PATENT AND TRADEMARK SECURITY AGREEMENT
This
Agreement, dated as of January 14, 2008, is made by and between MAGNETECH
INDUSTRIAL SERVICES, INC., an Indiana corporation having a business location
at
the address set forth below under its signature (the “Debtor”), and ▇▇▇▇▇ Fargo
Bank, National Association (the “Secured Party”), acting through its ▇▇▇▇▇ Fargo
Business Credit operating division, having a business location at the address
set forth below under its signature.
RECITALS:
The
Debtor, together with certain affiliates of the Debtor, and the Secured Party
are parties to a Credit and Security Agreement of even date herewith (as the
same may hereafter be amended, supplemented or restated from time to time,
the
“Credit Agreement”) setting forth the terms on which the Secured Party may now
or hereafter extend credit to or for the account of the Debtor.
As
a
condition to extending credit to or for the account of the Debtor, the Secured
Party has required the execution and delivery of this Agreement by the
Debtor.
ACCORDINGLY,
in consideration of the mutual covenants contained in the Loan Documents and
herein, the parties hereby agree as follows:
1. Definitions All
terms defined in the Recitals hereto or in the Credit Agreement that are not
otherwise defined herein shall have the meanings given to them
therein. In addition, the following terms have the meanings set forth
below:
“Obligations”
means each and every debt, liability and obligation of every type and
description arising under or in connection with any Loan Document (as defined
in
the Credit Agreement) which the Debtor may now or at any time hereafter owe
to
the Secured Party, whether such debt, liability or obligation now exists or
is
hereafter created or incurred and whether it is or may be direct or indirect,
due or to become due, absolute or contingent, primary or secondary, liquidated
or unliquidated, independent, joint, several or joint and several, and including
specifically, but not limited to, the Indebtedness (as defined in the Credit
Agreement).
“Patents”
means all of the Debtor’s right, title and interest in and to patents or
applications for patents, fees or royalties with respect to each, and including
without limitation the right to ▇▇▇ for past infringement and damages therefor,
and licenses thereunder, all as presently existing or hereafter arising or
acquired, including without limitation the patents listed on Exhibit
A.
“Security
Interest” has the meaning given in Section 2.
“Trademarks”
means all of the Debtor’s right, title and interest in and to:
(i) trademarks, service marks, collective membership marks, registrations
and applications for registration for each, and the respective goodwill
associated with each, (ii) licenses, fees or royalties with respect to
each, (iii) the right to ▇▇▇ for past, present and future infringement,
dilution and damages therefor, (iv) and licenses thereunder, all as
presently existing or hereafter arising or acquired, including, without
limitation, the marks listed on Exhibit B.
2. Security
Interest. The Debtor hereby irrevocably pledges and assigns to,
and grants the Secured Party a security interest (the “Security Interest”), with
power of sale to the extent permitted by law, in the Patents and in the
Trademarks to secure payment of the Obligations. As set forth in the
Credit Agreement, the Security Interest is coupled with a security interest
in
substantially all of the personal property of the Debtor. This
Agreement grants only the Security Interest herein described, is not intended
to
and does not affect any present transfer of title of any trademark registration
or application and makes no assignment and grants no right to assign or perform
any other action with respect to any intent to use trademark application, unless
such action is permitted under 15 U.S.C. §1060.
3. Representations,
Warranties and Agreements. The Debtor represents, warrants and
agrees as follows:
(a) Existence;
Authority. The Debtor is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation, and this Agreement has been duly and validly authorized
by all necessary corporate action on the part of the Debtor.
(b) Patents. Exhibit
A accurately lists all Patents owned or controlled by the Debtor as
of
the date hereof, or to which the Debtor has a right as of the date hereof to
have assigned to it, and accurately reflects the existence and status of
applications and letters patent pertaining to the Patents as of the date
hereof. If after the date hereof, the Debtor owns, controls or has a
right to have assigned to it any Patents not listed on Exhibit
A, or if Exhibit A ceases to accurately reflect the
existence and status of applications and letters patent pertaining to the
Patents, then the Debtor shall within sixty (60) days provide written notice
to
the Secured Party with a replacement Exhibit A, which upon acceptance by the
Secured Party shall become part of this Agreement.
(c) Trademarks.
Exhibit B accurately lists all Trademarks owned or
controlled by the Debtor as of the date hereof and accurately reflects the
existence and status of Trademarks and all applications and registrations
pertaining thereto as of the date hereof; provided, however, that
Exhibit B need not list common law marks (i.e., Trademarks for
which there are no applications or registrations) which are not material to
the
Debtor’s or any Affiliate’s business(es). If after the date hereof,
the Debtor owns or controls any Trademarks not listed on Exhibit B
(other than common
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law
marks
which are not material to the Debtor’s or any Affiliate’s business(es)), or if
Exhibit B ceases to accurately reflect the existence and status
of applications and registrations pertaining to the Trademarks, then the Debtor
shall promptly provide written notice to the Secured Party with a replacement
Exhibit B, which upon acceptance by the Secured Party shall
become part of this Agreement.
