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EXHIBIT 10.38
COLLATERAL ASSIGNMENT OF
PROPRIETARY RIGHTS AND SECURITY AGREEMENT
THIS COLLATERAL ASSIGNMENT OF PROPRIETARY RIGHTS AND SECURITY AGREEMENT
("Agreement"), dated as of July 15, 1997, is made by Medar, Inc., a Michigan
corporation, in favor of NBD Bank, a Michigan banking corporation ("NBD" or
"Lender").
Recitals:
A. Assignor, certain of its affiliates and Lender are parties to that
certain Revolving Credit and Loan Agreement dated as of August 10, 1995, as
amended by agreements dated October 12, 1995, October 31, 1995, March 29, 1996,
August 11, 1996, February 27, 1997, June 27, 1997 and the date hereof (such
agreement, as amended, modified or supplemented from time to time, is referred
to herein as the "Loan Agreement").
B. It is a condition to the Eighth Amendment to Revolving Credit and Loan
Agreement being executed simultaneously herewith, that Assignor executes and
delivers this Agreement.
NOW THEREFORE, in consideration of the premises and to induce Lender to
make extensions of credit to Assignor under the Loan Agreement, and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Assignor agrees with Lender as follows:
1. Defined Terms. In addition to those terms defined elsewhere in this
Agreement, terms defined in the Loan Agreement shall have their defined
meanings when used herein (unless otherwise defined herein) and the following
terms shall have the following meanings, unless the context otherwise requires:
"Collateral" means all of the Trademarks, Copyrights, Patents and
Intellectual Property Rights, whether now existing or hereafter created
or acquired (including, without limitation, such of the foregoing as are
listed on Schedule A attached hereto and made a part hereof).
"Copyrights" means all United States copyrights, registered or
unregistered, in and to all copyrightable works now owned or hereafter
acquired by Assignor, including all registrations and applications
therefor and all licenses thereof and (a) any renewals or extensions of
the registrations therefor that may be secured under the laws now or
hereafter in effect in the United States, (b) all income, royalties,
damages and payments now and hereafter due or payable under and with
respect thereto, including, without limitation, payments under all
licenses entered into in connection therewith and damages and payments
for past or future infringements thereof, (c) the right to xxx and
recover for past, present and future infringements thereof, and (d) all
rights corresponding thereto throughout the world.
"Event of Default" means an Event of Default as defined in the Loan
Agreement.
"Intellectual Property Rights" means all intellectual property
rights other than Trademarks, Copyrights and Patents, now owned or
hereafter acquired by Assignor, including, without limitation, trade
secrets, know-how and confidential business information, computer
software, data and documentation (including electronic media) and
licenses thereof, and (a) all
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income, royalties, damages and payments now and hereafter due or payable
under and with respect thereto, including, without limitation,
payments under all licenses entered into in connection therewith and
damages and payments for past or future infringements thereof, (b) the
right to xxx and recover for past, present and future infringements
thereof, and (c) all rights corresponding thereto throughout the
world.
"Patents" means all United States patents and patent applications,
now owned or hereafter acquired by Assignor, including, without
limitation, the inventions and improvements described and claimed
therein, all licenses thereof and (a) the reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof,
(b) all income, royalties, damages and payments now and hereafter due or
payable under and with respect thereto, including, without limitation,
payments under all licenses entered into in connection therewith and
damages and payments for past or future infringements thereof, (c) the
right to xxx and recover for past, present and future infringements
thereof, and (d) all rights corresponding thereto throughout the world.
"Trademarks" means all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos, other source or business identifiers, prints and
labels on which any of the foregoing have appeared or appear, designs and
general intangibles of like nature, trademark registrations and
applications for registration owned by Assignor and all licenses thereof,
together with the goodwill of the business connected with the use of, and
symbolized by, the foregoing, and (a) the registration renewals thereof,
(b) all income, royalties, damages and payments now and hereafter due or
payable under and with respect thereto including, without limitation,
payments under all licenses entered into in connection therewith and
damages and payments for past or future infringements thereof, (c) the
right to xxx and recover for past, present and future infringements
thereof, and (d) all rights corresponding thereto throughout the world.
2. Collateral Assignment of Security Interest in Trademarks, Copyrights
and Patents and Intellectual Property Rights. To secure the prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of all the Obligations, Assignor hereby grants to
Lender and its assignees a continuing security interest in the
Collateral, and, subject to Section 7 hereof, shall assign, transfer and convey
to Lender all right, title and interest, in the United States and throughout
the world, in, to and under the Collateral.
3. Continuing Liability. Assignor hereby expressly agrees that, anything
herein to the contrary notwithstanding, it shall remain liable under each
license, interest and obligation assigned to Lender hereunder to observe and
perform all the conditions and obligations to be observed and performed by
Assignor thereunder, all in accordance with and pursuant to the terms and
provisions thereof. Lender shall have no obligation or liability under any
such license, interest or obligation by reason of or arising out of this
Agreement or the assignment thereof to Lender or the receipt by Lender of any
payment relating to any such license, interest or obligation pursuant hereto,
nor shall Lender be required or obligated in any manner to perform or fulfill
any of the obligations of Assignor thereunder or pursuant thereto, or to make
any payment, or to make any inquiry as to the nature or the sufficiency of any
payment received by any of them or the sufficiency of any performance by any
party under any such license, interest or obligation, or to present or file any
claim, or to take any action to collect or enforce any performance of the
payment of any amounts which may have been assigned to Assignor or to which
Assignor may be entitled at any time or times.
