MORTGAGE OF INTELLECTUAL PROPERTY
THIS MORTGAGE OF INTELLECTUAL PROPERTY (this "Mortgage") is entered
into as of the 25th day of January, 2001 by and between INTERLOTT TECHNOLOGIES,
INC., a Delaware corporation having its principal office and place of business
at 0000 Xxxxxxxxxx Xxx, Xxxxx, Xxxx 00000-0000 ("Mortgagor"), and FIFTH THIRD
BANK, an Ohio banking corporation whose address is 00 Xxxxxxxx Xxxxxx Xxxxx,
Xxxxxxxxxx, Xxxx 00000 ("Mortgagee"), under the following circumstances:
W I T N E S S E T H:
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WHEREAS, Mortgagor and Mortgagee are parties to a certain Credit
Agreement dated as of January 25, 2001 (which Credit Agreement, as the same may
be renewed, supplemented, amended and/or restated from time to time, is
hereinafter referred to as the "Credit Agreement"), which Credit Agreement
provides for Mortgagee to extend credit to Mortgagor; and
WHEREAS, Mortgagor and Mortgagee are parties to a certain Security
Agreement dated as of January 25, 2001 (which Security Agreement, as the same
may be renewed, supplemented, amended and/or restated from time to time, is
hereinafter referred to as the "Security Agreement"), which Security Agreement
provides for the grant by Mortgagor to Mortgagee of a security interest in and
lien against Mortgagor's assets, including, without limitation, its intangible
assets;
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Mortgagor agrees as follows:
1. Incorporation of Credit Agreement and Security Agreement. The Credit
Agreement and Security Agreement and the terms and provisions thereof are hereby
incorporated herein in their entirety by this reference thereto. For purposes of
this Mortgage, "Obligations" shall have the same meaning as provided in the
Credit Agreement. For purposes of this Mortgage, satisfaction of the Obligations
shall occur when (i) the Obligations have been paid in full and (ii) the
financing arrangements between Mortgagee and Mortgagor under the Credit
Agreement have been terminated.
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2. Mortgage of Patents, Copyrights, Trade Secrets and Licenses. To
secure the satisfaction of the Obligations, Mortgagor hereby grants a security
interest in, mortgages, and collaterally assigns to Mortgagee all of Mortgagor's
rights, title and interest in and to all of its now owned or existing and
hereafter created or acquired:
(i) patents and patent applications, in the United States and
elsewhere, and the inventions and improvements described and claimed therein,
including, without limitation, those patents listed on Exhibit A attached hereto
and made a part hereof, and (a) the reissues, divisions, continuations,
renewals, extensions and continuations-in-part thereof, (b) all income,
royalties, damages and payments now and hereafter due and/or payable under and
with respect thereto, including, without limitation, damages and payments for
past or future infringements thereof, (c) the right to xxx for past, present and
future infringements thereof, and (d) all rights corresponding thereto
throughout the world (all of the foregoing patents and applications, together
with the items described in clauses (a)-(d), are sometimes hereinafter
individually and/or collectively referred to as the "Patents"); and
(ii) copyrights, copyright registrations and copyright
applications, used in the United States and elsewhere, including, without
limitation, the copyright registrations and copyright applications listed on
Exhibit B attached hereto and made a part hereof, and (a) renewals or extensions
thereof, (b) all income, royalties, damages and payments now and hereafter due
and/or payable with respect thereto, including, without limitation, damages and
payments for past or future infringements thereof, (c) the right to xxx for
past, present and future infringements thereof, and (d) all rights corresponding
thereto throughout the world (all of the foregoing copyrights, copyright
registrations and copyright applications, together with the items described in
clauses (a)-(d), are sometimes hereinafter individually and/or collectively
referred to as the "Copyrights"); and
(iii) all trade secrets, formulas, processes, devices,
know-how, or compilations of information (including technical information and
non-technical information such as customer lists and marketing plans),
collectively referred to as trade secrets, which are not available to others and
which are maintained as confidential by Mortgagor, including without limitation,
the trade secrets generally described on Exhibit C, attached hereto and made a
part hereof, and the right to prevent misappropriation and unauthorized
disclosures thereof and all rights corresponding thereto throughout the world
(all of the foregoing trade secrets and associated rights are sometimes
hereinafter individually and/or collectively referred to as the "Trade
Secrets"); and
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(iv) all license agreements with respect to any or all of the
Patents, the Copyrights, the Trade Secrets and/or the Trademarks (as defined in
Paragraph 3 below), or any other patent, trademark, tradename, copyright or
trade secret, or any application or registration thereof, between Mortgagor and
any other party, whether Mortgagor is a licensor or licensee under any such
license agreement, including, without limitation, any such license agreements
granting the right to prepare for sale, sell and advertise for sale, all
inventory now or hereafter owned by Mortgagor and now or hereafter covered by
such license agreements, and the licenses listed on Exhibit D attached hereto
and made a part hereof, and (a) renewals, extensions or amendments thereof, (b)
all income, damages and payments for past or future infringements thereof, (c)
the right to xxx for past, present and future infringements thereof, and (d) all
rights corresponding thereto throughout the world (all of the foregoing,
together with the items described in clauses (a)-(d), are sometimes hereinafter
individually and/or collectively referred to as the "Licenses").