(d) Affiliates. As
of the date hereof, no Affiliate owns, controls, or has a right to have assigned
to it any items that would, if such item were owned by the Debtor, constitute
Patents or Trademarks. If after the date hereof any Affiliate owns,
controls, or has a right to have assigned to it any such items, then the Debtor
shall promptly either: (i) cause such Affiliate to assign all of its rights
in such item(s) to the Debtor; or (ii) notify the Secured Party of such
item(s) and cause such Affiliate to execute and deliver to the Secured Party
a
patent and trademark security agreement substantially in the form of this
Agreement.
(e) Title. The
Debtor has absolute title to each Patent and each Trademark listed on Exhibits
A
and B, free and clear of all Liens except Permitted Liens. The Debtor
(i) will have, at the time the Debtor acquires any rights in Patents or
Trademarks hereafter arising, absolute title to each such Patent or Trademark
free and clear of all Liens except Permitted Liens, and (ii) will keep all
Patents and Trademarks free and clear of all Liens except Permitted
Liens.
(f) No
Sale. Except as permitted in the
Credit Agreement, the Debtor will not assign, transfer, encumber or otherwise
dispose of the Patents or Trademarks, or any interest therein, without the
Secured Party’s prior written consent.
(g) Defense. The
Debtor will at its own expense and using commercially reasonable efforts,
protect and defend the Patents and Trademarks against all claims or demands
of
all Persons other than those holding Permitted Liens.
(h) Maintenance. The
Debtor will at its own expense maintain the Patents and the Trademarks to the
extent reasonably advisable in its business including, but not limited to,
filing all applications to obtain letters patent or trademark registrations
and
all affidavits, maintenance fees, annuities, and renewals possible with respect
to letters patent, trademark registrations and applications
therefor. The Debtor covenants that it will not abandon nor fail to
pay any maintenance fee or annuity due and payable on any Patent or Trademark,
nor fail to file any required affidavit or renewal in support thereof, without
first providing the Secured Party: (i) sufficient written
notice, of at least thirty (30) days, to allow the Secured Party to timely
pay
any such maintenance fees or annuities which may become due on any Patents
or
Trademarks, or to file any affidavit or renewal with respect thereto, and
(ii) a separate written power of attorney or other authorization to pay
such maintenance fees or annuities, or to file such affidavit or renewal, should
such be necessary or desirable.
(i) Secured
Party’s Right to Take Action. If the Debtor fails to
perform or observe any of its covenants or agreements set forth in this Section
3, and if such failure continues for a period of ten (10) calendar days after
the Secured Party gives the Debtor written notice thereof (or, in the case
of
the agreements contained in subsection (h), immediately upon the occurrence
of
such failure, without notice or lapse of time), or if the Debtor notifies the
Secured Party that it intends to abandon a Patent or Trademark, the Secured
Party may (but need not) perform or observe such covenant or agreement or take
steps to prevent such intended abandonment on behalf and in the name, place
and
stead of the Debtor (or, at the Secured Party’s option, in the Secured Party’s
own name) and may (but need not) take any and all other actions which the
Secured Party may reasonably deem necessary to cure or correct such failure
or
prevent such intended abandonment.
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(j) Costs
and Expenses. Except to the extent
that the effect of such payment would be to render any loan or forbearance
of
money usurious or otherwise illegal under any applicable law, the Debtor shall
pay the Secured Party on demand the amount of all moneys expended and all costs
and expenses (including reasonable attorneys’ fees and disbursements) incurred
by the Secured Party in connection with or as a result of the Secured Party’s
taking action under subsection (i) or exercising its rights under Section 6,
together with interest thereon from the date expended or incurred by the Secured
Party at the Default Rate.
(k) Power
of Attorney. To facilitate the Secured
Party’s taking action under subsection (i) and exercising its rights under
Section 6, the Debtor hereby irrevocably appoints (which appointment is coupled
with an interest) the Secured Party, or its delegate, as the attorney-in-fact
of
the Debtor with the right (but not the duty) from time to time to create,
prepare, complete, execute, deliver, endorse or file, in the name and on behalf
of the Debtor, any and all instruments, documents, applications, financing
statements, and other agreements and writings required to be obtained, executed,
delivered or endorsed by the Debtor under this Section 3, or, necessary for
the
Secured Party, after an Event of Default, to enforce or use the Patents or
Trademarks or to grant or issue any exclusive or non-exclusive license under
the
Patents or Trademarks to any third party, or to sell, assign, transfer, pledge,
encumber or otherwise transfer title in or dispose of the Patents or Trademarks
to any third party. The Debtor hereby ratifies all that such attorney
shall lawfully do or cause to be done by virtue hereof. The power of
attorney granted herein shall terminate upon the termination of the Credit
Agreement as provided therein and the payment and performance of all
Obligations.
4. Debtor’s
Use of the Patents and Trademarks. The Debtor shall be permitted
to control and manage the Patents and Trademarks, including the right to exclude
others from making, using or selling items covered by the Patents and Trademarks
and any licenses thereunder,
in the same manner and with the same effect as if this Agreement had not been
entered into, so long as no Event of Default occurs and remains
uncured.
