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EXHIBIT 10.24
COMPANY PATENT COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
This COMPANY PATENT COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT (this
"AGREEMENT") is dated as of November 12, 1997 and entered into by and between
FWT, INC., a Texas corporation ("ASSIGNOR"), and BT COMMERCIAL CORPORATION, as
agent for and representative of (in such capacity herein called "ASSIGNEE") the
financial institutions ("LENDERS") party to the Credit Agreement (as hereinafter
defined).
PRELIMINARY STATEMENTS
A. Assignee and Lenders have entered into a Credit Agreement dated as
of November 12, 1997 (said Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Assignor, pursuant to which Lenders have
made certain commitments, subject to the terms and conditions set forth in the
Credit Agreement, to extend certain credit facilities to Assignor.
B. Assignor has and may in the future have rights, title and interests
in and to various Patents and other related Collateral (as such terms are
hereinafter defined).
C. Assignor is willing to grant to Assignee (i) a security interest in
all such Collateral for the purpose of securing the complete and timely
satisfaction of all of the Secured Obligations (as hereinafter defined) and (ii)
effective upon the occurrence and during the continuation of an Event of
Default, an assignment of Assignor's entire right, title and interest in and to
all such Collateral.
D. It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that Assignor shall have granted the security
interests and made the conditional assignment and undertaken the obligations
contemplated by this Agreement.
NOW, THEREFORE in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Credit Agreement
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Assignor hereby agrees with Assignee as follows:
SECTION 1. GRANT OF SECURITY. Assignor hereby grants to Assignee a
security interest in all of Assignor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Assignor
now has or hereafter acquires an interest and wherever the same may be located
(the "COLLATERAL"):
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(a) all patents and patent applications and rights and interests in
patents and patent applications under any domestic law that are presently, or in
the future may be, owned by Assignor and all patents and patent applications and
rights and interests in patents and patent applications under any domestic law
that are presently, or in the future may be, held or used by Assignor in whole
or in part (including, without limitation, the patents and patent applications
listed in Schedule A annexed hereto, as the same may be amended pursuant hereto
from time to time), all rights (but not obligations) corresponding thereto
(including without limitation the right (but not the obligation) to ▇▇▇ for
past, present and future infringements in the name of Assignor or in the name of
Assignee or Lenders), and all re-issues, divisions, continuations, renewals,
extensions and continuations-in-part thereof (all of the foregoing being
collectively referred to as the "PATENTS"); it being understood that the rights
and interest assigned hereby shall include, without limitation, all rights and
interests pursuant to licensing or other contracts in favor of Assignor
pertaining to patent applications and patents presently or in the future owned
or used by third parties but, in the case of third parties which are not
Affiliates of Assignor, only to the extent permitted by such licensing or other
contracts and, if not so permitted, only with the consent of such third parties;
(b) All general intangibles relating to the Patents;
(c) all books, records, ledger cards, files, correspondence, computer
programs, tapes, disks and related data processing software that at any time
evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon; and
(d) all proceeds, products, rents and profits (including without
limitation license royalties and proceeds of infringement suits) of or from any
and all of the foregoing Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Assignee is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral. For
purposes of this Agreement, the term "PROCEEDS" includes whatever is
receivable or received when Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary or
involuntary.
Notwithstanding the foregoing, Collateral shall exclude any
intellectual property right, contracts and agreements to the extent, and only to
the extent, that such intellectual property right, contract or agreement
contains a provision enforceable at law and in equity that would be breached by
(or would result in the termination of such intellectual property contract or
agreement upon) the grant of the security interest created herein pursuant to
the terms of this Agreement; provided, however, that if and when any prohibition
on the assignment, pledge or grant of a security interest in such intellectual
property right, contract or agreement is removed, the Secured Party will be
deemed to have been granted a security interest in such intellectual property
right, contract or agreement as of the date hereof, and the
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Collateral will be deemed to include such intellectual property right, contract
or agreement.
