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Exhibit
10.6
PATENT AND TRADEMARK
SECURITY AGREEMENT
This Patent and Trademark
Security Agreement (the “Agreement”), dated as of
June 10, 2008, is made by and between Chambers Belt Company, a
Delaware corporation having a business location at the address set
forth below next to its signature (the “Debtor”), and
Wells Fargo Bank, National Association (“Wells Fargo”),
and having a business location at the address set forth below next
to its signature.
Recitals
A. Company, certain
affiliates of Company, and Wells Fargo are parties to a Credit and
Security Agreement (as amended, supplemented or restated from time
to time, the “Credit Agreement”) dated the same date as
this Agreement, setting forth the terms on which Wells Fargo may
now or hereafter extend credit to or for the account of
Company.
B. As a condition to
extending credit to or for the account of Company, Wells Fargo has
required the execution and delivery of this Agreement by
Company.
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 in the Credit Agreement. In addition, the following terms
have the meanings set forth below:
“Patents” means
all of Company’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 sue 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 Company’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 sue for
past, present and future infringement, dilution and damages
therefor, and (iv) licenses thereunder, all as presently
existing or hereafter arising or acquired, including, without
limitation, the marks listed on Exhibit B.
2. Security Interest .
Company hereby irrevocably pledges and assigns to, and grants Wells
Fargo 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 Indebtedness. As set
forth in the Credit Agreement, the Security Interest is coupled
with a security interest in substantially all of the personal
property of Company. 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 . Company represents, warrants and
agrees as follows:
(a) Existence;
Authority. Company 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
Company.
(b) Patents. Exhibit A
accurately lists all Patents owned or controlled by Company as of
the date hereof, or to which Company 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,
Company 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 Company shall within
60 days provide written notice to Wells Fargo with a replacement
Exhibit A, which upon acceptance by Wells Fargo shall become part
of this Agreement.
(c) Trademarks.
Exhibit B accurately lists all Trademarks owned or controlled by
Company 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 Company’s or any Affiliate’s business(es).
If after the date hereof, Company owns or controls any Trademarks
not listed on Exhibit B (other than common law marks which are not
material to Company’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 Company shall promptly provide written notice to
Wells Fargo with a replacement Exhibit B, which upon acceptance by
Wells Fargo 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 Company, 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 Company shall promptly either:
(i) cause such Affiliate to assign all of its rights in such
item(s) to Company; or (ii) notify Wells Fargo of such item(s)
and cause such Affiliate to execute and deliver to Wells Fargo a
patent and trademark security agreement substantially in the form
of this Agreement.
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Patent and Trademark Security
Agreement
WFBC/Chambers Belt
Company
(e) Title. Company has
absolute title to each Patent and each Trademark listed on Exhibits
A and B, free and clear of all Liens except Permitted Liens.
Company (i) will have, at the time Company 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, Company will not assign,
transfer, encumber or otherwise dispose of the Patents or
Trademarks, or any interest therein, without Wells Fargo’s
prior written consent.
(g) Defense. Company
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.
Company 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.
Company 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 Wells Fargo:
(i) sufficient written notice, of at least 30 days, to allow
Wells Fargo 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) Wells Fargo’s
Right to Take Action. If Company 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 Wells Fargo gives Company 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 Company notifies Wells
Fargo that it intends to abandon a Patent or Trademark, Wells Fargo
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 Company (or, at Wells Fargo’s
option, in Wells Fargo’s own name) and may (but need not)
take any and all other actions which Wells Fargo may reasonably
deem necessary to cure or correct such failure or prevent such
intended abandonment.
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Patent and Trademark Security
Agreement
WFBC/Chambers Belt
Company
(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, Company shall pay Wells
Fargo on demand the amount of all moneys expended and all costs and
expenses (including reasonable attorneys’ fees and
disbursements) incurred by Wells Fargo in connection with or as a
result of Wells Fargo’s taking action under subsection
(i) or exercising its rights under Section 6, together
with interest thereon from the date expended or incurred by Wells
Fargo at the Default Rate.
(k) Power of Attorney.
To facilitate Wells Fargo’s taking action under subsection
(i) and exercising its rights under Section 6, Company
hereby irrevocably appoints (which appointment is coupled with an
interest) Wells Fargo, or its delegate, as the attorney-in-fact of
Company 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 Company, any and all instruments,
documents, applications, financing statements, and other agreements
and writings required to be obtained, executed, delivered or
endorsed by Company under this Section 3, or, necessary for
Wells Fargo, after an Event of Default and at any time thereafter
during the Default Period commenced thereby, 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. Company 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 Indebtedness.
4. Debtor’s Use of
the Patents and Trademarks . Company shall be permitted to
control and manage the Patents and Trademarks, incl
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