PATENT, TRADEMARK AND COPYRIGHT SECURITY AGREEMENT
This Patent, Trademark and Copyright Security Agreement (the
"Agreement"), dated March 21, 2000 is entered into by and between U.S.
INTERACTIVE, INC., a Delaware corporation (the "Pledgor"), and PNC BANK,
NATIONAL ASSOCIATION, as Agent for the Banks referred to below (the "Secured
Party").
WHEREAS, pursuant to that certain Credit Agreement (as amended,
restated, modified or supplemented from time to time, the "Credit Agreement") of
even date herewith by and among the Pledgor as borrower, the Banks and the
Secured Party as lenders (all as defined in the Credit Agreement), Secured Party
and the Banks have agreed to provide certain loans to the Pledgor, and the
Pledgor has agreed, among other things, to grant a security interest to the
Secured Party in certain patents, trademarks, copyrights and other property as
security for such loans and other obligations as more fully described herein.
NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto agree as follows:
1. Except as otherwise expressly provided herein, capitalized terms
used in this Agreement shall have the respective meanings given to them in the
Credit Agreement.
2. To secure the full payment and performance of all Obligations and
other liabilities of the Pledgor now or hereafter existing under the Credit
Agreement and the other Loan Documents, including, without limitation,
principal, interest, fees, expenses, costs and expenses of enforcement,
reasonable attorneys' fees and expenses, and obligations under indemnification
provisions in the Loan Documents (collectively, the "Secured Obligations"),
Pledgor hereby grants, and conveys a security interest to Secured Party in the
entire right, title and interest of Pledgor in and to all trade names, patent
applications, patents, trademark applications, trademarks and copyrights,
whether now owned or hereafter acquired by Pledgor, including, without
limitation, those listed on Schedule A hereto, including all proceeds thereof
(such as, by way of example, license royalties and proceeds of infringement
suits), the right to ▇▇▇ for past, present and future infringements, all rights
corresponding thereto throughout the world and all reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof, and the
goodwill of the business to which any of the patents, trademarks and copyrights
relate (collectively, the "Patents, Trademarks and Copyrights").
3. Pledgor covenants and warrants that:
(a) the Patents, Trademarks and Copyrights are subsisting and have
not been adjudged invalid or unenforceable, in whole or in part;
(b) to the best of Pledgor's knowledge, each of the Patents,
Trademarks and Copyrights is valid and enforceable;
(c) Pledgor is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the Patents, Trademarks
and Copyrights, free and clear of any liens, other than those under the Existing
Facility which are to be satisfied on or about the Closing Date, charges and
encumbrances, including without limitation pledges, assignments, licenses, shop
rights and covenants by Pledgor not to ▇▇▇ third persons;
(d) Pledgor has the corporate power and authority to enter into this
Agreement and perform its terms;
(e) no claim has been made to Pledgor or, to the knowledge of
Pledgor, any other person that the use of any of the Patents, Trademarks and
Copyrights does or may violate the rights of any third party;
(f) Pledgor has used, and will continue to use for the duration of
this Agreement, consistent standards of quality in its manufacture of products
sold under the Patents, Trademarks and Copyrights; and
(g) Pledgor has used, and will continue to use for the duration of
this Agreement, proper statutory notice in connection with its use of the
Patents, Trademarks and Copyrights, except for those Patents, Trademarks and
Copyrights that are hereafter allowed to lapse in accordance with Paragraph 10
hereof.
4. Pledgor agrees that, until all of the Secured Obligations shall have
been satisfied in full, it will not enter into any agreement (for example, a
license agreement) which is inconsistent with Pledgor's obligations under this
Agreement, without Secured Party's prior written consent which shall not be
unreasonably withheld except Pledgor may license technology in the ordinary
course of business without the Secured Party's consent to suppliers and
customers to facilitate the manufacture and use of Pledgor's products.
