1
EXHIBIT 10.3.3.c
PATENT, TRADEMARK, COPYRIGHT AND LICENSE MORTGAGE
THIS PATENT, TRADEMARK, COPYRIGHT AND LICENSE MORTGAGE (the
"Mortgage") made as of this 26th day of August, 1999, by TELXON CORPORATION, a
Delaware corporation, with its principal business and chief executive office at
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx, Xxxx 00000 ("Mortgagor") in favor of FOOTHILL
CAPITAL CORPORATION, as agent for the Lenders from time to time party to the
Loan and Security Agreement referred to below, with an office at 00000 Xxxxx
Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000 ("Mortgagee"):
W I T N E S S E T H:
WHEREAS, Mortgagor, Mortgagee and certain lenders are parties
to a certain Loan and Security Agreement of even date herewith (the lenders that
are from time to time a party thereto being herein referred to as "Lenders") and
other related loan documents of even date herewith (collectively, the "Loan
Agreements"), which Loan Agreements provide (i) for Lenders to, from time to
time, extend credit to or for the account of Mortgagor and (ii) for the grant by
Mortgagor to Mortgagee, for the benefit of Mortgagee and Lenders, of a security
interest in certain of Mortgagor's assets, including, without limitation, its
patents, patent applications, trademarks, trademark applications, trade names,
service marks, service xxxx applications, copyrights, copyright applications,
goodwill and licenses;
NOW, THEREFORE, in consideration of the premises set forth
herein and for other good and valuable consideration, receipt and sufficiency of
which are hereby acknowledged, Mortgagor agrees as follows:
1. Incorporation of Loan Agreements. The Loan Agreements and
the terms and provisions thereof are hereby incorporated herein in their
entirety by this reference thereto. All terms capitalized but not otherwise
defined herein shall have the same meanings herein as in the Loan Agreements.
2. Mortgage of Patents, Trademarks and Licenses. To secure the
complete and timely satisfaction of all of Mortgagor's Obligations, Mortgagor
hereby grants a security interest in and mortgages to Mortgagee, for the benefit
of Mortgagee and each Lender, as and by way of a first mortgage and security
interest having priority over all other security interests, with power of sale
upon the occurrence and during the continuance of an Event of Default, to the
extent permitted by law, in all of Mortgagor's right, title and interest in and
to all of its now existing and hereafter created or acquired:
(a) patents and patent applications, including, without
limitation, the inventions and improvements described and claimed therein, and
those patents listed on Exhibit A attached hereto and hereby made a part hereof,
and (i) the reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, (ii) all income, damages and payments
2
now and hereafter due or payable under or 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 (all of
the foregoing patents and applications, together with the items described in
clauses (i)-(iv) of this subsection 2(a), are sometimes hereinafter referred to
individually as a "Patent" and, collectively, as the "Patents");
(b) trademarks, trademark registrations, trademark
applications, trade names and tradestyles, service marks, service xxxx
registrations, service xxxx applications and brand names, including, without
limitation, the trademarks, trade names, service marks and applications and
registrations thereof listed on Exhibit B attached hereto and hereby made a part
hereof, and (i) renewals or extensions, thereof, (ii) all income, damages and
payments now and hereafter due or payable 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 (all of
the foregoing trademarks, trade names, service marks and applications and
registrations thereof, together with the items described in clauses (i)-(iv) of
this subsection 2(b), are sometimes hereinafter referred individually as a
"Trademark" and, collectively, as the "Trademarks");
(c) copyrights, rights and interests in copyrights, works
protectable by copyrights, copyright registrations and copyright applications,
including, without limitation, the copyright registrations and applications
listed on Exhibit C attached hereto and made a part hereof, and all renewals of
any of the foregoing, all income, royalties, damages and payments now and
hereafter due and/or payable under or with respect to the any of the foregoing,
including, without limitation, damages, and payments for past, present and
future infringements of any of the foregoing and the right to xxx for past,
present and future infringements of any of the foregoing (all of the foregoing
are sometimes hereinafter individually, as a "Copyright" and, collectively as
the "Copyrights").
