been terminated, Assignor will not, without Assignee's prior written
consent, take any action or enter into any agreement, including, without
limitation entering into any license agreement, which is inconsistent with
Assignor's obligations under this Assignment, and Assignor further agrees and
covenants that without Assignee's prior written consent it will not take any
action, or permit any action to be taken by others subject to its control,
including its licensees, or fail to take any action which would affect the
validity or enforcement or nature of the rights transferred to Assignee under
this Assignment. Assignor agrees and covenants not to sell or assign its
interest in, or grant any license under, the Patents, Marks, Copyrights or
Licenses, without receiving the prior written consent of Assignee thereto.
4. Certain Covenants, Representations and Warranties of Assignor. Assignor
covenants, represents and warrants (to the best of Assignor's knowledge with
respect to any Patents, Marks and Copyrights which are licensed by third parties
to Assignor) that: (i) the Patents, Marks, Copyrights and Licenses are
subsisting, have not been adjudged invalid or unenforceable in whole or in part,
and, to the best of Assignor's knowledge, are not currently being challenged in
any way; (ii) none of the Patents, Marks, Copyrights and Licenses have lapsed or
expired or have been abandoned, whether due to any failure to pay any
maintenance or other fees or make any filing or otherwise; (iii) each of the
Patents, Marks, Copyrights and Licenses is valid and enforceable and Assignor is
unaware of any invalidating prior art (including public uses and sales) relative
to the Patents, and is unaware of any impairments to the Patents, Marks,
Copyrights or Licenses which would have a material adverse effect on the
validity and/or enforceability of the Patents,
-3-
Marks, Copyrights or Licenses; (iv) to the best of Assignor's knowledge, no
claim has been made that the use of any of the Patents, Marks, Copyrights or
Licenses constitutes an infringement; (v) Assignor owns the entire right, title
and interest in and to each of the Patents, Marks and Copyrights (other than
those being licensed to Assignor pursuant to the Licenses) free and clear of any
Liens and encumbrances of every kind and nature, and the Licenses are valid and
subsisting licenses with respect to the Patents, Marks, Copyrights described
therein, free and clear of any Liens and encumbrances of every kind and nature
arising by, through or under Assignor, in each case except for (A) rights
granted by Assignor pursuant to the applicable licenses listed on Schedule C,
and (B) Liens and encumbrances in favor of Assignee pursuant to this Agreement
or the other Financing Agreements; (vi) the Patents, Marks and Copyrights and
Licenses listed on Schedules A, B and C, respectively, constitute all such items
in which Assignor has any right, title or interest; (vii) Assignor has the
unqualified right to enter into this Agreement and perform its terms; (viii)
Assignor will continue to use proper statutory notice in connection with its use
of the Patents, Marks and Copyrights; ality in its manufacture of products sold
under the Marks consistent with those currently employed by it.
5. New Patents, Marks, Copyrights and Licenses. If, before the Liabilities
shall have been satisfied in full and the Loan Agreement shall have been
terminated, Assignor shall (i) obtain rights to any new patentable inventions,
trademarks, service marks, trademark or service xxxx registrations, copyrights,
copyright registrations, trade names or licenses, or (ii) become entitled to the
benefit of any patent, trademark or service xxxx application, trademark, service
xxxx, trademark or service xxxx registration, copyrights, copyright
registrations, license or license renewal, or patent for any reissue, division,
continuation, renewal, extension, or continuation-in-part of any Patent or any
improvement on any Patent, the provisions of Section 2 above shall automatically
apply thereto and Assignor shall give to Assignee prompt written notice thereof.
Assignor hereby authorizes Assignee to modify this Assignment by noting any
future acquired Patents, Marks, Copyrights on Schedule A or B and any Licenses
and licensed Patents, Marks or Copyrights on Schedule C, as applicable;
provided, however, that the failure of Assignee to make any such notation shall
not limit or affect the obligations of Assignor or rights of Assignee hereunder.
