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 13 day of December, 1995, by Peerless Chain Company
(herein "PCC") and Peerless Chain of Iowa, Inc. (herein "PCII", PCC and PCII may
be referred to herein individually as a "Company" and collectively as the
"Companies"), each with its principal place of business at 0000 X. Xxxxxxx
Xxxxxx, Xxxxxx, XX 00000-0000, and The CIT Group/Business Credit, Inc., a New
York corporation, with offices at Ten South LaSalle Street, Chicago, IL 60603
(herein "CITBC").
W I T N E S E T H:
WHEREAS, the Companies and CITBC are parties to a certain Financing Agreement of
even date herewith, as the same may be amended from time to time (herein the
"Financing Agreement"), which Financing Agreement provides (i) for CITBC to make
certain loans, advances and extensions of credit, all to or for the account of
the Companies and (ii) for the grant by the Companies to CITBC of a security
interest in certain of the Companies' assets, including, without limitation, its
patents, patent applications and/or registrations, trademarks, trademark
applications and/or registrations, tradenames, goodwill and licenses, all as
more fully set forth therein;
NOW THEREFORE, in consideration of the premises set forth herein and for other
good and valuable consideration, receipt and sumiciency of which is hereby
acknowledged, the Companies agree as follows:
1 Definitions. Capitalized terms used herein and defined in the Financing
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"
(as defined in the Financing Agreement), each of the Companies hereby
grants to CITBC a security interest, effective immediately, in all
of their 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) 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 are
sometimes hereinafter individually and/or collectively
referred to as the "Patent Collateral");
(ii) Trademarks, trademark registrations and/or applications and
tradenames 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 are
sometimes hereinafter individually and/or collectively
referred to as the "Trademark Collateral");
(iii) Any license agreement in which the Companies are or become
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 are sometimes referred to herein
individually and/or collectively as the "License
Collateral");
(iv) The goodwill of the Companies'business connected with and
symbolized by the Intellectual Property Collateral; and
(v) All cash and non-cash proceeds of the foregoing.
3. CITBC's Rights. Upon the occurrence of any Event of Default hereunder,
CITBC shall have all the rights and remedies of a secured party under
the Uniform Commercial Code and any other applicable state or federal
laws. CITBC will give the Companies 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 Companies' 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 CITBC upon the occurrence of any Event of
Default hereunder, CITBC 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 Companies to CITBC concurrently with this Agreement to enable
such rights to be carried out. Each of the Companies agrees that, in
the event CITBC exercises its rights hereunder and/or pursuant to
said power of attorney in accordance with its terms, after written
notification of such exercise from CITBC to the Companies, the
Companies 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 Companies
shall continue to own and use the Intellectual Property Collateral in
the normal course of their business and to enjoy the benefits,
royalties and profits therefrom provided, however, that from and after
the occurrence of an Event of Default such right will, upon the
exercise by CITBC of the rights provided by this Agreement, be revoked
and the right of the Companies to enjoy the uses, benefits, royalties
and profits of said Intellectual Property Collateral will wholly cease,
whereupon CITBC or its transferee(s) shall be entitled to all of the
Companies' right, title and interest in and to the Intellectual
Property Collateral hereby so assigned. This Agreement will not operate
to place upon CITBC any duty or responsibility to maintain the
Intellectual Property Collateral.
4. Fees. The Companies will jointly and severally pay all filing fees with
respect to the security interest created hereby which CITBC 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. Each of the Companies represents and
warrants, that it lawfully possess and own the Intellectual Property
Collateral as indicated on the attached Schedules and that except for
the security interest granted hereby and Permitted Encumbrances (as
defined in the Financing Agreement), the Intellectual Property
Collateral will be kept free from all liens, security interests, claims
and encumbrances whatsoever; that the Companies have not made or given
any prior assignments, transfers or security interests 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.