(d) license agreements (to the extent such license agreements
may be assigned without violating the terms of any such license agreement) with
respect to any of the Patents, Trademarks or Copyrights, or any other patent,
trademark, service xxxx, copyright or any application or registration thereof or
any other trade name or tradestyle between Mortgagor and any other party,
whether Mortgagor is a licensor or licensee under any such license agreement,
including, without limitation, the licenses listed on Exhibit D attached hereto
and hereby made a part hereof (all of the foregoing license agreements and
Mortgagor's rights thereunder are referred to collectively as the "Licenses");
and
(e) the goodwill of Mortgagor's business connected with and
symbolized by the Trademarks.
3. Warranties and Representations. Mortgagor warrants and
represents to Mortgagee that, except as set forth on Schedule 5.16 to the Loan
Agreement:
(a) no Patent, Trademark, Copyright or License has been
adjudged invalid or unenforceable nor has any such Patent, Trademark, Copyright
or, to the best of Mortgagor's
-2-
3
knowledge, no License been cancelled, in whole or in part and each such Patent,
Trademark, Copyright and License is presently subsisting;
(b) each Patent, Trademark, Copyright and License is valid and
enforceable;
(c) Mortgagor is the sole and exclusive owner of the entire
and unencumbered right, title and interest in and to each Patent, Trademark,
Copyright and License, free and clear of any liens, charges and encumbrances,
including, without limitation, licenses, shop rights and covenants by Mortgagor
not to xxx third persons except for Permitted Liens;
(d) Mortgagor has adopted, used and is currently using all its
Trademarks;
(e) Mortgagor has no notice of any suits or actions commenced
or threatened with reference to the Patents, Trademarks, Copyrights or Licenses;
and
(f) Mortgagor has the unqualified right to execute and deliver
this Mortgage and perform its terms.
4. Restrictions on Future Agreements. Mortgagor agrees that
until Mortgagor's Obligations shall have been satisfied in full and the Loan
Agreements shall have been terminated, Mortgagor shall not, without the prior
written consent of Mortgagee, sell or assign its interest in, or grant any
license or sublicense under, the Patents, Trademarks, Copyrights or Licenses, or
enter into any other agreement with respect to the Patents, Trademarks,
Copyrights or Licenses, and Mortgagor further agrees that it shall not take any
action or permit any action to be taken by others subject to its control,
including licensees, or fail to take any action which would materially and
adversely affect the validity or enforcement of the rights transferred to
Mortgagee under this Mortgage. Nothing in this Section 4 shall be deemed,
however, to prevent Mortgagor in its sound business discretion and without the
prior written consent of Mortgagee to notify third parties of actual or alleged
infringement of the Patents, Trademarks, Copyrights or Licenses and pursue all
avenues available by law to enforce Mortgagor's rights in the patents,
Trademarks, Copyrights or Licenses.
5. New Patents, Trademarks, and Licenses. Mortgagor represents
and warrants that the Patents, Trademarks, Copyrights and Licenses listed on
Exhibits A, B, C, and D, respectively, constitute all of the Patents,
Trademarks, Copyrights and Licenses now owned by Mortgagor. If, before
Mortgagor's Obligations shall have been satisfied in full or before the Loan
Agreements have been terminated, Mortgagor shall (a) become aware of any
existing Patents, Trademarks, copyright works, Copyrights or Licenses of which
Mortgagor has not previously informed Mortgagee, (b) obtain rights to any new
Patents, Trademarks or Licenses, or (c) become entitled to the benefit of any
Patents, Trademarks, Copyrights or Licenses which benefit is not in existence on
the date hereof, the provisions of this Mortgage above shall automatically apply
thereto and Mortgagor shall give to Mortgagee prompt written notice thereof.
Mortgagor hereby authorizes Mortgagee to modify this Mortgage by amending
Exhibits A, B, C and D, as applicable, to include any such Patents, Trademarks,
Copyrights and Licenses.
