PATENT ASSIGNMENT AND SECURITY AGREEMENT
THIS PATENT ASSIGNMENT AND SECURITY AGREEMENT between AJAY LEISURE
PRODUCTS, INC., a Delaware corporation ("Borrower"), and XXXXX FARGO BANK,
NATIONAL ASSOCIATION ("Bank"), is as follows:
1. Preliminary Statements
(A) Borrower has executed and delivered this Agreement to Bank in order to
induce Bank (i) to enter into the Credit Agreement executed and delivered by
Borrower (together with other borrowers) contemporaneously herewith (said Credit
Agreement, as it may hereafter be amended or otherwise modified is hereinafter
referred to as the "Credit Agreement"), and (ii) to make advances pursuant to
the Credit Agreement.
(B) All capitalized terms used herein and not otherwise defined herein
shall have the meaning attributed to them in the Credit Agreement.
2. Assignment
Borrower hereby grants, assigns and conveys to Bank for its benefit
Borrower's entire right, title and interest in, to and under the Patent
Collateral. As used herein, "Patent Collateral" means: all of Borrower's right,
title and interest in and to all of its now owned or existing and filed and
hereafter acquired or arising and filed: Patent License Rights (as defined
below), patents, patent applications, and the inventions and improvements
described and claimed therein, including, without limitation, the patents and
patent applications listed on Schedule I attached hereto, and (i) the reissues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof; (ii) all income, royalties, damages and payments now and hereafter due
and/or payable under with respect thereto, including, without limitation,
damages and payments for past or future infringements thereof; (iii) the right
to xxx for past, present and future infringements thereof; and (iv) all rights
corresponding thereto throughout the world. "Patent License Rights" means
Borrower's entire right, title and interest in, to and under all license
agreements with any Person, whether Borrower is licensor or licensee, with
respect to any patents, patent applications and rights thereto, including,
without limitation, the licenses listed on Schedule I.
3. License
In consideration of Borrower's undertaking to fulfill the covenants of
this Agreement and to discharge the Obligations, Bank grants to Borrower a
personal, non-transferable exclusive license (without representation or warranty
of any kind), with the right to sublicense, under each patent application and
patent included in the Patent Collateral to make, to have made, to use and to
sell the subject matter claimed therein, and to exercise the Patent License
Rights (collectively, the "License"), provided, however, that every such
sublicense shall be necessary or desirable in the conduct of Borrower's
business. Upon the occurrence of an Event of Default and upon notice from Bank
to Borrower (i) the License shall terminate forthwith and (ii) all rights and
interests in, to and under the License shall revert to Bank. If such Event of
Default shall cease to exist, then, without any further action on the part of
Bank the License shall revest with Borrower.
4. Grant of Security
As security for the full and prompt performance of all of the Obligations,
Borrower hereby assigns, pledges and grants to Bank a lien on and security
interest in Borrower's entire right, title and interest in and to the Patent
Collateral and the License.
5. Representations and Warranties
Subject to any exceptions listed on Schedule I, Borrower represents and
warrants as follows:
(A) Borrower is the sole, legal and beneficial owner of the entire right,
title and interest in and to the Patent Collateral free and clear of any lien,
security interest, option, charge, pledge, license, assignment (whether
conditional or not) or covenant, or any other encumbrance.
(B) Schedule I sets forth a complete and accurate list of all patent
applications, patents and Patent License Rights owned by Borrower.
(C) Each patent and patent application identified in Schedule I is
subsisting and has not been adjudged invalid, unpatentable, or unenforceable, in
whole or in part, and is, to the best of Borrower's knowledge, valid, patentable
and enforceable.
(D) Borrower has not granted any license, release, covenant not to xxx, or
non-assertion assurance to any third person with respect to any part of the
Patent Collateral.
(E) The current conduct of Borrower's business does not conflict with or
infringe any proprietary right of any third party in any way which materially
adversely affects the business, financial condition or business prospects of
Borrower or its affiliates, and no one has asserted to Borrower or any of its
affiliates that such conduct conflicts with or infringes any valid proprietary
right of any third party in any way which materially adversely affects the
business, financial condition or business prospects of the Borrower.
(F) The Patent License Rights are in full force and effect; Borrower is
not in default under any of the Patent License Rights; and no event has occurred
which with notice or the passage of time, or both, might constitute a default by
Borrower under any of the Patent License Rights.