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5. Events
of Default. Each of the following occurrences shall constitute an
event of default under this Agreement (herein called “Event of
Default”): (a) an Event of Default, as defined in the Credit
Agreement, shall occur; or (b) the Debtor shall fail promptly to observe or
perform any covenant or agreement herein binding on it; or (c) any of the
representations or warranties contained in Section 3 shall prove to have been
incorrect in any material respect when made.
6. Remedies. Upon
the occurrence of an Event of Default and at any time thereafter, the Secured
Party may, at its option, take any or all of the following actions:
(a) The
Secured Party may exercise any or all remedies available under the Credit
Agreement.
(b) The
Secured Party may sell, assign, transfer, pledge, encumber or otherwise dispose
of the Patents and Trademarks.
(c) The
Secured Party may enforce the Patents and Trademarks and any licenses
thereunder, and if Secured Party shall commence any suit for such enforcement,
the Debtor shall, at the request of Secured Party, do any and all lawful acts
and execute any and all proper documents required by Secured Party in aid of
such enforcement.
7. Miscellaneous. This
Agreement can be waived, modified, amended, terminated or discharged, and the
Security Interest can be released, only explicitly in a writing signed by the
Secured Party. A waiver signed by the Secured Party shall be
effective only in the specific instance and for the specific purpose
given. Mere delay or failure to act shall not preclude the exercise
or enforcement of any of the Secured Party’s rights or remedies. All
rights and remedies of the Secured Party shall be cumulative and may be
exercised singularly or concurrently, at the Secured Party’s option, and the
exercise or enforcement of any one such right or remedy shall neither be a
condition to nor bar the exercise or enforcement of any other. All
notices to be given to Debtor under this Agreement shall be given in the manner
and with the effect provided in the Credit Agreement. The Secured
Party shall not be obligated to preserve any rights the Debtor may have against
prior parties, to realize on the Patents and Trademarks at all or in any
particular manner or order, or to apply any cash proceeds of Patents and
Trademarks in any particular order of application. This Agreement
shall be binding upon and inure to the benefit of the Debtor and the Secured
Party and their respective participants, successors and assigns and shall take
effect when signed by the Debtor and delivered to the Secured Party, and the
Debtor waives notice of the Secured Party’s acceptance hereof. The
Secured Party may execute this Agreement if appropriate for the purpose of
filing, but the failure of the Secured Party to execute this Agreement shall
not
affect or impair the validity or effectiveness of this
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Agreement. A
carbon, photographic or other reproduction of this Agreement or of any financing
statement signed by the Debtor shall have the same force and effect as the
original for all purposes of a financing statement. This Agreement
shall be governed by the internal law of Wisconsin without regard to conflicts
of law provisions. If any provision or application of this Agreement
is held unlawful or unenforceable in any respect, such illegality or
unenforceability shall not affect other provisions or applications which can
be
given effect and this Agreement shall be construed as if the unlawful or
unenforceable provision or application had never been contained herein or
prescribed hereby. All representations and warranties contained in
this Agreement shall survive the execution, delivery and performance of this
Agreement and the creation and payment of the Obligations.
THE
PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED
ON OR
PERTAINING TO THIS AGREEMENT.
IN
WITNESS WHEREOF, the parties have executed this Patent and Trademark Security
Agreement as of the date written above.
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▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION
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MAGNETECH SERVICES, INC.
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By:
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By:
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/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||||
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Its:
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Vice
President
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Its:
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CEO | |||
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▇▇▇▇▇
Fargo Bank, National Association
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Magnetech Industrial Services, Inc.
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▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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MAC
▇▇▇▇▇-▇▇▇
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▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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STATE
OF
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Indiana |
)
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)
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| St. ▇▇▇▇▇▇ |
)
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The
foregoing instrument was acknowledged before me this ___ day of January,
2008,
by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the President of Magnetech Industrial Services, Inc.,
an
Indiana corporation, on behalf of the corporation.
| /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
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Notary
Public
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My
commission:
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expires 2/9/2008 | |
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STATE
OF
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)
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)
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COUNTY
OF
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)
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The
foregoing instrument was
acknowledged before me this ___ day of January, 2008, by ▇▇▇▇ ▇. ▇▇▇▇▇▇,
a Vice
President of ▇▇▇▇▇ Fargo Bank, National Association, on behalf of the
association.
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Notary
Public
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My
commission:
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EXHIBIT
A
UNITED
STATES ISSUED PATENTS
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PATENT
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COUNTRY
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PATENT
NO.
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ISSUE
DATE
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STATUS
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|||||
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ELECTROMAGNET
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US
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5,410,289
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4/25/1995
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Issued
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FUEL
IGNITOR
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US
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6,739,308
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5/24/2004
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Issued
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EXHIBIT
B
UNITED
STATES ISSUED TRADEMARKS
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▇▇▇▇
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COUNTRY
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SERIAL
NO./REG. NO.
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FILING
DATE/REG. DATE
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STATUS
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MAGNETRAC
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US
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2,801,915
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01/06/2004
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Registered
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