SECTION 2. CONDITIONAL ASSIGNMENT. In addition to, and not by way of
limitation of, the granting of a security interest in the Collateral pursuant to
Section 1, Assignor hereby, effective only upon the occurrence and during the
continuance of an Event of Default and upon written notice from Assignee and
subject to the terms of this Agreement, grants, sells, conveys, transfers,
assigns and sets over to Assignee, for its benefit and the ratable benefit of
Lenders, all of Assignor's right, title and interest in and to the Collateral,
including without limitation Assignor's right, title and interest in and to the
Patents identified in Schedule A annexed hereto.
SECTION 3. SECURITY FOR OBLIGATIONS. This Agreement secures, and the
Collateral is collateral security for, the prompt payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. section 362(a), of all obligations and
liabilities of every nature of Assignor now or hereafter existing under or
arising out of or in connection with the Credit Agreement and the other Loan
Documents and all extensions or renewals thereof, whether for principal,
interest (including without limitation interest that, but for the filing of a
petition in bankruptcy with respect to Assignor, would accrue on such
obligations), reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnities or otherwise, whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any part
of such payment is avoided or recovered directly or indirectly from Assignee or
any Lender as a preference, fraudulent transfer or otherwise (all such
obligations and liabilities being the "UNDERLYING DEBT"), and all obligations
of every nature of Assignor now or hereafter existing under this Agreement (all
such obligations of Assignor, together with the Underlying Debt, being the
"SECURED OBLIGATIONS").
SECTION 4. ASSIGNOR REMAINS LIABLE. Anything contained herein to the
contrary notwithstanding, (a) Assignor shall remain liable under any contracts
and agreements included in the Collateral, to the extent set forth therein, to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by Assignee of any of its
rights hereunder shall not release Assignor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) Assignee shall not have any obligation or liability under any contracts and
agreements included in the Collateral by reason of this Agreement, nor shall
Assignee be obligated to perform any of the obligations or duties of Assignor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
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SECTION 5. REPRESENTATIONS AND WARRANTIES. Assignor represents and
warrants as follows:
(a) Description of Collateral. A true and complete list of all Patents
owned, held (whether pursuant to a license or otherwise) or used by Assignor, in
whole or in part, as of the date of this Agreement is set forth in Schedule A
annexed hereto.
(b) Validity and Enforceability of Collateral. Each of the Patents that
is material to Assignor's business is valid, subsisting and enforceable and
Assignor is not aware of any pending or, to Assignor's knowledge, threatened
claim by any third party that any such material Patent is invalid or
unenforceable or that the use of any such material Patents violates the rights
of any third person or of any basis for any such claim.
(c) Ownership of Collateral. Except for any interests disclosed in
Schedule B annexed hereto, if any, Permitted Encumbrances and the security
interest and conditional assignment created by this Agreement, Assignor owns the
Collateral free and clear of any Lien. Except with respect to any interests
disclosed in Schedule B annexed hereto and such as may have been filed in favor
of Assignee relating to this Agreement, (i) no effective financing statement or
other instrument similar in effect covering all or any part of the Collateral is
on file in any filing or recording office and (ii) no effective filing covering
all or any part of the Collateral is on file in the United States Patent and
Trademark Office.
SECTION 6. NEW PATENTS AND PATENT APPLICATIONS.
(a) Assignor hereby authorizes Assignee to modify this Agreement
without obtaining Assignor's approval of or signature to such modification by
amending Schedule A annexed hereto to include reference to any right, title or
interest in any existing Patent or any Patent acquired or developed by Assignor
after the execution hereof or to delete any reference to any right, title or
interest in any Patent in which Assignor no longer has or claims any right,
title or interest.