6. Royalties; Terms. The term of the mortgages granted herein
shall extend until the earlier of (a) the expiration of each of the respective
Patents, Trademarks, Copyrights and
-3-
4
Licenses assigned hereunder, and (b) the payment in full of Mortgagor's
Obligations and the termination of the Loan Agreements. Mortgagor agrees that
upon the occurrence and during the continuance of an Event of Default, the use
by Mortgagee of all Patents, Trademarks, Copyrights and Licenses shall be
worldwide, except as limited by their terms, and without any liability for
royalties or other related charges from Mortgagee to Mortgagor. Notwithstanding
anything to the contrary set forth herein or in any other Loan Documents, so
long as this Mortgage is in effect and so long as Mortgagee shall not have
commenced the exercise of any of its remedies hereunder or under the other Loan
Documents, Mortgagor shall continue to have the exclusive right to use the
Patents, Trademarks, Copyrights and Licenses and Mortgagee shall have no right
to use the Patents, Trademarks, Copyrights and Licenses or to issue any license
with respect thereto, or to assign, pledge or otherwise transfer title to the
Patents, Trademarks, Copyrights and Licenses to any other Person. Mortgagor
agrees not to sell, assign or further encumber (other than Permitted Liens) its
rights and interests in the Patents, Trademarks, Copyrights and Licenses without
the prior written consent of Mortgagee.
7. Product Quality. Mortgagor agrees (a) to maintain the
quality of any and all products in connection with which the Patents,
Trademarks, Copyrights and Licenses are used, consistent with commercially
reasonable business practices, and (b) to provide Mortgagee, upon Mortgagee's
reasonable request from time to time, with a certificate of an officer of
Mortgagor certifying Mortgagor's compliance with the foregoing. Upon the
occurrence and during the continuance of an Event of Default, Mortgagor agrees
that Mortgagee, or a conservator appointed by Mortgagee, shall have the right to
establish such additional product quality controls as Mortgagee, or said
conservator, in its reasonable judgment, may deem necessary to assure
maintenance of the quality of products sold by Mortgagor under the Patents,
Trademarks, Copyrights or Licenses.
8. Release of Mortgage. This Mortgage is made for collateral
purposes only. Upon payment in full of Mortgagor's Obligations and termination
of the Loan Agreements, Mortgagee shall execute and deliver to Mortgagor all
deeds, assignments and other instruments, and shall take such other actions, as
may be necessary or proper to re-vest in Mortgagor full title to the Patents,
Trademarks, Copyrights and Licenses, subject to any disposition thereof which
may have been made by Mortgagee pursuant to the Loan Agreements.
9. Expenses. All expenses incurred in connection with the
performance of any of the agreements set forth herein shall be borne by
Mortgagor. All reasonable fees, costs and expenses, of whatever kind or nature,
including attorneys' fees and legal expenses, incurred by Mortgagee in
connection with the filing or recording of any documents (including all taxes in
connection therewith) in public offices, the payment or discharge of any taxes,
reasonable counsel fees, maintenance fees, encumbrances or otherwise in
protecting, maintaining or preserving the Patents, Trademarks, Copyrights and
Licenses, or in defending or prosecuting any actions or proceedings arising out
of or related to the Patents, Trademarks, Copyrights and Licenses, shall be
borne by and paid by Mortgagor and shall be charged against the Obligations.
10. Duties of Mortgagor. Mortgagor shall have the duty (a) to
file and prosecute diligently any patent, trademark, service xxxx and copyright
applications pending as of the date hereof or hereafter until Mortgagor's
Obligations shall have been paid in full and the Loan
-4-
5
Agreements have been terminated, (b) upon the request of Mortgagee, to make
application on unpatented but patentable inventions and on trademarks and
service marks, (c) to preserve and maintain all rights in the Patents,
Trademarks, Copyrights and Licenses, and (d) to ensure that the Patents,
Trademarks and Licenses are and remain enforceable. Any expenses incurred in
connection with Mortgagor's obligations under this Section 10 shall be borne by
Mortgagor.
11. Mortgagee's Right to Xxx. After an Event of Default shall
have occurred and be continuing, Mortgagee shall have the right, but shall in no
way be obligated, to bring suit in its own name to enforce the Patents,
Trademarks, Copyrights and Licenses, and, if Mortgagee shall commence any such
suit, Mortgagor shall, at the request of Mortgagee, do any and all lawful acts
and execute any and all proper documents required by Mortgagee in aid of such
enforcement and Mortgagor shall promptly, upon demand, reimburse and indemnify
Mortgagee for all costs and expenses incurred by Mortgagee in the exercise of
its rights under this Section 11.