(G) No authorization, consent, approval or other action by, and no notice
to or filing or recording with, any governmental, administrative or judicial
authority or regulatory body is currently or is reasonably expected to be
required for the making by Borrower of the assignments and the granting by
Borrower of the liens and security interests made and granted hereby or for the
execution, delivery or performance of this Agreement by Borrower, or for the
perfection of or the exercise by Bank of its rights and remedies hereunder.
6. Further Assurances
(A) Borrower agrees that from time to time, at its expense, it will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that Bank may reasonably
request, in order (i) to continue, perfect and protect the assignment and the
security interest granted or purported to be granted hereby or (ii) to enable
Bank to exercise and enforce its rights and remedies hereunder with respect to
all or any part of the Patent Collateral and the License. Without limiting the
generality of the foregoing, Borrower will execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Bank may reasonably request, in
order to perfect and preserve the security interests granted or purported to be
granted hereby.
(B) Borrower hereby authorizes Bank to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Patent Collateral and the License without the signature of Borrower where
permitted by law. A carbon, photographic or other reproduction of this Agreement
or any financing statement covering the Patent Collateral or any part thereof or
the License shall be sufficient as a financing statement where permitted by law.
(C) Borrower will furnish to Bank from time to time statements and
schedules further identifying and describing the Patent Collateral and the
License, including, without limitation, any sublicensing of Patent Collateral by
Borrower, and such other reports in connection with the Patent Collateral and
the License as Bank may reasonably request, all in reasonable detail.
(D) Borrower agrees that, should it obtain an ownership interest in any
patent, patent application or Patent License Rights which is not now identified
in Schedule I, (i) Borrower shall give prompt written notice thereof to Bank,
(ii) the provisions of Paragraph 2 shall automatically apply to such patent,
patent application or Patent License Rights, and (iii) such patent or patent
application shall automatically become part of the Patent Collateral. Borrower
authorizes Bank to modify this Agreement by amending Schedule I to include any
patents and patent applications which become part of the Patent Collateral under
this Paragraph.
(E) With respect to any patent or patent application necessary to the
conduct of Borrower's business, Borrower agrees to take all necessary steps in
any proceeding before the United States Patent and Trademark Office or any
similar office or agency in any other country or any political subdivision
thereof or in any court to maintain and pursue such patent application now or
hereafter included in the Patent Collateral and to maintain each patent now or
hereafter included in the Patent Collateral, including the filing of divisional,
continuation, continuation-in-part and substitute applications, the filing of
applications for reissue, renewal or extensions, the payment of maintenance
fees, and the participation in interference, reexamination, opposition and
infringement proceedings. Any expenses incurred in connection with such
activities shall be borne by Borrower. Without the prior written consent of
Bank, Borrower shall not abandon any right to file a patent application, or
abandon any pending patent application or patent.
(F) Borrower agrees to notify Bank immediately and in writing if Borrower
learns (i) that any of the Patent Collateral may become abandoned or dedicated;
(ii) of any adverse determination or any development (including, without
limitation, the institution of any proceeding in the United States Patent and
Trademark Office or any court) regarding any material item of the Patent
Collateral; or (iii) that it is or potentially could be in default of any of the
Patent License Rights.
(G) If Borrower becomes aware that any item of the Patent Collateral is
infringed or misappropriated by a third party, Borrower shall promptly notify
Bank and shall take such actions as are necessary under the circumstances to
protect such Patent Collateral. Any expense incurred in connection with such
activities shall be borne by Borrower.
(H) Borrower shall continue to xxxx its products with the numbers of
appropriate patents in accordance with the existing practices of the Borrower.
7. Transfers and Other Liens
Borrower shall not:
(A) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Patent Collateral or the License, except (i) as
permitted by the Credit Agreement, or (ii) as permitted by Paragraph 3 of
this Agreement;
(B) create or suffer to exist any lien, security interest or other
charge or encumbrance upon or with respect to any of the Patent Collateral
or the License except as otherwise disclosed in Schedule I, or as
otherwise permitted by the Credit Agreement; or
(C) take any other action in connection with any of the Patent
Collateral or the License that would impair the value of the interests or
rights thereunder of Borrower.
8. Bank Appointed Attorney-in-Fact
Borrower hereby irrevocably appoints Bank as Borrower's attorney-in-fact,
with full authority in Borrower's place, stead and behalf of Borrower and in
Borrower's name or otherwise, from time to time in Bank's sole and absolute
discretion, to take any action and to execute any instrument that Bank may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation: (i) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Patent Collateral; (ii) to receive, endorse, and
collect any drafts or other instruments, documents and chattel paper, in
connection with clause (i) above; and (iii) to file any claims or take any
action or institute any proceedings that Bank may deem necessary or desirable
for the collection of any of the Patent Collateral or otherwise to enforce the
rights of Bank with respect to any of the Patent Collateral or the License.