6. Application of Proceeds. The proceeds of any sale, transfer or
disposition of the Intellectual Property Collateral shall be applied
first to all costs, including, but not limited to, reasonable
attorneys' fees and expenses and court costs, incurred by CITBC in
connection with such sole and the exercise of CITBC's rights and
remedies hereunder and under the Financing Agreement; next, such
proceeds shall be applied to the payment, in whole or in part, of the
Obligations due CITBC in such order as CITBC may elect; and the
balance, if any, shall be paid to the Companies or as a court of
competent jurisdiction may direct.
7. Defense of Claims. The Companies will defend at their own cost and
expense any action, claim or proceeding affecting the Intellectual
Property Collateral or the interest of CITBC therein. The Companies
agree to jointly and severally reimburse CITBC for all costs and
expenses incurred by CITBC in defending any such action, claim or
proceeding.
8. Rights Cumulative. This Agreement shall be in addition to the Financing
Agreement and shall not be deemed to affect, modify or limit the
Financing Agreement or any rights that CITBC has under the Financing
Agreement. The Companies agree to execute and deliver to CITBC (at the
Companies' 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 herefrom, but shall not invalidate the
remaining provisions hereof.
10. CHOICE OF LAW. EACH OF THE COMPANIES AGREES THAT THE VALIDITY,
INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT AND ALL RIGHTS
HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS. THIS
AGREEMENT TOGETHER WITH THE FINANCING AGREEMENT CONSTITUTES THE ENTIRE
AGREEMENT OF THE COMPANIES AND CITBC WITH RESPECT TO THE INTELLECTUAL
PROPERTY COLLATERAL, CAN ONLY BE CHANGED OR MODIFIED IN WRITING AND
SHALL BIND AND BENEFIT THE COMPANIES, CITBC AND THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS. EACH OF THE COMPANIES AND CITBC 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 Companies, or any one of them, fail to perform or observe
any agreement, covenant or condition required under this
Agreement;
(ii) Any warranty or representation made by Companies, or any one
of them, in this Agreement shall be or becomeg false or
misleading in any material respect; or
(iii) The occurrence of any Event of Default under the
Financing Agreement which is not waived in writing by CITBC.
12. Notices. Each of the Companies covenant and agree that, with respect to
the Intellectual Property Collateral, they will give CITBC written
notice in the manner provided in the Financing Agreement of:
(i) any claim by a third party that the Companies have infringed
on the rights of a third party;
(ii) any suspected infringement by a third party on the rights of
the Companies; or
(iii) any Intellectual Property Collateral created, arising or
acquired by the Companies after the date hereof.
13. Further Assurances. The Companies will take any such action as CITBC
may reasonably require to further confirm or protect CITBC's rights
under this Agreement in the Intellectual Property Collateral. In
furtherance thereof, each of the Companies hereby grants to CITBC 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 in the Companies' behalf required to effectuate the terms,
provisions and conditions of this Agreement.
14. Termination. This Agreement shall terminate upon termination of the
Financing Agreement and full, final and indefeasible payment of all
Obligations of the Companies thereunder. Upon the Companies' request,
CITBC shall within a reasonable time after any such termination execute
and deliver to the Companies (at the Companies' 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 13 day of December, 1995.
PEERLESS CHAIN COMPANY
By: Xxxxxxx X. Xxxxx
Title: Chairman
PEERLESS CHAIN OF IOWA, INC.
By: Xxxxxxx X. Xxxxx
Title: Chairman
Xxxxxx and Accepted this
13 day of December, 1995
THE CIT GROUP/BUSINESS CREDIT, INC.