(b) If Assignor shall hereafter obtain rights to any patentable
inventions, or become entitled to the benefit of any patent application or
patent or any reissue, division, continuation, renewal, extension, or
continuation-in-part of any Patent or any improvement on any Patent, the
provisions of this Agreement shall automatically apply thereto. Assignor shall
promptly notify Assignee in writing of any Patents acquired by Assignor after
the date hereof. Concurrently with the filing of an application for any Patent,
Assignor shall execute, deliver and record in all places where this Agreement is
recorded an appropriate Patent Collateral Assignment and Security Agreement,
substantially in the form hereof, with appropriate insertions, or an amendment
to this Agreement, in form and substance satisfactory to Assignee, pursuant to
which Assignor shall grant a security interest and conditional assignment to the
extent of its interest in such Patent as provided herein to Assignee unless so
doing would, in the reasonable judgment of Assignor, after due inquiry, result
in the
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grant of a patent in the name of Assignee, in which event Assignor shall give
written notice to Assignee as soon as reasonably practicable and the filing
shall instead be undertaken as soon as practicable but in no case later than
immediately following the grant of the Patent.
SECTION 7. CERTAIN COVENANTS OF ASSIGNOR. Assignor shall:
(a) diligently keep reasonable records respecting the Collateral and at
all times keep at least one complete set of its records concerning substantially
all of the Patents at its chief executive office or principal place of business;
(b) use commercially reasonable efforts not to permit the inclusion in
any contract to which it becomes a party after the date hereof of any provision
that could or might in any way impair or prevent the creation of a security
interest in, or the assignment of, Assignor's rights and interests in any
property included within the definition of any Patents acquired under such
contracts;
(c) take all steps reasonably necessary to protect the secrecy of all
trade secrets relating to the products and services sold or delivered under or
in connection with the Patents, including without limitation entering into
confidentiality agreements with employees and labeling and restricting access to
secret information and documents;
(d) use proper statutory notice in connection with its use of each of
the Patents; and
(e) use consistent standards of high quality (which may be consistent
with Assignor's past practices) in the manufacture, sale and delivery of
products and services sold or delivered under or in connection with the Patents,
including, to the extent applicable, in the operation and maintenance of its
retail stores and other merchandising operations.
SECTION 8. CERTAIN INSPECTION RIGHTS. Assignor hereby grants to
Assignee and its employees, representatives and agents the right to visit,
during Assignor's normal business hours, Assignor's plants, facilities and other
places of business that are utilized in connection with the manufacture,
production, inspection, storage or sale of products and services sold or
delivered under any of the Patents (or which were so utilized during the prior
six month period), and to inspect the quality control and all other records
relating thereto upon reasonable notice to Assignor and as often as may be
reasonably requested (but in no event more than two (2) times in any calendar
year), provided, however, that Assignee shall have the right to an unlimited
number of visits during an Event of Default.
SECTION 9. AMOUNTS PAYABLE IN RESPECT OF THE COLLATERAL. Except as
otherwise provided in this Section 9, Assignor shall continue to collect, at its
own expense, all amounts due or to become due to Assignor in respect of the
Collateral or any portion thereof. In connection with such collections, Assignor
may take (and, at
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Assignee's direction, shall take) such action as Assignor or Assignee may deem
necessary or advisable to enforce collection of such amounts; provided, however,
that Assignee shall have the right at any time, upon the occurrence and during
the continuation of an Event of Default and upon written notice to Assignor of
its intention to do so, to notify the obligors with respect to any such amounts
of the existence of the security interest created, and the conditional
assignment effected hereby, and to direct such obligors to make payment of all
such amounts directly to Assignee, and, upon such notification and at the
expense of Assignor, to enforce collection of any such amounts and to adjust,
settle or compromise the amount or payment thereof, in the same manner and to
the same extent as Assignor might have done. After receipt by Assignor of the
notice from Assignee referred to in the proviso to the preceding sentence, (i)
all amounts and proceeds (including checks and other instruments) received by
Assignor in respect of amounts due to Assignor in respect of the Collateral or
any portion thereof shall be received in trust for the benefit of Assignee
hereunder, shall be segregated from other funds of Assignor and shall be
forthwith paid over or delivered to Assignee in the same form as so received
(with any necessary endorsement) to be held as cash Collateral and applied as
provided by Section 17, and (ii) Assignor shall not adjust, settle or compromise
the amount or payment of any such amount or release wholly or partly any obligor
with respect thereto or allow any credit or discount thereon.