9. Bank May Perform
(A) If Borrower fails to perform any of its obligations contained herein,
Bank may itself perform, or cause performance of, such obligation, and the
expenses of Bank incurred in connection therewith shall be payable by Borrower
under Paragraph 12(B).
(B) Bank, or its designated representatives, shall have the right, at all
times, to inspect Borrower's premises and to examine books, records and
operations relating to the Patent Collateral.
(C) Bank shall have the right, but in no way shall be obligated, to bring
suit in its own name or in the name of Borrower to enforce any part of the
Patent Collateral. Borrower shall at the reasonable request of Bank do any and
all lawful acts and execute any and all proper documents required by Bank in aid
of such enforcement. Upon demand, Borrower shall promptly reimburse and
indemnify Bank for all costs and expenses incurred by Bank in the exercise of
its rights under this Paragraph.
10. Bank's Duties
The powers conferred on Bank hereunder are solely to protect its interest
in the Patent Collateral and the License and shall not impose any duty upon Bank
to exercise any such powers. Except for the safe custody of any Patent
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Bank shall have no duty as to any Patent Collateral, the License
or as to the taking of any necessary steps to preserve rights against other
parties or any other rights pertaining to any Patent Collateral or the License.
Bank shall be deemed to have exercised reasonable care in the custody and
preservation of the Patent Collateral and the License in its possession if such
Patent Collateral and the License are accorded treatment substantially equal to
that which Bank accords its own property.
11. Remedies
If any Event of Default shall have occurred and be continuing:
(A) Bank may exercise in respect of the Patent Collateral and the License,
in addition to other rights and remedies provided for herein or otherwise
available to Bank, all the rights and remedies of a secured party on default
under the Code (whether or not the Code applies to the affected Patent
Collateral) and also may (i) exercise any and all rights and remedies of
Borrower under or in connection with the License or otherwise in respect of the
Patent Collateral, (ii) require Borrower to, and Borrower hereby agrees that it
will at its expense and upon request of Bank forthwith, assemble all or any part
of the documents embodying the Patent Collateral as directed by Bank and make it
available to Bank at a place to be designated by Bank which is reasonably
convenient to both Bank and Borrower, (iii) occupy any premises owned or leased
by Borrower where documents embodying the Patent Collateral or any part thereof
and/or the License are assembled for a reasonable period in order to effectuate
Bank's rights and remedies hereunder or under law, without any obligation to
Borrower in respect of such occupation, (iv) license the Patent Collateral or
any part thereof, or assign its rights to the Patent License Rights to any
Person, and (v) without notice except as specified below, sell the Patent
Collateral or any part thereof and/or the License in one or more parcels at
public or private sale, at any of Bank's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as Bank may deem
commercially reasonable. Any notice required to be given by Bank with respect to
any of the Patent Collateral which notice is given pursuant to the Credit
Agreement and deemed received pursuant to the Credit Agreement at least five
days before a sale, lease, disposition or other intended action by Bank with
respect to any of the Patent Collateral shall constitute fair and reasonable
notice to Borrower of any such action. Bank shall not be obligated to make any
sale of Patent Collateral or the License regardless of notice of sale having
been given. Bank may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(B) All payments received by Borrower under or in connection with any of
the Patent Collateral or the License shall be received in trust for the benefit
of Bank, shall be segregated from other funds of Borrower and shall be forthwith
paid over to Bank in the same form as so received (with any necessary
endorsement).
(C) All payments made under or in connection with or otherwise in respect
of the Patent Collateral or the License, and all cash proceeds received by Bank
in respect of any sale of, collection from, or other realization upon all or any
part of the Patent Collateral or the License may, in the discretion of Bank be
held by Bank as collateral for, and/or then or at any time thereafter applied
(after payment of any amounts payable to Bank pursuant to Paragraph 12) in whole
or in part by Bank against, all or any part of the Obligations, in such order as
Bank shall elect. Any surplus of such cash or cash proceeds held by Bank and
remaining after payment in full of all the Obligations shall be paid over by
Borrower or to whomsoever may be lawfully entitled to receive such surplus.
