EXHIBIT 4.3
GRANT OF SECURITY INTEREST IN
PATENTS, TRADEMARKS AND LICENSES
THIS GRANT OF SECURITY INTEREST IN PATENTS, TRADEMARKS AND LICENSES (herein the
"Agreement") made as of this 29th day of March, 2004, by X. X. XXXXX
CORPORATION, an Ohio corporation, with its principal place of business at 00000
Xxxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxx 00000 (herein the "Company"), and THE CIT
GROUP/COMMERCIAL SERVICES, INC., a New York corporation, with offices at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (herein "CIT").
W I T N E S S E T H:
WHEREAS, the Company and CIT are parties to a certain factoring and/or financing
arrangement, pursuant to which CIT may make certain loan and advances to the
Company, all as further set forth in the loan and security documents executed in
connection herewith, dated of even date herewith and as the same may be amended
from time to time (herein collectively, the "Factoring Agreement"), which
Factoring Agreement provides (i) for CIT to purchase, at its discretion certain
accounts receivable of the Company and/or make certain loans, advances and
extensions of credit, all to or for the benefit and account of the Company, and
(ii) for the grant by the Company to CIT, as collateral security therefor, a
security interest in certain of the Company's assets, including, without
limitation, its trademarks, trademark applications and/or registrations, trade
names, goodwill and licenses, and, if applicable, any patents, patent
applications and/or registrations, all as more fully set forth herein and in the
Factoring Agreement;
NOW THEREFORE, in consideration of the premises set forth herein and for other
good and valuable consideration, receipt and sufficiency of which is hereby
acknowledged, the Company agrees as follows:
1. DEFINITIONS. Capitalized terms used herein and defined in the Factoring
Agreement shall have the meanings set forth therein unless otherwise
specifically defined herein.
2. GRANT OF SECURITY INTEREST. To secure the payment of the Obligations,
the Company hereby grants to CIT a security interest, effective
immediately, in all of the Company's right, title and interest in and
to all of the following described property, whether now owned or
hereafter acquired (collectively herein the "Intellectual Property
Collateral"):
(i) Trademarks, trademark registrations, recordings and/or applications,
trade names, trade styles, service marks, prints and labels on which
any of the foregoing have or may appear, designs, general intangibles
pertaining to any of the foregoing, including, without limitation, the
trademarks and applications, if any, listed on
SCHEDULE B attached hereto and made a part hereof, and any and all
reissues and/or renewals thereof, and all income, royalties, damages
and payments now and hereafter due and/or payable in connection
therewith including, without limitation, damages and payments for past
or future infringements thereof (all of the foregoing being sometimes
hereinafter individually and/or collectively referred to as the
"Trademark Collateral");
(ii) Patents and patent applications and/or registrations together with the
inventions and improvements described and claimed therein including,
without limitation, the patents and applications, if any, listed on
SCHEDULE A, attached hereto and made a part hereof, and any and all
reissues and renewals thereof and all income, royalties, damages and
payments now and hereafter due and/or payable in connection therewith
including, without limitation, damages and payments for past or future
infringements thereof (all of the foregoing being sometimes hereinafter
individually and/or collectively referred to as the "Patent
Collateral");
(iii) Any license agreement in which the Company is or becomes licensed to
use any patents and/or trademarks owned by a third party including,
without limitation, the licenses, if any, listed on SCHEDULE C attached
hereto and made a part hereof (all of the foregoing being sometimes
referred to herein individually and/or collectively as the "License
Collateral");
(iv) The goodwill of the Company's business connected with and symbolized by
the Intellectual Property Collateral;
(v) Any and all of the Company's rights and interests in any of the
foregoing as they relate to the Company's Accounts, Inventory,
Equipment and General Intangibles, or any Collateral bearing any of the
foregoing, including without limitation the right to sell Inventory,
goods and property bearing or covered by any of the foregoing
Intellectual Property; and
(vi) All cash and non-cash proceeds, royalties and income of the foregoing,
including without limitation any amounts obtained pursuant to any
infringement action.