SECTION 10. PATENT APPLICATIONS AND LITIGATION.
(a) Assignor shall have the duty diligently (subject to Assignor's
reasonable business judgment), through counsel reasonably acceptable to
Assignee, to prosecute any patent application relating to any of the Patents
specifically identified in Schedule A annexed hereto that is pending as of the
date of this Agreement, to make application on any existing or future unpatented
but patentable invention that is material to Assignor, and to do any and all
acts which are necessary or desirable to preserve and maintain all rights in all
Patents. Any expenses incurred in connection therewith shall be borne solely by
Assignor. Subject to the foregoing and Assignor's reasonable judgment, Assignor
shall not abandon any right to file a patent application or any pending patent
application or any Patent without the prior written consent of Assignee.
(b) Except as provided in Section 10(d) and notwithstanding Section 2,
Assignor shall have the right to commence and prosecute in its own name, as real
party in interest, for its own benefit and at its own expense, such suits,
proceedings or other actions for infringement, unfair competition, or other
damage or reexamination or reissue proceedings as are in its reasonable business
judgment necessary to protect the Collateral. Assignee shall provide, at
Assignor's expense, all reasonable and necessary cooperation in connection with
any such suit, proceeding or action including, without limitation, joining as a
necessary party.
(c) Assignor shall promptly, following its becoming aware thereof,
notify Assignee of the institution of, or of any adverse determination in, any
proceeding (whether in the United States Patent and Trademark Office or any
federal, state,
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local or foreign court) described in Section 10(a) or 10(b) or regarding
Assignor's interests in any material Collateral. Assignor shall provide to
Assignee any information with respect thereto reasonably requested by Assignee.
(d) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default, Assignee shall
have the right (but not the obligation) to bring suit, in the name of Assignor,
Assignee or otherwise, to enforce any Patent and any license thereunder, in
which event Assignor shall, at the request of Assignee, do any and all lawful
acts and execute any and all documents required by Assignee in aid of such
enforcement and Assignor shall promptly, upon demand, reimburse and indemnify
Assignee as provided in Section 18 in connection with the exercise of its rights
under this Section 10. To the extent that Assignee elects not to bring suit to
enforce any Patent or any license thereunder as provided in this Section 10(d),
Assignor agrees to use all reasonable measures, whether by action, suit,
proceeding or otherwise, to prevent the infringement of any of the Patents by
others and for that purpose agrees to diligently maintain any action, suit or
proceeding against any Person so infringing necessary to prevent such
infringement.
SECTION 11. NON-DISTURBANCE AGREEMENTS, ETC. If and to the extent that
Assignor is permitted to license the Collateral, Assignee shall enter into a
non-disturbance agreement or other similar arrangement, at Assignor's request
and expense, with Assignor and any licensee of any Collateral permitted
hereunder in form and substance satisfactory to Assignee pursuant to which (a)
Assignee shall agree not to disturb or interfere with such licensee's rights
under its license agreement with Assignor so long as such licensee is not in
default thereunder and (b) such licensee shall acknowledge and agree that the
Collateral licensed to it is subject to the security interest and conditional
assignment created in favor of Assignee and the other terms of this Agreement.
