Exhibit 10.3

 

TRADEMARK SECURITY AGREEMENT

THIS TRADEMARK SECURITY AGREEMENT (this “Security Agreement”) is made as of this
22ND day of May, 2007, by RESISTANCE TECHNOLOGY, INC., a Minnesota corporation
(the “Grantor”), in favor of LASALLE BANK NATIONAL ASSOCIATION, a national
banking association (the “Bank”), with an office at 3500 IDS Center, 80 South
8th Street, Minneapolis, MN 55402.

RECITALS:

A.           The Grantor owns the trademarks and trademark applications listed
on Schedule A annexed hereto.

B.            The Grantor, certain of its affiliates and the Bank are parties to
a certain Loan and Security Agreement dated on or about the date hereof (as
amended, amended and 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 or otherwise
modified from time to time, the “Loan Documents”), which Loan Documents provide
for, among other things, (i) Bank from time to time to extend credit to or for
the account of the Grantor, and (ii) the grant by Grantor to the Bank of a
security interest in certain of Grantor’s assets, including, without limitation,
its trademarks and trademark applications.

AGREEMENTS:

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, Grantor agrees as follows:

1.            Incorporation of Loan Documents. The Loan Documents 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 Obligations, Grantor
hereby grants to the Bank, and hereby reaffirms its prior grant pursuant to the
Loan Documents of, a continuing security interest in Grantor’s entire right,
title and interest in and to (a) all domain names, together with all contracts,
agreements, licenses and registrations relating thereto, and (b) all of its now
owned or existing and hereafter acquired or arising trademarks, 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
sue 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. To induce the Bank to enter into
the Loan Agreement and to extend the loans and other financial accommodations
provided for therein, Grantor warrants and represents that:

(a)           no registered 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 sue third persons except for Permitted
Liens;

(c)           Grantor has no notice of any suits or actions commenced or
threatened with reference to any Trademark except as disclosed in the Loan
Agreement and related schedules thereto; 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
Obligations shall have been satisfied in full and the Loan Documents shall have
been terminated, Grantor shall not, without the prior written consent of the
Bank, 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 the Bank 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 Obligations shall have been satisfied in full or
before the Loan Documents have been terminated, Grantor shall (a) become aware
of any existing registered Trademarks of which Grantor has not previously
informed the Bank, or (b) become entitled to the benefit of any registered
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 the Bank prompt written notice thereof. Grantor hereby authorizes
the Bank to modify this Security Agreement by amending Schedule A to include any
such Trademarks.

6.            Terms. The term of this Security Agreement shall extend until the
payment in full of all Obligations and the termination of the Loan Documents.
Grantor agrees that following the occurrence and during the continuance of an
Event of Default under the Loan Agreement, the use by the Bank of all Trademarks
shall be without any liability for royalties or other related charges from the
Bank to Grantor.

7.            Release of Security Agreement. This Security Agreement is made for
collateral purposes only and effects no present transfer of title as to any
Trademarks. Upon payment in full of all Obligations and termination of the Loan
Documents, Bank shall take execute and deliver such documents and take such
actions as may be reasonably necessary or proper to terminate the security
interests created hereby and pursuant to the Loan Documents.

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8.            Expenses. All reasonable expenses incurred in connection with the
performance of any of the agreements set forth herein shall be borne by Grantor.
All reasonable fees, costs and expenses, of whatever kind or nature, including
reasonable attorneys’ fees and legal expenses, incurred by the Bank 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 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
Obligations.

9.            Duties of Grantor. Grantor shall have the duty (a) to file and
prosecute diligently any trademark applications pending as of the date hereof or
hereafter until the Obligations shall have been paid in full and the Loan
Documents have been terminated, (b) to preserve and maintain all rights in the
Trademarks, as commercially reasonable and (c) to ensure that the Trademarks are
and remain enforceable, as commercially reasonable. Any expenses incurred in
connection with the Obligations under this Section 10 shall be borne by Grantor.

10.          Bank’s Right to Sue. After the occurrence of an Event of Default
that is continuing, Bank shall have the right, but shall in no way be obligated,
to bring suit in its own name, or in the name of Grantor, to enforce the
Trademarks and, if Bank shall commence any such suit, Grantor shall, at the
request of Bank, do any and all lawful acts and execute any and all proper
documents required by Bank in aid of such enforcement and Grantor shall
promptly, upon demand, reimburse and indemnify Bank for all costs and expenses
incurred by Bank in the exercise of its rights under this Section 11.