3. Grant of Security Interest in Trademarks. To secure the satisfaction
of the Obligations, Mortgagor hereby creates and grants to Mortgagee a security
interest in all of Mortgagor's rights, title and interest in and to all of its
now owned or existing and hereafter created or acquired trademarks, trademark
registrations, tradenames and trademark applications, used in the United States
and elsewhere, including, without limitation, the trademarks, trademark
registrations, tradenames and trademark applications listed on Exhibit E
attached hereto and made a part hereof and (a) renewals or extensions thereof,
(b) all income, royalties, damages and payments now and hereafter due and/or
payable with respect thereto, including, without limitation, damages and
payments for past or future infringements thereof, (c) the right to xxx for
past, present and future infringements thereof, (d) all rights corresponding
thereto throughout the world (all of the foregoing trademarks, trademark
registrations, tradenames and applications, together with the items described in
clauses (a)-(d), are sometimes hereinafter individually and or collectively
referred to as the "Trademarks") and (e) the goodwill of Mortgagor's business,
including, but not by way of limitation, such goodwill connected with and
symbolized by the Trademarks.
4. New Patents, Copyrights, Trade Secrets, Trademarks and Licenses. If,
before the Obligations shall have been satisfied, Mortgagor shall (i) obtain
rights to any new patentable inventions, copyrights, trade secrets, tradenames,
trademarks, trademark registrations or trademark applications; (ii) become a
party to any license agreement with respect to any patents, copyrights, trade
secrets or trademarks; or (iii) become entitled to the benefit of any patent,
copyright or trademark, trademark application, trademark registration, copyright
registration, copyright application, trade secret or license renewal, or patent
for any reissue, division, continuation, renewal, extension or
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continuation-in-part of any Patent or any improvement on any Patent, the
provisions of this Mortgage shall automatically apply thereto and Mortgagor
shall give to Mortgagee prompt written notice thereof. Mortgagor hereby
authorizes Mortgagee as its irrevocable attorney-in-fact to modify this Mortgage
by amending Exhibit A, Exhibit B, Exhibit C, Exhibit D, and Exhibit E as
applicable, to include any future patents, patent applications, trademarks,
trademark registrations, trademark applications, copyrights, copyright
registrations, copyright applications, tradenames, trade secrets and licenses
which are rights owned by Mortgagor and which are Patents, Copyrights,
Trademarks, Trade Secrets or Licenses, as applicable, under Paragraph 2 or
Paragraph 3 above or under this Paragraph 4, and to file or refile this Mortgage
with the United States Patent and Trademark Office, the United States Copyright
Office or other appropriate agency.
5. Term; Remedies. The term of the Mortgage and security interest
granted herein shall extend until the Obligations have been satisfied and the
Credit Agreement and the financing arrangements between Mortgagee and Mortgagor
thereunder have been terminated. Upon the occurrence and during the continuation
of any "Event of Default" (as defined in the Credit Agreement), Mortgagor hereby
authorizes: (a) the Commissioner of Patents and Trademarks, United States Patent
and Trademark Office (or as appropriate, such equivalent agency in foreign
countries), to issue any and all Patents to Mortgagee as assignee of Mortgagor's
entire interest therein; (b) the Register of Copyrights, United States Copyright
Office (or as appropriate, such equivalent agency in foreign countries), to
issue any and all certificates of registration or renewal for all of the
Copyrights to Mortgagee as assignee of Mortgagor's entire interest therein; and
(c) the Commissioner of Patents and Trademarks, United States Patent and
Trademark Office (or as appropriate, such equivalent agency in foreign
countries), to issue any and all certificates of registration or renewal for all
of the Trademarks to Mortgagee as assignee of Mortgagor's entire interest
therein and in the goodwill of Mortgagor's business connected therewith and
symbolized thereby. Upon the occurrence and during the continuation of an Event
of Default and enforcement of Mortgagee's rights under this Paragraph 5,
Mortgagee shall be entitled to use all Patents, Copyrights, Trade Secrets,
Trademarks and Licenses on a worldwide basis and without any liability for
royalties or other related charges from Mortgagee to Mortgagor.