SECTION 12. REASSIGNMENT OF COLLATERAL. If (a) an Event of Default
shall have occurred and, by reason of cure, waiver, modification, amendment or
otherwise, no longer be continuing, (b) no other Event of Default shall have
occurred and be continuing, (c) an assignment to Assignee of any rights, title
and interests in and to the Collateral shall have been previously made and shall
have become absolute and effective pursuant to Section 2, Section 13(f) or
Section 16(b), and (d) the Secured Obligations shall not have become immediately
due and payable, upon the written request of Assignor and the written consent of
Assignee; then Assignee shall promptly execute and deliver to Assignor such
assignments as may be necessary to reassign to Assignor any such rights, title
and interests as may have been assigned to Assignee as aforesaid, subject to any
disposition thereof that may have been made by Assignee pursuant hereto;
provided that, after giving effect to such reassignment, Assignee's security
interest and conditional assignment granted pursuant to Section 1 and Section 2,
as well as all other rights and remedies of Assignee granted hereunder, shall
continue to be in full force and effect; and provided, further that the rights,
title and interests so reassigned shall be free and clear of all Liens other
than Liens (if
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any) encumbering such rights, title and interest at the time of their assignment
to Assignee and Permitted Encumbrances
SECTION 13. ASSIGNEE APPOINTED ATTORNEY-IN-FACT. Assignor hereby
irrevocably appoints Assignee as Assignor's attorney-in-fact, with full
authority in the place and stead of Assignor and in the name of Assignor,
Assignee or otherwise, from time to time in Assignee's discretion to take any
action and to execute any instrument that Assignee may deem necessary or
advisable, consistent with the terms of this Agreement, to accomplish the
purposes of this Agreement, including without limitation:
(a) to endorse Assignor's name on all applications, documents, papers
and instruments necessary for Assignee in the use or maintenance of the
Collateral;
(b) during the continuance of an Event of Default, to ask for, demand,
collect, ▇▇▇ for, recover, compound, receive and give acquittance and receipts
for moneys due and to become due under or in respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (b) above;
(d) during the continuance of an Event of Default, to file any claims
or take any action or institute any proceedings that Assignee may deem necessary
or desirable for the collection of any of the Collateral or otherwise to endorse
the rights of Assignee with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens permitted
under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Assignee in its
sole discretion, any such payments made by Assignee to become obligations of
Assignor to Assignee, due and payable immediately without demand; and
(f) upon the occurrence and during the continuation of an Event of
Default, (i) to execute and deliver any of the assignments or documents
requested by Assignee pursuant to Section 16(b), (ii) to grant or issue an
exclusive or non-exclusive license to the Collateral or any portion thereof to
any Person, and (iii) otherwise generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though Assignee were the absolute owner thereof for all
purposes, and to do, at Assignee's option and Assignor's expense, at any time or
from time to time, all acts and things that Assignee deems necessary to protect,
preserve or realize upon the Collateral and Assignee's security interest therein
in order to effect the intent of this Agreement, all as fully and effectively as
Assignor might do.
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SECTION 14. ASSIGNEE MAY PERFORM. If Assignor fails to perform any
agreement contained herein, Assignee may itself perform, or cause performance
of, such agreement, and the expenses of Assignee incurred in connection
therewith shall be payable by Assignor under Section 18.
SECTION 15. STANDARD OF CARE. The powers conferred on Assignee
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Assignee shall have no
duty as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral.
Assignee shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Assignee accords its own property.
SECTION 16. REMEDIES. If any Event of Default shall have occurred and
be continuing:
(a) Assignee may exercise in respect of the Collateral, in addition to
all other rights and remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "CODE") (whether
or not the Code applies to the affected Collateral), and also may (i) require
Assignor to, and Assignor hereby agrees that it will at its expense and upon
request of Assignee forthwith, assemble all or part of the Collateral as
directed by Assignee and make it available to Assignee at a place to be
designated by Assignee that is reasonably convenient to both parties, (ii) enter
onto the property where any Collateral is located and take possession thereof
with or without judicial process, (iii) prior to the disposition of the
Collateral, store the Collateral or otherwise prepare the Collateral for
disposition in any manner to the extent Assignee deems appropriate, (iv) take
possession of Assignor's premises or place custodians in exclusive control
thereof, remain on such premises and use the same for the purpose of taking any
actions described in the preceding clause (iii) and collecting any Secured
Obligation, (v) exercise any and all rights and remedies of Assignor under or in
connection with the contracts related to the Collateral or otherwise in respect
of the Collateral, including without limitation any and all rights of Assignor
to demand or otherwise require payment of any amount under, or performance of
any provision of, such contracts, and (vi) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of Assignee's offices or elsewhere, for cash, on credit
or for future delivery, at such time or times and at such price or prices and
upon such other terms as Assignee may deem commercially reasonable. Assignee or
any Lender may be the purchaser of any or all of the Collateral at any such sale
and Assignee, as agent for and representative of Lenders (but not any Lender or
Lenders in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing), shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any
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such public sale, to use and apply any of the Secured Obligations as a credit on
account of the purchase price for any Collateral payable by Assignee at such
sale. Each purchaser at any such sale shall hold the property sold absolutely
free from any claim or right on the part of Assignor, and Assignor hereby waives
(to the extent Permitted by applicable law) all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. Assignor agrees
that, to the extent notice of sale shall be required by law, at least ten days'
notice to Assignor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
Assignee shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. Assignee 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. Assignor hereby waives any claims against Assignee arising by
reason of the fact that the price at which any Collateral may have been sold at
such a private sale was less than the price which might have been obtained at
a public sale, even if Assignee accepts the first offer received and does not
offer such Collateral to more than one offeree. If the proceeds of any sale or
other disposition of the Collateral are insufficient to pay all the Secured
Obligations, Assignor shall be liable for the deficiency and the fees of any
attorneys employed by Assignee to collect such deficiency.