12. Indemnity and Expenses
(A) Borrower agrees to indemnify and hold Bank harmless from and against
any and all claims, losses and liabilities arising out of or resulting from this
Agreement or the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting from Bank's bad faith or willful misconduct as determined by a final
judgment of a court of competent jurisdiction.
(B) Borrower, upon demand, will pay to Bank the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees and
disbursements of its counsel (whether incurred at the trial or appellate level,
in an arbitration proceeding, in a bankruptcy, including, without limitation any
adversary proceeding, contested matter or motion or otherwise) and of any
experts and agents, which Bank may incur in connection with any and all of the
following: (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any of the Patent Collateral and the License, (iii) the
exercise or enforcement of any of Bank's rights hereunder, or (iv) the failure
by Borrower to perform or observe any of the provisions hereof.
13. Amendments, Waivers, Consents
No amendment or waiver of any provision of this Agreement nor consent to
any departure by Borrower herefrom shall in any event be effective unless such
amendment or waiver shall be in writing and signed by Bank, and then such
amendment or waiver shall be effective only in the specific instance and for the
specific purpose for which it was given.
14. Notices
All notices, requests and demands which any party is required or may
desire to give to any other party under any provision of this Agreement must be
in writing delivered to each party at the following address:
BORROWER: Ajay Leisure Products, Inc.
c/o Williams Controls, Inc.
00000 XX 00xx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx, Chairman
Telecopy No.: (000) 000-0000
BANK: Xxxxx Fargo Bank, National Association
Commercial Finance Division
000 X. Xxx Xxxxxx Xxx., Xxx. 000
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three days after deposit in the
U.S. mail, first class and postage prepaid; and (c) if sent by telecopy, upon
receipt and the sender will endeavor to send a hard copy of such telecopied
notice to the recipient by mail.
15. Miscellaneous
(A) This Agreement shall create continuing ownership rights in the Patent
Collateral and a continuing security interest in the License and shall (i)
remain in full force and effect until payment in full of the Obligations, (ii)
be binding upon the Borrower, its successors and assigns, and (iii) inure,
together with the rights and remedies of Bank hereunder, to the benefit of Bank,
its successors and assigns.
(B) Upon the payment in full of the Obligations, the assignment made, and
the liens and security interests granted hereby shall terminate and all rights
to the Patent Collateral and the License shall revert to Borrower. Upon any such
termination, Bank will, at Borrower's expense, execute and deliver to Borrower
such documents as Borrower shall reasonably request to evidence such
termination.
(C) If any term or provision of this Agreement is or shall become illegal,
invalid or unenforceable in any jurisdiction, all other terms and provisions of
this Agreement shall remain legal, valid and enforceable in such jurisdiction
and such illegal, invalid or unenforceable provision shall be legal, valid and
enforceable in any other jurisdiction.
(D) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LOCAL LAW OF THE STATE OF
OREGON, EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT MIGHT OTHERWISE
REFER CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT TO THE SUBSTANTIVE LAW OF
ANOTHER JURISDICTION, AND ALL OTHER LAWS OF MANDATORY APPLICATION.
(E) AS A SPECIFICALLY BARGAINED INDUCEMENT FOR BANK TO ENTER INTO THIS
AGREEMENT AND EXTEND CREDIT TO BORROWER, BORROWER AND BANK EACH WAIVES TRIAL BY
JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR
ARISING OUT OF THIS AGREEMENT.
(F) The captions in this Agreement are for reference purposes only and
shall not relate to or affect in any way the construction or interpretation
hereof.
(G) The representations, warranties, covenants and agreements contained
herein or in any Schedule attached hereto shall survive the execution hereof.
IN WITNESS WHEREOF, Borrower has caused this Agreement to be duly executed
and delivered by its officer thereunto duly authorized as of July 11, 1997.
AJAY LEISURE PRODUCTS, INC.
By:____________________________
Title:___________________________
STATE OF OREGON )
) SS:
COUNTY OF MULTNOMAH )
The foregoing Patent Assignment and Security Agreement was executed and
acknowledged before me on July 11, 1997, by ___________________, personally
known to me to be the ___________________ of Ajay Leisure Products, Inc., a
Delaware corporation, on behalf of such corporation.