11.          Waivers. No course of dealing between Grantor and Bank, nor any
failure to exercise, nor any delay in exercising, on the part of Bank, any
right, power or privilege hereunder or under the Loan Documents 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.

12.          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.

13.          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.

14.          Cumulative Remedies; Power of Attorney; Effect on Loan Documents.
All of Bank’s rights and remedies with respect to the Trademarks, whether
established hereby or by the Loan Documents, or by any other agreements or by
law shall be cumulative and may be exercised singularly or concurrently. Grantor
hereby authorizes Bank after the occurrence of an Event of Default that is
continuing, to make, constitute and appoint any officer or agent of Bank as Bank
may select, in its sole discretion, as Grantor’s true and lawful
attorney-in-fact, with power to (a) endorse Grantor’s name on all applications,
documents, papers and instruments necessary or desirable for Bank in the use of
the Trademarks or (b) grant or issue any exclusive or non-exclusive license
under the Trademarks to anyone, or (c) 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 in
accordance with the terms hereof, except for the gross negligence or willful
misconduct of such attorney. This power of attorney shall be irrevocable until
the Obligations shall have been paid in full and the Loan Documents 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 Bank under
the Loan Documents but rather is intended to facilitate the exercise of such
rights and remedies. Bank shall have, in addition to all other rights and
remedies given it by the terms of this Security Agreement and the Loan
Documents, 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.

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15.          Binding Effect; Benefits. This Security Agreement shall be binding
upon be binding upon and shall inure to the benefit of Grantor and Bank, and
their respective successors, nominees and assigns.

16.          Governing Law. This Security Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois and applicable
federal law.

17.          Headings. Paragraph headings used herein are for convenience only
and shall not modify the provisions which they precede.

18.          Further Assurances. Grantor agrees to execute and deliver such
further agreements, instruments and documents, and to perform such further acts,
as Bank shall reasonably request from time to time in order to carry out the
purpose of this Security Agreement and agreements set forth herein. Bank may
record this Security Agreement, an abstract thereof, or any other document
describing Bank’s interest in the Trademarks with the U.S. Patent and Trademark
Office, at the expense of Grantor. In addition, Grantor authorizes Bank to file
financing statements describing the Trademarks in any UCC filing office deemed
appropriate by Bank. If the Grantor shall at any time hold or acquire a
commercial tort claim arising with respect to any one or more of the Trademarks,
Grantor shall immediately notify Bank in a writing signed by the Grantor of the
brief details thereof and grant to the Bank in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Security
Agreement, with such writing to be in form and substance satisfactory to the
Bank.

19.          Survival of Representations. All representations and warranties of
Grantor contained in this Security Agreement shall survive the execution and
delivery of this Security Agreement and shall be remade on the date of each
borrowing under the Loan Documents.

 

[Remainder of page left blank;

signature page follows]

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IN WITNESS WHEREOF, Grantor has duly executed this Security Agreement as of the
date first written above.

 

RESISTANCE TECHNOLOGY, INC.
a Minnesota corporation

 

 

By:   

/s/   Scott Longval

 

Name:   

Scott Longval

 

Title: 

Chief Financial Officer

 

 

Agreed to and accepted

as of the date first written above:

LASALLE BANK NATIONAL ASSOCIATION,

a national banking association

By:  

/s/   Peter L. Eaton

Name:   

Peter L. Eaton

Title: 

Senior Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURE PAGE TO TRADEMARK SECURITY AGREEMENT (RTI)

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SCHEDULE A

Trademark Registrations and Applications

 

Trademark  

Registration or Serial Number

Description of Trademark Item

Registration or Filing Date of Trademark

 

1,528,056

ULTIMA

March 7, 1989

 

1,539,058

RTI and Design

May 16, 1989

1,539,610

RTI

May 16, 1989

2,643,600

CLARI-D

October 29, 2002

(78/727,001)

INTUNE

October 5, 2005

 

 

 

Applications:
                        None.

 

 

 

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