Exhibit 10.4

 

ASSIGNMENT OF AND AMENDMENT TO

IP SECURITY AGREEMENT

 

THIS ASSIGNMENT OF AND AMENDMENT TO IP SECURITY AGREEMENT (the “Assignment”), is
made on June 29, 2018, by and among BANK OF MONTREAL (“Assignor”), BMO HARRIS
BANK N.A. (“Assignee”), and TWIN DISC, INCORPORATED, a Wisconsin corporation
(“Grantor”).

 

RECITALS:

 

A.     Pursuant to the Credit Agreement, dated April 22, 2016, by and among
Borrower, Assignor and the lenders party thereto (the “2016 Credit Agreement”),
Grantor and Assignor entered into that certain Intellectual Property Security
Agreement, dated as of April 22, 2016 (the “IP Security Agreement”), a copy of
which is attached hereto as Exhibit A;

 

B.      Contemporaneously herewith, Assignee will refinance the credit
facilities extended by Assignor to Borrower under the 2016 Credit Agreement, and
finance additional credit facilities, pursuant to that certain Credit Agreement,
dated as of the date hereof, by and between Assignee and Borrower (the “2018
Credit Agreement”);

 

C.     Assignor now desires to assign its rights and obligations as Secured
Party and Bank (as defined herein) under the IP Security Agreement to Assignee,
and Assignee desires to accept such assignment; and

 

D.     The parties hereto also desire to amend the IP Security Agreement on the
terms and conditions provided herein.

 

NOW, THEREFORE, in consideration of the foregoing recitals which are
incorporated herein and made a part hereof, and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

AGREEMENT:

 

1.     Assignment and Assumption.

 

(a)     Assignor hereby assigns to Assignee, and Assignee hereby assumes from
Assignor, all of Assignor’s rights and obligations as Secured Party and Bank (as
defined herein) under the IP Security Agreement. The assignment set forth in
this Section 1(a) shall be without recourse to or representation or warranty
(except as expressly provided in this Assignment, in the other documents
executed in connection with this Assignment, or in the IP Security Agreement, as
assigned and amended) by Assignor.

 

(b)     Assignee shall become and be a party to the IP Security Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of Secured Party and Bank under the IP Security Agreement.

 

 

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(c)     In conjunction with the assignment hereunder, Assignor shall transfer
and deliver to Assignee any and all Collateral, and/or evidence thereof, in
Assignor’s possession. Until such time as the Collateral in Assignor’s
possession is transferred to Assignee, Assignor shall hold such Collateral for
the benefit of the Assignee.

 

2.     Amendments. The IP Security Agreement is hereby amended as follows:

 

(a)     Secured Party. The definition “Secured Parties” in the IP Security
Agreement is hereby amended and restated to mean “BMO Harris Bank N.A., a
national banking association.”

 

(b)     Administrative Agent. The definition of “Administrative Agent” in the IP
Security Agreement is hereby deleted in its entirety and replaced with the term
“Bank” (as defined herein). It is the intention of the parties hereto that, from
and after the date hereof, all references in the IP Security Agreement to the
Administrative Agent shall mean and be a reference to Bank.

 

(c)     Credit Agreement. The definition of “Credit Agreement” in the IP
Security Agreement is hereby amended and restated to mean “the Credit Agreement,
dated as of June 29, 2018, by and between Bank and Grantor, as the same may
hereafter be amended, restated, supplemented or otherwise modified.”

 

(d)     Security Agreement. The definition of “Security Agreement” in the IP
Security Agreement is hereby amended and restated to mean “the Security
Agreement, dated as of April 22, 2016, by and between Grantor and Bank, as
assigned to and amended by that certain Assignment of and Amendment to IP
Security Agreement, dated as of June 29, 2018, between Grantor, Bank and Bank of
Montreal, as assignor.”

 

3.     No Termination. The parties hereto acknowledge and agree that
notwithstanding any terms or conditions contained in the IP Security Agreement
to the contrary, neither this Assignment, nor any other assignment, amendment or
restatement of any other Loan Document (as defined in the 2016 Credit
Agreement), shall trigger a termination of the IP Security Agreement.

 

4.     No Novation. It is the intention of the parties hereto that this
Assignment not constitute a novation of the obligations under the IP Security
Agreement and that, from and after the date hereof, the IP Security Agreement
shall be amended hereby and all references herein to “hereunder,” “hereof,” or
words of like import and all references in any Loan Documents or any documents
entered into in connection therewith to the “IP Security Agreement” or words of
like import shall mean and be a reference to the IP Security Agreement as
assigned and amended hereby as and as hereafter amended, supplemented, restated
or renewed.

 

5.     Ratification. As hereby assigned and amended, the IP Security Agreement
and all representations and warranties provided therein are hereby ratified,
approved and confirmed in all respects.

 

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6.     Conflict. In the event of a conflict between the terms and conditions of
this Assignment and the terms and conditions of the IP Security Agreement, the
terms and conditions of this Assignment shall control.

 

7.     Counterparts. This Assignment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

 

8.     Capitalized Terms. Capitalized terms used but not otherwise defined in
this Assignment shall have the definitions given said terms in the IP Security
Agreement.

 

[Signatures on following page]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be duly
executed as of the date first above written.

 

 

ASSIGNOR:

 

BANK OF MONTREAL

 

 

By:                                                                        

Name:

Title:

 

 

 

ASSIGNEE:

 

BMO HARRIS BANK N.A.

 

 

By:________________________________

      Mark Czarnecki, Senior Vice President

 

 

 

 

GRANTOR:

 

TWIN DISC, INCORPORATED

 

 

By: ________________________________

Jeffrey S. Knutson, Vice President –     Finance and Chief Financial Officer

 

 

 

Signature Page to Assignment of Amendment to IP Security Agreement

 

 

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Exhibit A

Copy of IP Security Agreement

 

See attached.