Notary Public
My Commission Expires:
Accepted as of July 11, 1997.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
Vice President
SCHEDULE I
TO
PATENT ASSIGNMENT AND SECURITY AGREEMENT
1. Patents
No. 5,407,155
2. Patent Applications
No. 08/643,049
PATENT ASSIGNMENT AND SECURITY AGREEMENT
THIS PATENT ASSIGNMENT AND SECURITY AGREEMENT between LEISURE LIFE,
INC., a Tennessee corporation ("Borrower"), and XXXXX FARGO BANK, NATIONAL
ASSOCIATION ("Bank"), is as follows:
1. Preliminary Statements
(A) Borrower has executed and delivered this Agreement to Bank in order to
induce Bank (i) to enter into the Credit Agreement executed and delivered by
Borrower (together with other borrowers) contemporaneously herewith (said Credit
Agreement, as it may hereafter be amended or otherwise modified is hereinafter
referred to as the "Credit Agreement"), and (ii) to make advances pursuant to
the Credit Agreement.
(B) All capitalized terms used herein and not otherwise defined herein
shall have the meaning attributed to them in the Credit Agreement.
2. Assignment
Borrower hereby grants, assigns and conveys to Bank for its benefit
Borrower's entire right, title and interest in, to and under the Patent
Collateral. As used herein, "Patent Collateral" means: all of Borrower's right,
title and interest in and to all of its now owned or existing and filed and
hereafter acquired or arising and filed: Patent License Rights (as defined
below), patents, patent applications, and the inventions and improvements
described and claimed therein, including, without limitation, the patents and
patent applications listed on Schedule I attached hereto, and (i) the reissues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof; (ii) all income, royalties, damages and payments now and hereafter due
and/or payable under with respect thereto, including, without limitation,
damages and payments for past or future infringements thereof; (iii) the right
to xxx for past, present and future infringements thereof; and (iv) all rights
corresponding thereto throughout the world. "Patent License Rights" means
Borrower's entire right, title and interest in, to and under all license
agreements with any Person, whether Borrower is licensor or licensee, with
respect to any patents, patent applications and rights thereto, including,
without limitation, the licenses listed on Schedule I.
3. License
In consideration of Borrower's undertaking to fulfill the covenants of
this Agreement and to discharge the Obligations, Bank grants to Borrower a
personal, non-transferable exclusive license (without representation or warranty
of any kind), with the right to sublicense, under each patent application and
patent included in the Patent Collateral to make, to have made, to use and to
sell the subject matter claimed therein, and to exercise the Patent License
Rights (collectively, the "License"), provided, however, that every such
sublicense shall be necessary or desirable in the conduct of Borrower's
business. Upon the occurrence of an Event of Default and upon notice from Bank
to Borrower (i) the License shall terminate forthwith and (ii) all rights and
interests in, to and under the License shall revert to Bank. If such Event of
Default shall cease to exist, then, without any further action on the part of
Bank the License shall revest with Borrower.
4. Grant of Security
As security for the full and prompt performance of all of the Obligations,
Borrower hereby assigns, pledges and grants to Bank a lien on and security
interest in Borrower's entire right, title and interest in and to the Patent
Collateral and the License.
5. Representations and Warranties
Subject to any exceptions listed on Schedule I, Borrower represents and
warrants as follows:
(A) Borrower is the sole, legal and beneficial owner of the entire right,
title and interest in and to the Patent Collateral free and clear of any lien,
security interest, option, charge, pledge, license, assignment (whether
conditional or not) or covenant, or any other encumbrance.
(B) Schedule I sets forth a complete and accurate list of all patent
applications, patents and Patent License Rights owned by Borrower.
(C) Each patent and patent application identified in Schedule I is
subsisting and has not been adjudged invalid, unpatentable, or unenforceable, in
whole or in part, and is, to the best of Borrower's knowledge, valid, patentable
and enforceable.
(D) Borrower has not granted any license, release, covenant not to xxx, or
non-assertion assurance to any third person with respect to any part of the
Patent Collateral.
(E) The current conduct of Borrower's business does not conflict with or
infringe any proprietary right of any third party in any way which materially
adversely affects the business, financial condition or business prospects of
Borrower or its affiliates, and no one has asserted to Borrower or any of its
affiliates that such conduct conflicts with or infringes any valid proprietary
right of any third party in any way which materially adversely affects the
business, financial condition or business prospects of the Borrower.
(F) The Patent License Rights are in full force and effect; Borrower is
not in default under any of the Patent License Rights; and no event has occurred
which with notice or the passage of time, or both, might constitute a default by
Borrower under any of the Patent License Rights.