3. CIT'S RIGHTS. Upon the occurrence and continuance of any Event of
Default hereunder, CIT shall have all the rights and remedies of a
secured party under the Uniform Commercial Code and any other
applicable state or federal laws. CIT will give the Company reasonable
notice of the time and place of any public sale of the Intellectual
Property Collateral or the time after which any private sale of the
Intellectual Property Collateral or any other intended disposition
thereof is to be made. Unless otherwise provided by law, the
requirement of reasonable notice shall be met if such notice is mailed,
postage prepaid to the address of the Company set forth above at least
ten (10) days before the date of such sale or disposition. In addition
to the foregoing and all other rights and remedies of CIT upon the
occurrence and continuance of any Event of Default hereunder, CIT shall
thereupon have the immediate right to transfer to itself or to sell,
assign and transfer to any other person all right, title and interest
in and to all or any part of the Intellectual Property Collateral. A
formal irrevocable power of attorney (in the form annexed hereto) is
being executed and delivered by the Company to CIT
concurrently with this agreement to enable such rights to be carried
out. The Company agrees that, in the event CIT exercises its rights
hereunder and/or pursuant to said power of attorney in accordance with
its terms, after written notification of such exercise from CIT to the
Company, the Company shall never thereafter, without the prior written
authorization of the owner or owners of such Intellectual Property
Collateral, use any of such Intellectual Property Collateral. The
condition of the foregoing provision is such that unless and until
there occurs an Event of Default under this agreement, the Company
shall continue to own and use the Intellectual Property Collateral in
the normal course of its business and to enjoy the benefits, royalties
and profits therefrom provided, however, that from and after the
occurrence and during the continuance of an Event of Default such right
will, upon the exercise by CIT of the rights provided by this
agreement, be revoked and the right of the Company to enjoy the uses,
benefits, royalties and profits of said Intellectual Property
Collateral will wholly cease, whereupon CIT or its transferee(s) shall
be entitled to all of the Company's right, title and interest in and to
the Intellectual Property Collateral hereby so assigned. This agreement
will not operate to place upon CIT any duty or responsibility to
maintain the Intellectual Property Collateral.
4. FEES. The Company will pay all filing fees with respect to the security
interest created hereby which CIT may deem necessary or advisable in
order to perfect and maintain the perfection of its security interest
in the Intellectual Property Collateral.
5. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants:
that the Company lawfully possesses and owns the Intellectual Property
Collateral and that except for the security interest granted hereby,
the Intellectual Property Collateral will be kept free from all liens,
security interests, claims and encumbrances whatsoever, other than
Permitted Liens, that the Company has not made or given any prior
assignment, transfer or security interest in the Intellectual Property
Collateral or any of the proceeds thereof; that the Intellectual
Property Collateral is and will continue to be, in all respects, in
full force and effect; and that there are no known infringements of the
Intellectual Property Collateral. The Company agrees not to take any
action inconsistent with the terms and intent hereof, provided that the
Company may enter into licensing agreements in the ordinary course of
its business on fair and reasonable terms, provided further that no
Event of Default (as defined herein below) has occurred and that any
such agreement does not adversely effect CIT' rights and interests
hereunder. The Company hereby further agrees to provide notice to CIT
of any hereafter acquired Intellectual Property Collateral, provided
that any such Collateral shall be automatically subject to the terms
hereof and provided that the Company shall take any such additional
action as CIT shall reasonably request with respect thereto.
6. APPLICATION OF PROCEEDS. The proceeds of any sale, transfer or
disposition of the Intellectual Property Collateral shall be applied
first to all costs and expenses, including, but not limited to,
reasonable attorneys' fees and expenses and court costs, incurred by
CIT in connection with such sale and the exercise of CIT' rights and
remedies hereunder and under the Factoring Agreement; next, such
proceeds shall be applied to the payment, in whole or in part, of the
Obligations due CIT in
such order as CIT may elect; and the balance, if any, shall be paid to
the Company or as a court of competent jurisdiction may direct.