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4. Representations and Warranties. Assignor hereby represents and
warrants to Lender:
(a) All of Assignor's Copyrights, Patents and Trademarks (whether
or not registered) which are material to its business are listed on
Schedule A hereto or have already been specifically pledged to Lender
prior to the date hereof, as updated from time to time.
(b) Except as set forth in Schedule A and except for Permitted
Liens, Assignor owns free and clear of all Liens all right, title and
interest in, or has full right and authority to use, all Collateral
necessary or desirable for the conduct of its business as currently
conducted, as previously conducted or as currently proposed to be
conducted.
5. Updated Information and Filings. Assignor agrees that it will deliver
to Lender an updated Schedule A to this Agreement on at least a quarterly
basis, and more often if requested by Lender. Assignor also agrees that it
will take such actions as requested by Lender to allow Lender to record and
perfect its Lien on Assignor's Copyrights, Patents, Trademanrks and
Intellectual Property Rights, including without limitation, filing and
registering its rights with appropriate governmental entities.
6. Restrictions on Future Agreements. Assignor agrees that until all of
the Obligations have been paid in full and the Loan Agreement has been
terminated, it will not, without Lender's prior written consent, enter into any
agreement, including, without limitation, any license agreement, which is
inconsistent with Assignor's obligations under this Agreement or which is
prohibited by the Loan Agreement.
7. Effect of Collateral Assignment and Remedies. (a) If an Event of
Default has occurred and is continuing, Lender may exercise, in addition to all
other rights and remedies granted to it in this Agreement, the Loan Agreement
and any other Loan Document, all rights and remedies of a secured party under
the Uniform Commercial Code or any other applicable law. Without limiting the
generality of the foregoing, Assignor expressly agrees that in any such event
Lender may forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, or may forthwith sell, lease, assign or sell
or otherwise dispose of and deliver said Collateral (or contract to do so), or
any part thereof, in one or more public or private sale or sales, at any
exchange, broker's board or at any of Lender's offices or elsewhere at such
prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk, and Lender shall apply the net proceeds
(after expenses) of any such sale, lease, assignment or other disposition
against the Obligations in such order as Lender in its sole discretion shall
determine (subject to the terms of the Loan Agreement), Assignor remaining
liable for any deficiency thereon. Lender shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in Assignor, which right or
equity is hereby expressly waived and released. To the extent permitted by
applicable law, Assignor waives all claims, damages and demands against Lender
arising out of the repossession, retention or sale of the Collateral. Assignor
agrees that Lender need not give more than ten days' notice of the time and
place of any public sale or of the time after which a private sale may take
place and that such notice is reasonable notification of such matter.
(b) During the continuance of an Event of Default, Assignor hereby
authorizes Lender
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to make, constitute and appoint any officer or agent of Lender as Lender may
select, in Lender's sole discretion, as Assignor's true and lawful
attorney-in-fact, with power: (i) to endorse Assignor's name on all
applications, documents, papers and instruments necessary or desirable for
Lender in the use of Collateral; (ii) to notify any licensee of Assignor that
such licensee should make future payments under the license directly to Lender;
(iii) to take any other actions with respect to the Collateral as Lender deem
in its best interest; and (iv) to assign, pledge, convey or otherwise transfer
title in or dispose of the Collateral to any Person. Assignor hereby ratifies
all that such attorney shall lawfully do or cause to be done by virtue of this
Agreement. This power of attorney shall be irrevocable until all of the
Obligations have been paid in full and all of the financing arrangements
between Assignor and Lender have been terminated. Assignor agrees that, in
addition to all other rights and remedies granted to Lender in this Agreement,
the Loan Agreement and any other Loan Document, Lender shall be entitled to
specific performance and injunctive and other equitable relief, and Assignor
further agrees to waive any requirement for the securing or posting of any bond
or other security in connection with the obtaining of any such specific
performance and injunctive or other equitable relief.
8. Indemnification. Assignor shall indemnify and hold harmless Lender
from and against any and all losses, claims, damages, liabilities and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
sustained, suffered or incurred by Lender arising out of, with respect to, or
resulting from any commercially reasonable exercise by Lender of its rights
under this Agreement, including without limitation, after a default by
Assignor, the exercise by Lender of its rights to sell, lease, assign, give
option or options to purchase, or sell and otherwise dispose of the Collateral.
In any suit, proceeding or action brought by Lender to enforce its rights in
the Collateral, Assignor will save, indemnify and hold Lender harmless from and
against all expenses, loss or damage suffered by reason of any defense,
set-off, counterclaim, recoupment or reduction or liability whatsoever of any
third party, arising out of a breach by Assignor of any obligation or arising
out of any other agreement, indebtedness or liability at any time owing to or
in favor of such third party or its successors from Assignor; provided that
Assignor shall have no obligation under this Section 8 to indemnify any Person
under this Agreement for liabilities arising from the gross negligence or
willful misconduct of such Person or arising from the breach by any such Person
of its obligations under applicable law (including the obligation to act in a
commercially reasonable manner in the disposition of certain Collateral).
9. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
10. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11. Section Headings, etc. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof. All
references to Sections, Schedules and Exhibits are to Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified.
12. No Waiver: Cumulative Remedies. Lender shall not by any act (except a
written instrument pursuant to Section 13 hereof), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Event of Default or in any
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