(G) No authorization, consent, approval or other action by, and no notice
to or filing or recording with, any governmental, administrative or judicial
authority or regulatory body is currently or is reasonably expected to be
required for the making by Borrower of the assignments and the granting by
Borrower of the liens and security interests made and granted hereby or for the
execution, delivery or performance of this Agreement by Borrower, or for the
perfection of or the exercise by Bank of its rights and remedies hereunder.
6. Further Assurances
(A) Borrower agrees that from time to time, at its expense, it will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that Bank may reasonably
request, in order (i) to continue, perfect and protect the assignment and the
security interest granted or purported to be granted hereby or (ii) to enable
Bank to exercise and enforce its rights and remedies hereunder with respect to
all or any part of the Patent Collateral and the License. Without limiting the
generality of the foregoing, Borrower will execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Bank may reasonably request, in
order to perfect and preserve the security interests granted or purported to be
granted hereby.
(B) Borrower hereby authorizes Bank to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Patent Collateral and the License without the signature of Borrower where
permitted by law. A carbon, photographic or other reproduction of this Agreement
or any financing statement covering the Patent Collateral or any part thereof or
the License shall be sufficient as a financing statement where permitted by law.
(C) Borrower will furnish to Bank from time to time statements and
schedules further identifying and describing the Patent Collateral and the
License, including, without limitation, any sublicensing of Patent Collateral by
Borrower, and such other reports in connection with the Patent Collateral and
the License as Bank may reasonably request, all in reasonable detail.
(D) Borrower agrees that, should it obtain an ownership interest in any
patent, patent application or Patent License Rights which is not now identified
in Schedule I, (i) Borrower shall give prompt written notice thereof to Bank,
(ii) the provisions of Paragraph 2 shall automatically apply to such patent,
patent application or Patent License Rights, and (iii) such patent or patent
application shall automatically become part of the Patent Collateral. Borrower
authorizes Bank to modify this Agreement by amending Schedule I to include any
patents and patent applications which become part of the Patent Collateral under
this Paragraph.
(E) With respect to any patent or patent application necessary to the
conduct of Borrower's business, Borrower agrees to take all necessary steps in
any proceeding before the United States Patent and Trademark Office or any
similar office or agency in any other country or any political subdivision
thereof or in any court to maintain and pursue such patent application now or
hereafter included in the Patent Collateral and to maintain each patent now or
hereafter included in the Patent Collateral, including the filing of divisional,
continuation, continuation-in-part and substitute applications, the filing of
applications for reissue, renewal or extensions, the payment of maintenance
fees, and the participation in interference, reexamination, opposition and
infringement proceedings. Any expenses incurred in connection with such
activities shall be borne by Borrower. Without the prior written consent of
Bank, Borrower shall not abandon any right to file a patent application, or
abandon any pending patent application or patent.
(F) Borrower agrees to notify Bank immediately and in writing if Borrower
learns (i) that any of the Patent Collateral may become abandoned or dedicated;
(ii) of any adverse determination or any development (including, without
limitation, the institution of any proceeding in the United States Patent and
Trademark Office or any court) regarding any material item of the Patent
Collateral; or (iii) that it is or potentially could be in default of any of the
Patent License Rights.
(G) If Borrower becomes aware that any item of the Patent Collateral is
infringed or misappropriated by a third party, Borrower shall promptly notify
Bank and shall take such actions as are necessary under the circumstances to
protect such Patent Collateral. Any expense incurred in connection with such
activities shall be borne by Borrower.
(H) Borrower shall continue to xxxx its products with the numbers of
appropriate patents in accordance with the existing practices of the Borrower.
7. Transfers and Other Liens
Borrower shall not:
(A) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Patent Collateral or the License, except (i) as
permitted by the Credit Agreement, or (ii) as permitted by Paragraph 3 of
this Agreement;
(B) create or suffer to exist any lien, security interest or other
charge or encumbrance upon or with respect to any of the Patent Collateral
or the License except as otherwise disclosed in Schedule I, or as
otherwise permitted by the Credit Agreement; or
(C) take any other action in connection with any of the Patent
Collateral or the License that would impair the value of the interests or
rights thereunder of Borrower.
8. Bank Appointed Attorney-in-Fact
Borrower hereby irrevocably appoints Bank as Borrower's attorney-in-fact,
with full authority in Borrower's place, stead and behalf of Borrower and in
Borrower's name or otherwise, from time to time in Bank's sole and absolute
discretion, to take any action and to execute any instrument that Bank may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation: (i) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Patent Collateral; (ii) to receive, endorse, and
collect any drafts or other instruments, documents and chattel paper, in
connection with clause (i) above; and (iii) to file any claims or take any
action or institute any proceedings that Bank may deem necessary or desirable
for the collection of any of the Patent Collateral or otherwise to enforce the
rights of Bank with respect to any of the Patent Collateral or the License.
