TRADEMARK SECURITY AGREEMENT
THIS TRADEMARK SECURITY AGREEMENT (this "Security Agreement") made as of
this 26th day of June 2002, by MTS PACKAGING SYSTEMS, INC., a Florida
corporation ("Grantor") in favor of LASALLE BUSINESS CREDIT, INC., as Agent
("Agent").
W I T N E S S E T H
WHEREAS, Grantor and Medical Technology Systems, Inc. ("MTS"), as the
borrowers, Agent, Standard Federal Bank National Association, as lender
("Lender"), and the Guarantors named therein are parties to that certain Loan
and Security Agreement of even date herewith (as amended, amended, restated or
otherwise modified from time to time, the "Loan Agreement") and other related
loan documents of even date herewith (collectively, with the Loan Agreement, and
as each may be amended, restated or otherwise modified from time to time, the
"Financing Agreements"), which Financing Agreements provide (i) for Agent and/or
Lender from time to time to extend credit to or for the account of the Grantor
and MTS and, as a condition to such extensions of credit, (ii) for the Grantor
to grant to Agent, for its benefit and for the benefit of Lender, a security
interest in certain of the Grantor's assets, including, without limitation, its
trademarks and trademark applications;
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, Borrower agrees as follows:
1. Incorporation of Financing Agreements. The Financing 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 Agreement.
2. Grant and Reaffirmation of Grant of Security Interests. To secure the
complete and timely payment and satisfaction of the Liabilities, Grantor hereby
grants to Agent, for its benefit and for the benefit of Lender, and hereby
reaffirms its prior grant pursuant to the Financing Agreements of, a continuing
security interest in Grantor's entire right, title and interest in and to all of
its now owned or existing and hereafter acquired or arising trademarks,
trademark license agreement, whether as licensor or licensee, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, service marks, logos, other business identifiers, prints and labels on
which any of the foregoing have appeared or appear, all registrations and
recordings thereof, and all applications (other than "intent to use"
applications until a verified statement of use is filed with respect to such
applications) in connection therewith, including, without limitation, the
trademarks and applications listed on Schedule A attached hereto and made a part
hereof and the trademarks, and renewals thereof, and all income, royalties,
damages and payments now or hereafter due and/or payable under or with respect
to 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 and/or collectively
referred to as the "Trademarks"); all rights corresponding to any of the
foregoing throughout the world and the goodwill of the Grantor's business
connected with the use of and symbolized by the Trademarks.
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3. Warranties and Representations. Grantor warrants and represents to Agent
that:
(a) no Trademark has been adjudged invalid or unenforceable by a court
of competent jurisdiction nor has any such Trademark been cancelled, in
whole or in part and each such Trademark is presently subsisting;
(b) Grantor is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each Trademark, free and
clear of any liens, charges and encumbrances, including without limitation,
shop rights and covenants by Grantor not to xxx third persons, other than
liens in favor of the Subordinated Lender, which are subordinate and junior
to the liens created hereunder in favor of Agent, and Permitted Liens;
(c) Grantor has no notice of any suits or actions commenced or
threatened with reference to any Trademark; and
(d) Grantor has the unqualified right to execute and deliver this
Security Agreement and perform its terms.
4. Restrictions on Future Agreements. Grantor agrees that, until the
Liabilities shall have been paid and satisfied in full and all of the Financing
Agreements shall have been terminated, Grantor shall not, without the prior
written consent of Agent, sell or assign its interest in any Trademark or enter
into any other agreement with respect to any Trademark which would affect the
validity or enforcement of the rights transferred to Agent under this Security
Agreement.
5. New Trademarks. Grantor represents and warrants that, based on a
diligent investigation by Grantor, the Trademarks listed on Schedule A
constitute all of the federally registered Trademarks, and federal applications
for registration of Trademarks (other than "intent to use" applications until a
verified statement of use is filed with respect to such applications) now owned
by Grantor. If, before the Liabilities shall have been paid and satisfied in
full or before the Financing Agreements have been terminated, Grantor shall (i)
become aware of any existing Trademarks of which Grantor has not previously
informed Agent, or (ii) become entitled to the benefit of any Trademarks, which
benefit is not in existence on the date hereof, the provisions of this Security
Agreement above shall automatically apply thereto and Grantor shall give to
Agent prompt written notice thereof. Grantor hereby authorizes Agent to modify
this Security Agreement by amending Schedule A to include any such Trademarks.
6. Term. The term of this Security Agreement shall extend until the payment
and satisfaction in full of the Liabilities and the termination of all of the
Financing Agreements. Grantor agrees that, during the continuance of an Event of
Default, the use by Agent of all Trademarks shall be without any liability for
royalties or other related charges from Agent to Grantor.
7. Product Quality. Grantor agrees to maintain the quality of any and all
products in connection with which the Trademarks are used, consistent with
commercially reasonable business practices. During the continuance of an Event
of Default, Grantor agrees that Agent, or a conservator appointed by Agent,
shall have the right to establish such additional product quality controls as
Agent, or said conservator, in its reasonable judgment, may deem necessary to
assure maintenance of the quality of products sold by Grantor under the
Trademarks.
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8. Release of Security Agreement. This Security Agreement is made for
Collateral purposes only. Upon payment and satisfaction in full of the
Liabilities and termination of all of the Financing Agreements, Agent shall take
such actions as may be necessary or proper to terminate the security interests
created hereby and pursuant to the Financing Agreements.