6. Royalties; Terms. Assignor hereby agrees that the use by Assignee of
all Patents, Marks, Copyrights and Licenses as described above shall be
worldwide (or in the case of the Patents, Marks and Copyrights licensed to
Assignor such smaller geographic location if any is specified for Assignor's use
in the applicable License) and without any liability for royalties or other
related charges from Assignee to Assignor. The term of the assignments granted
herein shall extend until the earlier of (i) the expiration of each of the
respective Patents, Marks, Copyrights and Licenses assigned hereunder, or (ii)
satisfaction in full of the Liabilities and termination of the Loan Agreement.
7. Grant of License to the Assignor. Unless and until a Default shall have
occurred and notice given as provided in the following sentence, Assignee hereby
grants to Assignor (but only to the extent the same was lawfully granted to
Assignee by Assignor pursuant to this Agreement) the royalty-free, exclusive,
nontransferable right and license
-4-
for Assignor's own benefit and account and no other to use the Marks and all
materials covered by the Copyrights, to exercise Assignee's rights under the
Licenses, and to make, have made, use and sell products conforming to the
inventions disclosed and claimed in the Patents for Assignor's own benefit and
account and for none other. Assignor agrees not to sell or assign its interest
in, or grant any sublicense under, the license granted to Assignor in this
Section 7 without the prior written consent of Assignee. From and after the
occurrence of a Default and notice to such effect from the Assignee to the
Assignor, Assignor's license with respect to the Patents, Marks, Copyrights and
Licenses as set forth in this Section 7 shall terminate forthwith.
8. Assignee's Right to Inspect. Assignee shall have the right, at any time
and from time to time, to inspect Assignor's premises and to examine Assignor's
books, records and operations, including, without limitation, Assignor's quality
control processes. From and after the occurrence of a Default and notice by
Assignee to Assignor of Assignee's intention to enforce its rights and claims
against any of the Patents, Marks, Copyrights and Licenses, Assignor agrees that
Assignee, or a conservator appointed by Assignee, shall have the right to
establish such additional product quality controls as Assignee or said
conservator, in its sole judgment, may deem necessary to assure maintenance of
the quality of products sold by Assignor under the Marks consistent with the
quality of products now manufactured by Assignor.
9. Termination of the Assignor's Security Interest. This Assignment is
made for collateral purposes only. Upon satisfaction in full of the Liabilities
and termination of the Loan Agreement, subject to any disposition thereof which
may have been made by Assignee pursuant hereto or pursuant to any of the other
Financing Agreements, title to the Patents, Marks, Copyrights and Licenses shall
automatically revert to Assignor. Assignee shall, at Assignor's expense, execute
and deliver to Assignor all termination statements and other instruments as may
be necessary or proper to terminate Assignee's security interest in, and to
revest in Assignor all right, title and interest in and to, the Patents, Marks,
Copyrights, and Licenses transferred to Assignee pursuant to this Assignment,
subject to any disposition thereof which may have been made by Assignee pursuant
hereto or pursuant to any of the other Financing Agreements. Any such
termination statements and instruments shall be without recourse upon or
warranty by Assignee.
10. Duties of the Assignor. Assignor shall have the duty (i) to prosecute
diligently any patent application of the Patents, any application respecting the
Marks, and any copyright application of the Copyrights pending as of the date
hereof or thereafter, (ii) to make application on unpatented but patentable
inventions and on registerable but unregistered trademarks, service marks and
copyrights, and (iii) to preserve, maintain and
-5-
enforce against infringement all rights in patent applications and patents
constituting the Patents, in trademark or service xxxx applications, trademarks,
service marks, and trademark or service xxxx registrations constituting the
Marks, and in copyright applications, copyrights and copyright registrations
constituting the Copyrights. Any expenses incurred in connection with the
foregoing shall be borne by Assignor. Assignor shall not abandon any pending
patent application, trademark application, copyright application, service xxxx
application, patent, trademark, service xxxx or copyright without the written
consent of Assignee.
11. Assignee's Right to Xxx. From and after the occurrence of a Default,
Assignee shall have the right, but shall in no way be obligated, to bring suit
in its own name to enforce the Patents, the Marks, the Copyrights and the
Licenses, and any licenses thereunder, and, if Assignee shall commence any such
suit, Assignor shall, at the request of Assignee, do any and all lawful acts and
execute any and all proper documents required by Assignee in aid of such
enforcement, and Assignor shall promptly, upon demand, reimburse and indemnify
Assignee for all costs and expenses incurred by Assignee in the exercise of its
rights under this Section 11.