9. Bank May Perform
(A) If Borrower fails to perform any of its obligations contained herein,
Bank may itself perform, or cause performance of, such obligation, and the
expenses of Bank incurred in connection therewith shall be payable by Borrower
under Paragraph 12(B).
(B) Bank, or its designated representatives, shall have the right, at all
times, to inspect Borrower's premises and to examine books, records and
operations relating to the Patent Collateral.
(C) Bank shall have the right, but in no way shall be obligated, to bring
suit in its own name or in the name of Borrower to enforce any part of the
Patent Collateral. Borrower shall at the reasonable request of Bank do any and
all lawful acts and execute any and all proper documents required by Bank in aid
of such enforcement. Upon demand, Borrower shall promptly reimburse and
indemnify Bank for all costs and expenses incurred by Bank in the exercise of
its rights under this Paragraph.
10. Bank's Duties
The powers conferred on Bank hereunder are solely to protect its interest
in the Patent Collateral and the License and shall not impose any duty upon Bank
to exercise any such powers. Except for the safe custody of any Patent
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Bank shall have no duty as to any Patent Collateral, the License
or as to the taking of any necessary steps to preserve rights against other
parties or any other rights pertaining to any Patent Collateral or the License.
Bank shall be deemed to have exercised reasonable care in the custody and
preservation of the Patent Collateral and the License in its possession if such
Patent Collateral and the License are accorded treatment substantially equal to
that which Bank accords its own property.
11. Remedies
If any Event of Default shall have occurred and be continuing:
(A) Bank may exercise in respect of the Patent Collateral and the License,
in addition to other rights and remedies provided for herein or otherwise
available to Bank, all the rights and remedies of a secured party on default
under the Code (whether or not the Code applies to the affected Patent
Collateral) and also may (i) exercise any and all rights and remedies of
Borrower under or in connection with the License or otherwise in respect of the
Patent Collateral, (ii) require Borrower to, and Borrower hereby agrees that it
will at its expense and upon request of Bank forthwith, assemble all or any part
of the documents embodying the Patent Collateral as directed by Bank and make it
available to Bank at a place to be designated by Bank which is reasonably
convenient to both Bank and Borrower, (iii) occupy any premises owned or leased
by Borrower where documents embodying the Patent Collateral or any part thereof
and/or the License are assembled for a reasonable period in order to effectuate
Bank's rights and remedies hereunder or under law, without any obligation to
Borrower in respect of such occupation, (iv) license the Patent Collateral or
any part thereof, or assign its rights to the Patent License Rights to any
Person, and (v) without notice except as specified below, sell the Patent
Collateral or any part thereof and/or the License in one or more parcels at
public or private sale, at any of Bank's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as Bank may deem
commercially reasonable. Any notice required to be given by Bank with respect to
any of the Patent Collateral which notice is given pursuant to the Credit
Agreement and deemed received pursuant to the Credit Agreement at least five
days before a sale, lease, disposition or other intended action by Bank with
respect to any of the Patent Collateral shall constitute fair and reasonable
notice to Borrower of any such action. Bank shall not be obligated to make any
sale of Patent Collateral or the License regardless of notice of sale having
been given. Bank may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(B) All payments received by Borrower under or in connection with any of
the Patent Collateral or the License shall be received in trust for the benefit
of Bank, shall be segregated from other funds of Borrower and shall be forthwith
paid over to Bank in the same form as so received (with any necessary
endorsement).
(C) All payments made under or in connection with or otherwise in respect
of the Patent Collateral or the License, and all cash proceeds received by Bank
in respect of any sale of, collection from, or other realization upon all or any
part of the Patent Collateral or the License may, in the discretion of Bank be
held by Bank as collateral for, and/or then or at any time thereafter applied
(after payment of any amounts payable to Bank pursuant to Paragraph 12) in whole
or in part by Bank against, all or any part of the Obligations, in such order as
Bank shall elect. Any surplus of such cash or cash proceeds held by Bank and
remaining after payment in full of all the Obligations shall be paid over by
Borrower or to whomsoever may be lawfully entitled to receive such surplus.