(b) Upon written demand from Assignee, Assignor shall execute and
deliver to Assignee an assignment or assignments of the Patents and such other
documents as are necessary or appropriate to carry out the intent and purposes
of this Agreement; provided that the failure of Assignor to comply with such
demand will not impair or affect the validity of the conditional assignment
effected by Section 2 or its effectiveness upon notice by Assignee as specified
in Section 2. Assignor agrees that such an assignment (including without
limitation the conditional assignment effected by Section 2) and/or recording
shall be applied to reduce the Secured Obligations outstanding only to the
extent that Assignee (or any Lender) receives cash proceeds in respect of the
sale of, or other realization upon, the Collateral.
SECTION 17. APPLICATION OF PROCEEDS. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Assignee in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of Assignee, be held by Assignee as Collateral
for, and/or then, or at any other time thereafter, applied in full or in part by
Assignee against, the Secured Obligations in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Assignee and its agents and counsel, and all other expenses, liabilities
and advances made or incurred by Assignee in connection therewith, and all
amounts for which Assignee is entitled to indemnification hereunder and
all advances made by Assignee hereunder for the account of Assignor, and
to the payment of all
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costs and expenses paid or incurred by Assignee in connection with the
exercise of any right or remedy hereunder, all in accordance with
Section 18;
SECOND: To the payment of all other Secured Obligations in such order
as Assignee shall elect; and
THIRD: To the payment to or upon the order of Assignor, or to whosoever
may be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, of any surplus then remaining from such proceeds.
SECTION 18. INDEMNITY AND EXPENSES.
(a) Assignor agrees to indemnify Assignee and each Lender from and
against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result
solely from Assignee's or such Lender's gross negligence or willful misconduct
as finally determined by a court of competent jurisdiction.
(b) Assignor shall pay to Assignee upon demand the amount of any and
all costs and expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that Assignee may incur in connection
with (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 Collateral, (iii) the exercise or enforcement of any of the rights of
Assignee hereunder, or (iv) the failure by Assignor to perform or observe any of
the provisions hereof.
SECTION 19. CONTINUING ASSIGNMENT AND SECURITY INTEREST: TRANSFER OF
LOANS. This Agreement shall create a continuing security interest in, and
conditional assignment of, the Collateral and shall (a) remain in full force and
effect until the payment in full of the Secured Obligations, the cancellation or
termination of the Commitments and the cancellation or expiration of all
outstanding Letters of Credit, (b) be binding upon Assignor, its permitted
successors and assigns, and (c) inure, together with the rights and remedies of
Assignee hereunder, to the benefit of Assignee and its successors, transferees
and assigns. Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 10.1 of the Credit Agreement, any
Lender may assign or otherwise transfer any Loans held by it to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to Lenders herein or otherwise. Upon the
payment in full of all Secured Obligations, the cancellation or termination of
the Commitments and the cancellation or expiration of all outstanding Letters of
Credit, the security interest and conditional assignment granted hereby shall
terminate and all rights to the Collateral shall revert to Assignor. Upon any
such termination Assignee will, at Assignor's expense, execute and deliver to
Assignor such documents as Assignor shall reasonably request to evidence such
termination.