6. Use While No Event of Default Exists. Prior to the occurrence of any
Event of Default and while no Event of Default is continuing, Mortgagor shall
have the continued and unencumbered right to use the Patents, Copyrights, Trade
Secrets, Trademarks and Licenses in the ordinary course of its business, subject
to the terms and covenants of the Credit Agreement and this Mortgage.
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7. Documents. At the request of Mortgagee, Mortgagor shall pay the
costs of filing and/or recording this Mortgage in all public offices where
filing or recording is necessary. Mortgagor shall execute and deliver to
Mortgagee from time to time such supplemental mortgages or other instruments as
may be necessary for confirming Mortgagee's interest in the Patents, Copyrights,
Trade Secrets, Trademarks and Licenses.
8. Mortgagee's Right to Xxx. After the occurrence and during the
continuation of any Event of Default, Mortgagee shall have the right, but shall
in no way be obligated, to bring suit in its own name and, in Mortgagee's
discretion, to join Mortgagor as a party plaintiff, to enforce the Patents,
Copyrights, Trade Secrets, Trademarks and Licenses.
9. Waivers. No course of dealing between Mortgagor and Mortgagee nor
any failure to exercise, nor any delay in exercising, on the part of Mortgagee
any right, power or privilege hereunder shall operate as a waiver thereof.
10. Severability. The provisions of this Mortgage are severable, and if
any clause or provision shall be held invalid and unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Mortgage in any jurisdiction.
11. Modification. This Mortgage cannot be altered, amended or modified
in any way, except as specifically provided in Paragraph 4 hereof or by a
writing signed by the parties hereto.
12. Cumulative Remedies. All of Mortgagee's rights and remedies with
respect to the Patents, Copyrights, Trade Secrets, Trademarks and Licenses,
whether established hereby or by the Credit Agreement, or by any other
agreements or by law, shall be cumulative and may be exercised singularly or
concurrently. Mortgagee shall have, in addition to all other rights and remedies
given it by the terms of this Mortgage and the Credit Agreement, all rights and
remedies allowed by law and the rights and remedies of a secured party under the
Uniform Commercial Code as enacted in any jurisdiction in which the Patents,
Copyrights, Trademarks, Trade Secrets or Licenses may be located.
13. Binding Effect; Benefits. This Mortgage shall be binding upon
Mortgagor and its successors and assigns, and shall inure to the benefit of
Mortgagee and its successors and assigns.
14. Governing Law. This Mortgage shall be governed by and construed in
accordance with the laws of the State of Ohio.
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15. Headings. Paragraph headings used herein are for convenience only
and shall not modify the provisions which they precede.
16. Release of Mortgage. This Mortgage is made for collateral purposes
only. Upon satisfaction of the Obligations and termination of the Credit
Agreement, Mortgagee shall execute and deliver to Mortgagor all deeds,
assignments and other instruments, and shall take such other actions, as may be
necessary or appropriate to re-vest in Mortgagor the Patents, Copyrights, Trade
Secrets, Trademarks and Licenses, subject to any disposition thereof which may
have been made by Mortgagee pursuant hereto or pursuant to the Credit Agreement.
IN WITNESS WHEREOF, Mortgagor, by its duly authorized officer, has
executed this Mortgage as of the date first above written.
INTERLOTT TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: CFO
STATE OF OHIO )
) SS:
COUNTY OF XXXXXXXX )
The foregoing Mortgage of Intellectual Property was acknowledged before me
this 23rd day of January, 2001, by Xxxxxx X. Xxxxxx, the CFO of Interlott
Technologies, Inc., a Delaware corporation, on behalf of the corporation.
/s/ Xxxxx Xxxxxx
Notary Public
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Accepted at Cincinnati, Ohio as of January 25, 2001:
FIFTH THIRD BANK
By: /s/ Xxxxx X. Xxxxxxxxxx
Name: Xxxxx X. Xxxxxxxxxx
Title: VP