 

 

 

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INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

THIS INTELLECTUAL PROPERTY SECURITY AGREEMENT (“IP Security Agreement”), dated
as of April 22, 2016, is made by TWIN DISC, INCORPORATED, a Wisconsin
corporation (the “Grantor”) in favor of BANK OF MONTREAL, a Canadian chartered
bank acting through its Chicago branch (the “Administrative Agent”), as
Administrative Agent for the secured parties under the Credit Agreement referred
to below (the “Secured Parties”).

 

WHEREAS, Grantor has entered into a Credit Agreement, dated as of even date
herewith (the “Credit Agreement”), with the Administrative Agent, the Lenders
(the “Lenders”) from time to time parties thereto, and the guarantors (the
“Guarantors”) from time to time parties thereto.

 

WHEREAS, as a condition precedent to the making of loans by the Lenders under
the Credit Agreement, Grantor has executed and delivered to the Administrative
Agent that certain Security Agreement, dated as of even date herewith, made by
and between the Grantor and the Administrative Agent (the “Security Agreement”).

 

WHEREAS, under the terms of the Security Agreement, the Grantor has granted to
the Administrative Agent, for the benefit of the Secured Parties, a security
interest in, among other property, certain intellectual property of the Grantor,
and have agreed to execute and deliver this IP Security Agreement, for recording
with national, federal and state government authorities, including, but not
limited to, the United States Patent and Trademark Office and the United States
Copyright Office.

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Grantor agrees with the Administrative Agent
as follows:

 

1.     Grant of Security. Grantor hereby pledges and grants to the
Administrative Agent for the ratable benefit of the Secured Parties a security
interest in and to all of the right, title and interest of Grantor in, to and
under the following, wherever located, and whether now existing or hereafter
arising or acquired from time to time (the “IP Collateral”):

 

(a)     the patents and patent applications set forth in the Perfection
Certificate dated contemporaneously herewith from Grantor (the “Perfection
Certificate”) and all reissues, divisions, continuations, continuations-in-part,
renewals, extensions and reexaminations thereof and amendments thereto (the
“Patents”);

 

(b)     the trademark registrations and applications set forth in the Perfection
Certificate, together with the goodwill connected with the use of and symbolized
thereby and all extensions and renewals thereof (the “Trademarks”), excluding
only United States intent-to-use trademark applications to the extent that, and
solely during the period in which, the grant, attachment or enforcement of a
security interest therein would, under applicable federal law, impair the
registrability of such applications or the validity or enforceability of
registrations issuing from such applications;

 

 

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(c)      the copyright registrations, applications and copyright registrations
and applications exclusively licensed to each Grantor set forth in the
Perfection Certificate, and all extensions and renewals thereof (the
“Copyrights”);

 

(d)     all rights of any kind whatsoever of such Grantor accruing under any of
the foregoing provided by applicable law of any jurisdiction, by international
treaties and conventions and otherwise throughout the world;

 

(e)     any and all royalties, fees, income, payments and other proceeds now or
hereafter due or payable with respect to any and all of the foregoing; and

 

(f)     any and all claims and causes of action, with respect to any of the
foregoing, whether occurring before, on or after the date hereof, including all
rights to and claims for damages, restitution and injunctive and other legal and
equitable relief for past, present and future infringement, dilution,
misappropriation, violation, misuse, breach or default, with the right but no
obligation to sue for such legal and equitable relief and to collect, or
otherwise recover, any such damages.

 

2.     Recordation. Grantor authorizes the Commissioner for Patents, the
Commissioner for Trademarks and the Register of Copyrights and any other
government officials to record and register this IP Security Agreement upon
request by the Administrative Agent.

 

3.     Loan Documents. This IP Security Agreement has been entered into pursuant
to and in conjunction with the Security Agreement, which is hereby incorporated
by reference. The provisions of the Security Agreement shall supersede and
control over any conflicting or inconsistent provision herein. The rights and
remedies of the Administrative Agent with respect to the IP Collateral are as
provided by the Credit Agreement, the Security Agreement and related documents,
and nothing in this IP Security Agreement shall be deemed to limit such rights
and remedies.

 

4.     Execution in Counterparts. This IP Security Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Delivery of an executed counterpart of a
signature page to this IP Security Agreement by facsimile or in electronic
(i.e., "pdf" or "tif" format) shall be effective as delivery of a manually
executed counterpart of this IP Security Agreement.

 

5.     Successors and Assigns. This IP Security Agreement will be binding on and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.

 

6.     Governing Law. This IP Security Agreement and any claim, controversy,
dispute or cause of action (whether in contract or tort or otherwise) based
upon, arising out of or relating to this IP Security Agreement and the
transactions contemplated hereby and thereby shall be governed by, and construed
in accordance with, the laws of the United States and the State of Wisconsin,
without giving effect to any choice or conflict of law provision or rule.

 

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7.     Notices. All written notices and other communications required hereunder
shall be sent to addresses as set forth in the Credit Agreement.

 

 

[Signatures on Following Page]

 

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IN WITNESS WHEREOF, each Grantor has caused this IP Security Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.

 

 

  TWIN DISC, INCORPORATED          

By____________________________________

Name:  Jeffrey S. Knutson

Title:  Vice President – Finance and Chief Financial Officer

             

BANK OF MONTREAL,

as Administrative Agent

         

By____________________________________

Name:  Jason Hoefler

Title:  Director

 

                                                                                   

Exhibit A to Assignment of Amendment to IP Security Agreement