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SECTION 20. ASSIGNEE AS AGENT.
(a) Assignee has been appointed to act as Assignee hereunder by
Lenders. Assignee shall be obligated, and shall have the right hereunder, to
make demands, to give notices, to exercise or refrain from exercising any
rights, and to take or refrain from taking any action (including, without
limitation, the release or substitution of Collateral), solely in accordance
with this Agreement and the Credit Agreement.
(b) Assignee shall at all times be the same Person that is Agent under
the Credit Agreement. Written notice of resignation by Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute notice of
resignation as Assignee under this Agreement; removal of Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute removal as Assignee
under this Agreement; and appointment of a successor Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute appointment of a
successor Assignee under this Agreement. Upon the acceptance of any appointment
as Agent under subsection 9.5 of the Credit Agreement by a successor Agent, that
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Assignee under
this Agreement, and the retiring or removed Assignee under this Agreement shall
promptly (i) transfer to such successor Assignee all sums, securities and other
items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Assignee under this Agreement, and (ii) execute and
deliver to such successor Assignee such amendments to financing statements, and
take such other actions, as may be necessary or appropriate in connection with
the assignment to such successor Assignee of the security interests created
hereunder, whereupon such retiring or removed Assignee shall be discharged from
its duties and obligations under this Agreement. After any retiring or removed
Agent's resignation or removal hereunder as Assignee, the provisions of this
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement while it was Assignee hereunder.
SECTION 21. AMENDMENTS; ETC. Subject to Section 6(a), no amendment,
modification, termination or waiver of any provision of this Agreement, and no
consent to any departure by Assignor therefrom, shall in any event be effective
unless the same shall be in writing and signed by Assignee and, in the case of
any such amendment or modification, by Assignor. Any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it was given.
SECTION 22. NOTICES. Any notice or other communication herein required
or permitted to be given shall be in writing and may be personally served,
telexed or sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by courier
service, upon receipt of telefacsimile or telex, or four Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes
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hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or, as to either party, such other
address as shall be designated by such party in a written notice delivered to
the other party hereto.
SECTION 23. FAILURE OR INDULGENCE NOT WAIVER, REMEDIES CUMULATIVE. No
failure or delay on the part of Assignee in the exercise of any power, right or
privilege hereunder shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude any other or
further exercise thereof or of any other power, right or privilege. All rights
and remedies existing under this Agreement are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
SECTION 24. SEVERABILITY. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 25. HEADINGS. Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
SECTION 26. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES,
EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE PERFECTION OF THE SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK. Unless otherwise defined herein or in the Credit Agreement, terms used
in Articles 8 and 9 of the Uniform Commercial Code in the State of New York are
used herein as therein defined.
SECTION 27. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ASSIGNOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT
ASSIGNOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF
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FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT. Assignor hereby agrees that service
of all process in any such proceeding in any such court may be made by
registered or certified mail, return receipt requested, to Assignor at its
address provided in Section 22, such service being hereby acknowledged by
Assignor to be sufficient for personal jurisdiction in any action against
Assignor in any such court and to be otherwise effective and binding service in
every respect. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of Assignee to bring
proceedings against Assignor in the courts of any other jurisdiction.
SECTION 28. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY LAW,
ASSIGNOR AND ASSIGNEE HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including without limitation contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims.
Assignor and Assignee each acknowledge that this waiver is a material inducement
for Assignor and Assignee to enter into a business relationship, that Assignor
and Assignee have already relied on this waiver in entering into this Agreement
and that each will continue to rely on this waiver in their related future
dealings. Assignor and Assignee further warrant and represent that each has
reviewed this waiver with its legal counsel, and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 29. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Assignor and Assignee have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
FWT, INC.