12. Waivers. No course of dealing between Assignor and Assignee, nor any
failure to exercise, nor any delay in exercising, on the part of Assignee, any
right, power or privilege hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
13. Severability. The provisions of this Assignment are severable, and if
any clause or provision shall be held invalid and unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Assignment in any jurisdiction.
14. Modification. This Assignment cannot be altered, amended or
modified in any way, except as specifically provided in Section 5 hereof or by a
writing signed by the parties hereto.
15. Further Assurances. Assignor shall execute and deliver to Assignee, at
any time or times hereafter at the request of Assignee, all papers (including,
without limitation, any as may be deemed desirable by Assignee for filing or
recording with any Patent and Trademark Office, and any successor thereto) and
take all such actions (including, without limitation, paying the cost of filing
or recording any of the foregoing
-6-
in all public offices reasonably deemed desirable by Assignee), as Assignee may
request, to evidence Assignee's interest in the Patents, Marks, Copyrights and
Licenses and the goodwill associated therewith and enforce Assignee's rights
under this Assignment.
16. Cumulative Remedies; Power of Attorney; Effect on Loan Documents. All
of Assignee's rights and remedies with respect to the Patents, Marks, Copyrights
and Licenses, whether established hereby, by any of the Financing Agreements or
otherwise, or by any other agreements or by law shall be cumulative and may be
exercised singularly or concurrently. Assignor hereby constitutes and appoints
Assignee as Assignor's true and lawful attorney-in-fact, with full power of
substitution in the premises, with power at any time after the occurrence of
Default, to (i) endorse Assignor's name on all applications, documents, papers
and instruments determined by Assignee in its sole discretion as necessary or
desirable for Assignee in the use of the Patents, Marks, Copyrights and
Licenses, (ii) take any other actions with respect to the Patents, Marks,
Copyrights and Licenses as Assignee deems in Good Faith to be in the best
interest of Assignee, (iii) grant or issue any exclusive or non-exclusive
license under the Patents, Marks or Copyrights to any Person, or (iv) assign,
pledge, convey or otherwise transfer title in or dispose of the Patents, Marks,
Copyrights or Licenses to any Person. Assignor hereby ratifies all that such
attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney shall be irrevocable until the Liabilities shall have been satisfied in
full and the Loan Agreement shall have been terminated. Assignor acknowledges
and agrees that this Assignment is not intended to limit or restrict in any way
the rights and remedies of Assignee under the Loan Agreement or any of the
Financing Agreements but rather is intended to facilitate the exercise of such
rights and remedies. Assignee shall have, in addition to all other rights and
remedies given it by the terms of this Assignment, all rights and remedies
allowed by law and the rights and remedies of a secured party under the Uniform
Commercial Code as enacted in any jurisdiction in which the Patents, Marks,
Copyrights or Licenses may be enforced. Assignor hereby releases the Assignee
from any and all claims, causes of action and demands at any time arising out of
or with respect to any actions taken or omitted to be taken by the Assignee
under the powers of attorney granted herein.
17. Binding Effect; Benefits. This Assignment shall be binding upon the
Assignor and its respective successors and assigns and shall inure to the
benefit of Assignee and its respective successors, assigns and nominees.
18. Governing Law. This Assignment shall be deemed to have been executed
and delivered in Chicago, Illinois, and shall be governed by and construed in
accordance with the internal laws (as opposed to conflicts of law provisions) of
Illinois.
-7-
WITNESS the due execution hereof as of the date first above written.
HAUPPAUGE RECORD MANUFACTURING LTD.
By: /s/ Xxxxxx Xxxxxxx
----------------------------------
Title: Chief Executive Officer
-------------------------------
(SEAL)
Attest:
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
By: /s/ Xxxxxxxxx Xxxxxxx
---------------------------------
Title: Vice President
------------------------------
-8-