12. Indemnity and Expenses
(A) Borrower agrees to indemnify and hold Bank harmless from and against
any and all claims, losses and liabilities arising out of or resulting from this
Agreement or the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting from Bank's bad faith or willful misconduct as determined by a final
judgment of a court of competent jurisdiction.
(B) Borrower, upon demand, will pay to Bank the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees and
disbursements of its counsel (whether incurred at the trial or appellate level,
in an arbitration proceeding, in a bankruptcy, including, without limitation any
adversary proceeding, contested matter or motion or otherwise) and of any
experts and agents, which Bank may incur in connection with any and all of the
following: (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any of the Patent Collateral and the License, (iii) the
exercise or enforcement of any of Bank's rights hereunder, or (iv) the failure
by Borrower to perform or observe any of the provisions hereof.
13. Amendments, Waivers, Consents
No amendment or waiver of any provision of this Agreement nor consent to
any departure by Borrower herefrom shall in any event be effective unless such
amendment or waiver shall be in writing and signed by Bank, and then such
amendment or waiver shall be effective only in the specific instance and for the
specific purpose for which it was given.
14. Notices
All notices, requests and demands which any party is required or may
desire to give to any other party under any provision of this Agreement must be
in writing delivered to each party at the following address:
BORROWER: Leisure Life, Inc.
c/o Williams Controls, Inc.
00000 XX 00xx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx, Chairman
Telecopy No.: (000) 000-0000
BANK: Xxxxx Fargo Bank, National Association
Commercial Finance Division
000 X. Xxx Xxxxxx Xxx., Xxx. 000
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three days after deposit in the
U.S. mail, first class and postage prepaid; and (c) if sent by telecopy, upon
receipt and the sender will endeavor to send a hard copy of such telecopied
notice to the recipient by mail.
15. Miscellaneous.
(A) This Agreement shall create continuing ownership rights in the Patent
Collateral and a continuing security interest in the License and shall (i)
remain in full force and effect until payment in full of the Obligations, (ii)
be binding upon the Borrower, its successors and assigns, and (iii) inure,
together with the rights and remedies of Bank hereunder, to the benefit of Bank,
its successors and assigns.
(B) Upon the payment in full of the Obligations, the assignment made, and
the liens and security interests granted hereby shall terminate and all rights
to the Patent Collateral and the License shall revert to Borrower. Upon any such
termination, Bank will, at Borrower's expense, execute and deliver to Borrower
such documents as Borrower shall reasonably request to evidence such
termination.
(C) If any term or provision of this Agreement is or shall become illegal,
invalid or unenforceable in any jurisdiction, all other terms and provisions of
this Agreement shall remain legal, valid and enforceable in such jurisdiction
and such illegal, invalid or unenforceable provision shall be legal, valid and
enforceable in any other jurisdiction.
(D) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LOCAL LAW OF THE STATE OF
OREGON, EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT MIGHT OTHERWISE
REFER CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT TO THE SUBSTANTIVE LAW OF
ANOTHER JURISDICTION, AND ALL OTHER LAWS OF MANDATORY APPLICATION.
(E) AS A SPECIFICALLY BARGAINED INDUCEMENT FOR BANK TO ENTER INTO THIS
AGREEMENT AND EXTEND CREDIT TO BORROWER, BORROWER AND BANK EACH WAIVES TRIAL BY
JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR
ARISING OUT OF THIS AGREEMENT.
(F) The captions in this Agreement are for reference purposes only and
shall not relate to or affect in any way the construction or interpretation
hereof.
(G) The representations, warranties, covenants and agreements contained
herein or in any Schedule attached hereto shall survive the execution hereof.
IN WITNESS WHEREOF, Borrower has caused this Agreement to be duly executed
and delivered by its officer thereunto duly authorized as of July 11, 1997.
LEISURE LIFE, INC.
By:____________________________
Title:___________________________
STATE OF OREGON )
) SS:
COUNTY OF MULTNOMAH )
The foregoing Patent Assignment and Security Agreement was executed and
acknowledged before me on July 11, 1997, by ___________________, personally
known to me to be the ___________________ of Leisure Life, Inc., a Tennessee
corporation, on behalf of such corporation.
Notary Public
My Commission Expires:
Accepted as of July 11, 1997.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
Vice President
SCHEDULE I
TO
PATENT ASSIGNMENT AND SECURITY AGREEMENT
1. Patents
No. Des. 356,215
No. Des. 358,722
2. Patent Applications
No. 08/642,689