By: [ILLEGIBLE]
---------------------------------
Title: CEO
--------------------------
Notice Address:
FWT, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
BT COMMERCIAL CORPORATION
as Assignee
By: /s/ ▇▇▇▇▇▇ SUN
---------------------------------
Title: Vice President
-------------------------
Notice Address:
BT Commercial Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop #4032
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Bhartai ▇▇▇▇▇▇
▇-▇
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SCHEDULE A (to Exhibit 10.24)
TO COMPANY PATENT COLLATERAL
ASSIGNMENT AND SECURITY AGREEMENT
Patents Issued and Patents Pending:
Patent No. Issue Date Invention Inventor
--------------- -------------------- ----------------------- -------------------
5,649,402 July 22, 1997 Antenna Support For FWT, Inc.
Power Transmission (Assignee)
Tower
Application No. Filing Date Invention Assignee
---------------- --------------------- ------------------------ ------------------
08/877,717 June 23, 1997 Antenna Support For FWT, Inc.
Power Transmission
Tower
08/202,444 February 28, 1994 Tree Styled Monopole FWT, Inc.
Tower
08/381,504 January 31, 1995 Tree Styled Monopole FWT, Inc.
Tower
The following reflect the status of the foreign counterparts to United
States Patent No. 5,649,402 issued July 22, 1997.
CANADA
The Canadian counterpart was filed on March 27, 1996 and was assigned
Patent File No. 2,172,743. The application was laid open on March 2,
1997. The first maintenance fee is due on March 27, 1998. A Request for
Substantive Examination is due by March 27, 2003. The application is
pending.
MALAYSIA
The Malaysian counterpart was filed on August 22, 1996 and was assigned
Application No. PI 9603450. A Request for Substantive Examination is
due by August 22, 1998; however, ▇▇▇ ▇▇▇ & Kandiah, FWT, Inc.'s foreign
associate, has been instructed to file a Request for Modified
Substantive Examination based on the issued United States patent.
PCT INTERNATIONAL
The PCT International Request designating all regions and countries
(except the United States) was filed on August 20, 1996 and was
assigned International Application No. PCT/US96/13733. A Demand for
International Preliminary
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SCHEDULE B (to Exhibit 10.24)
TO
COMPANY PATENT COLLATERAL SECURITY AGREEMENT
Permitted Patent Liens:
(1) Tree Styled Monopole Tower - Patent Application Serial No. 08/202,444,
(Attorney's Docket No. 1684B-25663), filed February 28, 1994. The Patent
rights are held jointly and severally among the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ who are both affiliated with PAL Cellular Group, Inc.
and hold joint and several rights to the above-mentioned patent in their
individual capacities.
(2) Tree Styled Monopole Tower - Patent Application Serial No. 08/381,504,
(Attorney's Docket No. 1684B-25357), filed January 31, 1995. The Patent
rights are held jointly and severally among the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ who are both affiliated with PAL Cellular Group, Inc.
and hold joint and several rights to the above-mentioned patent in their
individual capacities.
Schedule B-1
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Examination was filed on March 31, 1997. A favorable International
Preliminary Examination Report was mailed on May 21, 1997. The deadline
for entering the National Phase is March 1, 1998; however, FWT, Inc.
has entered the National Phase early in Brazil and South Korea (see
below).
BRAZIL
The Brazilian National Phase application was filed on August 1, 1997,
and assigned a filing date of August 20, 1996 and Deposit ▇▇.
▇▇▇/▇▇▇▇/▇▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ National Phase application was filed on August 1, 1997
and was assigned patent Application No. 705250 in 1997. A Request for
Examination is due by August 19, 2001.
(1) POWERMOUNT trademark - Registration No. 2,088,202.
(2) SMARTROCC trademark - Registration No. 1,944,176.
Computer Software Licenses:
(1) PJF Pole Automated Telecom Monopole Design and Analysis Software ("PJF
Pole") under Software License Agreement between ▇▇▇▇ ▇. ▇▇▇▇ and
Company, an Ohio corporation, and FWT, Inc.
(2) PJF Caisson (monopole foundation design).