5. If, before the Secured Obligations shall have been indefeasibly
satisfied in full and the Commitments have terminated, Pledgor shall own any new
trademarks or any new copyrightable or patentable inventions, or any patent
application or patent for any reissue, division, continuation, renewal,
extension, or continuation in part of any Patent, Trademark or Copyright or any
improvement on any Patent, Trademark or Copyright, the provisions of this
Agreement shall automatically apply thereto and Pledgor shall give to Secured
Party prompt notice thereof in writing. Pledgor and Secured Party agree to
modify this Agreement by amending Schedule A to include any future patents,
patent applications, trademark applications, trademarks, copyrights or copyright
applications and the provisions of this Agreement shall apply thereto.
6. Secured Party shall have, in addition to all other rights and
remedies given it by this Agreement and those rights and remedies set forth in
the Credit Agreement, those 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, Trademarks and Copyrights may be located and, without
limiting the generality of the foregoing, if an Event of Default has occurred
and is continuing, Secured Party may immediately, without demand of performance
and without other notice (except as set forth below) or demand whatsoever to
Pledgor, all of which are hereby expressly waived, and without advertisement,
sell at public or private sale or otherwise realize upon, in a city that the
Agent shall designate by notice to the Pledgor, in Philadelphia, Pennsylvania or
elsewhere, the whole or from time to time any part of the Patents, Trademarks
and Copyrights, or any interest which Pledgor may have therein and, after
deducting from the proceeds of sale or other disposition of the Patents,
Trademarks and Copyrights all expenses (including fees and expenses for brokers
and attorneys), shall apply the remainder of such proceeds toward the payment of
the Secured Obligations as the Secured Party, in its sole and reasonable
discretion, shall determine. Any remainder of the proceeds after payment in full
of the Secured Obligations shall be paid over to Pledgor. Notice of any sale or
other disposition of the Patents, Trademarks and Copyrights shall be given to
Pledgor at least fifteen (15) days before the time of any intended public or
private sale or other disposition of the Patents, Trademarks and Copyrights is
to be made, which Pledgor hereby agrees shall be reasonable notice of such sale
or other disposition. At any such sale or other disposition, Secured Party may,
to the extent permissible under applicable Law, purchase the whole or any part
of the Patents, Trademarks and Copyrights sold, free from any right of
redemption on the part of Pledgor, which right is hereby waived and released.
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7. If any Event of Default shall have occurred and be continuing,
Pledgor hereby authorizes and empowers Secured Party to make, constitute and
appoint any officer or agent of Secured Party, as Secured Party may select in
its exclusive discretion, as Pledgor's true and lawful attorney-in-fact, with
the power to endorse Pledgor's name on all applications, documents, papers and
instruments necessary for Secured Party to use the Patents, Trademarks and
Copyrights, or to grant or issue, on commercially reasonable terms, any
exclusive or nonexclusive license under the Patents, Trademarks and Copyrights
to any third person, or necessary for Secured Party to assign, pledge, convey or
otherwise transfer title in or dispose, on commercially reasonable terms, of the
Patents, Trademarks and Copyrights to any third Person. Pledgor hereby ratifies
all that such attorney shall lawfully do or cause to be done by virtue hereof.
This power of attorney, being coupled with an interest, shall be irrevocable for
the life of this Agreement.
8. At such time as Pledgor shall have indefeasibly paid in full all of
the Secured Obligations and the Commitments shall have terminated, this
Agreement shall terminate and Secured Party shall execute and deliver to Pledgor
all deeds, assignments and other instruments as may be necessary or proper to
re-vest in Pledgor full title to the Patents, Trademarks and Copyrights, subject
to any disposition thereof which may have been made by Secured Party pursuant
hereto.