12. 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 or under the Loan
Agreements shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
13. 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.
14. Modification. This Mortgage cannot be altered, amended or
modified in any way, except as specifically provided in Section 5 hereof or by a
writing signed by the parties hereto.
15. Cumulative Remedies; Power of Attorney; Effect on Loan
Agreements. All of Mortgagee's rights and remedies with respect to the Patents,
Trademarks, Copyrights and Licenses, whether established hereby or by the Loan
Agreements, or by any other agreements or by law shall be cumulative and may be
exercised singularly or concurrently. Mortgagor hereby authorizes Mortgagee upon
the occurrence and during the continuance of an Event of Default, to make,
constitute and appoint any officer or agent of Mortgagee as Mortgagee may
select, in its sole discretion, as Mortgagor's true and lawful attorney-in-fact,
with power to (a) endorse Mortgagor's name on all applications, documents,
papers and instruments necessary or desirable for Mortgagee in the use of the
Patents, Trademarks, Copyrights and Licenses, or (b) take any other actions with
respect to the Patents, Trademarks, Copyrights and Licenses as Mortgagee deems
to be in the best interest of Mortgagee, or (c) grant or issue any exclusive or
non-exclusive license under the Patents, Trademarks, Copyrights or Licenses to
anyone, or (d) assign, pledge, convey or otherwise transfer title in or dispose
of the Patents, Trademarks, Copyrights or Licenses to anyone. Mortgagor hereby
ratifies all that such attorney shall lawfully do or cause to be done by virtue
hereof. This power of attorney shall be irrevocable until Mortgagor's
Obligations shall have been paid in full and the Loan Agreements have been
terminated. Mortgagor acknowledges and agrees
-5-
6
that this Mortgage is not intended to limit or restrict in any way the rights
and remedies of Mortgagee under the Loan Agreements but rather is intended to
facilitate the exercise of such rights and remedies. Mortgagee shall have, in
addition to all other rights and remedies given it by the terms of this Mortgage
and the Loan Agreements, all rights and remedies allowed by law and the rights
and remedies of a secured party under the Uniform Commercial Code as enacted in
Illinois.
16. Binding Effect; Benefits. This Mortgage shall be binding
upon Mortgagor and its respective successors and assigns, and shall inure to the
benefit of Mortgagee, its successors, nominees and assigns.
17. Governing Law. This Mortgage shall be governed by and
construed in accordance with the laws of the State of Illinois.
18. Headings. Paragraph headings used herein are for
convenience only and shall not modify the provisions which they precede.
19. Further Assurances. Mortgagor agrees to execute and
deliver such further agreements, instruments and documents, and to perform such
further acts, as Mortgagee shall reasonably request from time to time in order
to carry out the purpose of this Mortgage and agreements set forth herein.
20. Survival of Representations. All representations and
warranties of Mortgagor contained in this Mortgage shall survive the execution
and delivery of this Mortgage and shall be remade on the date of each borrowing
under the Loan Agreements.
-6-
7
IN WITNESS WHEREOF, Mortgagor has duly executed this Mortgage
in favor of Mortgagee as of the date first written above.
TELXON CORPORATION
By /s/ Xxxxx X. XxXxx
--------------------------
Its VP/CFO
-------------------------
-7-
8
STATE OF ILLINOIS )
) SS.
COUNTY OF XXXX )
The foregoing Patent, Trademark, Copyright and License
Mortgage was executed and acknowledged before me this 26 day of August, 1999, by
Xxxxx XxXxx, personally known to me to be the Vice President and Chief Financial
Officer of Telxon Corporation, a Delaware corporation, on behalf of such
corporation.
/s/ Xxxxx Xxxxxxx
-------------------------
NOTARY PUBLIC
"OFFICIAL SEAL"
XXXXX XXXXXXX
Notary Public, State of Illinois
My Commission Expires March 31, 2000
THIS INSTRUMENT PREPARED BY
AND AFTER RECORDING RETURN TO:
Xxxx Xxxxxxx, Esq.
Goldberg, Kohn, Bell, Black,
Xxxxxxxxxx & Xxxxxx, Ltd.
00 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000
-8-