7. DEFENSE OF CLAIMS. The Company will defend at its own cost and expense
any action, claim or proceeding affecting the Intellectual Property
Collateral or the interest of CIT therein. The Company agrees to
reimburse CIT for all costs and expenses incurred by CIT in defending
any such action, claim or proceeding.
8. RIGHTS CUMULATIVE. This Agreement shall be in addition to the Factoring
Agreement and shall not be deemed to affect, modify or limit the
Factoring Agreement or any rights that CIT has under the Factoring
Agreement. The Company agrees to execute and deliver to CIT (at the
Company's expense) any further documentation or papers necessary to
carry out the intent or purpose of this agreement including, but not
limited to, financing statements under the Uniform Commercial Code.
9. CONSTRUCTION AND INVALIDITY. Any provisions hereof contrary to,
prohibited by or invalid under any laws or regulations shall be
inapplicable and deemed omitted here from, but shall not invalidate the
remaining provisions hereof.
10. CHOICE OF LAW. THE COMPANY AGREES THAT THE VALIDITY, INTERPRETATION AND
ENFORCEMENT OF THIS AGREEMENT AND ALL RIGHTS HEREUNDER SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THIS AGREEMENT TOGETHER
WITH THE FACTORING AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT OF THE
COMPANY AND CIT WITH RESPECT TO THE INTELLECTUAL PROPERTY COLLATERAL,
CAN ONLY BE CHANGED OR MODIFIED IN WRITING AND SHALL BIND AND BENEFIT
THE COMPANY, CIT AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. THE
COMPANY AND CIT EACH HEREBY EXPRESSLY WAIVES ANY RIGHT OF TRIAL BY JURY
ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING HEREUNDER.
11. EVENTS OF DEFAULT. Any of the following constitutes an Event of Default
under this Agreement:
(i) The Company fails to perform or observe any agreement,
covenant or condition required under this Agreement to be
performed by it;
(ii) Any warranty or representation made by Company in this
Agreement shall be or becomes false or misleading in any
material respect; or
(iii) The occurrence and continuance of any Event of Default under
the Factoring Agreement which is not waived in writing by CIT.
12. NOTICES. The Company covenants and agrees that, with respect to the
Intellectual Property Collateral, it will give CIT written notice in
the manner provided in the Factoring Agreement of:
(i) any claim by a third party that the Company has infringed on
the rights of a third party;
(ii) any suspected infringement by a third party on the rights of
the Company; or
(iii) any Intellectual Property Collateral created, arising or
acquired by the Company after the date hereof.
13. FURTHER ASSURANCES. The Company will take any such action as CIT may
reasonably require to further confirm or protect CIT' rights under this
agreement in the Intellectual Property Collateral. In furtherance
thereof, the Company hereby grants to CIT a power of attorney coupled
with an interest which shall be irrevocable during the term of this
agreement to execute any documentation or take any action on the
Company's behalf required to effectuate the terms, provisions and
conditions of this agreement.
14. TERMINATION. This agreement shall terminate upon termination of the
Factoring Agreement and full, final and indefeasible payment in cash of
all Obligations of the Company thereunder. Upon the Company's request,
CIT shall within a reasonable time after any such termination execute
and deliver to the Company (at the Company's expense) such documents
and instruments as are reasonably necessary to evidence such
termination and release of the security interest granted herein on any
applicable public record.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the 29th day of March, 2004.
X. X. XXXXX CORPORATION
By /s/ Xxxxxx X. Xxx Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxx Xxxxxx
Title: President and CEO
Agreed and Accepted this
29th day of March, 2004
THE CIT GROUP/COMMERCIAL SERVICES, INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Title: Sr. Vice President