9. Expenses. All expenses incurred in connection with the performance of
any of the agreements set forth herein shall be borne by Grantor. All fees,
costs and expenses, of whatever kind or nature, including reasonable attorneys'
fees and legal expenses, actually incurred by Agent and/or Lender 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 actually incurred, maintenance fees, encumbrances or otherwise in
protecting, maintaining or preserving the Trademarks or in defending or
prosecuting any actions or proceedings arising out of or related to the
Trademarks shall be borne by and paid by Grantor and until paid shall constitute
Liabilities.
10. Duties of Grantor. Grantor shall have the duty (i) to file and
prosecute diligently any trademark applications pending as of the date hereof or
hereafter until the Liabilities shall have been paid and satisfied in full and
all of the Financing Agreements have been terminated, (ii) to preserve and
maintain all rights in the Trademarks, as commercially reasonable and (iii) to
ensure that the Trademarks are and remain enforceable, as commercially
reasonable. Any expenses incurred in connection with the Liabilities under this
Section 10 shall be borne by Grantor.
11. Agent's Right to Xxx. During the continuance of an Event of Default,
Agent shall have the right, but shall in no way be obligated, to bring suit in
its own name to enforce the Trademarks and, if Agent shall commence any such
suit, Grantor shall, at the request of Agent, do any and all lawful acts and
execute any and all proper documents required by Agent in aid of such
enforcement and Grantor shall promptly, upon demand, reimburse and indemnify
Agent for all costs and expenses actually incurred by Agent in the exercise of
its rights under this Section 11.
12. Waivers. No course of dealing between Grantor and Agent, nor any
failure to exercise, nor any delay in exercising, on the part of Agent, any
right, power or privilege hereunder or under any of the Financing 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 Security Agreement 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 Security Agreement in any
jurisdiction.
14. Modification. This Security Agreement 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.
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15. Cumulative Remedies; Power of Attorney; Effect on Financing Agreements.
All of Agent's rights and remedies with respect to the Trademarks, whether
established hereby or by the Financing Agreements, or by any other agreements or
by law shall be cumulative and may be exercised singularly or concurrently.
Grantor hereby authorizes Agent, during the continuance of an Event of Default,
to make, constitute and appoint any officer or agent of Agent as Agent may
select, in its sole discretion, as Grantor's true and lawful attorney-in-fact,
with power to (i) endorse Grantor's name on all applications, documents, papers
and instruments necessary or desirable for Agent in the use of the Trademarks or
(ii) take any other actions with respect to the Trademarks as Agent deems to be
in the best interest of Agent, or (iii) grant or issue any exclusive or
non-exclusive license under the Trademarks to anyone, or (iv) assign, pledge,
convey or otherwise transfer title in or dispose of the Trademarks to anyone.
Grantor 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 the
Liabilities shall have been paid and satisfied in full and the Financing
Agreements have been terminated. Grantor acknowledges and agrees that this
Security Agreement is not intended to limit or restrict in any way the rights
and remedies of Agent and/or Lender under any of the Financing Agreements but
rather is intended to facilitate the exercise of such rights and remedies. Agent
and Lender shall have, in addition to all other rights and remedies given them
by the terms of this Security Agreement and the Financing 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 the Commonwealth of Pennsylvania.
16. Binding Effect; Benefits. This Security Agreement shall be binding upon
Grantor and its successors and assigns, and shall inure to the benefit of Agent,
and its successors, nominees and assigns.
17. Governing Law. This Security Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania and
applicable federal law.
18. Headings. Paragraph headings used herein are for convenience only and
shall not modify the provisions which they precede.
19. Further Assurances. Grantor agrees to execute and deliver such further
agreements, instruments and documents, and to perform such further acts, as
Agent shall reasonably request from time to time in order to carry out the
purpose of this Security Agreement and agreements set forth herein.
20. Survival of Representations. All representations and warranties of
Grantor contained in this Security Agreement shall survive the execution and
delivery of this Security Agreement.
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IN WITNESS WHEREOF, Grantor has duly executed this Security Agreement as of
the date first written above.
MTS PACKAGING SYSTEMS, INC.
By:___________________________________
Name
Title:
Agreed and Accepted
As of the Date First Written Above
LASALLE BUSINESS CREDIT, INC.
By:____________________________
Name:
Title:
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SCHEDULE A
TRADEMARK REGISTRATIONS
Trademark Description U.S. Serial/Registration No. Date Registered
--------------------- ---------------------------- ---------------
TRADEMARK APPLICATIONS
Trademark Application Description U.S. Application No. Date Applied
--------------------------------- -------------------- ------------
TRADEMARK LICENSES
Description of License U.S. Serial/Registration No. Date Registered
---------------------- ---------------------------- ---------------
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COMMONWEALTH OF PHILADELPHIA :
: SS.
COUNTY OF PHILADELPHIA :
On this, the ____ day of June, 2002, before me, a Notary Public, personally
appeared ____________, who acknowledged himself to be a Vice President of
LaSalle Business Credit, Inc., and that he as such officer, being duly
authorized to do so, executed the foregoing instrument for the purposes therein
contained by signing the name of the corporation by himself as such officer.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
____________________________
Notary Public
My commission expires
COMMONWEALTH OF PHILADELPHIA :
: SS.
COUNTY OF PHILADELPHIA
On this, the __ day of June, 2002, before me, a Notary Public, personally
appeared ______________, who acknowledged himself to be _______ of MTS Packaging
Systems, Inc., a Florida corporation, and that he as such officer, being duly
authorized to do so, executed the foregoing instrument for the purposes therein
contained by signing the name of the corporation by himself as such officer.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
____________________________
Notary Public
My commission expires