By Xxxxxxx Xxxx
Title Vice President
IRREVOCABLE POWER OF ATTORNEY
Peerless Chain Company (herein "PCC") and Peerless Chain of Iowa, Inc. (herein
"PCII", PCC and PCII may be referred to herein individually as a "Company" and
collectively as the "Companies") with offices at 0000 X. Xxxxxxx Xxxxxx, Xxxxxx,
XX 00000-0000, hereby grant to The CIT Group/Business Credit, Inc., a New York
corporation, with offices at 00 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, XX 00000
(hereinafter referred to as "CITBC"), the exclusive Irrevocable Power of
Attorney to transfer to CITBC or to any designee of CITBC all Intellectual
Property Collateral listed on the Schedules attached to the Grant of Security
Interest in Patents, Trademarks and Licenses (the "Agreement"), dated as of the
date hereof, between the Companies and CITBC including, without limitation, all
patents, patent applications and/or registrations, trademarks, trademark
applications and/or registrations, and licenses together with the goodwill of
the business connected with or symbolized by such Intellectual Property
Collateral and the Companies' entire inventory of labels and decals bearing any
trademarks not affixed to its products, and the right to operate and control,
sell, assign, and transfer the business under those trademarks under the
following terms and conditions:
1. The Power of Attorney granted hereunder shall be effective as of
the date hereof and shall last for as long as any now existing or hereafter
arising indebtedness, liabilities or obligations of the Companies to CITBC are
outstanding under the Financing Agreement, dated on or about the date hereof,
between the Companies and CITBC.
2. The Power of Attorney granted herein shall be irrevocable throughout
the duration of its life as specified in Paragraph 1 hereinabove;
3. The Power of Attorney granted herein shall only be exercisable by
CITBC after the occurrence of an Event of Default under the Agreement between
CITBC and the Companies; and
4. CITBC shall give the Companies five (5) days prior written notice of
the exercise of this power, and the waiver by CITBC of any particular Event of
Default as set forth in Paragraph 3 hereinabove shall have no force or effect
unless in writing and signed by an authorized officer of CITBC. Even then such
waiver shall not constitute or be considered a waiver of any other Event of
Default then existing or thereafter arising whether similar or not.
IN WITNESS WHEREOF, the Companies have caused this Power of Attorney to be
executed as of the 13 day of December, 1995.
PEERLESS CHAIN COMPANY
By: Xxxxxxx X. Xxxxx
Title: Chairman
PEERLESS CHAIN OF IOWA, INC.
By: Xxxxxxx X. Xxxxx
Title: Chairman
STATE OF MINNESOTA
COUNTY OF HENNEPIN
On December 13, 1995, before me, the undersigned, a notary public in
and for said State, personally appeared Xxxxxxx X. Xxxxx known to me to be the
Chairman of the corporations that executed the within instrument, and
acknowledged to me that such corporations executed the within instrument
pursuant to their by-laws and a resolution of their board of directors.
WITNESS my hand and official seal.
/s/ Xxxxxxxx X. Xxxxxxxxx
NOTARY PUBLIC
SCHEDULE A TO GRANT OF SECURITY INTEREST IN PATENTS,
TRADEMARKS AND LICENSES
between
PEERLESS CHAIN COMPANY AND
PEERLESS CHAIN OF IOWA, INC.
and
THE CIT GROUP/BUSINESS CREDIT, INC.
U.S. PATENTS
Title Patent No.
Traction Cable (cross cable clip) 5,068,948
Traction Cable (end connector) 4,825,923
Merchandise Hanger 4,801,116
Chain Pak 5,293,998
PATENT APPLICATION
Title Patent No.
Reel Display (Continuous Chain Bar Code) 08/285,631
SCHEDULE B TO GRANT OF SECURITY INTEREST IN PATENTS,
TRADEMARKS AND LICENSES
between
PEERLESS CHAIN COMPANY AND
PEERLESS CHAIN OF IOWA, INC.
and
THE CIT GROUP/BUSINESS CREDIT, INC.
U.S. TRADEMARKS
Title or Mark Registration No.
SCAN-PAK 74/556,422
SCHEDULE C TO GRANT OF SECURITY INTEREST IN PATENTS,
TRADEMARKS AND LICENSES
between
PEERLESS CHAIN COMPANY
PEERLESS CHAIN OF IOWA, INC.
and
THE CIT GROUP/BUSINESS CREDIT, INC.
U.S. LICENSES
Name Registration No. Registration Date
NONE