9. Any and all reasonable fees, costs and expenses, of whatever kind or
nature, including reasonable attorneys' fees and expenses incurred by Secured
Party in connection with the preparation of this Agreement and all other
documents relating hereto and the consummation of this transaction, the filing
or recording of any documents (including all taxes in connection therewith) in
public offices, the payment or discharge of any taxes, counsel fees, maintenance
fees, encumbrances, the protection, maintenance or preservation of the Patents,
Trademarks and Copyrights, or the defense or prosecution of any actions or
proceedings arising out of or related to the Patents, Trademarks and Copyrights,
shall be borne and paid by Pledgor within fifteen (15) days of demand by Secured
Party, and if not paid within such time, shall be added to the principal amount
of the Secured Obligations and shall bear interest at the highest rate
prescribed in the Credit Agreement.
10. Pledgor shall have the duty, through counsel reasonably acceptable
to Secured Party, to prosecute diligently any patent applications of the
Patents, Trademarks and Copyrights pending as of the date of this Agreement if
commercially reasonable or thereafter until the Secured Obligations shall have
been indefeasibly paid in full and the Commitments shall have terminated, to
make application on unpatented but patentable inventions (whenever it is
commercially reasonable in the reasonable judgment of Pledgor to do so) and to
preserve and maintain all rights in patent applications and patents of the
Patents, including without limitation the payment of all maintenance fees
(whenever it is commercially reasonable in the reasonable judgment of Pledgor to
do so). Any expenses incurred in connection with such an application shall be
borne by Pledgor. Pledgor shall not abandon any Patent, Trademark or Copyright
material to the business of Pledgor without the consent of Secured Party, which
shall not be unreasonably withheld.
11. Pledgor shall have the right, with the consent of Secured Party,
which shall not be unreasonably withheld, to bring suit, action or other
proceeding in its own name, and to join Secured Party, if necessary, as a party
to such suit so long as Secured Party is satisfied that such joinder will not
subject it to any risk of liability, to enforce the Patents, Trademarks and
Copyrights and any licenses thereunder. Pledgor shall promptly, upon demand,
reimburse and indemnify Secured Party for all damages, costs and expenses,
including reasonable legal fees, incurred by Secured Party as a result of such
suit or joinder by Pledgor.
12. No course of dealing between Pledgor and Secured Party, nor any
failure to exercise nor any delay in exercising, on the part of Secured Party,
any right, power or privilege hereunder or under the Credit Agreement or other
Loan Documents shall operate as a waiver of such right, power or privilege, 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.
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13. All of Secured Party's rights and remedies with respect to the
Patents, Trademarks and Copyrights, whether established hereby or by the Credit
Agreement or by any other agreements or by Law, shall be cumulative and may be
exercised singularly or concurrently.
14. The provisions of this Agreement 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 clause
or provision of this Agreement in any jurisdiction.
15. This Agreement is subject to modification only by a writing signed
by the parties, except as provided in Paragraph 5.
16. The benefits and burdens of this Agreement shall inure to the
benefit of and be binding upon the respective successors and permitted assigns
of the parties, provided, however, that Pledgor may not assign or transfer any
of its rights or obligations hereunder or any interest herein and any such
purported assignment or transfer shall be null and void.
17. This Agreement shall be governed by and construed in accordance
with the internal Laws of the Commonwealth of Pennsylvania without regard to its
conflicts of law principles.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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[SIGNATURE PAGE 1 OF 1 TO PATENT, TRADEMARK
AND COPYRIGHT SECURITY AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers or agents thereunto duly authorized, as of
the date first above written.
ATTEST: U.S. INTERACTIVE, INC.
____________________________ By:______________________________________
Name: Name:
Title: Title:
PNC BANK, NATIONAL ASSOCIATION, as Agent
By:______________________________________
Name:
Title:
SCHEDULE A
TO
PATENT, TRADEMARK AND COPYRIGHT SECURITY AGREEMENT
LIST OF REGISTERED PATENTS, TRADEMARKS,
TRADE NAMES AND COPYRIGHTS
1. Registered Patents:
2. Trademarks:
3. Trade Names:
4. Copyrights:
